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Exhibit 10.4
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is entered into as of February 8, 2021, by and among AYTU BIOSCIENCE, INC., a Delaware corporation ("Subordinated Creditor"), NEOS THERAPEUTICS, INC., a Delaware corporation ("Neos"), NEOS THERAPEUTICS BRANDS, LLC, a Delaware limited liability company ("NT Brands"), NEOS THERAPEUTICS, LP, a Texas limited partnership ("NT LP"; together with Neos and NT Brands, each a "Borrower" and collectively the "Borrowers"), NEOS THERAPEUTICS COMMERCIAL, LLC, a Delaware limited liability company ("NT Commercial"), PHARMAFAB TEXAS, LLC, a Texas limited liability company ("NT PharmaFab"; and, together with Borrowers, NT Commercial and each other Person that from time to time becomes a "Loan Party" under and as defined in the Senior Credit Agreement or guarantees the Senior Debt), the "Companies", and each individually, a "Company"), and ENCINA BUSINESS CREDIT, LLC, in its capacity as Agent for all Senior Lenders.
R E C I T A L S
A.        Borrowers and the other Loan Party Obligors (as defined in the Senior Credit Agreement) party thereto, Agent and Senior Lenders have entered into a Loan and Security Agreement dated as of October 2, 2019 (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, the "Senior Credit Agreement") pursuant to which, among other things, Senior Lenders have agreed, subject to the terms and conditions set forth in the Senior Credit Agreement, to make certain loans and financial accommodations to Borrowers.  All of Borrowers' obligations to Agent and Senior Lenders under the Senior Credit Agreement and the other Senior Debt Documents (as hereinafter defined) are guaranteed by the Companies (other than any Company that is a Borrower under and as defined in the Senior Credit Agreement) and secured by liens on and security interests in substantially all of the now existing and hereafter acquired real and personal property of the Companies (the "Collateral").
B.         Neos has issued to Subordinated Creditor that certain Unsecured Convertible Promissory Note of even date herewith in the original principal amount of $5,000,000 (as the same may be amended, restated, supplemented and/or otherwise modified from time to time as permitted hereunder, the "Subordinated Note").
C.         As an inducement to and as one of the conditions precedent to the agreement of Agent and Senior Lenders to continue making the loans and other financial accommodations available to Borrowers as contemplated by the Senior Credit Agreement, Agent and Senior Lenders have required the execution and delivery of this Agreement by Subordinated Creditor and the Companies in order to set forth the relative rights and priorities of Agent, Senior Lenders and Subordinated Creditor under the Senior Debt Documents and the Subordinated Note.
NOW, THEREFORE, in order to induce Agent and Senior Lenders to consummate the transactions contemplated by the Senior Credit Agreement, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto hereby agree as follows:
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1.         Definitions.  The following terms shall have the following meanings in this Agreement:
"Agent" shall mean Encina Business Credit, LLC, as Agent for the Senior Lenders, or any other Person appointed by the holders of the Senior Debt as administrative agent for purposes of the Senior Debt Documents and this Agreement.
"Bankruptcy Code" shall mean Chapter 11 of Title 11 of the United States Code, as amended from time to time and any successor statute and all rules and regulations promulgated thereunder.
"Distribution" shall mean, with respect to any security, indebtedness or obligation, (a) any payment or distribution by any Person of cash, securities or other property, by set-off or otherwise, on account of such security, indebtedness or obligation, (b) any redemption, purchase or other acquisition of such security, indebtedness or obligation by any Person or (c) the granting of any lien or security interest to or for the benefit of the holders of such security, indebtedness or obligation in or upon any property of any Person.
"Encina Loan Documents" shall mean the Senior Credit Agreement and all other agreements, documents and instruments executed from time to time in connection therewith, as the same may be amended, supplemented or otherwise modified from time to time.
"Enforcement Action" shall mean (a) to take from or for the account of any Company or any guarantor of the Subordinated Debt, by set-off or in any other manner, the whole or any part of any moneys which may now or hereafter be owing by any Company or any such guarantor with respect to the Subordinated Debt, (b) to initiate or participate with others in any suit, action or proceeding against any Company or any such guarantor to (i) sue for or enforce payment of or to collect the whole or any part of the Subordinated Debt, (ii) commence or join with other Persons to commence a Proceeding, or (iii) commence judicial enforcement of any of the rights and remedies under any Subordinated Debt Document or applicable law with respect to the Subordinated Debt, (c) to accelerate the Subordinated Debt, (d) to exercise any put option or to cause any Company or any such guarantor to honor any redemption or mandatory prepayment obligation under any Subordinated Debt Document or (e) take any action under the provisions of any state or federal law, including, without limitation, the Uniform Commercial Code, or under any contract or agreement, to enforce, foreclose upon, take possession of or sell any property or assets of any Company or any such guarantor.
"Hedging Obligation" shall mean, with respect to any Company, any liability of such Company to Agent, any Lender or any affiliate of Agent or any Lender under any interest rate, currency or commodity swap agreement, cap agreement or collar agreement, and any other agreement or arrangement designed to protect such Company against fluctuations in interest rates, currency exchange rates or commodity prices.
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"paid in full" or "payment in full" shall mean with respect to the Senior Debt, that: (a) all of such Senior Debt (other than contingent indemnification, reimbursement and/or other similar obligations to the extent no claim giving rise thereto has been asserted) has been paid in full in cash, (b) no Person has any further right to obtain any loans or other extensions of credit under the applicable Senior Debt Documents, and (c) any costs, expenses and contingent indemnification obligations which are not yet due and payable but with respect to which a claim has been asserted or may reasonably be expected to be asserted by Agent or any Lender are backed by standby letters of credit (issued by a bank, and in form and substance, acceptable to the Agent) or cash collateralized, in each case in an amount reasonably estimated by the Agent, to be the amount of costs, expenses and contingent indemnification obligations that may become due and payable.
"Permitted Refinancing" shall mean any refinancing or replacement of the Senior Debt under the Encina Loan Documents (or any Permitted Refinancing Senior Debt Documents).
"Permitted Refinancing Senior Debt Documents" shall mean any financing documentation which replaces the Encina Loan Documents (or any Permitted Refinancing Senior Debt Documents) and pursuant to which the Senior Debt under the Encina Loan Documents (or any Permitted Refinancing Senior Debt Documents) is refinanced or replaced, as such financing documentation may be amended, replaced, restated, supplemented or otherwise modified from time to time in compliance with this Agreement.
"Permitted Subordinated Debt Payments" shall mean (i) regularly scheduled payments of capitalized payments-in-kind of accrued interest (but not, for the sake of clarity, any payments in cash) on the Subordinated Note due and payable on a non-accelerated basis, (ii) payments effected through conversion of indebtedness under the Subordinated Note to common stock of the Company (or other qualified capital stock (on terms and conditions reasonably satisfactory to Agent) of the Company) and (iii) payments effected through conversion of the indebtedness under the Subordinated Note to other indebtedness so long as, to the extent any Company is an obligor thereunder, such convertible indebtedness is subject to a subordination agreement on the same terms and conditions of this Agreement and otherwise satisfactory to Agent.
"Person" shall mean any natural person, corporation, general or limited partnership, limited liability company, firm, trust, association, government, governmental agency or other entity, whether acting in an individual, fiduciary or other capacity.
"Proceeding" shall mean any voluntary or involuntary insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer with similar powers or any other proceeding for the liquidation, dissolution or other winding up of a Person.
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"Senior Debt" shall mean (a) all obligations, liabilities and indebtedness of every nature of the Companies from time to time owed to Agent or any Senior Lender under the Senior Debt Documents, including, without limitation, the principal amount of all debts, claims and indebtedness, accrued and unpaid interest and all fees, costs and expenses, whether primary, secondary, direct, indirect, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the filing of a Proceeding under the Bankruptcy Code together with any interest, fees, costs and expenses accruing thereon after the commencement of a Proceeding, without regard to whether or not such interest, fees, costs and expenses are an allowed claim, and (b) all Hedging Obligations.
"Senior Debt Documents" shall mean the Encina Loan Documents and, after the consummation of any Permitted Refinancing, the Permitted Refinancing Senior Debt Documents.
"Senior Default" shall mean any "Event of Default" under the Senior Debt Documents.
"Senior Lenders" shall mean the holders of the Senior Debt.
"Subordinated Debt" shall mean all of the obligations of the Companies to Subordinated Creditor evidenced by or incurred pursuant to the Subordinated Debt Documents (including all obligations in respect of the Subordinated Note).
"Subordinated Debt Documents" shall mean the Subordinated Note.
2.         Subordination.
2.1.      Subordination of Subordinated Debt to Senior Debt.  Each Company covenants and agrees, and Subordinated Creditor by its acceptance of the applicable Subordinated Debt Document (whether upon original issue or upon transfer or assignment) likewise covenants and agrees, notwithstanding anything to the contrary contained in such Subordinated Debt Documents, that the payment of any and all of the Subordinated Debt shall be subordinate and subject in right and time of payment, to the extent and in the manner hereinafter set forth, to the prior payment in full of all of the Senior Debt.  Each holder of Senior Debt, whether now outstanding or hereafter created, incurred, assumed or guaranteed, shall be deemed to have acquired Senior Debt in reliance upon the provisions contained in this Agreement.
2.2.      Liquidation, Dissolution, Bankruptcy.  In the event of any Proceeding involving any Company that owes Subordinated Debt to Subordinated Creditor:
(a)        All Senior Debt shall first be paid in full before any Distribution, whether in cash, securities or other property, shall be made to Subordinated Creditor on account of any Subordinated Debt.
(b)        Any Distribution which would otherwise, but for the terms hereof, be payable or deliverable in respect of the Subordinated Debt shall be paid or delivered
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directly to Agent (to be held and/or applied by Agent in accordance with the terms of the Senior Debt Documents) until all Senior Debt is paid in full.  Subordinated Creditor irrevocably authorizes, empowers and directs any debtor, debtor in possession, receiver, trustee, liquidator, custodian, conservator or other Person having authority, to pay or otherwise deliver all such Distributions to Agent.  Subordinated Creditor also irrevocably authorizes and empowers Agent, in the name of Subordinated Creditor, to demand, sue for, collect and receive any and all such Distributions.
(c)        Subordinated Creditor agrees to execute, verify, deliver and file any proofs of claim in respect of the Subordinated Debt reasonably requested by Agent in connection with any such Proceeding and hereby irrevocably authorizes, empowers and appoints Agent its agent and attorney-in-fact to (i) execute, verify, deliver and file such proofs of claim upon the failure of Subordinated Creditor promptly to do so prior to 30 days before the expiration of the time to file any such proof of claim and (ii) vote such claim in any such Proceeding upon the failure of Subordinated Creditor to do so prior to 15 days before the expiration of the time to vote any such claim; provided, Agent shall have no obligation to execute, verify, deliver, file and/or vote any such proof of claim.  In the event that Agent votes any claim in accordance with the authority granted hereby, Subordinated Creditor shall not be entitled to change or withdraw such vote.
2.3.      Subordinated Debt Payment Restrictions.  Notwithstanding the terms of the Subordinated Note, each Company hereby agrees that it shall not make, and Subordinated Creditor hereby agrees that it will not accept, any Distribution with respect to the Subordinated Debt until all of the Senior Debt is paid in full other than Permitted Subordinated Debt Payments (subject however to subsection 2.2).
2.4.      Subordinated Debt Standstill Provisions. Until all of the Senior Debt is paid in full, Subordinated Creditor shall not, without the prior written consent of Agent, take any Enforcement Action with respect to the Subordinated Debt.  Notwithstanding the foregoing or any provision of this Agreement to the contrary, Subordinated Creditor may (i) file proofs of claim against any Company in any Proceeding involving such Company, (ii) seek specific performance or injunctive relief to compel a Company to provide financial reporting required under the Subordinated Debt Documents (as in effect on the date hereof as the same may be amended, restated, supplemented and/or otherwise modified from time to time in accordance with this Agreement) so long as it is not accompanied by a claim for monetary damages or remuneration, (iii) to the extent (but only to such extent) that the commencement of a legal action is required to toll the running of any applicable statute of limitations or similar restriction of claims in respect of such legal action (other than actions to enforce Subordinated Creditor's rights to receive payment from the Companies or any rights with respect to any assets of the Companies, and other than initiating or joining with other creditors to initiate a Proceeding), then Subordinated Creditor may take such legal action, and (iv) declare and send notice of default to a Company (so long as not accompanied by a demand for payment).  Any Distributions or other proceeds of any Enforcement Action obtained by Subordinated Creditor shall in any event be held in trust by it for the benefit of Agent and Senior Lenders and promptly paid or delivered to Agent for the benefit of Senior Lenders in the form received until all of the Senior Debt is paid in full.
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2.5.      Incorrect Payments.  If any Distribution on account of the Subordinated Debt not permitted to be made by a Company or accepted by Subordinated Creditor under this Agreement is received by Subordinated Creditor, such Distribution shall not be commingled with any of the assets of Subordinated Creditor, shall be held in trust by Subordinated Creditor for the benefit of Agent and Senior Lenders and shall be promptly paid over to Agent for application (in accordance with the Senior Debt Documents ) to the payment of the Senior Debt then remaining unpaid, until all of the Senior Debt is paid in full.
2.6.      Subordination of Liens and Security Interests; Agreement Not to Contest; Sale of Collateral; Release of Liens.  Until all of the Senior Debt has been paid in full, Subordinated Creditor shall not obtain any liens or security interests in any Collateral or any other assets of any Company or other guarantor of the Subordinated Debt.  To the extent Subordinated Creditor obtains any such liens or security interest in violation of this Agreement, such liens and security interests which may exist shall be and hereby are subordinated for all purposes and in all respects to the liens and security interests of Agent and Senior Lenders in the Collateral, regardless of the time, manner or order of perfection of any such liens and security interests and regardless of the validity, perfection or enforceability of such liens and security interests of Agent.  Subordinated Creditor agrees that it will not at any time contest the validity, perfection, priority or enforceability of the Senior Debt, the Senior Debt Documents, or the liens and security interests of Agent and Senior Lenders in the Collateral securing the Senior Debt.  Until all of the Senior Debt has been paid in full, Subordinated Creditor shall not obtain any guaranty of the Subordinated Debt by any Person unless such Person executes and delivers a joinder to this Agreement in form and substance reasonably satisfactory to Agent to become party to this Agreement as a Company.  In the event that a Company desires to sell any of the Collateral and Agent consents to such sale, Subordinated Creditor shall be deemed to have consented to such sale and such sale shall be free and clear of any liens and security interests of Subordinated Creditor in such Collateral (and in the event that such sale includes the equity interests of Initial Borrower, Initial Borrower shall be immediately released by Subordinated Creditor from its obligations in respect of the Subordinated Debt upon the consummation of such sale) and any purchaser of any Collateral may rely on this Agreement as evidence of Subordinated Creditor's consent to such sale and that such sale is free and clear of any liens and security interests of Subordinated Creditor in such Collateral (and, in the case of a sale of equity interests of a Company other than Holdings, of the release of such Company from its obligations in respect of the Subordinated Debt).  In the event that Subordinated Creditor obtains any liens or security interests in the Collateral or other assets, or any guaranty of the Subordinated Debt by any Person other than Holdings, Subordinated Creditor shall promptly execute and deliver to Agent such termination statements and releases as Agent shall request to effect the release of the liens and security interests in such Collateral and/or such guaranty.  In furtherance of the foregoing, Subordinated Creditor hereby irrevocably appoints Agent its attorney-in-fact, with full authority in the place and stead of Subordinated Creditor and in the name of Subordinated Creditor or otherwise, to execute and deliver any document or instrument which Subordinated Creditor may be required to deliver pursuant to this subsection 2.6.
