Document:

Execution
Version 

 

 

Exhibit
10.3

 

 

INVESTOR RIGHTS AGREEMENT

between

BT DE INVESTMENTS INC.

and

CHARLOTTE’S WEB HOLDINGS, INC.

 

 

NOVEMBER 14, 2022

 

 

 

 

 

 

 

 

 

 

[Certain information indicated by [***]
has been excluded from this Exhibit 10.3 because it is private or confidential and not material.]

    	 

    	 

    

TABLE OF CONTENTS

Article 1

DEFINITIONS AND INTERPRETATION

	Section 1.1	Definitions.	1
	Section 1.2	Gender and Number.	8
	Section 1.3	Headings, etc.	8
	Section 1.4	Currency.	8
	Section 1.5	Certain Phrases, etc.	8
	Section 1.6	Accounting Terms.	9
	Section 1.7	Schedules.	9
	Section 1.8	References to Persons and Agreements.	9
	Section 1.9	Statutes.	9
	Section 1.10	Non-Business Days.	9
	Section 1.11	No Presumption.	9

Article 2

NOMINATION RIGHTS

	Section 2.1	Board of Directors.	9
	Section 2.2	Reserved.	10
	Section 2.3	Board Nomination Rights.	10
	Section 2.4	Board Committees.	12
	Section 2.5	Nomination Procedures.	12
	Section 2.6	Replacement Appointment.	13
	Section 2.7	Director Compensation.	14
	Section 2.8	Director Insurance and Indemnification.	14
	Section 2.9	Permitted Disclosure.	14
	Section 2.10	Termination of Board Nomination Rights.	14

Article 3

INFORMATION RIGHTS AND ACCESS; CONFIDENTIALITY

	Section 3.1	Information Rights and Access.	14
	Section 3.2	Confidentiality.	14

Article 4

BAT GROUP REPRESENTATIVE

	Section 4.1	BAT Group Representative.	16

Article 5

PRE-EMPTIVE RIGHT AND TOP-UP RIGHT

	Section 5.1	Pre-Emptive Right.	16
	Section 5.2	Top-Up Right.	17
	Section 5.3	Required Approvals.	19

Article 6

REGISTRATION RIGHTS

	Section 6.1	Demand Registration Rights.	19
	Section 6.2	Piggyback Registration Rights.	21
	Section 6.3	Underwriters’ Cutback.	21
	Section 6.4	Registered Distribution in the United States	22
	Section 6.5	Withdrawal of Registrable Securities.	23
	Section 6.6	Expenses.	23

 

    	 	( i )	 

     

    

 

Article 7

DUE DILIGENCE; INDEMNIFICATION

	Section 7.1	Preparation; Reasonable Investigation.	24
	Section 7.2	Indemnification by the Company.	24
	Section 7.3	Defence of Claim.	25
	Section 7.4	Contribution.	26
	Section 7.5	Survival.	26
	Section 7.6	Participating Shareholder as Trustee.	26

Article 8

OTHER COVENANTS

	Section 8.1	Standstill.	27
	Section 8.2	Transfer of Common Shares.	28
	Section 8.3	Compliance Matters.	28
	Section 8.4	Certain Protective Provisions.	28
	Section 8.5	Reserved Board Matters.	29
	Section 8.6	Additional Relationships	31

Article 9

REPRESENTATIONS AND WARRANTIES

	Section 9.1	Representations and Warranties.	31

Article 10

GENERAL PROVISIONS

	Section 10.1	No Obligation to Finance.	31
	Section 10.2	Governing Law and Jurisdiction.	31
	Section 10.3	Share Buybacks.	32
	Section 10.4	All Common Shares Subject to this Agreement.	32
	Section 10.5	Changes in Capital of the Company.	32
	Section 10.6	BAT Group Permitted Holders Agreement to be Bound.	32
	Section 10.7	Constating Documents.	32
	Section 10.8	Term and Termination.	32
	Section 10.9	Dividends and Distributions.	33
	Section 10.10	Notices.	33
	Section 10.11	Time of the Essence.	35
	Section 10.12	Expenses.	35
	Section 10.13	Severability.	35
	Section 10.14	Entire Agreement.	35
	Section 10.15	Successors and Assigns.	35
	Section 10.16	Third Party Beneficiaries.	35
	Section 10.17	Amendments.	36
	Section 10.18	Waiver.	36
	Section 10.19	Injunctive Relief.	36
	Section 10.20	Further Assurances.	36
	Section 10.21	Counterparts.	36

 

    	 	( ii )	 

     

    

 

ADDENDA

Schedule A         Registration Rights Procedures

Schedule B         Competitors of the Company

Schedule C         Competitors of the Security Holder

  

 

 

    	 	( iii )	 

     

    

INVESTOR RIGHTS AGREEMENT

This INVESTOR RIGHTS AGREEMENT dated
November 14, 2022 (this “Agreement”) is made by and between BT DE INVESTMENTS INC., a corporation existing under
the Laws of the State of Delaware (the “Security Holder”), and CHARLOTTE’S WEB HOLDINGS, INC., a corporation
existing under the Laws of the Province of British Columbia (the “Company”).

RECITALS:

		A.	The Security Holder wishes to subscribe for a Convertible Debenture (as defined below), pursuant to a
subscription agreement dated as of the date hereof (the “Subscription Agreement”) by and between the Security Holder
and the Company (the “Investment”).

		B.	In connection with the closing of the Investment, the Security Holder and the Company wish to set forth
their agreements regarding the Security Holder’s rights as a securityholder of the Company.

NOW, THEREFORE, in
consideration of the foregoing and the mutual agreements contained herein, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged by the Parties, the Parties hereby agree as follows:

Article 1

DEFINITIONS AND INTERPRETATION

Section 1.1     Definitions.

Whenever used in this Agreement,
the following terms shall have the meanings set forth below:

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

“Affiliate”
means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, such specified Person; provided, that, with respect to the Security Holder,
“Affiliate” shall also include (1) BAT Parent and (2) all entities in which BAT Parent owns, directly or indirectly, an equity
ownership of at least 50%.

“Agreement”
has the meaning ascribed to such term in the preamble to this Agreement.

“At-the-Market Distribution”
means a distribution of Common Shares pursuant to an at-the-market program implemented by the Company pursuant to NI 44-102 or similar
offerings implemented in accordance with applicable United States securities Laws.

“Available Nominees” means,
at any time, the maximum number of Directors based on the size of the Board at such time.

“Audit Committee” means the
Audit Committee of the Board, as the same may be constituted from time to time.

“Authorization” means, with
respect to any Person, any Order, license, permit, certification, approval, registration, consent, authorization, clearance, franchise,
qualification, filing, privilege, variance or exemption issued or granted by, or any Contract with, any Governmental Authority having
jurisdiction over such Person and/or any of its assets or any applicable stock exchange on which securities of such Person are listed,
as the same may have been, or may from time to time be, amended, supplemented or replaced.

“BAT Group Representative”
has the meaning ascribed to such term in Section 4.1(1).

     

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“BAT Group” means, collectively,
BAT Parent and its Affiliates, and “member of the BAT Group” means any one of them, as the context requires.

“BAT Group Permitted Holders”
means, collectively, the Security Holder and any other member of the BAT Group.

“BAT Parent” means British
American Tobacco plc.

“Board” means the board of
directors of the Company, as the same may be constituted from time to time.

“Board Observer” means each
of the individuals designated as an observer of the Board pursuant to Section 2.3(5).

“Bought Deal Distribution”
means a public offering of securities as described in the definition of “bought deal agreement” in Section 7.1 of National
Instrument 44-101 - Short Form Prospectus Distributions or similar offerings implemented in accordance with applicable United States
securities Laws.

“Business Day” means a day
other than a Saturday, Sunday or other day on which commercial banks in Toronto, Ontario, New York City, New York or London, United Kingdom
are authorized or required by Law to close.

“Cannabis” means (1) all
living or dead material, plants, seeds, plant parts or plant cells from any cannabis species or subspecies (including sativa, indica and
ruderalis), including wet and dry material, derivatives, trichomes, oil and extracts from cannabis (including cannabinoid or terpene extracts
from the cannabis plant); and (2) biologically or synthetically synthesized analogs of cannabinoids extracted from the cannabis plant
using micro-organisms, including (a) cannabis and marijuana or marihuana (as defined under Law, including the Cannabis Act and Section
802 of Title 21 of the United States Code) and (b) “hemp” or “industrial hemp” (as is defined in the Industrial
Hemp Regulations issued under the Cannabis Act, Section 1639(o) of Title 7 of the United States Code, or other applicable Laws).

“Cannabis Act” means the
Cannabis Act (Canada).

“Cannabis Authorizations”
means all Authorizations issued or granted, or required to be issued or granted, to a Person under or pursuant to Cannabis Laws, including
all Contracts with Governmental Authorities thereunder or relating thereto.

“Cannabis Laws” means all
Laws and other statutory requirements relating to Cannabis, including the Cannabis Act, and all Cannabis Authorizations.

“Committee” means each of
the Audit Committee, Compensation Committee, the Corporate Governance and Nominating Committee and any other committee of the Board established
by the Board from time to time.

“Common Shares” means the
common shares in the capital of the Company.

“Company” has the meaning
ascribed to such term in the preamble to this Agreement.

“Company Initiated Prospectus Distribution”
has the meaning ascribed to such term in Section 6.3(1)(a).

“Company Shareholders” means,
collectively, all Persons that own and/or control, directly or indirectly, Common Shares.

“Compensation Committee”
means the Compensation Committee of the Board, as the same may be constituted from time to time.

“Competitor” means (1) with
respect to the Company, the entities listed on Schedule B attached hereto (as such Schedule may be amended or supplemented from
time to time by Company with the consent of the BAT Group Representative (which consent shall not be unreasonably withheld, conditioned
or delayed) and (2) with respect to the Security Holder, the entities listed on Schedule C attached hereto (as such Schedule may
be amended or supplemented from time to time by the BAT Group Representative with the consent of the Company (which consent shall not
be unreasonably withheld, conditioned or delayed).

     

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“Conditions”
has the meaning ascribed to such term in Section 2.5.

“Confidential Information”
means, with respect to the Company and its Subsidiaries, on the one hand, and the Security Holder and its Affiliates, on the other hand,
all confidential or proprietary information, intellectual property and confidential facts relating to the business and affairs of the
Company and its Subsidiaries, on the one hand, or the Security Holder and its Affiliates, on the other hand, respectively, including their
respective customers, products, services, technology, trade secrets, know-how, systems and operations; provided, that “Confidential
Information” does not include any information that: (1) is or becomes generally available to the public other than as a result of
disclosure, directly or indirectly, by the Security Holder or any of its Affiliates or any of their respective Representatives, on the
one hand, or the Company or any of its Subsidiaries or any of their respective Representatives, on the other hand, in violation of Section
3.2; (2) is or becomes available to the Security Holder or its Affiliates or any of their respective Representatives, on the one hand,
or the Company or any of its Subsidiaries or any of their respective Representatives, on the other hand, on a non-confidential basis from
a source other than the other or any of its Representatives, as applicable, unless the applicable Person knew, after reasonable inquiry,
that such source was prohibited from disclosing the information to it by a contractual, fiduciary or other legal obligation; or (3) the
Security Holder, on the one hand, or the Company, on the other hand, can show was independently acquired or developed by or on behalf
of the Security Holder or any of its Affiliates or any of their respective Representatives, on the one hand, or by the Company or any
of its Subsidiaries or any of their respective Representatives, on the other hand, prior to the disclosure by or on behalf of the other
of, and without the use of any, Confidential Information.

“Constating Documents” means,
collectively, the notice of articles and articles of the Company, or other similar formation documents, as applicable and other constating
documents of the Company and its Subsidiaries, in each case, as the same may be amended, restated, replaced, modified and/or supplemented
from time to time.

“Contract” means any agreement,
indenture, contract, lease, deed of trust, license, option, instruments, arrangement, obligation, understanding or other commitment, in
each case whether written or oral.

“control” means the possession,
directly or indirectly, of the power to direct, or cause the direction of, the affairs, management and policies of a Person, whether through
the ownership of voting securities or partnership or other interests, by Contract or otherwise. The terms “controlling”
and “controlled by”, shall have correlative meanings.

“Convertible Debenture” means
the convertible debenture due on the seventh anniversary of the date hereof, in an aggregate principal amount of $75,341,080 issued on
and dated as of the date hereof, as the same may hereafter be amended.

“Convertible Securities”
means any securities in the capital of the Company or any of its Subsidiaries that are convertible into, exercisable or exchangeable for,
or otherwise grant the right to acquire, Common Shares (for greater certainty, including the Convertible Debenture, any warrants, stock
options, subscription receipts and any equity grants issued pursuant to the Equity Incentive Plans from time to time).

“Corporate Governance and Nominating
Committee” means the Corporate Governance and Nominating Committee of the Board, as the same may be constituted from time to
time.

“Demand Registration” has
the meaning ascribed to such term in Section 6.1(1).

“Director” means a director
on the Board.

     

    	 	- 4 -	 

    

 

“Director Nominees” means,
collectively, the Nominees designated as such, by the BAT Group Representative pursuant to Section 2.5, and “BAT
Director Nominee” means any one of them, as the context requires.

“Directors Election Meeting”
means any meeting of Company Shareholders at which individuals are proposed for election as Directors.

“Distributed Securities”
means any Common Shares or Convertible Securities distributed or issued pursuant to a Distribution.

“Distribution” means any
distribution or issuance by the Company or any of its Subsidiaries of Common Shares and/or Convertible Securities (for greater certainty,
including any Prospectus Distribution and the payment of any dividend in Common Shares and/or Convertible Securities), other than any
(1) Exempt Distribution and (2) issuance of Common Shares upon exercise or vesting of Convertible Securities in the Ordinary Course pursuant
to the Equity Incentive Plans.

“Distribution Notice” has
the meaning ascribed to such term in Section 5.1(2).

“Equity Incentive Plans”
means, collectively, all plans of the Company and/or any of its Subsidiaries in effect from time to time pursuant to which securities
of the Company and/or any of its Subsidiaries may be issued, or options or other securities convertible or exercisable into, or exchangeable
for, securities of the Company and/or any of its Subsidiaries may be granted, to the Persons set out therein, including the equity incentive
plan approved by the Company Shareholders at the annual general and special meeting of the Company Shareholders held on June 9, 2021 and
any equity incentive plan of the Company approved by the Board that is substantially similar to such plan.

“Exempt Distribution” means
any distribution or issuance by the Company or any of its Subsidiaries approved by the Board of: (1) Convertible Securities issued, and
Common Shares issued on the exercise, conversion or exchange of such Convertible Securities, in each case pursuant to the Equity Incentive
Plans in accordance with the terms thereof; (2) Common Shares pursuant to the exercise, conversion or exchange of any issued and outstanding
Convertible Securities on the date hereof, including the Convertible Debenture, in accordance with the terms thereof, as applicable; (3)
Common Shares pursuant to the exercise, conversion or exchange of Convertible Securities in accordance with the terms thereof, in each
case, where such Convertible Securities were issued pursuant to the Pre-Emptive Right in accordance with Section 5.1 or Top-Up
Rights in accordance with Section 5.2; (4) Common Shares as purchase price consideration in connection with any business acquisition
by the Company or any of its Subsidiaries, whether structured as a purchase of shares or assets and/or effected pursuant to an amalgamation,
arrangement, merger or other business combination transaction; (5) Common Shares as de minimis equity kickers to bona fide
third party debt financing sources of the Company or any of its Subsidiaries; (6) Common Shares pursuant to any At-the-Market Distribution
or Bought Deal Distribution; (7) distributions or issuances which, pursuant to Securities Laws and applicable United States securities
Laws, would require shareholder approval (but only to the extent that the participation of the BAT Group Permitted Holders triggers such
requirement); (8) Common Shares issued pursuant to any employee share purchase plan in effect; (9) securities issuable pursuant to any
contractual obligation existing as of the date hereof; and (10) Common Shares issuable by way of a dividend to all existing Company Shareholders.

“GAAP” means United States
generally accepted accounting principles.

“Governmental Authority”
means (1) any domestic or foreign government, whether national, federal, provincial, state, regional, territorial, municipal or local
(whether administrative, legislative, executive or otherwise); (2) any domestic or foreign agency, authority, ministry, department, regulatory
authority, court, central bank, bureau, board or other instrumentality having legislative, judicial, taxing, regulatory, prosecutorial
or administrative powers or functions of, or pertaining to, government, including Health Canada, the United States Food and Drug Administration,
the United States Department of Agriculture, the United States Drug Enforcement Agency and any other applicable regulatory authorities,
whether national, federal, provincial, state, regional, territorial, municipal or local (whether administrative, legislative, executive
or otherwise), with oversight of the Cannabis industry and any business or operations within the Cannabis industry generally; and (3)
any court, commission, individual, arbitrator, arbitration panel or other body having adjudicative, regulatory, judicial, quasi-judicial,
administrative or similar functions, including the Canadian Securities Regulators.

     

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“Indemnified Person” has
the meaning ascribed to such term in Section 7.3.

“Initiating Notice” has the
meaning ascribed to such term in Section 6.1(1).

“Investment” has the meaning
ascribed to such term in the recitals to this Agreement.

“Law” means any and all applicable:
(1) foreign or domestic constitution, treaty, law, statute, regulation, code, ordinance, principle of common law or equity, rule, municipal
bylaw, Order or other requirement having the force of law; (2) policy, practice, protocol, standard or guideline of any Governmental Authority
which, although not necessarily having the force of law, is regarded by such Governmental Authority as requiring compliance as if it had
the force of law; and (3) rules of the TSX or such other national stock or securities exchange on which the Common Shares are principally
traded.

“Lock-Up Period” has the
meaning ascribed to such term in Section 8.2(1).

“Minimum Price” has the meaning
ascribed to such term in Section 6.1(6).

“NI 44-102” means National
Instrument 44-102 - Shelf Distributions.

“Nomination Letter” has the
meaning ascribed to such term in Section 2.5.

“Nominee Cure Period” has
the meaning ascribed to such term in Section 2.3(2).

“Nominees” means, collectively,
the nominees that are proposed for election as Directors by the Company and included in a management information circular of the Company
relating to the election of Directors at a Directors Election Meeting, and “Nominee” means any one of them, as the
context requires.

