ARRANGEMENT AGREEMENT BETWEEN HEXO CORP. – AND – NEWSTRIKE BRANDS LTD. March 12, 2019

SECTION 1 INTERPRETATION

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

1.10

SECTION 2 THE ARRANGEMENT

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

2.10

2.11

2.12

SECTION 3 REPRESENTATIONS AND WARRANTIES OF COMPANY

3.1

3.2

3.3

SECTION 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER

4.1

4.2

SECTION 5 COVENANTS OF COMPANY AND PURCHASER

5.1

5.2

5.3

5.4

5.5

5.6

5.7

5.8

SECTION 6 CONDITIONS

6.1

6.2

6.3

SECTION 7 ADDITIONAL AGREEMENTS

7.1

7.2

7.3

7.4

SECTION 8 TERMINATION, AMENDMENT AND WAIVER

8.1

8.2

8.3

8.4

SECTION 9 GENERAL PROVISIONS

9.1

9.2

9.3

9.4

9.5

9.6

9.7

9.8

9.9

9.10

9.11

9.12

9.13

9.14

9.15

Definitions

any direct or indirect take-over bid, tender offer, exchange offer, treasury issuance or other transaction that, if consummated, would result in a Person or group of Persons,

any amalgamation, plan of arrangement, share exchange, business combination, merger, consolidation, recapitalization, reorganization, liquidation, dissolution, winding up, exclusive licence or other similar transaction involving Company and/or one or more Subsidiaries of Company, or any liquidation, dissolution or winding-up of Company and/or one or more Subsidiaries of Company which represents, individually or in the aggregate, 20% or more of the consolidated assets or contributed 20% or more of the consolidated revenues or earnings of Company and its Subsidiaries, taken as a whole;

any direct or indirect acquisition or sale, disposition or joint venture (or any lease, long-term supply arrangement licence or other arrangement having the same economic effect as a sale) of assets of Company and/or one or more Subsidiaries of Company which represents, individually or in the aggregate, 20% or more of the consolidated assets or contributed 20% or more of the consolidated revenues or earnings of Company and its Subsidiaries, taken as a whole;

any other transaction, the consummation of which could reasonably be expected to impede, prevent or delay the transactions contemplated by this Agreement or the Arrangement;

any other similar transaction or series of related transactions involving the Company or its Subsidiaries; or

any proposed amendment of, or public announcement of an intention to do, any of the foregoing,

any changes in general conditions affecting the industry in which such Person operates;

any general economic, securities, currency, financial or political conditions or global financing and capital markets, worldwide, in North America or in Canada;

acts of war, sabotage, terrorism, military actions or the escalation thereof;

any natural disaster or similar acts of nature;

any changes in applicable Laws, relating to the industry in which such Person operates, or accounting rules or principles, including IFRS;

any failure to meet financial projections or forecasts (it being understood that the causes underlying such change may be taken into account in determining whether a Material Adverse Change has occurred);

any actions taken (or omitted to be taken) upon the request or with the consent of the other Party, in connection with this Agreement or related agreements or the consummation of the transactions contemplated by this Agreement;

any action taken by the relevant Party or any of its Subsidiaries which is required, or expressly contemplated, to be taken pursuant to this Agreement or the failure to take any action prohibited by this Agreement; and

a change in the market trading price or trading volume of securities of that Person (it being understood that the causes underlying such change may, unless otherwise excluded by clauses (a) through (h), be taken into account in determining whether a Material Adverse Change has occurred), or any suspension of trading in securities generally on any securities exchange on which any securities of the relevant Party trade,

is consistent in nature, scope and magnitude with the past practices of that Person and its Subsidiaries and is taken in the ordinary course of normal day-to-day operations of such Person and its Subsidiaries; and

does not require the authorization of the shareholders of that Person or its Subsidiaries or any other separate or special authorization of any nature other than normal course authorizations of Governmental Entities;

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 or statutory Liens of contractors, subcontractors, mechanics, workers, suppliers, materialmen, carriers and others in respect of the construction, maintenance, repair or operation of assets, 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;

the right reserved to or vested in any Governmental Entity by any statutory provision or by the terms of any lease, licence, franchise, grant or permit of a Party or any of its Subsidiaries, to terminate any such lease, licence, franchise, grant or permit, or to require annual or other payments as a condition of their continuance;

easements, servitudes, restrictions, restrictive covenants, rights of way, licenses, permits and other similar rights in real or immovable property that in each case do not materially detract from the value or materially interfere with the use of the real or immovable property subject thereto;

zoning and building by-laws and ordinances, regulations made by public authorities that in each case do not materially detract from the value or materially interfere with the use of the real or immovable property subject hereto;

such other imperfections or irregularities of title or Lien that, in each case, do not materially adversely affect the use of the properties or assets subject thereto or otherwise materially adversely impair business operations of such properties; and

agreements with any Governmental Entity and any public utilities or private suppliers of services that in each case do not materially detract from the value or materially interfere with the use of the real or immovable property subject thereto;

complies with Applicable Securities Laws and did not result from or involve a breach of any agreement between any one or more of the Persons making such Acquisition Proposal and its affiliates and Company or a breach of this Agreement;

is made in writing after the date hereof, including any variation or other amendment of any Acquisition Proposal made prior to the date hereof;

is not subject to any due diligence or access condition;

is not subject to any financing condition and in respect of which it has been demonstrated to the satisfaction of the Company Board, acting in good faith (after receipt of advice from its financial advisors and its outside legal counsel) that adequate arrangements have been made in respect of any financing required to ensure the required funds or other consideration will be available to effect payment in full to complete such Acquisition Proposal;

the Company Board has determined in good faith (after consultation with its financial advisors and outside legal counsel), (1) is reasonably capable of being completed in accordance with its terms without undue delay taking into account, to the extent considered appropriate by the Company Board, all legal, financial, regulatory and other aspects of such Acquisition Proposal and the Person or Persons making such Acquisition, and (2) would, if consummated in accordance with its terms (but not assuming away any risk of non-completion), result in a transaction more favourable from a financial point of view to the Company Shareholders (other than Purchaser and its affiliates) than the Arrangement (taking into consideration any adjustment to the terms and conditions of the Arrangement proposed by the Purchaser pursuant to Section 7.2 where applicable); and

in the event that the Company does not have the financial resources to pay the Termination Payment, the terms of such Acquisition Proposal provide that the person making such Superior Proposal shall advance or otherwise provide the Company with the cash required for the Company to pay the Termination Payment in advance of the date that such Termination Payment is to be paid by the Company to the Purchaser;

Interpretation Not Affected by Headings

Number and Gender

Date for Any Action

Currency

Accounting Matters

Knowledge

Subsidiaries

Schedules

Schedule A

Schedule B

Schedule C

Schedule D

Schedule E

Schedule F

Other Definitional and Interpretive Provisions

References in this Agreement to the words “include”, “includes” or “including” shall be deemed to be followed by the words “without limitation” whether or not they are in fact followed by those words or words of like import.

References to “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,”.

The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

Any reference to a Person includes its heirs, administrators, executors, legal personal representatives, successors and permitted assigns.

References to time are to local time, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.

Any terms defined in this Agreement and used in the Disclosure Letter or any Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement.

References to any agreement, contract, license, lease, indenture, arrangement or commitment are to that agreement, contract, license, lease, indenture, arrangement or commitment as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. Any reference in this Agreement to any Person includes its heirs, administrators, executors, legal personal representatives, predecessors, successors and permitted assigns of that Person.

References to a particular statute or Law shall be to such statute or Law and the rules, regulations and published policies made thereunder, as now in effect and as they may be promulgated thereunder or amended from time to time and any statute or regulation that supplements or supersedes such statute or regulation.

Arrangement

Interim Order

for the calling and holding of the Meeting for the purpose of considering and, if deemed advisable, approving the Arrangement;

for the class of Persons to whom notice is to be provided in respect of the Arrangement and the Meeting and for the manner in which such notice is to be provided;

for confirmation of the record date in respect of the Meeting referred to in Section 2.3(1);

that the required level of approval for the Arrangement Resolution shall be:

66²⁄₃% of the votes cast on the Arrangement Resolution by the Company Shareholders present in person or represented by proxy at the Meeting; and

to the extent required, a majority of the votes attached to the Company Shares, voting as a separate class, held by Company Shareholders present in person or represented by proxy at the Meeting, excluding for this purpose votes attached to such Company Shares held by Persons described in items (a) through (d) of Section 8.1(2) of MI 61-101;

that, in all other respects, other than as ordered by the Court, the terms, restrictions and conditions of Company’s articles and bylaws, including quorum requirements and all other matters, shall apply in respect of the Meeting;

for the grant of the Dissent Rights to those Company Shareholders who are registered Company Shareholders as contemplated in the Plan of Arrangement;

for the notice requirements with respect to the presentation of the application to the Court for the Final Order;

that the Meeting may be adjourned or postponed from time to time by Company in accordance with the terms of this Agreement without the need for additional approval of the Court;

except as required by Law, that the record date for the Company Shareholders entitled to notice of and to vote at the Meeting will not, unless agreed to in writing by the Purchaser and the Company, change in respect or as a consequence of any adjournment(s) or postponement(s) of the Meeting; and

that it is Purchaser’s intention 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 Purchaser Shares to be issued pursuant to the Arrangement, based on the Court’s approval of the fairness of the terms and conditions of the Arrangement; and

for such other matters as Purchaser may reasonably require.

The Meeting

The Circular

Final Order

Court Proceedings

Options, Warrants and Other Securities

Articles of Arrangement and Effective Date

Delivery of Consideration

Tax Withholdings and Other Source Deductions

U.S. Securities Laws

the Court will be advised as to the intention of the Parties to rely on the exemption provided by Section 3(a)(10) of the U.S. Securities Act prior to the hearing required to approve the Interim Order;

the Court will be required to satisfy itself as to the procedural and substantive fairness of the terms and conditions of the Arrangement to Company Securityholders subject to the Arrangement;

prior to the issuance of the Interim Order, the Company will file with the Court a copy of the proposed text of the Circular together with any other documents required by Law in connection with the Meeting;

holders of Company Options entitled to receive Replacement Options pursuant to the Arrangement will be advised that the Replacement Options issued pursuant to the Arrangement (and underlying Purchaser Shares) have not been registered under the U.S. Securities Act and will be issued and exchanged by Purchaser in reliance on the exemption provided under Section 3(a)(10) under the U.S. Securities Act, but that such exemption does not exempt the issuance of securities upon the exercise of such Replacement Options; therefore, the Purchaser Shares issuable upon exercise of the

Company will ensure that each Company Securityholder will be given adequate notice advising them of their right to attend the hearing of the Court at which the Court will consider the procedural and substantive fairness of the terms and conditions of the Arrangement and providing them with sufficient information necessary for them to exercise that right;

Company Shareholders will be advised that the Purchaser Shares to be issued pursuant to the Arrangement in exchange for Company Shares have not been registered under the U.S. Securities Act and will be issued by Purchaser in reliance on the exemption provided by Section 3(a)(10) of the U.S. Securities Act and in the case of Company Shareholders that are, or, have been within 90 days of the Effective Date, affiliates of Purchaser, will be subject to restrictions on resale under the securities laws of the United States;

the Final Order approving the terms and conditions of the Arrangement that is obtained from the Court will expressly state that the Arrangement is approved by the Court as being procedurally and substantively fair to Company Securityholders;

the Interim Order approving the Meeting will specify that each Company Securityholder will have the right to appear before the Court at the hearing of the Court to give approval of the Arrangement so long as they enter an appearance within a reasonable time;

the Court will hold a hearing before approving the procedural and substantive fairness of the terms and conditions of the Arrangement; and

the Final Order shall include a statement to substantially the following effect: “This Order will serve as a basis of a claim to an exemption, pursuant to Section 3(a)(10) of the U.S. Securities Act, from the registration requirements otherwise imposed by that act, regarding the distribution of securities of Purchaser in connection herewith”.

Adjustment of Consideration

Representations and Warranties of Company

Disclosure Letter

Survival of Representations and Warranties of Company

Representations and Warranties of Purchaser

Survival of Representations and Warranties of Purchaser

Covenants of Company Regarding the Conduct of Business

amend its articles or bylaws or other comparable organizational documents or the terms of any of its outstanding securities, including any outstanding debt securities;

split, combine, consolidate or reclassify any of its shares nor undertake any other capital reorganization or amend the terms of its securities;

issue, grant, deliver, sell, pledge or otherwise encumber, or authorize the issuance, grant, delivery, sale, pledge or other encumbrance of any shares of capital stock, securities, any options (including for greater certainty Company Options), restricted share units, deferred share units, warrants or similar rights exercisable or exchangeable for or convertible into such capital stock, of Company or any of its Subsidiaries (except for the issuance of Company Shares issuable upon the exercise of Company Options or Company Warrants outstanding on the date hereof) or redeem, repurchase, or otherwise acquire or offer to redeem, repurchase or otherwise acquire, any of its outstanding securities or any of the outstanding securities of its Subsidiaries;

without limiting the generality of Section 5.1(c), authorize, approve, agree to issue, issue, grant or award any awards or options pursuant to the Stock Option Plan or take any action to approve, amend, agree to amend or waive any performance or vesting criteria or accelerate vesting of any awards or options outstanding under the Stock Option Plan;

declare, set aside or pay any dividends on or make any other distributions on or in respect of its shares, nor reduce capital in respect of its shares or the securities of any of its Subsidiaries or set aside funds or other assets for any dividend or otherwise payable by a Subsidiary, provided that Subsidiaries shall have the right to declare and pay dividends or other distributions to the Company or other Subsidiaries of the Company in a manner consistent with past practice;

reorganize, amalgamate, combine or merge Company or any of its Subsidiaries with any other person, nor acquire or agree to acquire by amalgamating, merging or consolidating with, purchasing substantially all of the assets or shares of or otherwise, any business of any corporation, partnership, association or other business organization or division thereof;

acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, in one transaction or in a series of related transactions, assets, securities, properties, interests or businesses or make any investment either by the purchase of securities, contribution of capital, property transfer, or purchase of any other property or assets of any other Person, or acquire any license rights, other than (i) pursuant to a contract in existence on the date hereof or (ii) pursuant to acquisitions in the ordinary course of business not in excess of $1,000,000 in purchase price;

incur, or commit to incur, capital expenditures other than capital expenditures up to the amount set forth in the capital plan that forms part of Company’s forecast as set forth in the Disclosure Letter and shall not delay or postpone the completion of such capital expenditures;

sell, lease, pledge option, encumber or otherwise dispose of, or commit to sell, lease, pledge option, encumber or otherwise dispose of, or allow any third party to encumber without contesting in good faith, any assets, securities, properties, interests or businesses or group of related assets, securities, properties, interests or businesses (through one or more related or unrelated transactions) except for assets which are obsolete and which individually or in the aggregate do not exceed $500,000 or inventory sold in the ordinary course of business;

enter into any joint venture or similar agreement, arrangement or relationship;

enter into or complete any transaction not in the ordinary course of business;