2.7.      Sale, Transfer or other Disposition of Subordinated Debt.  Subordinated Creditor shall not sell, assign, pledge, dispose of or otherwise transfer all or any portion of the Subordinated Debt or its Subordinated Note:  (i) without giving prior written notice of such action to Agent, (ii) to any Person other than an affiliate of Subordinated Creditor, and (iii) unless, prior to the consummation of any such action, the transferee thereof shall execute and deliver to Agent
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a counterpart signature page to this Agreement, an agreement joining such transferee as a party to this Agreement as a Subordinated Creditor or an agreement substantially identical to this Agreement, providing for the continued subordination of the Subordinated Debt to the Senior Debt as provided herein and for the continued effectiveness of all of the rights of Agent and Senior Lenders arising under this Agreement.  Notwithstanding the failure of any transferee to execute or deliver an agreement substantially identical to this Agreement, the subordination effected hereby shall survive any sale, assignment, pledge, disposition or other transfer of all or any portion of the Subordinated Debt, and the terms of this Agreement shall be binding upon the successors and assigns of Subordinated Creditor, as provided in Section 9 hereof.
2.8.      Legends.  Until the termination of this Agreement in accordance with Section 15 hereof, Subordinated Creditor will cause each Subordinated Debt Document to clearly and conspicuously state that it is subject to the terms of this Subordination Agreement and that any transferee thereof shall be bound hereby.
2.9.      Obligations Hereunder Not Affected.  All rights and interests of Senior Lenders and Agent hereunder, and all agreements and obligations of Subordinated Creditor and Companies hereunder, shall remain in full force and effect irrespective of (a) any lack of validity or enforceability of any document evidencing any of the Senior Debt; (b) any change in the time, manner or place of payment of, or any other term of, all or any of the Senior Debt, or any other permitted amendment or waiver of or any release or consent to departure from any of the Senior Debt Documents; any exchange, release or non-perfection of any collateral for all or any of the Senior Debt; (c) any failure of any Senior Lender or Agent to assert any claim or to enforce any right or remedy against any other party hereto under the provisions of this Agreement or any Senior Debt Document other than this Agreement; (d) any reduction, limitation, impairment or termination of the Senior Debt for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and Companies and Subordinated Creditor hereby waive any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of invalidity, illegality, non-genuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Senior Debt; and (e) any other circumstance which might otherwise constitute a defense available to, or a discharge of, Companies in respect of the Senior Debt or Subordinated Creditor in respect of this Agreement.  Subordinated Creditor acknowledges and agrees that Senior Lenders and Agent may in accordance with the terms of the Senior Debt Documents, without notice or demand and without affecting or impairing Subordinated Creditor's obligations hereunder, (i) modify the Senior Debt Documents at any time without notice to or the consent of Subordinated Creditor; (ii) take or hold security for the payment of the Senior Debt and exchange, enforce, foreclose upon, waive and release any such security; (iii) apply such security and direct the order or manner of sale thereof as Agent and Senior Lenders in their sole discretion, may determine; (iv) release and substitute one or more endorsers, warrantors, borrowers or other obligors; and (v) exercise or refrain from exercising any rights against any Company or any other Person.  The Senior Debt shall continue to be treated as Senior Debt and the provisions of this Agreement shall continue to govern the relative rights and priorities of Agent and Senior Lenders and Subordinated Creditor even if all or part of the Senior Debt or the security interests securing the Senior Debt are subordinated, set aside, avoided, invalidated or disallowed.
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3.         Modifications to Subordinated Debt Documents.  Until all of the Senior Debt has been paid in full, and notwithstanding anything to the contrary contained in the Subordinated Note, Companies and Subordinated Creditor shall not, without the prior written consent of Agent, agree to any amendment, modification or supplement to any Subordinated Debt Document the effect of which is to (a) increase the maximum principal amount of the Subordinated Debt or rate of interest (or required cash pay rate of interest) on any of the Subordinated Debt, (b) change the dates upon which payments of principal or interest on the Subordinated Debt are due to an earlier date, (c) change any redemption or prepayment provisions of the Subordinated Debt, (d) alter the subordination provisions with respect to the Subordinated Debt, including, without limitation, subordinating the Subordinated Debt to any other Indebtedness, (e) take any liens or security interests in any assets of any Company or any guarantor of the Subordinated Debt, (f) change or add any default or event of default or any covenant with respect to the Subordinated Debt, or (g) change or amend any other term of the Subordinated Debt Documents if such change or amendment would (i) result in a Senior Default, increase the obligations of any Company or any guarantor of the Subordinated Debt or (ii) confer additional material rights on Subordinated Creditor or any other holder of the Subordinated Debt in a manner adverse to the Senior Lenders.
4.         Representations and Warranties of Subordinated Creditor.  Subordinated Creditor hereby represents and warrants to Agent and Senior Lenders that as of the date hereof:  (a) Subordinated Creditor is a corporation duly formed and validly existing under the laws of the State of Delaware; (b)  Subordinated Creditor has the power and authority to enter into, execute, deliver and carry out the terms of this Agreement, all of which have been duly authorized by all proper and necessary action; (c) the execution of this Agreement by Subordinated Creditor will not violate or conflict with the organizational documents of Subordinated Creditor, any material agreement binding upon Subordinated Creditor or any law, regulation or order or require any consent or approval which has not been obtained; (d) this Agreement is the legal, valid and binding obligation of Subordinated Creditor, enforceable against Subordinated Creditor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by equitable principles; and (e)  Subordinated Creditor is the sole owner, beneficially and of record, of the Subordinated Debt Documents and the Subordinated Debt evidenced thereby.
5.         Subrogation; Recovery.  Subject to the payment in full of all of the Senior Debt, Subordinated Creditor shall be subrogated to the rights of Agent and Senior Lenders to receive Distributions with respect to the Senior Debt until the Subordinated Debt is paid in full.  If Agent or any Senior Lender is required to disgorge any proceeds of Collateral, payment or other amount received by such Person (whether because such proceeds, payment or other amount is invalidated, declared to be fraudulent or preferential or otherwise) or turn over or otherwise pay any amount (a "Recovery") to the estate or to any creditor or representative of a Company or any other Person, then the Senior Debt shall be reinstated (to the extent of such Recovery) as if such Senior Debt had never been paid and to the extent Subordinated Creditor has received proceeds, payments or other amounts to which Subordinated Creditor would not have been entitled under this Agreement had such reinstatement occurred prior to receipt of such proceeds, payments or other amounts, Subordinated Creditor shall turn over such proceeds, payments or other amounts to Agent for reapplication to the Senior Debt.  A Distribution made pursuant to this Agreement to Agent or Senior Lenders which otherwise would have been made to Subordinated Creditor is not, as
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between the Companies and Subordinated Creditor, a payment by the Companies to or on account of the Senior Debt.
6.         Modification.  Any modification or waiver of any provision of this Agreement, or any consent to any departure by any party from the terms hereof, shall not be effective in any event unless the same is in writing and signed by Agent and Subordinated Creditor, and then such modification, waiver or consent shall be effective only in the specific instance and for the specific purpose given.  Any notice to or demand on any party hereto in any event not specifically required hereunder shall not entitle the party receiving such notice or demand to any other or further notice or demand in the same, similar or other circumstances unless specifically required hereunder.
7.         Further Assurances.  Each party to this Agreement promptly will execute and deliver such further instruments and agreements and do such further acts and things as may be reasonably requested in writing by any other party hereto that may be necessary or desirable in order to effect fully the purposes of this Agreement.
8.         Notices.  Unless otherwise specifically provided herein, any notice delivered under this Agreement shall be in writing addressed to the respective party as set forth below and may be personally served, telecopied, sent by electronic mail (to the extent an electronic mail address is listed below) or sent by overnight courier service or certified or registered United States mail and shall be deemed to have been given (a) if delivered in person, when delivered; (b) if delivered by telecopy, on the date of transmission if transmitted on a business day before 4:00 p.m. (Chicago time) or, if not, on the next succeeding business day; (c) if delivered by overnight courier, one business day after delivery to such courier properly addressed; or (d) if by United States mail, four business days after deposit in the United States mail, postage prepaid and properly addressed.
Notices shall be addressed as follows:
If to Subordinated Creditor:
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Aytu Bioscience, Inc.
373 Inverness Parkway, Suite 206
Englewood, CO 80112
Attention: Joshua Disbrow
Email: josh.disbrow@aytubio.com
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with a copy to (which shall not constitute notice):
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Dorsey and Whitney LLP
111 South Main Street, Suite 2100
Salt Lake City, Utah 84111
Attention: Ken Logsdon
Email: logsdon.ken@dorsey.com
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If to any Company:
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Neos Therapeutics, Inc.
2940 N. Hwy 360, Suite 400
Grand Prairie, Texas 75050
Attention:  Richard Eisenstadt
Email:  reisenstadt@neostx.com
with a copy to (which shall not constitute notice):
Goodwin Procter LLP
53 State Street
Boston, Massachusetts 02109
Attention:  Mark Smith
Email:  marksmith@goodwinlaw.com
If to Agent or Senior Lenders:
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Encina Business Credit, LLC
123 N Wacker, Suite 2400
Chicago, Illinois  60606
Attention:  Neos Account Manager
Email: jelie@encinabc.com
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with a copy to (which shall not constitute notice):
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Goldberg Kohn Ltd.
55 E. Monroe, Suite 3300
Chicago, Illinois 60603
Attention: Jeffrey Dunlop
Email:  jeffrey.dunlop@goldbergkohn.com
or in any case, to such other address as the party addressed shall have previously designated by written notice to the serving party, given in accordance with this Section 8.
9.         Successors and Assigns; Permitted Refinancing.  This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and assigns of Agent, Senior Lenders, Subordinated Creditor and the Companies.  Senior Lenders may, from time to time, without notice to Subordinated Creditor, assign or transfer any or all of the Senior Debt or any interest therein to any Person and, notwithstanding any such assignment or transfer, or any subsequent assignment or transfer, the Senior Debt shall, subject to the terms hereof, be and remain Senior Debt for purposes of this Agreement, and every permitted assignee or transferee of any of the Senior Debt or of any interest therein shall, to the extent of the interest of such permitted assignee or transferee in the Senior Debt, be entitled to rely upon and be the third party beneficiary of the subordination provided under this Agreement and shall be entitled to enforce the terms and provisions hereof to the same extent as if such assignee or transferee were initially a party hereto.  Subordinated Creditor agrees that any party that consummates a Permitted Refinancing may rely on and enforce this Agreement.  Subordinated Creditor further agrees that it will, at the request of Agent, enter into an agreement, in the form of this Agreement, mutatis mutandis, with the party that consummates the Permitted Refinancing; provided, that the failure of Subordinated Creditor
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to execute such an agreement shall not affect such party's right to rely on and enforce the terms of this Agreement.
10.       Relative Rights.  This Agreement shall define the relative rights of Agent, Senior Lenders and Subordinated Creditor.  Nothing in this Agreement shall (a) impair, as among the Companies, Agent and Senior Lenders and as between the Companies and Subordinated Creditor, the obligation of the Companies with respect to the payment of the Senior Debt and the Subordinated Debt in accordance with their respective terms or (b) affect the relative rights of Agent, Senior Lenders or Subordinated Creditor with respect to any other creditors of any Company.
11.       Conflict.  In the event of any conflict between any term, covenant or condition of this Agreement and any term, covenant or condition of the Subordinated Debt Documents, the provisions of this Agreement shall control and govern.
12.       Headings.  The paragraph headings used in this Agreement are for convenience only and shall not affect the interpretation of any of the provisions hereof.
13.       Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This document may be executed and delivered electronically, via telecopy, "portable document format" or ".pdf" sent by electronic email or otherwise, and any such electronic execution and delivery shall be equally effective as the manual execution and physical delivery of a counterpart to this Agreement.
14.       Severability.  In the event that any provision of this Agreement is deemed to be invalid, illegal or unenforceable by reason of the operation of any law or by reason of the interpretation placed thereon by any court or governmental authority, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby, and the affected provision shall be modified to the minimum extent permitted by law so as most fully to achieve the intention of this Agreement.
15.       Continuation of Subordination; Termination of Agreement.  This Agreement shall remain in full force and effect until the payment in full of all of the Senior Debt after which this Agreement shall terminate without further action on the part of the parties hereto; provided, that if any payment is, subsequent to such termination, recovered from any holder of Senior Debt, this Agreement shall be reinstated; provided, further that a Permitted Refinancing shall not be deemed to be payment in full of all of the Senior Debt.
16.       APPLICABLE LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
17.       CONSENT TO JURISDICTION.  SUBORDINATED CREDITOR AND EACH COMPANY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS AND IRREVOCABLY AGREES THAT, SUBJECT TO AGENT'S ELECTION, ALL ACTIONS OR
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PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS.  SUBORDINATED CREDITOR AND EACH COMPANY EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS.  SUBORDINATED CREDITOR AND EACH COMPANY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUBORDINATED CREDITOR AND SUCH COMPANY AT THEIR RESPECTIVE ADDRESSES SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE 10 DAYS AFTER THE SAME HAS BEEN POSTED.
18.       WAIVER OF JURY TRIAL.  SUBORDINATED CREDITOR, EACH COMPANY AND AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE SUBORDINATED DEBT DOCUMENTS OR ANY OF THE SENIOR DEBT DOCUMENTS.  SUBORDINATED CREDITOR, EACH COMPANY AND AGENT ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE SENIOR DEBT DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.  SUBORDINATED CREDITOR, EACH COMPANY AND AGENT WARRANTS AND REPRESENTS THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
​
[Signature pages follow]
​
​
​