“Notice” has the meaning
ascribed to such term in Section 10.10(1).

“Order” means any order,
directive, judgment, decree, injunction, decision, ruling, award or writ of any Governmental Authority.

“Ordinary Course” means,
with respect to an action taken by a Person, that such action is consistent with the past practices of such Person (including with respect
to quantity, subject to reasonable adjustment for inflation, and frequency) and is taken in the ordinary course of normal operations of
such Person. For the avoidance of doubt, any extraordinary actions taken in response to the COVID-19 pandemic are not “ordinary
course” for purposes of this definition.

“Partially Diluted Ownership Percentage”
means, at any time, the direct and/or indirect aggregate ownership interest of the BAT Group Permitted Holders in the Company, expressed
as a percentage, calculated as follows: (1)(a) the aggregate number of issued and outstanding Common Shares owned and/or controlled by
the BAT Group Permitted Holders at such time, plus (b) the aggregate number of Common Shares represented by any issued and outstanding
Convertible Securities owned and/or controlled by the BAT Group Permitted Holders at such time, if applicable (assuming the conversion,
exercise and/or exchange thereof); divided by (2)(a) the aggregate number of issued and outstanding Common Shares at such time,
plus (b) the aggregate number of Common Shares represented by any issued and outstanding Convertible Securities owned and/or controlled
by the BAT Group Permitted Holders at such time, if applicable (assuming the conversion, exercise and/or exchange thereof) and excluding,
for greater certainty, any Common Shares represented by any other issued and outstanding Convertible Securities owned and/or controlled
by any other Person at such time.

     

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“Participating Shareholders”
means the BAT Group Permitted Holders exercising their rights under Section 6.1 or Section 6.2, as the case may
be, and a “Participating Shareholder” means any of them;

“Parties” means, collectively,
the Security Holder and the Company, and “Party” means any one of them, as the context requires.

“Person” means any individual,
corporation, partnership, limited partnership, firm, limited liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or other entity.

“Piggyback Shareholder” has
the meaning ascribed to such term in Section 6.2.

“Piggyback Notice” has the
meaning ascribed to such term in Section 6.2.

“Piggyback Registration”
has the meaning ascribed to such term in Section 6.2.

“Pre-Emptive Right” has the
meaning ascribed to such term in Section 5.1(1).

“Pre-Emptive Right Subscription Notice”
has the meaning ascribed to such term in Section 5.1(3).

“Prospectus” means a prospectus
(as such term is used in National Instrument 41-101 - General Prospectus Requirements), as varied in accordance with National Instrument
44-102, as the same may be required under applicable Canadian Securities Laws.

“Prospectus Distribution”
means a distribution of Common Shares to the public under Canadian Securities Laws by way of a Prospectus in one or more Qualifying Jurisdictions,
except for any At-the-Market Distribution.

“Qualification Expenses”
has the meaning ascribed to such term in Section 6.6.

“Qualifying Jurisdictions”
means, collectively, all of the provinces and territories of Canada.

“Representative” means, with
respect to any Person, such Person’s directors, officers, employees, agents, consultants, insurers, financing sources, legal counsel,
accountants, advisors and other representatives; provided, that, with respect to the Security Holder and each other member of the
BAT Group for purposes of Section 3.2, “Representative” shall also include a prospective purchaser of Common Shares
or Convertible Securities from the Security Holder (or any other BAT Group Permitted Holder) that agrees to be bound by the provisions
of Section 3.2(1), mutatis mutandis.

“Registrable Securities”
means: (1) any Common Shares owned and/or controlled by the Security Holder or any Affiliate; (2) any Common Shares issuable upon the
exercise, conversion or exchange of any Convertible Securities owned and/or controlled by the Security Holder or any Affiliate, in each
case, to the extent exercisable, convertible or exchangeable; and (3) all Common Shares directly or indirectly issued or issuable with
respect to the securities referred to in the foregoing (1) and (2) by way of share dividend or share split, or in connection with a combination
of shares, recapitalization, merger, consolidation or other reorganization (it being understood that a Person shall be deemed to be a
holder of Registrable Securities whenever such Person has the right to then acquire or obtain any Registrable Securities, whether or not
such acquisition has actually been effected).

“Securities
Act” means the Securities Act (Ontario).

“Securities Laws” means,
collectively, the United States federal securities Laws and the securities Laws of each of the provinces and territories of Canada and
any other jurisdictions in which the Common Shares are listed, and the respective regulations, instruments and rules made thereunder,
together with all applicable published policy statements, notices, blanket orders, “no action” letters and rulings of the
applicable Securities Regulators and the securities commissions or other securities regulatory authorities of each other jurisdiction
in which the Common Shares are listed, including the applicable rules and requirements of the TSX.

     

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“Securities Regulators” means,
collectively, the United States Securities and Exchange Commission and the securities commissions or other securities regulatory authorities
in each of the Qualifying Jurisdictions.

“Security Holder” has the
meaning ascribed to such term in the preamble to this Agreement.

“Share Buyback” has the meaning
ascribed to such term in Section 10.3.

“Subscription
Agreement” has the meaning ascribed to such term in the recitals to this Agreement.

“Subsidiaries” means, with
respect to any Person, any other Person with respect to which the first Person (i) has the right to elect a majority of the board of directors
or other Persons performing similar functions or (ii) beneficially owns more than 50% of the voting stock (or of any other form of voting
or controlling equity interest in the case of a Person that is not a corporation), in each case, directly or indirectly through one or
more other Persons.

“Taxes” means any and all:
(i) taxes, duties, fees, excises, premiums, assessments, imposts, levies, expansion fees and other charges of any kind whatsoever imposed
by any Governmental Authority, including all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental
Authority in respect thereof, and including those levied on, or measured by, or referred to as, income, gross receipts, profits, gains,
windfall, royalty, capital, transfer, land transfer, sales, goods and services, harmonized sales, use, value-added, excise, special assessment,
stamp, withholding, business, franchising, property, real or personal property, development, occupancy, employee health, payroll, employment,
workers’ compensation, employment or unemployment, severance, health, social services, education, utility and social security taxes,
all surtaxes, all customs duties and import and export taxes, countervail and anti-dumping, all license, franchise and registration fees
and all employment insurance, health insurance and other pension plan premiums or contributions imposed by any Governmental Authority;
(ii) interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Authority on or in respect of
amounts of the type described in clause (i) or this clause (ii); (iii) any liability for the payment of any amounts of the type described
in clauses (i) or (ii) as a result of being a member of an affiliated, consolidated, combined or unitary group for any period; and (iv)
any liability for the payment of any amounts of the type described in clauses (i) or (ii) as a result of any express or implied obligation
to indemnify any other Person or as a result of being a transferee or successor in interest to any Person.

“Top-Up Exempt Distribution”
means an Exempt Distribution, but excluding from the definition of Exempt Distribution: (1) Common Shares issued on the exercise, conversion
or exchange of Convertible Securities issued pursuant to the Equity Incentive Plans, in accordance with the terms thereof; (2) Common
Shares pursuant to the exercise, conversion or exchange of any issued and outstanding Convertible Securities on the date hereof, including
the Convertible Debenture, in accordance with the terms thereof, as applicable; (3) Common Shares issued pursuant to any employee share
purchase plan then in effect; (4) Common Shares issuable by way of a dividend to all existing Company Shareholders; and (5) any other
issuance of Common Shares that results in an adjustment to the Conversion Price (as defined in the Convertible Debenture) of the Convertible
Debenture such that the Partially Diluted Ownership Percentage of the BAT Group Permitted Holders following such adjustment remains the
same as the Partially Diluted Ownership Percentage of the BAT Group Permitted Holders immediately prior to such issuance of Common Shares.

“Top-Up
Notice” has the meaning ascribed to such term in Section 5.2(3).

“Top-Up
Right” has the meaning ascribed to such term in Section 5.2(1).

“Top-Up
Right Subscription Notice” has the meaning ascribed to such term in Section 5.2(3).

     

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“Transaction Agreements”
means, collectively, this Agreement, the Convertible Debenture, the Subscription Agreement and all agreements, certificates and other
instruments delivered pursuant hereto and thereto.

“Transfer” has the meaning
ascribed to such term in Section 8.2(1).

“TSX”
means the Toronto Stock Exchange.

“underwriter” and all terms
which are derivatives thereof shall be deemed to include “best efforts agent” and all terms which are derivatives thereof,
as appropriate.

“Underwriters’ Cutback”
has the meaning ascribed to such term in Section 6.3.

“Valid Business Reason” has
the meaning ascribed to such term in Section 6.1(3)(c).

Section 1.2     Gender
and Number.

Any reference in this Agreement
to gender includes all genders. Words importing the singular number only include the plural and vice versa.

Section 1.3     Headings,
etc.

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

Section 1.4     Currency.

All references in this Agreement
to dollars or to $ are expressed in Canadian currency unless otherwise specifically indicated.

Section 1.5     Certain
Phrases, etc.

In this Agreement, unless
otherwise specified:

		(1)	the words “including”, “includes” and “include”
mean “including (or includes or include) without limitation”;

		(2)	the phrase “the aggregate of”, “the total of”, “the sum
of” or a phrase of similar meaning means “the aggregate (or total or sum), without duplication, of”;

		(3)	the words “Article”, “Section” and “Schedule”
followed by a number mean and refer to the specified Article, Section or Schedule of this Agreement; and

		(4)	in the computation of periods of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean “to
but excluding”.

Section 1.6     Accounting
Terms.

All accounting terms not
specifically defined in this Agreement are to be interpreted in accordance with GAAP.

     

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Section 1.7     Schedules.

The Schedules attached to
this Agreement form an integral part of this Agreement for all purposes hereof.

Section 1.8     References
to Persons and Agreements.

Any reference in this Agreement
to a Person includes its heirs, administrators, executors, legal representatives, successors and permitted assigns, as applicable. Except
as otherwise provided in this Agreement, the term “Agreement” and any reference to this Agreement, or to any other
agreement, document or other instrument, includes, and is a reference to, this Agreement or such other agreement, document or other instrument,
as the same may have been, or may from time to time be, amended, restated, replaced, supplemented or novated, and includes all schedules
hereto.

Section 1.9     Statutes.

Except as otherwise provided
in this Agreement, any reference in this Agreement to a statute refers to such statute, and all rules and regulations made thereunder,
as the same may have been, or may from time to time be, amended, re-enacted or replaced.

Section 1.10     Non-Business
Days.

Whenever payments are to
be made, or an action is to be taken, on a day which is not a Business Day, such payment shall be made, or such action shall be taken,
on or not later than the next succeeding Business Day.

Section 1.11     No
Presumption.

This Agreement is the product
of negotiation by the Parties having the assistance of counsel and other advisers. It is the intention of the Parties that neither Party
shall be presumed to be the drafter hereof and that this Agreement not be construed more strictly with the regard to one Party than to
the other Party.

Article 2

NOMINATION RIGHTS

Section 2.1     Board
of Directors.

On the date hereof, the
Company’s Board consists of five Directors, which Directors are: John Held (Independent Chair), Jacques Tortoroli, Jean Birch, Susan
Vogt and Thomas Lardieri. The Company will take all action necessary or proper to increase the size of the Board in the event the Security
Holder elects to nominate one or more Director Nominees pursuant to this Article 2.

Section 2.2     Reserved.

Section 2.3     Board
Nomination Rights.

		(1)	Prior to the first Directors Election Meeting held following the date hereof, the Board shall appoint
to the Board a nominee designated by the BAT Group Representative no fewer than 30 days following such designation; provided, that
no such appointment shall be required if such nominee does not satisfy the Conditions, in which case the BAT Group Representative shall
be entitled to designate alternative nominee(s).

		(2)	From and after the date of this Agreement, the BAT Group Permitted Holders shall be entitled to designate
in accordance with the nomination procedures contained in Section 2.5:

     

    	 	- 10 -	 

    

 

		(a)	20% of the Available Nominees, rounding up or down to the nearest whole member (e.g., 2 of 10),
for so long as the Partially Diluted Ownership Percentage of the BAT Group Permitted Holders is at least 15%; and

		(b)	10% of the Available Nominees, rounding up or down to the nearest whole member (e.g., 1 of 10),
for so long as the Partially Diluted Ownership Percentage of the BAT Group Permitted Holders is at least 10% (but less than 15%);

provided, that in the event the Partially
Diluted Ownership Percentage of the BAT Group Permitted Holders falls below any threshold set forth in (a) or (b) above, the BAT Group
Permitted Holders may, during the 90-day period following such event (or, if such event results from a Top-Up Exempt Distribution or Bought
Deal Distribution, during the 90-day period following receipt by the BAT Group Representative of a Top-Up Notice relating to such Top-Up
Exempt Distribution or Bought Deal Distribution (the “Nominee Cure Period”), acquire Common Shares or Convertible Securities
to allow the Partially Diluted Ownership Percentage of the BAT Group Permitted Holders to exceed such threshold (in which case such Common
Shares or Convertible Securities would be deemed to be beneficially owned by the BAT Group Permitted Holders as of immediately prior to
the first day of such Nominee Cure Period).

		(3)	In the event that the number of Director Nominees serving on the Board exceeds the number of Nominees
that the BAT Group Permitted Holders are entitled to nominate under Section 2.3(1), Section 2.3(2)(a) or Section 2.3(2)(b),
as the case may be, due to the Partially Diluted Ownership Percentage of the BAT Group Permitted Holders being less than the applicable
minimum percentage thresholds for a period equal to 120 days following the expiration of the Nominee Cure Period set forth in Section 2.3(2),
provided that (i) if a Top-Up Right is then exercisable, the period shall not end prior to the expiry of the period for exercise thereof,
and (ii) if there is a blackout period imposed by the Company during such 120-day period, the period shall not expire until the 120th
day following the expiry of the last such blackout:

		(a)	the BAT Group Permitted Holders shall notify the Company promptly thereof;

		(b)	upon the written request of the Company, the BAT Group Permitted Holders shall cause such number of the
Director Nominee(s) in excess of the number of Nominee(s) that BAT Group Permitted Holders are entitled to nominate to forthwith resign;
and

		(c)	if no such request is made by the Company, the Director Nominee(s) shall continue until his, her or their
term expires at the next Directors Election Meeting, as applicable, or, if earlier, such Director Nominee(s) otherwise resign(s), become(s)
incapacitated, die(s) or cease(s) to be qualified to act as a Director.

		(4)	In the event that the BAT Group Permitted Holders have designated fewer Director Nominees than the total
number of Nominees that the BAT Group Permitted Holders are entitled to designate pursuant to Section 2.3(1), Section 2.3(2)(a)
or Section 2.3(2)(b), as the case may be, then the BAT Group Permitted Holders shall have the right, at any time and from
time to time, to designate such additional Director Nominee(s) to which they are entitled hereunder, in which case, the Company and the
Directors shall take all necessary corporate action, to the fullest extent permitted by Law (for greater certainty, not including the
calling of a meeting of Company shareholders other than the next regularly scheduled annual or special Company shareholder meeting), to
promptly:

		(a)	enable the BAT Group Permitted Holders to designate and effect the election or appointment of such additional
Director Nominee(s); and

		(b)	appoint such Director Nominee(s) to fill any available vacancies or, to the extent not so permitted, nominate
any such Director Nominee for election as a Director at the next Directors Election Meeting in accordance with Section 2.5.

     

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		(5)	The BAT Group Permitted Holders may, at any time and from time to time, upon written notice to the Company,
designate any or all of the Director Nominees as non-voting Board Observers. In such an event, the BAT Group Permitted Holders shall use
commercially reasonable efforts to cause such Director Nominee(s) to resign from the Board and the Company shall record such resignation(s)
in the Company’s books and records. All non-voting Board Observers designated as such by the BAT Group Permitted Holders shall be
entitled to the following rights and obligations:

		(a)	The Board Observers appointed by the BAT Group Permitted Holders will receive from the Company written
notice of and be invited to attend and observe all Board meetings with notice provided in the same form and at the same time as the Directors.
The Board Observers will be entitled to participate in all meetings of the Board absent written advice from outside counsel to the Company
that participation by such Board Observers would give rise to a conflict of interest and then, only following notice to the Board Observers
that such advice has been rendered and after providing each Board Observer with an opportunity to respond to the Board regarding such
advice. Board Observers will have no right to vote on any matter presented to the Board for a vote but will, subject to each Board Observer’s
entry into a commercially reasonable confidentiality agreement,‎ be entitled to receive all information, correspondence or materials
provided to the Board contemporaneously with delivery of such information or materials to the members of the Board and the Board Observers
will have an express right to consult with members of the Board with respect to material matters raised at any such meetings. The Board
Observers will also be entitled to copies of all written actions circulated to the members of the Board and no written action of the Board
will be deemed effective unless the Board Observers have been provided with a reasonable opportunity to review such proposed action and
an opportunity to discuss it with members of the Board.

		(b)	No Board Observer will be entitled to compensation from the Company for service as a Board Observer. Attendance
of a Board Observer at any meeting of the Board will not count towards any quorum requirement for the Board for the purposes of any Board
meeting and no Board Observer will hold any of the legal responsibilities attributable to Directors under Law.

		(c)	The right to appoint Board Observers is personal to the BAT Group Permitted Holders and not transferable
to any Person that is not a BAT Group Permitted Holder.

		(6)	For greater certainty, the selection of Nominees other than the Director Nominees designated by the BAT
Group Permitted Holders pursuant to this Section 2.3, shall rest with the Board, or the Corporate Governance and Nominating
Committee, if so determined by the Board.

		(7)	If the Company is at any time a Subsidiary of another body corporate, then the BAT Group Permitted Holders
shall have the right to representation on the board of directors or other similar governing body of such body corporate in the same proportion
as their representation on the Board under Section 2.3(1), Section 2.3(2)(a) or Section 2.3(2)(b),
as the case may be, subject to the terms and conditions of this Article 2, mutatis mutandis. For greater certainty,
this Section 2.3(7) shall not apply to the board of directors or other similar governing body of a third party, if such third
party acquires more than 50% of the Common Shares from time to time.

Section 2.4     Board
Committees.

