6-K

HEXO Corp.

Date: June 7, 2023

/s/ Joelle Maurais

Name: Joelle Maurais

Title: General Counsel

0001193125-23-162618.txt : 20230607 0001193125-23-162618.hdr.sgml : 20230607 20230607165252 ACCESSION NUMBER: 0001193125-23-162618 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20230607 FILED AS OF DATE: 20230607 DATE AS OF CHANGE: 20230607 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEXO Corp. CENTRAL INDEX KEY: 0001690947 STANDARD INDUSTRIAL CLASSIFICATION: MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833] IRS NUMBER: 000000000 STATE OF INCORPORATION: A8 FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-38781 FILM NUMBER: 23999627 BUSINESS ADDRESS: STREET 1: 120 CHEMIN DE LA RIVE CITY: GATINEAU STATE: A8 ZIP: J8M 1V2 BUSINESS PHONE: 1-844-406-1852 MAIL ADDRESS: STREET 1: 120 CHEMIN DE LA RIVE CITY: GATINEAU STATE: A8 ZIP: J8M 1V2 FORMER COMPANY: FORMER CONFORMED NAME: Hydropothecary Corp DATE OF NAME CHANGE: 20161128 6-K 1 d517519d6k.htm 6-K 6-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of June 2023

Commission File Number: 001-38781

HEXO Corp.

(Translation of registrant’s name into English)

120 chemin de la Rive

Gatineau, Québec, Canada J8M 1V2

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☐ Form 40-F ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EXHIBIT INDEX


Exhibit		Description of Exhibit

99.1		Subscription Agreement for Series 1 Preferred Shares of the registrant dated June 1, 2023 between the registrant and BPY Limited

99.2†		Cash Escrow Agency Agreement dated June 1, 2023 between the registrant, Tinglemerrett LLP and BPY Limited

99.3		Arrangement Agreement Amendment dated June 1, 2023 between the registrant and Tilray Brands, Inc.

99.4		Amendment to the Letter Agreement Dated April 10, 2023 providing for the waiver and amendment of certain covenants under the Amended and Restated Senior Secured Convertible Note due 2026 dated June 1, 2023 between the registrant and Tilray Brands, Inc.

†	Portions of this exhibit have been omitted because the information is (i) confidential personal information or (ii) of the type the registrant both customarily and actually treats as private or confidential.

EX-99.1 2 d517519dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

SUBSCRIPTION AGREEMENT FOR SERIES 1 PREFERRED SHARES OF HEXO CORP.

INSTRUCTIONS: To properly complete this Subscription Agreement:

All subscribers must complete all boxes on these two face pages.

All persons subscribing as an accredited investor must complete and sign Exhibit 1 and Appendix A to Exhibit 1.

All non-Canadian subscribers must complete and sign Exhibit 2.

TO:

HEXO Corp. (the “Corporation”)

The undersigned (hereinafter referred to as the “Subscriber”) hereby subscribes for and agrees to purchase Series 1 Preferred Shares in the capital of the Corporation (the “Preferred Shares”) in two tranches and for the subscription prices set forth below (the Subscription Price Tranche 1 and Subscription Price Tranche 2, described below, collectively referred to as the “Aggregate Subscription Price”), representing a subscription price of US$1.00 per Preferred Share in each case, upon and subject to the terms and conditions set forth in “Terms and Conditions of Subscription for Series 1 Preferred Shares of Hexo Corp.” attached hereto (together with the face pages and the attached exhibits, the “Subscription Agreement”).


BPY LIMITED		Number of Preferred Shares Tranche 1: 11,500,000
(Name of Subscriber - please print)		Number of Preferred Shares Tranche 2: 13,500,000
By:	(signed) Jason Jagessar
(Authorized Signature)

Director (Official Capacity or Title - please print)		Subscription Price Tranche 1: US$11,500,000 Subscription Price Tranche 2: US$13,500,000

Jason Jagessar (Please print name of individual whose signature appears above if different than the name of the Subscriber printed above.) Wessex House 3rd Floor (Subscriber’s Address) 45 Reid Street, Hamilton c/o Murchinson Ltd 416-845-0666 HM 12, Bermuda (Telephone Number) c/o ml@murchinsonltd.com (E-Mail Address)		Disclosed Beneficial Purchaser Information: If the Subscriber is signing as agent for a principal pursuant to paragraph 3(g)(i) (the “Disclosed Beneficial Purchaser”), complete the following and ensure that Appendix A to Exhibit 1 is completed on behalf of such Disclosed Beneficial Purchaser: (Name of Disclosed Beneficial Purchaser) (Disclosed Beneficial Purchaser’s Residential Address, Telephone Number and E-mail Address)


Register the Preferred Shares as set forth below:		Deliver the Preferred Shares as set forth below:

BPY Limited (Name) (Account reference, if applicable) Wessex House 3rd Floor, 45 Reid Street (Address) Hamilton, HM 12, Bermuda		BPY Limited (Name) (Account reference, if applicable) Elliot Davis (Contact Name) 145 Adelaide St West (Address) Toronto, Ontario, Canada, M5H 4E5

(SUBSCRIBERS MUST ALSO COMPLETE THE SECOND FACE PAGE)


Subscriber’s Present Holdings:

The Subscriber represents that securities of the Corporation presently owned (beneficially, directly or indirectly) by the Subscriber (or the Disclosed Beneficial Purchaser, if applicable) or over which the Subscriber (or the Disclosed Beneficial Purchaser, if applicable) exercises control or direction, are as follows *(please indicate “nil” if you (or the Disclosed* *Beneficial Purchaser, if applicable) do not currently own or control any securities of the Corporation)*:
Type of Securities Presently Owned		Number or Amount

Warrant - CUSIP 428304182, ISIN CA4283041826		847,457

Warrant - CUSIP 428304190, ISIN CA4283041909		2,400,000.00




The Subscriber represents that the Subscriber (or the Disclosed Beneficial Purchaser, if applicable) is ☐ or is not ☒ (check one) an insider of the Corporation (as defined in Exhibit 1).

The Subscriber represents that the Subscriber (or the Disclosed Beneficial Purchaser, if applicable) is ☐ or is not ☒ (check one) a promoter of the Corporation (as defined in Exhibit 1).

The Subscriber represents that the Subscriber (or the Disclosed Beneficial Purchaser, if applicable) is ☐ or is not ☒ (check one) a registrant (as defined in Exhibit 1).

ACCEPTANCE: The Corporation hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement.

June 1, 2023.

HEXO CORP.



By:		(signed) Rob Godfrey

TERMS AND CONDITIONS OF SUBSCRIPTION FOR SERIES 1 PREFERRED SHARES OF HEXO CORP.

Terms of the Offering

1	The Subscriber acknowledges (on its own behalf and, if applicable, on behalf of each person on whose behalf the Subscriber is contracting) that this subscription is subject to rejection, acceptance or allotment by the Corporation in whole or in part.

The Subscriber acknowledges (on its own behalf and, if applicable, on behalf of each person on whose behalf the Subscriber is contracting) that the Series 1 Preferred Shares subscribed for by it in two separate tranches hereunder, namely 11,500,000 Series 1 Preferred Shares (the “Tranche 1 Subscription”) and, subject to the conditions as set out herein, 13,500,000 Series 1 Preferred Shares (the “Tranche 2 Subscription”) (collectively, the “Preferred Shares”) comprise the entire issuance and sale by the Corporation of up to 25,000,000 Preferred Shares (the “Offering”). The share provisions attached hereto as Exhibit 3 set out the terms and conditions of the Preferred Shares.

Representations, Warranties and Covenants of the Corporation

3	The Corporation represents and warrants to the Subscriber that at each of the Tranche 1 Closing Time and the Tranche 2 Closing Time (as defined herein):

(a)

the Corporation is a corporation incorporated, organized and existing under the laws Ontario and has the corporate power and authority to enter into and perform its obligations under this Subscription Agreement and the Escrow Agreement (as defined below);

(b)

the execution, delivery and performance by the Corporation of this Subscription Agreement and the Escrow Agreement:

(i)

have been duly authorized by all necessary corporate action on the part of the Corporation; and

(ii)

do not (or would not with the giving of notice, the passage of time or the happening of any other event or circumstance) result in a breach or a violation of, or conflict with, or allow any other person to exercise any rights under, any of its constating documents, shareholders’ agreements, by-laws or resolutions of its board of directors or shareholders;

(c)

the execution, delivery and performance by the Corporation of this Subscription Agreement and the Escrow Agreement do not (or would not with the giving of notice, the passage of time or the happening of any other event or circumstance):

(i)

result in a breach or a violation of, conflict with, or cause the termination or revocation of, any authorization held by the Corporation;

(ii)

result in a breach or a violation of, or conflict with, any judgement, judicial order or decree of any governmental authority; or

(iii)

result in a breach or a violation of, or conflict with, any law applicable to the Corporation.

(d)

this Subscription Agreement and the Escrow Agreement have been (or will be) duly executed and delivered by the Corporation and constitute (or will constitute) legal, valid and binding obligations of the Corporation, enforceable against it in accordance with their respective terms;

(e)

immediately prior to:

(i)

the Tranche 1 Closing Time, the authorized capital of the Corporation shall consist of an unlimited number of common shares, an unlimited number of special shares issuable in series (including an unlimited number of Preferred Shares), of which nil special shares and nil Preferred Shares are issued and outstanding and 43,996,355 common shares have been duly issued and are outstanding as fully paid and non-assessable;

(ii)

the Tranche 2 Closing Time, the authorized capital of the Corporation shall consist of an unlimited number of common shares, an unlimited number of special shares issuable in series, and an unlimited number of Preferred Shares, of which nil special shares are issued and outstanding and 43,996,355 common shares and 11,500,000 Preferred Shares have been duly issued and are outstanding as fully paid and non-assessable;

(f)

the Preferred Shares are duly authorized and, when issued and paid for in accordance with this Subscription Agreement, will be duly and validly issued, fully paid, and non-assessable, free and clear of any lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction imposed by the Corporation. Assuming the accuracy of the representations and warranties of the Subscriber in Section 4 of this Subscription Agreement, the Preferred Shares will be issued in compliance with applicable securities laws.

