Document:

Adastra Holdings Ltd.: Exhibit 10.2 - Filed by newsfilecorp.com

    

    SUPPLY AGREEMENT

    THIS AGREEMENT made as of March 12, 2020 (the "Effective Date").

    B E T W E E N:

    
        	 	
                    ADASTRA LABS HOLDINGS LTD. 

                    (hereinafter called the "Supplier")

                	 
	 	 	 
	 	 	OF THE FIRST PART
	 	 	 
	 	- and -	 
	 	 	 
	 	
                    CANNMART LABS INC.

                    (hereinafter called the "Client")

                	 

    

    OF THE SECOND PART

    WHEREAS

    A. The Client desires to obtain from the Supplier certain cannabis and marihuana extract and concentrate products and related accessories by, or on behalf of, the Supplier (the "Products");

    B. The Supplier is willing to provide the Products to the Client in accordance with and subject to the terms and conditions of this Agreement;

    NOW THEREFORE in consideration of the sum of $2.00 now paid by each party hereto to the other party hereto (each, a "Party" and together, the "Parties"), and in consideration of the mutual covenants and agreements hereinafter contained and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged by each of the parties hereto) the parties covenant and agree each with the other as follows.

    1. Conditions Precedent. The completion of the transactions contemplated hereunder (the "Transaction") is expressly subject to the satisfaction of the conditions set forth below (the "Conditions Precedent"):

    (a) both Parties receipt of their independent requisite licenses issued by Health Canada;

    (b) bulk transfer approval by Health Canada, if required; and

    (c) receipt of regulatory approval, as required, of the Transaction and this Agreement. (collectively, the "Conditions Precedent").

    2. Definitions

    (a) Cannabis Oil - oil (cannabinoids and essential oils) extracted from cannabis (hemp) plant biomass using a solvent (CO2, Ethanol or other hydrocarbon). If required, the extracted oil is Winterized and filtered to remove waxes and lipids. All solvent is removed from the resultant oil. If terpenes are recovered as part of the extraction process, they are re-added to the resultant oil.

    

    
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    (b) Cannabis Distillate - cannabis (hemp) oil that is further distilled using short path distillation, wiped film distillation, or other distillation equipment to achieve a higher cannabinoid concentration.

    (c) Cannabis Distillate Formulation - product derived from distillate through mixing with terpenes and/or diluent(s) without further processing (e.g. sonication, recrystallization etc.).

    (d) Facility - means the facility of the Supplier licensed to produce the Products pursuant to applicable laws, including without limitation, the Cannabis Act and Cannabis Regulations, located at 5451 275th Street, Langley BC V6C 3X8.

    (e) Kief - the cannabinoid containing trichome glands that have been separated (sifted) from cannabis flowers and green plant material.

    (f) Shake - small pieces of cannabis flower that break from larger cannabis buds, generally as the result of regular handling.

    (g) Smalls - smaller size cannabis flower buds that are larfy (not dense) and typically of lower potency than other cannabis flowers.

    (h) Standard Processing - to alter the chemical or physical properties of cannabis and/or hemp by the use of a solvent to produce Cannabis Oil, hemp oil, Cannabis Distillate, or hemp distillate. This further includes preparation of these oils and distillates into specific formulations for various cannabis or hemp consumer packaged goods products.

    (i) Trim - the material resulting from the process of removing excess material from cannabis flower buds.

    (j) Winterization - the process of diluting cannabis or hemp extraction with food-grade ethanol and storing the solution in a sub-zero Fahrenheit freezer to cause waxes and lipids to come out of solution for removal by filtration.

    3. Within 90 days of the signing of this Agreement, both Parties agree to make best efforts/commercially best efforts to execute a quality assurance agreement (the "Quality Assurance Agreement") to set forth the quality control and quality assurance obligations of both Parties which quality control and quality assurance obligations shall be in compliance with applicable laws and regulations. At a minimum this shall include but not be limited to guidelines for Products to meet required Health Canada testing compliance.

    4. Subject to the satisfaction of the Conditions Precedent set out in paragraph 1 hereof, beginning May 1st, 2020 or upon Supplier's receipt of a Standard Processing license issued by Health Canada, whichever is later (the "Commencement Date"), the Parties agree to the following:

    (a) Client shall either provide Supplier with Smalls, Shake, and/or Trim ("Biomass Material") or assist the Supplier in locating a supplier of Biomass Material for Standard Processing by Supplier on behalf of Client to produce Cannabis Distillate (>90% total cannabinoid concentration) and Cannabis Distillate Formulation Products. If Client is unable to provide Biomass Material to Supplier, Supplier will obtain Biomass Material at best available wholesale market rates.

    

    
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    (b) Biomass Material that has been sifted to remove Kief and/or contains fan leaves, stems and/or seeds, will result in lower yields and lower quality extracts. Client will only provide un-sifted Biomass Material.

    (c) The target Product to be delivered from the Supplier to the Client shall be 120 kilograms (KG) over a period of 12 months at the initial pricing discussed in paragraph 10 below. Client will provide Supplier with a monthly Product delivery schedule a minimum of 30 days in advance of the Commencement Date. Client shall have the right to reject any shipment of Product within 10 days of receipt where such Product does not meet the quality standards set out in subparagraph (g) below.

    (d) Following the initial 12 month period in which this Agreement is effective, a Party may seek to amend the Fees payable in connection with the supply of Products by Supplier to Client by notice to the other Party, setting out the current and proposed pricing for the relevant Product and the justification for the proposed amendment, no less than one month prior to the proposed effective date of such price amendment, and upon receipt of such notice, the Parties shall use commercially reasonable efforts to mutually agree upon pricing for the specified Products.

    (e) The Parties will work cooperatively to establish service fees and purchase prices from time to time which is reflective of the quality of the Product, the competitive marketplace and that allows for both Parties to have a reasonable profit margin net of its costs of sales.

    (f) The Products to be delivered by Supplier to Client include.

    i. Unformulated THC Cannabis Bulk Distillate (>90% total cannabinoid concentration);

    ii. THC Cannabis Distillate Bulk Formulation (Per Client specified cannabinoid concentration and formulation); and

    iii. THC Cannabis Distillate Formulation in Consumer Package Format (Per Client specified cannabinoid concentration, container and packaging).