		(1)	For so long as the BAT Group Permitted Holders have the right to designate at least one Nominee pursuant
to Section 2.3(1) or Section 2.3(2), as applicable, the BAT Group Permitted Holders shall have the right to designate
one non-voting observer to any Committee to the extent that a Director Nominee is not already a voting member of such Committee. All non-voting
Committee observers shall be entitled to attend all Committee meetings, and to receive all notices, correspondence and materials associated
therewith, as if such non-voting Committee observers were members of the applicable Committee; provided, that they shall not: (a)
hold any voting authority attributable to Committee members whatsoever; (b) count towards the quorum of the Committee for the purposes
of any Committee meeting; or (c) hold any of legal responsibilities attributable to Committee members under Law.

     

    	 	- 12 -	 

    

 

		(2)	All Director Nominees shall be eligible to be appointed to any of the Committees from time to time as
may be determined by the Board; provided, that each such individual (a) has the expertise for the applicable Committee and
(b) meets applicable independence standards, in each case, required by Securities Laws.

Section 2.5     Nomination
Procedures.

		(1)	The Company shall notify the BAT Group Representative (on behalf of the BAT Group Permitted Holders having
a right to designate one or more Nominees under Section 2.3) of any Directors Election Meeting at least 60 days prior to the
date of such Directors Election Meeting.

		(2)	At least 45 days, and no more than 75 days, before each Directors Election Meeting, the BAT Group Representative
(on behalf of the BAT Group Permitted Holders having a right to designate one or more Director Nominees) will deliver to the Company (c/o
the Corporate Governance and Nomination Committee) in writing the name of its respective Nominee(s) together with the information regarding
such Nominee(s) (including the number of Common Shares beneficially owned or controlled by such Nominee) that the Company is required
by the Act and applicable Securities Laws to include in a management information circular of the Company to be sent to Company Shareholders
in respect of such Directors Election Meeting, and such other information, including a biography of such Nominee(s), that is consistent
with the information the Company intends to publish about Nominees as Directors of the Company in such management information circular
(the “Nomination Letter”). In the event that the Company, acting reasonably, requires additional information regarding
the Nominee, the BAT Group Representative shall promptly provide any such requested information.

		(3)	If the BAT Group Representative (on behalf of the BAT Group Permitted Holders) fails to deliver the Nomination
Letter to the Company at least 45 days before the Directors Election Meeting, the BAT Group Representative shall be deemed to have designated
(i) the same BAT Director Nominee that serves (or each of the same Director Nominees that serve) as a Director of the Company at such
time, subject to such individual(s) satisfying the Conditions for re-election to the Board or (ii) no Director Nominees, if there is no
BAT Director Nominee serving at such time.

		(4)	Notwithstanding anything to the contrary in this Agreement, each Director Nominee shall, at all times
while serving on the Board, (i) meet the qualification requirements to serve as a Director under the Act, applicable Securities Laws and
the Constating Documents, (ii) comply with applicable provisions of the Act, and (iii) comply with the written terms of reference or policies
approved in effect with respect of the conduct or the Board and applicable Committee’s (e.g. Company Blackout Policy) (collectively,
the “Conditions”). No Director Nominee may be an individual who: (a) has been convicted of a felony or a crime involving
moral turpitude; or (b) is not acceptable to the TSX, any other securities exchange on which the Common Shares are listed, any of the
Canadian Securities Regulators, securities commissions or other securities regulatory authorities of any other jurisdiction in which the
Common Shares are listed or to which the Company is subject, or the Company (acting reasonably).

		(5)	The Director Nominee(s) shall be nominated by or at the direction of the Board or an authorized officer
of the Company, including pursuant to a notice of meeting, to stand for election to the Board at the Directors Election Meeting and the
Company shall solicit proxies from the holders of Common Shares in respect thereof, which solicitation obligation will be satisfied by
delivery of a form of proxy to the holders of Common Shares following standard procedures and, where applicable, consistent with past
practice.

     

    	 	- 13 -	 

    

 

		(6)	The Company shall: (a) nominate for election and include in any management information circular relating
to any Directors Election Meeting (or submit to Company Shareholders by written consent, if applicable) each individual designated as
a Director Nominee under Section 2.2 in accordance with this Section 2.5; (b) recommend (and reflect such recommendation
in any management information circular relating to any Directors Election Meeting or in any written consent submitted to Company Shareholders
for the purpose of electing Directors of the Company) that the Company Shareholders vote to elect such Director Nominee(s) as a Director
for a term of office expiring at the closing of the subsequent annual meeting of the Company Shareholders; (c) use commercially reasonable
efforts to solicit and obtain proxies in favour of and otherwise support the election of such Nominee(s) at the applicable Directors Election
Meeting, each in a manner no less favourable than the manner in which the Company supports its own Nominees for election at the applicable
Directors Election Meeting; (d) take all steps which may be reasonably necessary or appropriate to recognize, enforce and comply with
the rights of the BAT Group Permitted Holders under this Article 2; and (e) subject to compliance with applicable Law and
stock exchange requirements, not take, authorize or approve any action, including the adoption of any amendments to any of its Constating
Documents, that would or would reasonably be expected to, individually or in the aggregate, eliminate, limit or otherwise frustrate in
any way the rights of the BAT Group Permitted Holders under this Article 2.

Section 2.6     Replacement
Appointment.

		(1)	In the event of the resignation, death or incapacity of a Director Nominee that is serving on the Board,
or in the event that a Director Nominee that is serving on the Board at any time ceases to satisfy any of the Conditions, the BAT Group
Permitted Holders shall be entitled to designate an individual satisfying each of the Conditions to replace such Director Nominee to serve
on the Board by delivery of a written notice by the BAT Group Representative to the Company within 45 days after the Director Nominee
resigns, dies or becomes incapacitated, or ceases to satisfy any of the Conditions, as applicable, and to the extent permitted by the
Act and the Constating Documents, the Board shall promptly appoint such individual as a Director, or to the extent not so permitted, nominate
such individual for election as a Director at the next Directors Election Meeting in accordance with Section 2.5.

		(2)	For the avoidance of doubt, for so long as the BAT Group Permitted Holders have the right to designate
at least one Nominee pursuant to Section 2.3(1) or Section 2.3(2), as applicable, without the BAT Group Representative’s
prior written consent, the Company shall ensure that no action is taken, authorized or approved by or on behalf of the Company or the
Board, to remove a Director Nominee from the Board, other than in the event (a) of the resignation, death or incapacity of a Director
Nominee that is serving on the Board, or (b) that a Director Nominee that is serving on the Board at any time ceases to satisfy any of
the Conditions, in each of which case the provisions of Section 2.6(1) shall apply.

Section 2.7     Director
Compensation.

No Director Nominee who
is an officer, employee or consultant of the BAT Group will be entitled to any compensation for his or her service as a Director or member
of any Committee.

Section 2.8     Director
Insurance and Indemnification.

		(1)	The Company shall obtain and maintain customary directors’ and officers’ liability insurance
on commercially reasonable terms.

		(2)	The Company and each Director Nominee that has been elected or appointed to the Board, as the case may
be, shall, upon request from such Director Nominee, enter into a customary director indemnity agreement.

     

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Section 2.9     Permitted
Disclosure.

Each Director Nominee and
Board Observer shall be permitted to disclose to any member of the BAT Group information about the Company and its Subsidiaries that he
or she receives as a result of being a Director or Board Observer, as applicable; provided, that the recipient of such disclosure
is directed to keep confidential and not disclose any Confidential Information, in each case, in accordance with Section 3.2.

Section 2.10     Termination
of Board Nomination Rights.

The Board observation and
nomination rights contained in this Article 2 are personal to the BAT Group Permitted Holders and not transferable to any Person
that is not a BAT Group Permitted Holder. If the Partially Diluted Ownership Percentage of the BAT Group Permitted Holders does not meet
or exceed the threshold set forth in Section 2.3(2)(b) above following the expiration of the Nominee Cure Period, the Board observation
and nomination rights contained in this Article 2 shall terminate and be of no further force and effect.

Article 3

INFORMATION RIGHTS AND ACCESS; CONFIDENTIALITY

Section 3.1     Information
Rights and Access.

Subject to compliance with
anti-trust Laws, the Company shall provide to the Security Holder (or such other member of the BAT Group that so requests): (1) any financial
or other information relating to the Company, its Subsidiaries and their respective businesses and operations; and (2) reasonable access
to the books, records, properties, employees and management of the Company and its Subsidiaries during normal business hours, upon reasonable
advance notice, and without causing undue interference to the operation of the Company’s and its Subsidiaries’ business in
the Ordinary Course, in each case, as is necessary or reasonably required by the BAT Group in order to: (a) comply with the legal, regulatory
and/or tax obligations, returns or filings of the BAT Group; (b) review the Company’s and its Subsidiaries’ compliance with
the Transaction Agreements and (c) conduct reasonable due diligence on the Company and its Subsidiaries prior to and in connection with
any conversion (in whole or in part) of the Convertible Debenture to Common Shares. Notwithstanding the foregoing, in no situation shall
the Company be required to disclose to the Security Holder any information that (i) could adversely affect the attorney-client privilege
between the Company and its counsel or (ii) that the Company has reasonably determined could not be provided to a Director Nominee because
of conflict of interest concerns.

Section 3.2     Confidentiality.

		(1)	The Security Holder (and each other member of the BAT Group that receives Confidential Information of
the Company and/or any of its Subsidiaries), on the one hand, and the Company (and each of its Affiliates that receives Confidential Information
of the BAT Group), on the other hand, shall keep confidential and not disclose such Confidential Information in any manner whatsoever,
in whole or in part, except as permitted by this Section 3.2.

		(2)	Notwithstanding Section 3.2(1):

		(a)	the Security Holder may disclose Confidential Information to (i) each other member of the BAT Group and
(ii) its and their respective Representatives; provided, that prior to making any disclosure to a Representative, each such
Representative has been informed of the confidential nature of the Confidential Information and has been directed to hold the Confidential
Information in accordance with this Section 3.2; and, provided, further, that the Security Holder shall
remain responsible for the compliance by such other members of the BAT Group with the requirements of this Article 3 in the
event of a permitted assignment pursuant to Section 10.15(2) hereof;

     

    	 	- 15 -	 

    

 

		(b)	the Company may disclose Confidential Information to (i) each of its Subsidiaries and (ii) its and their
respective Representatives; provided, that prior to making any disclosure to a Representative, each such Representative
has been informed of the confidential nature of the Confidential Information and has been directed to hold the Confidential Information
in accordance with this Section 3.2; and, provided, further, that the Company and shall remain responsible
for the compliance by each of its Subsidiaries with the requirements of this Article 3; and

		(c)	the Security Holder (and each other member of the BAT Group that receives Confidential Information of
the Company and/or any of its Subsidiaries), on the one hand, and the Company (and each of its Subsidiaries that receives Confidential
Information of the BAT Group), on the other hand, shall use commercially reasonable efforts to cause each of its Representatives that
receives Confidential Information to observe the terms of this Section 3.2 in respect thereof; provided, that the Security
Holder will remain liable for any damages arising out of an failure by a prospective purchaser of Common Shares or Convertible Securities
from the Security Holder to keep such Confidential Information confidential in accordance with the provisions of this Section 3.2
unless such prospective purchaser has entered into a confidentiality agreement enforceable by the Company.

		(3)	The disclosure restrictions contained in Section 3.2(1) do not apply to disclosure that is
required by Law, any Order or any other legally binding document discovery requests. Prior to making any such disclosure, the applicable
Party that received Confidential Information (or which Party’s Subsidiary, Affiliate and/or Representative received Confidential
Information, as applicable) shall, to the extent not prohibited by the Law, Order or legally binding request: (a) give the other Party
prompt written notice of the requirement and the proposed content of any disclosure; and (b) at the other Party’s request and expense,
co-operate with the other Party in limiting the extent of the disclosure and in obtaining an appropriate protective order or pursuing
such legal action, remedy or assurance as the other Party deems necessary to preserve the confidentiality of the Confidential Information.
If a protective order or other remedy is not obtained or the other Party fails to waive compliance with Section 3.2(1), the
applicable Party that received Confidential Information (or which Party’s Subsidiary, Affiliate and/or Representative received Confidential
Information, as applicable) may disclose only that portion of the Confidential Information that it is required to disclose and exercise
commercially reasonable efforts to obtain reliable assurance that confidential treatment is given to the Confidential Information disclosed.

		(4)	For the avoidance of doubt, the disclosure restrictions contained in Section 3.2(1) do not
apply to disclosure that is made by a Party with the prior written consent of the other Party.

Article 4

BAT GROUP REPRESENTATIVE

Section 4.1     BAT
Group Representative.

		(1)	The Security Holder (for and on behalf of the BAT Group Permitted Holders), hereby appoints Juan Palacios
as its representative (together with any replacement representative appointed in accordance with this Section 4.1, the “BAT
Group Representative”) to act in its name and on its and their behalf:

		(a)	with respect to all matters relating to this Agreement, including exercising any rights of the BAT Group
Permitted Holders under this Agreement, executing and delivering any amendment, restatement, supplement or modification to or of this
Agreement, and any waiver of any claim or right arising out of this Agreement; and

		(b)	in general, to do all other things and to perform all other acts, including executing and delivering all
agreements, certificates, receipts, instructions and other instruments, contemplated by, or deemed advisable in connection with, this
Agreement.

     

    	 	- 16 -	 

    

 

		(2)	The Company will be entitled to rely upon any document or other instrument delivered by the BAT Group
Representative as being authorized or directed to be delivered by each of the BAT Group Permitted Holders, and the Company will not be
liable to the BAT Group Permitted Holders for any action taken or omitted to be taken based on such reliance.

		(3)	The BAT Group Permitted Holders shall be entitled to replace the BAT Group Representative at any time,
and from time to time, by delivering a written notice to the Company signed by each BAT Group Permitted Holder that is at the applicable
time a Company Shareholder.

Article 5

PRE-EMPTIVE RIGHT AND TOP-UP RIGHT

Section 5.1     Pre-Emptive
Right.

		(1)	In connection with any Distribution following the conversion of the Convertible Debenture into Common
Shares (in whole or in part), all or any of the BAT Group Permitted Holders shall have the right, but not the obligation (the “Pre-Emptive
Right”), exercisable in accordance with Section 5.1(3), to subscribe for up to an aggregate number of Distributed
Securities, on the same terms and conditions as all other participants in the Distribution (including the same price but, in each case,
excluding any underwriting commissions and discounts, to the extent not payable by the Company in relation to the securities issued on
the exercise of the Pre-Emptive Right, it being agreed that the Company shall use its commercially reasonable efforts to have such charges
not apply to the BAT Group Permitted Holders), mutatis mutandis, determined in accordance with the following formula:

A = B X C

For purposes of the foregoing formula, the following
definitions shall apply:

		A	means the aggregate number of Distributed Securities for which the BAT Group Permitted Holders have the
right to subscribe pursuant to the Pre-Emptive Right, expressed as a positive number;

		B	means the Partially Diluted Ownership Percentage of the BAT Group Permitted Holders, together with any
joint actors, calculated as of immediately prior to the closing of the Distribution (for greater certainty, expressed for purposes of
this formula as a number - e.g., 19.9% shall be expressed as 0.1999), subject to a limit of 19.9%; and

		C	means the aggregate number of Distributed Securities to be issued in connection with the Distribution
(assuming the conversion, exercise and/or exchange of any Convertible Securities issued pursuant thereto, if applicable), expressed as
a positive number.

		(2)	The Company shall deliver to the BAT Group Representative a notice in writing, as soon as practicable
following a determination by the Company to effect a Distribution and in no event less than 5 Business Days prior to closing of any proposed
Distribution (a “Distribution Notice”), which Distribution Notice shall: (a) specify the total number and type of Distributed
Securities which are being offered in the Distribution, to the extent known; (b) specify the rights, privileges, restrictions, terms and
conditions of such Distributed Securities; (c) specify the price at which the Distributed Securities are being offered in the Distribution,
to the extent known; (d) specify the maximum number of Distributed Securities for which the BAT Group Permitted Holders have the right
to subscribe pursuant to Section 5.1(1) and the aggregate subscription price therefor, to the extent known; (e) specify the
date (which shall not be less than 5 Business Days after the date on which the Distribution Notice is delivered) on which the Distribution
is to be completed; (f) state the reasons for the issuance of the Distributed Securities; and (g) specify the resulting dilution to the
BAT Group Permitted Holders if pre-emptive rights are not exercised, to the extent known.

     

    	 	- 17 -	 

    

 

		(3)	The BAT Group Permitted Holders shall have the right, exercisable by the BAT Group Representative (for
and on behalf of the BAT Group Permitted Holders) within 3 Business Days after receipt by the BAT Group Representative of a Distribution
Notice pursuant to Section 5.1(2), by delivering a subscription notice to the Company (the “Pre-Emptive Right Subscription
Notice”) setting out the number of Distributed Securities for which each applicable BAT Group Permitted Holder wishes to subscribe.

		(4)	In the event that the Company expects to complete the applicable Distribution and the BAT Group Representative
has delivered a Pre-Emptive Right Subscription Notice, no later than three Business Days prior to the expected closing date thereof, the
Company shall deliver a written notice to the BAT Group Representative confirming: (a) the expected closing date thereof; and (b) the
number of Distributed Securities allocated to the applicable BAT Group Permitted Holders and the aggregate subscription price therefor.
The BAT Group Representative (for and on behalf of the BAT Group Permitted Holders) shall, on or prior to the closing date of the Distribution,
deliver or cause to be delivered to the Company (or as the Company may otherwise direct) a certified cheque, bank draft or wire transfer
of immediately available funds in the amount of the aggregate subscription price for the Distributed Securities allocated to the BAT Group
Permitted Holders, and the Company shall issue, or shall cause the issuance of, such Distributed Securities to the applicable BAT Group
Permitted Holders concurrently with the closing of the Distribution.

		(5)	The BAT Group Permitted Holders shall have the right to the Pre-Emptive Right set forth in this Section
5.1 from the date hereof through the date on which the Partially Diluted Ownership Percentage of the BAT Group Permitted Holders falls
below 10%.

Section 5.2     Top-Up
Right.

