CANOPY GROWTH CORPORATION and ACREAGE HOLDINGS, INC. ARRANGEMENT AGREEMENT April 18, 2019

ARTICLE 1 INTERPRETATION

Section 1.1     Defined Terms

Section 1.2     Certain Rules of Interpretation

Section 1.3     Schedules

ARTICLE 2 THE ARRANGEMENT

Section 2.1     Arrangement

Section 2.2     Interim Order

Section 2.3     The Company Meeting

Section 2.4     The Company Circular.

Section 2.5     Purchaser Meeting

Section 2.6     Final Order.

Section 2.7     Court Proceedings.

Section 2.8     Other Securities.

Section 2.9     Arrangement Filings and Effective Date

Section 2.10     Delivery of Option Premium/Consideration Shares by Purchaser

Section 2.11     Dissenting Company Shareholders

Section 2.12     Withholding Taxes.

Section 2.13     U.S. Securities Law Matters

Section 2.14     Exchange Ratio Adjustment Event.

Section 2.15     Purchaser Change of Control Adjustment

Section 2.16     Income Tax Treatment.

Section 2.17     Section 85 Election

ARTICLE 3 REPRESENTATIONS AND WARRANTIES

Section 3.1     Representations and Warranties of the Company.

Section 3.2     Representations and Warranties of the Purchaser.

ARTICLE 4 COVENANTS

Section 4.1     Conduct of Business of the Company.

Section 4.2     Covenants Regarding the Arrangement.

Section 4.3     Regulatory Approvals

Section 4.4     Access to Information; Confidentiality.

Section 4.5     Pre-Acquisition Reorganization.

Section 4.6     Interim Covenants of the Purchaser.

Section 4.7     Public Communications.

Section 4.8     Notice and Cure Provisions

Section 4.9     Insurance and Indemnification

Section 4.10     Stock Exchange Matters

Section 4.11     Board of Directors and Officers.

Section 4.12     Acquisition Closing Conditions.

Section 4.13     Lockup and Incentive Agreements

Section 4.14     Dissent Rights Payments

ARTICLE 5 ADDITIONAL COVENANTS REGARDING NON-SOLICITATION

Section 5.1     Company Non-Solicitation

ARTICLE 6 CONDITIONS

Section 6.1     Mutual Conditions Precedent

Section 6.2     Additional Conditions Precedent to the Obligations of the Purchaser

Section 6.3     Additional Conditions Precedent to the Obligations of the Company.

ARTICLE 7 TERM AND TERMINATION

Section 7.1     Term.

Section 7.2     Termination.

Section 7.3     Effect of Termination/Survival.

ARTICLE 8 GENERAL PROVISIONS

Section 8.1     Amendments

Section 8.2     Termination Fees

Section 8.3     Expenses and Expense Reimbursement.

Section 8.4     Notices

Section 8.5     Time of the Essence.

Section 8.6     Injunctive Relief

Section 8.7     Third Party Beneficiaries.

Section 8.8     Waiver.

Section 8.9     Entire Agreement.

Section 8.10     Successors and Assigns

Section 8.11     Severability

Section 8.12     Governing Law

Section 8.13     Rules of Construction

Section 8.14     No Personal Liability.

Section 8.15     Language.

Section 8.16     Counterparts.

Schedule A:  

Plan of Arrangement

Schedule B:

Arrangement Resolution

Schedule C:

Purchaser Shareholder Resolution

Schedule D:

Representations and Warranties of the Company

Schedule E:

Representations and Warranties of the Purchaser

Schedule F:

Form of Voting Support Agreement

Schedule G:

Trademark and Technology License Agreement

Schedule H:

Form of Lock-Up and Incentive Agreement

Exhibit 1:

High Street Operating Agreement - Amending Terms

Exhibit 2:

Tax Receivables Agreement - Amending Terms

any filings required by the HSR Act and any applicable foreign investment and competition law approvals in Canada, the United States and elsewhere;

the approval from the stock exchange(s) on which the Consideration Shares are listed to permit the Purchaser to acquire all of the issued and outstanding Company Shares; and

the approval from the stock exchange(s) on which the Consideration Shares are listed, for the listing of the Consideration Shares, and any Purchaser Shares issuable upon the exercise of Replacement Options, Replacement RSUs and Replacement Compensation Options.

the grant of the Interim Order and the Final Order;

in relation to the Company, the approval of the CSE in respect of the Arrangement; and

HSR Approval.

all items that would, at the relevant time, be classified as liabilities on the Company’s consolidated balance sheet; and

without duplication, any item that is: (i) an obligation in respect of borrowed money or that is evidenced by a note, bond, debenture, or any other similar instrument; (ii) a transfer with recourse or with an obligation to repurchase; (iii) an obligation secured by any Lien; (iv) a lease that would be capitalized under GAAP (except for any obligation under a lease for Real Property); (v) an

issued share capital or surplus, subject to paragraph (vii) above;

reserves for deferred income taxes or general contingencies;

minority interests in Subsidiaries;

trade accounts payable and accrued liabilities (including deferred revenues and income taxes payable) incurred in the Ordinary Course, unless any of the trade accounts payable or accrued liabilities under this paragraph remain unpaid more than 120 days after the date on which they were incurred; or

intercompany and affiliate payables/notes to the extent they are offset by intercompany and affiliate receivables/notes.

any change in global, national or regional political conditions (including military action and the outbreak or escalation of war or acts of terrorism) or in general economic, business, regulatory, political or market conditions or in national or global financial, banking or capital markets;

general conditions in the industry or markets in which the Company or its Subsidiaries operate;

any adoption, proposal, implementation or change in Law or any interpretation of Law by any Governmental Entity;

any change in GAAP or interpretation of GAAP applicable to the Company;

any natural disaster;

the failure by the Company to meet any internal, third party or public projections, forecasts, guidance or estimates of revenues or earnings or other financial or operating metrics for any period (it being understood that the cause underlying any such failure may be taken into account in determining whether a Company Material Adverse Effect has occurred, to the extent not otherwise excepted by another clause of this definition);

the announcement or disclosure of this Agreement, including any drop in the market price of the Company Subordinate Voting Shares and any loss or threatened loss of, or adverse change or threatened adverse change in, the relationship of the Company or its Subsidiaries with the Company’s employees, customers, suppliers, partners and other Persons with which the Company or any of its Subsidiaries has business relations;

compliance with this Agreement and any action taken (or omitted to be taken) by the Company that is consented to by the Purchaser expressly in writing;

any matter which has been disclosed by the Company in the Company Disclosure Letter;

any actions taken (or omitted to be taken) upon the written request of the Purchaser; or

any change in the market price or trading volume of any securities of the Company (it being understood that the causes underlying such change in market

“D” means Company Debt, and

“EQ” means Company Equity.

the rate of interest set by ICE Benchmark Administration Limited (or any successor to, or substitute for, such service), providing rate quotations comparable to those currently provided by ICE Benchmark Administration Limited applicable to U.S. dollar deposits in the London interbank market (as published by any service selected by the Company that has been nominated by ICE Benchmark Administration Limited (or any successor thereto) as an authorized information vendor for the purpose of displaying such rates); or

in the event that no such rate is available, then LIBOR shall be the rate per annum determined by the Purchaser, acting reasonably, to be the rate at which deposits in U.S. dollars would be offered to the Company by major banks in the London interbank market,

relating directly or indirectly to the guarantee of any material liabilities or material obligations or to indebtedness for borrowed money;

restricting the incurrence of indebtedness (including by requiring the granting of an equal and rateable Lien) or the incurrence of any Liens on any properties or assets, or restricting the payment of dividends, in each case, in any material respect;

relating to the purchase of materials, supplies, equipment or services involving payments, individually or in the aggregate, in excess of, $500,000 over the life of such Contract;

providing for the establishment, investment in, organization or formation of any joint venture, limited liability company, partnership or similar entity that creates an exclusive dealing arrangement or right of first offer or refusal that materially limits the Party’s business or of any Subsidiary;

with a Governmental Entity for a value in excess of $100,000;

that contains any material exclusivity or non-solicitation obligations of the Party or any Subsidiary;

providing for severance or change in control payments;

providing for the purchase, sale or exchange of, or option to purchase, sell or exchange, any property or asset where the purchase or sale price or agreed value or fair market value of such property or asset exceeds $1,000,000;

that limits or restricts in any material respect (i) the ability of the Party or any Subsidiary to engage in any line of business or carry on business in any geographic area, or (ii) the scope of Persons to whom the Party or any of its Subsidiaries may sell products or deliver services;

that gives another Person the right to purchase or license an unlimited quantity or volume of, or enterprise-wide scope of use of, that Party’s products or services (or licenses to that Party’s products or services) for a fixed aggregate price at no additional charge, or under which that Party grants most-favored customer pricing, rights of first refusal or similar rights or terms to any Person;

pertains to the acquisition, licensing, or disposition of any Intellectual Property material to the Party or its Subsidiaries (excluding “click-through” or “shrink-wrap” licenses of generally commercially available software entered into in the Ordinary Course) or that includes a grant to or from the Party or its Subsidiaries of any exclusive rights under any Intellectual Property; or

that is otherwise material to the current or future business, operations, results of operations, assets, properties, capitalization, condition (financial or otherwise) or liability of the Party and its Subsidiaries, taken as a whole.

Liens for Taxes which are not yet due or delinquent or that are being properly contested in good faith by appropriate proceedings and in respect of which reserves have been provided in the most recent publicly filed financial statements;

inchoate Liens of contractors, subcontractors, mechanics, workers, suppliers, materialmen, carriers and others arising or incurred in the Ordinary Course relating to obligations as to which there is no default on the part of the Company or any of its Subsidiaries, provided that such Liens are related to obligations not due or delinquent, are not registered against title to any assets and in respect of which adequate holdbacks are being maintained as required by applicable Law;

easements, servitudes, restrictions, restrictive covenants, rights of way, licenses, permits and other similar rights in the Company Owned Real Property (as defined in Schedule D) or the Company Leased Property (as defined in Schedule D) that in each case do not materially detract from or adversely affect the value or materially or adversely interfere with the use of the Company Owned Real Property or the Company Leased Property subject thereto;

zoning and building by-laws and ordinances, regulations made by public authorities that in each case do not materially detract from or adversely affect the value or materially or adversely interfere with the use of the Company Owned Real Property or the Company Leased Property subject thereto; or

Liens disclosed in the Company Disclosure Schedule.

any change in global, national or regional political conditions (including military action and the outbreak or escalation of war or acts of terrorism) or in general economic, business, regulatory, political or market conditions or in national or global financial, banking or capital markets;

general conditions in the industry or markets in which the Company or its Subsidiaries operate;

any adoption, proposal, implementation or change in Law or any interpretation of Law by any Governmental Entity;

any change in GAAP or interpretation of GAAP applicable to the Purchaser;

any natural disaster;

the failure by the Purchaser to meet any internal, third party or public projections, forecasts, guidance or estimates of revenues or earnings or other financial or operating metrics for any period (it being understood that the cause underlying any such failure may be taken into account in determining whether a Purchaser Material Adverse Effect has occurred, to the extent not otherwise excepted by another clause of this definition);

the announcement or disclosure of this Agreement, including any drop in the market price of the Purchaser Shares and any loss or threatened loss of, or adverse change or threatened adverse change in, the relationship of the Purchaser or its Subsidiaries with the Purchaser’s employees, customers, suppliers, partners and other Persons with which the Purchaser or any of its Subsidiaries has business relations;

compliance with this Agreement and any action taken (or omitted to be taken) by the Purchaser that is consented to by the Company expressly in writing;

any actions taken (or omitted to be taken) upon the written request of the Company; or

any change in the market price or trading volume of any securities of the Purchaser (it being understood that the causes underlying such change in market price may be taken into account in determining whether a Purchaser Material Adverse Effect has occurred),

complies with Securities Laws and did not result from or involve a breach of this Agreement or any other agreement between the Person making the Acquisition Proposal and the Company;

is reasonably capable of being completed without undue delay relative to the Arrangement, taking into account, all financial, legal, regulatory and other aspects of such proposal and the Person making such proposal;

is not subject to any financing condition and in respect of which adequate arrangements have been made to ensure that the required consideration will be available to effect payment in full for all of the Company Shares or assets, as the case may be;

is not subject to any due diligence or access condition;

in respect of which the Company Board determines in good faith (after receipt of advice from its outside legal counsel with respect to (x) below and financial advisors with respect to (y) below) that (x) failure to recommend such Acquisition Proposal to the Company Shareholders would be inconsistent with its fiduciary duties and (y) which would, taking into account all of the terms and conditions of such Acquisition Proposal, if consummated in accordance with its terms (but not assuming away any risk of non-completion), result in a transaction more favourable to the Company Shareholders, taken as a whole, from a financial point of view, than the Arrangement (after taking into account any adjustment to the terms and conditions of the Arrangement proposed by the Purchaser pursuant to Section 5.1(8)); and

in the event that the Company does not have the financial resources to pay the Termination Fee, the terms of such Acquisition Proposal provide that the Person making such Superior Proposal shall advance or otherwise provide the Company the cash required for the Company to pay the Termination Fee and such amount

Headings, etc. The provision of a Table of Contents, the division of this Agreement into Articles and Sections and the insertion of headings are for convenient reference only and do not affect the construction or interpretation of this Agreement.

Currency. All references to dollars or to “$” are references to United States dollars.

Gender and Number. Any reference to gender includes all genders. Words importing the singular number only include the plural and vice versa.

Certain Phrases and References, etc. The words “including”, “includes” and “include” mean “including (or includes or include) without limitation,” and “the aggregate of”, “the total of”, “the sum of”, or a phrase of similar meaning means “the aggregate (or total or sum), without duplication, of.” Unless stated otherwise, “Article”, “Section”, and “Schedule” followed by a number or letter mean and refer to the specified Article or Section of or Schedule to this Agreement. The term “Agreement” and any reference in this Agreement to this Agreement or any other agreement or document includes, and is a reference to, this Agreement or such other agreement or document as it may have been, or may from time to time be, amended, restated, replaced, supplemented or novated and includes all schedules to it. The terms “made available to the Purchaser” and “made available to the Company” mean copies of the subject materials were included in the Company Data Room, or otherwise provided in writing in the manner expressly set forth in the Company Disclosure Letter.

Capitalized Terms. All capitalized terms used in any Schedule or the Company Disclosure Letter have the meanings ascribed to them in this Agreement.

Knowledge. Where any representation or warranty is expressly qualified by reference to the knowledge of the Company, it is deemed to refer to the knowledge of the Chief Executive Officer of the Company and ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ after due and diligent inquiry. Where any representation or warranty is expressly qualified by reference to the knowledge of the

Accounting Terms. All accounting terms are to be interpreted in accordance with GAAP and all determinations of an accounting nature required to be made shall be made in a manner consistent with GAAP.

Statutes. Any reference to a statute refers to such statute and all rules and regulations made under it, as it or they may have been or may from time to time be amended or re-enacted, unless stated otherwise.

Computation of Time. A period of time is to be computed as beginning on the day following the event that began the period and ending at 4:30 p.m. on the last day of the period, if the last day of the period is a Business Day, or at 4:30 p.m. on the next Business Day if the last day of the period is not a Business Day. If the date on which any action is required or permitted to be taken under this Agreement by a Person is not a Business Day such action shall be required or permitted to be taken on the next succeeding day which is a Business Day.

Time References. References to time are to local time, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, unless otherwise indicated.

Subsidiaries. To the extent any covenants or agreements relate, directly or indirectly, to a Subsidiary of a Party, each such provision shall be construed as a covenant by the Party to cause (to the fullest extent to which it is legally capable) such Subsidiary to perform the required action.

As soon as reasonably practicable after the date of this Agreement, but in any event at a time so as to permit the Company Meeting to be held on or before the date specified in Section 2.3(a), and the Purchaser Meeting to be held on or before the date specified in Section 2.5(1), the Company shall apply in a manner reasonably acceptable to the Purchaser pursuant to Section 291(b) of the BCBCA and, in cooperation with the Purchaser, prepare, file and diligently pursue an application for the Interim Order, which must provide, among other things:

In seeking the Interim Order, the Company shall advise the Court that it is the intention of the Parties to rely upon the exemption from registration provided by Section 3(a)(10) of the U.S. Securities Act with respect to the issuance of all Arrangement Issued Securities to be issued pursuant to the Arrangement based and conditioned on the Court’s approval of the Arrangement and its determination that the Arrangement is fair and reasonable to holders of Company Securities to whom will be issued Arrangement Issued Securities pursuant to the Arrangement (such Company Securities, the “Subject Securities”), following a hearing and after consideration of the substantive and procedural terms and conditions thereof.

in the case of an adjournment, as required for quorum purposes (in which case the Company Meeting shall be adjourned and not cancelled); or

as otherwise permitted under this Agreement.

The Company shall promptly prepare and complete, in consultation with the Purchaser, the Company Circular together with any other documents required by applicable Law in connection with the Company Meeting and the Arrangement, and the Company shall, promptly after obtaining the Interim Order, cause the Company Circular and such other documents to be filed and sent to each Company Shareholder and other Person as required by the Interim Order and Law, in each case so as to permit the Company Meeting to be held by the date specified in Section 2.3(a).

The Company shall ensure that the Company Circular complies in material respects with the Interim Order and applicable Law, does not contain any Misrepresentation (other than in respect to any written information with respect to the Purchaser that is furnished in writing by or on behalf of the Purchaser for inclusion in the Company Circular) and provides the Company Shareholders with sufficient information to permit them to form a reasoned judgment concerning the matters to be placed before them at the Company Meeting. Without limiting the generality of the foregoing, the Company Circular must include:

a copy of the Fairness Opinions;

a statement that the Company Special Committee and the Company Board has received the Fairness Opinions;

a statement that the Company Special Committee and has unanimously determined, after receiving legal and financial advice:

that the Arrangement is fair to the Company Shareholders;

the Arrangement and the entering into of this Agreement is in the best interests of the Company; and

that the Company Special Committee recommends that the Company Shareholders vote in favour of the Arrangement Resolution and the rationale for that recommendation;

a statement (the “Company Board Recommendation”) that the Company Board unanimously determined (with directors abstaining or recusing themselves as required), after receiving legal and financial advice:

that the Arrangement is fair to the Company Shareholders;

the Arrangement and the entering into of this Agreement is in the best interests of the Company; and

that the Company Board (with directors abstaining or recusing themselves as required) recommends that the Company Shareholders vote in favour of the Arrangement Resolution and the rationale for that recommendation, and

a statement that each of the Company Locked-up Shareholders have entered into Support and Voting Agreements pursuant to which they intend to vote all of their Company Shares in favour of the Arrangement Resolution and against any resolution submitted by any Company Shareholder that is inconsistent therewith.

The Company shall give the Purchaser and its legal counsel a reasonable opportunity to review and comment on drafts of the Company Circular and other related documents, and shall give reasonable consideration to any comments made by the Purchaser and its counsel, and agrees that all information relating solely to the Purchaser for inclusion in the Company Circular and any information describing the Purchaser, the terms of the Arrangement and/or the Plan of Arrangement must be in a form and content satisfactory to the Purchaser, acting reasonably. The Company shall provide the Purchaser with a final copy of the Company Circular prior to its mailing to the Company Shareholders.

The Purchaser shall as soon as reasonably practicable after the date hereof, and in any event within 30 days of the date hereof, provide the Company with all information regarding the Purchaser, its affiliates and the Purchaser Shares, including any pro forma financial statements, as required by applicable Law and requested by the Company in writing for inclusion in the Company Circular or in any amendments or supplements to such Company Circular. The Purchaser shall ensure that such information does not include any Misrepresentation concerning the Purchaser, its affiliates and the Consideration.

Each Party shall promptly notify the other Party if it becomes aware that the Company Circular contains a Misrepresentation, or otherwise requires an amendment or supplement. The Parties shall, in a manner consistent with this Section 2.4, cooperate in the preparation of any such amendment or supplement as required or appropriate, and the Company shall, in a manner provided in the Interim Order, promptly mail, file or otherwise publicly disseminate any such amendment or supplement to the Company Shareholders and, if required by the Court or by applicable Law, file the same with the Securities Authorities or any other Governmental Entity as required.

The Purchaser shall convene and conduct the Purchaser Meeting for the purpose of obtaining approval of the Purchaser Shareholder Resolution in accordance with the Purchaser’s Constating Documents, the terms of the CBG Group Agreements and applicable Law, including the policies of the TSX, and will use commercially reasonable efforts to schedule the Purchaser Meeting on the same day as the Company Meeting and, in any event no later than the date of the Company Meeting (or such later date as may be agreed to by the Parties in writing or required as a result of a delay by the Company in

The Purchaser shall, subject to compliance by the directors and officers of the Purchaser with their fiduciary duties and the terms of this Agreement, use commercially reasonable efforts to solicit proxies in favour of the Purchaser Shareholder Resolution and against any resolution submitted by any Person that is inconsistent with or seeks (without the Company’s consent) to hinder or delay the implementation of the matters dealt with the in the Purchaser Shareholder Resolution and the completion of the transactions contemplated by this Agreement, including at the Purchaser’s discretion, and at the Purchaser’s sole expense, using the services of dealers and proxy solicitation services.

The Purchaser shall promptly prepare and complete the Purchaser Circular together with any other documents required by applicable Law in connection with the Purchaser Meeting and the issuance of the Consideration Shares, and the Purchaser shall cause the Purchaser Circular and such other documents to be filed and sent to each Purchaser Shareholder and other Person as required by applicable Law.

The Purchaser shall ensure that the Purchaser Circular complies in material respects with applicable Law, does not contain any Misrepresentation (other than in respect to any written information with respect to the Company that is furnished in writing by or on behalf of the Company for inclusion in the Purchaser Circular) and provides the Purchaser Shareholders with sufficient information to permit them to form a reasoned judgment concerning the matters to be placed before them at the Purchaser Meeting.

The required level of approval (the “Required Purchaser Shareholder Approval”) for the Purchaser Shareholder Resolution shall be not less than a majority of the votes cast on the Purchaser Shareholder Resolution by holders of Purchaser Shares present in person or represented by proxy and entitled to vote at the Purchaser Meeting, and, if required by applicable Law, a simple majority of the votes cast on the Purchaser Shareholder Resolution by disinterested holders of Purchaser Shares.