(i) incur or commit to incur any indebtedness for borrowed money or issue any debt securities, (ii) incur or commit to incur, or guarantee, endorse or otherwise become responsible for, any other liability, obligation or indemnity or the obligation of any other Person, or (iii) make any loans or advances to any Person;

vary Company’s payment or collection practices in any material respect from Company’s past practices, offer to discount the amount of any account receivable, delay the payment of any account payable or extend any incentive (whether to an account debtor, an account creditor or any Company Employee or third party responsible for the collection of receivables or the payment of payables) with respect to any account receivable or account payable or the payment or collection thereof;

make any changes to Company’s existing accounting policies or internal controls other than as required by applicable Laws or by IFRS;

pay, discharge or satisfy any material claims, liabilities or obligations other than (i) the payment, discharge or satisfaction, in the ordinary course of business or in accordance with their terms, of liabilities reflected or reserved against in the consolidated balance sheet of Company as at September 30, 2018 or incurred in the ordinary course of business since September 30, 2018, or in accordance with the terms of this Agreement, or the payment of a settlement or compromise permitted pursuant to Section 5.1(1)(y), and (ii) the payment, discharge or satisfaction of fees, expenses and other charges of the Company Board, the Company Financial Advisor, advisors and service providers which are or become payable in connection with the negotiation and entering into of this Agreement and any of the Contemplated Transactions;

prepay or repay any long-term indebtedness (whether on account of borrowed money, deferred purchase price of property or otherwise) before its scheduled maturity, other than repayments and contractually required prepayments of indebtedness under credit facilities that are set out in the Disclosure Letter;

terminate, or amend the terms of, the employment of any Company Employee (other than any termination or amendment in the ordinary course of business);

except as required by Law: (i) increase any severance, change of control or termination pay (or improvements to notice or pay in lieu of notice) 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; (ii) increase the benefits payable under any existing severance or termination pay policies with any current or former Company Employee or any current or former director of the Company or any of its Subsidiaries; (iii) increase the benefits payable under any employment agreements with any current or former Company Employee or any current or former director of the Company or any of its Subsidiaries; (iv) enter into any employment, deferred

enter into any agreement or arrangement that limits or otherwise restricts in any material respect the Company or any successor thereto, or that would, after the Effective Time, limit or restrict in any material respect the Company or any of its affiliates from competing in any manner;

enter into or amend any Contract with any broker, finder or investment banker including any amendment of any of the Contracts listed in section 31 of the Disclosure Letter;

make any loan or advance to, or any capital contribution or investment in, or assume, guarantee or otherwise become liable with respect to the liabilities or obligations of, any Person (other than in respect of a liability or obligation incurred by a wholly owned Subsidiary that is not restricted hereunder from incurring that liability or obligation);

make any bonus or profit sharing distribution or similar payment of any kind, except as may be required by the terms of a Contract or in accordance with past practice to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

enter into any non-arm’s length (as such term is used for the purpose of the Tax Act) agreement; (ii) amend or agree to amend the terms of any existing non-arm’s length agreement, or (iii) make any payment with respect to or in connection with a non-arm’s length agreement, in each case except as required thereby or pursuant to the terms hereof or waivers of payments that may become due upon a change of control;

commence or assign any rights relating to or any interest in any litigation, proceeding, claim, action, assessment or investigation that is material to Company and involving Company, its Subsidiaries or their respective material assets; nor waive, release, settle or compromise any such proceeding in a manner that could require a payment by, or release another Person of an obligation to, Company or any of its Subsidiaries in excess of $500,000 in aggregate and provided that any such waiver, release, settlement or compromise (i) provides only the payment of cash damages and not any other form of compensation or consideration, (ii) grants Company, its Subsidiaries and its Representatives a full release from such proceeding, and (iii) does not include any admission of liability or guilt or other admission by Company, its Subsidiaries or its Representatives;

enter into any interest rate, currency or equity swaps, ▇▇▇▇▇▇, derivatives or other similar financial instruments;

adopt a plan of liquidation or resolutions providing for the liquidation or dissolution, consolidation, reorganization or winding up of Company or any of its Subsidiaries;

change in any material respect its investment or risk management or other similar policies;

propose or enter into any contract which would be a Material Contract if in existence on the date hereof (other than the renewal of a contract in existence on the date hereof on terms materially consistent with terms in existence on the date hereof) or terminate, fail to renew, cancel, waive, release, assign, grant or transfer any rights of material value or amend, modify or change in any material respect any existing Material Contract or agree or consent to any material agreement or material modification of existing agreements with any Governmental Entity;

knowingly take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Entity to institute proceedings for the suspension, revocation or limitation of rights under, any material Authorizations necessary to conduct its businesses as now conducted or as proposed to be conducted, or fail to prosecute with commercially reasonable due diligence any pending applications to any Governmental Entities for material Authorizations;

enter into, amend or modify any union recognition agreement, Collective Agreement or similar agreement with any trade union or representative body other than in the ordinary course of business and upon reasonable consultation with the Purchaser;

abandon or fail to diligently pursue any application for any material licences, permits, Authorizations or registrations;

grant or commit to grant an exclusive license or otherwise transfer any Intellectual Property or exclusive rights in or in respect thereto that is material to the Company and its Subsidiaries taken as a whole, other than in the ordinary course or to wholly-owned Subsidiaries;

materially change its business or regulatory strategy; or

announce an intention, enter into any formal or informal agreement, or otherwise authorize, agree, resolve or make a commitment, whether or not in writing, to do any of the things prohibited by any of the foregoing subsections.

notify the Purchaser promptly, first orally and then in writing, of any notice or other communication from a customer alleging a defect or claim in respect of any products supplied or sold by Company or any of its Subsidiaries to a customer which is reasonably likely to be reflective of a material recurring product defect, to lead to a product recall or to form the basis for a potential class action recourse by customers;

notify the Purchaser promptly, first orally and then in writing, of any material change in relation to Company and of any material governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated);

duly and timely file all material forms, reports, schedules, statements and other documents required to be filed pursuant to any applicable corporate Laws or Applicable Securities Laws;

use commercially reasonable efforts to cause its current insurance (or re-insurance) policies within its control or any of the coverage thereunder not to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing

duly and timely file all Tax Returns required to be filed by it on or after the date hereof and all such Tax Returns will be true, complete and correct in all material respects;

to make adequate provision in its financial statements for Taxes which relate to any taxation year or part thereof ending or arising before the Effective Date or ending as a consequence of the Effective Date which are not yet due and payable and for which Tax Returns are not yet required to be filed;

in a timely manner withhold, collect, remit to the appropriate Governmental Entity and pay all Taxes which are required by applicable Laws to be withheld, collected, remitted or paid by it to the extent due and payable;

not make, amend or rescind any material express or deemed election relating to Taxes, except: (a) as contemplated in this Agreement, or (b) with the consent of Purchaser, such consent not to be unreasonably withheld, conditioned or delayed;

not make a request for a Tax ruling or enter into any agreement with any Governmental Entity or consent to any extension or waiver of any limitation period with respect to Taxes, except with the consent of Purchaser, such consent not to be unreasonably withheld, conditioned or delayed;

not amend any Tax Return, settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, except with the consent of Purchaser, such consent not to be unreasonably withheld, conditioned or delayed;

not change any of its methods of accounting for income Tax purposes from those employed in the preparation of its income Tax Returns for the taxation year ended December 31, 2018, except as may be required by applicable Laws or IFRS; and

keep the Purchaser reasonably informed, on a current basis, of any events, discussions, notices or changes with respect to any Tax or regulatory investigation or any other investigation by a Governmental Entity or action involving the Company and its Subsidiaries (in each case other than ordinary course communications which could not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole).

Conduct of Business of the Purchaser

split, combine, reclassify or amend the terms of the Purchaser Shares;

amend its articles of amalgamation, by-laws or other Constating Documents in any manner that would have a material and adverse impact on the value of the Purchaser Shares;

declare, set aside or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any Purchaser Shares;

redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire any Purchaser Shares, other than purchases of Purchaser Shares made in the public markets or off-market at then prevailing market price and other than redemptions or repurchases of Purchaser Shares in connection with the administration of equity or employee incentive plans;

adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of the Purchaser; or

authorize, agree, resolve or otherwise commit to do any of the foregoing.

Covenants Regarding the Arrangement.

using commercially reasonable efforts to satisfy, or cause the satisfaction of, all conditions precedent in this Agreement and take all steps set forth in the Interim Order and Final Order applicable to it and comply promptly with all requirements imposed by Law on it or its Subsidiaries with respect to this Agreement or the Arrangement;

using commercially reasonable efforts to obtain, as soon as practicable following execution of this Agreement, and maintain all third party or other consents, waivers, permits, exemptions, orders, approvals, agreements, amendments or confirmations that are (i) necessary to be obtained under the Material Contracts in connection with the Arrangement or this Agreement, or (ii) required in order to maintain the Material Contracts in full force and effect following completion of the Arrangement, in each case, on terms that are reasonably satisfactory to the Purchaser;

using commercially reasonable efforts to oppose, lift or rescind any injunction, restraining or other order, decree or ruling seeking to restrain, enjoin or otherwise prohibit or delay or otherwise adversely affect the consummation of the Arrangement and defend, or cause to be defended, any proceedings to which it is a party or brought against it or its directors or officers challenging the Arrangement or this Agreement; and

not taking any action, or refrain from taking any commercially reasonable action, or permitting any action to be taken or not taken, which would reasonably be expected to prevent, materially delay or otherwise impede the consummation of the Arrangement or the transactions contemplated by this Agreement.

any Material Adverse Change in respect of Company;

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;

any notice or other communication from any Person to the effect that such Person is terminating or otherwise materially adversely modifying its relationship with Company or any of its Subsidiaries as a result of this Agreement or the Arrangement;

any notice or other communication from any Governmental Entity in connection with this Agreement (and the Company shall contemporaneously provide a copy of any such written notice or communication to the Purchaser); or

any filing, actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against, relating to or involving or otherwise affecting the Company or any of its Subsidiaries.

any Material Adverse Change in respect of Purchaser;

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;

any filing, actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against, relating to or involving or otherwise affecting the Purchaser or any of its Subsidiaries; or

any notice or other communication from any Governmental Entity in connection with this Agreement (and Company shall contemporaneously provide a copy of any such written notice or communication to Purchaser).

Mutual Covenants Regarding Regulatory Approval Filings

Access to Information; Confidentiality

Pre-Acquisition Reorganization

can be implemented immediately prior to the Effective Date;

is not prejudicial to the Company or the Company Shareholders, as a whole, in any material respect;

does not unreasonably interfere with the ongoing operations of the Company or any of its Subsidiaries;

does not result in (i) any material breach by the Company of any existing contract or commitment of the Company; or (ii) a breach of any Law;

does not require the approval of the Company Shareholders;

would not reasonably be expected to impede or delay the completion of the Arrangement in any material respect; and

would not result in any Taxes being imposed on, or any adverse Tax or other consequences to, any securityholder of the Company incrementally greater than the Taxes or other consequences to such party in connection with the Arrangement in the absence of any Pre-Acquisition Reorganization.

Securityholder Communications

Privacy

for purposes other than those for which such Transaction Personal Information was collected by Company prior to the Effective Date; and

which does not relate directly to the carrying on of Company’s business or to the carrying out of the purposes for which the Contemplated Transactions were implemented.

Mutual Conditions Precedent

the Arrangement Resolution shall have been approved and adopted by the Company Shareholders at the Meeting in accordance with the Interim Order and the holders of Company Securities other than Company Shares shall not be entitled to vote in such capacity in respect of the Arrangement or if so entitled shall have approved the Arrangement at or prior to the Meeting;

the Interim Order and the Final Order shall each have been obtained on terms consistent with this Agreement, and shall not have been set aside or modified in a manner unacceptable to Company or Purchaser, each acting reasonably, on appeal or otherwise;

each of the Key Regulatory Approvals has been made, given or obtained on terms acceptable to the Purchaser and the Company, each acting reasonably, and each such Key Regulatory Approval is in force and has not been modified or rescinded;

no Law is in effect that makes the consummation of the Arrangement illegal or otherwise prohibits or enjoins the Company or the Purchaser from consummating the Arrangement;

there is no action or proceeding (whether, for greater certainty, by a Governmental Entity or any other Person other than the Purchaser or its Subsidiary or the Company or its Subsidiaries or any of their respective Affiliates or Representatives) pending or threatened in Canada or the United States to:

cease trade, enjoin or prohibit Purchaser’s ability to acquire, hold, or exercise full rights of ownership over, any Company Shares, including the right to vote the Company Shares;

prohibit the Arrangement, or the ownership or operation by the Purchaser or its Subsidiaries of a material portion of the business or assets of the Company or any of its Subsidiaries (taken as a whole), 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, the Company or any of its Subsidiaries as a result of the Arrangement of the transactions contemplated by this Agreement; or

prevent or materially delay the consummation of the Arrangement, or if the Arrangement is consummated, result in a Material Adverse Change in respect of the Company or Purchaser; and

this Agreement shall not have been terminated in accordance with its terms.

Additional Conditions Precedent to the Obligations of Purchaser

the representations and warranties of Company set forth in this Agreement shall be true and correct in all respects as of the date hereof and as of the Effective Time as though made at and as of the Effective Time (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of that specified date), in each case without regard to any materiality or Material Adverse Change qualifications contained therein, except where the failure or failures of any such representations and warranties to be so true and correct in all respects would not be, individually or in the aggregate, a Material Adverse Change in respect of Company, provided that the representations and warranties of Company in Sections 1, 2, 3 and 6(a) of Schedule D shall be true in all respects as of the date hereof and as of the Effective Time other than for de minimis inaccuracies (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of that specified date); and Purchaser shall have received a certificate of Company addressed to Purchaser and dated the Effective Date, signed on behalf of Company by two executive officers of Company (on Company’s behalf and without personal liability), confirming the same as of the Effective Time;

all covenants of Company under this Agreement to be performed on or before the Effective Time shall have been duly performed by Company in all material respects, and Purchaser shall have received a certificate of Company addressed to Purchaser

since the date of this Agreement, there shall not have occurred, or have been disclosed to the public (if previously undisclosed to the public prior to the date hereof) any event that has resulted in a Material Adverse Change in respect of Company, and Purchaser shall have received a certificate, addressed to Purchaser and effective as at the Effective Time, signed on behalf of Company by two executive officers of Company (on Company’s behalf and without personal liability) to such effect;

the aggregate number of Company Shares held, directly or indirectly, by those holders of such shares who have validly exercised Dissent Rights and not withdrawn such exercise in connection with the Arrangement (or instituted proceedings to exercise Dissent Rights) shall not exceed 5% of the aggregate number of Company Shares outstanding immediately prior to the Effective Time; and

the current members of the Company Board and each of its Subsidiaries shall resign as required by the Purchaser. To the extent any member of the Board of Directors of any Subsidiary is requested to not resign by the Purchaser in order to satisfy requirements under the Cannabis Act or Cannabis Regulations and the retention of the Newstrike Licences, such board member shall agree to remain on the board of such Subsidiary, provided that the Purchaser shall take such action as necessary to replace such member in a timely manner if such member has requested to be removed from the board of such Subsidiary.