		(1)	In connection with any Top-Up Exempt Distribution in respect of which the BAT Group Representative (for
and on behalf of the BAT Group Permitted Holders) did not deliver a Pre-Emptive Right Subscription Notice pursuant to Section 5.1(3)
prior to the execution of a definitive bought deal letter in respect thereof, in each case following conversion of the Convertible Debenture
into Common Shares (in whole or in part), all or any of the BAT Group Permitted Holders shall have the right, but not the obligation (the
“Top-Up Right”), exercisable in accordance with Section 5.2(3), to subscribe for up to an aggregate number
of Common Shares and/or Convertible Securities, as applicable, on the same terms and conditions as all other participants in the Top-Up
Exempt Distribution (including for any Top-Up Exempt Distribution, at the same price or, if such price is not permitted pursuant to applicable
Securities Laws or stock exchange rules, at the lowest price permitted thereunder for a private placement at such time, but excluding
any underwriting commissions and discounts to the extent not payable by the Company in relation to the securities issued on the exercise
of the Top-Up Right, it being agreed that the Company shall use its commercially reasonable efforts to have such charges not apply to
the BAT Group Permitted Holders), mutatis mutandis, determined in accordance with the following formula:

A = [B / (1 - C)] - B

For purposes of the foregoing formula,
the following definitions shall apply:

		A	means the aggregate number of Common Shares and/or Convertible Securities for which the BAT Group Permitted
Holders have the right to subscribe pursuant to the Top-Up Right, expressed as a positive number;

		B	means the aggregate number of Common Shares and/or Convertible Securities issued in connection with the
Top-Up Exempt Distribution, expressed as a positive number; and

		C	means the Partially Diluted Ownership Percentage of the BAT Group Permitted Holders, together with any
joint actors, calculated as of immediately prior to the closing of the Top-Up Exempt Distribution (for greater certainty, expressed for
purposes of this formula as a number - e.g., 19.9% shall be expressed as 0.1999), subject to a limit of 19.9%.

     

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		(2)	Concurrently with and, in any event, no later than two Business Days following:

		(a)	each six month period following the time of initial conversion of the Convertible Debenture into Common
Shares (in whole or in part); or

		(b)	if the Partially Diluted Ownership Percentage of the BAT Group Permitted Holders is reduced by more than
1% in the aggregate solely as a result of one or more Top-Up Exempt Distributions contemplated in Section 5.2(1) that have
been completed since the end of the most recent calendar quarter, the closing of the most recent Top-Up Exempt Distribution; or

		(c)	if applicable Securities Laws do not permit the exercise in full of the Top-Up Right until the passage
of a prescribed period of time, the later of: (i) the time implied by (a) and (b) above; and (ii) 20 Business Days prior to the expiry
of such prescribed period of time, as applicable,

the Company shall deliver to the BAT Group
Representative a notice (“Top-Up Notice”), which Top-Up Notice shall: (A) specify the total number and type of Common
Shares and/or Convertible Securities which were issued in connection with the Top-Up Exempt Distribution, as applicable; (B) specify the
rights, privileges, restrictions, terms and conditions of such Common Shares and/or Convertible Securities; (C) specify the price at which
such Common Shares and/or Convertible Securities were issued; (D) specify the maximum number of Common Shares and/or Convertible Securities
for which the BAT Group Permitted Holders have the right to subscribe pursuant to Section 5.2(1) and the aggregate subscription
price therefor; (E) in the case of a Top-Up Exempt Distribution, state with reasonable supporting details the specific clause of the definition
of “Top-Up Exempt Distribution” hereunder applicable thereto; and (F) specify the resulting dilution to the BAT Group Permitted
Holders if Top-Up Rights are not exercised.

		(3)	The BAT Group Permitted Holders shall have the right, exercisable by the BAT Group Representative (for
and on behalf of the BAT Group Permitted Holders) within 30 Business Days after receipt by the BAT Group Representative of a Top-Up Notice
pursuant to Section 5.2(2), by delivering a subscription notice to the Company (the “Top-Up Right Subscription Notice”)
setting out: (a) the number of Common Shares and/or Convertible Securities for which the BAT Group Permitted Holders wish to subscribe;
and (b) the desired closing date for the issuance of such Common Shares and/or Convertible Securities (which date shall not be earlier
than five Business Days after receipt by the Company of the Top-Up Right Subscription Notice and not earlier than, if applicable, the
passage of the prescribed period of time referenced in Section 5.2(2)).

		(4)	The BAT Group Representative (for and on behalf of the BAT Group Permitted Holders) shall, on or prior
to the desired closing date for the issuance of the Common Shares and/or Convertible Securities set out in the Top-Up Right Subscription
Notice, deliver or cause to be delivered to the Company (or as the Company may otherwise direct) a certified cheque, bank draft or wire
transfer of immediately available funds in the amount of the aggregate subscription price in respect of such Common Shares and/or Convertible
Securities, and the Company shall issue, or shall cause the issuance of, such Common Shares and/or Convertible Securities to the applicable
BAT Group Permitted Holders on the desired closing date for such issuance as set out in the Top-Up Right Subscription Notice.

		(5)	The BAT Group Permitted Holders shall have the right to the Top-Up Right set forth in this Section
5.2 from the date hereof through the date on which the Partially Diluted Ownership Percentage of the BAT Group Permitted Holders falls
below 10%.

     

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Section 5.3     Required
Approvals.

In the event that the approval
of the TSX, any Governmental Authority or other applicable stock exchange on which the Common Shares are listed is required in connection
with (1) any exercise by the BAT Group Representative (for and on behalf of the BAT Group Permitted Holders) of the Pre-Emptive Right
or the Top-Up Right, or (2) any issuance of Common Shares and/or Convertible Securities by the Company or any of its Subsidiaries to the
BAT Group Permitted Holders pursuant thereto, the Company shall use its commercially reasonable efforts to obtain any such approval as
promptly as practicable.

Article 6

REGISTRATION RIGHTS

Section 6.1     Demand
Registration Rights.

		(1)	At any time and from time to time from and after the Lock-Up Period, the BAT Group Permitted Holders,
as a group, may, subject to the limitations set forth in this Article 6, require the Company to file a Prospectus under applicable
Securities Laws and take such other steps as may be necessary to facilitate a secondary offering in Canada of all or any portion of the
Registrable Securities held by the BAT Group Permitted Holders (a “Demand Registration”), by giving written notice
of such Demand Registration to the Company (the “Initiating Notice”).

		(2)	The Company shall, subject to the limitations set forth in this Article 6 and applicable Securities
Laws, use commercially reasonable efforts to as expeditiously as reasonably practicable, but in any event no more than 60 days after the
Company’s receipt of the Initiating Notice, prepare and file a preliminary Prospectus under applicable Securities Laws and promptly
thereafter take such other steps as may be necessary in order to effect the Prospectus Distribution in Canada of all or any portion (as
may be reduced pursuant to Section 6.3) of the Registrable Securities of the BAT Group Permitted Holders requested to be included
in such Demand Registration. The Company and the BAT Group Permitted Holders shall cooperate in a timely manner in connection with any
such Prospectus Distribution and the procedures in Schedule A shall apply to such Prospectus Distribution.

		(3)	The Company shall not be obliged to effect a Demand Registration:

		(a)	at the request of the BAT Group Permitted Holders in any 12 month period after having complied with one
Demand Registration request from the BAT Group Permitted Holders during such 12 month period pursuant to this Section 6.1;

		(b)	after having complied with three Demand Registration requests from the BAT Group Permitted Holders in
total under this Agreement;

		(c)	in the event the Board reasonably determines in its good faith judgment that either: (A) the effect of
the filing of a Prospectus would impede the ability of the Company to consummate a pending or proposed material financing, acquisition,
corporate reorganization, merger or other material transaction involving the Company or would have a material adverse effect on the business
of the Company; or (B) there exists at the time material non-public information relating to the Company the disclosure of which would
be detrimental to the Company (each of (A) and (B) being a “Valid Business Reason”), then in either case, the Company’s
obligations under this Section 6.1 will be deferred for a period of not more than 90 days from the date of receipt of the
Initiating Notice; provided, however, that: (i) the Company shall give written notice to the BAT Group’s Representative: (1) of
its determination to postpone filing of the Prospectus and, subject to compliance by the Company with applicable Securities Laws, of the
facts giving rise to the Valid Business Reason; and (2) of the time at which it determines the Valid Business Reason to no longer exist;
and (ii) the Company shall not qualify for public distribution any securities offered by the Company for its own account during such period;

     

    	 	- 20 -	 

    

 

		(d)	if the anticipated gross aggregate offering price of the Registrable Securities to be qualified in connection
with such Demand Registration, including the value of any Common Shares which may be included in the Prospectus Distribution pursuant
to Section 6.2, is less than $25,000,000; or

		(e)	until the date that is 90 days after the date on which a receipt was issued for a Prospectus for securities
offered by the Company, provided that the Company has complied with its obligations pursuant to Section 6.2 in connection
with the Prospectus Distribution relating to such Prospectus.

		(4)	An Initiating Notice shall:

		(a)	specify the number of Registrable Securities that the BAT Group Permitted Holders intend to offer and
sell;

		(b)	express the intention of the BAT Group Permitted Holders to offer or cause the offering of such Registrable
Securities;

		(c)	describe the nature or methods of the proposed offer and sale thereof and the provinces and/or territories
of Canada in which such offer shall be made;

		(d)	contain the undertaking of the BAT Group Permitted Holders to provide all such information regarding its
holdings and the proposed manner of distribution thereof as may be required in order to permit the Company to comply with all Securities
Laws; and

		(e)	specify whether such offer and sale shall be made by an underwritten offering.

		(5)	In the case of an underwritten public offering initiated pursuant to this Section 6.1, the BAT
Group Permitted Holders shall have the right to select the managing underwriter or underwriters to effect the Prospectus Distribution
in connection with such Demand Registration, provided, however, that such selection shall also be satisfactory to the Company, acting
reasonably. The Company shall have the right to retain counsel of its choice to assist it in fulfilling its obligations under this Article
6.

		(6)	The Company shall be entitled to include Common Shares which are not Registrable Securities in any Demand
Registration. Notwithstanding the foregoing, if the managing underwriter or underwriters shall impose a limitation on the number or kind
of securities which may be included in any such Prospectus Distribution because, in its reasonable judgment, the inclusion of securities
requested to be included in such Prospectus Distribution exceeds the number of securities which can be sold in an orderly manner in such
offering within a price range reasonably acceptable to the BAT Group Permitted Holders (the “Minimum Price”), then
the BAT Group Permitted Holders shall be obligated to include in such Prospectus Distribution such portion of the Common Shares that have
been requested to be included in such Prospectus Distribution as is determined in good faith by such managing underwriter or underwriters
in the priority provided in Section 6.3(1)(b).

		(7)	In the case of an underwritten Demand Registration, the BAT Group Permitted Holders and its representatives
may participate with the Company and its representatives in the negotiation of the terms of any underwriting agreement. Such participation
in, and the Company’s completion of, the underwritten Demand Registration is conditional upon each of the BAT Group Permitted Holders
and the Company agreeing that the terms of any underwriting agreement are satisfactory to it, in its reasonable discretion.

		(8)	The Company shall not sell, offer to sell, announce any intention to sell, grant any option for the sale
of, or otherwise dispose of any Common Shares or securities convertible into Common Shares other than pursuant to the Company’s
equity incentive plans or other plans to purchase Common Shares or any other securities in favour of the management, directors, employees
or consultants of the Company, to acquire securities of the Company, whether for its own account or for the account of another securityholder,
from the date of an Initiating Notice until such date that is not later than 90 days from the closing of the sale of the Registrable Securities
in accordance with a Demand Registration (unless the BAT Group Permitted Holders withdraw its request for qualification of its Registrable
Securities pursuant to such Demand Registration in accordance with Section 6.5(1)).

     

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Section 6.2     Piggyback
Registration Rights.

If, at any time and from
time to time from and after the date hereof, the Company proposes to make a Prospectus Distribution, whether for its own account or for
the account of any Company Shareholders (or both), the Company shall, at that time, promptly give the BAT Group Representative written
notice (the “Piggyback Notice”) of the proposed Prospectus Distribution, which Piggyback Notice shall include the proposed
timing of, and the price and number of Common Shares subject to, the proposed Prospectus Distribution. Upon the written request of the
BAT Group Representative to the Company specifying that the BAT Group Permitted Holders wish to include all or a specified portion of
the Registrable Securities held by the BAT Group Permitted Holders (each, a “Piggyback Shareholder”) in the Prospectus
Distribution, which request must be delivered by the BAT Group Representative to the Company within 20 Business Days after receipt of
the Piggyback Notice (provided, that if the Company proposes to effect the Prospectus Distribution as a Bought Deal Distribution,
the BAT Group Representative shall undertake commercially reasonable efforts to respond consistent with the customary time periods for
bought deal transactions), the Company will cause the Registrable Securities requested to be qualified by such Piggyback Shareholders
to be included in the Prospectus Distribution (a “Piggyback Registration”), and the procedures in Schedule A
shall apply to any Piggyback Registration.

Section 6.3     Underwriters’
Cutback.

		(1)	If, in connection with a Demand Registration or a Piggyback Registration, the managing underwriter or
underwriters shall impose a limitation on the number or kind of securities which may be included in any such Prospectus Distribution because,
in its reasonable judgment, the inclusion of securities requested to be included in such offering exceeds the number of securities which
can be sold in an orderly manner in such offering within the Minimum Price (an “Underwriters’ Cutback”), then
the Company shall be obligated to include in such Prospectus Distribution such securities as is determined in good faith by such managing
underwriter or underwriters in the following priority:

		(a)	in the case of a Prospectus Distribution which was initiated by the Company and not any securityholder
(a “Company Initiated Prospectus Distribution”):

		(i)	first, such securities offered by the Company for its own account; and

		(ii)	second, if there are any additional securities that may be underwritten at no less than the Minimum Price
after allowing for the inclusion of all of the securities required under (i) above, such Registrable Securities requested to be qualified
by the BAT Group Permitted Holders, provided that if any Registrable Securities requested to be qualified by the BAT Group Permitted Holders
are not otherwise included in such Prospectus Distribution, such Registrable Securities that are not so included shall be included, to
the fullest extent possible, in an over-allotment option which shall be granted to the underwriters in connection with such Prospectus
Distribution for such amount of securities requested to be qualified by the BAT Group Permitted Holders that were not otherwise included
in such Prospectus Distribution, up to an aggregate maximum number as is equal to 15% of the securities referred to in Section 6.3(1)(a)(i);
and

     

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		(b)	in the case of a Prospectus Distribution other than a Company Initiated Prospectus Distribution:

		(i)	first, such Registrable Securities requested to be qualified by the BAT Group Permitted Holders; and

		(ii)	second, if there are any additional Common Shares that may be underwritten at no less than the Minimum
Price after allowing for the inclusion of all of the Registrable Securities required under (i) above, such Common Shares offered by the
Company for its own account, provided that, if any Common Shares requested to be qualified by the Company are not otherwise included in
the Prospectus Distribution, such Common Shares that are not so included shall be included in an over-allotment option which shall be
granted to the underwriters in connection with such Prospectus Distribution for such amount of Common Shares requested to be qualified
by the Company that were not otherwise included in such Prospectus Distribution, up to an aggregate maximum number as is equal to 15%
of the Registrable Securities referred to in Section 6.3(1)(a)(i).

Section 6.4     Registered
Distribution in the United States

If the Company proposes
to file a registration statement for the distribution of Common Shares (or American depositary receipts in respect thereof) to the public
in the United States (or otherwise proposes to cause the Common Shares (or American depositary receipts in respect thereof) to be listed
on a United States national securities exchange or inter-dealer quotation system), the Parties shall, prior to such distribution or listing
taking place, supplement this Agreement so as to provide the BAT Group Permitted Holders with registration rights enabling Distribution
of Registrable Securities to the public in the United States that are substantially equivalent to the registration rights provided under
this Agreement, including, without limitation, demand registration rights and piggyback registration rights upon terms and conditions
substantially equivalent to the terms and conditions set forth in Section 6.1 and Section 6.2, respectively, and
provisions relating to payment of expenses and indemnification upon terms and conditions substantially equivalent to the terms and conditions
set forth in Section 6.6 and Article 7, respectively.

Section 6.5     Withdrawal
of Registrable Securities.

		(1)	Each Participating Shareholder will have the right to withdraw its request for inclusion of all or any
portion of its Registrable Securities in any Demand Registration or Piggyback Registration pursuant to Section 6.1 or Section 6.2,
as applicable, by the BAT Group Representative (for and on behalf of the applicable Participating Shareholder(s)) providing written notice
to the Company of such request to withdraw; provided, that:

		(a)	subject to Section 6.5(2), such written notice must be delivered by the BAT Group Representative
prior to the execution of the definitive bought deal letter or underwriting agreement, as applicable, with respect to such Prospectus
Distribution; and

		(b)	such withdrawal will be irrevocable and, after making such withdrawal, such Participating Shareholder
will no longer have any right to include such withdrawn Registrable Securities in the Prospectus Distribution pertaining to which such
withdrawal was made.

		(2)	In the event a Participating Shareholder validly withdraws all of its Registrable Securities from a Demand
Registration or Piggyback Registration, as applicable, in accordance with Section 6.3(1) prior to the filing of a Prospectus in
respect of the applicable Prospectus Distribution, as applicable, such Participating Shareholder shall be deemed not to have participated
in or requested such Demand Registration or Piggyback Registration, as applicable; provided, that this provision shall only apply to one
such withdrawal in a calendar year and thereafter, subsequent withdrawals in such calendar year will count as an exercise of the Demand
Registration or Piggyback Registration, as applicable.

     

    	 	- 23 -	 

    

 

		(3)	Notwithstanding Section 6.5(1)(a), if a Participating Shareholder becomes aware of a material
adverse change in the condition, business and/or prospects of the Company and its Subsidiaries at any time prior to the closing of the
applicable Prospectus Distribution to which a Demand Registration or Piggyback Registration, as applicable, relates, such Participating
Shareholder will have the right to withdraw its request for inclusion of all or any portion of its Registrable Securities in such Demand
Registration or Piggyback Registration, as applicable, providing written notice to the Company of such request to withdraw at any time
prior to the closing of such Prospectus Distribution. If a Participating Shareholder validly withdraws its request for inclusion of all
of its Registrable Securities from a Demand Registration or Piggyback Registration, as applicable, such Participating Shareholder shall
be deemed not to have participated in or requested such Demand Registration or Piggyback Registration, as applicable.