Subject to obtaining the Final Order and to the satisfaction or, where not prohibited, the waiver (subject to applicable Laws) by the Party or Parties in whose favour the condition is, of each of the conditions set out in Article 6 hereof (excluding conditions that by their terms cannot be satisfied until the Effective Date, but subject to the satisfaction or, where not prohibited, waiver by the Party or Parties in whose favour the condition is, of those conditions as of the Effective Date), unless another time or date is agreed to in writing by the Parties, any Arrangement Filings required to be filed prior to the Effective Date shall be filed by the Company with the Registrar not later than one Business Day after receipt of the Final Order, provided, however, that no Arrangement Filings shall be sent to the Registrar, for endorsement and filing by the Registrar, except as contemplated hereby or with the Purchaser’s prior written consent.

The closing of the Arrangement will take place at the offices of DLA Piper (Canada) LLP, ▇▇▇▇▇ ▇▇▇▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇, 100 King St W, Toronto, Ontario M5X 1E2, or at such other location as may be agreed upon by the Parties.

If a Purchaser Change of Control occurs prior to the Acquisition Date, the Purchaser shall, effective from the effective time of such Purchaser Change of Control, cause the Purchaser Call Option, High Street Operating Agreement and USCo2 Constating Documents to be amended so that, instead of receiving Purchaser Shares (or any Alternate Consideration that a Company Shareholder is otherwise entitled to receive pursuant to this Section 2.15 as a result of a prior Purchaser Change of Control) in exchange for Company Shares upon the exercise or deemed exercise of the Purchaser Call Option in accordance with the Plan of Arrangement, each Company Shareholder shall instead be entitled to receive on the Acquisition Date, and shall accept, the number of shares or other securities or property (including cash) that such Company Shareholder would have been entitled to receive on such Purchaser Change of Control (the “Alternate Consideration”), if, at the effective time of such Purchaser Change of Control, the Company Shareholder had been the registered holder of that number of Purchaser Shares which is equal to the number of Purchaser Shares which it would otherwise have been entitled to receive in exchange for its Company Shares pursuant to the Arrangement if the Acquisition Date and the steps referred to in Section 3.1 of the Plan of Arrangement had been completed effective immediately prior to the effective time of the Purchaser Change of Control.

If, in connection with a Purchaser Change of Control, a holder of a Purchaser Share may elect a form of consideration (including, without limitation, shares, other securities, cash or other property) from options made available, then for purposes of this Section 2.15 (including, for the avoidance of doubt, the definition of “Alternate Consideration”) all Company Shareholders shall be deemed to have elected to receive an equal percentage of each of the different types of consideration offered.

For the purposes of this Section 2.15, the term “Purchaser Shares” shall, following the occurrence of a Purchaser Change of Control, be deemed to include any securities that are included in any Alternate Consideration. For the avoidance of doubt, any adjustments pursuant to this Section 2.15 shall apply sequentially to each Purchaser Change of Control that occurs during the Interim Period.

Upon the occurrence of each adjustment pursuant to this Section 2.15, the Purchaser shall promptly compute such adjustment in accordance with the terms hereof and provide the Depositary (with a copy to the Company) with a certificate setting forth such adjustment, including in detail the facts upon which such adjustment is based, and setting forth the Alternate Consideration that a Company Shareholder will be entitled to receive for their Company Shares pursuant to the Plan of Arrangement upon the exercise or deemed exercise of the Purchaser Call Option. The Company shall, upon the written request at any time of any Company Shareholder, furnish or cause to be furnished to such Company Shareholder a copy of such certificate.

Except as set forth in the correspondingly numbered paragraph of the Company Disclosure Letter, the Company represents and warrants to the Purchaser as set forth in Schedule D hereto and acknowledges and agrees that the Purchaser is relying upon such representations and warranties in connection with the entering into of this Agreement.

The representations and warranties of the Company contained in this agreement shall not survive the completion of the Arrangement and shall expire and be terminated on the earlier of the Effective Time and the date on which this Agreement is terminated in accordance with its terms, except for the Material Representations, which shall survive the completion of the Arrangement and shall not expire and be terminated when this Agreement is terminated in accordance with its terms.

The Purchaser represents and warrants to the Company as set forth in Schedule E hereto and acknowledges and agrees that the Company is relying upon such representations and warranties in connection with the entering into of this Agreement.

The representations and warranties of the Purchaser contained in this Agreement shall not survive the completion of the Arrangement and shall expire and be terminated on the earlier of the Effective Time and the date on which this Agreement is terminated in accordance with its terms.

The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Acquisition Effective Time and the time that this Agreement is terminated in accordance with its terms, except: (i) with the prior written consent of the Purchaser, such consent not to be unreasonably withheld or delayed; (ii) as expressly required or permitted by this Agreement; (iii) as required by applicable Law; or (iv) as expressly contemplated by the Company Disclosure Letter, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the Ordinary Course and in accordance with, in all material respects, all applicable Laws, with the exception of the Controlled Substances Act, 21 USC 801 et seq., as it applies to marijuana (including any implementing regulations and schedules in effect at the relevant time) or any other U.S. federal law the violation of which is predicated upon a violation of the Controlled Substances Act as it applies to marijuana, and the Company shall use commercially reasonable efforts to maintain and preserve its and its Subsidiaries’ business organizations, properties, assets, rights, employees, goodwill and business relationships with customers, suppliers, partners and other Persons with which the Company or any of its Subsidiaries has material business relations.

Without limiting the generality of Section 4.1(1), the Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Acquisition Effective Time and the time that this Agreement is terminated in accordance with its terms, except: (i) with the prior written consent of the Purchaser; (ii) as expressly required or permitted by this Agreement; (iii) as required by applicable Law; or (iv) as expressly contemplated by the Company Disclosure Letter, the Company shall not, and shall not permit any of the Key Subsidiaries to, directly or indirectly:

Without limiting the generality of Section 4.1(1), the Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Acquisition Effective Time and the time that this Agreement is terminated in accordance with its terms, except: (i) with the prior written consent of the Purchaser not to be unreasonably conditioned, withheld or delayed; (ii) as expressly required or permitted by this Agreement; (iii) as required by applicable Law; or (iv) as expressly contemplated by the Company Disclosure Letter, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly:

increase any severance, change of control, termination pay (or improvements to notice or pay in lieu of notice) or benefits payable under any existing severance or termination pay policies to (or amend any existing arrangement with) any current or former Company Employee or any current or former director of the Company or any of its Subsidiaries;

other than as disclosed in the Company Disclosure Letter, provide for any severance, change of control, termination pay (or improvements to notice or pay in lieu of notice) or benefits payable under any existing severance or termination pay policies to (or amend any existing arrangement with) any current, former or future Company Employee or any current, former or future director of the Company or any of its Subsidiaries that would be triggered by the Arrangement;

increase compensation, bonus levels or other benefits payable to any current, former or future Company Employee or any current, former or future director of the Company or any of its Subsidiaries that would be materially inconsistent with the compensation, bonus levels or other benefits payable under employment agreements of the Purchaser;

enter into any deferred compensation or other similar agreement (or amend any such existing agreement) with any current, former or future Company Employee or any current, former or future director of the Company or any of its Subsidiaries;

adopt any new Employee Plan or any amendment or modification of an existing Employee Plan that would be materially inconsistent with existing Employee Plans of the Company, provided; however, that the Company may be able to increase the number of securities available for issuance under the Company Equity Incentive Plan to a rolling 15% of the securities

outstanding from time to time, in the manner determined under such plan;

approve or take any action to accelerate the vesting of any compensation securities;

increase or agree to increase, any funding obligation or accelerate, or agree to accelerate, the timing of any funding contribution under any Employee Plan; or

terminate, dismiss, demote or otherwise materially decrease the job requirements or the employment of the Key Individuals;

be materially inconsistent with market standards for companies operating in the United States cannabis industry;

provide for an event of default, repayment or acceleration on the Effective Date, the Triggering Event Date or the Acquisition Date; or

provide for a stated annual interest rate that is more than LIBOR plus 8.0%;

The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Acquisition Effective Time and the time that this Agreement is terminated in accordance with its terms, except with the prior written

The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Acquisition Effective Time and the time that this Agreement is terminated in accordance with its terms, except with the prior written consent of the Purchaser, the Company shall, and shall cause the Key Subsidiaries to:

The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Acquisition Effective Time and the time that this Agreement is terminated in accordance with its terms, the Company shall, and shall cause its Subsidiaries, to prepare and file when due all Tax Returns required to be filed by the Company and its Subsidiaries (except for any Tax Return for which an extension has been granted as permitted hereunder), and pay, or cause the Company or its Subsidiaries to pay, all Taxes (including estimated Taxes) due on such Tax Return (or due with respect to Tax Returns for which an extension has been granted as permitted hereunder) or which are otherwise required to be paid, except where the failure to file such Tax Returns or pay such Taxes would not individually or in the aggregate have a Company Material Adverse Effect.

The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Acquisition Effective Time and the time that this Agreement is terminated in accordance with its terms, it shall:

The Company covenants and agrees that, during the period from the date a Purchaser Call Option Exercise Notice or Triggering Event Notice, as the case may be, is delivered to the Depositary pursuant to the Purchaser Call Option, until the earliest of the (i) Acquisition Effective Time, (ii) Acquisition Closing Outside Date, and (iii) termination of this Agreement in accordance with its terms, it shall not issue any securities.

The Company shall not, as part of the Arrangement or at any time following the Effective Date, require or permit holders of Company Shares, High Street Units or USCo2 Class B

For the purposes of maintaining the business and operations of the Company in the Ordinary Course prior to the Acquisition Date, the Company shall not, and shall not permit any of its Subsidiaries to operate outside of the United States. For greater certainty, operations shall include the sale of any cannabis, cannabis accessory or other product.

Subject to Section 4.3, each of the Company and the Purchaser shall (and shall cause its affiliates to) use its commercially reasonable efforts to take, or cause to be taken, all actions and to do or cause to be done all things required or advisable under applicable Law to consummate and make effective, as soon as reasonably practicable, the transactions contemplated by this Agreement and the Plan of Arrangement, including using commercially reasonable efforts to:

necessary to be obtained under the Material Contracts or the Company Lease Documents, as applicable, in connection with the Arrangement or this Agreement; or

required in order to maintain the Material Contracts or Company Lease Documents, as applicable, in full force and effect following completion of the Arrangement;

necessary to be obtained under the Material Contracts or the Company Lease Documents, as applicable, in connection with the Acquisition; or

required in order to maintain the Material Contracts or the Company Lease Documents, as applicable, in full force and effect following completion of the Acquisition,

The Company shall promptly notify the Purchaser of:

The Company will, in all material respects, conduct itself so as to keep the Purchaser fully informed as to the material decisions required to be made or actions required to be taken with respect to the operation of its business, provided that such disclosure is not otherwise prohibited by reason of an existing confidentiality obligation owed to a third party for which a waiver could not be obtained. The Company will use commercially reasonable efforts to ensure that all confidentiality obligations owed to third parties following the date hereof include an exception permitting the Company to disclose information to the Purchaser on a confidential basis. The Purchaser covenants and agrees with the Company that any such information disclosed by the Company to the Purchaser will be held and used by the Purchaser according to the terms of the Confidentiality Agreement.

The Purchaser shall promptly notify the Company in writing of any notice or other communication from any Person alleging that the consent (or waiver, permit, exemption, order, approval, agreement, amendment or confirmation) of such Person is required in connection with this Agreement or the Arrangement.

In the event that the Purchaser, acting reasonably, concludes that it is necessary or desirable to proceed with another form of transaction (such as a formal take-over bid or amalgamation) whereby the Purchaser or its affiliates would effectively acquire all of the Company Shares within approximately the same time periods and on the same economic terms, including without limitation a share exchange ratio being no less than the Exchange Ratio, and other terms and conditions (including tax treatment) and having consequences to the Company and its securityholders, including the High Street Holders and the USCo2 Class B Holders, which are substantially equivalent to or better than those

contemplated by the Arrangement (an “Alternative Transaction”), the Company agrees to support the completion of such Alternative Transaction in the same manner as the Arrangement and shall otherwise fulfill its covenants contained in this Agreement in respect of such Alternative Transaction. In particular but without limitation, the Company agrees that it will negotiate in good faith as to the “initial deposit period” in respect of any such Alternative Transaction, which shall be 35 days unless a longer period is requested by the Purchaser. In the event of any proposed Alternative Transaction, any reference in this Agreement to the Arrangement or Plan of Arrangement shall refer to the Alternative Transaction to the extent applicable, all terms, covenants, representations and warranties of this Agreement shall be and shall be deemed to have been made in the context of the Alternative Transaction and all references to the Acquisition Effective Time herein shall refer to the date of closing of the transactions contemplated by the Alternative Transaction (as such date may be extended from time to time).

So long as any Company Shareholder remains subject to a “gain recognition agreement” pursuant to Section 367 of the U.S. Tax Code and the applicable Treasury Regulations thereunder, the Purchaser and its affiliates will use commercially reasonable efforts to not knowingly take any action which would trigger any gain recognition by any such Company Shareholder, provided that such actions will not materially impact the business or activities of the Purchaser. Notwithstanding anything herein to the contrary, this provision shall survive the Acquisition by the Purchaser.

As soon as reasonably practicable after the date hereof, each Party, or where appropriate, both Parties jointly, shall (A) seek to obtain the Arrangement Regulatory Approvals in advance of the Effective Time, and (B) following the Effective Time and in advance of the Acquisition Effective Time, at such time and as agreed between the Parties, make all notifications, filings, applications and submissions with Governmental Entities required or advisable, and shall use best efforts to obtain and maintain, the Acquisition Regulatory Approvals and any other Regulatory Approvals deemed by any of the Parties, acting reasonably, to be necessary to discharge their respective obligations under this Agreement in connection with the completion of the Acquisition (including, but not limited to, the Regulatory Approvals listed on Schedule (e) of the Company Disclosure Letter).

The Parties shall cooperate with one another in connection with obtaining the Arrangement Regulatory Approvals, Acquisition Regulatory Approvals and any other Regulatory Approvals required or desirable in connection with the Arrangement including by providing or submitting on a timely basis all documentation and information that is required, or in the reasonably held opinion of the Purchaser, advisable, in connection with obtaining the Arrangement Regulatory Approvals, Acquisition Regulatory Approvals and any such other Regulatory Approvals and using their commercially reasonable efforts to ensure that such information does not contain a Misrepresentation.

The Parties shall cooperate with and keep one another fully informed as to the status of and the processes and proceedings relating to obtaining the Arrangement Regulatory Approvals, Acquisition Regulatory Approvals and any other Regulatory Approvals, and shall promptly notify each other of any communication from any Governmental Entity in respect of the Arrangement, the Acquisition or this Agreement.

The Company shall not make any submissions or filings, participate in any meetings or any material conversations with any Governmental Entity in respect of any filings, investigations or other inquiries related to the Arrangement or this Agreement unless it affords the Purchaser a reasonable opportunity to consult with it in advance and, to the extent not precluded by such Governmental Entity, gives the Purchaser the reasonable opportunity to review drafts of any submissions or filings, or attend and participate in any communications or meetings.

Each Party shall promptly notify the other Party if it becomes aware that any (i) application, filing, document or other submission for any Arrangement Regulatory Approval, Acquisition Regulatory Approval or any other Regulatory Approval contains a Misrepresentation, or (ii) any Arrangement Regulatory Approval, Acquisition Regulatory Approval or any other Regulatory Approval contains, reflects or was obtained following the submission of any application, filing, document or other submission containing a Misrepresentation, such that an amendment or supplement may be necessary or advisable. In such case, the Company or the Purchaser, as applicable shall, in consultation with and subject to the prior approval of the other Party, co-operate in the preparation, filing and dissemination, as applicable, of any such amendment or supplement.

The Parties shall request that the Arrangement Regulatory Approvals, Acquisition Regulatory Approvals and any other Regulatory Approvals be processed by the applicable Governmental Entity on an expedited basis and, to the extent that a public hearing is held, the Parties shall request the earliest possible hearing date for the consideration of the Arrangement Regulatory Approvals, Acquisition Regulatory Approvals or other Regulatory Approvals.

If any objections are asserted with respect to the transactions contemplated by this Agreement under any Law, or if any proceeding is instituted or threatened by any Governmental Entity challenging or which could lead to a challenge of any of the transactions contemplated by this Agreement as not in compliance with Law, the Parties shall use their commercially reasonable efforts consistent with the terms of this Agreement to resolve such proceeding so as to allow (i) the Effective Time to occur on or prior to the Effective Time Outside Date, and (ii) the Acquisition Date to occur on or prior to the Acquisition Closing Outside Date. Notwithstanding the foregoing, neither Party nor any of their affiliates shall be required to proffer or consent to a governmental order consenting to any restriction, prohibition or limitation that materially limits the Party’s business in order to remedy any concerns that any Governmental Entity may have.

If a Party becomes aware that an Acquisition Regulatory Approval will not be granted and in respect of which the failure to obtain same would result the failure to satisfy an Acquisition Closing Condition, the Party becoming so aware shall promptly notify the other Party and, subject to Section 4.3(7), hereof, forthwith notify the other Party hereto of its termination of this Agreement pursuant to Section 7.2(3) hereof.

The Company shall give the Purchaser and its Representatives (a) upon reasonable notice, reasonable access during normal business hours to its and its Subsidiaries’ (i) premises, (ii) property and assets (including all books and records, whether retained internally or otherwise, including, for greater certainty, tax and financial documentation), (iii) Contracts and Leases, and (iv) senior personnel, so long as the access does not unduly interfere with the Ordinary Course conduct of the business of the Company; and (b) such financial and operating data or other information with respect to the assets or business of the Company as the Purchaser may from time to time reasonably request.

The Company shall provide the Purchaser and its Representatives access to the Company Data Room.

Investigations made by or on behalf of a Party, whether under this Section 4.4 or otherwise, will not waive, diminish the scope of, or otherwise affect any representation or warranty made by the other Party in this Agreement, unless such Party had knowledge that such representation and warranty was not true and correct.

Without limiting the generality of the provisions of the Confidentiality Agreement, each of the Purchaser and the Company acknowledges that all information provided to it under this Section 4.4, or otherwise pursuant to this Agreement or in connection with the transactions contemplated hereby, is subject to the Confidentiality Agreement, which will remain in full force and effect in accordance with its terms notwithstanding any other provision of this Agreement or any termination of this Agreement. If any provision of this Agreement otherwise conflicts or is inconsistent with any provision of the Confidentiality Agreement, the provisions of this Agreement will supersede those of the Confidentiality Agreement but only to the extent of the conflict or inconsistency and all other provisions of the Confidentiality Agreement will remain in full force and effect.

The Company agrees that, upon written request of the Purchaser delivered after exercise or deemed exercise of the Purchaser Call Option, and at the Purchaser’s sole expense, the Company shall: (i) effect such reorganizations of its corporate structure, capital structure, business, operations and assets or such other transactions as the Purchaser may request, acting reasonably (each a “Pre-Acquisition Reorganization”), and (ii) cooperate with the Purchaser and its advisors to determine the nature of the Pre-Acquisition Reorganizations that might be undertaken and the manner in which they would most effectively be undertaken.

Neither the Company nor its affiliates will be obligated to participate in any Pre-Acquisition Reorganization under Section 4.5(1) unless such Pre-Acquisition Reorganization:

The Purchaser must provide written notice to the Company of any proposed Pre-Acquisition Reorganization at least 30 days prior to the Acquisition Date. Upon receipt of such notice, if the conditions in Section 4.5(2) are satisfied the Company and the Purchaser shall work cooperatively and use commercially reasonable efforts to prepare prior to the Acquisition Effective Time all documentation necessary and do such other acts and things as are necessary to give effect to such Pre-Acquisition Reorganization, including any amendment to this Agreement or the Plan of Arrangement and shall seek to have any such Pre-Acquisition Reorganization made effective as of the last moment of the Business Day ending immediately prior to the Acquisition Date (but after the Purchaser has confirmed in writing that all of the conditions set out in Section 6.1 and Section 6.2 have been satisfied, or waived those conditions set forth in Section 6.1 and Section 6.2 which it has not confirmed in writing have been satisfied, and that it is prepared to promptly without condition proceed to effect the Acquisition).

The Purchaser agrees that it will be solely responsible for all costs and expenses (including professional fees and expenses) associated with any Pre-Acquisition Reorganization to be carried out at its request and that any Pre-Acquisition

Reorganization will not be considered in determining whether a representation, warranty or covenant of the Company under this Agreement has been breached (including where any such Pre-Acquisition Reorganization requires the consent of any third party under a Contract) or if a condition for the benefit of the Purchaser has been satisfied.

The Purchaser shall indemnify the Company, its affiliates and Subsidiaries and their respective officers, directors and employees (to the extent that such Persons are assessed with statutory liability thereto) for all direct and indirect costs or losses, liabilities, damages, claims, costs, expenses, interest awards, judgments and penalties, including any material adverse Tax consequences, out-of-pocket costs and expenses, including out-of-pocket legal fees and disbursements, suffered or incurred by any of them in connection with or as a result of any Pre-Acquisition Reorganization or the unwinding of any Pre-Acquisition Reorganization.

The Purchaser covenants and agrees that, during the period from the date of this Agreement until the earlier of the Acquisition Effective Time and the time that this Agreement is terminated in accordance with its terms, except with the prior written consent of the Company, it shall not, and shall not permit any of its Subsidiaries, to operate within the United States in violation of applicable Laws as they apply to marijuana unless and until the Purchaser has waived the Triggering Event Date in accordance with the Plan of Arrangement and delivered the Purchaser Call Option Exercise Notice to the Depositary. For the purposes of this provision, the Parties agree that activities involving cannabinoids derived from hemp (hemp as defined in U.S. federal law) shall not trigger this section, nor shall licensing arrangements related to use of product-based intellectual property such as vape-filling or beverage-based IP. The Company acknowledges that (a) any U.S. hemp operations conducted by the Purchaser or its Subsidiaries; and (b) lack of regulation, shall each be deemed to be in compliance with applicable Laws.

The Purchaser covenants and agrees that, during the period from the date of this Agreement until the earlier of the Acquisition Effective Time and the time that this Agreement is terminated in accordance with its terms, except with the prior written consent of the Company, it shall not, and shall not permit any of its Subsidiaries, to conditionally acquire, whether on terms and conditions similar to the Arrangement or otherwise, any other Person with operations in more than one state of the United States unless the operations of such Person are in material compliance with applicable Laws, as determined by the Purchaser, acting reasonably (including, for greater certainty, the Controlled Substances Act, 21 USC 801 et seq., as it applies to marijuana).