Representations, Warranties and Covenants of the Subscriber

The Subscriber on its own behalf and, if applicable, on behalf of the Disclosed Beneficial Purchaser for whom it is contracting represents, warrants and covenants to the Corporation (and acknowledges that the Corporation is relying thereon) at each of the Tranche 1 Closing Time and the Tranche 2 Closing Time:

(a)

it has been independently advised as to restrictions with respect to trading in the Preferred Shares imposed by applicable securities laws, confirms that no representation (written or oral) has been made to it by or on behalf of the Corporation with respect hereto, acknowledges that it is aware of the characteristics of the Preferred Shares, the risks relating to an investment therein and of the fact that it may not be able to resell the Preferred Shares except in accordance with limited exemptions under applicable securities laws and regulatory policy until expiry of the applicable restricted period and compliance with the other requirements of applicable law and it agrees that, in addition to any further legend which may be required by the Toronto Stock Exchange or the Nasdaq, any certificates representing the Preferred Shares are to bear the following legend indicating that the resale of such securities is restricted:

“Unless permitted under securities legislation, the holder of this security must not trade the security before [Insert date that is 4 months and a day after expected Closing Date].”

and the subscriber further acknowledges that it has been advised to consult its own legal counsel in its jurisdiction of residence for full particulars of the resale restrictions applicable to it and that in the event that no physical certificates representing the Preferred Shares are provided to the Subscriber, the above constitutes written notice pursuant to, and as required by, Section 2.5(2)(3.1) of National Instrument 45-102 Resale of Securities;

(b)

it has not received or been provided with, nor has it requested, nor does it have any need to receive, any offering memorandum, prospectus, sales or advertising literature, or any other document (other than an annual report, annual information form, interim report, information circular or any other continuous disclosure document, the content of which is prescribed by statute or regulation) describing or purporting to describe the business and affairs of the Corporation which has been prepared for delivery to, and review by, prospective purchasers in order to assist them in making an investment decision in respect of the Preferred Shares;

(c)

it has not become aware of any advertisement in printed media of general and regular paid circulation (or other printed public media), radio, television or telecommunications or other form of advertisement (including electronic display and the internet) with respect to the distribution of the Preferred Shares;

(d)

it understands that the Preferred Shares are being offered for sale only on a “private placement” basis and that the sale and delivery of the Preferred Shares is conditional upon such sale being exempt from the requirements as to the filing of a prospectus or delivery of an offering memorandum or upon the issuance of such orders, consents or approvals as may be required to permit such sale without the requirement of filing a prospectus or delivery of an offering memorandum and, as a consequence (i) the Subscriber may be restricted from using most of the protections, rights and remedies, available under securities legislation, (ii) the Subscriber may not receive information that would otherwise be required to be provided to it under securities legislation, and (iii) the Corporation is relieved from certain obligations that would otherwise apply under securities legislation;

(e)

it understands that it will not have the right to vote at the special meeting of the Corporation’s shareholders on the pending arrangement pursuant to the arrangement agreement dated April 10, 2023 between the Corporation and Tilray Brands, Inc. (the “Pending Arrangement”), nor to exercise any dissent rights with respect to the Pending Arrangement;

(f)

if the Subscriber is not purchasing under subsection 4(h), it is purchasing the Preferred Shares as principal for its own account, not for the benefit of any other person, for investment only and not with a view to the resale or distribution of all or any of the Preferred Shares, and it is resident in the jurisdiction set out as the “Subscriber’s Address” on the face page hereof and the Subscriber fully complies with one or more of the criteria set out below:

(i)

it is an “accredited investor”, as such term is defined in National Instrument 45-106 Prospectus Exemptions (“NI 45-106”) or, where applicable, section 73.3 (1) of the Securities Act (Ontario), it was not created and is not being used solely to purchase or hold securities as an accredited investor as described in paragraph (m) of the definition of “accredited investor” in NI 45-106 and has concurrently executed and delivered a Representation Letter in the form attached to this Subscription Agreement as Exhibit 1 and specifically represents and warrants that one or more of the categories set forth in Appendix A to Exhibit 1 attached to the Representation Letter correctly, and in all respects, describes the Subscriber, and will describe the Subscriber as at the as at Tranche 1 Closing Date or the Tranche 2 Closing Date, as applicable, and the Subscriber has so indicated by initialling next to the category in such Appendix A which so describes it; or

(ii)

the Subscriber is not an individual and the aggregate acquisition cost of the Preferred Shares to the Subscriber is not less than $150,000 and it was not created and is not being used solely to purchase or hold securities in reliance on the prospectus exemption set out in section 2.10 of NI 45-106;

(g)

the Subscriber understands that the Corporation (A) must take reasonable steps to verify that the Subscriber meets the conditions of the accredited investor exemption; (B) may need to request additional information and documentation from the Subscriber in connection with such verification; and (C) will retain such information and documentation for a period of eight years following the applicable Closing Date;

(h)

if the Subscriber is not purchasing as principal, it is duly authorized to enter into this Subscription Agreement and to execute and deliver all documentation in connection with the purchase on behalf of each beneficial purchaser, each of whom is purchasing as principal for its own account, not for the benefit of any other person, and not with a view to the resale or distribution of all or any of the Preferred Shares, it acknowledges that the Corporation may be required by law to disclose to certain regulatory authorities the identity of each beneficial purchaser of Preferred Shares for whom it may be acting, and it and each beneficial purchaser is resident in the jurisdiction set out as the “Subscriber’s Address” or the “Disclosed Beneficial Purchaser’s Residential Address”, as applicable, and the Subscriber is either:

(i)

acting as agent for a Disclosed Beneficial Purchaser, who is disclosed on the face page of this Subscription Agreement, who is resident in the jurisdiction set out as the “Disclosed Beneficial Purchaser’s Residential Address” and who complies with paragraph (i) of subsection 4(f) hereof as if all references therein were to the Disclosed Beneficial Purchaser rather than to the Subscriber and the Subscriber has concurrently executed and delivered a Representation Letter in the form attached hereto as Exhibit 1 and Appendix A on behalf of such Disclosed Beneficial Purchaser; or

(ii)

deemed to be purchasing as principal under NI 45-106 because it is an “accredited investor” as such term is defined in paragraphs (p) or (q) of the definition of “accredited investor” in NI 45-106 and reproduced in Appendix A to Exhibit 1 of this Subscription Agreement and has concurrently executed and delivered a Representation Letter in the form attached hereto as Exhibit 1 and has initialled Appendix A thereto indicating that the Subscriber satisfies one of the categories of “accredited investor” set out in paragraphs (p) or (q) of Appendix A thereto;

(i)

if the Subscriber or any other purchaser for whom it is acting hereunder is resident in or otherwise subject to the applicable securities laws of a jurisdiction outside of Canada, it has concurrently executed and delivered a Representation Letter in the form attached to this Subscription Agreement as Exhibit 2 and will provide such evidence of compliance with all matters described in such Representation Letter as the Corporation or its counsel may request;

(j)

it acknowledges that:

(i)

no securities commission or similar regulatory authority has reviewed or passed on the merits of the Preferred Shares;

(ii)

there is no government or other insurance covering the Preferred Shares;

(iii)

there are risks associated with the purchase of the Preferred Shares;

(iv)

there are restrictions on the Subscriber’s ability to resell the Preferred Shares and it is the responsibility of the Subscriber to find out what those restrictions are and to comply with them before selling the Preferred Shares;

(v)

the Corporation has advised the Subscriber that the Corporation is relying on an exemption from the requirements to provide the Subscriber with a prospectus under the Securities Act (Ontario) and other applicable securities laws of each other province and territory of Canada and, as a consequence of acquiring securities pursuant to this exemption, certain protections, rights and remedies provided by the Securities Act (Ontario) and other applicable securities laws of each other province and territory of Canada, including statutory rights of rescission or damages, will not be available to the Subscriber; and

(vi)

the certificate representing the Preferred Shares will be endorsed with a legend stating that such securities will be subject to restrictions on resale in accordance with applicable securities legislation;

(k)

the Preferred Shares have not been offered to the Subscriber (or any person on whose behalf the Subscriber is contracting) in the United States, and any person making the order to purchase the Preferred Shares and executing and delivering this Subscription Agreement was not in the United States when the order was placed and this Subscription Agreement was executed and delivered, unless such person is a dealer or other professional fiduciary organized, incorporated, or (if an individual) resident in the United States signing on behalf of a discretionary account or similar account (other than an estate or trust) held for the benefit or account of a Disclosed Beneficial Purchaser which is not in the United States or a U.S. Person (as described below);

(l)

it is not a U.S. Person (as defined in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), which definition includes, but is not limited to, an individual resident in the United States, an estate or trust of which any executor or administrator or trustee, respectively, is a U.S. Person and any partnership or corporation organized or incorporated under the laws of the United States) and is not purchasing the Preferred Shares on behalf of, or for the account or benefit of, a person in the United States or a U.S. Person;

(m)

it is aware that the Preferred Shares have not been and will not be registered under the U.S. Securities Act or the securities laws of any state and that these securities may not be offered or sold in the United States without registration under the U.S. Securities Act or compliance with requirements of an exemption from registration and the applicable laws of all applicable states and acknowledges that the Corporation has no present intention of filing a registration statement under the U.S. Securities Act in respect of any of the Preferred Shares;

(n)

it undertakes and agrees that it will not offer or sell any of the Preferred Shares in the United States unless such securities are registered under the U.S. Securities Act and the securities laws of all applicable states of the United States or an exemption from such registration requirements is available, and further that it will not resell the Preferred Shares, except in accordance with the provisions of applicable securities legislation, regulations, rules, policies and orders and stock exchange rules;

(o)

it has not purchased the Preferred Shares as a result of any form of directed selling efforts in the United States, as such term is defined in Regulation S under the U.S. Securities Act;

(p)

it understands and acknowledges that the Corporation (i) is under no obligation to be or to remain a “foreign issuer”, as such term is defined in the U.S. Securities Act, (ii) may not, at the time the Subscriber sells the Preferred Shares or at any other time, be a foreign issuer, and (iii) may engage in one or more transactions that could cause the Corporation not to be a foreign issuer;

(q)

it pre-existed the offering of the Preferred Shares and has a bona fide business purpose other than the investment in the Preferred Shares and was not created, formed or established solely or primarily to acquire securities, or to permit purchases of securities without a prospectus, in reliance on an exemption from the prospectus requirements of applicable securities legislation;

(r)

it has the legal capacity to enter into and be bound by this Subscription Agreement and further certifies that all necessary approvals of directors, trustees, fiduciaries, shareholders, partners, stakeholders, holders of voting securities or otherwise have been given and obtained;