		(4)	The Company shall, and shall cause its Subsidiaries to, provide notice in writing to the BAT Group Representative
promptly upon becoming aware of any material adverse change in the condition, business and/or prospects of the Company and/or any of its
Subsidiaries in order to enable the Participating Shareholders to properly exercise their withdrawal rights pursuant to Section 6.5(2).

Section 6.6     Expenses.

All fees and expenses incurred
in connection with a Demand Registration or Piggyback Registration pursuant to Section 6.1 or Section 6.2, as
applicable, (excluding underwriters’ discounts and commissions attributable to the Participating Shareholders’ Registrable
Securities sold in the Prospectus Distribution, if any, applicable transfer taxes attributable to the Participating Shareholders’
Registrable Securities sold in the Prospectus Distribution, if any, and all fees and disbursements of counsel to the Participating Shareholders)
shall be borne by the Company, including: (1) Canadian Securities Regulators, the TSX, registration, listing and filing fees relating
to the Registrable Securities; (2) fees and expenses of compliance with Securities Laws; (3) printing and copying expenses; (4) messenger
and delivery expenses; (5) expenses incurred in connection with any road show and marketing activities; (6) fees and disbursements of
counsel to the Company; (7) fees and disbursements of all independent public accountants (including the expenses of any audit and/or “comfort”
letter), and fees and expenses of any other special experts retained by or on behalf of the Company; (8) translation expenses; and (9)
any other fees and disbursements of underwriters customarily paid by issuers or sellers of securities (collectively, the "Qualification
Expenses"). If a Distribution is not completed solely as a result of a default by the Participating Shareholder under this Agreement
or under an underwriting agreement or other enforceable agreement with the underwriters in respect of the Distribution, all Qualification
Expenses shall be borne by the Participating Shareholder.

Article 7

DUE DILIGENCE; INDEMNIFICATION

Section 7.1     Preparation;
Reasonable Investigation.

In connection with the preparation
and filing of any Prospectus in connection with a Demand Registration or Piggyback Registration pursuant to Section 6.1 or
Section 6.2, as applicable, the Company shall give the Participating Shareholders and the underwriter(s) of such Prospectus
Distribution, if any, and their respective counsel, auditors and other representatives, the opportunity to participate in the preparation
of the Prospectus and all related documents (including each amendment thereof or supplement thereto), and shall insert therein such material
furnished to the Company in writing, which in the reasonable judgment of the Company and its counsel should be included, and shall give
them such reasonable and customary (1) access to the Company’s books and records, (2) opportunity to discuss the business of the
Company and its Subsidiaries with its officers and auditors, and (3) opportunity to conduct all due diligence which the underwriter(s),
if any, and their respective counsel may reasonably require in order to conduct an investigation to enable such underwriter(s) to execute
any certificate required to be executed by it or them for inclusion in the Prospectus and all related documents; provided, that
the underwriter(s), if any, agree to maintain the confidentiality of such information in accordance with Section 3.2.

     

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Section 7.2     Indemnification
by the Company.

		(1)	In connection with any Demand Registration or Piggyback Registration pursuant to Section 6.1
or Section 6.2, as applicable, the Company will indemnify and hold harmless, to the fullest extent permitted by Law, each
Participating Shareholder and its Affiliates, and each of their respective directors, officers, employees, agents, shareholders, partners
and underwriters, from and against any loss, liability, claim, damage and expense whatsoever (including legal fees and expenses), including
any amounts paid in settlement of any investigation, order, litigation, proceeding or claim, joint or several, incurred, arising out of
or based upon any untrue statement or alleged untrue statement of a material fact contained in any Prospectus or any amendment or supplement
thereto, including all documents incorporated therein by reference, or any omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading
or as incurred, arising out of or based upon any failure to comply with Securities Laws (other than any failure to comply with Securities
Laws by such Participating Shareholder or underwriter, as applicable); provided, that the Company shall not be liable under
this Section 7.2(1) for any settlement of any action effected without its written consent (which consent shall not be unreasonably
withheld, conditioned or delayed); and, provided, further, that the indemnity provided for in this Section 7.2(1)
in respect of a Participating Shareholder or underwriter shall not apply to any loss, liability, claim, damage or expense to the extent
incurred, arising out of or based upon any untrue statement or omission, or alleged untrue statement or omission, made in reliance upon
and in conformity with written information furnished to the Company by such Participating Shareholder or underwriter stating that such
information is being provided for use in the Prospectus. Any amounts advanced by the Company to an Indemnified Person pursuant to this
Section 7.2(1) as a result of such losses will be returned to the Company if it is finally determined by a court of competent jurisdiction
in a judgment not subject to appeal or final review that such Indemnified Person was not entitled to indemnification by the Company hereunder.
For greater certainty, the rights to indemnification provided in this Section 7.2(1) may be exercised by each Participating Shareholder
individually and separately from the rights to indemnification of the other Participating Shareholders provided in this Section 7.2(1),
and shall not be affected in any way by the exercise, non-exercise or waiver, in whole or in part, by any other Participating Shareholder
of such rights to indemnification.

		(2)	In connection with any Demand Registration or Piggyback Registration pursuant to Section 6.1 or
Section 6.2, as applicable, the Participating Shareholder will indemnify and hold harmless, to the fullest extent permitted by
Law, the Company and its Affiliates, and each of their respective directors, officers, employees, agents, shareholders, partners and underwriters,
from and against any loss, liability, claim, damage and expense whatsoever (including legal fees and expenses), including any amounts
paid in settlement of any investigation, order, litigation, proceeding or claim, joint or several, incurred, arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained in any Prospectus or any amendment or supplement thereto,
including all documents incorporated therein by reference, or any omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading
or as incurred, arising out of or based upon any failure to comply with Securities Laws (other than any failure to comply with Securities
Laws by the Company or such underwriter, as applicable), in each case to the extent but only to the extent, that such loss, claim, damage,
cost, expense or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission
made in such Prospectus, or amendment or supplement thereto, caused by information relating solely to the Participating Shareholder and
its Affiliates in reliance upon and in conformity with written information furnished by or on behalf of the Participating Shareholder
to the Company in writing specifically for use therein; provided, that such Participating Shareholder shall not be liable
under this Section 7.2(2) for any settlement of any action effected without its written consent (which consent shall not be unreasonably
withheld, conditioned or delayed). Any amounts advanced by such Participating Shareholder to an Indemnified Person pursuant to this Section
7.2(2) as a result of such losses will be returned to such Participating Shareholder if it is finally determined by a court of competent
jurisdiction in a judgment not subject to appeal or final review that such Indemnified Person was not entitled to indemnification by such
Participating Shareholder hereunder. The Participating Shareholder shall reimburse any legal or other expenses reasonably incurred by
the Company or any such director or officer in connection with investigating or defending any such loss, claim, damage, judgment, fine,
penalty, charge, liability or action. In no event shall any indemnification obligation by the Participating Shareholder hereunder exceed
the net aggregated proceeds received by the Participating Shareholder from the sale of Registerable Securities covered by such Prospectus.

 

     

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Section 7.3     Defence
of Claim.

Each Person entitled to
indemnification under Section 7.2 (each, an “Indemnified Person”) shall give or cause to be given written notice
to the indemnifying party promptly after such Indemnified Person becomes aware of any claim in respect of which indemnification may be
sought under Section 7.2; provided, that the failure or delay to so notify the indemnifying party shall not relieve the
indemnifying party from any liability which it may have to the Indemnified Person pursuant to Section 7.2 except to the extent
that the indemnifying party is prejudiced by such failure or delay, as applicable. The indemnifying party shall assume the defence of
any claim, action or other proceeding giving rise to any such claim for indemnification, including the engagement of counsel selected
by the indemnifying party (to the reasonable satisfaction of the Indemnified Person) and the payment of all costs, fees and expenses relating
thereto. The Indemnified Person will have the right to engage its own counsel in connection with any such claim, action or proceeding,
at the expense of the Indemnified Person unless the engagement of such counsel is (1) authorized in writing by the indemnifying party
in connection with the defence of such claim, action or proceeding, (2) the indemnifying party shall not have engaged counsel to take
charge of the defence of such claim, action or proceeding in a reasonably timely manner, or (3) the Indemnified Person reasonably determines,
based on the advice of counsel, that there may be defences available to it which are different from, or in addition to or conflict with,
those available to the indemnifying party, that such claim, action or proceeding involves or could have an effect upon matters beyond
the scope of the indemnity provided hereunder or such claim, action or proceeding seeks an injunction or equitable relief against the
Indemnified Person or involves actual or alleged criminal activity (in which case the indemnifying party shall not have the right to direct
the defence of such claim, action or proceeding on behalf of the Indemnified Person), in any of which events the costs, fees and expenses
of such counsel will be borne by the indemnifying party; provided, that in no event shall the indemnifying party be required
to pay the costs, fees and expenses of more than one law firm as counsel for all Indemnified Persons pursuant to this Section 7.3,
unless in the reasonable judgment of any Indemnified Person a conflict of interest may exist between such Indemnified Person and any other
of such Indemnified Person with respect to such claim, action or proceeding. The indemnifying party shall not, in the defence of any claim,
action or proceeding assumed by the indemnifying party pursuant to this Section 7.3, except with the prior written consent
of each Indemnified Person (which may not be unreasonably withheld, conditioned or delayed), consent to the entry of any judgment, or
enter into any settlement, which does not include as an unconditional term thereof the giving by the claimant or plaintiff, as applicable,
to such Indemnified Person of a full and final release from all liability in respect to such claim, action or proceeding.

Section 7.4     Contribution.

If the indemnification provided
for in Section 7.2 is unavailable to a Person that would have been an Indemnified Person under Section 7.2 in
respect of any losses, liabilities, claims, damages and/or expenses referred to in this Article 7, then the indemnifying party
shall, in lieu of indemnifying such Indemnified Person, contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, liabilities, claims, damages and/or expenses in such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and such Indemnified Person, on the other hand, in connection with the statement or omission which
resulted in such losses, liabilities, claims, damages and/or expenses, as well as any other relevant equitable considerations; provided,
that the maximum amount of liability for such a Person who would have been an Indemnified Person shall be limited to an amount
equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by such Person from the sale of Registrable
Securities effected pursuant to the relevant Demand Registration or Piggyback Registration, as applicable. The relative fault will be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact, or the omission or
alleged omission to state a material fact, relates to information supplied by the indemnifying party or such Indemnified Person, and their
relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. The amount paid or
payable by a Person under this Section 7.4 as a result of the losses, liabilities, claims, damages and/or expenses referred
to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such Person in connection with any investigation
or proceeding. The Company and the Participating Shareholder agree that it would not be just and equitable if contribution pursuant to
this Section 7.4 were determined by pro rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to above in this Section 7.4.

     

    	 	- 26 -	 

    

 

Section 7.5     Survival.

The indemnification provided
for under this Article 7 will survive the expiration or termination of this Agreement, and will remain in full force and effect
regardless of any investigation made by or on behalf of any Indemnified Person, or any officer, director or controlling Person of such
Indemnified Person, and will survive any transfer of Common Shares and/or Convertible Securities held by such Indemnified Person or any
of its Affiliates.

Section 7.6     Participating
Shareholder as Trustee.

The Company hereby acknowledges
and agrees that, with respect to this Article 7, each Participating Shareholder is contracting on its own behalf and as agent
for the other Indemnified Persons referred to in this Article 7. In this regard, each Participating Shareholder will act as
trustee for such Indemnified Persons of the covenants of the Company under this Article 7 with respect to such Indemnified
Persons and accepts these trusts, and will hold and enforce those covenants, on behalf of such Indemnified Persons.

Article 8

OTHER COVENANTS

Section 8.1     Standstill.

		(1)	From the date hereof until the second anniversary of the date hereof, the Security Holder will not, and
will cause its Affiliates not to, directly or indirectly, whether individually or by acting jointly or in concert with any other Person,
without the express prior written consent of the Company:

		(a)	purchase, offer or agree to purchase any voting or equity securities of the Company or any of its Subsidiaries
that would result in ownership by the BAT Group Permitted Holders, together with any joint actors, of 19.9% or more of the voting or equity
securities of the Company or any of its Subsidiaries (or rights or interests in such voting or equity securities, including convertible
securities that, if exercised or converted, would result in ownership by the Security Holder or any of its Affiliates, whether acting
jointly or in concert with any other Person, of 19.9% or more of the voting or equity securities of the Company or any of its Subsidiaries),
calculated assuming conversion of the Convertible Securities held by the BAT Group Permitted Holders;

		(b)	enter into, offer, or agree to enter into any acquisition of, or other business combination involving,
the Company or any of its Subsidiaries;

		(c)	solicit or join in or in any way participate in a solicitation of proxies from the Company Shareholders
or otherwise attempt to influence the conduct of the Company Shareholders, other than in connection with the election of the Director
Nominees to the Board from time to time;

     

    	 	- 27 -	 

    

 

		(d)	make any public announcement with respect to any of the foregoing; or

		(e)	advise, assist or encourage any other Person to do, or take any action inconsistent with, any of the foregoing.

		(2)	The restrictions contained in Section 8.1(1) shall automatically lapse and be of no further
force or effect, and nothing contained in Section 8.1(1) or any other provision of this Agreement or any other Transaction
Agreement, shall prohibit any of the actions contained in Section 8.1(1) by the Security Holder or any of its Affiliates in
the event that, without any breach of Section 8.1(1) on the part of the Security Holder or any of its Affiliates the Company
publicly announces a transaction whereby a third party, together with any Persons acting jointly or in concert with such third party:
(i) has agreed to purchase, all of the issued and outstanding Common Shares of the Company; or (ii) has agreed to acquire substantially
all of the assets of the Company; provided, that, in each case, the Board publicly supports and/or approves the purchase,
offer, agreement or acquisition by such third party, as the case may be.

		(3)	For the avoidance of doubt, (i) nothing contained in Section 8.1(1) or any other provision
of this Agreement or any other Transaction Agreement shall prohibit or otherwise restrict the Security Holder or any of its Affiliates
from subscribing for and purchasing Common Shares from treasury; and (ii) the restrictions contained in Section 8.1(1) shall not
apply to the Security Holder acquiring Common Shares (x) in accordance with the Pre-Emptive Rights or Top-Up Rights set forth in Section 5.1
and Section 5.2 of this Agreement, (y) pursuant to an acquisition that does not constitute a take-over bid (exempt or otherwise),
or (z) by way of conversion of the Convertible Debenture (in whole or in part).

Section 8.2     Transfer
of Common Shares.

		(1)	From the date the Convertible Debenture is converted into Common Shares until the date that is 18 months
following the conversion date (the “Lock-Up Period”), the Security Holder shall not offer, pledge, sell, assign, transfer,
grant any option or contract to purchase, or otherwise dispose of (collectively, a “Transfer”), directly or indirectly,
Common Shares to any Person, other than:

		(a)	Transfers to Affiliates; provided, that the Security Holder shall remain responsible for
the covenants, agreements and obligations of the Security Holder under this Agreement notwithstanding any such Transfer and, following
such Transfer, such Affiliate shall also become responsible for the covenants, agreements and obligations of the Security Holder;

		(b)	Transfers: (i) by way of deposit under a bona fide take-over bid in respect of the Common Shares
made in compliance with Securities Laws; or (ii) in connection with a statutory plan of arrangement or other business combination involving
the Company;

		(c)	in the event that the Company and/or any of its Affiliates engage in any Restricted Activity (as defined
in the Convertible Debenture) or otherwise breaches any of the covenants set forth in this Agreement (including but not limited to the
covenants set forth in Section 8.3) and such breach is not cured within the applicable cure period set forth herein, Transfers
to any Person following ten Business Days’ prior written notice to the Company following expiration of such cure period to provide
the Company with an opportunity to identify a prospective purchaser of the Common Shares; or

		(d)	in the event that a change in Law or interpretation thereof gives rise to a reasonable prospect that the
Security Holder’s continued holding of Common Shares will be in breach of such Law, Transfers to any Person following ten Business
Days’ prior written notice to the Company to provide the Company with an opportunity to identify a prospective purchaser of the
Common Shares.

     

    	 	- 28 -	 

    

 

		(e)	For the avoidance of doubt, (i) the Security Holder will have the right but not the obligation to sell
any or all of its Common Shares to any purchaser identified by the Company in the ten Business Day period following notice from the Security
Holder to the Company in (c) above and (ii) the Company will shall use reasonable best efforts to maintain the confidentiality of any
potential sale by the Security Holder contemplated above.

Section 8.3     Compliance
Matters.

		(1)	From and after the date hereof, the Company shall and shall cause its Subsidiaries to:

		(a)	comply in all respects with applicable Cannabis Laws and in all material respects with all other applicable
Laws; and

		(b)	use commercially reasonable efforts to comply with the BAT Group’s Standards of Business Conduct
and International Marketing Principles in effect on the date of the Convertible Debenture (true, correct and complete copies of which
have been provided by or on behalf of the Security Holder to the Company prior to the date hereof), as may be amended in a manner acceptable
to the Company, acting reasonably.

Section 8.4     Certain
Protective Provisions.

		(1)	From and after the date hereof, the Company shall not and shall cause each of its Subsidiaries (as applicable)
not to, without the prior written consent of the BAT Group Representative:

		(2)	Adopt any plan or proposal for complete or partial liquidation, dissolution or winding-up of the Company
or any of its Subsidiaries (other (a) than dormant Subsidiaries or (b) a liquidation, dissolution or winding-up of any such entity in
connection with which all of such entity’s assets are transferred to the Company and/or one or more of its Subsidiaries), or reorganize,
make an assignment for the benefit of creditors or file a petition, answer or consent to seeking a reorganization, insolvency proceeding
or suffer any other bankruptcy event or commit to any of the foregoing;

		(3)	Create, issue or cause to be issued any class or series of equity or equity-linked securities that rank
senior to the Common Shares or have any rights attaching to them that are more favorable to the holder thereof than the rights attaching
to the Common Shares held by the Security Holder, including, without limitation, any rights with respect to voting, representation on
the Board, liquidation or other preference); and

		(4)	Voluntarily delist from any trading market (unless the Company is then concurrently listed on another
national exchange) or take any other action that would reasonably be expected to result in the Company ceasing to be listed on a national
exchange, other than in connection with a change of control of the Company.