The Purchaser covenants and agrees that, during the period from the date of this Agreement until the earlier of the Acquisition Effective Time and the time that this Agreement is terminated in accordance with its terms, except with the prior written consent of the Company not to be unreasonably withheld or delayed, it shall not, and shall not permit any of its Subsidiaries, to directly or indirectly acquire, whether on terms and conditions similar to the Arrangement or otherwise, any other Person with operations

in a single state of the United States unless the operations of such Person are in material compliance with applicable Laws, as determined by the Purchaser, acting reasonably (including, for greater certainty, the Controlled Substances Act, 21 USC 801 et seq., as it applies to marijuana).

In the event that the Company has breached any material term of this Agreement, as determined by the Purchaser, acting reasonably, and the Company fails to cure such breach within 30 days after written notice from the Purchaser, the covenants in Section 4.6(1), Section 4.6(2) and Section 4.6(3) shall terminate.

In the event that the Purchaser has breached any material term of Section 4.6(1), Section 4.6(2) or Section 4.6(3), and the Purchaser fails to cure such breach within 30 days after written notice from the Company, the Purchaser shall remedy such breach to the satisfaction of the Company, acting reasonably.

Subject to compliance with applicable Securities Laws, immediately after the execution of this Agreement, or such later time prior to the next opening of markets in Toronto or New York as is agreed to by the Company and the Purchaser, the Company and the Purchaser shall issue a news release announcing the entering into of this Agreement, which news release shall be satisfactory in form and substance to each of the Company and the Purchaser, each acting reasonably, and, thereafter, file such news release, a corresponding material change report in prescribed form and this Agreement in accordance with applicable Securities Laws.

No Party shall issue any press release or make any other public statement or disclosure with respect to this Agreement or the Arrangement without the consent of the other Party (which consent shall not be unreasonably withheld, conditioned or delayed), and the Company must not make any filing with any Governmental Entity (except as contemplated by this Article 4) with respect to this Agreement or the Arrangement without the consent of the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed); provided that any Party that is required to make disclosure by Law shall use its commercially reasonable efforts to give the other Party prior oral or written notice (and if such prior notice is not possible, to give notice immediately following the making of any such disclosure or filing) and a reasonable opportunity to review or comment on the disclosure or filing (other than with respect to confidential information contained in such disclosure or filing). The Party making such disclosure shall give reasonable consideration to any comments made by the other Party or its counsel, and if such prior notice is not possible, shall give such notice immediately following the making of such disclosure or filing.

The Company and the Purchaser agree to cooperate in the preparation of formal presentations, if any, to any Company Shareholders or other securityholders of the Company or the analyst community regarding the Arrangement, and the Company agrees to consult with the Purchaser in connection with any formal meeting with analysts that it may have, provided, however, that the foregoing shall be subject to the Company’s

overriding obligation to make any disclosure or filing required by applicable Laws or stock exchange rules and if the Company is required to make any such disclosure, it shall use its commercially reasonable efforts to give the Purchaser a reasonable opportunity to review and comment thereon prior to its dissemination.

Each Party shall promptly notify the other Party of the occurrence, or failure to occur, of any event or state of facts which occurrence or failure would, or would be reasonably likely to:

Notification provided under this Section 4.8 will not affect the representations, warranties, covenants, agreements or obligations of the Parties (or remedies with respect thereto) or the conditions to the obligations of the Parties under this Agreement.

The Purchaser may not elect to exercise its right to terminate this Agreement pursuant to Section 7.2(1)(d)(i) or Section 7.2(1)(d)(iii) and the Company may not elect to exercise its right to terminate this Agreement pursuant to Section 7.2(1)(c)(i) or Section 7.2(1)(c)(iii), unless the Party seeking to terminate the Agreement (the “Terminating Party”) has delivered a written notice (“Termination Notice”) to the other Party (the “Breaching Party”) specifying in reasonable detail all breaches of covenants, or incorrect representations and warranties or other matters which the Terminating Party asserts as the basis for termination. After delivering a Termination Notice, provided the Breaching Party is proceeding diligently to cure such matter and such matter is capable of being cured prior to the Effective Time Outside Date (with any intentional breach being deemed to be incurable), the Terminating Party may not exercise such termination right until the earlier of (a) the Effective Time Outside Date, and (b) if such matter has not been cured by the date that is ten Business Days following receipt of such Termination Notice by the Breaching Party. If the Terminating Party delivers a Termination Notice prior to the date of the Company Meeting, unless the Parties agree otherwise, the Company shall postpone or adjourn the Company Meeting to the earlier of (a) ten Business Days prior to the Effective Time Outside Date and (b) the date that is ten Business Days following receipt of such Termination Notice by the Breaching Party.

Prior to the Acquisition Date, the Company shall purchase customary “tail” policies of directors’ and officers’ liability insurance providing protection no less favourable in the aggregate to the protection provided by the policies maintained by the Company and its Subsidiaries which are in effect immediately prior to the delivery of a Purchaser Call

Option Exercise Notice or Triggering Event Notice, as the case may be, to the Depositary, provided that such policies are not materially inconsistent with market standard protections, and providing protection in respect of claims arising from facts or events which occurred on or prior to the Acquisition Date and the Purchaser shall, or shall cause the Company and its Subsidiaries to maintain such tail policies in effect without any reduction in scope or coverage for six years from the Acquisition Date; provided that the Purchaser shall not be required to pay any amounts in respect of such coverage prior to the Acquisition Effective Time and provided further that the cost of such policies shall not exceed market standards.

The Purchaser shall, from and after the Acquisition Effective Time, honour all rights to indemnification or exculpation existing as of the date of this Agreement in favour of all present and former employees and officers and directors of the Company and its Subsidiaries to the extent that they are contained in the Constating Documents of the Company or its Subsidiaries or disclosed in Section (gg) of the Company Disclosure Letter, and acknowledges that such rights, to the extent that they are disclosed in the Company Disclosure Letter, shall survive unamended from the Acquisition Effective Time and shall continue in full force and effect in accordance with their terms for a period of not less than six years from the Acquisition Date.

This Section 4.9 shall survive the consummation of the Acquisition and is intended to be for the benefit of, and shall be enforceable by, all present and former directors and officers of the Company, its Subsidiaries and their respective heirs, executors, administrators and personal representatives (the “Indemnified Persons”) and shall be binding on the Purchaser, the Company, its Subsidiaries and their respective successors and assigns, and, for such purpose, the Company hereby confirms that it is acting as agent on behalf of the Indemnified Persons.

On and after the date of this Agreement, except as expressly provided in this Agreement, the Company and its Subsidiaries shall not, directly or indirectly, through any Representative, or otherwise, and shall not permit any such Person to:

The Company shall, and shall cause its Subsidiaries and its Representatives to, immediately cease and terminate, and cause to be terminated, any solicitation, encouragement, discussion, negotiations, or other activities commenced prior to the date of this Agreement with any Person (other than the Purchaser) with respect to any inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, an Acquisition Proposal, and in connection therewith the Company shall:

The Company represents and warrants that the Company has not waived any confidentiality, standstill or similar agreement or restriction to which the Company or any Subsidiary is a party relating to an Acquisition Proposal, and covenants and agrees that (i) the Company shall take all necessary action to enforce each confidentiality, standstill, use, business purpose or similar agreement or restriction to which the Company or any Subsidiary is a party, and (ii) neither the Company, nor any Subsidiary nor any of their respective Representatives will, without the prior written consent of the Purchaser (which consent may be withheld or delayed in the Purchaser’s sole and absolute discretion), release any Person from, or waive, amend, suspend or otherwise modify such Person’s obligations respecting the Company, or any of its Subsidiaries, under any confidentiality, standstill, use, business purpose or similar agreement or restriction to which the Company or any Subsidiary is a party, it being acknowledged and agreed that the automatic termination of any standstill provisions of any such agreement or restriction as a result of the entering into and announcement of this Agreement by the Company pursuant to the express terms of any such agreement or restriction, shall not be a violation of this Section 5.1 and that the Company shall not be prohibited from considering a Superior Proposal from a party whose obligations so terminated automatically upon the entering into and announcement of this Agreement.

If after the date of this Agreement, the Company or any of its Subsidiaries or any of their respective Representatives, receives or otherwise becomes aware of any inquiry, proposal or offer that constitutes or could reasonably be expected to constitute or lead to an Acquisition Proposal, or any request for copies of, access to, or disclosure of, confidential information relating to the Company or any Subsidiary, including but not limited to information, access, or disclosure relating to the properties, facilities, books or records of the Company or any Subsidiary, the Company: (a) shall promptly notify the Purchaser, at first orally, and then, and in any event within 24 hours in writing, of such Acquisition Proposal, inquiry, proposal, offer or request, including a description of its material terms and conditions, the identity of all Persons making the Acquisition Proposal, inquiry, proposal, offer or request, and shall provide the Purchaser with copies of any and all documents, correspondence or other material received in respect of the Acquisition Proposal, from or on behalf of any such Person and such other details of such Acquisition Proposal, inquiry, proposal, offer or request as the Purchaser may reasonably request; and (b) may contact the Person making such Acquisition Proposal, inquiry, proposal, offer or request and its Representatives solely for the purpose of clarifying the terms and conditions of such Acquisition Proposal, inquiry, proposal, offer or request so as to determine whether such Acquisition Proposal, inquiry, proposal, offer or request is, or would reasonably be expected to lead to, a Superior Proposal.

The Company shall keep the Purchaser promptly and fully informed on a current basis of the status of developments and negotiations with respect to any Acquisition Proposal, inquiry, proposal, offer or request, including any changes, modifications or other amendments to any such Acquisition Proposal, inquiry, proposal, offer or request and shall provide to the Purchaser copies of all correspondence if in writing or electronic form, and if not in writing or electronic form, a description of the material terms of such correspondence sent or communicated to the Company by or on behalf of any Person making such Acquisition Proposal, inquiry, proposal, offer or request.

If at any time, prior to obtaining the Required Company Shareholder Approval, the Company receives an unsolicited written Acquisition Proposal, the Company may engage in or participate in discussions or negotiations with such Person regarding such Acquisition Proposal and may provide copies of, access to or disclosure of confidential information, properties, facilities, books or records of the Company or its Subsidiaries, if and only if:

prior written notice stating the Company’s intention to participate in such discussions or negotiations and to provide such copies, access or disclosure;

prior to providing any such copies, access or disclosure, a true, complete and final executed copy of the Acceptable Confidentiality Agreement referred to in Section 5.1(6)(d); and

any non-public information concerning the Company and its Subsidiaries requested by and provided to such other Person which was not previously provided to the Purchaser or its Representatives.

If the Company receives an Acquisition Proposal that constitutes a Superior Proposal prior to obtaining the Required Company Shareholder Approval, the Company Board may make a Change in Recommendation and approve, recommend or enter into a definitive agreement with respect to such Superior Proposal, if and only if:

During the Matching Period, or such longer period as the Company may approve in writing for such purpose: (a) the Company Board shall review any offer made by the Purchaser under Section 5.1(7)(f) to amend the terms of this Agreement and the Arrangement in good faith in order to determine whether such proposal would, upon acceptance, result in the Acquisition Proposal previously constituting a Superior Proposal ceasing to be a Superior Proposal; and (b) the Company shall, and shall cause its Representatives to, negotiate in good faith with the Purchaser to make such amendments to the terms of this Agreement and the Arrangement as would enable the Purchaser to proceed with the transactions contemplated by this Agreement on such amended terms. The Company agrees that, subject to the Company’s disclosure obligations under applicable Securities Laws, the fact of the making of, and each of the terms of, any such proposed amendments shall be kept strictly confidential and shall not be disclosed to any Person (including without limitation, the Person having made the Superior Proposal), other than the Company’s Representatives, without the Purchaser’s prior written consent. If the Company Board determines that such Acquisition Proposal would cease to be a Superior Proposal, the Company shall promptly so advise the Purchaser and the Company and the Purchaser shall amend this Agreement to reflect such offer made by the Purchaser, and shall take and cause to be taken all such actions as are necessary to give effect to the foregoing.

Each successive amendment or modification to any Acquisition Proposal that results in an increase in, or modification of, the consideration (or value of such consideration) to be received by the Company Shareholders or other material terms or conditions thereof shall constitute a new Acquisition Proposal for the purposes of this Section 5.1, and the Purchaser shall be afforded a new five Business Day Matching Period from the date on which the Purchaser has received each of (i) the Superior Proposal Notice, and (ii) a copy of the proposed definitive agreement for the new Superior Proposal from the Company.

The Company Board shall promptly reaffirm the Company Board Recommendation by press release after any Acquisition Proposal which is not determined to be a Superior Proposal is publicly announced, or the Company Board determines that a proposed amendment to the terms of this Agreement as contemplated under Section 5.1(8) would result in an Acquisition Proposal no longer being a Superior Proposal. The Company shall provide the Purchaser and its outside legal counsel with a reasonable opportunity to

If the Company provides a Superior Proposal Notice to the Purchaser after a date that is less than ten Business Days before the Company Meeting, the Company shall either proceed with or shall postpone or adjourn the Company Meeting, as directed by the Purchaser acting reasonably, to a date that is not more than ten Business Days after the scheduled date of the Company Meeting, but in any event to a date that is not less than five Business Days prior to the Effective Time Outside Date.

Nothing contained in this Section 5.1 shall limit in any way the obligation of the Company to convene and hold the Company Meeting in accordance with Section 2.3 of this Agreement while this Agreement remains in force.

Nothing contained in this Agreement shall prevent the Company Board from complying with Section 2.17 of National Instrument 62-104 – Takeover Bids and Issuer Bids and similar provisions under Securities Laws relating to the provision of a directors’ circular in respect of an Acquisition Proposal that is not a Superior Proposal.

Without limiting the generality of the foregoing, the Company shall advise its Subsidiaries and their respective Representatives of the prohibitions set out in this Article 5 and any violation of the restrictions set forth in this Section 5.1 by the Company, its Subsidiaries or their respective Representatives shall be deemed to be a breach of this Section 5.1 by the Company.

The Parties shall not be required to file, and shall not file, the Arrangement Filings giving effect to the Arrangement unless each of the following conditions is satisfied or waived, which conditions may only be waived, in whole or in part, by the mutual consent of each of the Parties:

The Company shall not file, and the Purchaser shall not be required to file, the Arrangement Filings giving effect to the Arrangement unless each of the following conditions is satisfied or waived, which conditions are for the exclusive benefit of the Purchaser, and may only be waived, in whole or in part, by the Purchaser in its sole discretion:

cease trade, enjoin, prohibit, or impose any limitations, damages or conditions on, the Purchaser’s ability to acquire, hold, or exercise full rights of ownership over, any Company Shares, including the right to vote the Company Shares, with the exception of prohibitions or restrictions contained in the Controlled Substances Act, 21 USC 801 et seq., as it applies to marijuana;

prohibit or restrict the Arrangement, or the ownership or operation by the Purchaser or its Subsidiaries of a material portion of the business or assets of the Purchaser and its Subsidiaries, the Company or any of its Subsidiaries, or compel the Purchaser or its Subsidiaries to dispose of or hold separate any material portion of the business or assets of the Purchaser and its Subsidiaries or the Company and its Subsidiaries as a result of the Arrangement or the transactions contemplated by this Agreement, with the exception of prohibitions or restrictions contained in the Controlled Substances Act, 21 USC 801 et seq., as it applies to marijuana; or

prevent or materially delay the consummation of the Arrangement, or if the Arrangement is consummated, have a Company Material Adverse Effect or a Purchaser Material Adverse Effect.

Following the Effective Date, the Purchaser shall be required to exercise the Purchaser Call Option after the Triggering Event Date and complete the Acquisition unless any of the following conditions (the “Purchaser Acquisition Closing Conditions”) is not satisfied or waived, which conditions are for the exclusive benefit of the Purchaser, and may only be waived, in whole or in part, by the Purchaser in its sole discretion:

If at any time between the Effective Time and the Acquisition Effective Time the Purchaser becomes aware of the occurrence, or failure to occur, of any event or state of facts which occurrence or failure results in the failure of the ability of the Company to satisfy any condition set forth in Section 6.2(2), the Purchaser must promptly notify the Company of such occurrence, or failure to occur in accordance with Section 4.8, which notification must specify in reasonable detail such event or state of facts.

The Company shall not be required to file, and the Purchaser shall not file, the Arrangement Filings giving effect to the Arrangement unless each of the following conditions are satisfied or waived, which conditions are for the exclusive benefit of the Company and may only be waived, in whole or in part, by the Company in its sole discretion:

Following the Effective Date, neither the Company nor the Company Shareholders shall be required to complete the Acquisition unless each of the following conditions (the “Company Acquisition Closing Conditions”) is satisfied or waived, which conditions are for the exclusive benefit of the Company and may only be waived, in whole or in part, by the Company in its sole discretion:

If at any time between the Effective Time and the Acquisition Effective Time the Company becomes aware of the occurrence, or failure to occur, of any event or state of facts which occurrence or failure results in the failure of the ability of the Purchaser to satisfy any condition set forth in Section 6.3(2), the Company must promptly notify the Purchaser of such occurrence, or failure to occur in accordance with Section 4.8, which notification must specify in reasonable detail such event or state of facts.

This Agreement may be terminated prior to the Effective Time by:

the mutual written agreement of the Parties; or

either the Company or the Purchaser:

if the Required Company Shareholder Approval is not obtained at the Company Meeting in accordance with the Interim Order, provided that a Party may not terminate this Agreement pursuant to this Section 7.2(1)(b)(i) if the failure to obtain the Required Company Shareholder Approval has been caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such Party to perform any of its covenants or agreements under this Agreement;

if the Required Purchaser Shareholder Approval is not obtained at the Purchaser Meeting in accordance with applicable Law, provided that a Party may not terminate this Agreement pursuant to this Section 7.2(1)(b)(ii) if the failure to obtain the Required Purchaser Shareholder Approval has been caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such Party to perform any of its covenants or agreements under this Agreement;

if, after the date of this Agreement, any Law is enacted, made, enforced or amended, as applicable, that makes the consummation of the Arrangement illegal or otherwise permanently prohibits or enjoins the Company or the Purchaser from consummating the Arrangement, and such Law has, if applicable, become final and non-appealable, provided the Party seeking to terminate this Agreement pursuant to this Section 7.2(1)(b)(iii) has used its commercially reasonable efforts to, as applicable, appeal, overturn or otherwise render such Law or otherwise have it lifted or rendered non-applicable in respect of the Arrangement; or

if the Effective Time does not occur on or prior to the Effective Time Outside Date, provided that a Party may not terminate this Agreement pursuant to this Section 7.2(1)(b)(iv) if the failure of the Effective Time to so occur has been caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such Party to perform any of its covenants or agreements under this Agreement;

the Company if:

a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Purchaser under this Agreement occurs that would cause any condition in Section 6.3(1) or Section 6.3(1)(b) not to be satisfied, and such breach or failure is incapable of being cured or is not cured on or prior to the Effective Time Outside Date in accordance with the terms of Section 4.8(3); provided that the Company is not then in breach of this Agreement so as to directly or indirectly cause any condition in Section 6.2(2)(a) or Section 6.2(1)(a) not to be satisfied;

the Company Board approves and authorizes the Company to enter into a binding written agreement with respect to a Superior Proposal (other than an Acceptable Confidentiality Agreement permitted by Section 5.1(6)(d)), subject to compliance with Section 5.1(7) in all material respects and provided, however, that no termination under this Section 7.2(1)(c)(ii) shall be effective unless and until the Company shall have paid to the Purchaser the amount required to be paid pursuant to Section 8.2(2)(b); or

since the date of this Agreement, there has occurred and is continuing a Purchaser Material Adverse Effect;

the Purchaser if:

a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company under this Agreement occurs that would cause any condition in Section 6.2(2)(a) or Section 6.2(1)(a) not to be satisfied, and such breach or failure is incapable of being cured on or prior to the Effective Time Outside Date or is not cured in accordance with the terms of Section 4.8(3); provided that the Purchaser is not then in breach of this Agreement so as to directly or indirectly cause any condition in Section 6.3(1) (Purchaser Representations and Warranties Condition) or Section 6.3(1)(b) (Purchaser Covenants Condition) not to be satisfied;

the Company Board or any committee of the Company Board (A) fails to unanimously recommend or withdraws, amends, modifies or qualifies, or publicly proposes or states an intention to withdraw, amend, modify or qualify, the Board Recommendation, (B) accepts, approves, endorses or recommends, or publicly proposes to accept, approve, endorse or recommend or takes no position or a neutral position, in each case with respect to a publicly announced, or otherwise publicly disclosed, Acquisition Proposal for more than five Business Days, (C) accepts, approves, endorses, recommends or executes or enters into (other than an

Acceptable Confidentiality Agreement permitted by and in accordance with Section 5.1) or publicly proposes to accept, approve, endorse, recommend or execute or enter into any agreement, letter of intent, understanding or arrangement relating to an Acquisition Proposal or any proposal or offer that could reasonably be expected to lead to an Acquisition Proposal, or (D) the Company or the Company Board publicly proposed or announces its intention to do any of the foregoing, (collectively, a “Change in Recommendation”); or

since the date of this Agreement, there has occurred and is continuing a Company Material Adverse Effect.

This Agreement may be terminated between the Effective Time and the Acquisition Effective Time by the mutual written agreement of the Parties.

The Party desiring to terminate this Agreement pursuant to this Section 7.2 (other than pursuant to Section 7.2(1)(a)) shall give written notice of such termination to the other Party, specifying in reasonable detail the basis for such Party’s exercise of its termination right.

For the purposes of this Agreement, “Termination Fee” means US$150,000,000.

“Termination Fee Event” means the termination of this Agreement:

prior to such termination, an Acquisition Proposal is publicly announced or otherwise publicly disclosed by any Person (other than the Purchaser or any of its affiliates) or any Person (other than the Purchaser or any of its affiliates) shall have publicly announced an intention to make an Acquisition Proposal; and

within 12 months following the date of such termination, (A) an Acquisition Proposal (whether or not such Acquisition Proposal is the same Acquisition Proposal referred to in clause (i) above) is consummated by the Company, or (B) the Company or one or more of its Subsidiaries, directly or indirectly, in one or more transactions, enters into a definitive agreement in respect of an Acquisition Proposal and such Acquisition Proposal is later consummated (whether or not within 12 months after such termination).