-12-

​

​
IN WITNESS WHEREOF, Subordinated Creditor, the Companies and Agent have caused this Agreement to be executed as of the date first above written.
	​
	SUBORDINATED CREDITOR:

	​
	​

	​
	AYTU BIOSCIENCE, INC.

	​
	​

	​
	​

	​
	By:
	/s/ Joshua Disbrow

	​
	Title: Chief Executive Officer

​
​

Signature Page to Subordination Agreement

​

​
	​

	​

	​

	​
	COMPANIES:

	​
	​

	​
	NEOS THERAPEUTICS, INC.

	​
	​

	​
	​

	​
	By:
	/s/ Richard Eisenstadt

	​
	Name:
	Richard Eisenstadt

	​
	Its:
	Chief Financial Officer

	​
	​

	​
	​

	​
	NEOS THERAPEUTICS BRANDS, LLC

	​
	​

	​
	​

	​
	By:
	/s/ Richard Eisenstadt

	​
	Name:
	Richard Eisenstadt

	​
	Its:
	Chief Financial Officer

	​
	​

	​
	​

	​
	NEOS THERAPEUTICS, LP

	​
	​

	​
	​

	​
	By:
	/s/ Richard Eisenstadt

	​
	Name:
	Richard Eisenstadt

	​
	Its:
	Chief Financial Officer

	​
	​

	​
	​

	​
	NEOS THERAPEUTICS COMMERCIAL, LLC

	​
	​

	​
	​

	​
	By:
	/s/ Richard Eisenstadt

	​
	Name:
	Richard Eisenstadt

	​
	Its:
	Chief Financial Officer

	​
	​

	​
	​

	​
	NEOS THERAPEUTICS, LP

	​
	​

	​
	​

	​
	By:
	/s/ Richard Eisenstadt

	​
	Name:
	Richard Eisenstadt

	​
	Its:
	Chief Financial Officer

​
​

Signature Page to Subordination Agreement

​

​
	​
	PHARMAFAB TEXAS, LLC

	​
	​

	​
	​

	​
	By:
	/s/ Richard Eisenstadt

	​
	Name:
	Richard Eisenstadt

	​
	Its:
	Chief Financial Officer

​
​

Signature Page to Subordination Agreement

​

​
	​
	AGENT:

	​
	​

	​
	ENCINA BUSINESS CREDIT, LLC, 

	​
	as Agent

	​
	​

	​
	​

	​
	By:
	/s/ Jean R. Elie

	​
	Name:
	Jean R. Elie

	​
	Title:
	Authorized Signatory

​

Signature Page to Subordination AgreementExhibit 10.1

 

ACREAGE HOLDINGS, INC.

SECOND AMENDED AND RESTATED OMNIBUS INCENTIVE PLAN

 

	TABLE OF CONTENTS	PAGE

 

	1.	HISTORY; EFFECTIVE DATE AND EXCHANGE OF OPTIONS AND RSUs	1
	 	 	 
	2.	PURPOSE	2
	 	 	 
	3.	DEFINITIONS	2
	 	 	 
	4.	ADMINISTRATION	10
	 	 	 
	5.	SHARES	12
	 	 	 
	6.	PARTICIPATION	14
	 	 	 
	7.	AWARDS	14
	 	 	 
	8.	WITHHOLDING OF TAXES	20
	 	 	 
	9.	TRANSFERABILITY OF AWARDS	20
	 	 	 
	10.	ADJUSTMENTS FOR CORPORATE TRANSACTIONS AND OTHER EVENTS	21
	 	 	 
	11.	CHANGE IN CONTROL PROVISIONS	22
	 	 	 
	12.	SUBSTITUTION OF AWARDS IN MERGERS AND ACQUISITIONS	24
	 	 	 
	13.	COMPLIANCE WITH SECURITIES LAWS; LISTING AND REGISTRATION	24
	 	 	 
	14.	SECTION 409A COMPLIANCE	25
	 	 	 
	15.	PLAN DURATION; AMENDMENT AND DISCONTINUANCE	25
	 	 	 
	16.	GENERAL PROVISIONS	26

 

    i

     

    

 

	1.	HISTORY; EFFECTIVE DATE AND EXCHANGE OF OPTIONS AND RSUs.

 

Acreage Holdings, Inc. (“Acreage”),
a company continued under the laws of the Province of British Columbia, Canada, previously established the ACREAGE HOLDINGS, INC.
OMNIBUS INCENTIVE PLAN (effective as of November 14, 2018) (the “Omnibus Plan”), with amendments to the
Omnibus Plan approved by the Board of Directors of Acreage (the “Board”) on May 7, 2019 and June 19,
2019. The Omnibus Plan was amended and restated effective as of August 19, 2019 (the “Amended and Restated Omnibus
Plan”).

 

Acreage and Canopy Growth Corporation (“Canopy
Growth”) are parties to an arrangement agreement dated ‎April 18, 2019, as amended on May 15, 2019, as
the same may be further amended, ‎supplemented or restated (the “Arrangement Agreement”) providing for an
arrangement between them pursuant to the BCBCA (the “Arrangement”). Pursuant to a proposal agreement between
Acreage and Canopy Growth dated June 24, 2020 (the “Proposal Agreement”), the parties thereto agreed to
amend certain terms of the ‎Arrangement Agreement as provided in the second amendment to the Arrangement Agreement to be entered
into between ‎Acreage and Canopy Growth (the “Amending Agreement”, and together with the Proposal Agreement,
the “Amending Documents”)‎. In accordance with the terms of the Amending Documents and for the ‎purposes
described in Section 2 below, the Board has authorized the adoption of this second amended and restated omnibus incentive
plan, effective August 16, 2020 (the “Effective ‎Date”), subject to the approval of Acreage’s
shareholders (the “Plan”).

 

‎In accordance with the terms of the
Amending Documents and the Amended Plan of Arrangement, at the ‎Amendment Time, all options to purchase Class A subordinate
voting shares of Acreage (“Existing SVS”) ‎granted under this Plan which are then ‎outstanding (“Existing
Options”) will be automatically exchanged ‎ in accordance with Section 10 of the Omnibus Plan for: (1) a
new option to acquire such number of Fixed Shares as is equal to: (A) the number of Existing SVS ‎that were issuable upon
exercise of such Existing Option ‎immediately prior to the Amendment Time, ‎multiplied by (B) 0.7, rounded down to
the nearest whole number, which ‎new options shall have an exercise ‎price (rounded ‎up to the nearest whole cent)
equal to the product obtained when: (i) the ‎exercise price per ‎Existing SVS that would ‎otherwise be payable
pursuant to the Existing Option it replaces is ‎multiplied by (ii) ‎‎0.7 (a “Fixed Option”);
(2) a new option to acquire such number of Floating Shares as ‎is equal to: (A) the ‎number of Existing SVS that
 ‎were issuable upon exercise of such Existing Option immediately prior to ‎the ‎Amendment Time, multiplied by (B) 0.3,
rounded ‎down to the nearest whole number, with such new options ‎having an exercise price (rounded up to the nearest whole
 ‎cent) equal to the product obtained when: (i) the ‎exercise price per ‎Existing SVS that would otherwise be payable
 ‎pursuant to the Existing Option it replaces is ‎multiplied by (ii) 0.3 (a “Floating Option”),
and any document evidencing such an Existing Option ‎shall ‎thereafter be deemed to evidence such new Fixed Option and
Floating Option. All such new Fixed Options ‎and Floating Options created at the Amendment Time shall be governed in all respects
by the terms of this ‎Plan‎.

 

In accordance with the terms of the Amending
Documents and the Amended Plan of Arrangement, at the Amendment Time, all RSUs granted under this Plan, which are ‎then outstanding
(“Existing RSUs”) will be automatically adjusted in accordance with Section 10 of the Omnibus Plan, ‎such
that each such Existing RSU shall be replaced by: (1) a new RSU to acquire such number of Fixed Shares as is equal to: (A) the
number of Existing SVS that were issuable upon vesting of such Existing RSU ‎immediately prior to the Amendment Time, multiplied
by (B) 0.7, rounded down to the nearest whole number, which new RSU shall provide for a conversion price (rounded up ‎to
the nearest whole cent) equal to the product obtained when: (i) the ‎conversion price per Existing SVS that would ‎otherwise
be payable pursuant to the Existing RSU it replaces is ‎multiplied by (ii) 0.7 (a “Fixed RSU”), and
(2) a new RSU to acquire such number of Floating Shares as ‎is equal to: (A) the number of Existing SVS that ‎were
issuable upon vesting of such Existing RSU immediately prior to ‎the Amendment Time, multiplied by (B) 0.3, which new
RSU shall provide for a conversion ‎price (rounded up to the nearest whole cent) equal to the ‎product obtained when:
(i) the conversion price per Existing SVS that would otherwise be payable pursuant to the ‎Existing RSU it replaces is
multiplied by (ii) 0.3 (a “Floating RSU”), and any document evidencing an Existing RSU shall thereafter
be deemed to evidence such ‎Fixed RSU and Floating RSU. All such Fixed RSUs and Floating RSUs created at the Amendment Time
shall be governed in all respects by the terms of the Plan.

 

    1

     

    

 

	2.	PURPOSE.

 

The Purpose of the Plan is to:

 

		(a)	promote the long-term financial interests and growth of Acreage and its Subsidiaries (together,
the “Company”) by attracting and retaining management and other personnel and key service providers with the
training, experience and ability to enable them to make a substantial contribution to the success of the Company’s business;

 

		(b)	motivate management personnel by means of growth-related incentives to achieve long-range goals;
and

 

		(c)	further the alignment of interests of Participants with those of the shareholders of Acreage through
opportunities for increased stock or stock-based ownership in Acreage.

 

Toward these objectives, the Administrator
may, subject to Board approval, grant stock options, stock appreciation rights, stock awards, restricted share units, performance
shares, performance units, and other stock-based awards to eligible individuals on the terms and subject to the conditions set
forth in the Plan.

 

	3.	DEFINITIONS.

 

Except as otherwise specifically provided
in an Award Agreement, capitalized words and phrases used in the Plan or an Award Agreement shall have the following meanings:

 

“Acreage” has the meaning
ascribed thereto on the first page hereof.

 

“Acreage LLC” means High Street Capital Partners,
LLC.

 

“Acreage LLC Units” means the Common Units
and Class C-1 units of Acreage LLC outstanding from time to time.

 

“Administrator” means
the Board or, where delegated by the Board, the Compensation Committee, or such other committee(s) or officer(s) duly
appointed by the Board or the Compensation Committee to administer the Plan or delegated limited authority to perform administrative
actions under the Plan, and having such powers as shall be specified by the Board or the Compensation Committee; provided, however,
that at any time the Board may serve as the Administrator in lieu of or in addition to the Compensation Committee or such other
committee(s) or officer(s) to whom administrative authority has been delegated. With respect to any Award to which Section 16
of the Exchange Act applies, the Administrator shall consist of either the Board or a committee of the Board, which committee shall
consist of two or more directors, each of whom is intended to be, to the extent required by Rule 16b-3 of the Exchange Act,
a “non-employee director” as defined in Rule 16b-3 of the Exchange Act and an “independent director”
to the extent required by the rules of the national securities exchange that is the principal trading market(s) for the
Fixed Shares and the Floating Shares; provided, that with respect to Awards made to a member of the Board who is not an employee
of the Company, “Administrator” means the Board. Any member of the Administrator who does not meet the foregoing requirements
shall abstain from any decision regarding an Award and shall not be considered a member of the Administrator to the extent required
to comply with Rule 16b-3 of the Exchange Act.

 

“Affiliate” means any
entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, Acreage or any successor
to Acreage. For this purpose, “control” (including the correlative meanings of the terms “controlled by”
and “under common control with”) shall mean ownership, directly or indirectly, of 50% or more of the total combined
voting power of all classes of voting securities issued by such entity, or the possession, directly or indirectly, of the power
to direct the management and policies of such entity, by contract or otherwise.

 

    2

     

    

 

‎“Amended Plan of Arrangement”
means the amended and restated plan of ‎arrangement, substantially in the form attached as Schedule A to the Amending Agreement.

 

“Amending Documents”
has the meaning ascribed thereto on the first page hereof.

 

“Amending Agreement”
has the meaning ascribed thereto on the first page hereof‎.

 

‎“Amendment Time”
means 12:01 a.m. (Vancouver time) on the date on which the records and information ‎required to be provided to the Registrar
of Companies under the BCBCA (the “Registrar”) in respect of the ‎amendment to the Arrangement provided
for in the Amending Agreement, together with a copy of the final ‎order of the Supreme Court of British Columbia approving
such amendment under Section 291 of the ‎BCBCA, are filed with the Registrar in accordance with the Amending Agreement.‎

 

“Arrangement Agreement”
has the meaning ascribed thereto on the first page hereof.

 

“as converted basis”
includes the conversion of the Multiple Voting Shares and the redemption or exchange, as applicable, on a 0.7:1.0 basis of the
Acreage LLC Units, Warrants, Awards and Class B non-voting common shares of Acreage Holdings WC, Inc. into Fixed Shares.

 

‎“as converted floating basis”
includes the redemption or exchange, as applicable, on a 0.3:1.0 basis of the Acreage LLC Units, Warrants, Awards and Class B
non-voting common shares of Acreage Holdings WC, Inc. into ‎Floating Shares.

 

“Award” means any stock
option, stock appreciation right, Stock Award, RSU, Performance Share, Performance Unit, and/or Other Stock-Based Award, granted
under this Plan.

 

“Award Agreement” means
the written document(s), including an electronic writing acceptable to the Administrator, and any notice, addendum or supplement
thereto, memorializing the terms and conditions of an Award granted pursuant to the Plan and which shall incorporate the terms
of the Plan.

 

‎“BCBCA” means the
Business Corporations Act (British Columbia).‎

 

“Board” means the Board of Directors of Acreage.

 

“Business Day” means
a day, other than a Saturday, Sunday or statutory holiday, when banks are generally open in the City of Vancouver, or the City
of New York for the transaction of banking business.

 

“Canopy Growth” has
the meaning ascribed thereto on the first page hereof.

 

“Change in Control”
means the first of the following to occur subsequent to the Effective Date: (i) a Change in Ownership of Acreage, (ii) a
Change in Effective Control of Acreage, or (iii) a Change in the Ownership of Assets of Acreage, as described herein and construed
in accordance with Code section 409A, but, notwithstanding anything to the contrary contained herein, any acquisition of Shares
by Canopy Growth upon the exercise (or deemed exercise) of the Purchaser Call Option‎ in the event the Floating Call Option
(as such terms are defined in the Amended Plan of Arrangement) is not also exercised by Canopy Growth shall in no case constitute
a “Change in Control” for the purposes of this Plan.

 

		(a)	A “Change in Ownership of Acreage” shall occur on the date that any one Person
acquires, or Persons Acting as a Group acquire, ownership of the capital stock of Acreage that, together with the stock held by
such Person or Group, constitutes more than 50% of the total fair market value or total voting power of the capital stock of Acreage.
However, if any one Person is, or Persons Acting as a Group are, considered to own more than 50%, on a fully diluted basis, of
the total fair market value or total voting power of the capital stock of Acreage, the acquisition of additional stock by the same
Person or Persons Acting as a Group is not considered to cause a Change in Ownership of Acreage or to cause a Change in Effective
Control of Acreage (as described below). An increase in the percentage of capital stock owned by any one Person, or Persons Acting
as a Group, as a result of a transaction in which Acreage acquires its stock in exchange for property will be treated as an acquisition
of stock.

 

    3

     

    

 

		(b)	A “Change in Effective Control of Acreage” shall occur on the date either (A) a
majority of members of Acreage’s Board is replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the members of Acreage’s Board before the date of the appointment or election, or (B) any
one Person (excluding Kevin Murphy and his affiliates), or Persons Acting as a Group (excluding Kevin Murphy and his affiliates),
acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons)
ownership of stock of Acreage possessing 50% or more of the total voting power of the stock of Acreage.