    (g) The Products must meet quality standards, as evidenced by a Certificate of Analysis provided by a licensed cannabis analytical testing laboratory, and as specified in Health Canada Cannabis Regulations for potency, pesticides, heavy metals, mycotoxins, residual solvents, microbial contaminants, and foreign matter. Further, the Biomass Material will not contain more than 15% moisture content as measured upon receipt at Supplier.

    (h) Supplier shall process the Biomass Material at the Facility, and the processed Biomass Material shall consist of Final Product in containers mutually agreed upon by the Parties.

    (i) The purchasing Party shall pay to the selling Party all sales taxes applicable to the purchase of the Product. All costs of shipping as well as any customs charges, duties, or any other charges that arise as a result of or in connection with the transport of the Product shall be for the account of purchasing Party.

    (j) Client will be responsible for secure shipment of Biomass Material, when Client provided, to Supplier and Supplier will be responsible for secure shipment of the Products to Client. The delivering Party will apply commercially reasonable efforts to ensure the Product is in good condition when it is delivered and is delivered by the target delivery date. Title in and to the Product shall remain with the delivering Party until the Product is delivered to receiving Party, at which time title is transferred to receiving Party. All liability and risk of loss for the Products remains with the delivering Party until the Product is delivered to receiving Party.

    

    
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    (k) In the event that a Party, determines in good faith or is required by Health Canada that it is required to initiate a recall with respect to a batch of a Product the recalling Party shall immediately notify the other Party of the recall and both Parties agree to cooperate with one another to accommodate any procedures and requirements necessitated by such recall.

    5. Term - This Agreement shall be effective as of the Effective Date and shall terminate upon the second anniversary of the Commencement Date (the "Term"). The Term of this Agreement may be extended by written mutual agreement.

    6. Termination - This Agreement may be terminated by written mutual agreement. Further, should Product orders by the Client fall below the quarterly equivalent of the target (30 KG) for two consecutive quarters, the Supplier has the right to terminate the agreement. Should one party not obtain Health Canada approval for its license within 60 days after the other has received it license, the other party may terminate this agreement on 30 days notice.

    7. Termination upon Default - Notwithstanding the foregoing, either party (the "Terminating party") may, at its sole discretion, terminate this Agreement by written notice to the other party (the "Defaulting party") upon the occurrence of any one of the following events:

    (a) the bankruptcy or insolvency of the Defaulting party or an assignment by the Defaulting party for the benefit of creditors or the appointment of a receiver for all or substantially all of the property or assets of the Defaulting party, or upon or after the institution of the Defaulting party of any proceedings for the winding up of its business; or

    (b) the failure by the Defaulting party to remedy or cure a material default or breach by it of any of the terms or provisions of this Agreement within thirty (30) days after the Defaulting party's receipt of written notice from the Terminating party of such default or breach.

    If either party becomes subject to a material order or determination, or a material proceeding or process, whether voluntary or involuntary, by a government or governmental agency, regulatory body, court, or other equivalent governing body (each, a "Governmental Authority"), and either party, acting in good faith and on the advice of outside legal counsel, determines that such order or determination, or proceeding or process, or Proceeding, as the case may be, restricts either party's ability to fulfill their respective obligations hereunder or to continue selling the Products in compliance with this Agreement or Applicable Laws, then either party may, upon 20 days' written notice to the other party, terminate this Agreement.

    8. Non-Exclusivity - Notwithstanding any other provision contained herein, each Party hereby expressly acknowledges and confirms that nothing herein shall create or be deemed to create an exclusive relationship between the Parties with respect to the purchase and sale of Products.

    9. Costs - Supplier will provide a breakdown of its costs for providing Products to Client to enable the determination of pricing for such services.

    

    
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    (a) The following costs will be considered allowable costs (the "Allowable Costs"):

    i. costs in obtaining Biomass Material where such Biomass Material is not provided by Client;

    ii. costs arising in connection with processing, labour and materials which are borne by Supplier (solvents, single-use filters, compressed gasses, dry ice, formulation additives, etc.);

    iii. costs of labour and materials in connection with in-process testing (reagents, single-use laboratory materials, etc.) including any third party in-process testing fees which are borne by the Supplier;

    iv. costs of labour and materials for packaging Products (bottles, jars, vaporizing cartridges, vaporizing batteries, etc.); and

    v. costs of flammable solvent and spent or rejected Biomass Material disposal.

    (b) The following costs, together with the Allowable Costs, will be considered the total costs (the "Total Costs"):

    i. all costs incurred by the Supplier in shipping the Products, including insurance costs incurred for shipping such Products; and

    ii. any taxes imposed on the sale of the Products, with such taxes not including any income taxes payable by the Supplier.

    10. Fees - The Client agrees to pay to the Supplier a fee (the "Fee") equal to 100% of Total Costs plus a mark-up equal to 20% percent of Allowable Costs in respect of the Products, with such Fee payable on a NET 45 basis.

    (a) Payment. Within 7 days of delivery of Products, the Supplier will provide a report of its Costs to the Client. Within 45 days of the delivery of Products, the Client shall remit the Fee to the Supplier.

    (b) Review and Objection. Within 90 days of the Client's payment of the Fees, the Client shall have the right to request access to the Supplier's records to the extent they relate to the Client's calculation of Fees ("Calculation"), review such records at the Client's expense and object in writing ("Objection Notice") to the Supplier's Calculation.

    (c) Negotiation. If the Client objects to the Supplier's Calculation, the Client and Supplier shall negotiate to resolve such objections within 30 days of the Objection Notice (the "Resolution Period"), and if same is resolved within the Resolution Period, the Calculation with such changes as agreed to in writing by the Client and Supplier shall be final and binding.

    (d) Independent Accountant. If the Client and Supplier fail to reach an agreement before expiration of the Resolution Period, then any amounts remaining in dispute (the "Disputed Amounts") shall be submitted for resolution to an impartial nationally recognized firm of independent chartered professional accountants mutually agreed to by the Client and Supplier (the "Independent Accountant") within 30 days of the Resolution Period. The Independent Accountant, acting as an expert and not an arbitrator, shall resolve the Disputed Amounts only and make any adjustments to the Calculation within 30 days of his or her appointment. If the Client and Supplier fail to agree on an Independent Accountant, any one of the Client and Supplier may apply to a court of competent jurisdiction for appointment of an Independent Accountant.