The Termination Fee shall be paid by the Company to the Purchaser as follows, by wire transfer of immediately available funds to an account designated by the Purchaser, if a Termination Fee Event occurs due to:

Each of the Parties acknowledges that the agreements contained in this Section 8.2 are an integral part of the transactions contemplated by this Agreement, and that without these agreements the Parties would not enter into this Agreement, and that the amounts set out in this Section 8.2 represent liquidated damages which are a genuine pre-estimate of the damages, including opportunity costs, which the Parties will suffer or incur as a result of the event giving rise to such damages and resultant termination of this Agreement, and is not a penalty. Each of the Parties irrevocably waives any right it may have to raise as a defence that any such liquidated damages are excessive or punitive.

Subject to Section 7.3, the Purchaser hereby expressly acknowledges and agrees that, upon any termination of this Agreement under circumstances where the Purchaser is entitled to the Termination Fee and such Termination Fee is paid in full within the prescribed time period, the Purchaser shall be precluded from any other remedy against the Company or its Subsidiaries and shall not seek to obtain any recovery, judgment or damages of any kind against the Company or its Subsidiaries in connection with this Agreement.

Subject to this Section 8.3, all out-of-pocket third party transaction expenses incurred in connection with this Agreement and the Plan of Arrangement and the transactions contemplated hereunder and thereunder, including all costs, expenses and fees of the Company incurred prior to or after the Effective Time in connection with, or incidental to, the Plan of Arrangement, shall be paid by the Party incurring such expenses, whether or not the Arrangement is consummated.

If this Agreement is terminated by the Company pursuant to Section 7.2(1)(c)(i), then the Purchaser shall, within two Business Days of such termination, pay or cause to be paid to the Company by wire transfer of immediately available funds, the Expense Reimbursement Fee.

If this Agreement is terminated by the Purchaser pursuant to Section 7.2(d)(i), then the Company shall, within two Business Days of such termination, pay or cause to be paid to the Purchaser by wire of immediately available funds, the Expense Reimbursement Fee.

If this Agreement is terminated by either Party pursuant to Section 7.2(1)(b)(ii), then the Purchaser shall, within two (2) Business Days of such termination, pay or cause to be

The payment of the Expense Reimbursement Fee pursuant to this Section 8.3 shall not preclude the Company, or the Purchaser, as applicable, from seeking damages and pursuing any and all other remedies that it may have in respect of losses incurred or suffered by it as a result of breach by the Company or the Purchaser, as applicable, of any representation or warranty, or failure by the Company or the Purchaser, as applicable, to perform any covenant or satisfy any condition.

The Company confirms that other than the fees disclosed in Section (ff) of the Company Disclosure Letter, no broker, finder or investment banker is or will be entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement.

Except as provided in Section 4.9 which, without limiting its terms, is intended as stipulations for the benefit of the Indemnified Persons, the Company and the Purchaser intend that this Agreement will not benefit or create any right or cause of action in favour of any Person, other than the Parties and that no Person, other than the Parties, shall be entitled to rely on the provisions of this Agreement in any action, suit, proceeding, hearing or other forum.

Despite the foregoing, the Purchaser acknowledges to each of the Indemnified Persons their direct rights against it under Section 4.9 of this Agreement, which are intended for the benefit of, and shall be enforceable by, each Indemnified Person, his or her heirs and his or her legal representatives, and for such purpose, the Company confirms that it is acting as agent on their behalf, and agrees to enforce such provisions on their behalf. The Parties reserve their right to vary or rescind such rights by mutual agreement at any time and in any way whatsoever, without notice to or consent of any Person, including any Indemnified Person.

This Agreement becomes effective only when executed by the Company and the Purchaser. After that time, it will be binding upon and enure to the benefit of the Company, the Purchaser and their respective successors and permitted assigns.

Neither this Agreement nor any of the rights or obligations under this Agreement are assignable or transferable by any Party without the prior written consent of the other Party.

This Agreement will be governed by and interpreted and enforced in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein.

Each Party irrevocably attorns and submits to the non-exclusive jurisdiction of the British Columbia courts situated in the City of Vancouver and waives objection to the venue of any proceeding in such court or that such court provides an inconvenient forum.

if the exercise of the Purchaser Call Option or Triggering Event Date has occurred prior to the Purchaser Call Option Expiry Date and the reason the Acquisition Date has not occurred prior to the Acquisition Closing Outside Date is because all of the Regulatory Approvals included in the Acquisition Closing Conditions (which, for certainty, does not include those Regulatory Approvals, the failure of which to obtain would not reasonably be expected to have a Company Material Adverse Effect (as defined in the Arrangement Agreement)) have not been satisfied or waived and, at such Acquisition Closing Outside Date, the Party responsible for obtaining such outstanding Regulatory Approvals is continuing to use good faith reasonable commercial efforts to obtain such Regulatory Approvals and there is a reasonable prospect that such Regulatory Approvals will be received, then the Acquisition Closing Outside Date shall automatically be extended to the date that is two Business Days following the date all such outstanding Regulatory Approvals are received or waived; or

if the exercise of the Purchaser Call Option or Triggering Event Date has occurred prior to the Purchaser Call Option Expiry Date and the reason the Acquisition Date has not occurred prior to the Acquisition Closing Outside Date is because all of the Purchaser Acquisition Closing Conditions included in the Acquisition Closing Conditions have not been satisfied or waived, then the Acquisition Closing Outside Date shall automatically be extended to the date that is the earliest of (i) two Business Days following the date all such outstanding Purchaser Acquisition Closing Conditions are satisfied or waived, or (ii) the date

on which the Purchaser, acting reasonably, determines that there is no longer a reasonable prospect that such outstanding Purchaser Acquisition Closing Conditions will be satisfied or waived.

for each Company Subordinate Voting Share in respect of which a Purchaser Call Option is granted pursuant to Section 3.1(b), the Option Premium;

for each Company Proportionate Voting Share in respect of which a Purchaser Call Option is granted pursuant to Section 3.1(b), the Option Premium multiplied by 40;

for each Company Multiple Voting Share in respect of which a Purchaser Call Option is granted pursuant to Section 3.1(b), the Option Premium;

for each Company Subordinate Voting Share which may be obtained upon exchange of Common Membership Units by Effective Time High Street Holders, the Option Premium; and

for each Company Subordinate Voting Share which may be obtained upon exchange of USCo2 Class B Shares by Effective Time USCo2 Class B holders, the Option Premium.

Headings, etc. The division of this Plan of Arrangement into Articles and Sections and the insertion of headings are for convenient reference only and do not affect the construction or interpretation of this Plan of Arrangement.

Currency. All references to dollars or to “$” are references to United States dollars.

Gender and Number. Any reference to gender includes all genders. Words importing the singular number only include the plural and vice versa.

Certain Phrases, etc. The words “including”, “includes” and “include” mean “including (or includes or include) without limitation,” and “the aggregate of”, “the total of”, “the sum of”, or a phrase of similar meaning means “the aggregate (or total or sum), without duplication, of.”

Statutes. Any reference to a statute refers to such statute and all rules and regulations made under it, as it or they may have been or may from time to time be amended or re-enacted, unless stated otherwise.

Computation of Time. A period of time is to be computed as beginning on the day following the event that began the period and ending at 4:30 p.m. on the last day of the period, if the last day of the period is a Business Day, or at 4:30 p.m. on the next Business Day if the last day of the period is not a Business Day. If the date on which any action is required or permitted to be taken under this Plan of Arrangement by a Person is not a Business Day, such action shall be required or permitted to be taken on the next succeeding day which is a Business Day.

Time References. References to time are to local time, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, unless otherwise indicated.

each Company Share held by a Dissenting Company Shareholder shall be, and shall be deemed to be, transferred to the Purchaser by the holder thereof, free and

clear of all Liens, and thereupon each Dissenting Company Shareholder shall cease to have any rights as a holder of such Company Shares other than a claim against the Purchaser in an amount determined and payable in accordance with Article 4 and the name of such Dissenting Company Shareholder shall be removed from the central securities register for the Company Shares;

each Effective Time Company Shareholder shall grant, and shall be deemed to have granted, to the Purchaser a Purchaser Call Option in respect of (i) each Company Share held by such Effective Time Company Shareholder at the Effective Time, (ii) all Company Shares into which any Company Share referred to in (i) of this Section 3.1(b) may be converted in accordance with the rights and restrictions attached to such Company Share in the Company’s notice of articles and articles, and (iii) all Company Shares for which any Company Share referred to in (i) of this Section 3.1(b) may be exchanged pursuant to Section 3.1(h)(i) or Section 3.1(h)(iii);

in consideration for the grant of the Purchaser Call Options by the Effective Time Company Shareholders to the Purchaser pursuant to Section 3.1(b), the Purchaser shall, concurrently with the grant of such Purchaser Call Options, pay to each Effective Time Company Shareholder the Per Share Option Premium in respect of each Company Share held by such Effective Time Company Shareholder at the Effective Time;

each Person (other than the Purchaser or any affiliate of the Purchaser) who, at any time after the Effective Time and prior to the earlier of the Acquisition Effective Time and the Acquisition Closing Outside Date, acquires a Company Share from the Company (other than a Company Share in respect of which the Person has already granted to the Purchaser a Purchaser Call Option pursuant to Section 3.1(b)) or from any other Person, shall, concurrently with the acquisition of such Company Share, grant and shall be deemed to have granted to the Purchaser a Purchaser Call Option in respect of (i) such Company Share, (ii) all Company Shares into which such Company Share may be converted in accordance with the rights and restrictions attached to such Company Share in the Company’s Notice of Articles and Articles, and (iii) all Company Shares for which any Company Share referred to in (i) of this Section 3.1(d) may be exchanged pursuant to Section 3.1(h)(i) or Section 3.1(h)(iii); provided, that the Purchaser shall not be required to pay, nor shall such Person be entitled to receive from the Purchaser or from any Effective Time Company Shareholder, any payment on account of, as compensation for, or in relation to, the Option Premium in respect of any Purchaser Call Option granted pursuant to this Section 3.1(d);

the Notice of Articles and Articles of the Company, as applicable, shall be altered to:

alter the rights and restrictions of the existing classes of Company Subordinate Voting Shares, Company Proportionate Voting Shares and Company Multiple Voting Shares and

to provide for the special rights and restrictions attaching to the Company Subordinate Voting Shares, Company Proportionate Voting Shares and Company Multiple Voting Shares, respectively, set out in the attached Exhibit A, which special rights and restrictions shall specifically refer to and include the Purchaser Call Option granted pursuant to this Plan of Arrangement; and

in connection with the foregoing, Articles 26, 27 and 28 of the existing articles of the Company shall be deleted in their entirety and replaced with Articles 26, 27 and 28 as set out in the attached Exhibit A;

upon the Triggering Event Date prior to the Purchaser Call Option Expiry Date, the Purchaser shall, in accordance with the terms and conditions of the Purchaser Call Option, exercise, and shall be deemed to have exercised, effective at the end of the Triggering Event Date, the Purchaser Call Option with respect to all (but not less than all) of the Purchaser Call Option Shares;

upon the exercise or deemed exercise of the Purchaser Call Option by the Purchaser prior to the Purchaser Call Option Expiry Date, the Purchaser shall, in accordance with the terms and conditions of the Purchaser Call Option, acquire from each Call Option Grantor, and each Call Option Grantor shall be required to transfer to the Purchaser, all of the Purchaser Call Option Shares that are held by such Call Option Grantor on the Acquisition Date immediately following the exchange referred to in Section 3.1(h)(iii) (which, for the avoidance of doubt, shall include any Company Subordinate Voting Shares received by such Call Option Grantor upon the exchange in Section 3.1(h)(i)), which acquisition and transfer shall occur on the Acquisition Date in accordance with Section 3.1(h)(v) or Section 3.1(h)(vii)(F), as applicable;

on the Acquisition Date, each of the transactions or events set out below in this Section 3.1(h) shall occur, and shall be deemed to occur, in the following sequence, in each case without any further authorization, act or formality on the part of any Person, effective as at two minute intervals starting at the Acquisition Effective Time:

each Company Proportionate Voting Share outstanding immediately prior to the Acquisition Effective Time shall be exchanged with the Company for that number of Company Subordinate Voting Shares equal to the PVS Conversion Ratio in effect immediately prior to the Acquisition Effective Time, and upon such exchange:

each such exchanged Company Proportionate Voting Share shall be cancelled, and the holders of such exchanged Company Proportionate Voting Shares shall be removed from the Company’s securities register for the Company Proportionate Voting Shares; and

each holder of such exchanged Company Proportionate Voting Shares shall be entered in the Company’s securities register for the Company Subordinate Voting Shares in respect of the Company Subordinate Voting Shares issued to such holder pursuant to this Section 3.1(h)(i);

concurrently with the exchange of Company Proportionate Voting Shares pursuant to Section 3.1(h)(i), the capital of the Company Proportionate Voting Shares shall be reduced to nil, and there shall be added to the capital of the Company Subordinate Voting Shares, in respect of the Company Subordinate Voting Shares issued pursuant to Section 3.1(h)(i), an amount equal to the paid-up capital (within the meaning of the Tax Act) of the Company Proportionate Voting Shares immediately prior to the Acquisition Effective Time;

each Company Multiple Voting Share outstanding immediately prior to the Acquisition Effective Time shall be exchanged with the Company for one Company Subordinate Voting Share, and upon such exchange:

each such exchanged Company Multiple Voting Share shall be cancelled, and the holders of such exchanged Company Multiple Voting Shares shall be removed from the Company’s central securities register for the Company Multiple Voting Shares; and

each holder of such exchanged Company Multiple Voting Shares shall be entered in the Company’s securities register for the Company Subordinate Voting Shares in respect of the Company Subordinate Voting Shares issued to such holder pursuant to this Section 3.1(h)(iii);

concurrently with the exchange of Company Multiple Voting Shares pursuant to Section 3.1(h)(iii), the capital of the Company Multiple Voting Shares shall be reduced to nil, and there shall be added to the capital of the Company Subordinate Voting Shares, in respect of the Company Subordinate Voting Shares issued pursuant to Section 3.1(h)(iii), an amount equal to the paid-up capital (within the meaning of the Tax Act) of the Company Multiple Voting Shares immediately prior to the Acquisition Effective Time;

in accordance with the terms of the Purchaser Call Option, each Company Subordinate Voting Share held by a Company Canadian Shareholder immediately following the exchange in Section 3.1(h)(iii) (which, for the avoidance of doubt, shall include any Company Subordinate Voting Shares received by such Call Option Grantor upon the exchange in Section 3.1(h)(i)) shall be transferred, and shall be deemed to be transferred, by the holder thereof to the Purchaser for the Purchaser Share Consideration (or, in the event a Purchaser Change of Control shall have occurred prior

to the Acquisition Date, the Per Share Consideration), which Purchaser Share Consideration or Per Share Consideration, as applicable, shall be paid in accordance with the provisions of Article 5, and upon such transfer:

each such former holder of such transferred Company Subordinate Voting Shares shall be removed from the Company’s securities register for the Company Subordinate Voting Shares;

the Purchaser shall be entered in the Company’s central securities register for the Company Subordinate Voting Shares as the legal owner of such transferred Company Subordinate Voting Shares; and

each such former holder of such transferred Company Subordinate Voting Shares shall, subject to Section 5.1, be entered in the Purchaser’s securities register for the Purchaser Shares in respect of the Consideration Shares issued to such holder pursuant to this Section 3.1(h)(v), or, to the extent applicable, in the securities register of the issuer of any Alternate Consideration that such former holder of Company Subordinate Voting Shares is entitled to receive in lieu of the Consideration Shares;

each Eligible Company Canadian Shareholder shall be entitled to make a tax election, pursuant to subsection 85(1) or 85(2) of the Tax Act, as applicable (and the analogous provisions of provincial income tax law). The Purchaser shall make available on the Purchaser’s website tax election forms required under the Tax Act within 60 days of the Acquisition Date. Any Eligible Company Canadian Shareholder who wants to make such election and otherwise qualifies to make such election may do so by providing to the Purchaser two signed copies of the necessary election forms within 120 days following the Acquisition Date, duly completed with the details of the number of Company Subordinate Voting Shares transferred and the applicable agreed amount or amounts for the purposes of such election. Thereafter, subject to the election forms complying with the provisions of the Tax Act (or applicable provincial or territorial income tax law), the forms will be signed by the Purchaser and returned to such Eligible Company Canadian Shareholder by ordinary mail within 30 days after the receipt thereof by the Purchaser for filing with the Canada Revenue Agency (or the applicable provincial or territorial taxing authority). The Purchaser will not be responsible for the proper completion of any election form and, except for the obligation of the Purchaser to so sign and return duly completed election forms which are received by the Purchaser within 120 days following the Acquisition Date. The Purchaser will not be responsible for any taxes, interest or penalties resulting from the failure by an Eligible Company Canadian Shareholder to properly complete or file the election forms in the form and manner and

within the time prescribed by the Tax Act (or any applicable provincial or territorial legislation). In its sole discretion, the Purchaser may choose to sign and return an election form received by it more than 120 days following the Acquisition Date, but the Purchaser will have no obligation to do so;

Purchaser Subco shall merge with and into the Company (the “Merger”) and be one corporate entity with the same effect as if they had amalgamated under Section 269 of the BCBCA, except that the legal existence of the Company shall not cease and the Company shall survive the Merger (the Company, as such surviving entity (“Mergeco”), notwithstanding the issue by the Registrar of a certificate of amalgamation and the assignment of a new incorporation number to Mergeco. The Merger, together with the transactions described in this Section 3.1(h)(i) through (h)(x) is intended to qualify as a reorganization within the meaning of sections 368(a)(1)(A) and 368(a)(2)(E) of the U.S. Tax Code for all United States federal income tax purposes, and the Amalgamation is intended to qualify as an amalgamation as defined in subsection 87(9) of the Tax Act, and upon the Merger becoming effective:

without limiting the generality of the foregoing, the Company shall survive the Merger as Mergeco;

the properties, rights and interests and obligations of the Company shall continue to be the properties, rights and interests and obligations of Mergeco, and the Merger shall not constitute an assignment by operation of law, a transfer or any other disposition of the property, rights and interests of the Company to Mergeco;

the separate legal existence of Purchaser Subco shall cease without Purchaser Subco being liquidated or wound up, and the property, rights and interests and obligations of Purchaser Subco shall become the property, rights and interests and obligations of Mergeco;

Mergeco shall continue to be liable for the obligations of each of the Company and Purchaser Subco;

the Notice of Articles and Articles of Mergeco shall be the same as the Notice of Articles and Articles of the Company, as altered in accordance with Section 3.1(e);

each Company Subordinate Voting Share held by a Company Non-Canadian Shareholder immediately following the exchange in Section 3.1(h)(iii) (which, for the avoidance of doubt, shall include any Company Subordinate Voting Shares received by such Call Option Grantor upon the exchange in Section 3.1(h)(i)) shall, in

accordance with the Purchaser Call Option, be transferred, and shall be deemed to be transferred, by the holder thereof to the Purchaser for the Purchaser Share Consideration (or, in the event a Purchaser Change of Control shall have occurred prior to the Acquisition Date, the Per Share Consideration), which Purchaser Share Consideration or Per Share Consideration, as applicable, shall be paid in accordance with the provisions of Article 5, and each such former holder shall be deemed to have executed and delivered all consents, releases, assignments and waivers, statutory or otherwise, required to transfer such Company Subordinate Voting Shares in accordance with this Section 3.1(h)(vii)(F), and upon such transfer:

each such former holder of such transferred Company Subordinate Voting Shares shall be removed from the Company’s central securities register for the Company Subordinate Voting Shares;

the Purchaser shall be entered in Mergeco’s central securities register for the Mergeco Subordinate Voting Shares as the legal owner of such transferred Company Subordinate Voting Shares; and

each such former holder of such transferred Company Subordinate Voting Shares shall, subject to Section 5.1, be entered in the Purchaser’s securities register for the Purchaser Shares in respect of the Consideration Shares issued to such holder pursuant to this Section 3.1(h)(vii)(F), or, to the extent applicable, in the securities register of the issuer of any Alternate Consideration that such former holder of Company Subordinate Voting Shares is entitled to receive in lieu of the Consideration Shares;

each Purchaser Subco Share outstanding immediately prior to the Merger shall be exchanged for Mergeco Subordinate Voting Shares on the basis of one Mergeco Subordinate Voting Share for each Purchaser Subco Share;

in consideration for the Purchaser issuing Consideration Shares to the Company Non-Canadian Shareholders in accordance with Section 3.1(h)(vii)(F), Mergeco shall issue to the Purchaser one Mergeco Subordinate Voting Share for each Purchaser Share issued by the Purchaser to the Company Non-Canadian Shareholders pursuant to Section 3.1(h)(vii)(F);

the board of directors of Mergeco shall be comprised of a minimum of one and a maximum of 10 directors; and

the amount added to the capital of the Purchaser Shares in respect of the Consideration Shares issued to Company Non-Canadian Shareholders pursuant to Section 3.1(h)(vii)(F) shall be equal to the product obtained when (I) the paid-up capital (within the meaning of the Tax Act) of the Company Subordinate Voting Shares immediately following the exchanges in Section 3.1(h)(i) and Section 3.1(h)(iii), is multiplied by (II) a fraction, the numerator of which is the number of Company Subordinate Voting Shares transferred pursuant to Section 3.1(h)(vii)(F), and the denominator of which is the number of Company Subordinate Voting Shares outstanding immediately following the exchanges in Section 3.1(h)(i) and Section 3.1(h)(iii);

each Company Option shall be exchanged for a Replacement Option to acquire from the Purchaser such number of Purchaser Shares as is equal to: (A) the number of Company Subordinate Voting Shares that were issuable upon exercise of such Company Option immediately prior to the Acquisition Effective Time, multiplied by (B) the Exchange Ratio in effect immediately prior to the Acquisition Effective Time (provided that if the foregoing would result in the issuance of a fraction of a Purchaser Share on any particular exercise of a Replacement Option, then the number of Purchaser Shares to otherwise be issued shall be rounded down to the nearest whole number). Such Replacement Options shall provide for an exercise price per Replacement Option (rounded up to the nearest whole cent) equal to the quotient obtained when: (i) the exercise price per Company Subordinate Voting Share that would otherwise be payable pursuant to the Company Option it replaces is divided by (ii) the Exchange Ratio in effect immediately prior to the Acquisition Effective Time, and any document evidencing a Company Option shall thereafter evidence and be deemed to evidence such Replacement Option. Except as provided herein, all terms and conditions of a Replacement Option, including the term to expiry, conditions to and manner of exercising, will be the same as the Company Option for which it was exchanged, and shall be governed by the terms of the Purchaser Equity Incentive Plan, and the exchange shall not provide any optionee with any additional benefits as compared to those under his or her original Company Option. It is intended that subsection 7(1.4) of Tax Act and Sections 1.424-1(a)(5) and 1.409A-1(b)(5)(v)(D) of the U.S. Treasury Regulations, as applicable, apply to such exchange of Company Options. Accordingly, and notwithstanding the foregoing, if required, the exercise price of a Replacement Option will be increased such that the Replacement Option In-The-Money Amount immediately after the exchange does not exceed the Company Option In-The-Money Amount of the Company Option (or a fraction thereof) exchanged for such Replacement Option immediately before the exchange and so on a share-by-share basis, the ratio of the exercise price to the fair market value of the Company Options being exchanged shall not be less favourable to the optionee than the ratio of the exercise price to the fair