Additional Conditions Precedent to the Obligations of Company

the representations and warranties of Purchaser set forth in this Agreement shall be true and correct in all respects as of the date hereof and as of the Effective Time as though made at and as of the Effective Time (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of that specified date), in each case without regard to any materiality or Material Adverse Change qualifications contained in them, except where any failure or failures of any such representations and warranties to be so true and correct in all respects would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change in respect of Purchaser or materially delay or materially impede the completion of the Arrangement, provided that the representations and warranties of Purchaser made as of a specified date (the accuracy of which shall be determined as of that specified date), and Company shall have received a certificate of Purchaser addressed to Company and dated the Effective Date, signed on behalf of Purchaser by two executive officers of Purchaser (on Purchaser’s behalf and without personal liability), confirming the same as of the Effective Time; and

all covenants of Purchaser under this Agreement to be performed on or before the Effective Time shall have been duly performed by Purchaser in all material respects, and Company shall have received a certificate of Purchaser addressed to Company and dated the Effective Date, signed on behalf of Purchaser by two executive officers of Purchaser (on Purchaser’s behalf and without personal liability), confirming the same as of the Effective Time.

Subject to obtaining the Final Order and satisfaction or waiver of the other conditions precedent contained herein in its favour (other than conditions which, by their nature, are only capable of being satisfied as of the Effective Time), Purchaser has shall have deposited or caused to be deposited with the Depositary an irrevocable direction for the issuance of Purchaser Shares (the terms and conditions of such deposit and associated escrow to be satisfactory to Company and Purchaser, acting reasonably) in accordance with Section 2.9 required to effect payment and delivery in full of the aggregate Consideration to be paid in respect of Company Shares outstanding at the Effective Time pursuant to the Arrangement and the Depositary shall have confirmed to Company receipt of such Purchaser Shares; and

since the date of this Agreement, there shall not have occurred, or have been disclosed to the public (if previously undisclosed to the public prior to the date hereof) any event that has resulted in a Material Adverse Change in respect of Purchaser, and Company shall have received a certificate, addressed to Company and effective as at the Effective Time, signed on behalf of Purchaser by two executive officers of Purchaser (on Purchaser’s behalf and without personal liability) to such effect.

Notice and Cure Provisions

cause any of the representations or warranties of such Party contained herein to be untrue or inaccurate in any material respect on the date hereof or at the Effective Time; or

result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such Party hereunder prior to the Effective Time.

Non-Solicitation, Superior Proposal, Right to Match

make, solicit, assist, initiate, promote, encourage or otherwise facilitate (including by way of furnishing information, permitting any visit to any facilities or properties of Company or any Subsidiary of Company or entering into any form of written or oral agreement, arrangement or understanding) any inquiries, proposals or offers regarding, constituting or that would reasonably be expected to lead to, an Acquisition Proposal;

participate in any discussions or negotiations with any person (other than Purchaser or any of its Representatives) regarding, or furnish to any Person any information in connection with or otherwise cooperate with, assist or participate in, any effort or attempt to make an Acquisition Proposal or inquiries, proposals, expressions of interest or offers that may reasonably be expected to constitute or lead to an Acquisition Proposal;

make, or propose publicly to make a Change in Recommendation or enter into any written agreement in respect of a Change in Recommendation other than a confidentiality and standstill agreement entered into in accordance with the terms of this Agreement;

release any person (including, for greater certainty, any person contacted prior to the date hereof and their Representatives) from, terminate, waive, amend or modify any provision of or otherwise fail to enforce specifically the terms and provisions of, any confidentiality or standstill agreement to which it or any of its Subsidiaries is a party, provided that, for the avoidance of doubt, any release or deemed waiver from the standstill provisions of any such agreement in accordance with its terms as a consequence of the execution and delivery of this Agreement, without further agreement or action by Company or any of its Subsidiaries shall not constitute a breach of this Section 7.2(1); or

accept, approve, endorse, recommend or enter into, or publicly propose to accept, approve, endorse or enter into, any letter of intent, agreement in principle, agreement, arrangement or understanding related to an Acquisition Proposal that may reasonably be expected to constitute or lead to an Acquisition Proposal.

the Company Board first determines in good faith, after consultation with its outside legal counsel and financial advisors, that such Acquisition Proposal is, or could reasonably be expected to lead to, a Superior Proposal and, after consultation with its outside counsel, that the failure to engage in such discussions or negotiations would be inconsistent with its fiduciary duties;

such Person was not restricted from making such Acquisition Proposal pursuant to an existing confidentiality, standstill, non-disclosure, use, business purpose or similar restriction with the Company or its Subsidiaries;

the Acquisition Proposal did not arise, directly or indirectly, as a result of a violation by the Company, its Subsidiaries or its Representatives of this Section 7.2;

the Company enters into a confidentiality and standstill agreement with such Person (if one has not already been entered into or if such previous agreement contains provisions

the Company has (i) provided prompt written notice to Purchaser of its decision to take such action, (ii) prior to providing any non-public information to such person Company provides a true, complete and final executed copy of the confidentiality and standstill referred to in Section 7.2(5)(d); and (iii) Purchaser is promptly provided (to the extent not previously provided) with any such non-public information provided to such person.

the Person making the Superior Proposal was not prohibited from making such Acquisition Proposal, pursuant to an existing confidentiality, standstill, non-disclosure, use, business purpose or similar restriction with the Company or its Subsidiaries;

the Acquisition Proposal, inquiry, proposal, offer or request did not arise, directly or indirectly, as a result of a violation by the Company of this Section 7.2;

Company has complied with its obligations under this Section 7.2;

the Company Board has determined in good faith, after consultation with the Company’s outside legal counsel that the failure by the Company Board to recommend that the Company enter into a definitive agreement with respect to such Superior Proposal would be inconsistent with its fiduciary duties;

Company has delivered written notice to Purchaser of the determination of the Company Board that such Acquisition Proposal constitutes a Superior Proposal and of the intention of the Company Board to accept, approve or recommend such Superior Proposal and/or of Company to enter into an agreement with respect to such Superior Proposal, together with a copy of the Acquisition Proposal and all documentation (including all agreements, arrangements and understandings) comprising the Acquisition Proposal to the extent not previously provided and a summary setting forth Company’s valuation of any non-cash consideration included in the Acquisition Proposal together with detailed information concerning the value and financial terms that the Company Board, in consultation with its financial advisors, has determined should be ascribed to any non-cash consideration offered under such Acquisition Proposal (collectively, the “Superior Proposal Notice”) such documents to be provided to Purchaser not less than five (5) Business Days prior to the proposed acceptance, approval or execution of the proposed agreement by Company;

at least five (5) Business Days shall have elapsed from the date the Superior Proposal Notice was received by Purchaser, which five business day-period is referred to herein as the ”Right to Match Period”;

during the Right to Match Period, Purchaser has had the opportunity (but not the obligation), in accordance with Section 7.2(7), to offer to amend this Agreement and the Arrangement in order for such Acquisition Proposal to cease to be a Superior Proposal;

if Purchaser has offered to amend the terms and conditions of this Agreement during the Right to Match Period pursuant to Section 7.2(7), Company has determined in accordance with Section 7.2(7) that such Acquisition Proposal continues to be a Superior Proposal when assessed against the Arrangement as it is proposed to be amended as at the termination of the Right to Match Period;

such Superior Proposal does not, except by virtue of entering into the written agreement in respect of such Superior Proposal or completion of the transaction contemplated by the Superior Proposal, require the Company or any other Person to take any action the primary purpose of which is to interfere with the attempted successful completion of the Arrangement or any alternative transaction pursued by the Purchaser pursuant to the terms of the Voting Support Agreements (including requiring the Company to delay, adjourn, postpone or cancel the Meeting) or provide for the payment of any break, termination or other fees or expenses or confer any rights or options to acquire assets or securities of the Company or any of its Subsidiaries to any Person in the event that the Company or any of its Subsidiaries completes the Arrangement or any other similar transaction with the Purchaser agreed to prior to the termination of this Agreement or pursuant to the Support and Voting Agreements; and

Company pays the Termination Payment prescribed by Section 7.3(1).

Termination Payment

Section 8.2(1)(c)(i) [Change in Recommendation] and Section 8.2(1)(d)(i) [Superior Proposal]; or

Section 8.2(1)(b)(i) [Outside Date] or Section 8.2(1)(b)(iii) [Shareholder Approval] either by Company or Purchaser, or Section 8.2(1)(c)(ii) [Company Breach] by Purchaser, and (i) following the date hereof and prior to the Meeting an Acquisition Proposal shall have been announced, offered, made by or otherwise disclosed by any person other than

Expense Reimbursement

Term

Termination

by mutual written agreement of Purchaser and Company, duly authorized by the board of directors of each;

by either Company or Purchaser, if:

the Effective Time shall not have occurred on or before the Outside Date, except that the right to terminate this Agreement under this Section 8.2(1)(b)(i) shall not be available to any such Party whose failure to fulfill any of its obligations or a breach by such Party of any of its representations or warranties, has been the principal cause of, or resulted in, the failure of the Effective Time to occur by such date;

after the date hereof, an action, suit, demand or proceeding shall have been taken or threatened by any Governmental Entity or any other person or a Governmental Entity shall have enacted, issued, promulgated, applied for (or advised either Purchaser or Company in writing that it has determined to make such application), made any order or enforced or entered (or amended) any Law (whether temporary, preliminary or permanent), in each case, (i) that restrains, enjoins or otherwise prohibits consummation of, or dissolves, the Arrangement or the Contemplated Transactions, or (ii) which, if the Arrangement were completed, would result in, or would be reasonably likely to result in, a Material Adverse Change in respect of the other Party, provided that the Party seeking to terminate this Agreement shall have used commercially reasonable efforts to prevent the entry of or remove or lift such prohibition or injunction and is not then in breach of this Agreement so as to directly or indirectly cause any condition in Section 6.2(b) (Representations and Warranties), Section 6.3(a) (Representations and Warranties), Section 6.2(c) (Performance of Covenants) or Section 6.3(b) (Performance of Covenants), as applicable, not to be satisfied; or

the Arrangement Resolution shall have failed to receive the requisite vote of the Company Shareholders for approval at the Meeting (including any adjournment or postponement thereof) in accordance with the Interim Order and applicable Laws and at or prior to the Meeting by any other Company Securityholders if so required by the Interim Order or applicable Laws; provided that a Party may not terminate this Agreement pursuant to this Section 8.2(1)(b)(iii) if the failure of the Arrangement Resolution to be passed by the Company Shareholders has been caused by, or is a result of, a breach by such Party of any of its representations

by Purchaser, if:

prior to obtaining the approval of the Arrangement Resolution by the Company Shareholders, (A) the Company Board shall have effected a Change in Recommendation, (B) Company Board approves, recommends or authorizes Company to enter into a written agreement (other than a confidentiality and standstill agreement as contemplated in Section 7.2(5)) concerning a Superior Proposal, or Company breaches Section 7.2 in any material respect; or

subject to Section 7.1(2), a breach of any representation or warranty or failure to perform any covenant or agreement on the part of Company set forth in this Agreement shall have occurred that would cause any of the conditions set forth in Section 6.1 or Section 6.2 not to be satisfied, and such breach or failure is incapable of being cured or is not cured on or prior to the Outside Date in accordance with the terms of Section 7.1(3), provided that Purchaser is not then in breach of this Agreement so as to cause any of the conditions set forth in Section 6.1 or Section 6.3 not to be satisfied; or

any event occurs as a result of which the condition set forth in Section 6.2(f) [Dissent Rights] is not capable of being satisfied by the Outside Date; or

since the date of this Agreement, there has occurred a Material Adverse Change in respect of Company;

by Company, if:

prior to obtaining the approval of the Arrangement Resolution by the Company Shareholders, the Company Board authorizes Company, subject to complying with the terms of Section 7.2 and Section 7.3(1), to approve, accept or enter into any agreement, understanding or arrangement concerning a Superior Proposal (other than a confidentiality agreement as described in Section 7.2(5)) and that prior to or concurrent with such termination Company pays the Termination Payment in accordance with Section 7.3(3);

a breach of any representation or warranty or failure to perform any covenant or agreement on the part of Purchaser set forth in this Agreement shall have occurred that would cause any of the conditions set forth in Section 6.1 or Section 6.2 not to be satisfied, and such breach or failure is incapable of being cured or is not cured on or prior to the Outside Date in accordance with the terms of Section 7.1(3); provided that Company is not then in breach of this Agreement so as to cause any of the conditions set forth in Section 6.1 or Section 6.2 not to be satisfied; or

since the date of this Agreement, there has occurred a Material Adverse Change in respect of Purchaser.

Effect of Termination

Waiver

Insurance, Indemnification and Waiver

TSX-V Delisting

Notices

if to Company:

if to Purchaser:

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Governing Law, Jurisdiction

Injunctive Relief and Specific Performance

Time of Essence

Entire Agreement, Binding Effect

Assignment

Severability

Rules of Construction

No Third Party Beneficiaries

No Liability

Language

Counterparts, Execution

Amendments

change the time for performance of any of the obligations or acts of the Parties;

modify any representation or warranty contained herein or in any document delivered pursuant hereto;

modify any of the covenants herein contained and waive or modify performance of any of the obligations of the Parties; and/or

modify any mutual conditions precedent herein contained.

The arrangement (the “Arrangement”) under Section 182 of the Business Corporations Act (Ontario) (the “OBCA”) of Newstrike Brands Ltd. (the “Corporation”), as more particularly described and set forth in the management proxy circular (the “Circular”) dated 12, 2019 of the Corporation accompanying the notice of this meeting and as it may be amended, modified or supplemented in accordance with the arrangement agreement dated March [●], 2019 between the Corporation and Hexo Corp. (as it may from time to time be amended, modified or supplemented, the “Arrangement Agreement”), is hereby authorized, approved and adopted.

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

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

The Corporation is hereby authorized to apply for a final order from the Ontario Superior Court of Justice, or other court as applicable to approve the Arrangement on the terms set forth in the Arrangement Agreement and the Plan of Arrangement.

Notwithstanding that this resolution has been passed (and the Arrangement adopted) by the shareholders of the Corporation or that the Arrangement has been approved by the Ontario Superior Court of Justice, or other court as applicable, the directors of the Corporation are hereby authorized and empowered to, without notice to or approval of the shareholders of the Corporation, (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 officer or director of the Corporation is hereby authorized and directed for and on behalf of the Corporation to execute and deliver for filing with the Director under the OBCA articles of arrangement and such other documents as may be necessary or desirable to give effect to the Arrangement in accordance with the Arrangement Agreement, such determination to be conclusively evidenced by the execution and delivery of such articles of arrangement and any such other documents.

Any officer or director of the Corporation is hereby authorized and directed for and on behalf of the Corporation 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 performed all such other acts and things as such person determines may be necessary or desirable to give full effect to the foregoing resolutions and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such document or instrument or the doing of any such act or thing.

Definitions

that number of Company Shares, Company Options or Company Warrants (as the case may be) set forth on Schedule A to this Agreement, being all of the Company Securities owned legally or beneficially, either directly or indirectly, by the Shareholder or over which the Shareholder exercises control or direction, either directly or indirectly, and shall further include any Company Shares issued upon the exercise by the Shareholder of any Convertible Securities, and any Company Shares otherwise acquired by the Shareholder after the date hereof; and

all shares or other securities into or for which the Subject Securities may be converted, exchanged or otherwise changed, including, without limitation, securities received or to be received pursuant to any arrangement, reorganization, merger, amalgamation or other transaction involving the Corporation or any Subsidiary of the Corporation.