Section 8.5     Reserved
Board Matters.

		(1)	From and after the date hereof, the Company shall not and shall cause each of its Subsidiaries not to
take any of the following actions without the requisite approval of the Board (or a Committee where applicable authority has been properly
so delegated):

		(2)	Issue, sell or grant any shares of its capital stock or other equity securities or voting interests, or
any securities or rights convertible into or exchangeable or exercisable for, or evidencing the right to subscribe for any shares of capital
stock or other equity or voting securities, other than (A) pursuant to the conversion of the Convertible Debenture or Equity Incentive
Plans, (B) the issue or grant of securities to the Company or another wholly-owned subsidiary of the Company, as applicable or (C) the
issue or grant of securities pursuant to the Gronk Agreement and MLB Subscription Agreement (each as defined in Disclosure Letter as defined
in and delivered pursuant to the Subscription Agreement);

     

    	 	- 29 -	 

    

 

		(3)	Redeem, purchase or otherwise acquire any of its outstanding shares of capital stock or other equity or
voting interests, or any rights, warrants or options to acquire any shares of its capital stock or other equity or voting interests;

		(4)	Establish a record date for, declare, set aside for payment or pay any dividend on, or make any other
distribution in respect of, any shares of its capital stock or other equity or voting interests other than dividends and distributions
made by Subsidiaries to the Company or other Subsidiaries, as applicable;

		(5)	Split, combine, subdivide or reclassify any shares of its capital stock or other equity or voting interests;

		(6)	Amend the Constating Documents in a manner that would adversely affect the Security Holder;

		(7)	Make any acquisition (including by plan of arrangement) of all or substantially all of the capital stock
or any other equity interest or all or substantially all of the assets of any other Person at a cost of greater than $5,000,000;

		(8)	Sell, license or lease to any Person, in a single transaction or series of related transactions, any of
its properties or assets, except (i) dispositions of inventory in the Ordinary Course and dispositions of obsolete, surplus or worn
out assets or assets that are no longer used or useful in the conduct of the business of the Company or any of its Subsidiaries, (ii) transfers
among the Company and its wholly-owned Subsidiaries, (iii) leases and subleases of immaterial real property owned by the Company
or its Subsidiaries, or (iv) non-exclusive licenses, in each case in the Ordinary Course;

		(9)	Sell, assign, lease, exclusively license, abandon or permit to lapse, transfer or otherwise dispose of
any intellectual property that is material to the Company and its Subsidiaries taken as a whole;

		(10)	Implement or adopt any material change in its financial accounting principles or its methods, other than
as may be required by GAAP or applicable Law;

		(11)	Incur, assume, endorse, guarantee or otherwise become liable for any indebtedness for borrowed money or
issue any debt securities or any rights to acquire any debt securities, except for (A) any indebtedness for borrowed money among
the Company and/or its wholly owned Subsidiaries or among wholly owned Subsidiaries of the Company, (B) guarantees by the Company
of indebtedness for borrowed money of wholly owned Subsidiaries of the Company or guarantees by wholly owned Subsidiaries of the Company
of indebtedness for borrowed money of the Company or any of its other wholly owned Subsidiaries, which indebtedness is incurred in compliance
with this clause (10) or is outstanding on the date hereof, (C) indebtedness incurred pursuant to the Convertible Debenture;

		(12)	Create, assume or permit to exist any lien on any material assets or property, other than (a) such liens
as existed on the date hereof, (b) liens imposed by any Governmental Authority for any Taxes, special assessments or other governmental
charges not yet due and payable or delinquent or which are being contested in good faith, (c) liens granted after the date hereof to secure
indebtedness for borrowed money approved by the Board, (d) statutory liens and deposits or pledges made in connection with, or to secure
payment of, worker's compensation, employment insurance, programs mandated under Law and for which appropriate accruals have been established
in accordance with GAAP; (e) undetermined or inchoate encumbrances imposed or permitted by Law and incurred in the Ordinary Course and
in the operation of real property, such as builder's liens, construction liens, materialmens' liens and other liens, privileges or other
charges of a similar nature that relate to obligations not due; (f) security given in the Ordinary Course to a public utility or any municipality
or governmental or public authority in connection with the operation of the business or the real property; (g) all permits, servitudes
and easements (including conservation easements and public trust easements, rights-of-way, road use agreements, covenants, conditions,
restrictions, reservations, licences, other surface agreements and other matters of record) and zoning by-laws and restrictions, ordinances
and other restrictions as to the use of real property;

     

    	 	- 30 -	 

    

 

		(13)	Settle any claim, assessment or dispute with respect to Taxes for an amount materially in excess of the
amount reserved in respect thereof;

		(14)	Commence, waive, release, compromise, pay, discharge, settle or satisfy any material claim, dispute or
litigation;

		(15)	Enter into any Equity Incentive Plan not in effect on the date hereof;

		(16)	Enter into any (a) material new line of business or (b) geographical markets unless the Company has received
an opinion of counsel stating that any such activity in any such geographical market is permissible under applicable Cannabis Laws;

		(17)	List any of the Company’s securities on a securities exchange other than the TSX; or

		(18)	Authorize any of, or agree or commit to do any of, the foregoing,

		(19)	provided, that, any matters previously approved by the Board (or a Committee where applicable authority
has been properly so delegated) after the date hereof shall not require any additional approval.

Section 8.6     Additional
Relationships

		(1)	The Parties acknowledge that the relationship between the Parties shall be a non-exclusive relationship
that allows each Party to independently carry out its own commercial activities and pursue third-party commercial partnerships; provided,
that, to the extent permitted under applicable Laws, neither Party will, without the prior written consent of the other Party,
invest in or participate in any joint venture with the other Party’s Competitors. Notwithstanding the foregoing, nothing shall preclude
a Party from entering into any transaction for the sale of all or substantially all of its equity securities with a competitor of the
other Party provided any such transaction is subject to the receipt of shareholder approval of the transacting party.

Article 9

REPRESENTATIONS AND WARRANTIES

Section 9.1     Representations
and Warranties.

Each Party represents and
warrants to the other Party that:

		(1)	it is duly formed and organized and validly existing under the Laws of its jurisdiction of incorporation,
and has the corporate power and capacity to own its assets, and to enter into and perform its obligations under this Agreement in accordance
with the terms hereof;

		(2)	this Agreement has been duly authorized, and duly executed and delivered by, such Party and constitutes
a legal, valid and binding obligation of such Party enforceable against such Party in accordance with its terms (assuming the due authorization,
execution and delivery thereof by the other Party), subject to all bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and similar Laws affecting creditors’ rights generally; and

     

    	 	- 31 -	 

    

 

		(3)	the execution, delivery and performance of this Agreement does not and will not contravene the provisions
of such Party’s constating or other organizational documents, or the provisions of any Contract to which such Party is a party or
by which such Party or any of its assets may be bound.

Article 10

GENERAL PROVISIONS

Section 10.1     No
Obligation to Finance.

None of the BAT Group Permitted
Holders shall have any obligation to provide any financing to the Company, its Subsidiaries or any of its or their respective Affiliates,
or otherwise to guarantee the fulfillment of any of their respective obligations to any other Person.

Section 10.2     Governing
Law and Jurisdiction.

This Agreement shall be
governed by, and construed and interpreted in accordance with, the Laws of the Province of Ontario and the federal Laws of Canada applicable
therein, without regard to conflict of Laws principles. Each Party irrevocably attorns and submits to the exclusive jurisdiction of the
Ontario courts situated in the City of Toronto (and appellate courts therefrom), and waives objection to the venue of any proceeding in
such court or that such court provides an inappropriate forum.

Section 10.3     Share
Buybacks.

The Company shall not, without
the prior written consent of the BAT Group Representative, acting reasonably, redeem, repurchase or otherwise acquire for cancellation,
or offer to redeem, repurchase or otherwise acquire for cancellation, any Common Shares (a “Share Buyback”), where
such Share Buyback would be reasonably likely to result in the BAT Group Permitted Holders beneficially owning and/or controlling, directly
or indirectly and assuming conversion of the Convertible Debenture in full, 20% or more of the voting rights attached to all of the issued
and outstanding Common Shares.

Section 10.4     All
Common Shares Subject to this Agreement.

The Security Holder (for
and on behalf of itself and each BAT Group Permitted Holder) agrees that it shall be bound by the terms of this Agreement with respect
to all Common Shares owned and/or controlled, directly or indirectly, by the Security Holder and each other BAT Group Permitted Holder
from time to time.

Section 10.5     Changes
in Capital of the Company.

At all times after the occurrence
of any event which results in a change to the Common Shares and/or Convertible Securities, this Agreement will forthwith be amended and
modified as necessary in order that it will apply with full force and effect, with appropriate changes, to all new securities into which
the Common Shares and/or Convertible Securities are so changed, and the Parties will execute and deliver a supplemental agreement giving
effect to and evidencing such necessary amendments and modifications.

Section 10.6     BAT
Group Permitted Holders Agreement to be Bound.

Each BAT Group Permitted
Holder that becomes a Company Shareholder or securityholder must concurrently with becoming a Company Shareholder or securityholder execute
and deliver to the Company a counterpart copy of this Agreement, or a written agreement in form and substance satisfactory to the Parties,
agreeing to be bound by this Agreement.

     

    	 	- 32 -	 

    

 

Section 10.7     Constating
Documents.

In the event of any conflict
or inconsistency between the terms of this Agreement, on the one hand, and the Constating Documents, on the other hand, the terms of this
Agreement shall prevail to the extent of the conflict or inconsistency.

Section 10.8     Term
and Termination.

		(1)	This Agreement shall come into force and effect as of the date set out on the first page of this Agreement
and, except as provided below, shall continue in full force and effect until the earlier of:

		(a)	the date on which the Convertible Debenture is repaid in full;

		(b)	upon a Change of Control (as defined in the Convertible Debenture) of the Company, if such Change of Control
results in (A) a successor entity upon completion of an arrangement, amalgamation, consolidation or merger involving the Company, (B)
another entity carrying on the business of the Company, or (C) the Company becoming a wholly-owned subsidiary of another entity;

		(c)	the date on which the BAT Group Permitted Holders cease to hold the Convertible Debenture and/or any Common
Shares issuable upon the exercise, conversion or exchange of any Convertible Securities;

		(d)	the date on which this Agreement is terminated by the mutual consent of the Parties; or

		(e)	the dissolution or liquidation of the Company.

		(2)	Notwithstanding the valid termination of this Agreement pursuant to Section 10.8(1):

		(a)	the provisions of Article 1, Section 3.2, Article 7 and Sections
10.1, 10.2, 10.7, 10.8 and 10.1 through 10.21 and, if the Company or the Security Holder reasonable
believe that the BAT Group Permitted Holders would beneficially own and/or control, directly or indirectly and assuming conversion of
the Convertible Debenture in full, 20% or more of the voting rights attached to all of the issued and outstanding Common Shares following
any Share Buyback, Section 10.3 shall survive such termination and continue in full force and effect in accordance with their terms;
and

		(b)	any rights or obligations which have accrued or arisen under the provisions of Article 7 of
this Agreement prior to the effective time of such termination shall survive such termination unimpaired in accordance with the terms
hereof.

Section 10.9     Dividends
and Distributions.

		(1)	The Company shall provide reasonable prior written notice to the BAT Group Representative, in advance
of the timelines required under Securities Laws, of the proposed declaration of any dividend or other distribution on or in respect of
the Common Shares, including the applicable record and payment dates and the proposed form of dividend or other distribution (i.e.,
cash, Common Shares and/or other property).

		(2)	The Parties shall discuss in good faith the manner by which the BAT Group Permitted Holders may defer
their receipt of all or a portion of any dividends or other distributions declared on or in respect of the Common Shares held by them
from time to time.

     

    	 	- 33 -	 

    

 

		(3)	The Company shall ensure that any payments made to the BAT Group Permitted Holders are not made from funds
which are derived from any conduct defined as “specified unlawful activity” under Section 1956(c)(7) of Title 18 of the United
States Code. Any such funds shall be held by the Company in a segregated bank account.

Section 10.10     Notices.

		(1)	Any notice, direction or other communication given regarding the matters contemplated by this Agreement
(each, a “Notice”) must be in writing, sent by personal delivery, courier or email, and addressed:

		(a)	to the Company, at:

700 Tech Court

Louisville,
CO 80027‎

United States

 

	Attention:	General Counsel
	E-mail:‎	‎ [* * *]

 

with a copy (which shall not constitute
notice) to:

DLA Piper (Canada) LLP

Suite 6000, 1 First Canadian Place

PO Box 367, 100 King St W

Toronto,
Ontario M5X 1E2‎

Canada

 

	Attention:	Jarrod Isfeld and‎ Russel W. Drew
	Email: ‎	‎jarrod.isfeld@dlapiper.com and russel.drew@dlapiper.com

 

		(b)	to the BAT Group Representative, at:

Globe House

4 Temple Pl

London WC2R 2PG

 

	Attention: 	Juan Palacios
	Email:	[* * *]

 

with a copy (which shall not constitute
notice) to:

Jones Day

250 Vesey Street, 33rd Floor

New York, New York 10281

	Attention: 	Randi Lesnick
	 	Brad Brasser
	Email:	rclesnick@jonesday.com
	 	bcbrasser@jonesday.com

 

Stikeman Elliott LLP

5300 Commerce Court West

199 Bay Street

Toronto, Ontario M5L 1B9

 

[***] Indicates material that has been excluded from this Exhibit 10.3
because it is private or confidential and not material.

     

    	 	- 34 -	 

    

 

	Attention: 	Evan Marcus and Colin Burn
	Email:	emarcus@stikeman.com and cburn@stikeman.com

 

 

		(2)	A Notice is deemed to be given and received on the date of delivery if it is a Business Day and the delivery
was made prior to 4:00 p.m. (local time in place of receipt), and otherwise on the next Business Day. A Party may change its address for
service from time to time by providing a Notice in accordance with the foregoing. Any subsequent Notice must be sent to the Party at its
changed address. Any element of a Party’s address that is not specifically changed in a Notice will be assumed not to be changed.

Section 10.11     Time
of the Essence.

Time is of the essence in
this Agreement.

Section 10.12     Expenses.

Except as otherwise expressly provided
in this Agreement, each Party will pay for its own costs and expenses incurred in connection with this Agreement and the transactions
contemplated hereby. The fees and expenses referred to in this Section 10.12 are those which are incurred in connection with
the negotiation, preparation, execution and performance of this Agreement and the transactions contemplated hereby, including the fees
and expenses of legal counsel, accountants and other advisors.

 

Section 10.13     Severability.

If any provision of this Agreement
is determined to be illegal, invalid or unenforceable by an arbitrator or any court of competent jurisdiction, that provision will be
severed from this Agreement, and the remaining provisions will remain in full force and effect. Upon any such determination, the Parties
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated by this Agreement be consummated as originally contemplated to
the greatest extent possible.

 

Section 10.14     Entire
Agreement.

This Agreement and the Subscription
Agreement, and the other Transaction Agreements by and among the Parties and certain of their respective Affiliates contemplated hereby
and thereby, constitute the entire agreement among the Parties and their respective Affiliates with respect to the transactions contemplated
hereby and thereby, and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the
Parties and their respective Affiliates with respect to such transactions. There are no representations, warranties, covenants, conditions
or other agreements, express or implied, collateral, statutory or otherwise, among the Parties in connection with the subject matter of
this Agreement and the Subscription Agreement, and the other Transaction Agreements contemplated hereby and thereby, except as specifically
set forth herein and therein. The Parties have not relied and are not relying on any other information, discussion or understanding in
entering into and completing the transactions contemplated by this Agreement.

 

Section 10.15     Successors
and Assigns.

		(1)	This Agreement becomes effective only when executed by the Parties. After that time, it is binding on
and enures to the benefit of the Parties and their respective successors and permitted assigns, as applicable.

		(2)	Neither this Agreement, nor any of the rights or obligations hereunder, may be assigned or transferred,
in whole or in part, by either Party without the prior written consent of the other Party; provided, that the Security Holder
may assign this Agreement, or any of its rights and/or obligations hereunder, to any of its Affiliates; provided further, that
the Security Holder shall remain responsible for the covenants, agreements and obligations of the Security Holder under this Agreement
notwithstanding any such assignment.

 

     

    	 	- 35 -	 

    

 

Section 10.16     Third
Party Beneficiaries.

Except as expressly provided in
this Agreement (including Article 7), the Parties intend that: (1) this Agreement will not benefit or create any right or
cause of action in favour of any Person other than (a) the BAT Group Permitted Holders, and (b) the Company; and (2) no Person other than
the BAT Group Permitted Holders, on the one hand, and the Company, on the other hand, shall be entitled to rely on the provisions of this
Agreement in any action, suit, proceeding, hearing or other forum. The Parties reserve their right to vary or rescind the rights granted
by or under this Agreement to any Person that is not a Party, at any time and in any way whatsoever, without notice to or consent of that
Person.

 

Section 10.17     Amendments.

This Agreement may only be amended,
supplemented or otherwise modified by written agreement signed by both Parties.

 

Section 10.18     Waiver.

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.

 

Section 10.19     Injunctive
Relief.

The Parties agree that irreparable
harm would occur for which money damages alone would not be an adequate remedy at law in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the Parties agree that,
in the event of any breach or threatened breach of this Agreement by a Party, the non-breaching Party will be entitled, without the requirement
of posting a bond or other security, to equitable relief, including injunctive relief and specific performance, and the Parties shall
not object to the granting of injunctive or other equitable relief on the basis that there exists an adequate remedy at law. Such remedies
will not be the exclusive remedies for any breach of this Agreement but will be in addition to all other remedies available at law or
equity to each of the Parties.

Section 10.20     Further
Assurances.

Each Party shall promptly
do, make, execute, deliver, or cause to be done, made, executed or delivered, all such further acts, documents and things as the other
Party may reasonably require from time to time for the purpose of giving effect to this Agreement, and the transactions contemplated hereby,
and shall use commercially reasonable efforts, and take all such steps as may be reasonably within its power, to implement to their full
extent the provisions of this Agreement in accordance with the terms hereof.

Section 10.21     Counterparts.