(s)

the entering into of this Subscription Agreement and the transactions contemplated hereby will not result in a violation of any of the terms or provisions of any law applicable to the Subscriber (or any person on whose behalf the Subscriber is contracting), or if the Subscriber (or any person on whose behalf the Subscriber is contracting) is not a natural person, any of such person’s constating documents, or any agreement to which such person is a party or by which it is bound;

(t)

this Subscription Agreement has been duly and validly authorized, executed and delivered by and constitutes a legal, valid, binding and enforceable obligation of the Subscriber;

(u)

in the case of a subscription by it for Preferred Shares acting as agent for a principal, it is duly authorized to execute and deliver this Subscription Agreement and all other necessary documentation in connection with such subscription on behalf of such principal and this Subscription Agreement has been duly authorized, executed and delivered by or on behalf of, and constitutes a legal, valid and binding agreement of, such principal;

(v)

it has such knowledge and experience in financial and business affairs as to be capable of evaluating the merits and risks of its investment in the Preferred Shares and is able to, and agrees to, bear the economic risk of loss of its investment or, where it is not purchasing as principal, each beneficial purchaser is able to, and agrees to, bear the economic risk of loss of its investment;

(w)

except for the representations and warranties made by the Corporation to the Subscriber in this Subscription Agreement, it has relied solely upon publicly available information relating to the Corporation and not upon any verbal or written representation as to fact or otherwise made by or on behalf of the Corporation, such publicly available information having been delivered to the Subscriber without independent investigation or verification, and agrees that the Corporation assumes no responsibility or liability of any nature whatsoever for the accuracy, adequacy or completeness of the publicly available information or as to whether all information concerning the Corporation required to be disclosed by the Corporation has been generally disclosed;

(x)

acknowledges that the Corporation’s counsel are acting as counsel to the Corporation and not as counsel to the Subscriber (or any person on whose behalf the Subscriber is contracting);

(y)

if required by applicable securities legislation, regulations, rules, policies or orders or by any securities commission, stock exchange or other regulatory authority, the Subscriber will execute, deliver, file and otherwise assist the Corporation in filing, such reports, undertakings and other documents with respect to the issue of the Preferred Shares, including, without limitation: (A) this Subscription Agreement; and (B) if the Subscriber, or if applicable, the Disclosed Beneficial Purchaser, is an accredited investor, a Representation Letter in the form attached as Exhibit 1 hereto;

(z)

the acquisition of the Preferred Shares hereunder by the Subscriber (and each person on whose behalf the Subscriber is contracting) will not result in the Subscriber (or any such person) becoming a “control person” in respect of the Corporation, as defined under applicable securities laws;

(aa)

the Subscriber is not purchasing the Preferred Shares with knowledge of any material information or material change concerning the Corporation that has not been generally disclosed;

(bb)

other than as set out in the share terms attached as Exhibit 3 hereto, no person has made to the Subscriber (or any person on whose behalf the Subscriber is contracting) any written or oral representations (i) that any person will resell or repurchase the Preferred Shares, or (ii) that any person will refund the purchase price of the Preferred Shares, or (iii) as to the future price or value of the Preferred Shares;

(cc)

the Aggregate Subscription Price which will be advanced by the Subscriber to the Corporation and TSX Trust Company of Canada (the “Escrow Agent”) hereunder will not represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the “PCMLA”) and the Subscriber acknowledges that the Corporation may in the future be required by law to disclose the Subscriber’s name and other information relating to this Subscription Agreement and the Subscriber’s subscription hereunder, on a confidential basis, pursuant to the PCMLA; and to the best of its knowledge (i) none of the subscription funds to be provided by the Subscriber (A) have been or will be derived from or related to any activity that is deemed criminal under the laws of Canada, the United States of America, or any other jurisdiction, or (B) are being tendered on behalf of a person or entity who has not been identified to the Subscriber, and (ii) it shall promptly notify the Corporation and the Escrow Agent if the Subscriber discovers that any of such representations ceases to be true, and to provide the Corporation and the Escrow Agent with appropriate information in connection therewith; and

(dd)

the Subscriber (including any person on whose behalf the Subscriber is contracting) has been encouraged to obtain independent legal, income tax and investment advice with respect to this subscription for Preferred Shares and accordingly, has had the opportunity to acquire an understanding of the meanings of all terms contained herein relevant to the Subscriber (and each person on whose behalf the Subscriber is contracting) for purposes of giving representations, warranties and covenants under this Subscription Agreement.

Closing

Closing this subscription for Preferred Shares (the “Closings”) will be completed electronically or at the offices of Norton Rose Fulbright Canada LLP in the City of Toronto, Ontario, in the case of Tranche 1 Subscription at 8:00 a.m. (Toronto Time) or such other time as agreed to by the parties (the “Tranche 1 Closing Time”) on June 1, 2023, or such other date agreed to by the parties (the “Tranche 1 Closing Date”), and in the case of Tranche 2 Subscription at the actual time (Toronto Time) (the “Tranche 2 Closing Time”) on the day the Escrow Release Notice (as such term is defined in the Escrow Agreement) is delivered by the Corporation to each of the Escrow Agent and the Subscriber (the “Tranche 2 Closing Date”), in each case, against delivery of certificates or by other electronic evidence of ownership representing the Preferred Shares.

6	The Subscriber’s obligation to purchase the Preferred Shares at each of the Tranche 1 Closing Time on the Tranche 1 Closing Date and the Tranche 2 Closing Time on the Tranche 2 Closing Date shall be subject to the following conditions:

(a)

each of the representations and warranties of the Corporation contained in this Agreement are accurate as at the Tranche 1 Closing Time and the Tranche 2 Closing Time, as applicable;

(b)

all covenants and agreements of the Corporation contained in this Agreement have been performed or completed by the Corporation;

(c)

the Corporation, Escrow Agent and Subscriber shall have entered into the Escrow Agreement;

(d)

there is no order in effect that temporarily or permanently prohibits the completion of the transactions contemplated by this Subscription Agreement; and

(e)

the Offering has been conditionally approved by the Toronto Stock Exchange.

In addition, the Subscriber’s obligation to purchase the Preferred Shares under the Tranche 2 Subscription shall be subject to the Subscriber receiving a copy of the Escrow Release Notice from the Corporation concurrently with the delivery of the Escrow Release Notice by the Corporation to the Escrow Agent.

7	The Corporation’s obligations to sell the Preferred Shares to the Subscriber at each of Tranche 1 Closing Time and Tranche 2 Closing Time on Tranche 1 Closing Date or Tranche 2 Closing Date, as the case may be, shall be subject to the following conditions:

(a)

each of the representations and warranties of the Subscriber contained in this Agreement is accurate as at the Tranche 1 Closing Time and the Tranche 2 Closing Time, as applicable;

(b)

all covenants and agreements of the Subscriber contained in this Agreement have been performed or completed in all material respects by the Subscriber;

(c)

the Corporation, Escrow Agent and Subscriber shall have entered into the Escrow Agreement;

(d)

there is no order in effect that temporarily or permanently prohibits the completion of the transactions contemplated by this Subscription Agreement; and

(e)

the Offering has been conditionally approved by the Toronto Stock Exchange.

At the Tranche 1 Closing Time, the Subscriber shall wire (i) USD$11,500,000 to, or to the direction of, the Corporation and (ii) USD$13,500,000 to the Escrow Agent in accordance with the terms of the escrow agreement among the Corporation, the Subscriber and the Escrow Agent (the “Escrow Agreement”) and the Corporation shall issue 11,500,000 Preferred Shares.

9	At the Tranche 2 Closing Time, the Corporation shall issue 13,500,000 Preferred Shares to the Subscriber.

The Corporation shall be entitled to rely on an executed copy of this Subscription Agreement delivered electronically (including email), and acceptance by the Corporation of such executed copy of this Subscription Agreement shall be legally effective to create a valid and binding agreement between the Subscriber and the Corporation in accordance with the terms hereof. In addition, this Subscription Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same document.

Covenants

The Subscriber hereby covenants and agrees that it shall not have the right to vote the Preferred Shares at the special meeting of shareholders of the Corporation scheduled for June 14, 2023 or at any adjournment or postponement thereof (the “Meeting”). The Subscriber also hereby waives any right to dissent in respect of the special resolution approving an arrangement under Section 182 of the Business Corporations Act (Ontario) involving the Corporation and Tilray Brands, Inc. (the “Arrangement Resolution”).

The Subscriber hereby covenants and agrees that if it is required or permitted to vote by court order or otherwise, the Subscriber will vote all of its Preferred Shares held as of the record date for voting at the Meeting (i) in favour of the Arrangement Resolution and any other matter necessary for the consummation of the Pending Arrangement and (ii) against any action, proposal, transaction, agreement, or other matter that would reasonably be expected to impede, interfere with, delay, discourage, postpone or adversely affect the Pending Arrangement.

The Subscriber hereby covenants and acknowledges that, as set out in further detail in the articles of the Corporation, unless otherwise approved by the Toronto Stock Exchange, the Subscriber and any subsequent holder of Series 1 Preferred Shares shall be entitled to convert only such number of Series 1 Preferred Shares as would result in the Subscriber or other holder of Series 1 Preferred Shares owning no more than 9.9% of the issued and outstanding Common Shares after giving effect to the conversion.

General

The Subscriber, on its own behalf and (if applicable) on behalf of others for whom it is contracting hereunder, agrees that the representations, warranties and covenants of the Subscriber herein will be true and correct both as of the Subscriber’s execution of this Subscription Agreement and as of Tranche 1 Closing Time and Tranche 2 Closing Time, as applicable, and will survive the completion of the issuance of the Preferred Shares. The representations, warranties and covenants of the Subscriber herein are made with the intent that they be relied upon by the Corporation and its counsel in determining the eligibility of a purchaser of the Preferred Shares and the Subscriber agrees to indemnify and save harmless the Corporation its respective affiliates, shareholders, directors, officers, employees and counsel against all losses, claims, costs, expenses and damages or liabilities which any of them may suffer or incur which are caused or arise from a breach thereof. The Subscriber undertakes to immediately notify the Corporation of any change in any statement or other information relating to the Subscriber set forth herein which takes place prior to the respective Closing Time.

15	The obligations of the parties hereunder are subject to acceptance of the terms of the Offering by the Toronto Stock Exchange, the Nasdaq and any other required regulatory approvals.