    

    
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    (e) Fees of the Independent Accountant. The fees and expenses of the Independent Accountant shall be paid equally by the parties; provided that if the result of negotiation or determination hereunder result in Fees being overstated by 2% or more, then the Supplier shall refund the Client all of the excess Fees incurred in the process set out in this paragraph 10, or if Fees being understated by 2% or more, then the Client shall refund the Supplier all of the excess Fees incurred in the process set out in this paragraph 10.

    11. Independent Projects - Nothing in this Agreement shall restrict:

    (a) either party's right to independently or with third parties develop cannabis formulations similar to those developed jointly by the parties; and

    (b) the Client's right to market, sell or distribute generic or other brands of cannabis or marihuana products.

    12. Mutual Representations and Warranties - Each party hereby represents and warrants to and in favour of, and covenants with, the other party as follows, and acknowledges that the other party is relying upon the following representations, warranties and covenants in connection with its execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereunder:

    (a) the party is a corporation validly formed and existing in good standing under the laws of its jurisdiction of formation;

    (b) the party has all necessary power, authority and capacity to enter into this Agreement and to perform its obligations under this Agreement. The execution, delivery and performance of this Agreement has been duly authorized by all necessary action of the party. This Agreement has been duly and validly executed by the party, and constitutes a valid and binding obligation of the party enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors generally and by general principles of equity, regardless of whether asserted in a proceeding in equity or law;

    (c) the authorization of, execution and delivery of, and the performance by the party of its obligations under this Agreement and every other agreement or document to be entered into or delivered hereunder, will not constitute or result in the violation or breach of or default under, or cause the acceleration of, any obligations of the party under:

    

    
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    i. any term or provision of the articles, by-laws or other constating documents of the party;

    ii. the terms of any material agreement (written or oral), indenture, instrument or understanding or other obligation or restriction to which the party is a party or by which it is bound, except as would not reasonably be expected to have a material adverse effect on the party's ability to perform its obligations under this Agreement;

    iii. any Applicable Law or consent or approval issued by a Governmental Authority, except as would not reasonably be expected to have a material adverse effect on the party's ability to perform its obligations under this Agreement; or

    iv. any term or provision of any order of any court applicable to the party, except as would not reasonably be expected to have a material adverse effect on the party's ability to perform its obligations under this Agreement;

    (d) subject to the Supplier's receipt of Facility licensing by Health Canada, no consent or approval of any Governmental Authority, or filing with or notice to, any Governmental Authority, court or other person, is required in connection with the execution, delivery or performance of this Agreement by the party, except for any such consent, approval, filing or notice that would not have a materially adverse effect on the party's ability to perform its obligations under this Agreement;

    (e) the party has conducted and is conducting its business in compliance in all material respects with all Applicable Laws and has held and maintained and will hold and maintain in good standing all necessary licenses, leases, permits, authorizations and other approvals necessary to permit it to conduct its business or to own, lease or operate its properties and assets, except where the failure to obtain any license, lease, permit, authorization or other approval would not have a material adverse effect on the party;

    (f) there are no actions, suits or proceedings, judicial or administrative (whether or not purportedly on behalf of the party) pending, or to the best of the knowledge of the party after due inquiry, threatened against or affecting the party at law or in equity, or before or by any court or other Governmental Authority, domestic or foreign, that would materially adversely affect the party's ability to perform its obligations under this Agreement; and

    (g) there are no bankruptcy or similar proceedings pending or being contemplated by the party or, to the best of its knowledge after due inquiry, threatened against or affecting the party.

    13. Confidentiality -

    (a) "Confidential Information" means all of the materials and information (whether or not reduced to writing and whether or not patentable or protected by copyright) provided by either party hereto to the other, including, but not limited to, the following:

    i. Product and patent information, specifications and details;

    ii. profits, costs and pricing data, sales policies, marketing plans and strategies and any other information relating to the distribution, sale or supply of the Products;

    

    
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    iii. records and other materials in the form of notes, letters, data, tapes, reference items, models, sketches, blueprints, drawings and writings, in any way relating to any of the above information and any and all copies or extracts thereof; and

    iv. any other materials or information related to the business of each party which is not generally known to others;

    provided, however that Confidential Information shall not include any information that: (a) is now or subsequently becomes generally available to the public through no fault of Client, (b) Client can demonstrate was rightfully in Client's possession, without obligation of nondisclosure, prior to disclosure pursuant to this Agreement; (c) is independently developed without the use of any Confidential Information; or (d) is rightfully obtained from a third party who has the right, without obligation of nondisclosure, to transfer or disclose such information.

    (b) The Parties agree to:

    i. keep in confidence all Confidential Information and not, directly or indirectly, disclose any Confidential Information to any person whatsoever;

    ii. not, directly or indirectly, use any Confidential Information for my own benefit or for the benefit of any person or business whatsoever; and

    iii. not, directly or indirectly, use or copy any Confidential Information for any reason, except with the consent of the other party.

    14. Non-Solicitation - During the Term of this Agreement and for a period of two years following the termination or expiration of this Agreement, neither party shall solicit any employees or contactors of the other who were involved in the performance of such party's obligations hereunder. Notwithstanding the foregoing, a general advertisement for employment shall not be considered a breach hereof.

    15. Indemnity - Each Party agrees to indemnify, keep indemnified and save harmless the other Party in respect of all actions, suits, proceedings, claims, demands, damages, losses, costs, charges and expenses arising directly from or incurred by reason of:

    (a) injury or death to persons caused by defective Products which are defective as a result of any act or omission on its behalf;

    (b) non-compliance by either Party with any legal obligations including cultivation, processing, Product quality or legal obligations including Product indications and labeling (unless caused solely by the other Party), in respect of the Product; and

    (c) the negligence or unlawful action of either Party or its representatives, unless caused by the gross negligence of the other Party.

    16. Cumulative Rights - The rights of the Supplier and the Client hereunder are cumulative and no exercise or enforcement by the Supplier or the Client of any right or remedy hereunder shall preclude the exercise or enforcement by the Supplier or the Client of any other right or remedy hereunder of which the Supplier or the Client is otherwise entitled by law to enforce.

    

    
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    17. Independent parties - The parties are and will at all times remain independent and are not and shall not represent themselves to be the agent, joint venture partner, franchisee, partner or employee of the other. No representations will be made or acts taken by either party which could establish or imply any apparent relationship of agency, joint venture, or employment and neither party shall be bound in any manner whatsoever by any agreements, warranties or representations made by the other party to any other person nor with respect to any other action of the other party.