Interpretation Not Affected by Headings

Number and Gender

Date for Any Action

Governing Law, Jurisdiction

Incorporation of Schedules

General Covenants of the Shareholder

at any meeting of Company Securityholders called to vote upon the Arrangement Agreement or the transactions contemplated by the Arrangement Agreement or at any adjournment or postponement thereof or in any other circumstances upon which a vote, consent or other approval (including by written consent in lieu of such meeting) with respect to the Arrangement Agreement or the transactions contemplated by the Arrangement Agreement is sought, the Shareholder shall cause its Subject Securities (to the extent that they carry the right to vote at such meeting) to be counted as present for purposes of establishing quorum and shall vote (or cause to be voted) its Subject Securities (to the extent that they carry the right to vote at such meeting) in favour of the approval of the Arrangement, any other transactions contemplated in the Arrangement Agreement, and any other matter necessary for the consummation of the Arrangement. If the Shareholder is the beneficial owner, but not the registered holder, of any of its Subject Securities, the Shareholder agrees to take all actions necessary to cause the registered holder and any nominees to vote all of its Subject Securities in accordance with this Section 2.1(a);

at any meeting of Company Securityholders or at any adjournment or postponement thereof or in any other circumstances upon which a vote, consent or other approval of all or some of the holders of Subject Securities is sought (including by written consent in lieu of such meeting), the Shareholder shall cause its Subject Securities (to the extent that they carry the right to vote at such meeting) to be counted as present for purposes of establishing quorum and shall, unless otherwise directed by Purchaser in writing, vote (or cause to be voted) its Subject Securities (to the extent that they carry the right to vote at such meeting) against: (i) any Acquisition Proposal (including any Superior Proposal) involving the Company or any Subsidiary of the Company; (ii) any action, agreement, transaction or proposal that would result in a breach of any representation, warranty, covenant, agreement or other obligation of the Company under the Arrangement Agreement or of the Shareholder under this Agreement, and/or (iii) any matter that could reasonably be expected to delay, prevent, impede or frustrate the successful completion of the Arrangement or any of the transactions contemplated by the Arrangement Agreement. If the Shareholder is the beneficial owner, but not the registered holder, of any of its Subject Securities, the Shareholder agrees to take all actions necessary to cause the registered holder and any nominees to vote all of its Subject Securities in accordance with this Section 2.1(b);

the Shareholder shall not, directly or indirectly, through any affiliates or any of their respective officers, directors, employees, representatives, agents or otherwise, and shall not permit any such person to:

solicit proxies or become a participant in a solicitation in opposition to or competition with the Purchaser’s proposed purchase of the Company Shares as contemplated by the Arrangement;

assist any Person in taking or planning any action that would compete with, restrain or otherwise serve to interfere with or inhibit the Purchaser’s proposed purchase of the Company Shares as contemplated by the Arrangement;

act jointly or in concert with others with respect to voting securities of the Company for the purpose of opposing or competing with the Purchaser’s proposed purchase of the Common Shares as contemplated by the Arrangement;

solicit, assist, initiate, knowingly encourage or otherwise facilitate (including by way of furnishing or providing copies of, access to, or disclosure of, any confidential information, properties, facilities, books or records of Company or entering into any form of agreement, arrangement or understanding) any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to, an Acquisition Proposal;

enter into or otherwise engage or participate in any substantive discussions or negotiations with any person (other than Purchaser and its affiliates) regarding any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to, an Acquisition Proposal;

withdraw, amend, modify or qualify, or publicly propose or state an intention to withdraw, amend, modify or qualify support for the transactions contemplated by the Arrangement Agreement;

accept, approve, endorse or recommend, or publicly propose to accept, approve, endorse or recommend any publicly disclosed Acquisition Proposal;

accept or enter into or publicly propose to accept or enter into any letter of intent, agreement, understanding or arrangement in respect of an Acquisition Proposal; or

cooperate in any way with, assist or participate in, knowingly encourage or otherwise facilitate or encourage any effort or attempt by any other Person to do or seek to do any of the foregoing;

the Shareholder hereby covenants, undertakes and agrees, in the event that any transaction for the proposed acquisition of at least a majority of the Company Shares, where such transaction requires the approval of Company Securityholders under applicable law, other than the Arrangement or an Alternative Transaction, is presented prior to the Effective Time for approval of, or acceptance by, the Company Securityholders, whether or not it may be recommended by the Company Board, not to directly or indirectly, accept, assist or otherwise further the successful completion of such transaction or purport to tender or deposit into any such transaction any of the Subject Securities;

the Shareholder will and will cause each of its affiliates and will instruct each of its representatives to immediately cease and terminate and cause to be terminated any solicitation, encouragement, discussion or negotiation or other activities commenced prior to the date of this Agreement with any person (other than Purchaser or an affiliate thereof) with respect to any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to, an Acquisition Proposal, whether or not initiated by the Shareholder or any of its affiliates or their respective officers, directors, employees, representatives or agents;

the Shareholder will not directly or indirectly (i) sell, transfer, assign, grant a participation interest in, option, pledge, hypothecate, grant a security interest in, hypothecate or otherwise convey or encumber (each, a “Transfer”), or enter into any forward sale, repurchase agreement, option or other arrangement or monetization transaction with respect any of its Subject Securities, or any right or interest therein (legal or equitable) to any Person or group of Persons, or agree to do any of the foregoing, other than pursuant to the Arrangement, or (ii) grant or agree to grant any proxies or power of attorney or other right to vote the Subject Securities, or deposit any of the Subject Securities into any voting trust or enter into any voting arrangement, voting trust, vote pooling or other agreement, whether by proxy or otherwise, with respect to the right to vote, call meetings

the Shareholder shall not contest in any way the approval of the Arrangement by any Governmental Entity or take any other action of any kind, directly or indirectly, which might reasonably be regarded to materially reduce the success of, or delay or interfere with the completion of the transactions contemplated by the Arrangement Agreement, unless otherwise directed by the Purchaser and the Company in writing;

at the request of the Purchaser, the Shareholder will, and will cause its applicable affiliates and representatives to, use all commercially reasonable efforts in its capacity, and their capacities, as a Company Securityholder to assist the Company and the Purchaser to successfully complete the Arrangement and the other transactions contemplated by the Arrangement Agreement and this Agreement, including without limitation cooperating with the Purchaser and the Company to make all requisite regulatory filings and to oppose any of the matters listed in Section 2.1(b);

the Shareholder shall not exercise any rights of appraisal or rights of dissent that the Shareholder may have under applicable Law or otherwise in connection with the Arrangement or the transactions contemplated by the Arrangement Agreement; and

as soon as practicable following the mailing of the Circular and in any event at least ten business days prior to the date of the Meeting, the Shareholder shall (i) with respect to any Subject Securities (to the extent that they carry the right to vote at such meeting) that are registered in the name of the Shareholder, deliver or cause to be delivered, in accordance with the instructions set out in the Circular and with a copy to Purchaser concurrently with such delivery, a duly executed proxy or proxies directing the holder of such proxy or proxies to vote in favour of the Arrangement, including without limitation the Arrangement Resolution and/or any other matter necessary for the consummation of the Arrangement; and (ii) with respect to any Subject Securities (to the extent that they carry the right to vote at such meeting) that are beneficially owned by the Shareholder but not registered in the name of the Shareholder, the Shareholder shall deliver a duly executed voting instruction form to the intermediary through which the Shareholder holds its beneficial interest in the Shareholder’s Subject Securities, with a copy to Purchaser concurrently, instructing that the Shareholder’s Subject Securities be voted at the Meeting in favour of the Arrangement, including without limitation the Arrangement Resolution and/or any other matter necessary for the consummation of the Arrangement. Such proxy or proxies shall name those individuals as may be designated by Company in the Circular (with full power of substitution) and such proxy or proxies or voting instructions shall not be revoked, withdrawn, amended or invalidated without the written consent of Purchaser or upon the termination of this Agreement notwithstanding any statutory or other rights or otherwise which the Shareholder might have.

Public Disclosure and Announcements

The Shareholder hereby consents to: (i) details of this Agreement being set out in any press release, information circular, including the Circular, and court documents produced by the Company, the Purchaser or any of their respective affiliates in connection with the transactions contemplated by this Agreement and the Arrangement Agreement; and (ii) this Agreement being made publicly available, including by filing on SEDAR.

Except as required by applicable Law, the Shareholder will not, and will ensure that their affiliates and representatives do not, make any public announcement with respect to the transactions contemplated herein or pursuant to the Arrangement Agreement without the prior written approval of the Purchaser.

Revocation of Proxies

Co-operation/Alternative Transaction

Representations and Warranties of the Shareholder

Incorporation; Capacity; Authorization. Where the Shareholder is a corporation, it is a corporation duly incorporated and validly existing under the laws of its jurisdiction of incorporation; it has the requisite corporate power and authority and has received all requisite approvals to execute and deliver this Agreement and to perform its obligations hereunder. Where the Shareholder is not a corporation, he, she or it has the power and capacity and has received all requisite approvals to execute and deliver this Agreement and to perform its obligations hereunder.

Enforceable. This Agreement has been duly executed and delivered by the Shareholder and constitutes a legal, valid and binding obligation, enforceable against the Shareholder in accordance with its terms, subject only to bankruptcy, insolvency and other similar Laws affecting creditors’ rights generally, and to the discretion that a court may exercise in granting equitable remedies.

Ownership of Subject Securities. The Shareholder is the sole registered and/or beneficial owner of the Subject Securities with good and marketable title thereto free and clear of any Liens of any kind whatsoever. Neither the Shareholder nor any of its affiliates owns or has any interest in or exercises control or direction over any other securities of the Company or any of its affiliates. The Shareholder is and will be immediately prior to the Effective Date, the sole registered and/or beneficial owner of the Subject Securities, with good and marketable title thereto, free and clear of any and all Liens of any kind whatsoever.

No Breach. Neither the execution and delivery of this Agreement by the Shareholder, the consummation by the Shareholder of the transactions contemplated hereby nor the compliance by the Shareholder with any of the provisions hereof will:

result in any breach of, or constitute a default (or an event which with notice or lapse of time or both would become a default) (or give rise to any third party right of termination, cancellation, material modification, acceleration, purchase or right of first refusal) under, where the Shareholder is a corporation, any provision of the certificate of incorporation, articles, by-laws or any other constating document of the Shareholder, or under any of the terms, conditions or provisions of any note, loan agreement, bond, mortgage, indenture, contract, license, agreement, lease, permit or other instrument or obligation to which the Shareholder is a party or by which the Shareholder or any of its properties or assets (including the Subject Securities) may be bound, except such breaches or defaults which could not, individually or in the aggregate, impair the ability of the Shareholder to perform its obligations under this Agreement,

require on the part of the Shareholder, the making of any declaration or filing with (other than pursuant to the requirements of applicable securities legislation (which filings the Shareholder will undertake)), or any permit, authorization, consent, approval or order to be obtained from, any Governmental Entity or any other person, or

conflict with any judgement, order, notice, decree, applicable to the Shareholder or affecting any of its properties or assets or any statute, law, ordinance, rule or regulation.

No Proceedings. There is no private or governmental action, suit, proceeding, claim, arbitration or investigation pending before any Governmental Entity, or, to the knowledge of the Shareholder, threatened against the Shareholder or any of its properties that, individually or in the aggregate, could reasonably be expected to have an adverse effect on the Shareholder’s ability to consummate the transactions contemplated by this Agreement. There is no order of any Governmental Entity against the Shareholder that could prevent, enjoin, alter or materially delay any of the transactions contemplated by this Agreement, or that could reasonably be expected to have an adverse effect on the Shareholder’s ability to consummate the transactions contemplated by this Agreement.

No Agreements. No person has any agreement or option, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option, for the purchase, acquisition or transfer of any of the Subject Securities, or any interest therein or right thereto, including any right to vote, except pursuant to this Agreement.

Voting. The Shareholder has the sole and exclusive right to enter into this Agreement and to sell, vote or direct the sale and voting of the Subject Securities. None of the Subject Securities is subject to any proxy, power of attorney, attorney-in-fact, voting trust, vote pooling or other agreement with respect to the right to vote, call Meetings of shareholders or give consents or approvals of any kind.

Representations and Warranties of Purchaser

Capacity. Purchaser validly subsists under the laws of Canada and has necessary requisite corporate power and capacity to execute and deliver this Agreement and to perform its obligations hereunder.

Authorization. The execution, delivery and performance of this Agreement by Purchaser have been duly authorized and no other internal proceedings on its part are necessary to authorize this Agreement or the transactions contemplated hereunder.

Enforceable. This Agreement has been duly executed and delivered by Purchaser and constitutes a legal, valid and binding obligation, enforceable against it in accordance with its terms, subject only to bankruptcy, insolvency and other similar Laws affecting creditors’ rights generally, and to the discretion that a court may exercise in granting equitable remedies.

Termination

at any time upon written agreement of the Purchaser and the Shareholder;

by the Shareholder: (i) if any of the representations and warranties of the Purchaser in this Agreement shall not be true and correct in all material respects except to the extent it does not result in a Purchaser Material Adverse Change; (ii) if the Purchaser shall not have complied with its covenants to the Shareholder contained in this Agreement, provided that the Shareholder has notified the Purchaser in writing of any of the foregoing events and the same has not been cured within 10 Business Days of the date such notice was received by the Purchaser; or (iii) if the Purchaser, without the prior written consent of the Shareholder, varies the terms of the Arrangement Agreement in a manner that is materially adverse to the Shareholder; or

by the Purchaser if: (i) any of the representations and warranties of the Shareholder in this Agreement shall not be true and correct in all material respects; or (ii) the Shareholder shall not have complied with its covenants to the Purchaser contained in this Agreement, provided that the Purchaser has notified the Shareholder in writing of any of the foregoing events and the same has not been cured within 10 Business Days of the date such notice was received by the Shareholder.

Automatic Termination

the Effective Time; or

the date and time that is the earlier of: (i) September 30, 2019; and (ii) the Arrangement Agreement is terminated in accordance with its terms other than pursuant to section 8.2(1)(d)(i) of the Arrangement Agreement.

Effect of Termination

Fiduciary Obligations

Further Assurances

Time

Entire Agreement

Amendments; Waivers

Severability

Assignment

Notices

Purchaser, addressed as follows:

the Shareholder, as set forth on the signature page to this Agreement.

Specific Performance and other Equitable Rights

Survival

Expenses

Rules of Construction

Independent Legal Advice

Counterparts

Shareholder

Definitions

Interpretation Not Affected by Headings

Number and Gender

Date for any Action

Currency

Other Definitional and Interpretive Provisions

References in this Plan of Arrangement to the words “include”, “includes” or “including” shall be deemed to be followed by the words “without limitation” whether or not they are in fact followed by those words or words of like import.

References to “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,”.

The words “hereof”, “herein” and “hereunder” and words of like import used in this Plan of Arrangement shall refer to this Plan of Arrangement as a whole and not to any particular provision of this Plan of Arrangement.

References to time herein or in any Letter of Tranasmittal are to local time, Toronto, Ontario.

References to any agreement, contract, license, lease, indenture, arrangement or commitment are to that agreement, contract, license, lease, indenture, arrangement or commitment as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. Any reference in this Agreement to any Person includes its heirs, administrators, executors, legal personal representatives, predecessors, successors and permitted assigns of that Person.