 

		(c)	A “Change in the Ownership of Assets of Acreage” shall occur on the date that
any one Person acquires, or Persons Acting as a Group acquire (or has or have acquired during the 12-month period ending on the
date of the most recent acquisition by such Person or Persons), assets from Acreage that have a total gross fair market value equal
to or more than 50% of the total gross fair market value of all of the assets of Acreage immediately before such acquisition or
acquisitions. For this purpose, gross fair market value means the value of the assets of Acreage, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such assets.

 

The following rules of construction apply in interpreting
the definition of Change in Control:

 

		(i)	A “Person” means any individual, entity or group within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended, other than employee benefit plans sponsored or maintained
by Acreage and by entities controlled by Acreage or an underwriter, initial purchaser or placement agent temporarily holding the
capital stock of Acreage pursuant to a registered public offering.

 

		(ii)	Persons will be considered to be Persons Acting as a Group (or Group) if they are owners of a corporation
that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the corporation.
If a Person owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar
transaction, such shareholder is considered to be acting as a Group with other shareholders only with respect to the ownership
in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other
corporation. Persons will not be considered to be acting as a Group solely because they purchase assets of the same corporation
at the same time or purchase or own stock of the same corporation at the same time, or as a result of the same public offering.

 

		(iii)	A Change in Control shall not include a transfer to a related person as described in Code section
409A or a public offering of capital stock of Acreage.

 

		(iv)	For purposes of the definition of Change in Control, Section 318(a) of the Code applies
to determine stock ownership. Stock underlying a vested option is considered owned by the individual who holds the vested option
(and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option). For purposes
of the preceding sentence, however, if a vested option is exercisable for stock that is not substantially vested (as defined by
Treasury Regulation §1.83-3(b) and (j)), the stock underlying the option is not treated as owned by the individual who
holds the option.

 

“Code” means the Internal
Revenue Code of 1986, as amended from time to time, and any successor thereto, the Treasury Regulations thereunder and other relevant
interpretive guidance issued by the Internal Revenue Service or the Treasury Department. Reference to any specific section of
the Code shall be deemed to include such regulations and guidance, as well as any successor section, regulations and guidance.

 

    4

     

    

 

“Company” means Acreage
and its Subsidiaries, except where the context otherwise requires. For purposes of determining whether a Change in Control has
occurred, Company shall mean only Acreage.

 

“Compensation Committee” means the Compensation
and Corporate Governance Committee of the Board.

 

“Dividend Equivalent” means Dividend Floating
Share Equivalent or Dividend Subordinate Voting Share Equivalent, as the context requires.

 

“Dividend Floating Share Equivalent”
means a right, granted to a Participant, to receive cash, Floating Shares, Floating Units or other property equal in value to dividends
paid with respect to a specified number of Floating Shares.

 

“Dividend Subordinate Voting Share
Equivalent” means a right, granted to a Participant, to receive cash, Subordinate Voting Shares, stock Units or other
property equal in value to dividends paid with respect to a specified number of Subordinate Voting Shares.

 

“Effective Date” has the meaning ascribed
thereto on the first page hereof.

 

“Eligible Individuals”
means (i) officers and employees of, and other individuals, including non-employee directors, who are natural persons providing
bona fide services to or for, Acreage, or any of its Subsidiaries, provided that such services are not in connection with the offer
or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for Acreage’s
securities and (ii) Acreage consultants who are natural persons providing bona fide services to or for, Acreage or any of
its Subsidiaries, provided that such services are not in connection with the offer or sale of securities in a capital-raising transaction
and do not directly or indirectly promote or maintain a market for Acreage’s securities.

 

“Exchange” means the Subordinate Voting Share
Exchange or the Floating Share Exchange, as the context requires.

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto. Reference to any specific section
of the Exchange Act shall be deemed to include such regulations and guidance issued thereunder, as well as any successor section,
regulations and guidance.

 

“Existing Multiple Voting Shares”
 ‎ means the Class C multiple voting shares of Acreage existing as at the date hereof, and any ‎securities into which
they are converted, including, without limitation, the New Multiple Voting Shares.

 

“Existing Subordinate Voting Shares”
means the Class A subordinate voting shares of Acreage existing as at the date hereof, and any ‎securities into which
they are converted, including, without limitation, the Fixed Shares.

 

“Fair Market Value” means the Subordinate
Voting Share Fair Market Value or the Floating Share Fair Market Value, as the context requires.

 

‎“Fixed Shares”
means the Class E subordinate voting shares of Acreage to be created in accordance with the ‎Amended Plan of Arrangement
and designated as subordinate voting shares, each entitling the holder thereof ‎to one vote per share at shareholder meetings
of Acreage, and any securities into which they may be ‎converted.‎

 

“Floating RSU” means a right granted to a
Participant to receive Floating Shares or cash at the end of a specified deferral period, which right may be conditioned on the
satisfaction of certain requirements (including the satisfaction of certain Performance Criteria).

 

    5

     

    

 

“Floating Share Exchange” means the Canadian
Securities Exchange or any such exchange in Canada or the United States on which Floating Shares are listed and posted for trading.

 

“Floating Share Fair Market Value” means,
on a per share basis as of any date, unless otherwise determined by the Administrator:

 

		(a)	if the principal market for the Floating Shares (as determined by the Administrator if the Floating
Shares are listed or admitted to trading on more than one exchange or market) is a national securities exchange or an established
securities market, the official closing price per Floating Share for the regular market session on that date on the principal exchange
or market on which the Floating Shares are then listed or admitted to trading or, if no sale is reported for that date, on the
last preceding day on which a sale was reported, all as reported by such source as the Administrator may select;

 

		(b)	if the principal market for the Floating Shares is not a national securities exchange or an established
securities market, but the Floating Shares are quoted by a national quotation system, the average of the highest bid and lowest
asked prices for the Floating Shares on that date as reported on a national quotation system or, if no prices are reported for
that date, on the last preceding day on which prices were reported, all as reported by such source as the Administrator may select;
or

 

		(c)	if the Floating Shares are neither listed or admitted to trading on a national securities exchange
or an established securities market, nor quoted by a national quotation system, the value determined by the Administrator in good
faith by the reasonable application of a reasonable valuation method, which method may, but need not, include taking into account
an appraisal of the fair market value of the Floating Shares conducted by a nationally recognized appraisal firm selected by the
Administrator.

 

“Floating Shares” means
the Class D subordinate voting shares of Acreage to be created in accordance with the Amended Plan of ‎Arrangement, each
entitling the holder to one vote per share at shareholder meetings of Acreage, and any securities into which they may be converted.

 

“Floating Unit” means
a bookkeeping entry used by Acreage to record and account for the grant of the following types of Awards until such time as the
Award is paid, cancelled, forfeited or terminated, as the case may be: stock units, RSUs, Performance Units, and Performance Shares
that are expressed in terms of units of Floating Shares.

 

“Full Value Award” means
an Award that results in Acreage transferring the full value of a Subordinate Voting Share or Floating ‎Share, as applicable,
under the Award, whether or not an actual share is issued. Full Value Awards shall ‎include, but are not limited to, Stock
Awards, RSUs, Performance Shares, Performance Units that are ‎payable in Subordinate Voting Shares or Floating Shares, as applicable,
and Other Stock-Based Awards for ‎which Acreage transfers the full value of a Subordinate Voting Share or a Floating Share,
as applicable, ‎under the Award, but shall not include Dividend Equivalents‎.

 

“Incentive Stock Option”
means any stock option that is designated, in the applicable Award Agreement or the resolutions of the Administrator under which
the stock option is granted, as an “incentive stock option” within the meaning of Section 422 of the Code and
otherwise meets the requirements to be an “incentive stock option” set forth in Section 422 of the Code.

 

“Multiple Voting Shares”
means the Existing Multiple Voting Shares or the New Multiple Voting Shares, as the context requires.

 

‎“New Multiple Voting Shares”
means shares in the capital of Acreage to be created in accordance with the Amended Plan of Arrangement and designated as multiple
voting shares, being the shares into which the Existing Multiple Voting Shares will be converted, and any securities into which
they are converted.

 

    6

     

    

 

“Non-qualified Option” means any stock option
that is not an Incentive Stock Option.

 

“Other Stock-Based Award”‎
means an Award of Subordinate Voting Shares, Floating Shares or any other Award that is valued in whole ‎or in part by reference
to, or is otherwise based upon, Subordinate Voting Shares or Floating Shares, as ‎applicable, including without limitation
Dividend Equivalents‎.

 

“Participant” means
an Eligible Individual to whom one or more Awards are or have been granted pursuant to the Plan and have not been fully settled
or cancelled and, following the death of any such person, his successors, heirs, executors and administrators, as the case may
be.

 

“Performance Award”
means a Full Value Award, the grant, vesting, lapse of restrictions or settlement of which is conditioned upon the achievement
of performance objectives over a specified Performance Period and includes, without limitation, Performance Shares and Performance
Units.

 

“Performance Criteria”
means the Performance Criteria established by the Administrator in connection with the grant of Awards based on Performance Metrics
or other performance criteria selected by the Administrator.

 

“Performance Period”
means that period established by the Administrator during which any Performance Criteria specified by the Administrator with respect
to such Award are to be measured.

 

“Performance Metrics”
means criteria established by the Administrator relating to any of the following, as it may apply to an individual, one or more
business units, divisions, or Affiliates, or on a company-wide basis, and in absolute terms, relative to a base period, or relative
to the performance of one or more comparable companies, peer groups, or an index covering multiple companies:

 

		(a)	Earnings or Profitability Metrics: any derivative of revenue; earnings/loss (gross, operating,
net, or adjusted); earnings/loss before interest and taxes (“EBIT”); earnings/loss before interest, taxes, depreciation
and amortization (“EBITDA”); profit margins; operating margins; expense levels or ratios; provided that any
of the foregoing metrics may be adjusted to eliminate the effect of any one or more of the following: interest expense, asset impairments
or investment losses, early extinguishment of debt or stock-based compensation expense;

 

		(b)	Return Metrics: any derivative of return on investment, assets, equity or capital (total or invested);

 

		(c)	Investment Metrics: relative risk-adjusted investment performance; investment performance of assets
under management;

 

		(d)	Cash Flow Metrics: any derivative of operating cash flow; cash flow sufficient to achieve financial
ratios or a specified cash balance; free cash flow; cash flow return on capital; net cash provided by operating activities; cash
flow per share; working capital;

 

		(e)	Liquidity Metrics: any derivative of debt leverage (including debt to capital, net debt-to-capital,
debt-to-EBITDA or other liquidity ratios);

 

		(f)	Stock Price and Equity Metrics: any derivative of return on shareholders’ equity; total shareholder
return; stock price; stock price appreciation; market capitalization; earnings/loss per share (basic or diluted) (before or after
taxes);

 

		(g)	Strategic Metrics: product research and development; completion of an identified special project;
clinical trials; regulatory filings or approvals; patent application or issuance; manufacturing or process development; sales or
net sales; market share; market penetration; economic value added; customer service; customer satisfaction; inventory control;
balance of cash, cash equivalents and marketable securities; growth in assets; key hires; employee satisfaction; employee retention;
business expansion; acquisitions, divestitures, joint ventures or financing; legal compliance or safety and risk reduction; and/or

 

		(h)	Any such personal performance objectives as determined by the Plan Administrator.

 

    7

     

    

 

“Performance Shares”
means a grant of stock or stock Units the issuance, vesting or payment of which is contingent on performance as measured against
predetermined objectives over a specified Performance Period.

 

“Performance Units”
means a grant of dollar-denominated Units the value, vesting or payment of which is contingent on performance against predetermined
objectives over a specified Performance Period.

 

“Plan” means this Second Amended and Restated
Omnibus Incentive Plan, as set forth herein and as it may be amended from time to time.

 

“Proposal Agreement” has the meaning ascribed
thereto on the first page hereof.

 

“RSU” means a Subordinate
Voting RSU or a Floating Share RSU, as the context ‎requires.‎

 

“Restricted Stock” means
an Award of Subordinate Voting Shares or Floating Shares, as applicable, to a Participant that may be subject to certain transferability
and other restrictions and to a risk of forfeiture (including by reason of not satisfying certain Performance Criteria).

 

“Restriction Period”
means, with respect to Full Value Awards, the period commencing on the date of grant of such Award to which vesting or transferability
and other restrictions and a risk of forfeiture apply and ending upon the expiration of the applicable vesting conditions, transferability
and other restrictions and lapse of risk of forfeiture and/or the achievement of the applicable Performance Criteria (it being
understood that the Administrator may provide that vesting shall occur and/or restrictions shall lapse with respect to portions
of the applicable Award during the Restriction Period in accordance with Section 7(b)).

 

“Shares” means the Subordinate
Voting Shares and/or the Floating Shares, as the context ‎requires.‎

 

“Stock Award” has the meaning ascribed thereto
in Section 7(g).

 

“Subordinate Voting RSU” means a right granted
to a Participant to receive Subordinate Voting Shares or cash at the end of a specified deferral period, which right may be conditioned
on the satisfaction of certain requirements (including the satisfaction of certain Performance Criteria).

 

“Subordinate Voting Share Exchange”
means the Canadian Securities Exchange or any such exchange in Canada or the United States on which Subordinate Voting Shares are
listed and posted for trading.

 

“Subordinate Voting Share Fair Market Value”
means, on a per share basis as of any date, unless otherwise determined by the Administrator:

 

		(a)	if the principal market for the Subordinate Voting Shares (as determined by the Administrator if
the Subordinate Voting Shares are listed or admitted to trading on more than one exchange or market) is a national securities exchange
or an established securities market, the official closing price per Subordinate Voting Share for the regular market session on
that date on the principal exchange or market on which the Subordinate Voting Shares are then listed or admitted to trading or,
if no sale is reported for that date, on the last preceding day on which a sale was reported, all as reported by such source as
the Administrator may select;

 

		(b)	if the principal market for the Subordinate Voting Shares is not a national securities exchange
or an established securities market, but the Subordinate Voting Shares are quoted by a national quotation system, the average of
the highest bid and lowest asked prices for the Subordinate Voting Shares on that date as reported on a national quotation system
or, if no prices are reported for that date, on the last preceding day on which prices were reported, all as reported by such source
as the Administrator may select; or

 

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		(c)	if the Subordinate Voting Shares are neither listed or admitted to trading on a national securities
exchange or an established securities market, nor quoted by a national quotation system, the value determined by the Administrator
in good faith by the reasonable application of a reasonable valuation method, which method may, but need not, include taking into
account an appraisal of the fair market value of the Subordinate Voting Shares conducted by a nationally recognized appraisal firm
selected by the Administrator.

 

“Subordinate Voting Shares”
means the Existing Subordinate Voting Shares or the Fixed Shares, as the context requires.

 

“Subordinate Voting Unit”
means a bookkeeping entry used by Acreage to record and account for the grant of the following types of Awards until such time
as the Award is paid, cancelled, forfeited or terminated, as the case may be: stock units, RSUs, Performance Units, and Performance
Shares that are expressed in terms of units of Subordinate Voting Shares.