The Subscriber acknowledges that this Subscription Agreement, Exhibits 1, 2 and Appendix A require the Subscriber to provide certain personal information to the Corporation. Such information is being collected by the Corporation for the purposes of completing the Offering, which includes, without limitation, determining the Subscriber’s eligibility (or that of any Disclosed Beneficial Purchaser) to purchase the Preferred Shares under applicable securities laws, preparing and registering certificates representing the Preferred Shares to be issued to the Subscriber and completing filings required by any stock exchange or securities regulatory authority. The Subscriber’s personal information (and that of any Disclosed Beneficial Purchaser) will be included in closing books prepared in connection with the Offering and may be disclosed by the Corporation to: (i) stock exchanges and/or securities regulatory authorities (including the OSC and other relevant securities commissions); (ii) the Corporation’s registrar and transfer agent; (iii) Canadian tax authorities; (iv) any of the other parties involved in the Offering, including legal counsel; and (v) other parties subsequent to the Offering, including legal counsel, reviewing closing books prepared in connection with the Offering. By executing this Subscription Agreement, the Subscriber (on its own behalf and on behalf of any Disclosed Beneficial Purchaser for whom it is contracting hereunder):

(a)

consents to the foregoing collection, use and disclosure of the Subscriber’s (and any Disclosed Beneficial Purchaser’s) personal information;

(b)

consents to the filing of copies or originals of any of the Subscriber’s documents delivered in connection with this Subscription Agreement as may be required to be filed with any stock exchange or securities regulatory authority in connection with the transactions contemplated hereby and expressly consents to the collection, use and disclosure of the Subscriber’s (and any Disclosed Beneficial Purchaser’s) personal information by the Toronto Stock Exchange for the purposes identified by such exchange, from time to time; and

(c)

acknowledges that it has been notified by the Corporation (i) of the requirement to deliver to the Ontario Securities Commission (the “OSC”) the full name, residential address and telephone number of the purchaser of the securities, the number and type of securities purchased, the total purchase price, the exemption relied upon and the date of distribution; (ii) that this information is being collected indirectly by the OSC under the authority granted to it in securities legislation; (iii) that this information is being collected for the purposes of the administration and enforcement of the securities legislation of Ontario; and (iv) that the Administrative Support Clerk can be contacted at Ontario Securities Commission, Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario M5H 3S8, or at (416) 593-3684, and can answer any questions about the OSC’s indirect collection of this information.

17	The Subscriber acknowledges and agrees that all costs incurred by the Subscriber (including any fees and disbursements of any counsel retained by the Subscriber) relating to the sale of the Preferred Shares to the Subscriber shall be borne by the Subscriber.

The Subscriber acknowledges that it has consented to and requested that all documents evidencing or relating in any way to the sale of the Preferred Shares be drawn up in the English language only. Le soussigné reconnaît par les présentes avoir consenti et exigé que tous les documents faisant foi ou se rapportant de quelque manière à la vente d’actions soient rédigés en anglais seulement.

The contract arising out of this Subscription Agreement and all documents relating thereto is governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. The parties irrevocably attorn to the exclusive jurisdiction of the courts of the Province of Ontario.

20	Time is of the essence hereof.

21	This Subscription Agreement (including the exhibits) represents the entire agreement of the parties hereto relating to the subject matter hereof and there are no representations, covenants or other agreements relating to the subject matter hereof except as stated or referred to herein.

The terms and provisions of this Subscription Agreement are binding upon and enure to the benefit of the Subscriber and the Corporation and their respective heirs, executors, administrators, successors and assigns; provided that, except for as otherwise herein provided, this Subscription Agreement is not assignable by any party hereto without prior written consent of the other parties.

The Subscriber, on its own behalf and, if applicable, on behalf of others for whom it is contracting hereunder, agrees that this subscription is made for valuable consideration and may not be withdrawn, cancelled, terminated or revoked by the Subscriber, on its own behalf and, if applicable, on behalf of others for whom it is contracting hereunder.

24	Neither this Subscription Agreement nor any provision hereof shall be modified, changed, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought.

25	The invalidity, illegality or unenforceability of any provision of this Subscription Agreement does not affect the validity, legality or enforceability of any other provision hereof.

26	The headings used in this Subscription Agreement have been inserted for convenience of reference only and shall not affect the meaning or interpretation of this Subscription Agreement or any provision hereof.

27	The covenants, representations and warranties contained herein shall survive the closing of the transactions contemplated hereby.

28	In this Subscription Agreement (including exhibits), references to “$” are to Canadian dollars, unless otherwise noted.

EXHIBIT 1

REPRESENTATION LETTER

TO:

HEXO Corp. (the “Corporation”)

(Capitalized terms not specifically defined in this Exhibit have the meaning ascribed to them in the Subscription Agreement to which this Exhibit is attached)

In connection with the execution by the undersigned Subscriber of the Subscription Agreement which this Representation Letter forms a part of, the undersigned Subscriber hereby represents, warrants, covenants and certifies to the Corporation that:

the undersigned Subscriber is resident in the jurisdiction set out as the “Subscriber’s Address” on the face page of the Subscription Agreement and if the undersigned Subscriber is purchasing as agent for a Disclosed Beneficial Purchaser, the Disclosed Beneficial Purchaser is resident in the jurisdiction set out as the “Disclosed Beneficial Purchaser’s Residential Address” on the face page of the Subscription Agreement;

the undersigned Subscriber is either (a) purchasing the Preferred Shares as principal for its own account, (b) deemed to be purchasing the Preferred Shares as principal in accordance with subsection 2.3(2) or (4) of National Instrument 45-106 Prospectus Exemptions (NI 45-106), or (c) acting as agent for a Disclosed Beneficial Purchaser who is purchasing the Preferred Shares as principal for its own account;

the undersigned Subscriber (or if the undersigned Subscriber is purchasing as agent for a Disclosed Beneficial Purchaser, the Disclosed Beneficial Purchaser) is an “accredited investor” within the meaning of NI 45-106 or the Securities Act (Ontario), where applicable, by virtue of satisfying the indicated criterion as set out in Appendix A to this Representation Letter;

the undersigned Subscriber (or if the undersigned Subscriber is purchasing as agent for a Disclosed Beneficial Purchaser, the Disclosed Beneficial Purchaser) was not created, and is not used, solely to purchase or hold securities as an accredited investor as described in paragraph (m) of the definition of “accredited investor” in NI 45-106; and

5.	upon execution of this Representation Letter by the undersigned Subscriber, this Representation Letter, including Appendix A hereto, shall be incorporated into and form a part of the Subscription Agreement.

Dated: June 1, 2023


		BPY LIMITED.

By:		(signed) Jason Jagessar
		Signature

		Jason Jagessar
		Print name of Signatory (if different from the Subscriber)

		Director
		Title

IMPORTANT: PLEASE INITIAL THE APPLICABLE PROVISION(S) IN APPENDIX A ON THE FOLLOWING PAGES

APPENDIX A

TO EXHIBIT 1

NOTE: PLEASE MARK YOUR INITIALS BESIDE THE APPLICABLE CATEGORY OR CATEGORIES OF “ACCREDITED INVESTOR” TO WHICH YOU BELONG.

Accredited Investor means:


		(a)		(i) except in Ontario, a Canadian financial institution, or a Schedule III bank; (ii) in Ontario, (A) a bank listed in Schedule I, II or III to the Bank Act (Canada); (B) an association to which the Cooperative Credit Association Act (Canada) applies or a central cooperative credit society for which an order has been made under subsection 473(1) of that Act; or (C) a loan corporation, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative or credit union league or federation that is authorized by a statute of Canada or Ontario to carry on business in Canada or Ontario, as the case may be;

		(b)		the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada);

		(c)		a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary;

		(d)		a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer;

		(e)		an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d);

		(e.1)		an individual formerly registered under the securities legislation of a jurisdiction of Canada, other than an individual formerly registered as a representative of a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador);

		(f)		the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada;

		(g)		a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l’île de Montréal or an intermunicipal management board in Québec;

		(h)		any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government;

		(i)		a pension fund that is regulated by the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction of Canada;

		(j)		an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000 (execution of Form 45-106 F9 required);

		(j.1)		an individual who beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $5,000,000; or

		(k)		an individual whose net income before taxes exceeded $200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year (execution of Form 45-106 F9 required);


	(Note: if individual accredited investors wish to purchase through wholly-owned holding companies or similar entities, such purchasing entities must qualify under section (t) below, which must be initialled.)

	(Note: For the purposes of sections (j) and (j.1) “financial assets” means cash, securities, or a contract of insurance, a deposit or an evidence of deposit that is not a security for the purposes of security legislation. “Related assets” means liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets or liabilities that are secured by financial assets).

	(l)	an individual who, either alone or with a spouse, has net assets of at least $5,000,000 (execution of Form 45-106 F9 required);

	(m)	a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements;

X	(n)	an investment fund that distributes or has distributed its securities only to

		(i) a person that is or was an accredited investor at the time of the distribution,

		(ii) a person that acquires or acquired securities in the circumstances referred to in sections 2.10 minimum amount investment or 2.19 additional investment in investment funds of NI 45-106,

		(iii) a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 investment fund reinvestment of NI 45-106;

	(o)	an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt;

	(p)	a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be;

	(q)	a person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction;

	(r)	a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded;

	(s)	an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function;

	(t)	a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors (as defined in NI 45-106);

	(u)	an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser;

	(v)	a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as an accredited investor; or

	(w)	a trust established by an accredited investor for the benefit of the accredited investor’s family members of which a majority of the trustees are accredited investors and all the beneficiaries are the accredited investor’s spouse, a former spouse of the accredited investor or a parent, grandparent, brother, sister, child or grandchild of that accredited investor, of that accredited investor’s spouse or of that accredited investors former spouse.

For the purposes of this certificate and the Subscription Agreement:

“Affiliate” means an issuer connected with another issuer because

(x)

one of them is the subsidiary of the other, or

(y)

each of them is controlled by the same person.