market value of the Replacement Options immediately following the exchange;

each Company Compensation Option shall be exchanged for a Replacement Compensation Option to acquire from the Purchaser such number of Purchaser Shares as is equal to: (A) the number of Company Subordinate Voting Shares that were issuable upon exercise of such Company Compensation Option immediately prior to the Acquisition Effective Time, multiplied by (B) the Exchange Ratio in effect immediately prior to the Acquisition Effective Time (provided that if the foregoing would result in the issuance of a fraction of a Purchaser Share on any particular exercise of a Replacement Compensation Option, then the number of Purchaser Shares to otherwise be issued shall be rounded down to the nearest whole number). Such Replacement Compensation Option shall provide for an exercise price per Replacement Compensation Option (rounded up to the nearest whole cent) equal to the quotient obtained when: (i) the exercise price per Company Subordinate Voting Share that would otherwise be payable pursuant to the Company Compensation Option it replaces is divided by (ii) the Exchange Ratio in effect immediately prior to the Acquisition Effective Time, and any document evidencing a Company Compensation Option shall thereafter evidence and be deemed to evidence such Replacement Compensation Option. Except as provided herein, all terms and conditions of a Replacement Compensation Option, including the term to expiry, conditions to and manner of exercising, will be the same as the Company Compensation Option for which it was exchanged, and the exchange shall not provide any optionee with any additional benefits as compared to those under his or her original Company Compensation Option; and

each Company RSU shall be exchanged for a Replacement RSU to acquire from the Purchaser such number of Purchaser Shares as is equal to: (A) the number of Company Subordinate Voting Shares that were issuable upon vesting of such Company RSU immediately prior to the Acquisition Effective Time, multiplied by (B) the Exchange Ratio in effect immediately prior to the Acquisition Effective Time (provided that if the foregoing would result in the issuance of a fraction of a Purchaser Share on any particular conversion of a Replacement RSU, then the number of Purchaser Shares to otherwise be issued shall be rounded down to the nearest whole number). Such Replacement RSU shall provide for a conversion price per Replacement RSU (rounded up to the nearest whole cent) equal to the quotient obtained when: (i) the conversion price per Company Subordinate Voting Share that would otherwise be applicable pursuant to the Company RSU it replaces is divided by (ii) the Exchange Ratio in effect immediately prior to the Acquisition Effective Time, and any document evidencing a Company RSU shall thereafter evidence and be deemed to evidence such Replacement RSU. Except as provided herein, all terms and conditions of a Replacement RSU, including the term

to expiry, conditions to and manner of exercising, will be the same as the Company RSU for which it was exchanged, and the exchange shall not provide any holder with any additional benefits as compared to those under his or her original Company RSU.

are ultimately determined to be entitled to be paid fair value by the Purchaser, for the Dissenting Shares in respect of which they have exercised Dissent Rights, notwithstanding anything to the contrary contained in Section 245 of the BCBCA, will be deemed to have irrevocably transferred such Dissenting Shares to the Purchaser pursuant to Section 3.1(a) in consideration of such fair value, and in no case will the Company or the Purchaser or any other Person be required to recognize such holders as holders of Company Shares after the Effective Time, and each Dissenting Company Shareholder will cease to be entitled to the rights of a Company Shareholder in respect of the Company Shares in relation to which such Dissenting Company Shareholder has exercised Dissent Rights and the securities register of the Company will be amended to reflect that such former holder is no longer the holder of such Company Shares as at and from the Effective Time; or

are ultimately not entitled, for any reason, to be paid fair value for the Dissenting Shares in respect of which they have exercised Dissent Rights, will be deemed to have participated in the Arrangement on the same basis as a Company Shareholder who has not exercised Dissent Rights.

Following receipt of the Final Order and prior to the Effective Date, the Purchaser shall deliver, or cause to be delivered, to the Payment Agent, by wire transfer in immediately available funds, an amount sufficient to pay the

Following receipt by the Depositary of a Purchaser Call Option Exercise Notice or a Triggering Event Notice, as the case may be, and prior to the Acquisition Date, the Purchaser shall deliver, or cause to be delivered, to the Depositary a sufficient number of Purchaser Shares (or, to the extent applicable, any Alternate Consideration) to satisfy the Purchaser’s obligation to issue Consideration Shares (or, to the extent applicable, any Alternate Consideration) to Company Shareholders in accordance with Sections 3.1(h)(v) and 3.1(h)(vii)(F).

Upon surrender to the Depositary for cancellation of a certificate which immediately prior to the Acquisition Effective Time represented outstanding Company Shares, together with a duly completed and executed Letter of Transmittal and such additional documents and instruments as the Depositary may reasonably require, the holder of such surrendered certificate shall be entitled to receive in exchange therefor, and the Depositary shall deliver to such Company Shareholder(s), a certificate representing the Consideration Shares (or, to the extent applicable, securities representing any Alternate Consideration) which such holder is entitled to receive, which Consideration Shares (or, to the extent applicable, securities representing any Alternate Consideration) will be registered in such name or names and either (A) delivered to the address or addresses as such Company Shareholder directed in their Letter of Transmittal; or (B) made available for pick up at the office of the Depositary in accordance with the instructions of the Company Shareholder in the Letter of Transmittal, and any certificate representing Company Shares so surrendered shall forthwith thereafter be cancelled.

Until surrendered as contemplated by Section 5.1(c), each certificate that immediately prior to the Acquisition Effective Time represented Company Shares shall be deemed after the Acquisition Effective Time to represent only the right to receive upon such surrender the Consideration Shares (or, to the extent applicable, any Alternate Consideration) in lieu of such certificate as contemplated in Section 5.1(c), less any amounts withheld pursuant to Section 5.3. Any such certificate formerly representing Company Shares not duly surrendered on or before the sixth anniversary of the Acquisition Date shall cease to represent a claim by or interest of any former Company Shareholder of any kind or nature against or in the Company or the Purchaser. On such date, all Consideration Shares (or, to the extent applicable, securities representing any Alternate Consideration) to which such Company Shareholder was entitled shall be deemed to have been surrendered to the Purchaser and shall be paid over by the Depositary to the Purchaser or as directed by the Purchaser.

No dividends or other distributions declared or made after the Acquisition Date with respect to Purchaser Shares (or, to the extent applicable, securities

No holder of Company Shares shall be entitled to receive any consideration or entitlement with respect to such Company Shares in connection with the transactions or events contemplated by this Plan of Arrangement other than any consideration or entitlement to which such holder is entitled to receive in accordance with Section 3.1, this Section 5.1 and the other terms of this Plan of Arrangement.

The Purchaser, the Company, the Payment Agent or the Depositary shall be entitled to deduct and withhold from any amount payable to any Person under this Plan of Arrangement and the Acquisition (including, without limitation, any amounts payable pursuant to Section 4.1), such amounts as the Purchaser, the Company, the Payment Agent or the Depositary determines, acting reasonably,

are required to be deducted and withheld with respect to such payment under the Tax Act, the U.S. Tax Code or any provision of any other Law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes hereof as having been paid to the Person in respect of which such withholding was made, provided that such amounts are actually remitted to the appropriate Governmental Entity.

Not later than 10 Business Days prior to the Acquisition Date, the Purchaser shall give written notice to the Company of any deduction or withholding set forth in Section 5.3(a) that the Purchaser intends to make or that it anticipates the Payment Agent or Depositary making and afford the Company a reasonable opportunity to dispute any such deduction or withholding.

Each of the Company, the Purchaser, the Payment Agent and the Depositary is hereby authorized to sell or otherwise dispose of such portion of any Purchaser Shares payable to any Company Shareholder pursuant to this Plan of Arrangement as is necessary to provide sufficient funds to the Company, the Purchaser, the Payment Agent or the Depositary, as the case may be, to enable it to implement such deduction or withholding, and the Company, the Purchaser, the Payment Agent or the Depositary will notify the holder thereof and remit to the holder any unapplied balance of the net proceeds of such sale.

The Company and the Purchaser may amend, modify and/or supplement this Plan of Arrangement at any time and from time to time prior to the Effective Time, provided that each such amendment, modification and/or supplement must be (i) set out in writing, (ii) approved by the Purchaser and the Company (subject to the Arrangement Agreement), each acting reasonably, (iii) filed with the Court and, if made following the Company Meeting, approved by the Court, and (iv) communicated to or approved by the Company Shareholders if and as required by the Court.

Any amendment, modification or supplement to this Plan of Arrangement may be proposed by the Company or the Purchaser at any time prior to the Company Meeting and the Purchaser Meeting (provided that the Purchaser or the Company, subject to the Arrangement Agreement, have each consented in writing thereto) with or without any other prior notice or communication, and if so proposed and accepted by the Persons voting at the Company Meeting and the Purchaser Meeting, respectively (other than as may be required under the Interim Order), shall become part of this Plan of Arrangement for all purposes.

Any amendment, modification or supplement to this Plan of Arrangement that is approved or directed by the Court following the Company Meeting shall be effective only if (i) it is consented to in writing by each of the Company and the Purchaser (in each case, acting reasonably), and (ii) if required by the Court, it is consented to by some or all of the Company Shareholders voting in the manner directed by the Court.

Any amendment, modification or supplement to this Plan of Arrangement may be made following the Effective Date and prior to the Acquisition Date by the Purchaser and the Company, provided that it concerns a matter which, in the reasonable opinion of the Purchaser and the Company, is of an administrative nature required to better give effect to the implementation of this Plan of Arrangement and is not adverse to the economic interest of any Company Shareholder, High Street Holder or USCo2 Class B Shareholder.

prejudice or interfere with any right or special right attached to the Subordinate Voting Shares; or

affect the rights or special rights of the holders of Subordinate Voting Shares, Proportionate Voting Shares or Multiple Voting Shares on a per share basis as provided for herein.

“Arrangement Agreement” means the arrangement agreement made April 18, 2019 between Canopy Growth Corporation and the Company;

“Plan of Arrangement” means the plan of arrangement contemplated by the Arrangement Agreement implementing an arrangement under Section 288 of the Business Corporations Act (British Columbia) involving the Company and Canopy Growth Corporation, as such plan of arrangement may be amended from time to time in accordance with the Arrangement Agreement; and

“Purchaser Call Option” has the meaning ascribed to such term in the Plan of Arrangement containing the terms and conditions in Exhibit B to the Plan of Arrangement, a copy of which is set out in Appendix A to this Exhibit A and forms part of the rights, privileges, restrictions and conditions attached to the Subordinate Voting Shares.

prejudice or interfere with any right or special right attached to the Proportionate Voting Shares; or

affect the rights or special rights of the holders of Subordinate Voting Shares, Proportionate Voting Shares or Multiple Voting Shares on a per share basis as provided for herein.

“Arrangement Agreement” means the arrangement agreement made April 18, 2019 between Canopy Growth Corporation and the Company;

“Plan of Arrangement” means the plan of arrangement contemplated by the Arrangement Agreement implementing an arrangement under Section 288 of the Business Corporations Act (British Columbia) involving the Company and Canopy Growth Corporation, as such plan of arrangement may be amended from time to time in accordance with the Arrangement Agreement; and

“Purchaser Call Option” has the meaning ascribed to such term in the Plan of Arrangement containing the terms and conditions in Exhibit B to the Plan of Arrangement, a copy of which is set out in Appendix A to this Exhibit A and forms part of the rights, privileges, restrictions and conditions attached to the Proportionate Voting Shares.

Right to Convert Proportionate Voting Shares. Each Proportionate Voting Share shall be convertible at the option of the holder into such number of Subordinate Voting Shares as is determined by multiplying the number of Proportionate Voting Shares in respect of which the Share Conversion Right is exercised by 40. Fractions of Proportionate Voting Shares may be converted into such number of Subordinate Voting Shares as is determined by multiplying the fraction by 40.

Right to Convert Multiple Voting Shares. Each Multiple Voting Share shall be convertible at the option of the holder into such number of Subordinate Voting Shares as is determined by multiplying the number of Multiple Voting Shares in respect of which the Share Conversion Right is exercised by one. Fractions of Multiple Voting Shares may be converted into such number of Subordinated Voting Shares as is determined by multiplying the fraction by one.

Conversion Limitation. Unless already appointed, upon receipt of a Conversion Notice (as defined below), the directors (or a committee thereof) shall designate an officer of the Company who shall determine whether the Conversion Limitation set forth in this Article shall apply to the conversion referred to therein (the “Conversion Limitation Officer”).

Foreign Private Issuer Status. The Company shall use commercially reasonable efforts to maintain its status as a “foreign private issuer” (as determined in accordance with Rule 3b-4 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, the Company shall not give effect to any voluntary conversion of Proportionate Voting Shares or Multiple Voting Shares pursuant to this Article 27.8 or

otherwise, and the Share Conversion Right will not apply, to the extent that after giving effect to all permitted issuances after such conversion of Proportionate Voting Shares or Multiple Voting Shares, the aggregate number of Subordinate Voting Shares, Proportionate Voting Shares and Multiple Voting Shares (calculated on the basis that each Subordinate Voting Share, Proportionate Voting Share and Multiple Voting Share is counted once, without regard to the number of votes carried by such share) held of record, directly or indirectly, by residents of the United States (as determined in accordance with Rules 3b-4 and 12g3-2(a) under the Exchange Act (“U.S. Residents”) would exceed 40% (the “40% Threshold”) of the aggregate number of Subordinate Voting Shares, Multiple Voting Shares, Proportionate Voting Shares and Multiple Voting Shares (calculated on the same basis) issued and outstanding (the “FPI Restriction”). The directors may by resolution increase the 40% Threshold to a number not to exceed 50%, and if any such resolution is adopted, all references to the 40% Threshold herein shall refer instead to the amended percentage threshold set by the directors in such resolution.

Conversion Limitation. In order to give effect to the FPI Restriction, the number of Subordinate Voting Shares issuable to a holder of Proportionate Voting Shares or Multiple Voting Shares upon exercise by such holder of the Share Conversion Right will be subject to the 40% Threshold based on the number of Proportionate Voting Shares or Multiple Voting Shares held by such holder as of the date of issuance of Proportionate Voting Shares or Multiple Voting Shares to such holder, and thereafter at the end of each of the Company’s subsequent fiscal quarters (each, a “Determination Date”), calculated as follows:

Disputes.

Any holder of Proportionate Voting Shares or Multiple Voting Shares who beneficially owns more than 5% of the issued and outstanding Proportionate Voting Shares or Multiple Voting Shares may submit a written dispute as to the calculation of the 40% Threshold or the FPI Restriction by the Conversion Limitation Officer to the directors with the basis for the disputed calculations. The Company shall respond to the holder within five business days of receipt of the notice of such dispute with a written calculation of the 40% Threshold or the FPI Restriction, as applicable. If the holder and the Company are unable to agree upon such calculation of the 40% Threshold or the FPI Restriction, as applicable, within five business days of such response, then the Company and the holder shall, within one business day thereafter submit the disputed calculation of the 40% Threshold or the FPI Restriction to the Company’s independent auditor. The Company, at the Company’s expense, shall cause the auditor to perform the calculations in dispute and notify the Company and the holder of the results no later than five business days from the time it receives the disputed calculations. The auditor’s calculations shall be final and binding on all parties, absent demonstrable error.

In the event of a dispute as to the number of Subordinate Voting Shares issuable to a holder of Proportionate Voting Shares or Multiple Voting Shares in connection with a voluntary conversion of Proportionate Voting Shares or Multiple Voting Shares, the Company shall issue to the holder of Proportionate Voting Shares or Multiple Voting Shares the number of Subordinate Voting Shares not in dispute, and resolve such dispute in accordance with Article 27.8(f)(i).

Mechanics of Conversion. Before any holder of Proportionate Voting Shares or Multiple Voting Shares shall be entitled to voluntarily convert Proportionate Voting Shares or Multiple Voting Shares into Subordinate Voting Shares in accordance with Articles 27.8(a) or (b), the holder shall surrender the certificate or certificates representing the Proportionate Voting Shares or Multiple Voting Shares to be converted at the head office of the Company, or the office of any transfer agent for the Proportionate Voting Shares or Multiple Voting Shares, and shall give written notice to the Company at its head office of his or her election to convert such Proportionate Voting Shares or Multiple Voting Shares and shall state therein the name or names in which the certificate or certificates representing the Subordinate Voting Shares are to be issued (a “Conversion Notice”). The Company shall (or shall cause its transfer agent to) as soon as practicable thereafter, issue to such holder or his or her nominee, a certificate or certificates or direct registration statement representing the number of Subordinate Voting Shares to which such holder is entitled upon conversion. Such conversion shall be deemed to have taken place immediately prior to the close of business on the day on which the certificate or certificates representing the Proportionate Voting Shares or Multiple Voting Shares to be converted is surrendered and the Conversion Notice is delivered, and the person or persons entitled to receive the Subordinate Voting Shares issuable upon such conversion shall be treated for all purposes as the holder or holders of record of such Subordinate Voting Shares as of such date.

prejudice or interfere with any right or special right attached to the Multiple Voting Shares; or

affect the rights or special rights of the holders of Subordinate Voting Shares, Proportionate Voting Shares and Multiple Voting Shares on a per share basis as provided for herein.

“Arrangement Agreement” means the arrangement agreement made April 18, 2019 between Canopy Growth Corporation and the Company;

“Plan of Arrangement” means the plan of arrangement contemplated by the Arrangement Agreement implementing an arrangement under Section 288 of the Business Corporations Act (British Columbia) involving the Company and Canopy Growth Corporation, as such plan of arrangement may be amended from time to time in accordance with the Arrangement Agreement; and

“Purchaser Call Option” has the meaning ascribed to such term in the Plan of Arrangement containing the terms and conditions in Exhibit B to the Plan of Arrangement, a copy of which is set out in Appendix A to this Exhibit A and forms part of the rights, privileges, restrictions and conditions attached to the Multiple Voting Shares.

Following the exchange referred to in Section 3.1(h)(iii) of the Plan of Arrangement, Company Canadian Shareholders shall exchange their Company Subordinate Voting Shares for Consideration Shares (or, to the extent applicable, any Alternate Consideration) in accordance with Section 3.1(h)(v) of the Plan of Arrangement; and

Following the sale by Company Canadian Shareholders of their Company Subordinate Voting Shares to the Purchaser in accordance with Section 3.1(h)(v) of the Plan of Arrangement, Company Non-Canadian Shareholders shall exchange their Company Subordinate Voting Shares for Consideration Shares (or, to the extent applicable, any Alternate Consideration) in accordance with Section 3.1(h)(vii)(F) of the Plan of Arrangement.

Following the exchange referred to in Section 3.1(h)(iii) of the Plan of Arrangement, Company Canadian Shareholders shall exchange their Company Subordinate Voting Shares for Consideration Shares (or, to the extent applicable, any Alternate Consideration) in accordance with Section 3.1(h)(v) of the Plan of Arrangement; and

Following the sale by Company Canadian Shareholders of their Company Subordinate Voting Shares to the Purchaser in accordance with Section 3.1(h)(v) of the Plan of Arrangement, Company Non-Canadian Shareholders shall exchange their Company Subordinate Voting Shares for Consideration Shares (or, to the extent applicable, any Alternate Consideration) in accordance with Section 3.1(h)(vii)(F) of the Plan of Arrangement.

TO:

    Computershare Trust Company of Canada (the “Depositary”)

AND TO:

    Acreage Holdings, Inc. (the “Company”)

TO:

    Computershare Trust Company of Canada (the “Depositary”)

AND TO:

    Canopy Growth Corporation. (the “Purchaser”)

The arrangement (the “Arrangement”) under Section 288 of the Business Corporations Act (British Columbia) (the “BCBCA”) of Acreage Holdings, Inc. (the “Company”), as more particularly described and set forth in the management information circular (the “Circular”) dated ●, 2019 of the Company accompanying the notice of this meeting (as the Arrangement may be amended, modified or supplemented in accordance with the arrangement agreement (as it may be amended, the “Arrangement Agreement”) made as of April 18, 2019 between the Company and Canopy Growth Corporation) is hereby authorized, approved and adopted.

The plan of arrangement of the Company (as it has been or may be amended, modified or supplemented in accordance with its terms and the Arrangement Agreement, the “Plan of Arrangement”), the full text of which is set out in Appendix ● to the Circular, is hereby authorized, approved and adopted.

The (i) Arrangement Agreement and related transactions, (ii) actions of the directors of the Company in approving the Arrangement Agreement, and (iii) actions of the directors and officers of the Company in executing and delivering the Arrangement Agreement, and any amendments, modifications or supplements thereto, are hereby ratified and approved.

The Company is hereby authorized to apply for a final order from the Supreme Court of British Columbia to approve the Arrangement on the terms set forth in the Arrangement Agreement and the Plan of Arrangement (as they may be amended, modified or supplemented and as described in the Circular).

Notwithstanding that this resolution has been passed (and the Arrangement adopted) by the shareholders of the Company or that the Arrangement has been approved by the Supreme Court of British Columbia, the directors of the Company are hereby authorized and empowered to, without notice to or approval of the shareholders of the Company, (i) amend, modify or supplement the Arrangement Agreement or the Plan of Arrangement to the extent permitted thereby and (ii) subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement and related transactions.

Any one officer or director of the Company is hereby authorized and directed for and on behalf of the Company to execute or cause to be executed, under the seal of the Company or otherwise, and to deliver such documents as are necessary or desirable to the Director under the BCBCA in accordance with the Arrangement Agreement for filing.