 

“Subsidiary” means any
corporation or other entity in an unbroken chain of corporations or other entities beginning with Acreage if each of the corporations
or other entities, or group of commonly controlled corporations or other entities, other than the last corporation or other entity
in the unbroken chain then owns stock or other equity interests possessing 50% or more of the total combined voting power of all
classes of stock or other equity interests in one of the other corporations or other entities in such chain or otherwise has the
power to direct the management and policies of the entity by contract or by means of appointing a majority of the members of the
board or other body that controls the affairs of the entity; provided, however, that solely for purposes of determining whether
a Participant has a Termination of Service that is a “separation from service” within the meaning of Section 409A
of the Code or whether an Eligible Individual is eligible to be granted an Award that in the hands of such Eligible Individual
would constitute a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, a
 “Subsidiary” of a corporation or other entity means all other entities with which such corporation or other entity
would be considered a single employer under Sections 414(b) or 414(c) of the Code.

 

“Tax Withholding Obligation”
means any federal, state, local or foreign (non-United States) income, employment or other tax or social insurance contribution
required by applicable law to be withheld in respect of Awards.

 

“Termination of Service”
means the termination of the Participant’s employment or consultancy with, or performance of services for, Acreage and its
Subsidiaries. Temporary absences from employment because of illness, vacation or leave of absence and transfers among Acreage and
its Subsidiaries shall not be considered Terminations of Service. With respect to any Award that constitutes a “nonqualified
deferred compensation plan” within the meaning of Section 409A of the Code, “Termination of Service”
shall mean a “separation from service” as defined under Section 409A of the Code to the extent required
by Section 409A of the Code to avoid the imposition of any tax or interest or the inclusion of any amount in income pursuant
to Section 409A of the Code. A Participant has a separation from service within the meaning of Section 409A of the Code
if the Participant terminates employment with Acreage and all Subsidiaries for any reason. A Participant will generally be treated
as having terminated employment with Acreage and all Subsidiaries as of a certain date if the Participant and the entity that employs
the Participant reasonably anticipate that the Participant will perform no further services for Acreage or any Subsidiary after
such date or that the level of bona fide services that the Participant will perform after such date (whether as an employee or
an independent contractor) will permanently decrease to no more than 20 percent (20%) of the average level of bona fide services
performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period
of services if the Participant has been providing services for fewer than 36 months); provided, however, that the employment relationship
is treated as continuing while the Participant is on military leave, sick leave or other bona fide leave of absence if the period
of leave does not exceed six months or, if longer, so long as the Participant retains the right to reemployment with Acreage or
any Subsidiary.

 

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“Total and Permanent Disability”
means, with respect to a Participant, except as otherwise provided in the relevant Award Agreement, that a Participant is (i) unable
to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be
expected to last until the Participant’s death or result in death, or (ii) determined to be totally disabled by the
Social Security Administration or other governmental or quasi-governmental body that administers a comparable social insurance
program outside of the United States in which the Participant participates and which conditions the right to receive benefits
under such program on the Participant being unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to last until the Participant’s death or result in death. The Administrator
shall have sole authority to determine whether a Participant has suffered a Total and Permanent Disability and may require such
medical or other evidence as it deems necessary to judge the nature and permanency of the Participant’s condition.

 

“Unit” means a Subordinated
Voting Unit or a Floating Unit, as the context requires.

 

“Warrants” means the issued and outstanding
warrants in the capital of Acreage outstanding from time to time.

 

	4.	ADMINISTRATION.

 

		(a)	Administration of the Plan. The Plan shall be administered by the Administrator. Nothing
in this Plan shall derogate from the Board’s authority to approve the grant of Awards and the issuance of any Shares pursuant
thereto.

 

		(b)	Powers of the Administrator. The Administrator shall, except as otherwise provided under
the Plan, have full authority, subject to Board approval, to grant Awards pursuant to the terms of the Plan to Eligible Individuals
and to take all other actions necessary or desirable to carry out the purpose and intent of the Plan. Among other things, the Administrator
shall have the authority, in its sole and absolute discretion, subject to the terms and conditions of the Plan to:

 

		(i)	determine the Eligible Individuals to whom, and the time or times at which, Awards shall be granted;

 

		(ii)	determine the types of Awards to be granted any Eligible Individual;

 

		(iii)	determine the number of Subordinate Voting Shares and Floating Shares to be covered by or used
for reference purposes for each Award or the value to be transferred pursuant to any Award;

 

		(iv)	determine the terms, conditions and restrictions applicable to each Award (which need not be identical)
and any shares acquired pursuant thereto, including, without limitation, (A) the purchase price of any Subordinate Voting
Shares and Floating Shares, as applicable, (B) the method of payment for shares purchased pursuant to any Award, (C) the
method for satisfying any tax withholding obligation arising in connection with any Award, including by the withholding or delivery
of Subordinate Voting Shares and Floating Shares, as applicable, (D) subject to Section 7(b), the timing, terms and conditions
of the exercisability, vesting or payout of any Award or any shares acquired pursuant thereto, (E) the Performance Criteria
applicable to any Award and the extent to which such Performance Criteria have been attained, (F) the time of the expiration
of any Award, (G) the effect of the Participant’s Termination of Service on any of the foregoing, and (H) all other
terms, conditions and restrictions applicable to any Award or shares acquired pursuant thereto as the Administrator shall consider
to be appropriate and not inconsistent with the terms of the Plan;

 

		(v)	subject to Sections 7(f), 10(c) and 15, modify, amend or adjust the terms and conditions of
any Award;

 

    10

     

    

 

		(vi)	subject to Section 7(b), accelerate or otherwise change the time at or during which an Award
may be exercised or becomes payable and waive or accelerate the lapse, in whole or in part, of any restriction, condition or risk
of forfeiture with respect to such Award; provided, however, that, except in connection with death, disability, Change in Control,
termination of employment following the implementation of the Amended Plan of Arrangement, or resignation following the one year
anniversary of the implementation of the Amended Plan of Arrangement, no such change, waiver or acceleration shall be made to any
Award that is considered “deferred compensation” within the meaning of Section 409A of the Code if the effect
of such action is inconsistent with Section 409A of the Code;

 

		(vii)	determine whether an Award will be paid or settled in cash, Subordinate Voting Shares, Floating
Shares, or in any combination thereof and whether, to what extent and under what circumstances cash, Subordinate Voting Shares
and/or Floating Shares payable with respect to an Award shall be deferred either automatically or at the election of the Participant;

 

		(viii)	for any purpose, including but not limited to, qualifying for preferred or beneficial tax treatment,
accommodating the customs or administrative challenges or otherwise complying with the tax, accounting or regulatory requirements
of one or more jurisdictions, adopt, amend, modify, administer or terminate sub-plans, appendices, special provisions or supplements
applicable to Awards regulated by the laws of a particular jurisdiction, which sub-plans, appendices, supplements and special provisions
may take precedence over other provisions of the Plan, and prescribe, amend and/or rescind rules and regulations relating
to such sub-plans, supplements and/or special provisions;

 

		(ix)	establish any “blackout” period, during which transactions affecting Awards may not
be effected, that the Administrator in its sole discretion deems necessary or advisable;

 

		(x)	determine the Fair Market Value of Subordinate Voting Shares, Floating Shares or other property
for any purpose under the Plan or any Award;

 

		(xi)	administer, construe and interpret the Plan, Award Agreements and all other documents relevant
to the Plan and Awards issued thereunder, and decide all other matters to be determined in connection with an Award;

 

		(xii)	establish, amend, rescind and interpret such administrative rules, regulations, agreements, guidelines,
instruments and practices for the administration of the Plan and for the conduct of its business as the Administrator deems necessary
or advisable;

 

		(xiii)	correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award
or Award Agreement in the manner and to the extent the Administrator shall consider it desirable to carry it into effect; and

 

		(xiv)	specify that vesting conditions in respect of Awards shall not extend beyond applicable limitations
such that the Award complies at all times with the exception in paragraph (k) of the definition of “salary deferral
arrangement” in subsection 248(1) of the Income Tax Act (Canada) or comparable legislation of any jurisdiction;
and

 

		(xv)	otherwise administer the Plan and all Awards granted under the Plan.

 

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		(e)	Delegation of Administrative Authority. The Administrator may designate officers or employees
of Acreage to assist the Administrator in the administration of the Plan and, to the extent permitted by applicable law and stock
exchange rules, the Administrator may delegate to officers or other employees of the Company any of the Administrator’s duties
and powers under the Plan, subject to such conditions and limitations as the Administrator shall prescribe, including without limitation
the authority to execute agreements or other documents on behalf of the Administrator; provided, however, that such delegation
of authority shall not extend to the granting of, or exercise of discretion with respect to, Awards to Eligible Individuals who
are officers under Section 16 of the Exchange Act.

 

		(c)	Non Uniform Determinations. The Administrator’s determinations under the Plan (including
without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and
provisions of such Awards and the Award Agreements evidencing such Awards, and the ramifications of a Change in Control upon outstanding
Awards) need not be uniform and may be made by the Administrator selectively among Awards or persons who receive or are eligible
to receive Awards under the Plan, whether or not such persons are similarly situated.

 

		(d)	Limited Liability; Advisors. To the maximum extent permitted by law, no member of the Administrator
shall be liable for any action taken or decision made in good faith relating to the Plan or any Award thereunder. The Administrator
may employ counsel, consultants, accountants, appraisers, brokers or other persons. The Administrator, Acreage, and the officers
and directors of Acreage shall be entitled to rely upon the advice, opinions or valuations of any such persons.

 

		(e)	Indemnification. To the maximum extent permitted by law, by Acreage’s Articles, and
by any directors’ and officers’ liability insurance coverage which may be in effect from time to time, the members
of the Administrator and any agent or delegate of the Administrator who is a director, officer or employee of Acreage or an Affiliate
shall be indemnified by Acreage against any and all liabilities and expenses to which they may be subjected by reason of any act
or failure to act with respect to their duties on behalf of the Plan.

 

		(f)	Effect of Administrator’s Decision. All actions taken and determinations made by the
Administrator on all matters relating to the Plan or any Award pursuant to the powers vested in it hereunder shall be in the Administrator’s
sole and absolute discretion, unless in contravention of any express term of the Plan, including, without limitation, any determination
involving the appropriateness or equitableness of any action. All determinations made by the Administrator shall be conclusive,
final and binding on all parties concerned, including Acreage, its shareholders, any Participants and any other employee, consultant,
or director of Acreage and its Affiliates, and their respective successors in interest. No member of the Administrator, nor any
director, officer, employee or representative of Acreage shall be personally liable for any action, determination or interpretation
made in good faith with respect to the Plan or Awards.

 

	5.	SHARES.

 

Number
of Shares Available for Awards. Subject to adjustment as provided in Section 5(a), the number of Shares issuable
pursuant to Awards that may be granted under the Plan shall be equal to 15% of the aggregate number of Subordinate Voting Shares
and Floating Shares issued and outstanding from time to time, on an as-converted basis and an as-converted floating basis (the
 “Share Pool”). Subject to applicable Law, the requirements of the Exchange and any shareholder or other approval
which may be required, the Administrator may in its discretion amend the Plan to increase such limit without notice to any Participants.

 

		(a)	Adjustments. On and after the Effective Date, the Share Pool shall be adjusted, in addition
to any adjustments to be made pursuant to Section 10 of the Plan, as follows:

 

		(i)	The Share Pool shall be reduced, on the date of grant, by one share for each stock option or stock
appreciation right granted under the Plan and by one share for each Stock Award, RSU, Performance Share and/or Other Stock-Based
Award granted under the Plan; provided that Awards that are valued by reference to Subordinate Voting Shares or Floating Shares
but are required to be paid in cash pursuant to their terms, shall not reduce the Share Pool;

 

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		(ii)	If and to the extent options or stock appreciation rights originating from the Share ‎Pool
terminate, expire, or are canceled, forfeited, exchanged, or surrendered ‎without having been exercised, or if any Stock Awards,
RSUs, Performance ‎Shares and/or Other Stock-Based Awards are forfeited, the Subordinate Voting ‎Shares and/or Floating
Shares, subject to such Awards shall again be available for ‎Awards under the Share Pool, and shall increase the Share Pool
by one share for ‎each stock option or stock appreciation right so terminated, expired, canceled, ‎forfeited, exchanged
or surrendered and one share for each Stock Award, RSU, ‎Performance Share and/or Other Stock-Based Award forfeited;

 

		(iii)	Notwithstanding the foregoing, the following Shares shall not become available for issuance under
the Plan: (A) shares tendered by Participants, or withheld by the Company, as full or partial payment to the Company upon
the exercise of stock options granted under the Plan, until such Shares are cancelled; (B) shares reserved for issuance upon
the grant of stock appreciation rights, to the extent the number of reserved shares exceeds the number of shares actually issued
upon the exercise of the stock appreciation rights; and (C) shares withheld by, or otherwise remitted to, the Company to satisfy
a Participant’s tax withholding obligations upon the lapse of restrictions on Stock Awards or the exercise of stock options
or stock appreciation rights granted under the Plan, until such shares are cancelled.

 

		(b)	ISO Limits. The following limitations shall apply to awards of Incentive Stock Options,
notwithstanding any generally applicable contrary provisions in the Plan. Any Award of Incentive Stock Options which does not comply
with the provisions of this paragraph shall be deemed to be an award of Non-Qualified Stock Options to the extent of such non-compliance.

 

		(i)	Subject to adjustment pursuant to Section 10 of the Plan, and also subject to the total number
of the maximum number of Shares available for all Grants under this Plan, the total number of Shares that may be issued pursuant
to stock options granted under the Plan that are intended to qualify as Incentive Stock Options within the meaning of Section 422
of the Code shall be 2,000,000.

 

		(ii)	To the extent that the aggregate Fair Market Value of (x) the Shares with respect to Incentive
Stock Options, plus (y) the Shares with respect to which other Incentive Stock Options are first exercisable by a Participant
during any calendar year under all plans of the Company and any Affiliate exceeds $100,000, such Incentive Stock Options shall
be treated as Nonqualified Stock Options. For purposes of the preceding sentence, the Fair Market Value of the Shares shall be
determined as of the time the Option or other incentive stock option is granted.

 

		(iii)	No Incentive Stock Options may be granted pursuant to the Plan after the day immediately prior
to the tenth anniversary of the Effective Date.

 

		(iv)	During a Participant’s lifetime, an Incentive Stock Option may be exercised only by the Participant
or, in the case of the Participant’s Disability, by the Participant’s guardian or legal representative.

 

		(v)	No Incentive Stock Option may be granted to any non-employee of the Company or an Affiliate.

 

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		(c)	Source of Shares. The Shares with respect to which Awards may be made under the Plan shall
be shares authorized by Acreage for issuance but unissued, or issued and reacquired, including without limitation shares purchased
in the open market or in private transactions.

 

		(d)	Stock Exchange Limits.

 

		(i)	The number of Shares subject to Awards granted to any one Participant shall be determined by the
Board, but no one Participant shall be granted Awards which exceed, in aggregate, the maximum number permitted by the Exchange,
if applicable.

 

		(ii)	Subject to the aggregate limit and adjustment provisions in Section 5 of this Plan, the aggregate
number of Shares that may be issued to “Insiders” (as defined in the Securities Act (Ontario) and includes an
associate and Affiliate, as defined in the Securities Act (Ontario) pursuant to the exercise of Awards under the Plan and
all other security based compensation arrangements of the Company are subject, in all respects, to Exchange policies.