This Agreement may be executed
(including by electronic means) in any number of counterparts, each of which (including any electronic transmission of an executed signature
page), is deemed to be an original, and such counterparts together constitute one and the same instrument.

    	 

    	 

    

IN WITNESS WHEREOF,
the Parties have caused this Agreement to be on the date first above written.

	 	 	CHARLOTTE’S WEB HOLDINGS, INC.
	By:	/s/ Jacques Tortoroli
	 	Name:Jacques Tortoroli
	 	Title:Chief Executive Officer

 

	 	 	BT DE INVESTMENTS INC.
	By:	/s/ Valerie Solomon
	 	Name: Valerie Solomon
	 	Title:    Director

 

 

 

    	 

    	 

    

Schedule A

Registration Rights Procedures

1.1        Registration
Procedures.

		(1)	In connection with the Demand Registration and Piggyback Registration obligations pursuant to the Agreement,
the Company will use commercially reasonable efforts in accordance with the Agreement to effect the qualification for the offer and sale
or other disposition or Prospectus Distribution of Registrable Securities of the BAT Permitted Group Holders in one or more Canadian jurisdictions
as directed by the BAT Permitted Group Holders, and in pursuance thereof the Company will as expeditiously as possible:

		(a)	to the extent not already prepared and filed, prepare and file in the English language and, if required,
French language, with the Canadian Securities Regulators a Prospectus in compliance with Securities Laws, relating to the Demand Registration
or Piggyback Registration, as applicable, including all exhibits, financial statements and such other related documents required by the
Canadian Securities Regulators to be filed therewith, and use its commercially reasonable efforts to cause the applicable Canadian Securities
Regulator or Canadian Securities Regulators to issue a receipt for such Prospectus, if applicable; and the Company will furnish to the
Participating Shareholders and the lead underwriter or underwriters, if any, copies of such Prospectus and any amendments or supplements
thereto in the form filed with the Canadian Securities Regulators, promptly after the filing of such Prospectus and any amendment or supplement
thereto;

		(b)	prepare and file with the Canadian Securities Regulators such amendments or supplements to the Prospectus
as may be necessary to complete the Prospectus Distribution of all such Registrable Securities and as required under the Securities Act
or under any applicable provisions of Securities Laws;

		(c)	notify the Participating Shareholders and the lead underwriter or underwriters, if any, and (if requested)
confirm such advice in writing, as soon as practicable after notice thereof is received by the Company: (i) when the Prospectus or any
amendment or supplement thereto has been filed or a receipt has been issued, and furnish to the Participating Shareholders and lead underwriter
or underwriters, if any, with copies thereof; (ii) of any request by the Canadian Securities Regulators for amendments to the Prospectus
or for additional information; (iii) of the issuance by the Canadian Securities Regulators of any stop order or cease trade order relating
to the Prospectus or any order preventing or suspending the use of any Prospectus or the initiation or threatening of any proceedings
for such purposes; and (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the
Registrable Securities for offering or sale in jurisdiction or the initiation or threatening of any proceeding for such purpose;

		(d)	promptly notify the Participating Shareholders and the lead underwriter or underwriters, if any, when
the Company becomes aware of the happening of any event as a result of which the Prospectus contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statement therein (in the case of the Prospectus in light of the circumstances
under which they were made) when such Prospectus was delivered not misleading, fails to constitute full, true and plain disclosure of
all material facts regarding the Registrable Securities when such Prospectus was delivered or if for any other reason it will be necessary
during such time period to amend the Prospectus in order to comply with Securities Laws and, in either case as promptly as practicable,
prepare and file with the Canadian Securities Regulators, and furnish to the Participating Shareholders and the managing underwriters
or underwriters, if any, a supplement or amendment to such Prospectus which will correct such statement or omission or effect such compliance;

     

    	 	- 2 -	 

    

 

		(e)	use commercially reasonable efforts to obtain the withdrawal of any stop order, cease trade order or other
order against the Company or affecting the securities of the Company suspending the use of any Prospectus or suspending the qualification
of any Registrable Securities covered by the Prospectus, or the initiation or the threatening of any proceedings for such purposes;

		(f)	furnish to the Participating Shareholders and each lead underwriter or underwriters, if any, without charge,
one executed copy and as many conformed copies as they may reasonably request, of the Prospectus, including financial statements and schedules
and all documents incorporated therein by reference, and provide the Participating Shareholders and their respective counsel with a reasonable
opportunity to review and provide comments to the Company on the Prospectus;

		(g)	deliver to the Participating Shareholders and the underwriters, if any, without charge, as many commercial
copies of the Prospectus and any amendment or supplement thereto as such Persons may reasonably request (it being understood that the
Company consents to the use of the Prospectus or any amendment or supplement thereto by each of the Participating Shareholders and the
underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendment
or supplement thereto) and such other documents as the Participating Shareholders may reasonably request in order to facilitate the disposition
of the Registrable Securities by such Person;

		(h)	on or prior to the date on which a receipt is issued for the Prospectus by the applicable Canadian Securities
Regulators, use commercially reasonable efforts to qualify, and cooperate with the Participating Shareholders, the lead underwriter or
underwriters, if any, and their respective counsel in connection with the qualification of, such Registrable Securities for offer and
sale under the Securities Laws of each Qualifying Jurisdiction, as any such Person or underwriter reasonably requests in writing provided
that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to
take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject;

		(i)	in connection with any underwritten offering enter into customary agreements, including an underwriting
or agency agreement with the underwriter or underwriters, such agreements to contain such representations and warranties by the Company
and such other terms and provisions as are customarily contained in underwriting or agency agreements, as applicable, with respect to
secondary distributions and indemnification provisions and/or agreements substantially consistent with Article 5 of the Agreement,
but in any event, which agreements will contain provisions for the indemnification by the underwriter or underwriters in favour of the
Company with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Prospectus included in
reliance upon and in conformity with written information furnished to the Company by any underwriter in writing;

     

    	 	- 3 -	 

    

 

		(j)	as promptly as practicable after filing with the Canadian Securities Regulators any document which is
incorporated by reference into the Prospectus, provide copies of such document to the Participating Shareholders and their respective
counsel and to the lead underwriter or underwriters, if any;

		(k)	file, and to not withdraw, a notice declaring its intention to be qualified to file a short form prospectus
as soon as permitted by Securities Laws;

		(l)	use its commercially reasonable efforts to obtain a customary legal opinion, in the form and substance
as is customarily given by external company counsel in securities offerings, addressed to the Participating Shareholders and the underwriters,
if any, and such other Persons as the underwriting agreement may reasonably specify, and a customary “comfort letter” from
the Company’s auditor and/or the auditors of any financial statements included or incorporated by reference in a Prospectus;

		(m)	furnish to the Participating Shareholders and the lead underwriter or underwriters, if any, and such other
Persons as the Participating Shareholders may reasonably specify, such corporate certificates, satisfactory to the Participating Shareholders
acting reasonably, as are customarily furnished in securities offerings, and, in each case, covering substantially the same matters as
are customarily covered in such documents in the relevant jurisdictions and such other matters as the Participating Shareholders may reasonably
request;

		(n)	provide and cause to be maintained a transfer agent and registrar for such Common Shares not later than
the date a receipt is issued for the final Prospectus by the applicable Canadian Securities Regulators and use its best efforts to cause
all Common Shares covered by the Prospectus to be listed on each securities exchange or automated quotation system on which similar securities
issued by the Company are then listed;

		(o)	participate in such marketing efforts as the Participating Shareholders or lead underwriter or underwriters,
if any, determine are reasonably necessary, such as “roadshows”, institutional investor meetings and similar events;

		(p)	take such other actions and execute and deliver such other documents as may be reasonably necessary to
give full effect to the rights of each Participating Shareholder under the Agreement; and

		(q)	take no direct or indirect action prohibited by OSC Rule 48-501 - Trading during Distributions, Formal
Bids and Share Exchange Transactions; provided, that, to the extent that any prohibition is applicable to the Company,
the Company will take all reasonable action to make any such prohibition inapplicable.

     

    	 	- 4 -	 

    

 

1.2.       Participating
Shareholders’ Obligations.

		(1)	The Company may require the Participating Shareholders to furnish to the Company such information regarding
the Prospectus Distribution of such Registrable Securities and such other information relating to the Participating Shareholders and their
respective beneficial ownership of Common Shares as the Company may from time to time reasonably request in writing in order to comply
with Securities Laws in each jurisdiction in which a Demand Registration or Piggyback Registration, as applicable, is to be effected.
The Participating Shareholders agree to furnish such information to the Company and to cooperate with the Company as necessary to enable
the Company to comply with the provisions of the Agreement and Securities Laws. The Participating Shareholders will promptly notify the
Company when a Participating Shareholder becomes aware of the happening of any event (insofar as it relates to such Participating Shareholder
or information provided by such Participating Shareholder in writing for inclusion in the applicable Prospectus) as a result of which
the Prospectus contains any untrue statement of a material fact or omits to state a material fact necessary to make the statement therein
(in the case of the Prospectus in light of the circumstances under which they were made) when such Prospectus was delivered not misleading
or, if for any other reason it will be necessary during such time period to amend or supplement the Prospectus in order to comply with
Securities Laws.

		(2)	Each Participating Shareholder, if requested by the underwriter or underwriters of such Prospectus Distribution,
if any, agrees to become bound by and to execute and deliver a lock-up agreement restricting such Participating Shareholder’s right,
for a period of time not to exceed 90 days, to: (a) transfer, directly or indirectly, any Common Shares or any securities convertible
into or exercisable or exchangeable for such Common Shares; or (b) enter into any swap or other arrangement that transfers to another
any of the economic consequences of beneficially ownership of Common Shares. Notwithstanding the foregoing, such lock-up agreement shall
not apply to: (i) transfers to an Affiliate; provided, however, that in any such case, it shall be a condition to the transfer that such
transferee execute an agreement stating that the transferee is receiving and holding such Common Shares subject to the provisions of the
lock-up agreement; (ii) conversions of Common Shares into other classes of shares without change of beneficial ownership; (iii) transactions
relating to Registrable Securities in open market transactions after the date hereof; or (iv) any Registrable Securities sold pursuant
to a Prospectus for such Prospectus Distribution.

		(3)	In addition, the Participating Shareholders shall, if required under Securities Laws, execute any certificate
forming part of a Prospectus to be filed with the applicable Canadian Securities Regulators.

		(4)	In connection with any underwritten offering in connection with a Demand Registration or Piggyback Registration,
as applicable, the Participating Shareholder shall enter into customary agreements, including an underwriting or agency agreement with
the lead underwriter or underwriters, such agreements to contain such representations and warranties by the Participating Shareholder
and such other terms and provisions as are customarily contained in underwriting or agency agreements, as applicable, with respect to
secondary distributions and indemnification provisions and/or agreements substantially consistent with Article 7, but in any
event, which agreements will contain provisions for the indemnification by the underwriter or underwriters in favour of the Participating
Shareholder with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Prospectus included
in reliance upon and in conformity with written information furnished to the Company by the underwriter in writing.

    	 

    	 

    

Schedule B

Competitors of the Company

[* * * ]

 

 

 

 

 

 

 

 

 

 

 

 

[***] Indicates material that has been excluded
from this Exhibit 10.3 because it is private or confidential and not material.

 

     

    	 	- 2 -	 

    

Schedule C

Competitors of the Security Holder

[* * *]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[***] Indicates material that has been excluded from this Exhibit
10.2 because it is private or confidential and not material.ex_449043.htm

Exhibit 10.1

 

INDEPENDENT CONTRACTOR AGREEMENT

 

 

THIS INDEPENDENT CONTRACTOR AGREEMENT (hereinafter referred to as the “Agreement”) is made and entered into this 21st day of November, 2022, with an effective date of the 3rd day of April, 2023 (hereinafter referred to as the “Effective Date”), by and between WILSON BANK & TRUST, a Tennessee banking corporation (hereinafter referred to as “Company”), and GARY WHITAKER (hereinafter referred to as “Independent Contractor” and, together with the Company, as the “Parties”).

 

RECITALS

 

WHEREAS, Company is financial institution headquartered at 623 West Main Street, Lebanon, Tennessee engaged in the banking, mortgage and financial services business (hereinafter referred to as the “Business”);

 

WHEREAS, Company desires to contract Independent Contractor to perform certain services for Company in connection with the Business (hereinafter collectively referred to as the “Services”) upon the terms and subject to the conditions set forth below and Independent Contractor acknowledges and agrees that Company would not contract Independent Contractor but for Independent Contractor’s agreement to enter this Agreement;

 

WHEREAS, Independent Contractor acknowledges and agrees that, by virtue of Independent Contractor performing the Services, Independent Contractor will have unique direct access to certain confidential information and trade secrets of Company and certain confidential information regarding Company’s customers (hereinafter collectively referred to as “Company’s Customers”);

 

WHEREAS, Independent Contractor acknowledges and agrees that, because of the Independent Contractor’s unique direct access to certain confidential information and trade secrets of Company and certain confidential information regarding Company’s Customers, this Agreement is manifestly reasonable upon its face, and its terms and conditions are reasonable as to time period and geographic scope, and are no greater than is reasonably necessary for the protection of Company; and

 

WHEREAS, the Parties desire to memorialize their agreement with respect to the terms and conditions of Independent Contractor’s contract to perform the Services.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree as follows:

 

SECTION 1

SERVICES

 

1.1             Contract and Acceptance.  Company hereby contracts Independent Contractor to perform the Services and Independent Contractor hereby accepts such contract and agrees to perform the Services beginning on the Effective Date upon the terms and subject to the conditions of this Agreement, which Services shall, in part, consist of providing general support and consulting services to the Company in the area of commercial loan development, including, but not limited to, the following:

 

(a)        Assisting the Company with the development of new commercial loan products and services;

 

(b)        Providing expertise to Company in the structuring and securing of commercial loans;

 

(c)        Providing support to Company loan officers in the development of and closing of commercial loans, including, but not limited to, assisting the Company with establishing new customer relationships and assisting the Company with maintaining and growing current customer relationships;

 

(d)       Participating in meetings, phone calls and videoconferences with Company management and loan officers in connection with commercial loan development as reasonably requested by Company; and

 

(e)        Performance of other duties for Company in connection with commercial loan development as reasonably requested by Company.

 

Services will also include any other tasks which the Parties may agree that Independent Contractor shall perform and Independent Contractor hereby agrees to perform such services to Company.  Notwithstanding any other provision in this Agreement, Independent Contractor acknowledges and agrees that he shall not perform the Services for more than Eight (8) hours in any calendar week during the term of the Agreement without the prior approval by the Company in writing.  Independent Contractor shall hold the title of Executive Vice President during the term of this Agreement. 

 

1.2             Duties and Obligations of Independent Contractor.  In addition to the duties listed in Sections 1.1 and 1.5 of this Agreement, Independent Contractor agrees to abide by and follow all laws, statues, ordinances, rules or regulations governing or pertaining to Company and the Business.

 

1.3             Duties and Obligations of Company.  Company agrees to not impose duties or constraints that would require Independent Contractor to violate any law, statute, ordinance, rule or regulation now or hereafter in effect. 

 

1.4             Nondiscrimination.  Independent Contractor shall, during the term of this Agreement, provide prompt and professional attention to all Company’s employees and Company’s Customers irrespective of age, race, religion, color, disability or national origin.

 

1.5             Best Efforts.  During the term of this Agreement, Independent Contractor will do as follows:

 

(a)     Faithfully, diligently and to the best of his ability, experience and talent perform all acts and duties in connection with the express and implicit terms of this Agreement;

 

(b)     Devote his time, attention and best efforts to the performance of the Services; and

 

(c)    Conduct himself in a respectful manner and be courteous and respectful to Company's Customers and the officers, directors, stockholders, members, partners, attorneys, agents, servants, representatives, employees, heirs, successors, executors, administrators, and/or assigns of Company and       Company's Customers while performing all acts and duties in connection with the express and implicit terms of this Agreement.

 

1.6           Indemnity.  Independent Contractor agrees to defend, indemnify and hold harmless Company from any and all liability for any reason as a result of injury to person(s), or damages or loss to property arising from and/or relating to the actions and/or omissions of Independent Contractor, including, but not limited to, any and all liability for any reason as a result of injury to person(s) or damages or loss of property arising from and/or relating to the Services.  This indemnification will survive the expiration or earlier termination of this Agreement.

 

SECTION 2

CONSULTING PAYMENTS

2.1             Consulting Payments.  

 

(a)     Guaranteed Consulting Payments.  During the term of this Agreement and subject to any reasonable dispute by Company, Independent Contractor shall receive a monthly payment in an amount equal to Six Thousand Five Hundred and No/100 Dollars ($6,500.00) for each month that he performs the Services plus an additional monthly vehicle allowance payment of Two Hundred and No/100 Dollars ($200.00) for each month that he performs the Services and all such payments shall be made in arrears (hereinafter collectively referred to as the "Guaranteed Consulting Payments").  In the event of a termination of the Agreement prior to the end of the term of the Agreement, Guaranteed Consulting Payments for partial months shall be prorated based on date of termination.

 

(b)      Non-Guaranteed Consulting Payments.

 

i.       During the term of this Agreement and subject to any reasonable dispute by Company, Independent Contractor shall receive payment in an amount equal to (1) .20 bps of any loan origination fee collected by the Company as a result of a new customer relationship established by Independent Contractor as determined in the Company's sole and reasonable discretion (hereinafter collectively referred to as "Non-Guaranteed Loan Payments").  Independent Contractor shall not be entitled to any Non-Guaranteed Loan Payments for (1) loan origination fees collected by the Company after the expiration or earlier termination of this Agreement or (2) loans closed after the expiration or earlier termination of this Agreement; provided that Independent Contractor will be entitled to Non-Guaranteed Loan Payments based on any loan origination fees collected by the Bank prior to the expiration or earlier termination of this Agreement.