“Canadian financial institution” means

(a)

an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of that Act, or

(b)

a bank, loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or league that, in each case, is authorized by an enactment of Canada or a jurisdiction of Canada to carry on business in Canada or a jurisdiction of Canada;

“Control person” has the same meaning as in securities legislation;

“Director” means

(a)

a member of the board of directors of a company or an individual who performs similar functions for a company; and

(b)

with respect to a person that is not a company, an individual who performs functions similar to those of a director of a company;

“Eligibility adviser” means

(a)

a person that is registered as an investment dealer and authorized to give advice with respect to the type of security being distributed; and

(b)

in Saskatchewan or Manitoba, also means a lawyer who is a practicing member in good standing with a law society of a jurisdiction of Canada or a public accountant who is a member in good standing of an institute or association of chartered accountants, certified general accountants or certified management accountants in a jurisdiction of Canada provided that the lawyer or public accountant must not:

(i)

have a professional, business or personal relationship with the issuer, or any of its directors, executive officers, founders, or control persons, and

(ii)

have acted for or been retained personally or otherwise as an employee, executive officer, director, associate or partner of a person that has acted for or been retained by the issuer or any of its directors, executive officers, founders or control persons within the previous 12 months;

“Executive officer” means, for an issuer, an individual who is

(a)

a chair, vice-chair or president;

(b)

a vice-president in charge of a principal business unit, division or function including sales, finance or production, or

(c)

performing a policy-making function in respect of the issuer;

“Financial assets” means

(a)

cash;

(b)

securities, or

(c)

a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation;

“Foreign jurisdiction” means a country other than Canada or a political subdivision of a country other than Canada;

“Founder” means, in respect of an issuer, a person who,

(a)

acting alone, in conjunction, or in concert with one or more persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the issuer, and

(b)

at the time of the distribution or trade is actively involved in the business of the issuer,

“Fully managed account” means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client’s express consent to a transaction;

“Holding entity” means a person that is controlled by an individual;

“Individual” means a natural person, but does not include

(a)

a partnership, unincorporated association, unincorporated syndicate, unincorporated organization or a trust, or

(b)

a natural person in the person’s capacity as trustee, executor, administrator or other legal personal representative;

“Insider” means: (a) a director or an officer of an issuer; (b) a director or an officer of a person that is itself an insider or a subsidiary of an issuer; (c) a person that has (i) beneficial ownership of, or control or direction over, directly or indirectly, or (ii) a combination of beneficial ownership of, and control or direction over, directly or indirectly, securities of an issuer carrying more than 10% of the voting rights attached to all the issuer’s outstanding voting securities, excluding, for the purpose of the calculation of the percentage held, any securities held by the person as underwriter in the course of a distribution; (d) an issuer that has purchased, redeemed or otherwise acquired a security of its own issue, for so long as it continues to hold that security; (e) a person designated as an insider in an order made under the applicable securities legislation; or (f) a person that is in a prescribed class of persons;

“Investment fund” has the same meaning as in National Instrument 81-106 Investment Fund Continuous Disclosure;

“Jurisdiction” means a province or territory of Canada except when used in the term “foreign jurisdiction”

“Local jurisdiction” means the jurisdiction in which the applicable Canadian securities regulatory authority is situate

“Mutual fund” has the meaning ascribed to it under the securities legislation of the local jurisdiction

“Non-redeemable investment fund” means an issuer

(a)

whose primary purpose is to invest money provided by its securityholders,

(b)

that does not invest:

(i)

for the purpose of exercising or seeking control of an issuer, other than an issuer that is a mutual fund or a non-redeemable investment fund, or

(ii)

for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is a mutual fund or a non-redeemable investment fund, and

(c)

that is not a mutual fund

“Person” includes

(a)

an individual

(b)

a corporation

(c)

a partnership, trust, fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not, and

(d)

an individual or other person in that person’s capacity as a trustee, executor, administrator or personal or other legal representative

“Promoter” means a person who (a) acting alone or in concert with one or more other persons, directly or indirectly, takes initiative in founding, organizing or substantially reorganizing the business of the issuer, or (b) in connection with the founding, organization or substantial reorganization of the business of the issuer, directly or indirectly receives, in consideration of services or property or both, 10% or more of a class of the issuer’s own securities or 10% or more of the proceeds from the sale of a class of the issuer’s own securities of a particular issue, but does not include a person who (c) receives securities or proceeds referred to in paragraph (b) solely (i) as underwriting commissions, or (ii) in consideration for property, and (d) does not otherwise take part in founding, organizing or substantially reorganizing the business;

“Registrant” other than for the purposes of Form 45-109F9 (Appendix B to Exhibit 1), means a person registered or required to be registered under the Securities Act (Ontario)

“Regulatory Authority” means, for the local jurisdiction, the person referred to in Appendix D of National Instrument 14-101 opposite the name of the local jurisdiction

“Related entity” means, for an issuer, a person that control or is controlled by the issuer or that is controlled by the same person that controls the issuer

“Related liabilities” means

(a)

liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or

(b)

liabilities that are secured by financial assets

“Schedule III bank” means an authorized foreign bank named in Schedule III of the Bank Act (Canada)

“Spouse” means an individual who,

(a)

is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual,

(b)

is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender, or

(c)

in Alberta, is an individual referred to in paragraph (a) or (b), or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta);

“Subsidiary” means an issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary

“Control”

Other than in respect of the definitions of “holding entity” or “related entity” above, a person (first person) is considered to control another person (second person) if:

(a)

the first person beneficially owns, or directly or indirectly, exercises control or direction over securities of the second person carrying votes which, if exercised, would entitle the first person to elect a majority of the directors of the second person, unless that first person holds the voting securities only to secure an obligation

(b)

the second person is a partnership, other than a limited partnership, and first person holds more than 50% of the interests of the partnership, or

(c)

the second person is a limited partnership and the general partner of the limited partnership is the first person

In respect of the definitions of “holding entity” and “related entity” above, a person (first person) is considered to control another person (second person) if the first person, directly or indirectly, has the power to direct the management and policies of the second person by virtue of

(a)

ownership of or direction over voting securities in the second person

(b)

a written agreement or indenture

(c)

being the general partner or controlling the general partner of the second person, or

(d)

being a trustee of the second person.

All monetary references are in Canadian Dollars

EXHIBIT 2

REPRESENTATION LETTER

TO:

HEXO CORP. (the “Corporation”)

(Capitalized terms not specifically defined in this Exhibit have the meaning ascribed to them in the Subscription Agreement to which this Exhibit is attached)

The undersigned Subscriber and (if applicable) any other purchaser for whom it is acting hereunder, is resident in the jurisdiction set out as the “Subscriber’s Address” on the face page of the Subscription Agreement (the “Foreign Jurisdiction”) and the undersigned Subscriber certifies that it and (if applicable) any other purchaser for whom it is acting hereunder is not resident in or otherwise subject to applicable securities laws of any province or territory of Canada.

The undersigned Subscriber and (if applicable) any other purchaser for whom it is acting hereunder, is a purchaser which is purchasing the Preferred Shares pursuant to an exemption from any prospectus or securities registration or similar requirements under the applicable securities laws of the Foreign Jurisdiction or any other securities laws to which the Subscriber and (if applicable) any other purchaser for whom the Subscriber is acting hereunder are otherwise subject.

The purchase of Preferred Shares by the Subscriber, and any other purchaser for whom it is acting hereunder, does not contravene any of the applicable securities laws in the Foreign Jurisdiction or any other securities laws to which the Subscriber and (if applicable) any other purchaser for whom the Subscriber is acting hereunder are otherwise subject and does not result in: (i) any obligation of the Corporation to prepare and file a prospectus, an offering memorandum or similar document; or (ii) any obligation of the Corporation to make any filings with or seek any approvals of any kind from any regulatory body in such jurisdiction or any other ongoing reporting requirements with respect to such purchase or otherwise; or (iii) any registration or other obligation on the part of the Corporation under the applicable securities laws in the Foreign Jurisdiction or any other securities laws to which the Subscriber and (if applicable) any other purchaser for whom the Subscriber is acting hereunder are otherwise subject.

4.	The Preferred Shares are being acquired for investment purposes only and not with a view to the resale or distribution of all or any of the Preferred Shares.

The Subscriber, and any other purchaser for whom it is acting hereunder, are knowledgeable of, and have been independently advised as to, the securities laws of the Foreign Jurisdiction or any other securities laws to which the Subscriber and (if applicable) any other purchaser for whom the Subscriber is acting hereunder are otherwise subject.

6.	Upon execution of this Exhibit by the undersigned Subscriber, this Exhibit shall be incorporated into and form a part of the Subscription Agreement.

Dated: June 1, 2023


BPY Limited
Print name of Subscriber

By:		(signed) Jason Jagessar
		Signature

Jason Jagessar
Print name of Signatory (if different from the Subscriber)

Director
Title

EXHIBIT 3

SHARE TERMS OF SERIES 1 PREFERRED SHARES

[See attached.]

5. Shares and Provisions (if applicable)

Complete this section only if you are amending the Shares and Provisions

Description of Changes to Classes of Shares

The corporation amends the Description of Classes of Shares as follows (please be specific):

To create a first series of Special Shares which shall consist of an unlimited number of shares designated as Series 1 Preferred Shares and which, in addition to the rights, privileges, restrictions and conditions attached to the Special Shares as a class, shall have attached thereto the rights, privileges, restrictions and conditions as set out in these Articles.

2	To declare that effective upon the issuance of the Certificate of Articles of Amendment, as provided herein, the authorized capital of the Corporation shall consist of:

(a)

an unlimited number of Common Shares;

(b)

an unlimited number of Special Shares, issuable in series;

(c)

an unlimited number of Series 1 Preferred Shares,

and all other references to authorized and unissued share capital inconsistent with the foregoing, are cancelled.

3	To provide that the Series 1 Preferred Shares shall have attached thereto the following rights, privileges, restrictions and conditions:

Description of Changes to Rights, Privileges, Restrictions and Conditions

The corporation amends the Rights, Privileges, Restrictions and Conditions as follows (please be specific):

The rights, privileges, restrictions and conditions attaching to the Series 1 Preferred Shares shall be as follows:

SERIES 1 PREFERRED SHARES

(a)

Dividends

The holders of Series 1 Preferred Shares shall be entitled to receive and the Corporation shall pay thereon, out of the monies of the Corporation properly applicable to the payment of dividends, non-cumulative dividends, in such amount and at such rate as the directors may from time to time determine.

(b)

Voting

Except as provided in the Business Corporations Act (Ontario) (the “Act”), the holders of the Series 1 Preferred Shares shall not be entitled to receive notice of or to attend or vote at meetings of the shareholders of the Corporation.