 

		6.	PARTICIPATION.

 

Participation in the Plan shall be open
to all Eligible Individuals, as may be selected by the Administrator from time to time.

 

		7.	AWARDS.

 

		(a)	Awards, In General. The Administrator, in its sole discretion, shall establish the
terms of all Awards granted under the Plan consistent with the terms of the Plan. Awards may be granted individually or in tandem
with other types of Awards, concurrently with or with respect to outstanding Awards. All Awards are subject to the terms and conditions
of the Plan and as provided in the Award Agreement, which shall be delivered to the Participant receiving such Award upon, or as
promptly as is reasonably practicable following, the grant of such Award. Unless otherwise specified by the Administrator, in its
sole discretion, or otherwise provided in the Award Agreement, an Award shall not be effective unless the Award Agreement is signed
or otherwise accepted by Acreage and the Participant receiving the Award (including by electronic delivery and/or electronic signature).
Unless the Administrator determines otherwise, any failure by the Participant to sign and return the Award Agreement within such
period of time following the granting of the Award as the Administrator shall prescribe shall cause such Award to the Participant
to be null and void. The Administrator may direct that any stock certificate evidencing shares issued pursuant to the Plan shall
bear a legend setting forth such restrictions on transferability as may apply to such shares pursuant to the Plan.

 

		(b)	Minimum Restriction Period for Full Value Awards. Except as provided below and notwithstanding
any provision of the Plan to the contrary, each Award granted under the Plan shall be subject to a minimum Restriction Period of
12 months from the date of grant if vesting of or lapse of restrictions on such Award is based on the satisfaction of Performance
Criteria and a minimum Restriction Period of 36 months from the date of grant, applied in either pro rata installments or a single
installment, if vesting of or lapse of restrictions on such Award is based solely on the Participant’s satisfaction of specified
service requirements with the Company. If the grant of a Performance Award is conditioned on satisfaction of Performance Criteria,
the Performance Period shall not be less than 12 months’ duration, but no additional minimum Restriction Period need apply
to such Award. Except as provided below and notwithstanding any provision of the Plan to the contrary, the Administrator shall
not have discretionary authority to waive the minimum Restriction Period applicable to a Full Value Award, except in the case of
death, disability, retirement, a Change in Control, termination of employment following the implementation of the Amended Plan
of Arrangement, or resignation following the one year anniversary of the implementation of the Amended Plan of Arrangement. Notwithstanding
the foregoing, the provisions of this Section 7(b) shall not apply and/or may be waived, in the Administrator’s
sole discretion, with respect to up to the number of Full Value Awards that is equal to 10% of the aggregate Share Pool as of the
Effective Date. Notwithstanding the foregoing, the minimum Restriction Period may be less than 36 months in order to ensure that
an Award complies at all times with the exception in paragraph (k) of the definition of “salary deferral arrangement”
in subsection 248(1) of the Income Tax Act (Canada) or comparable legislation of any jurisdiction.

 

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		(c)	Stock Options.

 

		(i)	Grants. A stock option means a right to purchase a specified number of Subordinate Voting
Shares or Floating Shares, as applicable, from Acreage at a specified price during a specified period of time. The Administrator
may from time to time grant to Eligible Individuals Awards of Incentive Stock Options or Non-qualified Options; provided, however,
that Awards of Incentive Stock Options shall be limited to employees of Acreage or of any current or hereafter existing “parent
corporation” or “subsidiary corporation,” as defined in Sections 424(e) and 424(f) of the Code, respectively,
of Acreage, and any other Eligible Individuals who are eligible to receive Incentive Stock Options under the provisions of Section 422
of the Code. No stock option shall be an Incentive Stock Option unless so designated by the Administrator at the time of grant
or in the applicable Award Agreement.

 

		(ii)	Exercise. Stock options shall be exercisable at such time or times and subject to such terms
and conditions as shall be determined by the Administrator; provided, however, that Awards of stock options may not have a term
in excess of ten years’ duration unless required otherwise by applicable law. The exercise price per share subject to a stock
option granted under the Plan shall not be less than the Fair Market Value of one Subordinate Voting Share or Floating Share, as
applicable, on the date of grant of the stock option, except as provided under applicable law or with respect to stock options
that are granted in substitution of similar types of awards of a company acquired by Acreage or a Subsidiary or with which Acreage
or a Subsidiary combines (whether in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition
of property or stock, or otherwise) to preserve the intrinsic value of such awards. Notwithstanding the foregoing, An Incentive
Stock Option shall not be granted to any individual who, at the date of grant, owns Stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or any Affiliate, unless the exercise price per share is at
least 110% of the Fair Market Value per share of Stock at the date of grant, and the Option expires no later than five years after
the date of grant. Should the expiry date of a stock option fall within a period during which the relevant Participant is prohibited
from exercising a Nonqualified Option due to trading restrictions imposed by the Company pursuant to any policy of the Company
respecting restrictions on trading that is in effect at that time (a “blackout period”) or within nine Business
Days following the expiration of a blackout period, such expiry date of the Nonqualified Option shall be automatically extended
without any further act or formality to that date which is the tenth Business Day after the end of the blackout period (but not
beyond the first to occur of the original term of the option or the 10th anniversary of the original grant date of the
option), such tenth Business Day to be considered the expiry date for such Nonqualified Option for all purposes under the Plan.
The ten Business Day period referred to in this paragraph may not be extended by the Board.

 

		(iii)	Termination of Service. Except as provided in the applicable Award Agreement or otherwise
determined by the Administrator, to the extent stock options are not vested and exercisable, a Participant’s stock options
shall be forfeited upon his or her Termination of Service.

 

		(iv)	Additional Terms and Conditions. The Administrator may, by way of the Award Agreement or
otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of stock options, provided
they are not inconsistent with the Plan.

 

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		(d)	Limitation on Reload Options. The Administrator shall not grant stock options under this
Plan that contain a reload or replenishment feature pursuant to which a new stock option would be granted automatically upon receipt
of delivery of any Shares to Acreage in payment of the exercise price or any tax withholding obligation under any other stock option.

 

		(e)	Stock Appreciation Rights.

 

		(i)	Grants. The Administrator may from time to time grant to Eligible Individuals Awards of
stock appreciation rights. A stock appreciation right entitles the Participant to receive, subject to the provisions of the Plan
and the Award Agreement, a payment having an aggregate value equal to the product of (i) the excess of (A) the Fair Market
Value on the exercise date of one Subordinate Voting Share or Floating Shares, as applicable, over (B) the base price per
share specified in the Award Agreement, times (ii) the number of shares specified by the stock appreciation right, or portion
thereof, which is exercised. The base price per share specified in the Award Agreement shall not be less than the Fair Market Value
on the date of grant, or with respect to stock appreciation rights that are granted in substitution of similar types of awards
of a company acquired by Acreage or a Subsidiary or with which Acreage or a Subsidiary combines (whether in connection with a corporate
transaction, such as a merger, combination, consolidation or acquisition of property or stock, or otherwise) such base price as
is necessary to preserve the intrinsic value of such awards.

 

		(ii)	Exercise. Stock appreciation rights shall be exercisable at such time or times and subject
to such terms and conditions as shall be determined by the Administrator; provided, however, that stock appreciation rights granted
under the Plan may not have a term in excess of ten years’ duration unless required otherwise by applicable law. The applicable
Award Agreement shall specify whether payment by Acreage of the amount receivable upon any exercise of a stock appreciation right
is to be made in cash, Subordinate Voting Shares, Floating Shares or a combination thereof, or shall reserve to the Administrator
or the Participant the right to make that determination prior to or upon the exercise of the stock appreciation right. If upon
the exercise of a stock appreciation right a Participant is to receive a portion of such payment in Subordinate Voting Shares,
the number of shares shall be determined by dividing such portion by the Subordinate Voting Share Fair Market Value of a Subordinate
Voting Share on the exercise date. If upon the exercise of a stock appreciation right a Participant is to receive a portion of
such payment in Floating Shares, the number of shares shall be determined by dividing such portion by the Floating Share Fair Market
Value of a Floating Share on the exercise date. No fractional shares shall be used for such payment and the Administrator shall
determine whether cash shall be given in lieu of such fractional shares or whether such fractional shares shall be eliminated.

 

		(iii)	Termination of Service. Except as provided in the applicable Award Agreement or otherwise
determined by the Administrator, to the extent stock appreciation rights are not vested and exercisable, a Participant’s
stock appreciation rights shall be forfeited upon his or her Termination of Service.

 

		(iv)	Additional Terms and Conditions. The Administrator may, by way of the Award Agreement or
otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of stock appreciation
rights, provided they are not inconsistent with the Plan.

 

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		(f)	Repricing. Notwithstanding anything herein to the contrary, the terms of stock options and
stock appreciation rights granted under the Plan may be amended, after the date of grant, to reduce the exercise price of such
stock options or stock appreciation rights, or outstanding stock options or stock appreciation rights be canceled in exchange for
(i) cash, (ii) stock options or stock appreciation rights with an exercise price or base price that is less than the
exercise price or base price of the original outstanding stock options or stock appreciation rights, or (iii) other Awards,
provided that any such actions are in compliance with the applicable rules and requirements, if any, of the stock exchange
upon which the Shares are listed and have been approved by the Board.

 

		(g)	Stock Awards.

 

		(i)	Grants. The Administrator may from time to time grant to Eligible Individuals Awards of
unrestricted Subordinate Voting Shares, Floating Shares or Restricted Stock (collectively, “Stock Awards”) on
such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required
by law, as the Administrator shall determine, subject to the limitations set forth in Section 7(b). Stock Awards shall be
evidenced in such manner as the Administrator may deem appropriate, including via book-entry registration.

 

		(ii)	Vesting. Restricted Stock shall be subject to such vesting, restrictions on transferability
and other restrictions, if any, and/or risk of forfeiture as the Administrator may impose at the date of grant or thereafter. The
Restriction Period to which such vesting, restrictions and/or risk of forfeiture apply may lapse under such circumstances, including
without limitation upon the attainment of Performance Criteria, in such installments, or otherwise, as the Administrator may determine.
Subject to the provisions of the Plan, the applicable Award Agreement and applicable law, during the Restriction Period, the Participant
shall not be permitted to vote sell, assign, transfer, pledge or otherwise encumber shares of Restricted Stock.

 

		(iii)	Rights of a Shareholder; Dividends. Except to the extent restricted under the Award Agreement
relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of the rights of a registered holder of
Subordinate Voting Shares or Floating Shares, as applicable, including, without limitation, the right to vote Restricted Stock
upon the expiry of the Restriction Period. Subject to shareholder approval, cash dividends declared payable on Subordinate Voting
Shares and/or Floating Shares shall be paid, with respect to outstanding Restricted Stock, as determined by the Administrator,
and shall be paid in cash or as unrestricted Subordinate Voting Shares or Floating Shares, as applicable, having a Fair Market
Value equal to the amount of such dividends or may be reinvested in additional shares of Restricted Stock as determined by the
Administrator; provided, however, that dividends declared payable on Restricted Stock that is granted as a Performance Award shall
be held by Acreage and made subject to forfeiture at least until achievement of the applicable Performance Goal related to such
shares of Restricted Stock. Stock distributed in connection with a stock split or stock dividend, and other property distributed
as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect
to which such Subordinate Voting Shares, Floating Shares or other property has been distributed. As soon as is practicable following
the date on which restrictions on any shares of Restricted Stock lapse, Acreage shall deliver to the Participant the certificates
for such shares or shall cause the shares to be registered in the Participant’s name in book-entry form, in either case with
the restrictions removed, provided that the Participant shall have complied with all conditions for delivery of such shares contained
in the Award Agreement or otherwise reasonably required by Acreage.

 

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		(iv)	Termination of Service. Except as provided in the applicable Award Agreement, upon Termination
of Service during the applicable Restriction Period, Restricted Stock and any accrued but unpaid dividends that are at that time
subject to restrictions shall be forfeited; provided that, subject to the limitations set forth in Section 7(b), the Administrator
may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or
forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from
specified causes, and the Administrator may in other cases waive in whole or in part the forfeiture of Restricted Stock.

 

		(v)	Additional Terms and Conditions. The Administrator may, by way of the Award Agreement or
otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of Restricted Stock,
provided they are not inconsistent with the Plan.

 

		(h)	Share Units.

 

		(i)	Grants. The Administrator may from time to time grant to Eligible Individuals Awards of
unrestricted stock Units or RSUs on such terms and conditions, and for such consideration, including no consideration or such minimum
consideration as may be required by law, as the Administrator shall determine, subject to the limitations set forth in Section 7(b).
RSUs represent a contractual obligation by Acreage to deliver a number of Subordinate Voting Shares or Floating Shares, an amount
in cash equal to the Fair Market Value of the specified number of Shares subject to the Award, or a combination of Subordinate
Voting Shares or Floating Shares, and cash, in accordance with the terms and conditions set forth in the Plan and any applicable
Award Agreement.

 

		(ii)	Vesting and Payment. RSUs shall be subject to such vesting, risk of forfeiture and/or
                                                              payment provisions as the Administrator may impose at the date of grant. The Restriction Period to which such vesting and/or
                                                              risk of forfeiture apply may lapse under such circumstances, including without limitation upon the attainment of Performance
                                                              Criteria, in such installments, or otherwise, as the Administrator may determine. Subordinate Voting Shares, Floating Shares,
                                                              cash or a combination of Shares and cash, payable in settlement of RSUs shall be delivered to the Participant as soon as
                                                              administratively practicable, but no later than 30 days, after the date on which payment is due under the terms of the Award
                                                              Agreement provided that the Participant shall have complied with all conditions for delivery of such shares or payment
                                                              contained in the Award Agreement or otherwise reasonably required by Acreage, or in accordance with an election of the
                                                              Participant, if the Administrator so permits, that meets the requirements of Section 409A of the Code.

 

		(iii)	No Rights of a Shareholder; Dividend Equivalents. Until Subordinate Voting Shares or Floating
Shares are issued to the Participant in settlement of stock Units, the Participant shall not have any rights of a shareholder of
Acreage with respect to the stock Units or the shares issuable thereunder. The Administrator may grant to the Participant the right
to receive Dividend Equivalents on stock Units, on a current, reinvested and/or restricted basis, subject to such terms as the
Administrator may determine provided, however, that Dividend Equivalents payable on stock Units that are granted as a Performance
Award shall, rather than be paid on a current basis, be accrued and made subject to forfeiture at least until achievement of the
applicable Performance Goal related to such stock Units.

 

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		(iv)	Termination of Service. Upon Termination of Service during the applicable deferral period
or portion thereof to which forfeiture conditions apply, or upon failure to satisfy any other conditions precedent to the delivery
of Subordinate Voting Shares, Floating Shares or cash to which such RSUs relate, all RSUs and any accrued but unpaid Dividend Equivalents
with respect to such RSUs that are then subject to deferral or restriction shall be forfeited; provided that, subject to the limitations
set forth in Section 7(b), the Administrator may provide, by rule or regulation or in any Award Agreement, or may determine
in any individual case, that restrictions or forfeiture conditions relating to RSUs will be waived in whole or in part in the event
of termination resulting from specified causes, and the Administrator may in other cases waive in whole or in part the forfeiture
of RSUs.