Any one officer or director of the Company is hereby authorized and directed for and on behalf of the Company to execute or cause to be executed and to deliver or cause to be delivered all such other documents and instruments and to perform or cause to be

Canopy Growth Corporation (the “Company”) is hereby authorized to issue such number of common shares in the capital of the Company (the “Common Shares”) as is necessary to allow the Company to acquire 100% of the issued and outstanding subordinate voting shares, assuming conversion of the issued and outstanding proportionate voting shares and multiple voting shares of Acreage Holdings, Inc. (“Acreage”) pursuant to a plan of arrangement (the “Arrangement”) in accordance with an arrangement agreement between the Company and Acreage (the “Arrangement Agreement”), as more particularly described in the management information circular of the Company (the “Company Circular”) (as the Arrangement may be, or may have been, modified or amended in accordance with its terms), including, but not limited to, the issuance of Common Shares upon the exercise of convertible securities of Acreage and the issuance of Common Shares for any other matters contemplated by or related to the Arrangement;

the Company is hereby authorized to issue up to such number of Common Shares to CBG Holdings LLC (“CBG”) and/or Greenstar Canada Investment Limited Partnership (“GCILP”) as is necessary to satisfy the top-up right held by CBG and GCILP pursuant to the terms of the second amended and restated investor rights agreement dated as of April 18, 2019 between CBG, GCILP and the Company, as more particularly described in the Company Circular;

the Company is hereby authorized to amend the terms of the 88,472,861 issued and outstanding Tranche A warrants and the 51,272,592 issued and outstanding Tranche B warrants of the Company held by CBG, collectively exercisable to acquire up to an aggregate of 139,745,453 Common Shares, in accordance with the terms and conditions of the certificates evidencing such warrants and pursuant to the terms and conditions of the consent agreement dated as of April 18, 2019 between CBG and the Company, as more particularly described in the Company Circular; and

notwithstanding that this resolution has been duly passed by the holders of the common shares of the Company, the directors of the Company are hereby authorized and empowered, if they decide not to proceed with the aforementioned resolution, to revoke this resolution at any time prior to the closing date of the Arrangement, without further notice to or approval of the shareholders of the Company;

any one or more directors or officers of the Company is hereby authorized, for and on behalf and in the name of the Company, to execute and deliver, whether under corporate seal of the Company or otherwise, all such agreements, forms, waivers, notices, certificates, confirmations and other documents and instruments, and to do or cause to be done all such other acts and things, as in the opinion of such director or officer may be necessary, desirable or useful for the purpose of giving effect to the foregoing resolutions and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such document, agreement or instrument or the doing of any such act or thing.

Fairness Opinions and Directors’ Approvals. As of the date hereof:

each of the Financial Advisor and the Independent Financial Advisor has delivered an oral opinion to the Company Special Committee and the Company Board to the effect that as of the date hereof, subject to the assumptions and limitations set out therein, the Consideration to be received under the Arrangement is fair from a financial point of view to the Company Shareholders other than the Purchaser and/or its affiliates;

the Company has been authorized by each of the Financial Advisor and Independent Financial Advisor to permit inclusion of the Fairness Opinions and references thereto and summaries thereof in the Company Circular; and the Company Board has unanimously (A) determined that the Arrangement is in the best interests of the Company and is fair to the Company Shareholders, (B) resolved to recommend to the Company Shareholders that they vote in favour of the Arrangement Resolution and (C) approved: (i) the Arrangement pursuant to the Plan of Arrangement; and (ii) the execution and performance of this Agreement.

Organization and Qualification. The Company is a corporation duly incorporated and validly existing under the applicable Laws of its jurisdiction of incorporation, continuance or creation and has all necessary corporate power and authority to own its property and assets as now owned and to carry on its business as it is now being conducted. The Company is duly qualified to do business and is in good standing in each jurisdiction in which the character of its properties, owned, leased, licensed or otherwise held, or the nature of its activities, makes such qualification necessary. No proceedings have been taken, instituted or are pending for the dissolution, winding-up or liquidation of the Company or any of its Subsidiaries, and no board approvals have been given to commence any such proceedings.

Authority Relative to this Agreement. The Company has all necessary corporate power, authority and capacity to enter into this Agreement and all other agreements and instruments to be executed by the Company as contemplated by this Agreement and (subject to obtaining the Required Company Shareholder Approval, the Interim Order and the Final Order in the manner contemplated herein) to perform its obligations hereunder and under such agreements and instruments. The execution and delivery of this Agreement by the Company and the performance by the Company of its obligations under this Agreement have been duly authorized by the Company Board and, except for obtaining the Required Company Shareholder Approval, the approval of the CSE in respect of the Arrangement, the Interim Order and the Final Order in the manner contemplated herein and filing of the Arrangement Filings with the Registrar, no other corporate proceedings on its part are necessary to authorize this Agreement or the Arrangement, other than, with respect to the Company Circular and other matters relating thereto, the approval of the Company Board. This Agreement has been duly executed and

No Violation. Other than as set forth in Section (d) of the Company Disclosure Letter, neither the authorization, execution and delivery of this Agreement by the Company nor the completion of the transactions contemplated by this Agreement or the Arrangement, nor the performance of its obligations hereunder or thereunder, nor compliance by the Company with any of the provisions hereof or thereof will result in a violation or breach of, constitute a default (or an event which, with notice or lapse of time or both, would become a default), require any consent or approval to be obtained or notice to be given under, or give rise to any third party right of termination, cancellation, suspension, acceleration, penalty or payment obligation or right to purchase or sale under, any provision of:

its Notice of Articles or Articles;

any Authorization or Contract to which the Company is a party or to which it or any of its properties or assets are bound; or

any Laws (assuming compliance with the matters referred to in Section (e) below), regulation, order, judgment or decree applicable to the Company or any of its Subsidiaries or any of their respective properties or assets, with the exception of the Controlled Substances Act 21 USC 801 et seq., as it applies to marijuana;

Governmental Approvals. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Arrangement requires no consent, waiver or approval or any action by or in respect of, or filing with, or notification to, any Governmental Entity other than: (i) the Interim Order and any approvals required by the Interim Order; (ii) the Final Order; (iii) filing of the Arrangement Filings with the Registrar; (iv) compliance with any applicable Securities Laws and stock exchange rules and regulations; (v) any approvals required by any United States Governmental Entity outlined in Section (e) of the Company Disclosure Letter; and (vi) any actions, filings or notifications the absence of which would not materially delay or prevent the completion of the Arrangement or reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

Capitalization.

The authorized share capital of the Company consists of an unlimited number of Company Subordinate Voting Shares, an unlimited number of Company Proportionate Voting Shares and an unlimited number of Company Multiple Voting Shares. As of the date hereof, there were issued and outstanding: (i) 46,073,518 Company Subordinate Voting Shares (ii) 865,585.4851 Company Proportionate Voting Shares; and (iii) 168,000 Company Multiple Voting Shares.

As of the date hereof an aggregate of up to: (A) 4,902,200 Company Subordinate Voting Shares are issuable upon the exercise of Company Options; (B) 157,512 Company Subordinate Voting Shares are issuable upon the exercise of Company Compensation Options; (C) 1,926,600 Company Subordinate Voting Shares issuable upon the vesting of outstanding Company RSUs; (D) 2,100,604 Company Subordinate Voting Shares issuable upon the exercise of warrants issued by the Company; (E) 21,215,646 Company Subordinate Voting Shares have been reserved for issuance upon the redemption of exchange, as applicable of the Common Membership Units; (F) 5,990,000 Company Subordinate Voting Shares have been reserved for issuance upon the redemption of exchange, as applicable of the Profit Interests; (G) 1,410,585 Company Subordinate Voting Shares have been reserved for issuance upon the redemption of exchange, as applicable of the Class B Non-Voting Common Shares; and (H) 160,000 Company Subordinate Voting Shares issuable in connection with a definitive agreement entered into with Blue Tire Holdings, LLC (collectively, the “Company Reserved Shares”). The exercise and conversion prices, expiration dates and other material terms of which (including the vesting schedules) are set forth in Section (f)(i) of the Company Disclosure Letter. The Company has included in the Company Data Room a true and complete copy of the stock option and incentive plan governing the Company Options and Company RSUs and the form of certificates in respect of the Company Compensation Options.

Other than as disclosed in Section (f)(iii) of the Company Disclosure Letter, except for the Company Options, Company Compensation Options, Company RSUs and Company Reserved Shares, and, with respect to Subsidiaries of the Company, as disclosed in the Company Disclosure Letter, there are no securities, options, warrants, stock appreciation rights, restricted stock units, conversion privileges or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) of any character whatsoever to which the Company or any of its Subsidiaries is a party or by which any of the Company or its Subsidiaries may be bound, obligating or which may obligate the Company or any of its Subsidiaries to issue, grant, deliver, extend, or enter into any such security, option, warrant, stock appreciation right, restricted stock unit, conversion privilege or other right, agreement, arrangement or commitment.

All outstanding Company Shares have been duly authorized and validly issued, are fully paid and non-assessable, and all Company Shares issuable upon the conversion or exercise, as applicable, of the Company Options, Company

Apart from the outstanding Company Shares, there are no other securities of the Company or of any of its Subsidiaries outstanding which have the right to vote generally (or are convertible into or exchangeable for securities having the right to vote generally) with the holders of the outstanding Company Shares on any matter. There are no outstanding contractual or other obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any of its securities or with respect to the voting or disposition of any outstanding securities of any of its Subsidiaries, other than with respect to the Class B Non-Voting Common Shares, the Common Membership Units and the Profit Interests. There are no outstanding bonds, debentures or other evidences of indebtedness of the Company or any of its Subsidiaries having the right to vote with the holders of the outstanding Company Shares on any matters.

Subsidiaries.

Section (g)(i) of the Company Disclosure Letter includes complete and accurate lists of all Subsidiaries owned, directly or indirectly, by the Company, each of which is wholly-owned except as disclosed in Section (g)(i) of the Company Disclosure Letter. All of the issued and outstanding shares and other ownership interests in the Subsidiaries of the Company are duly authorized, validly issued, fully paid and, where the concept exists, non-assessable, and all such shares and other ownership interests held directly or indirectly by the Company are legally and beneficially owned free and clear of all Liens (other than Permitted Liens), and there are no outstanding options, warrants, rights, entitlements, understandings or commitments (contingent or otherwise) regarding the right to purchase or acquire, or securities convertible into or exchangeable for, any such shares or other ownership interests of any of the Subsidiaries of the Company. Other than as disclosed in Section (g)(i) of the Company Disclosure Letter, there are no Contracts, commitments, understandings or restrictions which require any Subsidiaries of the Company to issue, sell or deliver any shares or other ownership interests, or any securities or obligations convertible into or exchangeable for, any shares or other ownership interests. Except for ownership of equity interests listed on Section (g)(i) of the Company Disclosure Letter, the Company, directly or indirectly through any of its Subsidiaries or otherwise, does not own any equity interest of any kind in any other Person.

Neither the Company nor any of its Subsidiaries has any investments, active business or commercial operations outside of the United States, other than the Company’s registered office, which is located in Vancouver, British Columbia.

Other than as disclosed in Section (g)(iii) of the Company Disclosure Letter, the Company and its Subsidiaries are not party to any intercompany guarantees, loans, advances and/or other arrangements.

Reporting Status and Securities Laws Matters. The Company is a “reporting issuer” or the equivalent and not on the list of reporting issuers in default under applicable Canadian provincial Securities Laws in Ontario. The Company is in compliance, in all material respects, with all applicable Securities Laws and there are no current, pending or, to the knowledge of the Company, threatened proceedings before any Securities Authority or other Governmental Entity relating to any alleged non-compliance with any Securities Laws. The Company Subordinate Voting Shares are listed on, and the Company is in compliance in all material respects with the rules and policies of, the CSE. No delisting, suspension of trading in or cease trading order with respect to any securities of the Company and, to the knowledge of the Company, no inquiry or investigation (formal or informal) of any Securities Authority or the CSE is in effect or ongoing or, to the knowledge of the Company, expected to be implemented or undertaken. To the knowledge of the Company, no directors or officers of the Company or any of its Subsidiaries have received any objection from the securities regulatory authorities as to their serving in any capacities as directors or officers of any reporting issuer in a jurisdiction in Canada.

U.S. Securities Matters.

The Company is a “foreign private issuer” within the meaning of Rule 405 of Regulation C under the U.S. Securities Act.

The Company is not registered, and is not required to be registered, as an “investment company” pursuant to the U.S. Investment Company Act.

Pursuant to the multijurisdictional disclosure system, the Company is subject to periodic reporting obligations, including the requirement to annually file certain of the Company’s Canadian disclosure documents under cover of Form 40-F and the furnishing of other material information made public in Canada under the cover of Form 6-K.

Company Filings. The Company has filed all documents required to be filed by it in accordance with applicable Securities Laws with the Securities Authorities and/or the CSE, except where failure to do so would not have any Company Material Adverse Effect. The Company has timely filed or furnished all Company Filings required to be filed or furnished by the Company with any Governmental Entity (including “documents affecting the rights of securityholders” and “material contracts” required to be filed by Part 12 of National Instrument 51-102 – Continuous Disclosure Obligations), except where failure to do so would not have any Company Material Adverse Effect. Each of the Company Filings complied as filed in all material respects with applicable Securities Laws and did not, as of the date filed (or, if amended or superseded by a subsequent filing prior to the date of this Agreement, on the date of such filing), contain any

Financial Statements. The (i) audited consolidated financial statements for the years ended December 31, 2017 and 2016 and related MD&A of High Street filed as part of the Company’s filing statement (the “Filing Statement”) on SEDAR dated November 14, 2018; (ii) the unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2018 and 2017 and related MD&A of High Street filed as part of the Filing Statement; (iii) the audited financial statements as of December 31, 2017, December 31, 2016 and January 1, 2016 and for the years ended December 31, 2017 and 2016 and related MD&A of D&B Wellness, LLC filed as part of the Filing Statement; (iv) the unaudited interim financial statements as of June 30, 2018 and December 31, 2017 and for the three and six months ended June 30, 2018 and 2017 and related MD&A of D&B Wellness, LLC filed as part of the Filing Statement; (v) the audited financial statements for the years ended December 31, 2017 and 2016 and related MD&A of Prime Wellness of Connecticut, LLC filed as part of the Filing Statement; (vi) the unaudited interim financial statements as of June 30, 2018 and December 31, 2017 and for the three and six months ended June 30, 2018 and June 30, 2017 and related MD&A of Prime Wellness of Connecticut, LLC filed as part of the Filing Statement; (vi) the audited financial statements for the years ended December 31, 2017 and 2016 and related MD&A of The Wellness & Pain Management Connection, LLC filed as part of the Filing Statement; (viii) the unaudited interim financial statements for the three and six months ended June 30, 2018 and 2017 and related MD&A of The Wellness & Pain Management Connection, LLC filed as part of the Filing Statement; and (ix) the unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2018 and 2017 and related MD&A of High Street (collectively, the “Company Financial Statements”) were prepared in accordance with IFRS consistently applied (except (a) as otherwise indicated in such financial statements and the notes thereto or, in the case of audited statements, in the related report of the Company’s independent auditors, or (b) in the case of unaudited interim statements, are subject to normal period-end adjustments and may omit notes which are not required by applicable Laws in the unaudited statements) and present fairly, in all material respects, the consolidated financial position, financial performance and cash flows of the applicable entity for which such Company Financial Statements were prepared for the dates and periods indicated therein (subject, in the case of any unaudited interim financial statements, to normal period-end adjustments) and reflect reserves required by IFRS in respect of all material contingent liabilities, if any, of the Company on a consolidated basis. There has been no material change in the Company’s accounting policies, except as described in the Company Financial Statements, since January 1, 2018.

Internal Controls and Financial Reporting. The Company has (i) designed disclosure controls and procedures to provide reasonable assurance that material information relating to the Company and its Subsidiaries is made known to the Chief Executive Officer and Chief Financial Officer of the Company on a timely basis, particularly during the periods in which the annual or interim filings are being prepared; and (ii) designed internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external

there are no material weaknesses in, the internal controls over financial reporting of the Company that could reasonably be expected to adversely affect the Company’s ability to record, process, summarize and report financial information; and

there is and has been no fraud, whether or not material, involving management or any other employees who have a significant role in the internal control over financial reporting of the Company. Since January 1, 2017 the Company has received no: (x) complaints from any source regarding accounting, internal accounting controls or auditing matters; or (y) expressions of concern from employees of the Company regarding questionable accounting or auditing matters.

Books and Records; Disclosure. The financial books, records and accounts of the Company and its Subsidiaries: (i) have been maintained in accordance with applicable Laws and IFRS and/or U.S. GAAP, as applicable, on a basis consistent with prior years; (ii) are stated in reasonable detail and accurately and fairly reflect the material transactions, acquisitions and dispositions of the assets of the Company and its Subsidiaries; and (iii) accurately and fairly reflect the basis for the Company Financial Statements.

Independent Auditors. The Company’s current auditors are independent with respect to the Company within the meaning of the rules of professional conduct applicable to auditors in Canada and there has never been a “reportable event” (within the meaning of National Instrument 51-102 – Continuous Disclosure Obligations) with the current, or to the best knowledge of the Company any predecessor, auditors of the Company during the last three years.

Minute Books.

Since November 14, 2018, the corporate minute books of the Company contain minutes of all meetings and resolutions of its boards of directors and committees of its board of directors, other than those portions of minutes of meetings reflecting discussions of the Arrangement, and shareholders, held according to applicable Laws and are complete and accurate in all material respects.

The corporate minute books of the Company’s Subsidiaries contain minutes of all meetings and resolutions of its boards of directors and committees of its board of directors, other than those portions of minutes of meetings reflecting discussions of the Arrangement, and shareholders, held according to applicable Laws and are complete and accurate in all material respects.

No Undisclosed Liabilities. The Company and its Subsidiaries have no outstanding indebtedness, liabilities or obligations, whether accrued, absolute, contingent or otherwise, and are not party to or bound by any suretyship, guarantee, indemnification or

No Material Change. Since November 14, 2018, other than as disclosed in Section (q) of the Company Disclosure Letter or the Company Filings in the form of material change reports:

the Company and its Subsidiaries have conducted its business only in the Ordinary Course, excluding matters relating to the proposed Arrangement;

there has not occurred any event, occurrence or development or a state of circumstances or facts which has had or would, individually or in the aggregate, reasonably be expected to have any Company Material Adverse Effect;

there has not been any acquisition or sale by the Company or its Subsidiaries of any material property or assets;

there has not been any incurrence, assumption or guarantee by the Company or its Subsidiaries of any material debt for borrowed money, any creation or assumption by the Company or its Subsidiaries of any Lien or any making by the Company or its Subsidiaries of any material loan, advance or capital contribution to or investment in any other Person, except as disclosed in the Company Financial Statements;

there has been no dividend or distribution of any kind declared, paid or made by the Company on any Company Shares;

the Company has not effected or passed any resolution to approve a split, consolidation or reclassification of any of the outstanding Company Shares;

there has not been any material increase in or modification of the compensation payable to or to become payable by the Company or its Subsidiaries to any of their respective directors, officers, employees or consultants or any grant to any such director, officer, employee or consultant of any increase in severance, change in control or termination pay or any increase or modification of any Employee Plans of the Company (including the granting of Company Options) made to, for or with any of such directors, officers, employees or consultants; and

the Company has not removed any auditor or director or terminated any senior officer.

Litigation. Except as disclosed in Section (r) of the Company Disclosure Letter, there is no claim, action, suit, grievance, complaint, proceeding, arbitration, charge, audit, indictment or investigation that is pending or has been commenced or, to the knowledge of the Company, is threatened affecting the Company or its Subsidiaries or affecting any

Taxes.

The Company and each of its Subsidiaries has duly and timely filed (or timely requested and were granted extensions of) all income and other material Tax Returns required to be filed prior to the date hereof with the appropriate Governmental Entities and all such Tax Returns are true and correct in all material respects.

The Company and each of its Subsidiaries has duly and timely paid all income and other material Taxes, including all instalments on account of Taxes for the current year that are due and payable by it whether or not assessed by the appropriate Governmental Entity.

The Company and each of its Subsidiaries has duly and timely collected all material Taxes required to be collected and has duly and timely paid and remitted the same to the appropriate Governmental Entity.

Except as disclosed in Section (s)(iv) of the Company Disclosure Letter, to the knowledge of the Company, there are no proceedings, investigations, audits or claims now pending against the Company or its Subsidiaries in respect of any Taxes and no Governmental Entity has asserted in writing, or to the knowledge of the Company, has threatened to assert against the Company or its Subsidiaries any deficiency or claim for Taxes or interest thereon or penalties in connection therewith which has not yet been paid.

Other than as disclosed in Section (s)(v) of the Company Disclosure Letter, all deficiencies asserted or assessments made as a result of any examinations have been fully paid, or are fully reflected as a liability in the Company Financial Statements, or are being contested and an adequate reserve therefor has been established and is fully reflected in the Company Financial Statements.

Other than duly and timely filed requests for extensions of time to file current year Tax Returns, there are no outstanding agreements, arrangements, waivers or objections extending the statutory period or providing for an extension of time with respect to the assessment or reassessment of Taxes or the filing of any Tax Return by, or any payment of Taxes by, the Company or any of its Subsidiaries.

There are no Liens for Taxes upon any property or assets of the Company and its Subsidiaries, except Liens for current Taxes not yet due.

Except as disclosed in Section (s)(viii) of the Company Disclosure Letter: (i) the Company or its Subsidiaries are not a party to any agreement, understanding, or arrangement relating to allocating or sharing any amount of Taxes the principal purpose of which is to allocate and share Taxes; and (ii) neither the Company nor any of its Subsidiaries has any liability for the Taxes of any other Person (other than the Company and its Subsidiaries) (a) under Section 1.1502-6 of the U.S. Treasury Regulations (or any similar provision of state, local or foreign applicable Law); (b) as a transferee or successor; or (c) by contract or indemnity (including under any Tax sharing agreement) or otherwise.

The Company and each of its Subsidiaries has duly and timely withheld from any amount paid or credited by it to or for the account or benefit of any Person, including any employees, vendors, independent contractors, creditors, shareholders, or any other Person (including any non-resident Person), the amount of all material Taxes and other deductions required by any Laws to be withheld from any such amount and has duly and timely remitted the same to the appropriate Governmental Entity.

All employees and independent contractors of the Company and its Subsidiaries have been properly classified as such for Tax purposes as well as for employee benefit purposes and, to the knowledge of the Company, there have been no audits, controversies or adverse determinations made by any Governmental Entity in respect of whether a service provider is a treated as an employee or as an independent contractor.

The Company is a “taxable Canadian corporation” for the purposes of the Tax Act.

The Company is treated as a domestic corporation for U.S. federal income tax purposes.