(c)	Rights on Dissolution

In the event of the liquidation, dissolution or winding-up of the Corporation (whether voluntary or involuntary), reduction of capital or other distribution of its assets among the shareholders by way of repayment of capital, the holders of the Series 1 Preferred Shares shall be entitled to receive in respect of each such share, before any distribution of any part of the assets of the Corporation among the holders of the Common Shares, an amount equal to the Redemption Price (as hereinafter defined) and no more.

(d)	Automatic Redemption

Subject to Act, the Corporation shall automatically redeem all of the issued and outstanding Series 1 Preferred Shares for an amount per share equal to the Redemption Price on the earlier of (i) the 12-month anniversary of the issue date of such Series 1 Preferred Shares, and (ii) the 30th day following the Special Meeting (as hereinafter defined) (such date, the “Redemption Date”). On the Redemption Date, the Corporation shall redeem all Series 1 Preferred Shares and all rights with respect to such shares shall immediately terminate, except only the right of the holders to receive the Redemption Price without interest which Redemption Price shall, if the Series 1 Preferred Shares are uncertificated, be paid promptly, and if such Series 1 Preferred Shares are certificated, be paid on presentation and surrender of the certificate(s) for the Series 1 Preferred Shares so redeemed. Such payment shall be made by delivery to such holder of a cheque or, at the option of the Corporation, by way of wire transfer. From and after the Redemption Date, such Series 1 Preferred Shares shall not be entitled to exercise any of the rights of holders of Series 1 Preferred Shares in respect unless payment of the said Redemption Price is not made on the Redemption Date, or on presentation and surrender of the certificate(s) for the Series 1 Preferred Shares so called for redemption, whichever is later, in which case the rights of the holder of the said Series 1 Preferred Shares shall remain unaffected until payment in full of the Redemption Price. The Corporation shall give 10 days written notice to the holders of the Series 1 Preferred Shares of the Redemption Date.

(e)	Conversion

The holders of Series 1 Preferred Shares shall have the right, at the option of the holder, at any time during the ten day period following the delivery of the Conversion Eligibility Notice, to give written notice in the form of Exhibit “A” together with the presentation and surrender of the certificate(s) for the Series 1 Preferred Shares to be so converted (the “Conversion Notice”) requiring the Company to convert each Series 1 Preferred Shares into such number of fully paid and non-assessable Common Shares as is equal to the

Redemption Price divided by the VWAP provided that unless otherwise approved by the Toronto Stock Exchange the holder of the Series 1 Preferred Share shall be entitled to convert only such number of Series 1 Preferred Shares as would result in the holder and persons acting in combination or in concert with it owning no more than 9.9% of the issued and outstanding Common Shares after giving effect to the conversion.

On the Conversion Date, the Common Shares issuable upon conversion of the specified Series 1 Preferred Shares shall be deemed to be outstanding as of 10:00 a.m. on the Conversion Date and at such time and all rights with respect to the Series 1 Preferred Shares so converted shall immediately terminate. The Corporation shall, as soon as practicable and in any event within one business day after the Conversion Date, deliver, a certificate or DRS statement for the number of Common Shares issuable upon such conversion.

If the Arrangement Agreement is terminated, the Corporation shall promptly give written notice (the “Conversion Eligibility Notice”) to the holders of the Series 1 Preferred Shares of such termination and whether or not any regulatory (including stock exchange approval) or related shareholder approvals are required. If any shareholder approvals are required to effect the conversion, the Corporation shall convene a special meeting for the purpose of obtaining such approvals, such meeting to be called within 30 days of the termination of the Arrangement Agreement and held within 45 days of the public announcement of such meeting (the “Special Meeting”).

(f)	No Voting or Dissent Rights in Respect of Arrangement

For greater certainty, holders of the Series 1 Preferred Shares shall not benefit from or be entitled to exercise any voting rights or rights of dissent in respect of or in connection with the plan of arrangement contemplated by the Arrangement Agreement.

(g)

Other

Notwithstanding the foregoing, in addition, as long as any shares of Series 1 Preferred Shares are outstanding, the Corporation shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series 1 Preferred Shares, voting as a separate class, (i) alter or change the powers, preferences or rights of the Series A Preferred Stock so as to affect them adversely, (ii) amend the Articles of Incorporation or other charter documents in a manner adverse to the holders, (iii) increase the number of authorized shares of Series 1 Preferred Shares, or (iv) enter into any agreement with respect to any of the foregoing.

(h)	Definitions

Conversion Date means (i) if the conversion requires regulatory (including stock exchange approval) or related shareholder approvals, the date that such required regulatory (including stock exchange approval) or related shareholder approval is obtained and (ii) in all other cases, the date the Conversion Notice is received by the Corporation.

Redemption Price in respect of a Series 1 Preferred Share at any time means an amount equal to US$1.22 per share.

Arrangement Agreement means an arrangement agreement entered into between Tilray Brands, Inc. and the Corporation dated April 10, 2023, as amended from time to time.

VWAP means the 5 day volume-weighted average trading price of the Common Shares on the Nasdaq (or such other stock exchange on which, at the relevant time, the primary trading in the Common Shares occurs) ending on the date that the Conversion Notice is received by the Corporation.

Exhibit “A”

Conversion Notice

To: HEXO Corp. (the “Company”)

Date: ___

The undersigned holder of [insert number] Series 1 Preferred Shares hereby gives notice to the Company that it requires the Company to convert [insert number] Series 1 Preferred Shares into such number of fully paid and non-assessable Common Shares as is equal to the Redemption Price divided by the VWAP (each as defined in the Company’s articles), provided that unless otherwise approved by the Toronto Stock Exchange, the number of Series 1 Preferred Share to be converted shall be reduced to such number of Series 1 Preferred Shares as would result in the holder and persons acting in combination or in concert with it owning no more than 9.9% of the issued and outstanding Common Shares after giving effect to the conversion and any Series 1 Preferred Shares not so converted will remaining outstanding.

In furtherance of hereof, the undersigned hereby certifies:

1. that it, and persons acting in combination or in concert with it, hold [insert number] Series 1 Preferred Shares and [insert number] Common Shares;

2. it has made all reasonable inquiries to ensure that the information provided in this Conversion Notice is accurate

Dated this [day] day of [month], [year]

[insert signature block]

Acknowledged and agreed by [by the transfer agent or a senior officer, on behalf of the Company] who hereby certifies it has taken reasonable steps and precautions to verify the foregoing and that, to be best of the undersigned’s knowledge, such information is accurate.

Dated this [day] day of [month], [year]

[insert signature block]

EX-99.2 3 d517519dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

CASH ESCROW AGENCY AGREEMENT

THIS AGREEMENT is made the 1^st day of June, 2023.

BETWEEN:

TINGLEMERRETT LLP, a limited liability partnership existing under the laws of the Province of Alberta (the “Escrow Agent”)

- and -

BPY Limited, a corporation incorporated under the laws of Bermuda (“Subscriber”)

- and -

Hexo Corp, a corporation incorporated under the laws of the Province of Ontario (the “Issuer”)

WHEREAS the Subscriber wishes to deposit US$13,500,000 (the “Escrow Amount”) with the Escrow Agent to be held by the Escrow Agent in accordance with the terms of this Agreement;

AND WHEREAS the Escrow Funds are being deposited pursuant to a subscription agreement dated June 1, 2023 (the “Subscription Agreement”) pursuant to which up to 25,000,000 Series 1 Preferred Shares (the “Preferred Shares”) will be issued by the Issuer to the Subscriber.

AND WHEREAS the Subscription Agreement contemplates that the subscription will close in two tranches, with the first tranche consisting of 11,500,000 Preferred Shares subscribed for in consideration of $11,500,000 and the second tranche, consisting of 13,500,000 Preferred Shares (the “Tranche 2 Preferred Shares”) to be issued conditional upon release of, and in consideration of, the Escrow Amount, which amount is to be funded to the Escrow Agent in accordance with this Agreement;

AND WHEREAS the foregoing statements of fact and recitals are made by the parties hereto other than the Escrow Agent;

AND WHEREAS the Subscriber and the Issuer have requested the Escrow Agent to act as escrow agent and the Escrow Agent is willing to act as the escrow agent and to hold, administer and distribute the funds deposited with it in accordance with the terms of this Agreement,

NOW THEREFORE for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

SECTION 1:

INTERPRETATION

1.1

Definitions

The terms used herein shall have the following meanings:

(a)

“Affiliate” means affiliated companies within the meaning of the Business Corporations Act (Ontario);

(b)

“Agreement”, “this Agreement”, “the Agreement”, and similar expressions mean this escrow agency agreement;

(c)

“Authorized Investments” means short term interest bearing or discount debt obligations issued or guaranteed by the Government of Canada or a Province or a Canadian chartered bank or trust company (which may include an Affiliate or related party or restricted party of the Escrow Agent), provided that each such obligation is rated at least R1 (middle) by Dominion Bond Rating Service Limited or an equivalent rating by an equivalent rating service;

(d)

“Business Day” means each day other than a Saturday, Sunday, a statutory holiday in Montreal Quebec or Toronto, Ontario or any day on which the principal chartered banks located in Montreal Quebec or Toronto, Ontario are not generally open for business during normal banking hours.

(e)

“Release Condition” means the Issuer having delivered the Escrow Release Notice to the Escrow Agent and the Subscriber constituting confirmation that of all closing conditions set forth in the arrangement agreement dated April 10, 2023 entered into between the Issuer and Tilray Brands, Inc. (as amended from time to time, the “Arrangement Agreement”) have been satisfied or waived, other than those conditions that cannot be satisfied, waived or completed until the effective time of the plan of arrangement contemplated by the Arrangement Agreement.

1.2

Sections and Headings

The division of the Agreement into sections and headings are for the convenience of reference only and shall not affect the interpretation or construction of the Agreement.

1.3

Interpretation

In this Agreement, words importing the singular shall include the plural and vice versa, and words importing gender shall include all genders.

SECTION 2:

APPOINTMENT

2.1

Appointment of Escrow Agent

The Subscriber and the Issuer hereby appoint the Escrow Agent to serve as escrow agent and the Escrow Agent hereby agrees to act as escrow agent in accordance with the terms of this Agreement.

SECTION 3:

ESCROW PROVISIONS

3.1

Delivery into Escrow

The Escrow Agent shall establish an account (the “Escrow Account”) for the purpose of receiving the Escrow Amount. The Subscriber will deliver by wire transfer the Escrow Amount to the Escrow Account for deposit in escrow. The details of the Escrow Account are provided in Schedule “A” hereto.