    18. Compliance with Laws - The Client and the Supplier shall comply with all applicable laws, regulations and rules imposed by any municipal, regional, provincial or federal governments and their agencies, authorities, branches, departments, commissions or boards, having or claiming jurisdiction over the Client and the Supplier ("Applicable Laws").

    19. Survival - All obligations of the Supplier and the Client which expressly or by their nature survive termination or expiration of this Agreement shall continue in full force and effect subsequent to and notwithstanding such termination or expiration and until they are satisfied or by their nature expire.

    20. Notice - All written notices, consents, approvals and payments (herein referred to as a "Notice") permitted or required to be given or made hereunder shall be deemed to be sufficiently and duly given or made if delivered personally or if sent by prepaid registered mail posted in Canada or if transmitted by electronic mail, if to the Supplier addressed as follows:

    Adastra Labs Holdings Ltd.

    5451 275th Street

    Langley, BC, V4W 3X8

    Attention: Andrew Hale

    Email: andy@adastralabs.ca

    and if to the Client addressed as follows:

    Cannmart Labs Inc.

    7 Canso Rd

    Etobicoke, ON M9W 1C3

    Attention: Daniel Stern

    Email: daniel@cannmart.com

    Any Notice other than payment so given shall be deemed to have been given and received on the date of delivery or on the fifth (5th) business day of mailing of the same or on the day of transmission by electronic mail. Any payment shall be deemed to have been made on the date of delivery of same to the addressee. Any party from time to time by Notice may change its address for the purpose of this Agreement. In the event of actual or threatened disruption of postal service, Notices shall be delivered or sent by electronic mail.

    

    
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    21. Entire Document - This Agreement, Quality Assurance Agreement, and any documents incorporated by reference herein constitute the entire agreement between the parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions with respect to the subject matter hereof whether oral or written, including the term sheet executed by the parties. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by authorized officers of the Supplier and the Client.

    22. Applicable Law - This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein and shall be treated in all respects as a British Columbia contract.

    23. Severability of Provisions - The invalidity or unenforceability of any provisions of this Agreement or any covenant herein contained shall not affect the validity or enforceability of any other provision or covenant hereof or herein contained and any such invalid provision or covenant shall be deemed to be severable.

    24. Counterparts - This agreement may be executed in counterparts.

    25. Arbitration. Any dispute or claim between the Supplier and Client under this Agreement or arising out of or in connection with the interpretation of or performance of the terms hereof shall be submitted to binding arbitration before a single arbitrator mutually acceptable to the parties, or if the parties are unable to reach such agreement, by such panel of three (3) arbitrators, in each case in accordance with the ruled of the British Columbia International Commercial Arbitration Centre, as amended from time to time. In the case of a panel of three arbitrators, such panel shall be composed of one (1) arbitrator selected by each party with the third arbitrator being selected by the other two (2) arbitrators. The arbitration proceedings shall be undertaken in as expeditious a manner as possible. The arbitration proceedings shall take place in Vancouver, British Columbia. Judgment upon any award rendered by the arbitrator or the panel, as the case may be, shall be entered into any court having competent jurisdiction without any right of appeal. Each party shall pay its own expenses of arbitration, and the expenses of the arbitration process and the arbitration proceeding shall be shared equally. However, if in the opinion of a majority of the arbitrator or the panel, as the case may be, any claim or defense was unreasonable, then the arbitrator(s) may assess, as part of the award, all or any part of the arbitration expenses of the other party (including reasonable attorneys' fees and costs) and of the arbitrators and the arbitration proceeding.

    [SIGNATURE PAGE FOLOWS]

     

    

    IN WITNESS WHEREOF the parties have duly executed and delivered this Agreement as of the date first above written.

    	 	ADASTRA LABS HOLDINGS LTD.
	 	 
	 	 
	 	/s/ Andrew M. Hale
	 	Andrew M. Hale, CEO/Director
	 	 
	 	I have authority to bind the corporation
	 	 
	 	CANNMART LABS INC.
	 	 
	 	 
	 	/s/ Daniel Stern
	 	Daniel Stern, Director
	 	 
	 	I have authority to bind the corporationAdastra Holdings Ltd.: Exhibit 10.3 - Filed by newsfilecorp.com

    

    

    5451 275th Street
Langley, BC V4W 3X8

    Private and Confidential

    April 3rd, 2020

    Acreage Pharms Ltd.

    P.O. Box 51

    Peers, Alberta TOE 1W0

    Dear Kris Love, VP Production:

    Re: Toll Processing Agreement

    This letter agreement (the "Agreement") sets out the terms and conditions pursuant to which Adastra Labs Holdings Ltd. ("Adastra") will provide standard processing services to Acreage Pharms Ltd. ("Acreage Pharms" or "Client") (collectively, the "Transaction"). Adastra and Client are known individually as a "Party" and jointly as the "Parties".

    The completion of the Transaction is expressly subject to the satisfaction of the conditions set forth

    below:

    (a) both Parties receipt of their independent requisite licenses issued by Health Canada;

    (b) bulk transfer approval by Health Canada, if required; and

    (c) receipt of regulatory approval, as required, of the Transaction and this Agreement.

    (collectively, the "Conditions Precedent").

    1. Transaction

    1.1. Definitions

    A. Smalls - smaller size cannabis flower buds that are larfy (not dense) and typically of lower potency than other cannabis flowers.

    B. Shake - small pieces of cannabis flower that break from larger cannabis buds, generally as the result of regular handling.

    C. Trim - the material resulting from the process of removing excess material from cannabis flower buds.

    D. Kief - the cannabinoid containing trichome glands that have been separated (sifted) from cannabis flowers and green plant material.

    

        	
                    Adastra - Acreage Pharms - Cannabis Toll Processing Agreement

                	
                    Page 1 of 12

                

        

    

    

    E. Winterization - the process of diluting cannabis or hemp extraction with food-grade ethanol and storing the solution in a sub-zero Fahrenheit freezer to cause waxes and lipids to come out of solution for removal by filtration.

    F. Cannabis (Hemp) Oil - oil (cannabinoids and essential oils) extracted from cannabis (hemp) plant biomass using a solvent (CO2, Ethanol or other hydrocarbon). If required, the extracted oil is winterized and filtered to remove waxes and lipids. All solvent is removed from the resultant oil. If terpenes are recovered as part of the extraction process, they are re-added to the resultant oil.

    G. Cannabis (Hemp) Distillate - cannabis (hemp) oil that is further distilled using short path distillation, wiped film distillation, or other distillation equipment to achieve a higher cannabinoid concentration.