Neither the Company nor any of its Subsidiaries has been a “distributing corporation” or a “controlled corporation” in a distribution intended to qualify for tax-free treatment under Section 355 of the U.S. Tax Code.

Neither the Company nor any of its Subsidiaries has participated in any “reportable transaction” within the meaning of Section 1.6011-4(b) of the U.S. Treasury Regulations or Section 237.3 of the Tax Act (or a similar provision of applicable Law).

Neither the Company nor any of its Subsidiaries will be required to include any material item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Effective Date as a result of any (i) change in method of accounting (or an improper use of an accounting method) for a taxable period ending on or prior to the Effective Date; (ii) “closing agreement,” as described in Section 7121 of the U.S. Tax Code (or any corresponding provision of state, local or foreign income Tax law) entered

The value of the consideration paid or received by the Company and Subsidiaries for the acquisition, sale, transfer or provision of property (including intangibles) or the provision of services (including financial transactions) from or to any Person with which it was not dealing at arm’s length at the relevant time was the fair market value of such property acquired, provided or sold or services purchased or provided. Transactions between the Company, the Subsidiaries and any such non-resident person or partnership were priced in a manner so as not to give rise to any material adjustments pursuant to Section 247 of the Tax Act.

Neither the Company nor its Subsidiaries has received any requirement, demand or request from any Governmental Entity pursuant to Section 224 of the Tax Act or any similar provision of an applicable Law that remains unsatisfied in any respect.

No written claim has ever been made by a taxing authority, in a jurisdiction where the Company or the Subsidiaries does not file Tax Returns, that the Company or its Subsidiaries is or may be subject to taxation by that jurisdiction or any of the Company’s or its Subsidiaries’ assets are or may be subject to such taxation.

Neither the Company nor the Subsidiaries has requested, received or entered into any advance Tax rulings or advance pricing agreements with any Governmental Entity.

There are no circumstances existing prior to the date hereof which could result in the application to the Company or any Subsidiaries of any of Sections 80, 80.01, 80.02, 80.03 or 80.04 of the Tax Act or any analogous provision of any comparable Law of any province or territory of Canada. Neither the Company nor any Subsidiaries has any unpaid amounts that may be required to be included in the Company or such Subsidiaries income for Canadian income tax purposes for any tax period ending on or before the Effective Date under Section 78 of the Tax Act or a corresponding provincial provision. Neither the Company nor any Subsidiaries have acquired property from a Person in circumstances that would result in the Company or Subsidiaries, as the case may be, becoming liable to pay Taxes of such Person under subsection 160(1) of the Tax Act or a corresponding provincial provision.

The Company is not, and has not been, a United States real property holding corporation (as defined in Section 897(c)(2) of the U.S. Tax Code) during the applicable period specified in Section 897(c)(1)(A)(ii) of the U.S. Tax Code.

Neither the Company nor any of its Subsidiaries has taken any material Tax deduction that is not permitted under Section 280E of the U. S. Tax Code.

Data Privacy and Security.

The Company and each of its Subsidiaries complies, and during the past three years has complied, in all material respects, with all Privacy and Information Security Requirements. Neither the Company nor any of its Subsidiaries have been notified in writing of, or is the subject of, any complaint or proceeding or to the Company’s knowledge, any, regulatory investigation related to Processing of Personal Data by any Governmental Entity or payment card association, regarding any actual or possible violations of any Privacy and Information Security Requirement by or with respect to the Company or any of its Subsidiaries.

The Company and each of its Subsidiaries employs commercially reasonable organizational, administrative, physical and technical safeguards that comply in all material respects with all Privacy and Information Security Requirements to protect Company Data within its custody or control and requires the same of all vendors under contract with the Company that Process Company Data on its behalf. The Company and each of its Subsidiaries have provided all requisite notices and obtained all required consents, and satisfied all other requirements (including but not limited to notification to Governmental Entities), necessary for the Processing (including international and onward transfer) of all Personal Data in connection with the conduct of the business as currently conducted and in connection with the consummation of the transactions contemplated hereunder.

To the knowledge of the Company, neither the Company nor any of its Subsidiaries has suffered a security breach with respect to any of the Company Data and to the Company’s knowledge, there has been no unauthorized or illegal use of or access to any Company Data. Neither the Company nor any of its Subsidiaries has notified, or been required to notify, any Person of any information security breach involving Personal Data. To the Company’s knowledge, the Company Systems have had no material errors or defects that have not been fully remedied and contain no code designed to disrupt, disable, harm, distort or otherwise impede in any manner the legitimate operation of such Company Systems (including what are sometimes referred to as “viruses”, “worms”, “time bombs” or “back doors”) that have not been removed or fully remedied. Neither the Company nor any of its Subsidiaries have experienced within the past three years any material disruption to, or material interruption in, the conduct of its business that affected the business for more than one calendar week, and attributable to a defect, bug, breakdown, unauthorized access, introduction of a virus or other malicious programming, or other failure or deficiency on the part of any computer software or the Company Systems.

Property.

The Company or its Subsidiaries is the registered and/or beneficial owner of the Real Property described in Section (u)(i) of the Company Disclosure Letter (each, a “Company Owned Real Property” and collectively, the “Company Owned Real Properties”) and has good and marketable fee simple title to such Company Owned Real Properties, free and clear of all Liens, except Permitted Liens.

Other than the Company Owned Real Property, the Company and its Subsidiaries do not own any other Real Property. Other than the Company Leased Property, the Company and its Subsidiaries do not lease any other Real Property.

Neither the Company nor its Subsidiaries have received any notice, and have no knowledge, of any intention of any Governmental Entity to expropriate all or any part of the Company Owned Real Property or the Company Leased Property; there are no leases in respect of the Company Owned Real Property, Company Leased Property (except those leases evidenced by the Company Lease Documents (as defined below)), or any part thereof; no Person has any right of first refusal, option, or other right to acquire the Company Owned Real Property, Company Leased Property or any part thereof; the Company and its Subsidiaries are not in default under any of their material obligations arising out of any Permitted Liens or any other matter of record beyond any applicable cure periods; all necessary permits, licenses and approvals have been obtained from the appropriate Governmental Entity in respect of the Company and its Subsidiaries’ present use of and operations on the Company Owned Real Property and the Company Leased Property and the Company owns all such licenses and all production facilities and is not operating on behalf of another license holder; the Company and its Subsidiaries have no present or future obligation to pay moneys to any Governmental Entity in connection with any on-site or off- site servicing, including off-site roads, services or utilities, save and except obligations which are expressly set forth in the Permitted Liens or are paid through realty taxes.

Each property currently leased or subleased by the Company or its Subsidiaries from any party (collectively, the “Company Leased Properties”) is listed in Section (u)(iv) of the Company Disclosure Letter, identifying all of the documents under which such leasehold interests are held (together with any amendments, supplements, modifications, extensions, correspondence, guaranties, and other documents, each, a “Company Lease Document” and collectively, the “Company Lease Documents”) and setting forth the amounts of any security deposits or letters of credit held pursuant to any Company Lease Document. The Company has delivered to Purchaser a true and complete copy of each Company Lease Document. The Company or its Subsidiaries, as applicable, holds good and valid leasehold interests in the Company Leased Properties, free and clear of all Liens other than Permitted Liens. Each of the Company Lease Documents is valid, binding, enforceable, and in full force and effect as against the Company and its Subsidiaries, as applicable, and to the knowledge of the Company, as against the other parties thereto. Neither the Company, its Subsidiaries nor, to the

The Company Owned Real Properties and the Company Leased Properties, as applicable, are adequately serviced by utilities (or well water with adequate septic systems, if any) having adequate capacities for the current operations of the Company’s and its Subsidiaries’ facilities.

The Company’s or its applicable Subsidiary’s possession and quiet enjoyment of the Company Owned Real Properties and Company Leased Properties have not been disturbed in any material respect.

Except as set forth in a Permitted Lien, neither the Company nor any of its Subsidiaries has leased, subleased, licensed, or otherwise granted any Person the right to use or occupy the Company Owned Real Property or Company Leased Property or any portion of it, or collaterally assigned or granted any other Lien in such Company Owned Real Property or Company Leased Property or any interest in it.

Except as disclosed in Section (u)(viii) of the Company Disclosure Letter, neither the Landlord nor any other party to any Company Lease Document is an affiliate of, or otherwise has any economic interest in, the Company or its Subsidiaries.

Except as disclosed in Section (u)(ix) of the Company Disclosure Letter, no Company Lease Document is subordinate to any existing Lien of any mortgage or deed of trust (each a “Mortgage”) encumbering fee or leasehold title to the Company Leased Properties or, in the event such Company Lease Document is subordinate to a Mortgage, such Company Lease Document has received an agreement from the applicable lender under the applicable Mortgage that such lender will not evict, disturb the possession or terminate the leasehold estate of the Company or its applicable Subsidiary under such Company Lease Document if there is a foreclosure of the Mortgage.

Each Company Owned Real Property and Company Leased Property is in material compliance with all applicable Laws and the Company and its Subsidiaries have obtained and currently maintain all applicable licenses and permits reasonably necessary for the use and operation of all Company Owned Real Property or Company Leased Property.

Neither the Company nor any of its Subsidiaries have received any written notice of any existing plan or study by any Governmental Entity or by any other Person that challenges or otherwise adversely affects the continuation of the use or operation of any Company Owned Real Property or Company Leased Property, and to the knowledge of the Company, there is no such plan or study with respect to which it has not received written notice.

With respect to the Company Owned Real Property and the Company Leased Property, there is no: (i) pending or, to the Company’s knowledge, threatened condemnation, eminent domain or taking proceeding; or (ii) to the Company’s knowledge, private restrictive covenant or governmental use restriction (including zoning) on all or any portion of the Company Owned Real Property or Company Leased Property, as applicable, that prohibits or materially interferes with the current use of the Company Owned Real Property or Company Leased Property, as applicable.

All water, oil, gas, electrical, steam, compressed air, telecommunications, sewer, storm and waste water systems and other utility services or systems, as applicable, for the Company Owned Real Property or Company Leased Property have been installed and are operational and sufficient for the operation of the Company’s or its Subsidiaries’ business as currently conducted thereon.

The Company or its Subsidiaries, as applicable, have obtained a title insurance policy for each Company Owned Real Property, all of which remain in full force and effect as at the date hereof. True, complete and correct copies of the title insurance policies for the Company Owned Real Property were provided in the Company Data Room.

Sufficiency of Assets. The Company and its Subsidiaries have valid, good and marketable title to all personal property owned by them, free and clear of all Liens other than Permitted Liens. The assets and property owned, leased or licensed by the Purchaser and its Subsidiaries are sufficient, in all material respects, for conducting the business, as currently conducted, of the Company.

Material Contracts. With respect to the Material Contracts of the Company:

Section (w)(i) of the Company Disclosure Letter includes a complete and accurate list of all Material Contracts to which the Company is a party and that are currently in force. The Company has made available to the Purchaser for inspection true and complete copies of all such Material Contracts.

Except as would not be reasonably expected to result in, individually or in the aggregate, a Company Material Adverse Effect, all of the Material Contracts are in full force and effect, and the Company or one of its Subsidiaries is entitled to all rights and benefits which accrue to it thereunder in accordance with the terms thereof. Neither the Company nor its applicable Subsidiaries have waived any rights under a Material Contract and no material default or breach exists in respect

All of the Material Contracts are valid and binding obligations of the Company or one of its Subsidiaries, as the case may be, enforceable in accordance with their respective terms, except as may be limited by bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights generally and subject to the qualification that equitable remedies may only be granted in the discretion of a court of competent jurisdiction.

As at the date hereof, neither the Company nor any of its Subsidiaries has received written notice that any party to a Material Contract, intends to cancel, terminate or otherwise modify or not renew such Material Contract, and to the knowledge of the Company, no such action has been threatened.

Neither the entering into of this Agreement, nor the consummation of the Arrangement or the Acquisition, as applicable, will trigger any change of control or similar provisions in any of the Material Contracts, other than as set forth in Section (w)(v) of the Company Disclosure Letter.

Authorizations.

Section (x)(i) of the Company Disclosure Letter includes a complete and accurate list of all material Authorizations required by the Company and its Subsidiaries by applicable Laws with the exception of the Controlled Substances Act, 21 USC 801 et seq., as it applies to marijuana (including any implementing regulations and schedules in effect at the relevant time) or any other U.S. federal law the violation of which is predicated upon a violation of the Controlled Substances Act as it applies to marijuana, in order to conduct their current business as now being conducted. The Company has made available to the Purchaser for inspection true and complete copies of all such material Authorizations. The Company and its Subsidiaries have obtained and are in compliance in all material respects with all such material Authorizations.

All material Authorizations of the Company and its Subsidiaries are in full force and effect, and, to the knowledge of the Company, no suspension or cancellation thereof has been threatened.

Except as disclosed in Section (x)(iii) of the Company Disclosure Letter, no material Authorizations of the Company or any of its Subsidiaries will in any way be affected by, or terminate or lapse by reason of, the transactions contemplated by this Agreement or any of the other agreements contemplated hereunder or executed herewith.

To the Company’s knowledge, there are no facts, events or circumstances that would reasonably be expected to result in a failure to obtain or failure to be in compliance with such Authorizations as are necessary to conduct the business of the Company and its Subsidiaries as it is currently being conducted.

Environmental Matters.

The Company and each of its Subsidiaries have, in all material respects, carried on its businesses and operations in compliance with all applicable Environmental Laws.

Neither the Company nor any its Subsidiaries have received any order, request or written notice from any Person either alleging a violation of any Environmental Law or requiring that the Company or any of its Subsidiaries carry out any work, incur any costs or assume any liabilities, related to Environmental Laws or to any agreements with, or Authorizations from, any Governmental Entity with respect to or pursuant to Environmental Laws

To the knowledge of the Company, there are no Hazardous Substances or other conditions that would reasonably be expected to result in liability of or adversely affect the Company or any of its Subsidiaries under or related to any Environmental Law on, at, in, under or from any of the Company Owned Real Property or Company Leased Properties (including the workplace environment) currently or, to the knowledge of the Company, previously owned, leased or operated by the Company or any of its Subsidiaries.

There are no pending claims or, to the knowledge of the Company, threatened claims, against the Company or any of its Subsidiaries arising out of any Environmental Laws.

The Company has provided true and complete copies of all material environmental assessment reports, health and safety audits, and reports of environmental investigations with respect to the Company’s operations and the Company Owned and Company Leased Real Properties in the Company’s possession or control.

Compliance with Laws.

Each of the Company and its Subsidiaries has complied with and is not in violation, in any material respect, of any applicable Laws in each jurisdiction in which it carries on business, with the exception of the Controlled Substances Act, 21 USC 801 et seq., as it applies to marijuana (including any implementing regulations and schedules in effect at the relevant time) or any other U.S. federal law the violation of which is predicated upon a violation of the Controlled Substances Act as it applies to marijuana.

Other than as set forth in Section (z)(ii) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries has received any written notices or other

Neither the Company, its Subsidiaries nor, to the knowledge of the Company, any of their respective directors, executives, representatives, agents or employees while acting in such capacity on behalf of the Company or its Subsidiaries (A) has used or is using any corporate funds for any illegal contributions, gifts, entertainment or other expenses relating to political activity that would be illegal, (B) has used or is using any corporate funds for any direct or indirect illegal payments to any foreign or domestic governmental officials or employees, (C) has violated or is violating any provision of the United States Foreign Corrupt Practices Act of 1977, as amended and the rules and regulations thereunder, the Corruption of Foreign Public Officials Act (Canada) or any similar Laws of other jurisdictions, (D) has established or maintained, or is maintaining, any illegal fund of corporate monies or other properties or (E) has made any bribe, illegal rebate, illegal payoff, influence payment, kickback or other illegal payment of any nature.

The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court of governmental authority or any arbitrator non-Governmental Entity involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

None of the Company or any of its Subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its Subsidiaries, has had any sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department, the Government of Canada or any other relevant sanctions authority (collectively, “Sanctions”) imposed upon any such person, and the Company and its Subsidiaries are not in violation of any of the Sanctions or law or executive order relating thereto, or are conducting business with any person subject to any Sanctions.

Employment & Labour Matters.

Except as disclosed in Section (aa)(i) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries are: (A) party to any Contract providing for termination notice, payment in lieu of termination notice, change of control payments, or severance payments to, or any employment or consulting agreement for the provision of services to the Company or its Subsidiaries with, any current or former director, officer or employee of the Company or its Subsidiaries other than such arising from any applicable Law; and (B) party to any Collective Agreement nor, to the knowledge of the Company, subject to any application for certification or threatened union-organizing campaigns for employees not covered under a Collective Agreement nor are there any current, or to the knowledge of the Company, pending or threatened strikes or lockouts at the Company or its Subsidiaries.

There are no labour disputes, strikes, organizing activities or work stoppages against the Company or any of its Subsidiaries pending, or to knowledge of the Company, threatened.

The execution, delivery and performance of this Agreement and the consummation of the Arrangement, but excluding the Acquisition, will not result in the automatic acceleration of the time of payment or vesting of entitlements available to any employee, consultant or contractor of the Company or any of its Subsidiaries or otherwise under any Employee Plan of the Company or any of its Subsidiaries.

Except as disclosed in Section (aa)(iv) of the Company Disclosure Letter, the consummation of the Acquisition will not result in the automatic acceleration of the time of payment or vesting of entitlements available to any employee, consultant or contractor of the Company or any of its Subsidiaries or otherwise under any Employee Plan of the Company or any of its Subsidiaries.

The Company and each of its Subsidiaries has been and is now in compliance, in all material respects, with all terms and conditions of employment, with respect to employment and labour, including, wages, hours of work, overtime, human rights, occupational health and safety and workers compensation, and there are no current, or, to the knowledge of the Company, pending or threatened proceedings (including grievances, arbitration, applications or pending applications) before any Governmental Entity or labour arbitrator with respect to the Company, its Subsidiaries or any Employee Plan (other than routine claim for benefits).

To the knowledge of the Company, no executive or manager of the Company or its Subsidiaries (A) has any present intention to terminate their employment, or (B) is a party to any confidentiality, non-competition, proprietary rights or other such agreement with any other Person besides the Company or its Subsidiaries which would impede the business, be material to the performance of such employee’s employment duties, or the ability of the Company and any of its Subsidiaries, or the Purchaser and any of its Subsidiaries to conduct the business.

There are no outstanding assessments, penalties, fines, Liens, charges, surcharges, or other amounts due or owing by the Company or its Subsidiaries pursuant to any workers’ compensation statute or regulation, and nether the Company nor any of its Subsidiaries has been reassessed in any material respect under such statute or regulation during the past three years and, to the knowledge of the Company, no audit of the Company or any its Subsidiaries is currently being performed pursuant to any workers’ compensation statute or regulation, and, to the knowledge of the Company, there are no claims or potential claims which may adversely affect the Company’s or any of its Subsidiaries’ accident cost experience in respect of the business.

Section (aa)(viii) of the Company Disclosure Letter contains a correct and complete list of each member of management providing services to the Company and its Subsidiaries, indicating their respective location, hire date, position, salary, benefits and current status (full time, part-time, active, non- active), as applicable and whether they are subject to a written employment contract. Within 2 days of the date of this Agreement, the Company will provide Purchaser with a correct and complete list of each individual serving as an independent contractor, external consultant, or otherwise providing services to the Company and its Subsidiaries, indicating their respective location, hire date, position, and compensation, and whether they are subject to a written contract.

Each independent contractor or consultant of the Company or any Subsidiary has been properly classified by the Company and its Subsidiaries as an independent contractor and neither the Company, nor any of its Subsidiaries has received any notice from any Governmental Entity disputing such classification.

Section (aa)(x) of the Company Disclosure Letter lists all Employee Plans of the Company and its Subsidiaries. The Company has made available to the Purchaser true, correct and complete copies of all such Employee Plans as amended.

All Employee Plans of the Company and its Subsidiaries are and have been established, registered, funded and administered in all material respects: (x) in accordance with applicable Laws and (y) in accordance with their terms. To the knowledge of the Company, no fact or circumstance exists which could materially adversely affect the registered status of any such Employee Plan.

All contributions, premiums or Taxes required to be made or paid by the Company or any of its Subsidiaries under the terms of each Employee Plan of the Company and its Subsidiaries or by applicable Laws have been made in a timely fashion.

Acceleration of Benefits; Arrangement. Except as contemplated in this Agreement, no Person will, as a result of any of the transactions contemplated herein or in the Plan of Arrangement, but excluding the Acquisition, become entitled to (i) any retirement, severance, bonus or other similar payment from the Company or any of its Subsidiaries, (ii) the acceleration of the vesting or the time to exercise of any outstanding Company

Acceleration of Benefits; Acquisition. Except as set out in Section (cc) of the Company Disclosure Letter, no Person will, as a result of the Acquisition, become entitled to (i) any retirement, severance, bonus or other similar payment from the Company or any of its Subsidiaries, (ii) the acceleration of the vesting or the time to exercise of any outstanding Company Option or Company RSU or employee or director awards of the Company or any of its Subsidiaries, (iii) the forgiveness or postponement of payment of any indebtedness owing by such Person to the Company or any of its Subsidiaries, or (iv) receive any additional payments or compensation under or in respect of any employee or director benefits or incentive or other compensation plans or arrangements from the Company or any of its Subsidiaries.

Intellectual Property.

The Company and its Subsidiaries own all right, title and interest in and to, or have validly licensed (and are not in material breach of such licenses), all Intellectual Property that is material to the conduct of the business, as currently conducted, of the Company and its Subsidiaries (collectively, the “Company Intellectual Property Rights”), provided that neither the Company nor its Subsidiaries have obtained registered Intellectual Property protection from the United States Patent and Trademark Office. All such Company Intellectual Property Rights are sufficient, in all material respects, for conducting the business, as currently conducted, of the Company and its Subsidiaries, and to the knowledge of the Company, all such Company Intellectual Property Rights are valid and enforceable (subject to the effects of bankruptcy, insolvency, reorganization, moratorium or laws relating to or affecting creditors’ rights generally). The operation of the businesses of the Company and its Subsidiaries, including the manufacture, marketing, use, and sale of the products and services of the Company and its Subsidiaries, and the use and exploitation of the Company Intellectual Property Rights do not infringe upon, misappropriate, or otherwise violate the Intellectual Property rights of any third party. To the knowledge of the Company, no third party is infringing upon, misappropriating, or otherwise violating the Company Intellectual Property Rights.