 

		(v)	Additional Terms and Conditions. The Administrator may, by way of the Award Agreement or
otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of stock Units, provided
they are not inconsistent with the Plan.

 

		(i)	Performance Shares and Performance Units.

 

		(i)	Grants. The Administrator may from time to time grant to Eligible Individuals Awards in
the form of Performance Shares and Performance Units. Performance Shares, as that term is used in this Plan, shall refer to Subordinate
Voting Shares, Floating Shares or Units that are expressed in terms of Subordinate Voting Shares or Floating Shares, the issuance,
vesting, lapse of restrictions on or payment of which is contingent on performance as measured against predetermined objectives
over a specified Performance Period. Performance Units, as that term is used in this Plan, shall refer to dollar-denominated Units
valued by reference to designated criteria established by the Administrator, other than Subordinate Voting Shares and Floating
Shares, the issuance, vesting, lapse of restrictions on or payment of which is contingent on performance as measured against predetermined
objectives over a specified Performance Period. The applicable Award Agreement shall specify whether Performance Shares and Performance
Units will be settled or paid in cash, Subordinate Voting Shares, Floating Shares or a combination thereof, or shall reserve to
the Administrator or the Participant the right to make that determination prior to or at the payment or settlement date.

 

		(ii)	Performance Criteria. The Administrator shall, prior to or at the time of grant, condition
the grant, vesting or payment of, or lapse of restrictions on, an Award of Performance Shares or Performance Units upon (A) the
attainment of Performance Criteria during a Performance Period or (B) the attainment of Performance Criteria and the continued
service of the Participant. The length of the Performance Period, the Performance Criteria to be achieved during the Performance
Period, and the measure of whether and to what degree such Performance Criteria have been attained shall be conclusively determined
by the Administrator in the exercise of its absolute discretion. Performance Criteria may include minimum, maximum and target levels
of performance, with the size of the Award or payout of Performance Shares or Performance Units or the vesting or lapse of restrictions
with respect thereto based on the level attained. An Award of Performance Shares or Performance Units shall be settled as and when
the Award vests or at a later time specified in the Award Agreement or in accordance with an election of the Participant, if the
Administrator so permits, that meets the requirements of Section 409A of the Code.

 

		(iii)	Additional Terms and Conditions. The Administrator may, by way of the Award Agreement or
otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of Performance Shares
or Performance Units, provided they are not inconsistent with the Plan.

 

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		(j)	Other Stock-Based Awards. The Administrator may from time to time grant to Eligible Individuals
Awards in the form of Other Stock-Based Awards. Other Stock-Based Awards in the form of Dividend Equivalents may be (A) awarded
on a free-standing basis or in connection with another Award other than a stock option or stock appreciation right, (B) paid
currently or credited to an account for the Participant, including the reinvestment of such credited amounts in Subordinate Voting
Shares equivalents or Floating Shares equivalents, to be paid on a deferred basis, and (C) settled in Subordinate Voting Shares
or Floating Shares, or cash as determined by the Administrator; provided, however, that Dividend Equivalents payable on Other Stock-Based
Awards that are granted as a Performance Award shall, rather than be paid on a current basis, be accrued and made subject to forfeiture
at least until achievement of the applicable Performance Goal related to such Other Stock-Based Awards. Any such settlements, and
any such crediting of Dividend Equivalents, may be subject to such conditions, restrictions and contingencies as the Administrator
shall establish.

 

		(k)	Awards to Participants Outside the United States. The Administrator may grant Awards to
Eligible Individuals who are foreign nationals, who are located outside the United States or who are not compensated from a payroll
maintained in the United States, or who are otherwise subject to (or could cause Acreage or a Subsidiary to be subject to) tax,
legal or regulatory provisions of countries or jurisdictions outside the United States, on such terms and conditions different
from those specified in the Plan as may, in the judgment of the Administrator, be necessary or desirable in order that any such
Award shall conform to laws, regulations, and customs of the country or jurisdiction in which the Participant is then resident
or primarily employed or to foster and promote achievement of the purposes of the Plan.

 

		(l)	Limitation on Dividend Reinvestment and Dividend Equivalents. Reinvestment of dividends
in additional Restricted Stock at the time of any dividend payment, and the payment of Subordinate Voting Shares or Floating Shares
with respect to dividends to Participants holding Awards of stock Units, shall only be permissible if sufficient shares are available
under the Share Pool for such reinvestment or payment (taking into account then outstanding Awards). In the event that sufficient
shares are not available under the Share Pool for such reinvestment or payment, such reinvestment or payment shall be made in the
form of a grant of stock Units equal in number to the Subordinate Voting Shares or Floating Shares, as applicable, that would have
been obtained by such payment or reinvestment, the terms of which stock Units shall provide for settlement in cash and for Dividend
Equivalent reinvestment in further stock Units on the terms contemplated by this Section 7(m).

 

		8.	WITHHOLDING OF TAXES.

 

Participants and holders of Awards shall
pay to Acreage or its Affiliate, or make arrangements satisfactory to the Administrator for payment of, any Tax Withholding Obligation
in respect of Awards granted under the Plan no later than the date of the event creating the tax or social insurance contribution
liability. The obligations of Acreage under the Plan shall be conditional on such payment or arrangements. Unless otherwise determined
by the Administrator, and subject always to applicable law, Tax Withholding Obligations may be settled in whole or in part with
Subordinate Voting Shares and/or Floating Shares, including unrestricted outstanding shares surrendered to Acreage and unrestricted
shares that are part of the Award that gives rise to the Tax Withholding Obligation, having a Fair Market Value on the date of
surrender or withholding equal to the statutory minimum amount (or such greater amount permitted under FASB Accounting Standards
Codification Topic 718, Compensation—Stock Compensation, for equity-classified awards) required to be withheld for
tax or social insurance contribution purposes, all in accordance with such procedures as the Administrator establishes. Acreage
or its Affiliate may deduct, to the extent permitted by law, any such Tax Withholding Obligations from any payment of any kind
otherwise due to the Participant or holder of an Award.

 

		9.	TRANSFERABILITY OF AWARDS.

 

		(a)	Requirement for Administrator Permission. Except as otherwise determined by the Administrator,
and in any event in the case of an Incentive Stock Option or a tandem stock appreciation right granted with respect to an Incentive
Stock Option, no Award granted under the Plan shall be transferable by a Participant otherwise than by will or the laws of descent
and distribution. The Administrator shall not permit any transfer of an Award for value except to the Company or in connection
with a Change in Control. An Award may be exercised during the lifetime of the Participant, only by the Participant or, during
the period the Participant is under a legal disability, by the Participant’s guardian or legal representative, unless otherwise
determined by the Administrator. Awards granted under the Plan shall not be subject in any manner to alienation, anticipation,
sale, transfer, assignment, pledge, or encumbrance, except as otherwise determined by the Administrator; provided, however, that
the restrictions in this sentence shall not apply to the Subordinate Voting Shares or Floating Shares received in connection with
an Award after the date that the restrictions on transferability of such shares set forth in the applicable Award Agreement have
lapsed. Nothing in this paragraph shall be interpreted or construed as overriding the terms of any Acreage stock ownership or retention
policy, now or hereafter existing, that may apply to the Participant or Subordinate Voting Shares or Floating Shares received under
an Award.

 

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		(b)	Administrator Discretion to Permit Transfers Other Than For Value. Except as otherwise restricted
by applicable law, the Administrator may, but need not, permit an Award, other than an Incentive Stock Option or a tandem stock
appreciation right granted with respect to an Incentive Stock Option, to be transferred to a Participant’s Family Member
(as defined below) as a gift or pursuant to a domestic relations order in settlement of marital property rights. The Administrator
shall not permit any transfer of an Award for value except to the Company or in connection with a Change in Control. For purposes
of this Section 9, “Family Member” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, any person sharing the Participant’s household (other than a tenant or employee), a trust
in which these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the Participant)
control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent
(50%) of the voting interests. The following transactions are not prohibited transfers for value: (i) a transfer under a domestic
relations order in settlement of marital property rights; and (ii) a transfer to an entity in which more than fifty percent
of the voting interests are owned by Family Members (or the Participant) in exchange for an interest in that entity.

 

		10.	ADJUSTMENTS FOR CORPORATE TRANSACTIONS AND OTHER EVENTS.

 

		(a)	Mandatory Adjustments. In the event of a merger, consolidation, stock rights offering, statutory
share exchange or similar event affecting Acreage (each, a “Corporate Event”) or a stock dividend, stock split,
reverse stock split, separation, spinoff, reorganization, extraordinary dividend of cash or other property, share combination or
subdivision, or recapitalization or similar event affecting the capital structure of Acreage (each, a “Share Change”)
that occurs at any time after adoption of this Plan by the Board (including any such Corporate Event or Share Change that occurs
after such adoption and coincident with or prior to the Effective Date), the Administrator shall, with the approval of the Exchange
or the shareholders of the Company (if required), make equitable and appropriate substitutions or proportionate adjustments to
(i) the aggregate number and kind of Shares or other securities on which Awards under the Plan may be granted to Eligible
Individuals, (ii) the maximum number of Shares or other securities with respect to which Awards may be granted during any
one calendar year to any individual, (iii) the maximum number of Shares or other securities that may be issued with respect
to Incentive Stock Options granted under the Plan, (iv) the number of Shares or other securities covered by each outstanding
Award and the exercise price, base price or other price per share, if any, and other relevant terms of each outstanding Award,
and (v) all other numerical limitations relating to Awards, whether contained in this Plan or in Award Agreements; provided,
however, that any fractional shares resulting from any such adjustment shall be eliminated; and, provided further, that in no event
shall the exercise price per Share of a stock option or stock appreciation right, or subscription price per Share or any other
Award, be reduced to an amount that is lower than the par value of such Share.

 

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		(b)	Discretionary Adjustments. In the case of a Corporate Event, the Administrator may, with
the approval of the Exchange or the shareholders of the Company (if required), make such other adjustments to outstanding Awards
as it determines to be appropriate and desirable, which adjustments may include, without limitation, (i) the cancellation
of outstanding Awards in exchange for payments of cash, securities or other property or a combination thereof having an aggregate
value equal to the value of such Awards, as determined by the Administrator in its sole discretion (it being understood that in
the case of a Corporate Event with respect to which shareholders of Acreage receive consideration other than publicly traded equity
securities of the ultimate surviving entity, any such determination by the Administrator that the value of a stock option or stock
appreciation right shall for this purpose be deemed to equal the excess, if any, of the value of the consideration being paid for
each Share pursuant to such Corporate Event over the exercise price or base price of such stock option or stock appreciation right
shall conclusively be deemed valid and that any stock option or stock appreciation right may be cancelled for no consideration
upon a Corporate Event if its exercise price or base price equals or exceeds the value of the consideration being paid for each
Share pursuant to such Corporate Event), (ii) the substitution of securities or other property (including, without limitation,
cash or other securities of Acreage and securities of entities other than Acreage) for the Shares subject to outstanding Awards,
and (iii) the substitution of equivalent awards, as determined in the sole discretion of the Administrator, of the surviving
or successor entity or a parent thereof (“Substitute Awards”).

 

		(c)	Adjustments to Performance Criteria. The Administrator may, in its discretion, adjust the
Performance Criteria applicable to any Awards to reflect any unusual or infrequently occurring event or transaction, impact of
charges for restructurings, discontinued operations and the cumulative effects of accounting or tax changes, each as defined by
generally accepted accounting principles or as identified in Acreage’s consolidated financial statements, notes to the consolidated
financial statements, management’s discussion and analysis or other Acreage filings with the Canadian provincial securities
administrators or the ‎Securities and Exchange Commission. If the Administrator determines that a change in the business, operations,
corporate structure or capital structure of Acreage or the applicable subsidiary, business segment or other operational unit of
Acreage or any such entity or segment, or the manner in which any of the foregoing conducts its business, or other events or circumstances,
render the Performance Criteria to be unsuitable, the Administrator may modify such Performance Criteria or the related minimum
acceptable level of achievement, in whole or in part, as the Administrator deems appropriate and equitable.

 

		(d)	Statutory Requirements Affecting Adjustments. Notwithstanding the foregoing: (A) any
adjustments made pursuant to Section 10 to Awards that are considered “deferred compensation” within the meaning
of Section 409A of the Code shall be made in compliance with the requirements of Section 409A of the Code; (B) any
adjustments made pursuant to Section 10 to Awards that are not considered “deferred compensation” subject to Section 409A
of the Code shall be made in such a manner as to ensure that after such adjustment, the Awards either (1) continue not to
be subject to Section 409A of the Code or (2) comply with the requirements of Section 409A of the Code; (C) in
any event, the Administrator shall not have the authority to make any adjustments pursuant to Section 10 to the extent the
existence of such authority would cause an Award that is not intended to be subject to Section 409A of the Code at the date
of grant to be subject thereto; and (D) any adjustments made pursuant to Section 10 to Awards that are Incentive Stock
Options shall be made in compliance with the requirements of Section 424 (a) of the Code.

 

		(e)	Dissolution or Liquidation. Unless the Administrator determines otherwise, all Awards outstanding
under the Plan shall terminate upon the dissolution or liquidation of Acreage.

 

		11.	CHANGE IN CONTROL PROVISIONS.

 

		(a)	Termination of Awards. Notwithstanding the provisions of Section 11(b), in the event
that any transaction resulting in a Change in Control occurs, outstanding Awards will terminate upon the effective time of such
Change in Control unless provision is made in connection with the transaction for the continuation or assumption of such Awards
by, or for the issuance therefor of Substitute Awards of, the surviving or successor entity or a parent thereof. Solely with respect
to Awards that will terminate as a result of the immediately preceding sentence and except as otherwise provided in the applicable
Award Agreement:

 

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		(i)	the outstanding Awards of stock options and stock appreciation rights that will terminate upon
the effective time of the Change in Control shall, immediately before the effective time of the Change in Control, become fully
exercisable and the holders of such Awards will be permitted, immediately before the Change in Control, to exercise the Awards;

 

		(ii)	the outstanding shares of Restricted Stock the vesting or restrictions on which are then solely
time-based and not subject to achievement of Performance Criteria shall, immediately before the effective time of the Change in
Control, become fully vested, free of all transfer and lapse restrictions and free of all risks of forfeiture;

 

		(iii)	the outstanding shares of Restricted Stock the vesting or restrictions on which are then subject
to and pending achievement of Performance Criteria shall, immediately before the effective time of the Change in Control and unless
the Award Agreement provides for vesting or lapsing of restrictions in a greater amount upon the occurrence of a Change in Control,
become vested, free of transfer and lapse restrictions and risks of forfeiture in such amounts as if the applicable Performance
Criteria for the unexpired Performance Period had been achieved at the target level set forth in the applicable Award Agreement;

 

		(iv)	the outstanding RSUs, Performance Shares and Performance Units the vesting, earning or settlement
of which is then solely time-based and not subject to or pending achievement of Performance Criteria shall, immediately before
the effective time of the Change in Control, become fully earned and vested and shall be settled in Subordinate Voting Shares or
Floating Shares, as applicable, or cash (consistent with the terms of the Award Agreement after taking into account the effect
of the Change in Control transaction on the shares) as promptly as is practicable, subject to any applicable limitations imposed
thereon by Section 409A of the Code; and

 

		(v)	the outstanding RSUs, Performance Shares and Performance Units the vesting, earning or settlement
of which is then subject to and pending achievement of Performance Criteria shall, immediately before the effective time of the
Change in Control and unless the Award Agreement provides for vesting, earning or settlement in a greater amount upon the occurrence
of a Change in Control, become vested and earned in such amounts as if the applicable Performance Criteria for the unexpired Performance
Period had been achieved at the target level set forth in the applicable Award Agreement and shall be settled in Subordinate Voting
Shares or Floating Shares, as applicable, or cash (consistent with the terms of the Award Agreement after taking into account the
effect of the Change in Control transaction on the shares) as promptly as is practicable, subject to any applicable limitations
imposed thereon by Section 409A of the Code. Implementation of the provisions of this Section 11(a) shall be conditioned
upon consummation of the Change in Control.