    H. Standard Processing - to alter the chemical or physical properties of cannabis and/or hemp by the use of a solvent to produce cannabis oil, hemp oil, cannabis distillate, or hemp distillate. This further includes preparation of these oils and distillates into specific formulations for various cannabis or hemp consumer packaged goods products.

    I. Cannabis Distillate Formulation - product derived from distillate through mixing with terpenes and /or diluent(s) without further processing (e.g. sonication, recrystallization etc.)

    1.2. The Parties will co-operate with each other and use commercially reasonable efforts to fulfil the Conditions Precedent by April 13th, 2020. Each Party shall keep the other informed on a timely basis of its efforts in this regard.

    1.3. Subject to the satisfaction of the Conditions Precedent, beginning April 13th, 2020 (the "Commencement Date"), the Parties agree to the following:

    A. Client may, on a non-exclusive basis, provide Adastra with cannabis flower, small flower (Smalls), Shake, and/or Trim (collectively, "Biomass Material") for: (i) standard processing by Adastra on behalf of Client to produce cannabis winterized crude, Cannabis Distillate (>90% total cannabinoid concentration) and/or Cannabis Distillate Formulations as communicated to Adastra by Client; and (ii) package such processed material in accordance with instructions received from Client and agreed by Adastra (such processed material alone or as so packaged collectively called "Final Product") and, together with the Biomass Material, (collectively, "Product"). The Parties acknowledge and agree that this arrangement is non-exclusive and Client may engage one or more other entities to provide the same or similar processing services to those agreed to be provided herein by Adastra.

    B. Biomass Material that has been sifted to remove Kief and/or contains fan leaves, stems and/or seeds, will result in lower yields and lower quality extracts. Client will only provide un-sifted Biomass Material.

    C. Client is under no obligation to provide Biomass Material to Adastra for processing under this Agreement. However, if Client does provide Biomass Material to Adastra for processing under this Agreement, the minimum Biomass Material batch size to be provided from Client to Adastra for processing shall be no less than a minimum of 100 kilograms (KG) up to 1,000 KG, as Client may from time to time determine. Client will provide Adastra proposed batch sizes and dates for delivery as soon as available but no less than 5 days in advance for any deliveries to Adastra scheduled before May 30, 2020 and thereafter 21 days in advance of the desired start of processing services; in either case unless a shorter notification period is agreed to by the Parties from time to time.

    

        	
                    Adastra - Acreage Pharms - Cannabis Toll Processing Agreement

                	
                    Page 2 of 12

                

        

    

    

    The Parties acknowledge and agree that, at all times: (i) title to and ownership of all Product remains solely with Client whether any portion of the Product is or remains in or about the premises of Adastra or under the power or control of Adastra.; (ii) all Biomass Material from time to time delivered by Client to Adastra, and all Product, shall be physically segregated, stored and processed by Adastra from other materials stored or processed by Adastra, and shall at all times be conspicuously marked as the Client's property; (iii) all strains and their designations, trademarks, copyrights and packaging designs, and all narrative materials associated with the Product are and remain the sole property of the Client; (iv) Adastra has no security interest in, no rights of set-off against and /or no workman's or processor's liens of any kind in and to the Biomass Material, the Client's Share of the Final Product and /or the results and proceeds arising therefrom; and (v) Adastra irrevocably declares that all the Biomass Material, the Client's Share of the Final Product and the results and proceeds arising therefrom are held in trust for the Client as the Client's separate property.

    D. A Party seeking an amendment to either the service fees or purchase prices must notify the other Party, setting out the current and proposed pricing for the relevant Product and the justification for the proposed amendment, no less than 2 months prior to the proposed price amendment becoming effective.

    E. The Parties will work cooperatively to establish service fees and purchase prices from time to time which is reflective of the quality of the Product, the competitive marketplace and that allows for both Parties to have a reasonable profit margin net of its costs of sales.

    F. Adastra's fee for processing and packaging services provided to the Client will be 50% of the volume of Final Product output, inclusive of all HST/GST and sales taxes for those processing and packaging services. Such 50% of the volume of Final Product output due to Adastra is referred to in this Agreement as "Adastra's Share of Final Product" and the remaining 50% of the Final Product output is referred to in this Agreement as the "Client's Share of Final Product". Adastra will make best commercial efforts to source a buyer for Client's Share of the Final Product at market wholesale pricing to be negotiated. Adastra will be permitted, with Client approval, to purchase any of the Client's Share of the Final Product at prevailing market wholesale pricing to be negotiated in good faith, plus all applicable HST/GST thereon.

    G. Each of the Biomass Material and the Final Product must be cultivated or produced, as the case may be, in accordance with applicable law, including the Cannabis Act and the regulations from time to time promulgated thereunder (collectively, the "Act").

    H. The Client warrants that the Biomass Material: (i) was and will be produced, stored upon the Client's premises, and transported to Adastra in compliance with the Act and with any additional quality standards agreed to in writing between the Parties; (ii) complies with specifications for chemical and microbial contaminants, established or referenced under the Act; (iii) has not been treated with any pest control product unless the pest control product is registered for use on cannabis under the Pest Control Products Act or is otherwise authorized for use under that Act; (iv) is of merchantable quality and free from material defect, (v) is safe for intended use, i.e. packaging and sale of Final Product to end users for consumption, and (vi) falls within the potency range agreed to from time to time by the Parties, (all of the forgoing collectively, the "Quality Standards"). Adastra shall return to the Client, at the Client's expense, any unprocessed Biomass Material that does not conform to the foregoing Quality Standards.

    

        	
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    I. Adastra warrants that Biomass Material received by it from Client will be stored and processed in compliance with the Act and with any additional quality standards agreed to in writing between the Parties. Adastra further warrants that all Final Product: (i) shall be processed, manufactured and packaged in compliance with the Act and with any additional quality standards agreed to in writing between the Parties; (ii) complies with specifications for chemical and microbial contaminants, established or referenced under the Act; (iii) has not been treated with any pest control product or other product or chemical unless the product or chemical is authorized for use under the Act or other applicable law and/or registered for use on cannabis under the Pest Control Products Act ; (iv) is of merchantable quality and free from material defect, (v) is safe for intended use, i.e. packaging and sale to end users for consumption, and (vi) falls within the potency range agreed to from time to time by the Parties. Adastra shall replace, at its own cost and expense, all Biomass Material and Final Product that does not conform to the foregoing warranties.