References to a particular statute or Law shall be to such statute or Law and the rules, regulations and published policies made thereunder, as now in effect and as they may be promulgated thereunder or amended from time to time and any statute or regulation that supplements or supersedes such statute or regulation.

Time

Arrangement Agreement

Binding Effect

Arrangement

each outstanding Company Share held by a Dissenting Shareholder shall be deemed to have been transferred by the holder thereof to Purchaser free and clear of any Liens of any kind whatsoever, and:

each such Dissenting Shareholder shall cease to be the holder of such Company Shares and to have any rights as a Company Shareholder other than the right to be paid the fair value of such Company Shares in accordance with Article 4 hereof;

each such Dissenting Shareholder’s name shall be removed as the holder of such Company Shares from the register of Company Shareholders maintained by or on behalf of Company;

the Purchaser shall be deemed to be the transferee of such Company Shares free and clear of any Liens of any kind whatsoever (other than the right to be paid fair value for such Company Shares as set out in Section 4.1), and shall be entered in the register of Company Shares maintained by or on behalf of Company; and

Purchaser will be the registered holder of all of the outstanding Company Shares.

each outstanding Company Share (other than any Company Shares held by a Dissenting Shareholder) shall be and be deemed to be assigned and transferred by the holder thereof to Purchaser (free and clear of any Liens of any kind whatsoever) in exchange for the Consideration, and:

each holder of such Company Shares shall cease to be the holder thereof and to have any rights as a Company Shareholder other than the right to be paid the Consideration per Company Share in accordance with this Plan of Arrangement;

the name of each such holder shall be removed from the register of the Company Shares maintained by or on behalf of Company; and

Purchaser shall be deemed to be the transferee of such Company Shares free and clear of all Liens of any kind whatsoever and shall be entered in the register of Company Shares maintained by or on behalf of Company; and

each Company Option outstanding at the Effective Time (whether vested or unvested) will be exchanged for a Replacement Option to acquire such number of Purchaser Shares as is equal to: (A) that number of Company Shares that were issuable upon exercise of such Company Option immediately prior to the Effective Time, multiplied by (B) the Exchange Ratio, rounded down to the nearest whole number of Purchaser Shares, at an exercise price per Purchaser Share equal to the greater of (i) the quotient determined by dividing: (X) the exercise price per Company Share at which such Company Option was exercisable immediately prior to the Effective Time, by (Y) the Exchange Ratio, rounded up to the nearest whole cent, and (ii) such minimum amount that meets the requirements of paragraph 7(1.4)(c) of the Tax Act. All terms and conditions of a Replacement Option, including the term to expiry, vesting, conditions to and manner of exercising, shall be the same as the Company Option for which it was exchanged, and any certificate or option agreement previously evidencing the Company Option shall thereafter evidence and be deemed to evidence such Replacement Option.

No Fractional Purchaser Shares

Rights of Dissent

Registered Company Shareholders may exercise dissent rights (“Dissent Rights”) with respect to the Company Shares held by such Company Shareholders pursuant to and in the manner set forth in Section 185 of the OBCA, as modified by this Article 4 and the Interim Order; provided that, notwithstanding Subsection 185(6) of the OBCA, the written objection to the Arrangement Resolution referred to in Subsection 185(6) of the OBCA must be received by Company not later than 5:00 p.m. (Toronto time) on the Business Day that is two Business Days immediately preceding the date of the Meeting (as it may be adjourned or postponed from time to time). Dissenting Shareholders that validly exercise such holder’s Dissent Rights shall be deemed to have transferred the Company Shares held by such holder and in respect of which Dissent Rights have been validly exercised to the Purchaser free and clear of all Liens of any kind whatsoever (other than the right to be paid fair value for such Common Shares as set out in this Section 4.1), as provided in Section 3.1(a) and if they:

are ultimately entitled to be paid fair value for their Company Shares: (i) shall be deemed not to have participated in the transactions in Article 3 (other than Section 3.1(a)); (ii) will be entitled to be paid the fair value of such Company Shares by the Purchaser, which fair value, notwithstanding anything to the contrary contained in Part XIV of the OBCA, shall be determined as of the close of business on the Business Day before the Arrangement Resolution was adopted; and (iii) will not be entitled to any other payment or consideration, including any payment that would be payable under the Arrangement had such holder not exercised their Dissent Rights in respect of such Company Shares; or

are ultimately not entitled, for any reason, to be paid fair value for their Company Shares, shall be deemed to have participated in the Arrangement, as of the Effective Time, on the same basis as a non-dissenting holder of Company Shares and shall be entitled to receive only the Consideration contemplated in Subsection 3.1(b) hereof that such holder would have received pursuant to the Arrangement if such holder had not exercised Dissent Rights.

Recognition of Dissenting Shareholders

In no circumstances shall Company, Purchaser or any other Person be required to recognize a Person purporting to exercise Dissent Rights unless such Person is the registered holder of those Company Shares in respect of which such rights are sought to be exercised.

For greater certainty, in no case shall Company, Purchaser or any other person be required to recognize Dissenting Shareholders as holders of Company Shares in respect of which Dissent Rights have been validly exercised after the completion of the transfer under Section 3.1(a), and the names of such Dissenting Shareholders shall be removed from the register of holders of Company Shares in respect of which Dissent Rights have been validly exercised at the same time as the event described in Section 3.1(a). In addition to any other restrictions under Section 185 of the OBCA, none of the following shall be entitled to exercise Dissent Rights: (i) holders of any Company Securities other than Company Shares; and (ii) Company Shareholders who vote, or who have instructed a proxyholder to vote in favour of the Arrangement Resolution (but only in respect of Company Shares so voted).

Company Warrants

Each holder of a Company Warrant issued pursuant to a Warrant Indenture, to the extent the holder of such Company Warrant has not exercised its rights of acquisition thereunder prior to the Effective Time, shall, upon the exercise of such rights, be entitled to be issued and receive and shall accept for the same aggregate consideration, upon such exercise, in lieu of the number of Company Shares to which such holder was theretofore entitled upon exercise of such Company Warrants, the kind and aggregate number of Purchaser Shares that such holder would have been entitled to be issued and receive if, immediately prior to the Effective Time, such holder had been the registered holder of the number of Company Shares to which such holder was theretofore entitled upon exercise of such Company Warrants.

Each Company Warrant, if applicable, shall continue to be governed by and be subject to the terms of the applicable Warrant Indenture.

Exercise of Company Warrants Post-Effective Time

Idem

Delivery of Purchaser Shares

Before the Effective Time, Purchaser shall deposit or cause to be deposited with the Depositary, for the benefit of and to be held on behalf of Former Company Shareholders entitled to receive the Consideration pursuant to Section 3.1(b), certificates representing the aggregate number of Purchaser Shares which such Former Company Shareholders are entitled to receive pursuant to Section 3.1(b), subject to Section 3.2 and Section 6.3, for distribution to such Former Company Shareholders in accordance with the provisions of Article 5 hereof.

Upon surrender to the Depository for cancellation of a certificate that immediately before the Effective Time represented outstanding Company Shares that were exchanged for the Consideration in accordance with Section 3.1(b) hereof together with a duly completed and executed Letter of Transmittal and such additional documents and instruments as the Depository may reasonably require, the holder of such surrendered certificate shall be entitled at the Effective Time to receive in exchange therefor, and the Depository shall deliver to such holder as soon as practicable and in accordance with Section 3.1(b) the certificate(s) representing the Purchaser Shares that such holder is entitled to receive in accordance with Section 3.1(b) hereof.

Until surrendered as contemplated by Section 6.1(b), each certificate that immediately prior to the Effective Time represented one or more Company Shares shall be deemed,

No Company Securityholder shall be entitled to receive any consideration with respect to any Company Securities other than the consideration to which such Company Securityholder is entitled to receive in accordance with Section 3.1, and, no such Company Securityholder shall be entitled to receive any interest, dividends, premium or other payment in connection therewith.

Lost Certificates

Withholding Rights

No Liens

Amendments to Plan of Arrangement

Purchaser and Company may amend, modify 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 or supplement must be (i) set out in writing, (ii) approved by Purchaser, each acting reasonably, (iii) filed with the Court and, if made following the Meeting, approved by the Court; and (iv) communicated to holders of Company Shares or Former Company Shareholders, as applicable, if and as required by the Court.

Any amendment, modification or supplement to this Plan of Arrangement may be proposed by Company or Purchaser at any time prior to or at the Meeting (provided that Company or Purchaser, as applicable, shall have consented thereto in writing) with or without any other prior notice or communication and, if so proposed and approved by the Persons voting at the Meeting (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 which is approved or directed by the Court following the Meeting shall be effective only: (i) if it is consented to in writing by Company and Purchaser, each acting reasonably; and (ii) if required by the Court, it is approved by the holders of Company Shares voting at the Meeting in the manner directed by the Court.

This Plan of Arrangement may be amended, modified or supplemented following the Effective Time unilaterally by Purchaser, provided that it concerns a matter that, in the reasonable opinion of Purchaser, 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 Former Company Shareholder, or holder or former holder of Company Securities (other than Company Shares).

Further Assurances

Each of Company and its Subsidiaries has been duly incorporated or formed under all applicable Laws of the jurisdiction of its incorporation or formation, is validly existing and in good standing under the Laws of the jurisdiction of its incorporation or formation, and has all necessary corporate power, authority, and capacity to own, lease, and operate its property and assets and to carry on its business as currently owned and conducted. Company has made available to Purchaser complete and correct copies of the certificate of incorporation, articles and bylaws of Company and each of its Subsidiaries. Copies of such charter documents are accurate and complete and have not been amended or superseded and no steps or proceedings have been taken or are pending or contemplated to amend, supplement or cancel such constating documents. Company has made available to Purchaser minute books of Company and each of its Subsidiaries which minute books are complete in all material respects, provided that in the case of any Subsidiary of Company which is not a wholly-owned Subsidiary, are complete in all material respects from the date such Subsidiary became a Subsidiary of Company and, to the knowledge of Company, are complete in all material respects prior to the date on which such Subsidiary became a Subsidiary of Company.

Each of Company and its active Subsidiaries is duly registered, qualified or licensed to do business and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such registration, qualification or licensing necessary, and has all governmental licences, authorizations, permits, consents and approvals required to own, lease and operate its properties and assets and to carry on its business as now conducted, except where the failure to be so registered, qualified, licensed, authorized, permitted, or approved or in good standing is not and would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change in respect of the Company and its Subsidiaries (taken as a whole).

The authorized capital of Company consists of an unlimited number of Company Shares.

As of close of business on the date of this Agreement, there are 557,246,090 Company Shares issued and outstanding.

All outstanding Company Shares have been duly authorized and validly issued as fully paid and non-assessable and all Company Shares issuable upon the exercise of rights under the Options and Warrants in accordance with their respective terms have been duly authorized and, upon issuance, will be validly issued as fully paid and non- assessable.

All outstanding securities of Company have been issued in compliance with all applicable Laws, including Applicable Securities Laws, and have been recorded on Company’s financial statements.

The Disclosure Letter sets forth, for all of the outstanding Company Options, a true and complete list as at the date hereof setting out the name of each registered holder of Company Options and whether such individual is an employee, the number of Company Options held by such person, the number of Company Shares issuable therefor, and the exercise price, date of grant, vesting schedule and expiry date of such Company Options. Company has provided to Purchaser a true and complete copy of the Stock Option Plan. There are no contracts, commitments, agreements arrangements or undertakings between Company or any of its Subsidiaries on the one hand and any participant in the Stock Option Plan on the other, which would result in a Company Option vesting solely as a result of the Contemplated Transactions.

The Disclosure Letter sets forth, for all of the outstanding Company Warrants, a true and complete list as at the date hereof setting out the name of each registered holder of Company Warrants and whether such individual is an employee, the number of Warrants held by such person and the number of Company Shares issuable therefor, and the exercise price, vesting schedule and expiry date of such Company Warrants.

Except for the Company Warrants and Company Options, there are no options, warrants, conversion privileges or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) of any kind that obligate the Company or any of its Subsidiaries to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries.

All outstanding Company Shares and Company Warrants and the Company Shares to be issued on the exercise, conversion or settlement, as applicable, of such Company Options and Company Warrants have been duly authorized and, where applicable, issued in compliance with all applicable Laws. The outstanding Company Shares are, and any Company Shares to be issued on the exercise, conversion or settlement, as applicable, of such Company Options and Company Warrants prior to completion of the Arrangement will be, when issued, validly issued and outstanding as fully paid and non- assessable shares, free of pre-emptive rights.

There are no outstanding bonds, debentures or other evidences of indebtedness of Company or its Subsidiaries having the right to vote (or that are convertible for or exercisable into securities having the right to vote) with the holders of the Company Shares on any matter. There are no outstanding obligations of Company to (i) repurchase, redeem or otherwise acquire any outstanding Company Shares or with respect to the voting or disposition of any outstanding securities of Company or its Subsidiaries (other than in the case of Subsidiaries which are not directly or indirectly wholly-owned Subsidiaries of Company pursuant to rights of first refusal and similar rights restricting transfer or otherwise disposing of such capital stock or other ownership

There are no shareholder agreements, pooling agreements, voting trusts or other agreements or understandings to which Company or any of its Subsidiaries is a party with respect to the ownership or voting of the capital stock or other equity interests of Company or any of its Subsidiaries or pursuant to which any Person may have any right or claim in connection with any existing or past equity interest in the Company or in any of its Subsidiaries. The Company has not adopted a shareholders’ rights plan or any similar plan or arrangement.

No dividends or distributions have been declared on any securities of the Company.

Company has the necessary corporate power, authority and capacity to enter into this Agreement and to perform its obligations hereunder. The execution, delivery of and performance of this Agreement by Company and the consummation by Company of the Contemplated Transactions have been duly authorized by the Company Board and no other corporate proceedings on the part of Company are necessary to authorize this Agreement or the Contemplated Transactions, other than with respect to the approval by the Company Board of the Circular and the approval by the Company Shareholders in the manner required by the Interim Order and applicable Laws and approval by the Court. This Agreement has been duly executed and delivered by Company and constitutes a legal, valid and binding obligation of Company, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other applicable Laws affecting the enforcement of creditors’ rights generally, and to general principles of equity.

Except to the extent that any violation or other matter referred to in this subsection (b), individually or in the aggregate, would reasonably be expected to have a Material Adverse Change in respect of the Company and its Subsidiaries (taken as a whole), the authorization of this Agreement, the execution and delivery by Company of this Agreement, the performance by Company of its obligations under this Agreement, and the consummation of the Contemplated Transactions will not:

contravene, conflict with, result (with or without notice or the passage of time) in a violation or breach of or constitute a default under, require an Authorization to be obtained under or give rise to any third party right of termination, amendment, cancellation, acceleration, penalty or payment obligation or right of purchase or sale or pre-emptive or participation right under, any provision of:

the articles, bylaws, notice of articles, other charter documents, or the terms of any joint venture agreement, distribution agreement, partnership agreement, cooperative agreement or shareholders agreement of Company or any of its Subsidiaries;

subject to complying with the statutes, regulations and obtaining and complying with the approvals referred to below and obtaining the Key Regulatory Approvals, any applicable Laws or any licence, approval, consent or authorization issued by a Governmental Entity held by Company or any of its Subsidiaries;

any judgment, decree, order or award of any Governmental Entity or arbitrator applicable to Company or any of its Subsidiaries; or

subject to obtaining the Third Party Consents, any note, bond, mortgage, indenture, instrument, contract, agreement, lease (subject to obtaining landlord consent), or government grant or licence to which Company or any of its Subsidiaries is party or by which any of them is bound;

subject to obtaining the Third Party Consents, give rise to any right of termination, amendment, acceleration or cancellation of indebtedness or other obligation of Company or its Subsidiaries, or cause any available credit to Company or its Subsidiaries or any other benefit to which Company or its Subsidiaries is entitled, or cause any security interest in any assets of Company or its Subsidiaries to become enforceable or realizable;

subject to obtaining the Third Party Consents, give rise to any rights of first refusal or trigger any change in control provisions or any restriction or limitation under any Material Contract or Authorization except as set forth in the Disclosure Letter; or

result in the creation or imposition of any Lien upon any assets of Company or its Subsidiaries.