 

ii.       During the term of this Agreement and subject to any reasonable dispute by Company, Independent Contractor shall be entitled to receive payment, if earned, in an amount equal to the ROA bonus paid by the Wilson Bank Holding Company Board of Directors to Company employees plus 3.50% based on the total amount of Guaranteed Consulting Payments and Non-Guaranteed Loan Payments actually paid to Independent Contractor during the calendar year in which such ROA bonus arose (hereinafter referred to as the "Non-Guaranteed ROA Payments" and, collectively with the Non-Guaranteed Loan Payments, the "Non-Guaranteed Consulting Payments").  In the event that an ROA bonus is paid by Wilson Bank Holding Company Board of Directors to Company employees after the expiration or earlier termination of this Agreement, but arising from a calendar year in which Independent Contractor had performed the Services, then Independent Contractor shall receive a Non-Guaranteed ROA Payment, if earned, calculated on the Guaranteed Consulting Payments and Non-Guaranteed Loan Payments actually paid to Independent Contractor during such calendar year.

 

Other than the Guaranteed Consulting Payments and, if earned, the Non-Guaranteed Consulting Payments, no other payment shall be made by Company to Independent Contractor except as otherwise approved in writing by Company. 

 

The Guaranteed Consulting Payments and, if earned, the Non-Guaranteed Consulting Payments shall not be construed as giving the Independent Contractor the right to be retained as an independent contractor of the Company for any guaranteed period of time, and the Company may at any time terminate this Agreement for any reason or no reason.

 

2.2             Payments.  All Guaranteed Consulting Payments and, if earned, Non-Guaranteed Consulting Payments paid by Company to Independent Contractor pursuant to this Agreement shall be paid in arrears on a monthly basis during the term of this Agreement.  Upon the expiration or earlier termination of this Agreement, Independent Contractor shall receive any Guaranteed Consulting Payments and, if earned, Non-Guaranteed Consulting Payments that are then due from Company after Company makes any deductions that are allowed under this Agreement.  In the event all liability of Independent Contractor pursuant to this Agreement exceeds all Guaranteed Consulting Payments and, if earned, Non-Guaranteed Consulting Payments due to Independent Contractor under this Agreement at the time this Agreement expires or earlier terminates, Independent Contractor shall make payment to Company within thirty (30) days of the expiration or earlier termination of this Agreement in an amount equal to all amounts for which Independent Contractor is liable to Company pursuant to this Agreement.

 

2.3             Taxes.  Independent Contractor is classified as a contract laborer under the U.S. Tax Codes and all income from Company to Independent Contractor shall be reported on a Form 1099.  Independent Contractor recognizes and understands that he will receive an IRS 1099 statement and related tax statements, and will be required to file corporate and/or individual tax returns and to pay taxes in accordance with all provisions of applicable federal and state law and is responsible for consulting with his own tax advisor on the effect of the 1099 (hereinafter referred to as the “Tax Liability”).  Independent Contractor hereby promises and agrees to indemnify Company for any damages or expenses, including attorney’s fees, court costs, and other legal expenses, incurred by Company as a result of Independent Contractor’s failure to make payments for Tax Liability. 

 

2.4             Independent Contractor Not An Employee.  Independent Contractor acknowledges and agrees that he is not an employee of Company and has no claim under this Agreement for any employee benefits except for health insurance for Independent Contractor and his spouse, which health insurance Company agrees to provide at the same levels that Company provides health insurance to other retired executives of the Company and the value of which health insurance benefits received Independent Contractor agrees will be reflected on a Form 1099 as described in Section 2.3 of this Agreement.  Company does not provide any of the following benefits to Independent Contractor:  life insurance, vacation, sick leave, social security, worker’s compensation, unemployment, disability or retirement benefits. 

 

Independent Contractor acknowledges and agrees that Company shall neither have nor exercise any control or direction over the methods or manner by which Independent Contractor performs the Services, Company shall not set nor have the right to set the specific working hours of Independent Contractor, and Independent Contractor shall not be subject to any policies or procedures applicable to Company, except those required for Company to be in compliance with governmental laws and regulations and those determined by Company to be required to ensure the safety and well-being of the Company’s employees and Company’s Customers.  Notwithstanding the preceding sentence, Independent Contractor shall notify Company of any time periods during the term of the Agreement that he is not available to perform the Services.

 

Independent Contractor acknowledges and agrees that the independent contractor status of Independent Contractor is based on the fact that Independent Contractor will generally have discretion over such matters as the manner in which Independent Contractor will perform the Services, the hours of the day and the days of the week when Independent Contractor will perform the Services, the approaches and techniques Independent Contractor will use to perform the Services.  Company will, however, maintain discretion and control over the results of the Services performed by Independent Contractor. 

 

SECTION 3

TERM AND TERMINATION

 

3.1             Effective Date.  This Agreement shall be effective on the Effective Date and shall continue for One (1) year unless earlier terminated as set forth below.

 

3.2             Termination.  This Agreement will terminate upon the earliest to occur of any of the following, even if the occurring prior to the Effective Date:

 

(a)     Upon Thirty (30) days written notice by Independent Contractor unless a shorter time period is desired by Company, in its sole discretion;

 

(b)     Upon Thirty (30) days written notice, with or without cause, by Company;

 

(c)     Without prior written notice, upon the death of Independent Contractor;

 

(d)     Without prior written notice, upon Company becoming insolvent, or filing for relief under any federal bankruptcy or state insolvency law or a receiver, trustee or similar person is appointed to oversee Company's business or affairs;

 

(e)     Without prior written notice, upon Company's dissolution and liquidation;

 

(f)     Without prior written notice, if Independent Contractor fails to abide by and follow all laws, statues, ordinances, rules or regulations governing or pertaining to Company, the Business and/or the Independent Contractor's profession or otherwise engages in conduct that is considered by Company, in its sold discretion, to be unethical, unprofessional, fraudulent, unlawful or adverse to Company's interest, reputation or business;

 

(g)     Without prior written notice, if Independent Contractor is convicted of a felony; and/or

 

(h)     The Parties enter into a written agreement terminating this Agreement.

 

Notwithstanding any provision in the Agreement to the contrary, the Agreement shall not be construed as giving the Independent Contractor the right to be retained as an independent contractor of the Company for any guaranteed period of time, and the Company may at any time terminate this Agreement for any reason or no reason.

 

3.3             Work Product Ownership.  Any copyrightable works, ideas, discoveries, inventions, patents, products, software or other information designed and/or developed, in whole or in part, by Independent Contractor in connection with the Services shall be the exclusive property of Company (hereinafter collectively referred to as the “Work Product”).  Upon request, Independent Contractor shall sign all documents necessary to confirm and/or perfect the exclusive ownership of Company in the Work Product.

 

3.4             Equipment, Machines, and Furniture.  Company agrees to provide Independent Contractor with a cell phone issued by and owned by the Company.  Upon the termination of this Agreement, all equipment, machines and/or furniture belonging to Company prior to the Effective Date of this Agreement or acquired by Company after the Effective Date of this Agreement shall remain personal property of Company, and all equipment, machines and/or furniture belonging to Independent Contractor after the Effective Date of the Agreement shall remain personal property of the Independent Contractor.  Notwithstanding the preceding sentence, Independent Contract shall return any personal property of Company upon Company’s request at any time.

 

3.5             Insurance.  Independent Contractor agrees to maintain at least the following insurance coverage and limits, at Independent  Contractor’s expense, with an insurance company rated by A.M. Best Company at A- or better:

 

	 	
			i.

				
			Commercial General Liability coverage in standard form on an occurrence basis covering your operations with minimum limits of :

			

 

$4,000,000 General Aggregate

$2,000,000 Products/Completed Operations Aggregate, if appropriate

$2,000,000 Personal and Advertising Injury

$2,000,000 Each Occurrence

 

	 	
			ii.

				
			Comprehensive automobile liability insurance covering all of Independent Contractor’s owned, hired, and non-owned vehicles, with minimum limits of $2,000,000 combined single limit per occurrence for bodily injury and property damage liability;

			

 

	 	
			iii.

				
			Comprehensive Cyber Security and Liability coverage to be approved in writing by Company; and

			

 

 

	 	
			iv.

				
			All your above-required insurance policies and any excess or umbrella coverages related to these policies that you have obtained for your operations will:

			

	 	
			a.

				
			provide for written notice to Company prior to cancellation or non-renewal of the coverage, per the terms of the policies;

			

	 	
			b.

				
			be endorsed to waive any and all rights of subrogation against Company;

			

	 	
			c.

				
			name Company as an additional insured with same limits for coverage as Independent Contractor has obtained; and

			

	 	
			d.

				
			be primary insurance and not excess over or contributory with any other valid, existing and applicable insurance carried by Company;  

			

 

 

Independent Contractor shall submit certificates of insurance to Company properly evidencing all insurance required above within Ten (10) days of the Effective Date.  Company agrees to reimburse Independent Contractor for the insurance premiums paid by Independent Contractor during the term of the Agreement for the insurance coverages required by Section 3.5 of this Agreement; provided that Independent Contractor agrees to refund to Company the prorated amount of any such reimbursement upon the termination of this Agreement by either Company or Independent Contractor based on the policy period remaining for such insurance coverages at the time such termination.  For instance, if Company reimburses Independent Contractor the amount of $1200 for an insurance coverage premium covering a policy period of one year and the Agreement is terminated six months into the one-year policy period, then Independent Contractor would owe Company a refund of $600.00 ($100.00 for each month remaining in the policy period after the date of the termination of the Agreement).

 

SECTION 4

CONFIDENTIALITY

 

4.1             Factual Understanding.   During the term of this Agreement, Independent Contractor acknowledges that Independent Contractor will have access to certain confidential information and trade secrets of Company and certain confidential information regarding Company’s Customers, including, but not limited to, customer personal data, customer financial data, Work Product, business management documents, forms, policies or procedures, business or management methods, marketing data, financial data, fee schedules, vendor data, investor lists, customer lists, trade secrets, training modules, research or marketing test results, marketing techniques and materials, marketing and development plans, price lists, pricing policies, business plans, credit agreements, invoices, contracts, sales and profit data, corporate finances and earnings information, products or services under development, business systems, practices, and plans, database templates, characteristics and agreements, financial information and projections, banking software platforms or other software, used or acquired by the Company in the course of its trade or business, whether or not invented, improved, or created by the Company or Independent Contractor, and any transaction or document executed by the Parties pursuant to this Agreement or otherwise (hereinafter collectively referred to as the “Confidential Information”).

 

4.2           Confidentiality Agreement.  During the term of this Agreement, Independent Contractor shall not disclose the Confidential Information to any other person or entity and shall not use the Confidential Information except as necessary in performing the Services and, in the event of the expiration or earlier termination of this Agreement, Independent Contractor shall not disclose the Confidential Information to any other person or entity.

 

4.3             Acknowledgement.  Independent Contractor acknowledges the following:

 

	 	
			(a)

				
			He will be making use of, acquiring, or contributing to the development of valuable Confidential Information of a special and unique nature relating to the business of Company and its affiliates; and

			

 

	 	
			(b)

				
			The Confidential Information is extremely valuable and an important asset of Company and its affiliates, as the case may be, and that the unauthorized use or disclosure of or communication to any person or entity, either directly or indirectly, orally or in writing, or under any circumstances, any Confidential Information disclosed to him or obtained by him during the term of this Agreement shall be prohibited.

			

 

 

4.4             Customer Records.  Independent Contractor shall treat all records of Company (including, without limitation, any data or information pertaining to identification obtained from Company’s Customers) as confidential and shall not use or disclose the information contained in such records.  All records of Company’s Customers shall be the exclusive property of Company.  The covenants contained in Section 4.4 of this Agreement shall survive the expiration or earlier termination for any reason of this Agreement.

 

4.5             Nondisclosure. Except as required by his duties to Company or unless Independent Contractor shall first secure Company’s written consent, Independent Contractor agrees that he shall not, during the term of this Agreement or at any time thereafter utilize, disseminate, disclose or communicate to any person or entity, either directly or indirectly, orally or in writing, or under any circumstances, any Confidential Information disclosed to him or obtained by him during the term of this Agreement.  Independent Contractor shall immediately notify Company of any unauthorized disclosure or use of any Confidential Information of which Independent Contractor becomes aware.  Independent Contractor shall assist Company, to the extent necessary, in the procurement or any protection of Company’s rights to or in any of the Confidential Information.

 

4.6             Adequate Protection.  Independent Contractor agrees that he will undertake all necessary and appropriate steps to ensure that the Confidential Information disclosed will be kept confidential.

 

4.7             Return of Information.  Upon the expiration or earlier termination of this Agreement, Independent Contractor shall deliver to Company all Confidential Information together with any and all documents, records, data compilations, software files, and similar repositories containing Confidential Information provided and furnished by Company to the Independent Contractor during the course of this Agreement then in his possession or under his control.  Independent Contractor agrees not to make or retain copies or extracts from any such document, record or data compilation.

 

4.8             Enforcement by Injunction. 

 

(a)        Independent Contractor acknowledges and agrees that Independent Contractor’s experience and capabilities are such that Independent Contractor can obtain employment that will not cause Independent Contractor to violate the terms and conditions of Section 4 of this Agreement and the enforcement of a remedy for Company by way of injunction will not prevent Independent Contractor from earning a livelihood.

 

(b)        Independent Contractor acknowledges and agrees that any breach of Section 4 of this Agreement will result in irreparable injury to Company, that a remedy at law for any breach or threatened breach of any provision of Section 4 of this Agreement will be inadequate and that, in the event of any such breach, Company, in addition to any other remedies or damages available to it at law or in equity, shall be entitled to temporary injunctive relief before trial from any court of competent jurisdiction as a matter of course, including, but not limited to, an injunction restraining Independent Contractor and any other person or entity acting in concert with Independent Contractor from continuance of any act in violation of the terms and conditions of Section 4 of this Agreement, and to permanent injunctive relief without the necessity of proving actual damages or securing or posting any bond.

 

SECTION 5

 

[Intentionally omitted]. 

 

SECTION 6

 

[Intentionally omitted].

 

SECTION 7

NON-DISPARAGEMENT

 

 

7.1             Non-disparagement.  Neither Company nor Independent Contractor shall make, publish, or communicate to any person or entity or in any public forum any comment or statement (written, oral or otherwise) that disparages the other or the other's employees, directors or officers. 

 

7.2             Consideration. The consideration in support of the restrictions contained in Section 7 of this Agreement has been separately bargained for and included in the total compensation paid to the Independent Contractor.

 

SECTION 8

MISCELLANEOUS

 

8.1             Expenses. Each Party shall bear it or his own expenses incurred in connection with the negotiation and consummation of the transactions contemplated under this Agreement.

 

8.2            Notice.  Any notice to be given pursuant to this Agreement shall be in writing and shall be either hand delivered or sent by first class, certified mail, return receipt requested, with postage prepaid to the address set forth below, or to such other address as either Party may from time-to-time designate by notice given as provided by Section 8.2 of this Agreement:

 

If to Company:                                          If to Independent Contractor:

                                                                                                                                                                                                                            Wilson Bank & Trust                                Gary Whitaker

                                                                                                                                                                                                                            ATTN: Human Resources                         505 Gilmore Hill Road

                                                                                                                                                                                                                            P.O. Box 768                                             Lebanon, TN  37087

                                                                                                                                                                                                                            Lebanon, TN  37088     

 

                           

                Notice hereunder shall be deemed to have been received by the person to who addressed at the time it is personally delivered or forty-eight (48) hours after it is deposited in the United States mail as specified above.

 

8.3             Binding Effect.  This Agreement shall be binding upon and insure to the benefit of the Parties and their respective heirs, personal representatives, successors and assigns.

 

 

8.4             Assignment and Encumbrances.  This Agreement may be assigned at the sole discretion of Company, subject to the rights and obligations herein.  Independent Contractor may not assign, pledge or encumber any of his rights and obligations under this Agreement.

 

8.5            Entire Agreement. This Agreement represents the entire agreement of the Parties concerning Independent Contractor’s engagement to perform the Services.  Notwithstanding the preceding sentence, the Parties hereby acknowledge and agree that the Agreement does not supersede the “Restrictive Covenants” as defined in Section 16 of that certain Wilson Bank Holding Company Non-Qualified Stock Option Agreement entered by Wilson Bank Holding Company and Gary Whitaker on February 25, 2022 (hereinafter referred to as the “Option Agreement”), which Restrictive Covenants the Parties hereby acknowledge and agree shall remain in effect pursuant to the terms of the Option Agreement and not be affected by this Agreement.

 

8.6             Severability of Provisions Any provision of this Agreement which is determined to be invalid, or unenforceable shall not affect the remainder of this Agreement, which shall remain in effect, unless the removal of the invalid or unenforceable provision would substantially defeat the basic intent, purpose and spirit of this Agreement.

 

8.7             No Third Party Beneficiary. The Parties do not intend to confer any benefits under this Agreement on any other person or entity.

 

8.8            Extension, Modification and Waivers.  This Agreement may be modified or amended only by the written agreement of the Parties.  No waiver of any breach of any provision of this Agreement shall constitute a waiver of any preceding or succeeding breach of the same provision.  No extension of the time for performance of any obligation or other act shall be deemed to be an extension of the time for the performance of any obligation or their act shall be deemed to be an extension of the time for the performance of any other obligation or any other act.  No breach shall excuse the performance of the Independent Contractor under Sections 4 and 7 of this Agreement.

 

8.9            Governing Law. This Agreement shall be governed by and construed pursuant to the laws of the State of Tennessee.  The Independent Contractor and the Company shall submit to the jurisdiction of, and waive any venue objections against, the United States District Court for the Middle District of Tennessee or the Chancery Court for Wilson County, Tennessee in any litigation arising out of this Agreement. The Independent Contractor hereby expressly waives the Independent Contractor’s right to a jury trial in any court proceeding arising out of or relating to this Agreement.

 

8.10           Survival of Terms.  The expiration or earlier termination of this Agreement for any reason shall not release any of the Parties from any liability or obligation described in this Agreement which has been expressly agreed to survive any such expiration or earlier termination, or remains to be performed, or by its nature would be intended to be applicable following any such expiration or earlier termination.

 

8.11           Number and Gender. Where appropriate, references to the masculine, feminine or neuter gender shall also mean all or any of the other genders, and single or plural references shall also mean the plural or singular.

 

8.12          Counterparts.  This Agreement may be executed simultaneously in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

 

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first written above.

 

 

 

 

 

WILSON BANK & TRUST                                                                                 Independent Contractor

                                                                                                                                                                                              

By: /s/ John C. McDearman III                                                                              By:    /s/ Gary Whitaker                          

 

Its: Chief Executive Officer                                                                                    Gary Whitaker

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