    J. As evidence that the Biomass Material delivered to Adastra meets the Quality Standards, the Client shall provide Adastra with a Certificate of Analysis provided by a licensed cannabis analytical testing laboratory, and as specified in Health Canada Cannabis Regulations for potency, pesticides, heavy metals, mycotoxins, residual solvents, microbial contaminants, and foreign matter. Further, the Biomass Material will not contain more than 15% moisture content as measured upon receipt at Adastra.

    K. In the event that Biomass Material does not meet quality standards as specified in Health Canada Cannabis Regulations, the Parties may agree at that time to process the Biomass Material to determine if the extraction process will be remediated in the Final Product.

    L. As evidence that the Final Product meets Adastra's warranties under this Agreement, the Client shall provide the Client with a Certificate of Analysis provided by a licensed cannabis analytical testing laboratory, and as specified in Health Canada Cannabis Regulations for potency, pesticides, heavy metals, mycotoxins, residual solvents, microbial contaminants, and foreign matter.

    M. Both Parties acknowledge the shared risk that certain contaminants such as pesticides, aflatoxins and heavy metals that maybe below the limit in Biomass Material may be concentrated in the extraction process to higher than the limit allowed by Health Canada regulations in the Final Product rendering it unusable for sale or remediation. In such cases, unless such higher concentrations are the result of the act or omission of Adastra in breach of its warranties in this Agreement, there is no penalty for either Party, Adastra has the right to return unprocessed Biomass Material to the Client at no cost to Adastra, and Adastra will deal with the Final Product so processed, as instructed at the time by Client who will be responsible for reasonable disposal costs not to exceed $500 CAD.

    N. Adastra, at its sole cost and expense, shall process the Biomass Material at its facility, and the processed Biomass Material shall consist of Final Product packaged by Adastra in containers (at Adastra's sole cost), mutually agreed upon by the Parties, that comply with applicable law.

    

        	
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    O. Subject to the provisions of Section 1.3G, the purchasing Party shall pay to the selling Party all value added and sales taxes applicable to the purchase of the Product. All costs of shipping as well as any customs charges, duties, or any other charges that arise as a result of or in connection with the transport of the Product shall be for the account of purchasing Party.

    P. Client will be responsible, including costs, for secure shipment of Biomass Material to Adastra and Adastra will be responsible, including costs, for secure shipment of the Final Product to or as directed by Client. The delivering Party will apply commercially reasonable efforts to ensure the Product is in good condition when it is delivered and is delivered by the target delivery date. Title in and to the Product shall remain with the Client until the Product is delivered to the end line customer, at which time title is transferred to the end line customer. All liability and risk of loss for the Product remains with the delivering Party until the Product is delivered to or on behalf of the receiving Party.

    Q. In the event that a Party, determines in good faith or is required by Health Canada that it is required to initiate a recall with respect to a batch of a Product, the recalling Party shall immediately notify the other Party of the recall and both Parties agree to cooperate with one another to accommodate any procedures and requirements necessitated by such recall.

    R. "Intellectual Property" means any statutory or non-statutory intellectual property rights in any jurisdiction, including any issued, pending, registered, filed or unfiled application for any patent (including any utility, design or plant patent, and including any continuation, continuation-in-part, divisional, re-issue, re-examination, national phase entry or regional phase entry application), copyright, trademark, industrial design, plant breeder's right, the Plant Breeders Rights Act (Canada) registration, the Plant Varieties Protection Act (US) registration or other statutory intellectual property right, and any trade secret, know-how, goodwill, or other intellectual property or other proprietary right, and any written or unwritten title, interest, license, right to bring or participate in any proceeding for past infringement or any other actionable right under or relating to any intellectual property right, or any other rights to any of the foregoing, relating to any aspect of the business of a Party, including standard operating procedures, production processes, packaging processes, labelling processes, ingredients, technology, inventions, plant varieties, clonally propagated plant material, stable cultivars, business management processes, compilations of information, contracts, records, specifications, business procedures, label designs, branding, compliance documentation, files, records, documents, drawings, specifications, equipment and data (data includes all information whether written or in an electronic format), and including any suppliers, manufacturers, equipment, methodologies, customer lists or other relevant information, relating to any of the foregoing or otherwise pertaining to the business of a Party.

    S. Any and all Intellectual Property used in cultivating and processing the Biomass Material shall be wholly owned by Acreage Pharms, and any existing Intellectual Property of Acreage Pharms shall remain wholly owned by Acreage Pharms. Any and all Intellectual Property of Adastra used in processing the Final Products (but not the Final Product itself) shall be wholly owned by Adastra, and any existing Intellectual Property of Adastra shall remain wholly owned by Adastra.

    

        	
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    T. If: (i) either Party materially breaches the terms of the this Agreement and the breaching Party fails to cure such breach within 30 days of written notice from the non-breaching Party; (ii) bankruptcy, insolvency, dissolution or liquidation proceedings are instituted by or against the either Party or the either Party discontinues a significant part of its business operations (excluding Acreage Pharm's proceedings (as one of the petitioners) commenced on February 13, 2020 under the Companies Creditors' Arrangement Act ); or (iii) either Party fails to maintain its license with Health Canada; then the non-breaching Party may, at its sole discretion, terminate the this Agreement upon written notice to the breaching Party. All payments due to Adastra or to Acreage Pharms, as applicable, before termination will become immediately due and payable upon termination of this Agreement, and both Parties will relinquish any and all future rights and obligations of this Agreement other than for or in respect of: (iv) the return of Biomass Material and Product to the Client; (v) the respective warranties and agreements of the Parties with respect to maters or things occurring prior to the termination of the Agreement; (vi) the respective Intellectual Property rights and obligations of the Parties under this Agreement; and (vii) the respective indemnities of each Party provided for in this Agreement.

    1.4. Within 5 days of the signing of this Agreement, both Parties agree to execute a quality assurance agreement (the "Quality Assurance Agreement") to set forth the quality control and quality assurance obligations of both Parties in compliance with applicable laws and regulations. At a minimum this shall include but not be limited to guidelines for Product to meet required Health Canada testing compliance.