 

		(b)	Continuation, Assumption or Substitution of Awards. The administrator may specify, on or
after the date of grant, in an award agreement or amendment thereto, the consequences of a Participant’s Termination of Service
that occurs coincident with or following the occurrence of a Change in Control, if a Change in Control occurs under which provision
is made in connection with the transaction for the continuation or assumption of outstanding Awards by, or for the issuance therefor
of Substitute Awards of, the surviving or successor entity or a parent thereof.

 

		(c)	Other Permitted Actions. In the event that any transaction resulting in a Change in Control
occurs, the Administrator may take any of the actions set forth in Section 10 with respect to any or all Awards granted under
the Plan.

 

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		(d)	Section 409A Savings Clause. Notwithstanding the foregoing, if any Award is considered
to be a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, this Section 11
shall apply to such Award only to the extent that its application would not result in the imposition of any tax or interest or
the inclusion of any amount in income under Section 409A of the Code.

 

		12.	SUBSTITUTION OF AWARDS IN MERGERS AND ACQUISITIONS.

 

Awards may be granted under the Plan from
time to time in substitution for assumed awards held by employees, officers, consultants or directors of entities who become employees,
officers, consultants or directors of Acreage or a Subsidiary as the result of a merger or consolidation of the entity for which
they perform services with Acreage or a Subsidiary, or the acquisition by Acreage of the assets or stock of the such entity. The
terms and conditions of any Awards so granted may vary from the terms and conditions set forth herein to the extent that the Administrator
deems appropriate at the time of grant to conform the Awards to the provisions of the assumed awards for which they are substituted
and to preserve their intrinsic value as of the date of the merger, consolidation or acquisition transaction. To the extent permitted
by applicable law and marketplace or listing rules of the primary securities market or exchange on which the Subordinate Voting
Shares and/or the Floating Shares are listed or admitted for trading, any available shares under a shareholder-approved plan of
an acquired company (as appropriately adjusted to reflect the transaction) may be used for Awards granted pursuant to this Section 12
and, upon such grant, shall not reduce the Share Pool.

 

		13.	COMPLIANCE WITH SECURITIES LAWS; LISTING AND REGISTRATION.

 

		(a)	The obligation of Acreage to sell or deliver Shares with respect to any Award granted under the
Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal, state or foreign (non-United
States) securities laws, or foreign (non-United States) securities laws and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Administrator. If at any time the Administrator determines that the delivery
of Shares under the Plan is or may be unlawful under the laws of any applicable jurisdiction, or federal, state or foreign (non-United
States) securities laws, the right to exercise an Award or receive Shares pursuant to an Award shall be suspended until the Administrator
determines that such delivery is lawful. If at any time the Administrator determines that the delivery of Shares under the Plan
would or may violate the rules of any exchange on which Acreage’s securities are then listed for trading, the right
to exercise an Award or receive Shares pursuant to an Award shall be suspended until the Administrator determines that such delivery
would not violate such rules. If the Administrator determines that the exercise or nonforfeitability of, or delivery of benefits
pursuant to, any Award would violate any applicable provision of securities laws or the listing requirements of any stock exchange
upon which any of Acreage’s equity securities are listed, then the Administrator may postpone any such exercise, nonforfeitability
or delivery, as applicable, but Acreage shall use all reasonable efforts to cause such exercise, nonforfeitability or delivery
to comply with all such provisions at the earliest practicable date. The inability of the Company to obtain from any regulatory
body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance
and sale of any shares under the Plan shall relieve the Company of any liability in respect of the failure to issue or sell such
shares as to which such requisite authority shall not have been obtained.

 

		(b)	Each Award is subject to the requirement that, if at any time the Administrator determines, in
its absolute discretion, that the listing, registration or qualification of any Shares issuable pursuant to the Plan is required
by any securities exchange or under any state, federal or foreign (non-United States) law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Award or the issuance of any
Shares, no such Award shall be granted or payment made or Shares issued, in whole or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions not acceptable to the Administrator.

 

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		(c)	In the event that the disposition of any Shares acquired pursuant to the Plan is not covered by
a then current registration statement under the Securities Act of 1933, as amended (the “Securities Act”), and
is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required by the
Securities Act or regulations thereunder, and the Administrator may require a person receiving any Shares pursuant to the Plan,
as a condition precedent to receipt of such Shares, to represent to Acreage in writing that the Shares acquired by such person
is acquired for investment only and not with a view to distribution and that such person will not dispose of the Shares so acquired
in violation of federal, state or foreign securities laws and furnish such information as may, in the opinion of counsel for the
Company, be appropriate to permit the Company to issue the Shares in compliance with applicable federal, state or foreign securities
laws. If applicable, all certificates representing such Shares shall bear applicable legends as required by federal, state or foreign
securities laws or stock exchange regulation.

 

		14.	SECTION 409A COMPLIANCE.

 

It is the intention of Acreage that any
Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code
shall comply in all respects with the requirements of Section 409A of the Code to avoid the imposition of any tax or interest
or the inclusion of any amount in income pursuant to Section 409A of the Code, and the terms of each such Award shall be construed,
administered and deemed amended, if applicable, in a manner consistent with this intention. Notwithstanding the foregoing, neither
Acreage nor any of its Affiliates nor any of its or their directors, officers, employees, agents or other service providers will
be liable for any taxes, penalties or interest imposed on any Participant or other person with respect to any amounts paid or payable
(whether in cash, Shares or other property) under any Award, including any taxes, penalties or interest imposed under or as a result
of Section 409A of the Code. Any payments described in an Award that are due within the “short term deferral period”
as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise.
For purposes of any Award, each amount to be paid or benefit to be provided to a Participant that constitutes deferred compensation
subject to Section 409A of the Code shall be construed as a separate identified payment for purposes of Section 409A
of the Code. For purposes of Section 409A of the Code, the payment of Dividend Equivalents under any Award shall be construed
as earnings and the time and form of payment of such Dividend Equivalents shall be treated separately from the time and form of
payment of the underlying Award. Notwithstanding any other provision of the Plan to the contrary, with respect to any Award that
constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, any payments
(whether in cash, Shares or other property) to be made with respect to the Award that become payable on account of the Participant’s
separation from service, within the meaning of Section 409A of the Code, while the Participant is a “specified employee”
(as determined in accordance with the uniform policy adopted by the Administrator with respect to all of the arrangements subject
to Section 409A of the Code maintained by Acreage and its Affiliates) and which would otherwise be paid within six months
after the Participant’s separation from service shall be accumulated (without interest) and paid on the first day of the
seventh month following the Participant’s separation from service or, if earlier, within 15 days after the appointment of
the personal representative or executor of the Participant’s estate following the Participant’s death. Notwithstanding
anything in the Plan or an Award Agreement to the contrary, in no event shall the Administrator exercise its discretion to accelerate
the payment or settlement of an Award where such payment or settlement constitutes deferred compensation within the meaning of
Code section 409A unless, and solely to the extent that, such accelerated payment or settlement is permissible under Treasury Regulation
section 1.409A-3(j)(4).

 

		15.	PLAN DURATION; AMENDMENT AND DISCONTINUANCE.

 

		(a)	Plan Duration. The Plan shall remain in effect, subject to the right of the Board or the
Compensation Committee to amend or terminate the Plan at any time, until the (a) earliest date as of which all Awards granted
under the Plan have been satisfied in full or terminated and no Shares approved for issuance under the Plan remain available to
be granted under new Awards or (b) the tenth anniversary of the Effective Date. No Awards shall be granted under the Plan
after such termination date. Subject to other applicable provisions of the Plan, all Awards made under the Plan on or before the
tenth anniversary of the Effective Date, or such earlier termination of the Plan, shall remain in effect until such Awards have
been satisfied or terminated in accordance with the Plan and the terms of such Awards.

 

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		(b)	Amendment and Discontinuance of the Plan. The Board or the Compensation Committee may, without
shareholder approval, amend, alter or discontinue the Plan, but no amendment, alteration or discontinuation shall be made which
would materially impair the rights of a Participant with respect to a previously granted Award without such Participant’s
consent, except such an amendment made to comply with applicable law or rule of any securities exchange or market on which
the Subordinate Voting Shares and/or Floating Shares are listed or admitted for trading or to prevent adverse tax or accounting
consequences to Acreage or the Participant. Notwithstanding the foregoing, no such amendment shall be made without the approval
of Acreage’s shareholders to the extent such amendment would (A) materially increase the benefits accruing to Participants
under the Plan, (B) materially increase the number of Subordinate Voting Shares and/or Floating Shares which may be issued
under the Plan or to a Participant, (C) materially expand the eligibility for participation in the Plan, (D) eliminate
or modify the prohibition set forth in Section 7(f) on repricing of stock options and stock appreciation rights, (E) lengthen
the maximum term or lower the minimum exercise price or base price permitted for stock options and stock appreciation rights, or
(F) modify the prohibition on the issuance of reload or replenishment options. Except as otherwise determined by the Board
or Compensation Committee, termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted
to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

 

		(c)	Amendment of Awards. Subject to Section 7(f), the Administrator may unilaterally amend
the terms of any Award theretofore granted, but no such amendment shall materially impair the rights of any Participant with respect
to an Award without the Participant’s consent, except such an amendment made to cause the Plan or Award to comply with applicable
law, applicable rule of any securities exchange on which the Subordinate Voting Shares and/or Floating Shares are listed or
admitted for trading, or to prevent adverse tax or accounting consequences for the Participant or the Company or any of its Affiliates.
For purposes of the foregoing sentence, an amendment to an Award that results in a change in the tax consequences of the Award
to the Participant shall not be considered to be a material impairment of the rights of the Participant and shall not require the
Participant’s consent.

 

		16.	GENERAL PROVISIONS.

 

		(a)	Non-Guarantee of Employment or Service. Nothing in the Plan or in any Award Agreement thereunder
shall confer any right on an individual to continue in the service of Acreage or any Affiliate or shall interfere in any way with
any right of Acreage or any Affiliate may have to terminate such service at any time with or without cause or notice and whether
or not such termination results in (i) the failure of any Award to vest or become payable; (ii) the forfeiture of any
unvested or vested portion of any Award; and/or (iii) any other adverse effect on the individual’s interests under any
Award or the Plan. No person, even though deemed an Eligible Individual, shall have a right to be selected as a Participant, or,
having been so selected, to be selected again as a Participant. To the extent that an Eligible Individual who is an employee of
a Subsidiary receives an Award under the Plan, that Award shall in no event be understood or interpreted to mean that Acreage is
the Participant’s employer or that the Participant has an employment relationship with Acreage.

 

		(b)	No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to
create a trust or separate fund of any kind or a fiduciary relationship between Acreage and a Participant or any other person.
To the extent that any Participant or other person acquires a right to receive payments from Acreage pursuant to an Award, such
right shall be no greater than the right of any unsecured general creditor of Acreage.

 

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		(c)	Status of Awards. Awards shall be special incentive payments to the Participant and shall
not be taken into account in computing the amount of salary or compensation of the Participant for purposes of determining any
pension, retirement, death, severance or other benefit under (a) any pension, retirement, profit-sharing, bonus, insurance,
severance or other employee benefit plan of Acreage or any Affiliate now or hereafter in effect under which the availability or
amount of benefits is related to the level of compensation or (b) any agreement between (i) Acreage or any Affiliate
and (ii) the Participant, except as such plan or agreement shall otherwise expressly provide.

 

		(d)	Subsidiary Employees. In the case of a grant of an Award to an Eligible Individual who provides
services to any Subsidiary, Acreage may, if the Administrator so directs, issue or transfer the Shares, if any, covered by the
Award to the Subsidiary, for such lawful consideration as the Administrator may specify, upon the condition or understanding that
the Subsidiary will transfer the Shares to the Eligible Individual in accordance with the terms of the Award specified by the Administrator
pursuant to the provisions of the Plan. All Shares underlying Awards that are forfeited or canceled after such issue or transfer
of shares to the Subsidiary shall revert to Acreage.

 

		(e)	Governing Law and Interpretation. The validity, construction and effect of the Plan, of
Award Agreements entered into pursuant to the Plan, and of any rules, regulations, determinations or decisions made by the Administrator
relating to the Plan or such Award Agreements, and the rights of any and all persons having or claiming to have any interest therein
or thereunder, shall be determined exclusively in accordance with the laws of British Columbia and the laws of Canada applicable
therein without regard to its conflict of laws principles. The captions of the Plan are not part of the provisions hereof and shall
have no force or effect. Except where the context otherwise requires: (i) the singular includes the plural and vice versa;
(ii) a reference to one gender includes other genders; (iii) a reference to a person includes a natural person, partnership,
corporation, association, governmental or local authority or agency or other entity; and (iv) a reference to a statute, ordinance,
code or other law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements
of any of them.

 

		(f)	Use of English Language. The Plan, each Award Agreement, and all other documents, notices
and legal proceedings entered into, given or instituted pursuant to an Award shall be written in English, unless otherwise determined
by the Administrator. If a Participant receives an Award Agreement, a copy of the Plan or any other documents related to an Award
translated into a language other than English, and if the meaning of the translated version is different from the English version,
the English version shall control.

 

		(g)	Recovery of Amounts Paid. Except as otherwise provided by the Administrator, Awards granted
under the Plan shall be subject to any and all policies, guidelines, codes of conduct, or other agreement or arrangement adopted
by the Board or Compensation Committee with respect to the recoupment, recovery or clawback of compensation (collectively, the
 “Recoupment Policy”) and/or to any provisions set forth in the applicable Award Agreement under which Acreage
may recover from current and former Participants any amounts paid or Shares issued under an Award and any proceeds therefrom under
such circumstances as the Administrator determines appropriate. The Administrator may apply the Recoupment Policy to Awards granted
before the policy is adopted to the extent required by applicable law or rule of any securities exchange or market on which
Subordinate Voting Shares and/or Floating Shares, as applicable, are listed or admitted for trading, as determined by the Administrator
in its sole discretion.

 

    27

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