The Escrow Agent shall have no liability or responsibility for any property until it is in fact received by the Escrow Agent.

3.2

Holding of Escrow Amount

The Escrow Amount, when delivered, will be held by the Escrow Agent in the name of the Subscriber and dealt with in accordance with the provisions of this Agreement.

The parties hereby agree that the Escrow Amount, when delivered, will be held by the Escrow Agent in the Escrow Account and dealt with in accordance with the provisions of this Agreement.

3.3

Cash Balances

(a)

Until such time as the Escrow Agent is in receipt of a joint direction from the Subscriber and Issuer to invest the Escrow Amount in Authorized Investments, the Escrow Agent may hold cash balances constituting part or all of the Escrow Amount in an interest bearing account, and may, but need not, invest the same in the deposit department of a Canadian chartered bank and its Affiliates, but the Escrow Agent, its Affiliates or the applicable Canadian chartered bank and its Affiliates shall not be liable to account for any profit to any parties to this Agreement or to any other person or entity other than at a rate, if any, established from time to time by the Escrow Agent, its Affiliates or the Canadian chartered bank and its Affiliates.

(b)

Any joint direction from the Subscriber and Issuer to the Escrow Agent shall be in writing and shall be provided to the Escrow Agent no later than 9:00 a.m. MT on the day on which the investment is to be made. Any such joint direction received by the Escrow Agent after 9:00 a.m. MT or received on a non-Business Day, shall be deemed to have been given prior to 9:00 a.m. MT the next Business Day. Any joint direction from the Subscriber and Issuer for the release of the Escrow Amount must be received prior to 11:00 a.m. MT on the day on which the release of Escrow Amount is to be made. Any such joint direction for the release of Escrow Amount received after 11:00 a.m. MT or on a non-Business Day, will be handled on a commercially reasonable efforts basis and may result in Escrow Amount being released on the next Business Day.

(c)

In the event that the Escrow Agent does not receive a joint direction or receives only a partial direction, the Escrow Agent shall continue to hold cash balances constituting part or all of the Escrow Amount in accordance with (a) above.

(d)

Any interest, dividends or other amounts received on the Escrow Amount as a result of the investment thereof as provided hereunder shall form part of the “Escrow Amount”.

(e)

The Escrow Agent shall have no liability for any investment losses, including without limitation any market loss on any investment liquidated prior to maturity in order to make a payment required hereunder.

3.4

Release of Escrow Amount

The parties hereby direct the Escrow Agent to release the Escrow Amount as follows:

(a)

If the Escrow Agent receives on or before 5:00p.m. MT on August 31, 2023 (the “Escrow Release Deadline”) written notice (the “Escrow Release Notice”) delivered by the Issuer to the Escrow Agent in the form attached as Schedule “B”, the Escrow Amount shall be released to Issuer. For certainty, the Escrow Release Notice shall only be delivered if the completion of the plan of arrangement contemplated by the Arrangement Agreement is imminent and the Escrow Release Notice constitutes confirmation that of all closing conditions set forth in the Arrangement Agreement have been satisfied or waived, other than those conditions that cannot be satisfied, waived or completed until the effective time of the plan of arrangement contemplated by the Arrangement Agreement and the Escrow Release Notice shall not be delivered until such confirmation can be provided.

(b)

If the Escrow Release Notice is not received by the Escrow Release Deadline, the Escrow Amount shall be automatically released to the Subscriber.

(c)

The Escrow Amount is to be released by way of wire transfer as directed by the parties, as applicable.

(d)

This Agreement shall terminate upon the distribution of all of the Escrow Amount in accordance with this Agreement.

3.5

Share Issuance

Upon receipt of the Escrow Release Notice by the Subscriber and concurrently with the release of the Escrow Amount to the Issuer in accordance with 3.4(a) the Issuer shall issue to the Tranche 2 Preferred Shares to the Subscriber in accordance with the Subscription Agreement.

SECTION 4:

REMUNERATION

4.1

Remuneration

The Issuer agrees to pay the Escrow Agent’s fees in advance, as agreed between the Escrow Agent, the Subscriber and the Issuer, for its services hereunder and the Issuer shall pay or reimburse the Escrow Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Escrow Agent in the administration of its duties hereunder (including, without limitation, legal fees and expenses and the reasonable compensation and disbursements of all other advisers, agents and assistants not regularly in its employ). The parties hereto agree that if any of the Escrow Agent’s fees, expenses and disbursements are in arrears then the Escrow Agent has the right to withhold the release of any Escrow Amount until such fees, expenses and disbursements are paid in full. The parties hereto further agree that any residual fees or expenses incurred by the Escrow Agent after termination of the Agreement will be reimbursed by the Issuer.

SECTION 5:

[RESERVED]

SECTION 6:

TAXES

6.1

Tax Obligations

The Subscriber and the Issuer shall notify the Escrow Agent jointly in writing of any Tax Obligations (defined herein) in connection with services rendered under this Agreement. The Subscriber and the Issuer shall jointly direct the Escrow Agent with respect to the performance of such Tax Obligations and shall provide the Escrow Agent with the necessary funds and all information required by the Escrow Agent to fund, pay or meet such Tax Obligations. The Escrow Agent shall use reasonable efforts, based upon available information to assist the Subscriber and the Issuer with respect to any Tax Obligations. Upon request, the Subscriber and the Issuer agree to provide the Escrow Agent with their certified tax identification numbers and other forms, documents and information that the Escrow Agent may request in order to fulfil any tax reporting function. For the purposes of this paragraph, “Tax Obligations” means the responsibility for payment of taxes (including related interest and penalties), withholding of taxes, certificates, reporting and filing requirements.

The Issuer agrees to indemnify the Escrow Agent, its directors, officers, employees, Affiliates and agents in connection with services rendered under this Agreement from and against any present or future taxes (except for taxes based on the net income of the Escrow Agent), remittances, fees, duties, assessments or other similar governmental charges (including all interest and penalties thereon and additions thereto) of whatever nature imposed or levied by any government, governmental subdivision, agency or other taxing authority of or in any jurisdiction, including, without limitation, Canada or any province or political subdivision thereof or any authority or agency therein or thereof or any foreign authority having power to tax or sanction, provided such taxes, duties, assessments or charges are not imposed or levied as a result of actions taken by the Escrow Agent in respect of its own business, independent of matters relating to the Subscriber or the Issuer or either of their corporate assets maintained by the Escrow Agent under this Agreement.

SECTION 7:

RIGHTS AND DUTIES OF THE ESCROW AGENT

7.1

Rights and Duties of Escrow Agent

The Escrow Agent shall not be liable for any action taken or omitted by it, or any action suffered by it to be taken or omitted or for any error of judgment made by it in the performance of its duties under this Agreement excepting only direct loss caused by its own gross negligence, wilful misconduct or fraud. Notwithstanding any other provision of this Agreement, and whether such losses or damages are foreseeable or unforeseeable, the Escrow Agent shall not be liable under any circumstances whatsoever for any (a) breach by any other party of securities law or other rule of any securities regulatory authority, (b) lost profits or (c) special, indirect, incidental, consequential, exemplary, aggravated or punitive losses or damages. Notwithstanding the foregoing or any other provision of this Agreement, in no event shall the liability of the Escrow Agent under or in connection with this Agreement to any one or more parties exceed in aggregate the amount of the annual fee for acting as escrow agent hereunder.

7.2

Right Not to Act

The Escrow Agent shall retain the right not to act and shall not be liable for refusing to act if, it is due to a lack of information or instructions or the Escrow Agent, in its sole judgment, acting reasonably, determines that such act is conflicting with or contrary to the terms of this Agreement or the law or regulation of any jurisdiction or any order or directive of any court, governmental agency or other regulatory body.

7.3

Retain Experts, Counsel and Advisors

The Escrow Agent may appoint such agents and employ or retain such counsel, accountants, engineers, appraisers or other experts or advisers as it may reasonably require for the purpose of discharging its duties and determining its duties, obligations and rights hereunder and may pay reasonable remuneration for all services performed by any of them, without taxation of costs of any counsel, and shall not be responsible for any misconduct on the part of any of them. The Issuer shall pay or reimburse the Escrow Agent for any reasonable fees, expenses and disbursements of such counsel, accountants, engineers, appraisers or other experts or advisers.

7.4

Reliance on Experts

The Escrow Agent may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any agent, counsel, accountant, engineer, appraiser or other expert or adviser, retained or employed by the Subscriber, the Issuer or the Escrow Agent, in relation to any matter arising in the performance of its duties under this Agreement.

7.5

Express Duties

The Escrow Agent shall have no duties or responsibilities except as expressly provided in this Agreement and shall have no liability or responsibility arising under any other agreement, including any agreement referred to in this Agreement, to which the Escrow Agent is not a party. No trust is intended to be, or is or will be, created hereby and the Escrow Agent shall owe no duties hereunder as a trustee.

7.6

Indemnity

In addition to and without limiting any other protection of the Escrow Agent hereunder or otherwise by law, the Issuer and the Subscriber hereby agree, jointly and not severally, to indemnify and hold harmless the Escrow Agent and its officers, directors, employees, Affiliates and agents and former officers, directors, employees, and agents harmless from and against any and all liabilities, losses, claims, damages, penalties, actions, suits, demands, levies, costs, expenses and disbursements including any and all reasonable legal and adviser fees and disbursements of whatever kind or nature which may at any time be suffered by, imposed on, incurred by or asserted against the Escrow Agent, whether groundless or otherwise, howsoever arising from or out of any act, omission or error of the Escrow Agent in connection with its acting as Escrow Agent hereunder unless arising from bad faith, the gross negligence or wilful misconduct on the part of the Escrow Agent. Notwithstanding any other provision hereof, this indemnity shall survive the removal or resignation of the Escrow Agent and the termination of this Agreement.

In the event that the Escrow Agent shall become involved in any arbitration or litigation relating to the Escrow Amount, the Escrow Agent is authorized to comply with any decision reached through such arbitration or litigation. If the Escrow Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands from any party hereto or from a third person with respect to any matter arising pursuant to this Agreement which, in its opinion, are in conflict with any provision of this Agreement, it shall be entitled to refrain from taking any action authorized and directed hereunder, and in so doing, the Escrow Agent shall not be or become liable in any way to the parties hereto for its failure or refusal to comply with such claims or demands, until it shall be authorized or directed in writing by the parties hereto.

7.7

Reliance on Documents, etc.