Section (dd)(ii) of the Company Disclosure Letter sets forth an accurate and complete list of all registered or applied for trademarks, trade names, service marks, domain names, patents, and copyrights owned or purported to be owned by the Company and its Subsidiaries.

The Company and its Subsidiaries have taken reasonable steps to maintain their rights to the Company Intellectual Property and to protect and preserve the

Related Party Transactions. Except as disclosed in Section (ee) of the Company Disclosure Letter, there are no Contracts or other transactions currently in place between the Company or any of its Subsidiaries, on the one hand, and: (i) any officer or director of the Company or any of its Subsidiaries; and (ii) any affiliate or associate of any such, officer or director. To the knowledge of the Company, no related party of the Company (within the meaning of MI 61-101) together with its associated entities, beneficially owns or exercises control or direction over 1% or more of the outstanding Company Shares, except for related parties who will not receive a “collateral benefit” (within the meaning of MI 61-101) as a consequence of the Arrangement or Acquisition.

Brokers. Other than as disclosed in Section (ff) of the Company Disclosure Letter, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of the Company or any of its Subsidiaries. The Company has provided to the Purchaser correct and complete copies of the agreements under which the Financial Advisor and Independent Financial Advisor has agreed to provide services to the Company. Section (ff) of the Company Disclosure Letter sets out the aggregate dollar amount, or percentage, as applicable, determined to be payable to and as agreed upon with the Financial Advisor and the Independent Financial Advisor in the event the Arrangement is completed.

Insurance. As of the date hereof, the Company and each of its Subsidiaries have such policies of insurance as are included in Section (gg) of the Company Disclosure Letter. All insurance maintained by the Company and its Subsidiaries is in full force and effect and in good standing and is in amounts and in respect of such risks as are normal and usual for companies of similar size operating in the cannabis industry.

Restrictions on Business Activities. Other than Controlled Substances Act, 21 USC 801 et seq., as it applies to marijuana, there is no agreement, judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries that has or would reasonably be expected to have the effect of prohibiting, restricting or impairing any business practice of the Company or any of its Subsidiaries or affiliates, any acquisition of property by the Company or any of its Subsidiaries or affiliates, or the conduct of business by the Company or any of its Subsidiaries or affiliates, as currently conducted (including following the transactions contemplated by this Agreement).

Funds Available. The Company has sufficient funds available to pay: (i) prior to the Effective Time, all transaction costs, all payments required pursuant to change of control provisions, all of the Company’s remaining forecast commitments as set out in Section (ii) of the Company Disclosure Letter, all additional remaining accounts payable and

Arrangements with Securityholders. Other than the Support and Voting Agreements, the Confidentiality Agreement, the Lock-Up and Incentive Agreements, the Trademark and Technology License and this Agreement, the Company does not have any agreement, arrangement or understanding (whether written or oral) with respect to the Purchaser or any of its securities, businesses or operations, with any shareholder of the Purchaser, any interested party of the Purchaser or any related party of any interested party of the Purchaser, or any joint actor with any such Persons (and for this purpose, the terms “interested party”, “related party” and “joint actor” shall have the meaning ascribed to such terms in MI 61-101).

Audit Committee. The responsibilities and composition of the audit committee of the Company Board comply with National Instrument 52-110 – Audit Committees of the Canadian Securities Administrators, as such instrument applies to the Company.

Accuracy of Information. The Company has made available to the Purchaser all material information concerning the Company and its Subsidiaries and all such information as made available is accurate, true and correct in all material respects.

Licenses/Permits. Section (mm) of the Company Disclosure Letter includes a list of: (i) all production facility licenses and permits held by the Company and its Subsidiaries; and (ii) all retail facilities owned or operated by the Company and its Subsidiaries; in each case detailed on a state-by-state basis and including the type of operation (e.g. production, growing or retail and whether medical or recreational), the owner of such license and/or permit, the expiration date, whether the Company or a Subsidiary owns or operates the facility, the type of license held, whether the facility is operational and, if applicable, the annual throughput at such facility. The Company has provided to the Purchaser copies of all such licenses and permits held by it and its Subsidiaries and any renewals thereof.

Organization and Qualification. The Purchaser is a corporation duly incorporated and validly existing under the applicable Laws of its jurisdiction of incorporation, continuance or creation and has all necessary corporate power and authority to own its property and assets as now owned and to carry on its business as it is now being conducted. The Purchaser is duly qualified to do business and is in good standing in each jurisdiction in which the character of its properties, owned, leased, licensed or otherwise held, or the nature of its activities, makes such qualification necessary. No material proceedings have been taken, instituted or are pending for the dissolution, winding-up or liquidation of the Purchaser and no board approvals have been given to commence any such proceedings.

Authority Relative to this Agreement. The Purchaser has all necessary corporate power, authority and capacity to enter into this Agreement and all other agreements and instruments to be executed by the Purchaser as contemplated by this Agreement, and, subject to obtaining the Purchaser Shareholder Approval, the Interim Order and the Final Order, to perform its obligations hereunder and under such agreements and instruments. The execution and delivery of this Agreement by the Purchaser and the performance by the Purchaser of its obligations under this Agreement have been duly authorized by the board of the directors of the Purchaser and no other corporate proceedings on its part are necessary to authorize this Agreement or the Arrangement, except for obtaining the Purchaser Shareholder Approval, the Interim Order and the Final Order. This Agreement has been duly executed and delivered by the Purchaser, and constitutes a legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to the qualification that such enforceability may be limited by bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting rights of creditors and that equitable remedies, including specific performance, are within the discretion of a court.

No Violation. Neither the authorization, execution and delivery of this Agreement by the Purchaser nor the completion of the transactions contemplated by this Agreement or the Arrangement (provided, for greater certainty, that the Acquisition is only completed following the Triggering Event Date) nor the performance of its obligations hereunder or thereunder, nor compliance by the Purchaser with any of the provisions hereof or thereof will result in a violation or breach of, constitute a default (or an event which, with notice or lapse of time or both, would become a default), require any consent or approval to be obtained or notice to be given under, or give rise to any third party right of termination, cancellation, suspension, acceleration, penalty or payment obligation or right to purchase or sale under, any provision of:

its articles of incorporation or bylaws;

any Authorization or Contract to which the Purchaser is a party or to which it or any of its properties or assets are bound; or

any Laws, regulation, order, judgment or decree applicable to the Purchaser or any of its Subsidiaries or any of their respective properties or assets;

Governmental Approvals. The execution, delivery and performance by the Purchaser of this Agreement and the consummation by the Purchaser of the Arrangement requires no consent, waiver or approval or any action by or in respect of, or filing with, or notification to, any Governmental Entity other than: (i) the Interim Order and any approvals required by the Interim Order; (ii) the Final Order; (iii) filing of the Arrangement Filings with the Registrar; (iv) such filings and approvals required for the issuance of the Consideration Shares as a result of the Arrangement required under applicable securities laws and the rules and policies of the TSX and NYSE, or such other recognized stock exchange(s) on which the Purchaser Shares may be listed; (v) the approvals for the amendments to the CBG Group Warrants and the issuance of the CBG Group Top-Up Shares as a result of the Arrangement and pursuant to the terms and conditions of the CBG Group Agreements, required under the rules and policies of the TSX and NYSE, or such other recognized stock exchange(s) on which the Purchaser Shares may be listed; (vi) compliance with any applicable securities laws and stock exchange rules and regulations; and (vii) any actions, filings or notifications the absence of which would not materially delay the completion of the Arrangement or reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.

Capitalization.

The authorized share capital of the Purchaser consists of an unlimited number of Purchaser Shares. As of the date hereof, there were issued and outstanding 345,079,431 Purchaser Shares.

As of the date hereof an aggregate of up to: (A) 12,454,620 Purchaser Shares are issuable upon the conversion of notes issued by the Purchaser; (B) 32,203,404 Purchaser Shares are issuable upon the exercise of stock options granted by the Purchaser; (C) 159,119,516 Purchaser Shares are issuable upon the exercise of warrants issued by the Purchaser or its Subsidiaries; and (D) 135,764 Purchaser Shares issuable upon the vesting of outstanding restricted share units issued by the Purchaser. The Purchaser has provided the Company with a true and complete copy of the incentive plan governing such stock options and restricted share units.

Other than as disclosed in the Purchaser Filings (including this Agreement), there are no other securities, options, warrants, stock appreciation rights, restricted stock units, conversion privileges or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) of any character whatsoever to which the Purchaser or any of its Subsidiaries is a party or by which any of the Purchaser or its Subsidiaries may be bound, obligating or which may obligate the Purchaser or any of its Subsidiaries to issue, grant, deliver, extend, or enter into

All outstanding Purchaser Shares have been duly authorized and validly issued, are fully paid and non-assessable, and all Purchaser Shares issuable upon the conversion, exercise or vesting, as applicable, of the Purchaser notes, stock options, warrants and restricted share units in accordance with their respective terms have been duly authorized and, upon issuance, will be validly issued as fully paid and non- assessable, and are not and will not be subject to, or issued in violation of, any pre-emptive rights. All securities of the Purchaser have been issued in compliance with all applicable Laws and Securities Laws.

All of the issued and outstanding shares and other ownership interests in the Subsidiaries of the Purchaser are duly authorized, validly issued, fully paid and, where the concept exists, non-assessable, and all such shares and other ownership interests held directly or indirectly by the Company are legally and beneficially owned free and clear of all Liens (other than Permitted Liens).

There are no securities of the Purchaser or of any of its Subsidiaries outstanding which have the right to vote generally (or are convertible into or exchangeable for securities having the right to vote generally) with the holders of the outstanding Purchaser Shares on any matter. There are no outstanding contractual or other obligations of the Purchaser or any Subsidiary to repurchase, redeem or otherwise acquire any of its securities or with respect to the voting or disposition of any outstanding securities of any of its Subsidiaries. There are no outstanding bonds, debentures or other evidences of indebtedness of the Purchaser or any of its Subsidiaries having the right to vote with the holders of the outstanding Purchaser Shares on any matters.

Reporting Status and Securities Laws Matters. The Purchaser is a “reporting issuer” or the equivalent and not on the list of reporting issuers in default under applicable Canadian provincial Securities Laws in each of the provinces of Canada, other than Quebec. The Purchaser is in compliance, in all material respects, with all applicable Securities Laws and there are no current, pending or, to the knowledge of the Purchaser, threatened proceedings before any Securities Authority or other Governmental Entity relating to any alleged non-compliance with any Securities Laws. The Purchaser Shares are listed on, and the Purchaser is in compliance in all material respects with the rules and policies of, the TSX and the NYSE. No delisting, suspension of trading in or cease trading order with respect to any securities of the Purchaser and to the knowledge of the Purchaser no inquiry or investigation (formal or informal) of any Securities Authority, the TSX or the NYSE is in effect or ongoing or, to the knowledge of the Purchaser, expected to be implemented or undertaken. To the knowledge of the Purchaser, no directors or officers of the Purchaser or any of its Subsidiaries have received any objection from the securities regulatory authorities as to their serving in any capacities as directors or officers of any reporting issuer in a jurisdiction in Canada or the United States.

U.S. Securities Matters.

The Purchaser is not registered, and is not required to be registered, as an “investment company” pursuant to the U.S. Investment Company Act.

Purchaser Filings. The Purchaser has filed all documents required to be filed by it in accordance with applicable Securities Laws with the Securities Authorities and/or the TSX and NYSE, except where failure to do so would not have any Purchaser Material Adverse Effect. The Purchaser has filed or furnished all Purchaser Filings including “documents affecting the rights of securityholders” and “material contracts” required to be filed by Part 12 of, or furnished by the Purchaser with any Securities Authorities pursuant to, National Instrument 51-102 – Continuous Disclosure Obligations), except where failure to do so would not have any Purchaser Material Adverse Effect. Each of the Purchaser Filings complied as filed in all material respects with applicable Securities Laws and did not, as of the date filed (or, if amended or superseded by a subsequent filing prior to the date of this Agreement, on the date of such filing), contain any Misrepresentation. The Purchaser has not filed any confidential material change report which at the date of this Agreement remains confidential.

Funds Available. The Purchaser has sufficient funds available to pay, at the Effective Time, the Aggregate Option Premium payable to Effective Time Company Shareholders, Effective Time High Street Holders and Effective Time USCo2 Class B Holders under the Arrangement.

Independent Auditors. The Purchaser’s current auditors are independent with respect to the Purchaser within the meaning of the rules of professional conduct applicable to auditors in Canada and there has never been a “reportable event” (within the meaning of National Instrument 51-102 – Continuous Disclosure Obligations) with the current, or to the best knowledge of the Purchaser any predecessor, auditors of the Purchaser during the last three years.

No Undisclosed Liabilities. The Purchaser and its Subsidiaries have no outstanding indebtedness, liabilities or obligations, whether accrued, absolute, contingent or otherwise, and are not party to or bound by any suretyship, guarantee, indemnification or assumption agreement, or endorsement of, or any other similar commitment with respect to the obligations, liabilities or indebtedness of any Person, other than those specifically identified in the financial statements of the Purchaser contained in the Purchaser Filings, which relate to the proposed Arrangement or incurred in the Ordinary Course and which are not material since the date of the most recent financial statements of the Purchaser contained in the Purchaser Filings.

No Material Change. Since the December 31, 2018: (i) the Purchaser and its Subsidiaries have operated their respective businesses only in the Ordinary Course, and (ii) there has not been any Purchaser Material Adverse Effect.

Sufficiency of Assets. The assets and property owned, leased or licensed by the Company and its Subsidiaries are sufficient, in all material respects, for conducting the business, as currently conducted, of the Purchaser.

Litigation. There is no claim, action, suit, grievance, complaint, proceeding, arbitration, charge, audit, indictment or investigation that is pending or has been commenced or, to the knowledge of the Purchaser, is threatened affecting the Purchaser or its Subsidiaries or affecting any of their property or assets (whether owned or leased) at law or in equity, which, individually or in the aggregate, if determined adversely to the Purchaser or its Subsidiaries, has or could reasonably be expected to result in liability to the Purchaser or its Subsidiaries or to injunctive relief against the Purchaser that would result in a Purchaser Material Adverse Effect. Neither the Purchaser, its Subsidiaries nor any of their respective assets or properties is subject to any outstanding or, to the knowledge of the Purchaser, threatened, judgment, order, writ, injunction or decree material to the Purchaser and its Subsidiaries on a consolidated basis that would result in a Purchaser Material Adverse Effect.

Product Recall. In the last two years, no products of the Purchaser or its Subsidiaries have been subject to any voluntary or involuntary, or other product recall, replacement or similar action or event that would result in a Purchaser Material Adverse Effect. In the last two years, there have been no product returns ordered or recommended by any Governmental Entity with respect to any products of the Purchaser or its Subsidiaries that would result in a Purchaser Material Adverse Effect. The Purchaser and its Subsidiaries have not received any written notice, correspondence or writing from any Governmental Entity, including Health Canada, regarding any voluntary or involuntary, or other product recall, replacement or similar action or event that would result in a Purchaser Material Adverse Effect.

Authorizations. All material Authorizations of the Purchaser and its Subsidiaries are in full force and effect, and, to the knowledge of the Purchaser, no suspension or cancellation thereof has been threatened. No material Authorizations of the Purchaser or any of its Subsidiaries will in any way be affected by, or terminate or lapse by reason of, the transactions contemplated by this Agreement or any of the other agreements contemplated hereunder or executed herewith.

Compliance with Laws.

Each of the Purchaser and its Subsidiaries has complied with and is not in violation, in any material respect, of any applicable Laws in each jurisdiction in which it carries on business.

Neither the Purchaser nor any of its Subsidiaries has received any written notices or other written correspondence from any Governmental Entity (A) regarding any violation (or any investigation, inspection, audit, or other proceeding by any Governmental Entity involving allegations of any violation) of any Law (other than Environmental Laws) that would result in a Purchaser Material Adverse Effect or (B) of any circumstances that may have existed or currently exist which

Neither the Purchaser, its Subsidiaries nor, to the knowledge of the Purchaser, any of their respective directors, executives, representatives, agents or employees while acting in such capacity on behalf of the Purchaser or its Subsidiaries (A) has used or is using any corporate funds for any illegal contributions, gifts, entertainment or other expenses relating to political activity that would be illegal, (B) has used or is using any corporate funds for any direct or indirect illegal payments to any foreign or domestic governmental officials or employees, (C) has violated or is violating any provision of the United States Foreign Corrupt Practices Act of 1977, as amended and the rules and regulations thereunder, the Corruption of Foreign Public Officials Act (Canada) or any similar Laws of other jurisdictions, (D) has established or maintained, or is maintaining, any illegal fund of corporate monies or other properties or (E) has made any bribe, illegal rebate, illegal payoff, influence payment, kickback or other illegal payment of any nature.

The operations of the Purchaser and its Subsidiaries are and have been conducted at all times in compliance with applicable Money Laundering Laws and no action, suit or proceeding by or before any court of governmental authority or any arbitrator non-Governmental Entity involving the Purchaser or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Purchaser, threatened.

None of the Purchaser or any of its Subsidiaries or, to the knowledge of the Purchaser, any director, officer, agent, employee or affiliate of the Purchaser or any of its Subsidiaries, has had any Sanctions imposed upon any such person, and the Purchaser and its Subsidiaries are not in violation of any of the Sanctions or law or executive order relating thereto, or are conducting business with any person subject to any Sanctions.

Restrictions on Business Activities. There is no agreement, judgment, injunction, order or decree binding upon the Purchaser or any of its Subsidiaries that has or would reasonably be expected to have the effect of prohibiting, restricting or impairing any business practice of the Purchaser or any of its Subsidiaries or affiliates, any acquisition of property by the Purchaser or any of its Subsidiaries or affiliates, or the conduct of business by the Purchaser or any of its Subsidiaries or affiliates, as currently conducted (including following the transactions contemplated by this Agreement).

Taxes. Except as would not be reasonably expected to result in, individually or in the aggregate, a Purchaser Material Adverse Effect:

The Purchaser and each of its Subsidiaries has duly and timely filed (or timely requested and were granted extensions of) all income and material Tax Returns required to be filed prior to the date hereof with the appropriate Governmental Entities and all such Tax Returns are true and correct in all material respects.

The Purchaser and each of its Subsidiaries has duly and timely paid all income and material Taxes, Purchaser all instalments on account of Taxes for the current year that are due and payable by it whether or not assessed by the appropriate Governmental Entity.

The Purchaser and each of its Subsidiaries has duly and timely collected all material Taxes required to be collected and has duly and timely paid and remitted the same to the appropriate Governmental Entity.

Except as disclosed in Section (v)(iv) of the Purchaser Disclosure Letter, to the knowledge of the Purchaser there are no proceedings, investigations, audits or claims now pending against the Purchaser or its Subsidiaries in respect of any Taxes and no Governmental Entity has asserted in writing, or to the knowledge of the Purchaser, has threatened to assert against the Purchaser or its Subsidiaries any deficiency or claim for Taxes or interest thereon or penalties in connection therewith which has not yet been paid.

No waivers of statutes of limitation with respect to such Tax Returns of the Purchaser have been given by or requested from the Purchaser which have not yet expired. Other than as disclosed in Section (v)(v) of the Purchaser Disclosure Letter, all deficiencies asserted or assessments made as a result of any examinations have been fully paid, or are fully reflected as a liability in the Purchaser Financial Statements, or are being contested and an adequate reserve therefor has been established and is fully reflected in the Purchaser Financial Statements.

There are no Liens for Taxes upon any property or assets of the Purchaser and its Subsidiaries, except Liens for current Taxes not yet due.

Except as disclosed in Section (v)(vii) of the Purchaser Disclosure Letter: (i) the Purchaser or its Subsidiaries are not a party to any agreement, understanding, or arrangement relating to allocating or sharing any amount of Taxes , the principal purpose of which is to allocate or share Taxes; and (ii) neither the Purchaser nor any of its Subsidiaries has any liability for the Taxes of any other Person (other than the Purchaser and its Subsidiaries) (a) under Section 1.1502-6 of the U.S. Treasury Regulations (or any similar provision of state, local or foreign applicable Law); (b) as a transferee or successor; or (c) by contract or indemnity (including under any Tax sharing agreement) or otherwise.

All employees and independent contractors of the Purchaser and its Subsidiaries have been properly classified as such for Tax purposes as well as for employee benefit purposes and, to the knowledge of the Purchaser, there have been no

The Purchaser is a “taxable Canadian corporation” for the purposes of the Tax Act.

The value of the consideration paid or received by the Purchaser and Subsidiaries for the acquisition, sale, transfer or provision of property (including intangibles) or the provision of services (including financial transactions) from or to any Person with which it was not dealing at arm’s length at the relevant time was the fair market value of such property acquired, provided or sold or services purchased or provided. Transactions between the Purchaser, the Subsidiaries and any such non-resident person or partnership were priced in a manner so as not to give rise to any material adjustments pursuant to Section 247 of the Tax Act.

Neither the Purchaser nor its Subsidiaries has received any requirement, demand or request from any Governmental Entity pursuant to Section 224 of the Tax Act or any similar provision of an applicable Law that remains unsatisfied in any respect.

No written claim has ever been made by a taxing authority, in a jurisdiction where the Purchaser or the Subsidiaries does not file Tax Returns, that the Purchaser or its Subsidiaries is or may be subject to taxation by that jurisdiction or any of the Purchaser’s or its Subsidiaries’ assets are or may be subject to such taxation.

Neither the Purchaser nor the Subsidiaries has requested, received or entered into any advance Tax rulings or advance pricing agreements with any Governmental Entity.

There are no circumstances existing prior to the date hereof which could result in the application to the Purchaser or any Subsidiaries of any of Sections 80, 80.01, 80.02, 80.03 or 80.04 of the Tax Act or any analogous provision of any comparable Law of any province or territory of Canada. Neither the Purchaser nor any Subsidiaries has any unpaid amounts that may be required to be included in the Purchaser or such Subsidiaries’ income for Canadian income tax purposes for any tax period ending on or before the Effective Date under Section 78 of the Tax Act or a corresponding provincial provision. Neither the Purchaser nor any Subsidiaries have acquired property from a Person in circumstances that would result in the Purchaser or Subsidiaries, as the case may be, becoming liable to pay Taxes of such Person under subsection 160(1) of the Tax Act or a corresponding provincial provision.

The Purchaser is duly registered under subdivision (d) of Division V of Part IX of the Excise Tax Act (Canada) with respect to the goods and services tax and harmonized sales tax, and under applicable provincial Tax statutes in respect of