    1.5. Each Party hereby represents and warrants to and in favour of, and covenants with, the other Party as follows as of the date hereof and as of the Commencement Date, and acknowledges Each that the other Party is relying upon the following representations, warranties and covenants in connection with its execution, delivery and performance of this Agreement and the consummation of the Transaction:

    A. the Party is a corporation validly formed and existing in good standing under the laws of its jurisdiction of incorporation in Canada; other than Acreage Pharm is one of the petitioners in proceedings commenced on February 13, 2020 under the Companies Creditors' Arrangement Act;

    B. the Party has all necessary corporate power, authority and capacity to enter into this Agreement and to perform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action of the Party. This Agreement has been duly and validly executed by the Party, and constitutes a valid and binding obligation of the Party enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors generally and by general principles of equity, regardless of whether asserted in a proceeding in equity or law;

    C. the authorization of, execution and delivery of, and the performance by the Party of its obligations under, this Agreement and every other agreement or document to be entered into or delivered hereunder, will not constitute or result in the violation or breach of or default under, or cause the acceleration of, any obligations of the Party under: (i) any term or provision of the articles, by-laws or other constating documents of the Party; (ii) the terms of any material agreement (written or oral), indenture, instrument or understanding or other obligation or restriction to which the Party is a party or by which it is bound, except as would not reasonably be expected to have a material adverse effect on the Party's ability to perform its obligations under this Agreement; (iii) any applicable law or consent or approval issued by a governmental authority, except as would not reasonably be expected to have a material adverse effect on the Party's ability to perform its obligations under this Agreement; or (iv) any term or provision of any order of any court applicable to the Party, except as would not reasonably be expected to have a material adverse effect on the Party's ability to perform its obligations under this Agreement;

    

        	
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    D. other than any applicable notices to be provided by each Party to the relevant governmental authority in connection with each transfer of Biomass Material or in respect of the transfer and sale of Product hereunder, no consent or approval of any governmental authority, or filing with or notice to, any governmental authority, court or other Person, is required in connection with the execution, delivery or performance of this Agreement (and each of the agreements to be executed and delivered pursuant to the terms hereof) by the Party, except for any such consent, approval, filing or notice that would not have a materially adverse effect on the Party's ability to perform its obligations under this Agreement (and each of the agreements to be executed and delivered pursuant to the terms hereof) in a timely manner;

    E. the Party holds (or will, as of the Commencement Date, hold) requisite licenses issued, by Health Canada with respect to their respective obligations representations and warranties under this Agreement;

    F. the Party has conducted and is conducting its business in compliance in all material respects with all applicable law, and has held and maintained and will hold and maintain in good standing all necessary licenses, leases, permits, authorizations and other approvals necessary to permit it to conduct its business or to own, lease or operate its properties and assets (including without limitation any rights or registrations relating to any intellectual property rights) except where the failure to obtain any license, lease, permit, authorization or other approval would not have a material adverse effect on the Party;

    G. there are no actions, suits or proceedings, judicial or administrative (whether or not purportedly on behalf of the Party) pending, or to the best of the knowledge of the Party after due inquiry, threatened against or affecting the Party at law or in equity, or before or by any court or other governmental authority, domestic or foreign, that would materially adversely affect the Party's ability to perform its obligations under this Agreement (and each of the agreements to be executed and delivered pursuant to the terms hereof) in a timely manner;

    H. there are no bankruptcy proceedings pending or being contemplated by the Party or, to the best of its knowledge after due inquiry, threatened against or affecting the Party except as otherwise disclosed in this document (namely, that Acreage Pharm is one of the petitioners in proceedings commenced on February 13, 2020 under the Companies Creditors' Arrangement Act;

    I. Without limitation to the other obligations of each Party set forth in this Agreement, each Party shall: (i) cultivate or process, as applicable, its Product in a manner that complies with the generally accepted guidelines for cannabis products and applicable laws; (ii) apply appropriate quality control and quality assurance principles to ensure compliance with the agreed product specifications; and (iii) ensure that each batch of Product is checked by Adastra before release and that retention samples of all Product are kept for batch control; and

    J. Without limitation to the other obligations of each Party set forth in this Agreement, each Party's Product: (i) will meet its specifications; (ii) will be free of any identifiable defects; (iii) when supplied will be of merchantable quality and the required quality fit for the purpose for which it is to be used (namely, packaging and sale to end users for consumption).

    

        	
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    1.6. Each Party hereby acknowledges and agrees any Certificate of Analysis provided by a licensed analytical testing laboratory pursuant to this Agreement is solely for informational purposes, and the Parties do not make any representations and warranties with respect to the information contained in any such the Certificate of Analysis.

    2. Confidentiality

    2.1 The Parties acknowledge that the confidentiality agreement dated April 3, 2020 (the "Confidentiality Agreement") between the Parties continues to apply and that any Confidential Information (as defined therein) provided pursuant to this Agreement and the Transaction shall be subject to the terms of the Confidentiality Agreement.

    2.2 Each Party agrees that it will not make any public disclosure of the existence of this Agreement or of any of its terms without first advising the other Party and obtaining consent of such other Party to the proposed disclosure, unless such disclosure is required by applicable law, regulation of the Court, Court Order, to the Monitor appointed for the Companies Creditors' Arrangement Act proceedings involving the Client or any of the secured parties, lenders and professionals involved in that Companies Creditors' Arrangement Act proceedings involving the Client, or regulation or policies of any applicable stock exchange, in which event the Party contemplating disclosure will inform the other Party..

    3. Access

    Each of the Parties and its representatives will provide the other Party with:

    A. such information (including copies of documents) as either Party may reasonably request, including documents relating to tracking, inventory, batch records and any other documentation which a Party reasonably anticipates may be requested by a governmental authority; and

    B. access to copies of excerpts of its financial records, business data, facilities and personnel as the other Party may reasonably request relating specifically and solely to this Toll Processing Agreement.

    C. Unless applicable law or regulatory authority prescribes or requires a longer retention period: (i) the obligation pursuant to this Section 3 will continue for a period of 2 years after the delivery of each order of Product; and (iii) the Parties will retain all records described above for a period of 2 years after the delivery of each order of their Product and will also comply with all its obligations under applicable law with respect to such records.

    D. At a Party's request, the other Party will give the requesting Party and its authorized representatives every reasonable opportunity to have access to and to inspect (in either case during normal business hours) the Product prior to shipment.

    4. Expenses

    Each of the Parties will bear its own respective costs and expenses associated with the Transaction, including the preparation of this Agreement the Quality Assurance Agreement and the Confidentiality Agreement..