No consent, approval, waiver, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained by Company or any of its Subsidiaries in connection with the consummation of the Contemplated Transactions, other than (i) the Interim Order and any approvals required by the Interim Order, (ii) the Final Order, (iii) filings with the Director under the OBCA, (iv) the Key Regulatory Approvals, and (v) compliance with any Applicable Securities Laws.

As at the date hereof, to the knowledge of Company, there are no Laws and no pending changes to Laws that would render illegal, or materially restrict, the business of Company or its Subsidiaries.

As of the date hereof, (i) the Company Financial Advisor, has delivered the Fairness Opinion, (ii) the Company has been authorized by the Company Financial Advisor to permit inclusion of the Fairness Opinion and references thereto and summaries thereof to the Circular; and (iii) after receiving advice of outside legal and financial advisors, the Board has unanimously determined that this Agreement is in the best interests of the Company and is fair to the Company Shareholders and recommends that the Company Shareholders vote in favour of the Arrangement Resolution.

Company has filed all documents, reports, forms, schedules, statements or other information required to be filed by it under Applicable Securities Laws (collectively, the “Company Public Documents”) except where failure to file such Company Public Documents would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change in respect of the Company and its Subsidiaries (taken as a whole). None of the Company Public Documents, as of their respective dates, contained any misrepresentation at the time at which they were filed with applicable Securities Authorities. All of the Company Public Documents, as of their respective dates (and as of the dates of any amendments thereto), complied as to both form and content in all material respects with the requirements of Applicable Securities Laws or were amended on a timely basis to correct deficiencies identified by securities commissions or similar securities regulatory authorities. Company has not filed any confidential material change report with any securities regulatory authority that at the date hereof remains confidential. To the knowledge of the Company, none of the Company Public Documents is the subject of an ongoing review by applicable securities authorities in Canada, outstanding comment by the securities authorities or outstanding investigation by the securities authorities in Canada.

Company is a “reporting issuer” under the Applicable Securities Laws of each of the Provinces in Canada other than Quebec and has not been noted in default of any Applicable Securities Laws. To the knowledge of the Company no delisting, suspension of trading in or cease trading order with respect to the Company Shares is pending or, threatened.

Neither Company nor any of its Subsidiaries nor, to Company’s knowledge, any Representative of Company or any of its Subsidiaries has received or otherwise had or obtained knowledge of any complaint, allegation, assertion, or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of Company or any of its Subsidiaries or their respective internal accounting controls, including any complaint, allegation, assertion, or claim that Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices, which has not been resolved to the satisfaction of the audit committee of the Company Board.

The Company has not taken any action to cease to be a reporting issuer in any province nor has the Company received notification from any Securities Authority seeking to revoke the reporting issuer status of the Company. Except for the trading halt expected to be imposed by the TSXV following disclosure of this Agreement, no delisting, suspension of trading or cease trade or other order or restriction with respect to any securities of the Company that may prevent or restrict trading is pending, in effect, has been threatened, or is expected to be implemented or undertaken.

Company has never been and is not currently required to file reports with, or furnish reports to, the United States Securities and Exchange Commission pursuant to the U.S. Exchange Act.

The audited financial statements of Company (including any related notes thereto) for the fiscal years ended December 31, 2017 and December 31, 2016 and the unaudited condensed interim consolidated financial statements as at and for the nine months ended September 30, 2018 (collectively, the “Financial Statements”) in each case have been prepared in accordance with all applicable Laws and present fairly, in all material respects, in conformity with IFRS applied on a consistent basis (except as may be indicated expressly in the notes thereto), the consolidated financial position and results of operations of Company and its Subsidiaries as at such dates, respectively, for the periods covered thereby. Except as set forth in such financial statements, neither Company nor any of its Subsidiaries have any documents creating any material off-balance sheet arrangements. Neither Company nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, partnership agreement or any similar contract (including any contract relating to any transaction, arrangement or relationship between or among Company or any of its Subsidiaries, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand) where the primary purpose or effect of such arrangement is to avoid disclosure of any material transaction involving Company or any of its Subsidiaries in Company’s Financial Statements.

The financial and accounting books and records of Company and its Subsidiaries have been maintained in accordance with sound business practices and fairly reflect in all material respects the financial position of Company and its Subsidiaries and all material financial transactions relating to the businesses carried on by Company and its Subsidiaries have been accurately recorded in all material respects in such books and records in conformity with IFRS.

As of the date hereof, except as disclosed in the Financial Statements (including any notes related thereto) or as set forth in the Disclosure Letter, the Company and its Subsidiaries do not have any liabilities or obligations of any nature (whether accrued, absolute, determined, contingent or otherwise).

Company and its Subsidiaries do not have any obligations to issue any debt securities, or guarantee, endorse or otherwise become responsible for material obligations of any other person, other than such obligations incurred in the ordinary course of business since December 31, 2018, except as set forth in the Disclosure Letter.

The Company is a “foreign private issuer” within the meaning of Rule 405 under the 1933 Act.

The Company is not registered or required to be registered as an “investment company” pursuant to the United States Investment Company Act of 1940, as amended.

No class of securities of the Company is registered or required to be registered under Section 12 of the U.S. Exchange Act, nor does the Company have any reporting obligation under Section 15(d) of the U.S. Exchange Act.

the business of Company and its Subsidiaries has only been conducted in the ordinary course of business;

there has not occurred one or more changes, events, developments, states of circumstances, facts or occurrences which is or would reasonably be expected to be a Material Adverse Change in respect of Company and no such changes, events, developments, states of circumstances, facts or occurrences are anticipated by Company or any of its Subsidiaries;

there has not been any change in financial or tax accounting methods, principles or practices by Company or any of its Subsidiaries, and Company and its Subsidiaries have not effected any change in its accounting methods, principles or practices, except as required by applicable Law; and

other than in the ordinary course of business, there has not been any material increase in the compensation payable to or to become payable by Company or any of 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 or termination pay or any increase or modification of any Benefit Plan made to, for or with any of such directors, officers, employees or consultants.

Except as set forth in the Disclosure Letter, there is no claim, action, proceeding, grievance, demand or other suit or investigation that has been commenced or is pending or, to the knowledge of Company, threatened against Company or its Subsidiaries, or affecting any of their property or assets before any Governmental Entity or otherwise and to the knowledge of Company no grounds exist on which any such claim, action, proceeding, grievance, demand or other suit or investigation might be commenced against Company or any of its Subsidiaries with any reasonable likelihood of success, which, if determined adversely to Company or its Subsidiaries, as the case may be, individually or in the aggregate:

involves or would reasonably be expected to involve any allegations of violations of criminal law or which is or would, individually or in the aggregate, reasonably be expected to have a Material Adverse Change in respect of the Company and its Subsidiaries (taken as a whole); or

would reasonably be expected to prevent or materially delay the consummation of the Contemplated Transactions.

Neither Company nor any of its Subsidiaries nor their respective assets or properties are subject to any outstanding order, writ, injunction or decree.

Compliance with Laws

Each of Company and its Subsidiaries has complied and is in compliance with, and has not violated and is not in violation of, any applicable Laws except where such violation would not be and would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change in respect of the Company and its Subsidiaries (taken as a whole). To the knowledge of Company, neither Company nor any of its Subsidiaries or Representatives has been or is the subject of any investigation, has been or is being threatened to be charged with, or been given, or is in possession of, notice of any material violation of any Laws by any Governmental Entity.

Company and its Subsidiaries possess all Authorizations required by applicable Laws and necessary to properly conduct their businesses as they are now being conducted, except for any such Authorizations, the failure of which to possess, is not and would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change in respect of the Company and its Subsidiaries (taken as a whole), and subject to obtaining and complying with the approvals referred to in Section 4(c), would not reasonably be expected to impair the ability of Company to perform its obligations hereunder or prevent or materially delay the consummation of Contemplated Transactions. Each Authorization obtained by Company and its Subsidiaries is in full force and effect in all material respects and there is no action, investigation or proceeding pending or, to the knowledge of Company, threatened regarding any such Authorizations. None of Company nor any of the Subsidiaries of Company have received any notice, whether written or oral, of revocation or non-renewal of any such Authorizations, or of any intention of any person to revoke or refuse to renew any such Authorizations, except in each case, for revocations or non-renewals which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change in respect of the Company and its Subsidiaries (taken as a whole). Company and its Subsidiaries are in compliance with each of such Authorizations, except for such non-compliance as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change in respect of the Company and its Subsidiaries (taken as a whole), or would not reasonably be expected to materially impair the ability of Company to perform its obligations hereunder or prevent or delay the consummation of the Contemplated Transactions. No event has occurred which, with the giving of notice, lapse of time or both, could constitute a material default under, or in respect of, any of such Authorizations.

The Company’s production calculation, manufacturing, labelling and other business activities are, in all material respects, being conducted (A) in compliance with the Authorizations and (B) in accordance with applicable Laws.

The Company and its Subsidiaries have not received any written notice, correspondence or writing from a Governmental Entity, including Health Canada, or any other governmental agency, requiring the termination or suspension of any study, test or trial conducted by, or on behalf of, the Corporation or its Subsidiaries or in which the Company or its Subsidiaries have participated and have not received any written notice of correspondence from other third parties requiring termination or suspension of any study, test or trial conducted by others on the existing products of Company or the products of Company under development.

Each of Company and its Subsidiaries and, to the knowledge of Company, their respective Representatives, acting on behalf of Company or any of its Subsidiaries, (i) have complied and are in compliance in all material respects with the Corruption of Foreign Public Officials Act (Canada), the U.S. Foreign Corrupt Practices Act, the Organization for Economic Cooperation and Development Convention Against Bribery of Foreign    Public    Officials    in    International    Business    Transactions    and      legislation

Employment Matters.

Except as disclosed in the Disclosure Letter, (i) neither Company nor its Subsidiaries is a party to any written employment, engagement or similar written agreement with any director, officer, employee, independent contractor or consultant of Company or any of its Subsidiaries, (ii) the terms and conditions of the agreements set forth in Section 24 of the Disclosure Letter are not materially different than the terms and conditions in the applicable standard form agreement attached to the Disclosure Letter, (iii) no person is a party to or a participant in any agreement, arrangement, plan, obligation or understanding providing for notice, severance or termination or other payments in connection with the termination of the employment or engagement of, or resignation of, any director, officer or employee of, or independent contractor or consultant to, Company or its Subsidiaries, except pursuant to applicable Law, and (iv) no person will, as a result of Company completing the Contemplated Transactions (either alone or upon the occurrence of any subsequent termination of employment or other event), become entitled to (A) any material retirement, termination, severance, bonus or other similar payment or benefit (or any increase therein), or (B) the forgiveness or postponement of any indebtedness owing by such person to Company or any of its Subsidiaries.

Except as disclosed in the Disclosure Letter, Company and its Subsidiaries are in material compliance with all Laws respecting employment and employment practices, including employment standards laws as well as laws relating to human rights, occupational health and safety, workplace safety and insurance, labour relations and pay equity and has not and is not engaged in any unfair labour practice. To the knowledge of the Company, each independent contractor has been properly classified as an independent contractor and neither Company nor its Subsidiaries has received any notice from an Governmental Entity disputing such classification.

Except as provided in the Disclosure Letter, none of Company or any of its Subsidiaries is subject to any claim for wrongful dismissal, constructive dismissal or any other tort claim, actual or, to the knowledge of Company, threatened, or any litigation actual, or to the knowledge of Company, threatened relating to employment or termination of employment or employees or independent contractors. To the knowledge of the Company, no event has occurred or circumstance exists which could reasonably be expected to give rise to or serve as a valid basis for the commencement of any such action, suit, investigation, arbitration, administrative proceeding or other proceedings by or against the Company or any of its Subsidiaries in respect of employment matters.

Neither Company nor any of its Subsidiaries is a party to or bound by, either directly or by operation of law, any collective bargaining agreement, labour contract, letter of understanding, letter of intent, voluntary recognition agreement or legally binding commitment with or to, as applicable, any labour union, trade union or employee organization or group which may qualify as a trade union, affecting directors, officers, employees, independent contractors or consultants of Company or any of its Subsidiaries. To the knowledge of Company, neither Company nor any of its Subsidiaries is subject to any application for certification or threatened or apparent union-organizing campaign and there are no current, pending or, to the knowledge of Company, threatened strikes, lockouts or other labour disputes or disruptions at Company or at any of its Subsidiaries. To the knowledge of Company, there are no successor or related employer applications and there are no employee associations, retiree associations,

A true and complete list of all employees, agents, independent contractors and any other persons who are receiving remuneration for work or services provided to Company or    any Subsidiary of Company and the employer, position, status, length of service, location of employment, works or services, and compensation of each employee and the terms on which each other person who is providing work or services to Company or any Subsidiary of Company is engaged has been provided to Purchaser. Except as set out in the list provided to Purchaser, no employee of Company or any of its Subsidiaries is on long- term disability leave, receiving benefits pursuant to workers compensation legislation or is otherwise an inactive employee.

No Benefit Plan is a “registered pension plan” as that term is defined in subsection 248(1) of the Tax Act.

Each Benefit Plan has been established, administered, registered (where required), and maintained, in all material respects, in accordance with applicable Laws, and in accordance with its terms.

In all material respects, all contributions, premiums or Taxes required to be made or paid by the Company and its Subsidiaries by applicable Laws or under the terms of each Benefit Plan have been made in a timely fashion in accordance with applicable Laws and the terms of such Benefit Plan.

To the knowledge of the Company, no Benefit Plan is subject to any action initiated by any Governmental Entity, or by any other party (other than routine claims for benefits) which, if adversely determined, would reasonably be expected to have, individually or in the aggregate, a Material Adverse Change on Company and its Subsidiaries (taken as a whole).

Except as provided in the Disclosure Letter, the execution, delivery and performance of this Agreement and the consummation of the Arrangement will not (A) result in any material payment (including bonus, golden parachute, retirement, severance, unemployment compensation, or other benefit or enhanced benefit) becoming due or payable to any of Company or its Subsidiaries’ employees, agents, independent and/or dependent contractors, (B) materially increase the compensation or benefits otherwise payable under any Benefit Plan or (C) result in the acceleration of the time of payment or vesting of any material benefits or entitlement otherwise available pursuant to any Benefit Plan (except for outstanding Options).

Tax Matters.