    

        	
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    5. Indemnity

    Each Party agrees to indemnify, keep indemnified and save harmless the other Party in respect of all actions, suits, proceedings, claims, demands, damages, losses, costs, charges and expenses arising directly from or incurred by reason of:

    A. Breach of, or a third party claim inconsistent with, any of the representations, warranties and/or agreements to be performed or observed by the indemnifying party under or pursuant to this Agreement;

    B. injury or death to persons caused by defective goods which are defective as a result of the act or omission on its behalf;

    C. non-compliance by the indemnifying Party with any legal obligations including cultivation, processing, Product quality or legal obligations including Product indications and labeling (unless caused solely by the indemnified Party), in respect of the Product; and

    D. the negligence or unlawful action of the indemnifying Party or its representatives, unless caused by the gross negligence of the indemnified Party.

    6. Limitation of Liability

    6.1 The representations and warranties contained above are in lieu of all other implied warranties and conditions, including, but not limited to, those governing merchantability or fitness for a particular purpose.

    6.2 Notwithstanding any other provision of this Agreement to the contrary, and save and except for claims involving Intellectual Property or injury or death toany person or in consequence of thegross negligence of a Party, neither Party shall be liable to the other Party for any consequential, special, or incidental damages, arising from a default under this Agreement, whether in contract (including breach of warranty) or tort (including strict liability and negligence) nor for lost or imputed profits, royalties or other economic loss.This limitation will apply whether or not the Party has been advised of the possibility of such damages. Each Party hereby waives any claim that these exclusions deprive such Party of an adequate remedy.

    7. Binding Effect

    7.1 The provisions of this Agreement are intended to create binding obligations against the Parties.

    7.2 Each of the Parties acknowledge and agree that adequate consideration (the receipt and sufficiency of which is hereby acknowledged) was received by it for the binding obligations contained herein.

    8. Reasonable Commercial Efforts and Good Faith

    The Parties will use their reasonable commercial efforts and good faith to meet the terms of this Agreement.

    

        	
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    9. Non-Exclusivity

    Notwithstanding any other provision contained herein, each Party hereby expressly acknowledges and confirms that nothing herein shall create or be deemed to create an exclusive relationship between the Parties with respect to the purchase and sale of Products.

    11. Independent Contractor

    Except as expressly provided to the contrary in this Agreement, this Agreement does not create a fiduciary or trust relationship between the Parties hereto. The Parties are independent contractors, and, except as expressly provided to the contrary in this Agreement, nothing in this Agreement is intended to constitute a Party as an agent, legal representative, subsidiary, joint venturer, partner, employee or servant of the other Party for any purpose whatsoever. Neither Party is authorized by this Agreement to: (i) make any contract, agreement, warranty or representation; or (ii) create any obligation, liability, commitment or undertaking, express, implied or collateral; in either case on behalf of the other Party or represent that it has the right to so act or do so.

    12. Term and Termination

    12.1 This Agreement shall be in effect from the date of execution until 12 months after the Commencement Date (the "Term").

    12.2 The Term may be terminated by written mutual agreement by the Parties, by either Party with 30 days written notice or extended by written mutual agreement on a periodic basis with confirmation of terms discussed in paragraph 1 above.

    13. Notices

    Any notice, consent, waiver, direction or other communication required or permitted to be given under this Agreement by a Party hereto will be in writing and will be delivered to the Party to which the notice is to be given by mail, email or facsimile

    14. General

    14.1 A provision of this Agreement must not be construed to the disadvantage of a Party merely because that Party was responsible for the preparation of this Agreement.

    14.2 This Agreement, the Confidentiality Agreement, and the Quality Assurance Agreement to be entered into between the Parties, set forth the entire agreement and understanding of the Parties in respect of the Transaction contemplated hereby and supersede all prior agreements and understandings, oral or written, among the Parties or their respective representatives with respect to the matters herein and will not be modified or amended except by written agreement signed by the Parties to be bound thereby.

    14.3 In the event either Party is prevented from performing its obligations under this Agreement by circumstances beyond its reasonable control, including the government declaration or directive pursuant to the current COVID-19 pandemic and without limitation fire, explosion, flood, acts of God, war and other hostilities, or like events, the obligations of such Party under this Agreement shall be suspended during the currency of such suspending circumstance.

    

        	
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    14.4 Time is of the essence in this Agreement.

    14.5 No waiver of any of the provisions of this Agreement will constitute a waiver of any other provision (whether or not similar). No waiver will be binding unless executed in writing by the Party to be bound by the waiver. A Party's failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a Party from any other or further exercise of that right or the exercise of any other right it may have.

    14.6 Each of the Parties covenants and agrees to do such things, to attend such meetings and to execute such further documents and assurances as may be deemed necessary or advisable from time to time in order to carry out the terms and conditions of this Agreement in accordance with their true intent.

    14.7 If any provision of this Agreement is determined to be illegal, invalid or unenforceable, by an arbitrator or any court of competent jurisdiction from which no appeal exists or is taken, that provision will be severed from this Agreement and the remaining provisions will remain in full force and effect.

    14.8 This Agreement is private to the Parties and may not be assigned without the consent of the other Party.

    14.9 This Agreement may be executed in several counterparts as may be necessary or by facsimile or such other electronic means and each such counterpart agreement or facsimile so executed are deemed to be an original and such counterparts and facsimile copies together will constitute one and the same instrument.

    14.10 The binding obligations of this Agreement are and will be deemed to be made in the Province of British Columbia, for all purposes will be governed exclusively by and construed and enforced in accordance with the laws prevailing in the Province of British Columbia and the federal laws of Canada applicable therein.

    14.11 Each person signing this Agreement as an authorized officer of a Party hereto hereby represents and warrants that he is duly authorized to sign this Agreement for that Party and that this Agreement will, upon having been so executed, be binding on that Party in accordance with its terms.

    If the foregoing reflects your understanding of the Transaction and if you agree with the terms and conditions of the proposal herein, please so acknowledge by executing this Agreement and returning the same to Adastra on or before April 6rd, 2020.

    Signature Page Follows

    

        	
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    	Adastra Labs Holdings Ltd.
	 	 
	 	 
	Per:	/s/ Andrew M. Hale
	 	Andrew M. Hale, CEO

    
ACKNOWLEDGED AND AGREED TO this 3rd day of April 2020

    	Acreage Pharms Ltd.
	 	 
	 	 
	Per:	/s/ Kris Love
	 	Kris Love, VP Production

    

        	
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