Company and each of its Subsidiaries:

has duly and timely filed (taking into account any extension of time within which to file) all income Tax Returns and other material Tax Returns required to be filed by, with respect to, or on behalf of any of them with any Governmental Entity, and all such Tax Returns are true, correct and complete in all material respects;

has timely paid all Taxes, whether or not shown on any Tax Return, that are required to be paid by any of them at or prior to the date hereof except with respect to matters contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with IFRS;

has provided adequate accruals in accordance with applicable accounting standards in its Books and Records and in the most recently published consolidated financial statements of Company for any Taxes of Company and each of its Subsidiaries for the period covered by such financial statements that have not been paid whether or not shown as being due on any Tax Returns. Since such publication date, no material liability in respect of Taxes not reflected in such statements or otherwise provided for has been assessed, proposed to be assessed, incurred or accrued, other than in the ordinary course.

has timely deducted, withheld and remitted (or accounted for) to the proper Governmental Entities all Taxes required to have been deducted, withheld and remitted (or accounted for) by any of them in connection with amounts paid or owing to any person, including to any employee, creditor, person that is or is deemed to be a non-resident of Canada (for purposes of the Tax Act) or a non- resident with respect to any such Subsidiary’s jurisdiction of residence or other third party, in compliance with all applicable Laws related to Taxes, except with respect to matters contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with IFRS; and

has not waived any statute of limitations with respect to any Taxes, or agreed to any extension of time with respect to the assessment, reassessment or collection of a Tax.

There are not pending or, to the knowledge of Company, threatened, against Company or any of its Subsidiaries any material claims, audits, deficiencies, litigation, proposed adjustments examinations, investigations or other proceedings ongoing or asserted in writing in respect of Taxes or Tax matters and neither Company nor its Subsidiaries is a party to any material action or proceeding for assessment or collection of Taxes and no such event has been asserted or, to the knowledge of Company, threatened in writing against Company or any of its Subsidiaries or any of their respective affiliates.

Company and its Subsidiaries have charged and collected and remitted on a timely basis all material Taxes as required under applicable Law on any sale, supply or delivery whatsoever, made by any of them.

Company and its Subsidiaries have not received any notification of material deficiencies from any Governmental Entity with respect to Taxes of Company or any of its Subsidiaries.

The terms and conditions made or imposed in respect of every transaction (or series of transactions) between Company or any Subsidiary of Company and any person that is not dealing at arm’s length (within the meaning of the Tax Act) with Company or such Subsidiary, as the case may be, do not materially differ from those that would have been made between persons dealing at arm’s length, and each of Company and each Subsidiary of Company has complied in all material respects with the transfer pricing requirements of any applicable Law.

Adequate provision has been made on the consolidated financial statements of Company for all material Taxes assessed and all material Taxes owing by Company or any Subsidiary of Company that are not yet due and payable and relate to periods ending prior to the date hereof.

Neither the Company nor its Subsidiaries have been party to any transaction or other arrangement which could be subject to adjustment under section 247 of the Tax Act or any provincial equivalent.

Neither the Company nor its Subsidiaries have been party to any transaction or claimed any reserves for purposes of the Tax Act (or any other applicable Law) in any period that will result in a liability for Taxes or a requirement to include any item of income for a subsequent period.

There are no circumstances existing which could result in the application of section 17, section 78 or section 80 to 80.4 of the Tax Act, or any equivalent provision under Canadian provincial Law, to Company or any of its Subsidiaries. Other than in the ordinary course, Company and its Subsidiaries have not claimed nor will they claim any reserve under any provision of the Tax Act or any equivalent provincial provision, if any amount could be included in the income of Company or its Subsidiaries after the Effective Time.

Material Contracts.

Except as set forth in the Disclosure Letter, there is no contract (or amendment thereto) to which Company or any of its Subsidiaries is a party or by which its respective assets are bound that (i) is material to the business of Company and its Subsidiaries, (ii) if terminated by the other party, would be material to the business of Company and its Subsidiaries as presently conducted, (iii) is a contract that contains any non-competition, exclusive dealing or non-solicitation obligations limiting or restricting or purporting to limit or restrict in any material way the business of Company and its Subsidiaries as presently conducted, (iv) would reasonably be expected to materially delay or prevent the consummation of the Contemplated Transactions, (v) provides for indemnification in excess of $50,000 other than indemnification agreements for directors and officers of Company and its Subsidiaries, in such capacity, the primary purpose of which is to provide indemnification by Company or any of its Subsidiaries for a person, (vi) grants a right of first refusal or right of first offer or similar right that limits or purports to limit the ability of Company or any of its Subsidiaries to own, operate, sell, transfer, pledge or otherwise dispose of any material assets or business, (vii) provides for any payments that are conditioned, in whole or in part, on a change of control of Company and its Subsidiaries, (viii) requires the consent of any other party to the contract to a change of control of Company or any of its Subsidiaries; (ix) involves or would reasonably be expected to involve payments in excess of $50,000 annually or $250,000 in the aggregate and that is not terminable within 30 days, or (x) involves the obligation, or potential obligation, to issue or grant securities of Company or make payments based on the value of securities of Company (the agreements described above collectively being the “Material Contracts”).

Company and its Subsidiaries (i) have performed the obligations required to be performed by them under the Material Contracts; (ii) are not in material breach of or material default under any Material Contract; and (iii) have not received written notice of any alleged breach of or alleged default under or dispute in connection with any Material Contract or of any intention of any party to any Material Contract to cancel, terminate or otherwise modify or not renew its relationship with Company or its Subsidiaries. Each Material Contract is valid and binding on Company or, to the extent a Subsidiary of Company is a party, such Subsidiary and, to the knowledge of Company, any other party thereto, and each Material Contract is in full force and effect, subject to limitations with respect to enforcement imposed by Law in connection with bankruptcy or similar proceedings, the equitable power of the courts to stay proceedings before them and the execution of judgments and to the extent that equitable remedies such as specific performance and injunction are in the discretion of the courts from which they are sought. A true and complete copy of each Material Contract has been made available to Purchaser prior to the date hereof in the Data Room.

Related Party Transactions.

Except as disclosed in the Disclosure Letter, neither Company nor any of its Subsidiaries or, to the knowledge of Company, its affiliates is a creditor of or indebted to any director, officer, employee, or agent of, or independent contractor to, Company or any of its Subsidiaries, except for amounts due as normal compensation and bonuses and in reimbursement of ordinary expenses.

Except as disclosed in the Disclosure Letter on or before the date hereof, (i) no director, officer, employee or agent of Company or any of its Subsidiaries is a party to any loan, contract, arrangement or understanding or other transactions with Company (other than an employment agreement) required to be disclosed pursuant to Applicable Securities Laws, and (ii) there are no loans, guarantees, obligations, liabilities, contracts or other transactions between (A) Company or any of its Subsidiaries, on the one hand, and (B) other than Purchaser and its affiliates, any holder of record or, to the knowledge of Company, beneficial owner of any class of the voting or non-voting securities of Company, or any affiliate or associate of any such securityholder, on the other hand. Except for those disclosed in the Disclosure Letter, there are no non-arm’s length agreements and no non-scheduled payments (including payments in connection with the termination of a non-arm’s length agreement) that have been made under any non-arm’s length agreement.

Intellectual Property.

Company and its Subsidiaries own, have validly licensed (and are not in material breach of such licenses) or otherwise have the right to use, free and clear of all Liens, all patents, trade-marks, trade names, service marks, domain names, logos, slogans, trade dress, copyrights, know-how, trade secrets, software, technology, inventions, rights of publicity, and all other intellectual property and proprietary rights that are material to the conduct of the business, as presently conducted, of Company and its Subsidiaries taken as a whole (all such rights that are owned being collectively referred to as the “Owned IP Rights” and the Owned IP Rights together with all such rights that are licensed to Company and its Subsidiaries being collectively referred to as the “Intellectual Property Rights”).

The Intellectual Property Rights are sufficient to operate the business of Company and its Subsidiaries as presently conducted;

Except as disclosed in the Disclosure Letter, all licenses relating to the Intellectual Property Rights are transferrable pursuant to this transaction, without permission or further consideration;

The Disclosure Letter sets forth a true, complete and correct list of all Owned IP Rights for which registration or application has been filed by Company or its Subsidiaries with a Governmental Entity;

(i) Company and its Subsidiaries are the exclusive owners of all Owned IP Rights, (ii) to the knowledge of the Company, the Owned IP Rights are valid and enforceable and the conduct of the business of Company and its Subsidiaries (including the Owned IP Rights and the products and services of Company and its Subsidiaries) does not infringe upon, misappropriate, or otherwise violate any third party’s intellectual property and proprietary rights, and (iii) the entering into of this Agreement and completion of the Contemplated Transactions contemplated hereby will not render invalid or unenforceable, or result in the loss of or require material additional payment with respect to, any Intellectual Property Rights;

To the knowledge of Company, no third party is infringing upon the Owned IP Rights;

To the knowledge of Company and its Subsidiaries, (A) Company has not received any notice that the prior and continuing operation of the business of Company and its Subsidiaries interferes with, infringes upon, misappropriates, or otherwise comes into conflict with, any Intellectual Property Rights of third parties, (B) there is no claim or demand of any person pertaining to, or any proceeding which is pending or, to the knowledge of Company, threatened, that challenges the rights of Company and its Subsidiaries in respect of any such Intellectual Property Rights, or claims that any activities of the business of Company and its Subsidiaries (including use of the trademarks) infringes, violates, or misappropriates any material Intellectual Property Rights of any person, and (C) Company and its Subsidiaries are not infringing or passing off the intellectual property rights of any third parties in relation to the business of Company and its Subsidiaries or with respect to the use of the trademarks.

The Company and its Subsidiaries have secured from all (i) consultants, advisors, employees and independent contractors who independently or jointly contributed to or participated in the conception, reduction to practice, creation or development of any Owned IP Rights for the Company or its Subsidiaries, and (ii) named inventors of patents and patent applications included within any Owned IP Rights (any Person described in clause (i) or (ii), a “Creator”), unencumbered and unrestricted exclusive ownership of, all of the Creators’ right, title and interest in and to such Owned IP Rights, and the Company and its Subsidiaries have obtained the irrevocable waivers from such Creator of all non- assignable rights, including moral rights, to the maximum extent permitted by law. No Creator has retained any rights, licenses, claims or interest whatsoever with respect to any Owned IP developed by the Creator.

There is no restriction on the Company or its Subsidiaries to use or convey the Owned IP Rights, and to the knowledge of the Company and its Subsidiaries, there is no restriction on the ability of Purchaser to use the Intellectual Property Rights following the Effective Date.

Company and its Subsidiaries (i) own, or have validly licensed (and are not in material breach of such licences), all hardware, software and firmware, processed data, technology infrastructure and other computer systems that are material to the conduct of the business, as presently conducted, of Company and its Subsidiaries taken as a whole (collectively, the “Technology”), and (ii) have taken commercially reasonable steps consistent with industry standard practices to implement and maintain appropriate virus protection and security measures in relation to the Technology;

Except in the event of a force majeure, Company and its Subsidiaries have reasonable back-up systems and a disaster recovery plan adequate to ensure the continuing availability of the functionality provided by the Technology except for such unavailability as would not reasonably be expected to result in a Material Adverse Change in respect of Company, which disaster recovery plan allows them to continue to provide the functionality provided by the Technology in the event of any malfunction of the Technology or other form of disaster affecting the Technology; and

Except for any claims which would be, or would reasonably be expected to be, a Material Adverse Change in respect of Company, no claims have been asserted in writing (or otherwise to the knowledge of Company) which are outstanding against Company or its Subsidiaries or, to the knowledge of Company, threatened against Company or its Subsidiaries alleging a violation of any person’s privacy or personal information rights, nor, to the knowledge of Company, does there exist a substantial basis for any material claim therefor and, except for any non-performance which would not, and would not reasonably be expected to be, a Material Adverse Change in respect of Company,

is currently and has been in material compliance with all Environmental Laws;

is currently and has operated its business at all times and, to the extent applicable, has received, handled, used, stored, treated, shipped and disposed of all Hazardous Substances, without violation and in material compliance with Environmental Laws in all respects;

to the knowledge of Company, there are no Hazardous Substances located on, in or under or migration from or onto any of the Real Property and no Release of any Hazardous Substances has occurred on, in or from the Real Property from operation of the business of Company and its Subsidiaries or the conduct of the activities related to the business of Company and its Subsidiaries thereon;

is not the subject of any orders, directions or notices that have been issued and remain outstanding pursuant to any Environmental Laws relating to the business or assets of Company or any of its Subsidiaries nor in relation to any Real Property historically or currently, owned, leased, licensed, used or operated;

has not failed to report to the applicable Governmental Entities the occurrence of any event relating to the business or assets of Company or any of its Subsidiaries which is required to be so reported by any Environmental Laws nor in relation to any Real Property historically or currently, owned, leased, licensed, used or operated;

holds all material Environmental Permits required under any Environmental Laws in connection with the development of its assets, all such Environmental Permits are in full force and effect, and each of Company and each of its Subsidiaries has not received any notification pursuant to any Environmental Laws that any work, repairs, constructions or capital expenditures are required to be made by it as a condition of continued compliance with any Environmental Laws, or any Environmental Permit issued pursuant thereto, or that any Environmental Permit referred to above is about to be reviewed, made subject to limitation or conditions, revoked, withdrawn or terminated;

to the knowledge of Company, there have been no Releases of Hazardous Substances contrary to Environmental Laws into the earth, air or into any body of water or any municipal or other sewer or drain water systems that have not been remedied, except as otherwise set out in Disclosure Letter and there is no basis whether in law or in equity, upon which Company or its Subsidiaries, either on behalf of itself or the landlord, could reasonably be expected to become responsible for any clean-up or corrective action pursuant to Environmental Laws with respect to the Real Property historically or currently, owned, leased, licensed, used or operated and/or the buildings, structures, additions or improvements thereon;

Company has made available to Purchaser copies of any and all material environmental audits, site assessments and studies (including drafts thereof) concerning or with respect to the Real Property, or that are in any way related to the business, whether lawful or otherwise, of Company and its Subsidiaries, the Real Property, the landlord, that it has ever conducted or that are in its possession or control;

to the knowledge of Company, there are no underground or above-ground storage tanks or facilities of any nature or kind whatsoever, whether active or abandoned, or any associated piping or appurtenances (whether active or abandoned), or Hazardous Substances or materials located on, in or under the surface of any of the Real Properties or other assets or Real Property historically or currently, owned, leased, licensed, used or operated thereon except as disclosed in the Disclosure Letter; and

has not received any notice of, or been prosecuted for, fined or otherwise sentenced for an offence alleging, breach of, violation or material non-compliance with any Environmental Laws, and has not, settled any allegation of material non-compliance short of prosecution.

Real Property Rights.

All Owned Real Property is listed in the Disclosure Letter and the Company or one of its Subsidiaries, as the case may be, is the registered and beneficial owner of such Owned Real Property and has good and marketable title thereto free from all Claims and Liens other than the Permitted Liens. Neither the Company nor its Subsidiaries own any real property other than the Owned Real Property.

The Company and its Subsidiaries have not received notice of a material default by Company or any of its Subsidiaries, nor to the knowledge of Company is there any event that with the passage of time or the giving of notice would constitute a material default by Company or any of its Subsidiaries, in the performance or observance of the terms and provisions of the Permitted Liens, each of which has been complied with in all material respects; except, in each case, for any such failure of title, proceeding, defect or default as individually or taken cumulatively would not reasonably be expected to result in a Material Adverse Change in respect of Company.

The Disclosure Letter lists all of Company’s Leases, with the basic terms thereof, true and complete copies of which, including all amendments and extensions, have been delivered to the Purchaser. Neither the Company nor its Subsidiaries are party to any Lease of any real property other than the Leased Real Property. The Leases are currently in good standing in all material respects, the Company and/or its Subsidiaries as tenant and the respective landlords have, as of the date hereof, complied in all material respects with their respective obligations under the Leases and to the knowledge of Company, there exists no claim of any kind or right of set-off against Company and its Subsidiaries as tenant by the landlord or against the landlord by Company and its Subsidiaries as tenant as of the date hereof. The Company, or its Subsidiaries, as tenant is in actual possession of the Leased Properties. The Company and its Subsidiaries are not in arrears of any rent or any monetary amounts required to be paid pursuant to the Leases.

The Company and its Subsidiaries, as applicable, have good and sufficient title to such other real property interests, licenses, easements and rights of way permitting the use of land or premises by Company and its Subsidiaries, which, together with its interest in the Real Property are necessary to permit the conduct of its respective business, as it is now being conducted, except for such failure, proceeding, defect or default as would not be, or would not reasonably be expected to be, a Material Adverse Change in respect of Company.

The Disclosure Letter lists all Real Property utilized by the Company and its Subsidiaries and sets forth the municipal addresses and legal descriptions thereto. Except as has been specifically disclosed by Company to Purchaser in the Disclosure Letter, there are no existing Contracts, options, rights of first refusal, rights of first offer, leases or otherwise, to sell, transfer, lease or otherwise dispose of any of the Real Property, or to

To the knowledge of Company:

neither Company and its Subsidiaries nor the landlords of the Real Property are in material breach of any applicable Laws, including any material building, zoning or other statutes or any official plan, or any covenants, restrictions, rights or easements affecting such Real Property;

all buildings, structures, additions and/or improvements situated on any of the Real Property are located wholly within the boundaries of such Real Property, are free of any structural or material defect and comply with all Laws, covenants, restrictions, rights and easements affecting the same and their use, in each case in all material respects;

there are no material outstanding work orders, non-compliance orders, deficiency notices or other such notices relative to any of the Real Property;

the heating, ventilating, plumbing (including, where applicable, the septic and well systems), drainage, electrical and air conditioning systems and all other systems used in any of the buildings, structures, additions or improvements on the Real Property are in good working order, operational in all material respects and free of any material defect, except for normal wear and tear; and

there is no defect or condition affecting any of the Real Property including the buildings structures, additions and improvements thereon and/or the soil or subsoil thereunder, in each case which would materially impair and/or materially impede marketability and/or the current lawful use of such Real Property by Company and its Subsidiaries.

The Real Properties are serviced by utilities (or well water with adequate septic systems, if any) having capacities for the normal operations of Company’s facilities that are currently growing cannabis in accordance with the Newstrike Licences and the business of Company.

No material amounts are owing by Company and its Subsidiaries in respect of any of the Real Properties to the applicable municipality in respect of property taxes or to a public utility, other than current accounts which are not in arrears.

Except as disclosed in the Disclosure Letter, there are no major capital expenditures required, contemplated or pending with respect to the Real Property, including, without limitation, any expansions thereof. All amounts that are due for labour or materials supplied to or on behalf of Company and its Subsidiaries relating to the construction, expansion, alteration or repair of or on any of the Real Properties have been paid in full and, to the knowledge of Company, no one has filed or has any right of any nature or kind whatsoever to file any construction, builders’, mechanics’ or similar liens relating to the supply of work or materials to or on any of the Real Properties with respect to amounts that are not in arrears. No work has been done to the Real Property within the past forty-five (45) days which would give rise to a construction lien pursuant to the Construction Liens Act of Ontario and if such work has been done, Company and its

Except in connection with the Arrangement (or pursuant to the terms of the applicable Lease), no Person has any right of first refusal, undertaking or commitment or any right or privilege capable of becoming such, to purchase, lease or acquire any of the Real Property, or any part thereof or interest therein, including, without limitation, pursuant or otherwise.

Other than Permitted Liens, no part of the Real Properties has been taken, condemned or expropriated by any Governmental Entity nor has any written notice or proceeding in respect thereof been given to Company or, to the knowledge of Company, commenced nor, to the knowledge of Company, does any Person have any intent or proposal to give such notice or commence any such proceedings.

Organization

Purchaser is a corporation duly incorporated and validly existing under the Laws of the jurisdiction of its incorporation, and has all necessary corporate power and authority to own, lease, and operate its property and assets and to carry on its business as currently owned and conducted. Purchaser has made available to Company complete and correct copies of the certificate of incorporation, articles and bylaws and other charter documents of Purchaser. Copies of such charter documents are accurate and complete and have not been amended or superseded and no steps or proceedings have been taken or are pending or contemplated to amend, supplement or cancel such constating documents.

Purchaser is duly registered, qualified or licensed to do business and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such registration, qualification or licensing necessary, and has all governmental licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and assets and to carry on its business as now conducted, except where the failure to be so registered, qualified, licensed, authorized, permitted, or approved or in good standing is not and would not be a Material Adverse Change in respect of Purchaser.

Subsidiaries.

Capitalization

The authorized capital of Purchaser consists of: (i) an unlimited number of common shares; and (ii) an unlimited number of special shares.

As of the close of business on the date of this Agreement, there are 210,436,205 issued and outstanding.

There are no shareholder agreements, voting trusts or other agreements or understandings to which Purchaser is a party with respect to the voting of the capital stock or other equity interests of Purchaser.

As of the date hereof, an aggregate of up to 19,222,727 Purchaser Shares are issuable upon the exercise of outstanding incentive stock compensation plans of the Purchaser and up to 31,343,067 Purchaser Shares are issuable upon the exercise of outstanding common share purchase warrants of the Purchaser, the exercise prices, expiration dates

All outstanding Purchaser Shares have been duly authorized and validly issued and are fully paid and non-assessable.

The Purchaser Shares to be issued and delivered as contemplated in the Plan of Arrangement at the Effective Time, on the exercise of the Options and Warrants, at or following the Effective Time will, when issued or delivered in accordance with this Agreement, the Arrangement and/or the terms thereof, as applicable, be duly authorized, validly issued, fully-paid and non-assessable, and will not have been issued in violation of or subject to any pre-emptive rights or contractual rights.

Residence of Purchaser.

Corporate Authority and No Violation

Purchaser has the necessary corporate power, authority and capacity to enter into this Agreement and to perform its obligations hereunder. The execution, delivery of and performance of this Agreement by Purchaser and the consummation by Purchaser of the Contemplated Transactions have been duly authorized by all necessary corporate action on the party of Purchaser and no other corporate proceedings on the part of Purchaser are necessary to authorize this Agreement or the Contemplated Transactions. This Agreement has been duly executed and delivered by Purchaser and constitutes a legal, valid and binding obligation of Purchaser, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other applicable Laws affecting creditors’ rights generally, and to general principles of equity.

The authorization of this Agreement, the execution and delivery by Purchaser of this Agreement, the performance by Purchaser of its obligations under this Agreement, and the consummation of the Contemplated Transactions will not contravene, conflict with, result (with or without notice or the passage of time) in a violation or breach of or constitute a default under, require an Authorization to be obtained under or give rise to any third party right of termination, amendment, cancellation, acceleration, penalty or payment obligation or right of purchase or sale or pre-emptive or participation right under, any provision of:

the certificate of incorporation, articles, bylaws, notice of articles or other charter documents of Purchaser;

subject to the receipt of the Regulatory Approvals, any applicable Laws or any licence, approval, consent or authorization issued by a Governmental Entity held by Purchaser, except to the extent that the violation or breach of, or default under, any applicable Laws or any licence, approval, consent or authorization

any judgment, decree, order or award of any Governmental Entity or arbitrator applicable to Purchaser; or

any note, bond, mortgage, indenture, instrument, contract, agreement, lease (subject to obtaining landlord consent), or government grant or licence to which Purchaser is party or by which any of them is bound, except as would not be a Material Adverse Change in respect of Purchaser and would not materially impede or materially delay the consummation of the Arrangement.

No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained by Purchaser in connection with the consummation of the Contemplated Transactions, other than (i) compliance with any Applicable Securities Laws, (ii) approval by the TSX of the listing of the Purchaser Shares issuable pursuant to the Arrangement, and, on the exercise of the Options and Warrants, at or following the Effective Time, and (iii) the Competition Act Approval (the “Purchaser Regulatory Approvals”).

Securities Law Compliance

Purchaser has filed all documents, reports, forms, schedules, statements or other information required to be filed by it under Applicable Securities Laws (collectively, the “Purchaser Public Documents”). All of the Purchaser Public Documents, as of their respective dates, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading as at the time at which they were filed with applicable securities regulatory authorities. All of the Purchaser Public Documents, as of their respective dates (and as of the dates of any amendments thereto), complied as to both form and content in all material respects with the requirements of Applicable Securities Laws or were amended on a timely basis to correct deficiencies identified by securities commissions or similar securities regulatory authorities. Purchaser has not filed any confidential material change report with any securities regulatory authority that at the date hereof remains confidential.

Purchaser is a “reporting issuer” under the Applicable Securities Laws of each Province and Territory of Canada and is not in default of any Applicable Securities Laws of any Canadian jurisdiction. No delisting, suspension of trading in or cease trading order with respect to the Purchaser Shares is pending or, to the knowledge of Purchaser, threatened.

Auditors

Disclosure Controls and Internal Control over Financial Reporting

Financial Statements

The audited financial statements of Purchaser (including any related notes thereto) for the fiscal years ended July 31, 2018 and July 31, 2017 and the unaudited condensed interim consolidated financial statements for the three months ended October 31, 2018 (collectively, the “Purchaser Financial Statements”), have been prepared in accordance with all applicable Laws and present fairly, in all material respects, in conformity with IFRS applied on a consistent basis (except as may be indicated expressly in the notes thereto), the consolidated financial position and results of operations of Purchaser and its Subsidiaries as at such dates, respectively, for the periods covered thereby. Except as set forth in such financial statements, neither Purchaser nor any of its Subsidiaries have any documents creating any material off-balance sheet arrangements.

Neither Purchaser nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, partnership agreement or any similar contract (including any contract relating to any transaction, arrangement or relationship between or among Purchaser or any of its Subsidiaries, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand) where the primary purpose or effect of such arrangement is to avoid disclosure of any material transaction involving Purchaser or any of its Subsidiaries in Purchaser’s Financial Statements.

The financial and accounting books and records of Purchaser and its Subsidiaries have been maintained in accordance with sound business practices.

Liabilities and Indebtedness.

Except as disclosed in the Purchaser Financial Statements (including any notes related thereto) and except as disclosed in the Purchaser Public Documents filed subsequently to July 31, 2018, Purchaser and its Subsidiaries do not have any material liabilities or obligations of any nature (whether accrued, absolute, determined, contingent or otherwise), other than any such liabilities or obligations incurred in the ordinary course of business since July 31, 2018 or pursuant to the terms of this Agreement.

Except as otherwise disclosed in the Purchaser Financial Statements, Purchaser and its Subsidiaries do not have any obligations to issue any debt securities, or guarantee, endorse or otherwise become responsible for material obligations of any other person, other than such obligations incurred in the ordinary course of business since July 31, 2018.

Stock Exchange Compliance.

Money Laundering Laws.

OFAC.

United States Securities Laws.

The Purchaser is a “foreign private issuer” within the meaning of Rule 405 under the 1933 Act.

The Purchaser is not registered or required to be registered as an “investment company” pursuant to the United States Investment Company Act of 1940, as amended.

The Purchaser Shares are registered under Section 12 of the U.S. Exchange Act and Purchaser has reporting obligation under Section 15(d) of the U.S. Exchange Act.

Absence of Certain Changes or Events.

the business of Purchaser and its Subsidiaries has only been conducted in the ordinary course of business;

there has not occurred one or more changes, events, developments, states of circumstances, facts or occurrences which is or would reasonably be expected to be a Material Adverse Change in respect of Purchaser and no such changes, events, developments, states of circumstances, facts or occurrences are anticipated by Purchaser or any of its Subsidiaries; and

there has not been any change in financial or tax accounting methods, principles or practices by Purchaser or any of its Subsidiaries, and Purchaser and its Subsidiaries have not effected any change in its accounting methods, principles or practices, except as required by applicable Law.

Litigation

Except as disclosed in the Purchaser Public Documents, there is no claim, action, proceeding, grievance, demand or other suit or investigation that has been commenced or is pending or, to the knowledge of Purchaser, threatened against Purchaser or its Subsidiaries:

if adversely determined, involves or would reasonably be expected to involve any allegations of violations of criminal law or is or would reasonably be expected to be, individually or in the aggregate, material to the business of Purchaser and its Subsidiaries as presently conducted; or

would reasonably be expected to prevent or materially delay the consummation of the Contemplated Transactions.

Compliance with Laws.

Purchaser has complied and is in compliance in all material respects with, and has not violated and is not in violation of, any applicable Laws. Purchaser has not conducted any internal investigation with respect to any actual, potential or alleged material violation of any Law or any policy of Purchaser by any director, officer or employee of Purchaser. To the knowledge of Purchaser, neither Purchaser nor any of its Representatives has been or is the subject of any investigation, has been or is being threatened to be charged with, or been given, or is in possession of, notice of any violation of any applicable Laws by any Governmental Entity.

The Purchaser is not a non-Canadian within the meaning of the ICA.

Employment Matters.

Purchaser is in material compliance with all Laws respecting employment and employment practices, including employment standards laws as well as laws relating to human rights, occupational health and safety, workplace safety and insurance, labour relations and pay equity and has not and is not engaged in any unfair labour practice.

Neither Purchaser nor any of its Subsidiaries is a party to or bound by, either directly or by operation of law, any collective bargaining agreement, labour contract, letter of understanding, letter of intent, voluntary recognition agreement or legally binding commitment with or to, as applicable, any labour union, trade union or employee organization or group which may qualify as a trade union, affecting directors, officers, employees, independent contractors or consultants of Purchaser or any of its Subsidiaries.

Tax Matters.

Intellectual Property.

There are no material proceedings, investigations, audits or claims now pending against the Purchaser or its Subsidiaries with respect to any patents, trade-marks, trade names, service marks, domain names, logos, slogans, trade dress, copyrights, know-how, trade secrets, software, technology, inventions, rights of publicity, and all other intellectual property and proprietary rights that are material to the conduct of the business, as presently conducted, of Purchaser and its Subsidiaries taken as a whole (all such rights that are owned by the Purchaser or any of its Subsidiaries being collectively referred to as the “Purchaser Owned IP Rights” and the Purchaser Owned IP Rights together with all such rights that are licensed to Purchaser and its Subsidiaries being collectively referred to as the “Purchaser Intellectual Property Rights”); and

The Purchaser Intellectual Property Rights are sufficient to operate the business of Purchaser and its Subsidiaries as presently conducted.

Insurance.

Data Room Information.