In the exercise of its rights, duties and obligations hereunder, the Escrow Agent may act and rely, and shall be protected in acting and relying upon any judgment, order, notice, demand, request, waiver, consent, receipt, direction, instruction, certificate, affidavit or other instrument, paper, writing or document (collectively referred to as “Documents”) furnished to it and purporting to have been executed or issued by any officer or person required to or entitled to execute and deliver to the Escrow Agent any such Documents in connection with this Agreement, not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth or accuracy of any information therein contained, which the Escrow Agent in good faith believes to be genuine. The Escrow Agent may, in its absolute discretion, require reasonable evidence of the due execution thereof before acting or relying thereon. The Escrow Agent shall in no way be bound to call for further evidence (whether as to due execution, validity or effectiveness, or the jurisdiction of any court, or as to the truth of any fact), and shall not be responsible for any loss that may be occasioned by its failing to do so.

The Escrow Agent shall have the right not to act and shall not be liable for refusing to act unless it has received clear and reasonable documentation that complies with the terms of this Agreement. Such documentation must not require the exercise of any discretion or independent judgment.

7.8

Third Party Interests

Each party to this Agreement (in this paragraph referred to as a “representing party”), other than the Escrow Agent, hereby represents to the Escrow Agent that any account to be opened by, or interest to be held by, the Escrow Agent in connection with this Agreement, for or to the credit of such representing party, either (i) is not intended to be used by or on behalf of any third party, or (ii) is intended to be used by or on behalf of a third party, in which case such representing party hereby agrees to complete, execute and deliver forthwith to the Escrow Agent a declaration, in the Escrow Agent’s prescribed form or in such other form as may be satisfactory to it, as to the particulars of such third party.

7.9

No Assumption of Responsibility

The Escrow Agent shall not by reason of signing this Agreement assume any responsibility or liability for any transaction or agreement between the Subscriber and the Issuer other than the performance of its obligations under this Agreement, notwithstanding any reference herein to such other transactions or agreements.

7.10

Anti-Money Laundering

The Escrow Agent shall have the right not to act and shall not be liable for refusing to act under this Agreement if, due to a lack of information or for any other reason whatsoever, the Escrow Agent in its reasonable judgment, determines that such act might cause it to be in non-compliance with any sanctions legislation or regulation or any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline. Should the Escrow Agent, in its reasonable judgment, determine at any time that its acting under this Agreement has resulted in the Escrow Agent being in non-compliance with any sanctions legislation or regulation or any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline, then the Escrow Agent shall have the right to resign on 10 days’ written

notice to the Subscriber and the Issuer, provided (i) that the written notice shall describe the circumstances of such non-compliance to the extent permitted under any sanctions legislation or regulation or applicable anti-money laundering or anti-terrorist financing legislation, regulation or guideline; and (ii) that if such circumstances are rectified to the Escrow Agent’s satisfaction within such 10 day period, then such resignation shall not be effective.

7.11

Not Required to Expend its Own Funds

None of the provisions contained in this Agreement or any supplement shall require the Escrow Agent to expend or risk its own funds or otherwise incur financial liability in performing its duties or in the exercise of any of its rights or powers.

7.12

Resignation, Removal and Replacement of the Escrow Agent

The Escrow Agent may resign and be discharged from all further duties and obligations hereunder by giving to the Subscriber and the Issuer thirty (30) days’ written notice of the effective date of resignation (“Effective Date”) or such shorter notice period as may be agreed between the Subscriber, the Issuer and the Escrow Agent. In the event of the Escrow Agent resigning, the Subscriber and the Issuer shall forthwith appoint a successor agent. Failing such appointment by the Subscriber and the Issuer within thirty (30) days from the Effective Date, the Escrow Agent shall return the Escrow Amount to the Subscriber to be held in trust for the Issuer and the duties and obligations of the Escrow Agent under this Agreement shall cease immediately.

Any new escrow agent appointed pursuant to the provisions of this section shall be a corporation authorized to carry on the business of an escrow agent in the province of Ontario. On any new appointment, the new escrow agent shall be vested with the same powers, rights, duties and obligations as if it had been originally named herein as escrow agent, without any further assurance, conveyance, act or deed. The Escrow Agent, upon receipt of payment for any outstanding amounts for its services and expenses then unpaid, shall transfer, deliver and pay over to such successor escrow agent, who shall be entitled to receive, all cash and property on deposit with such predecessor hereunder.

7.13

Survival

The provisions of this section shall survive for the benefit of the Escrow Agent notwithstanding the resignation or removal of the Escrow Agent or the termination of this Agreement.

SECTION 8:

TERM OF AGREEMENT

8.1

Term and Termination

This Agreement shall commence on the date hereof and shall terminate pursuant to Sections 3, 5 or 7 hereof or this Section 8.

8.2

Termination

Notwithstanding any provisions contained in this Agreement, if the Escrow Agent continues to hold the Escrow Amount in escrow after five (5) years from the date of this Agreement, then the Escrow Agent shall return the Escrow Amount to the Subscriber to be held in trust for the Issuer and the duties and obligations of the Escrow Agent under this Agreement shall cease immediately.

SECTION 9:

NOTICES

9.1

Notice to the Subscriber

Any notice, demand or other communication to the Subscriber shall be in writing and addressed to the Subscriber as follows:

BPY Limited

c/o 145 Adelaide Street West, 4^th Floor

Toronto, ON

M5H 4E5

Attention: Paul Zogala

Email: pzogala@murchinsonltd.com

9.2

Notice to the Issuer

Any notice, demand or other communication to the Issuer shall be in writing and addressed to the Issuer as follows:

HEXO CORP.

120, chemin de la Rive

Gatineau, QC

J8M 1V2

Attention: General Counsel, Joelle Maurais

Email: [REDACTED CONFIDENTIAL INFORMATION]

With a copy to:

Norton Rose Fulbright Canada LLP

222 Bay Street, Suite 3000

P.O. Box 53

Toronto, ON M5K 1E7

Attention: [REDACTED CONFIDENTIAL INFORMATION]

Email: [REDACTED CONFIDENTIAL INFORMATION]

9.3

Notice to the Escrow Agent

Any notice, direction, demand or other communication to the Escrow Agent shall be in writing and addressed to the Escrow Agent as follows:

TingleMerrett LLP

1250, 639 – 5 Avenue SW

Calgary, AB T2P 0M9

Attention: Scott Reeves

Facsimile: (403) 571-8008

Email: sreeves@tinglemerrett.com

9.4

Delivery

Notices given pursuant to this Section 9 may be sent by personal delivery (including courier) during business hours or may be sent by ordinary mail or by facsimile or email. Such notice delivered in accordance with the foregoing shall be deemed to have been delivered at the time of personal delivery, or, if mailed, on the third (3^rd) Business Day following the date of the postmark on such notice or, if transmitted by facsimile or email, on the next Business Day following the date of transmission.

Any party may change its address by giving notice to the other parties in the manner set forth in this section.

If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving postal employees any notice to be given to the Escrow Agent or the Subscriber or the Issuer hereunder could reasonably be considered unlikely to reach its destination, such notice shall be valid and effective only if it is delivered, or sent by facsimile or email transmission.

SECTION 10:

GENERAL

10.1

Force Majeure

No party shall be liable to the other, or held in breach of this Agreement, if prevented, hindered, or delayed in the performance or observance of any provision contained herein by reason of act of God, riots, terrorism, acts of war, epidemics, pandemics, governmental action or judicial order, earthquakes, or any other similar causes (including, but not limited to, mechanical, electronic or communication interruptions, disruptions or failures). Performance times under this Agreement shall be extended for a period of time equivalent to the time lost because of any delay that is excusable under this section.

10.2

Representation

Each party represents that it has the power and authority to enter into and perform its obligations under this Agreement, that the person or persons signing this Agreement on behalf of the named party are properly authorized and empowered to sign it and that the Agreement is valid and binding on the party and enforceable against the party in accordance with its terms.

10.3

Merger, Consolidation or Amalgamation

This Agreement shall not be assigned by any party hereto without the prior written consent of the other parties hereto. Notwithstanding the foregoing, any corporation into or with which the Escrow Agent may be merged or consolidated or amalgamated, or any corporation resulting therefrom, or any corporation succeeding to the trust business of the Escrow Agent, shall be the successor to the Escrow Agent hereunder without any further act on the Escrow Agent’s part or any of the parties hereto.

10.4

Severability

If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired.

10.5

Currency

All amounts stated herein are expressed in United States dollars.

10.6

Amendment

No provision of this Agreement shall be deemed waived, amended or modified by any party unless such waiver, amendment or modification is in writing and signed by the parties hereto.

10.7

Entire Agreement

This Agreement constitutes the entire Agreement between the parties and cancels, replaces and supersedes all existing and prior and contemporaneous agreements, understandings and negotiations relating to its subject matter and there are no warranties, representations or agreements among the parties in connection with the subject matter hereof except as specifically set forth and referred to herein.

10.8

Counterparts

This Agreement may be executed (including electronically) in any number of counterparts and may be delivered by facsimile transmission or in PDF format delivered by email. Each counterpart, when so executed, shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

10.9

Time of the Essence

Time shall be of the essence.

10.10

Successors and Assigns

This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. Except as may be otherwise specifically provided herein, no assignment shall be made of this Agreement without the prior written consent of the parties hereto.

10.11

Governing Law

This Agreement shall be construed in accordance with and governed by the laws of the province of Alberta and the federal laws of Canada applicable therein, and any actions, proceedings, claims or disputes regarding it shall be resolved by the courts in that province.

[signature pages follow]

Signature Page of Subscriber to Cash Escrow Agency Agreement

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.


BPY Limited

By:		(signed) Jason Jagessar
		Name: Jason Jagessar
		Title: Director

Signature Page of Escrow Agent to Cash Escrow Agency Agreement

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.


TINGLEMERRETT LLP

By:		(signed) Scott Reeves
		Name: Scott Reeves
		Title: Partner

Signature Page of Issuer to Cash Escrow Agency Agreement

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.


HEXO CORP.

By:		(signed) Rob Godfrey
		Name: Rob Godfrey
		Title: Chair, Special Committee

Schedule “A”

Escrow Account

[REDACTED CONFIDENTIAL INFORMATION]

Schedule “B”

Escrow Release Notice

To: TINGLEMERRETT LLP (the “Escrow Agent”)

AND TO: BPY Limited (the “Subscriber”)

Reference is made to the escrow agreement dated June 1, 2023 (the “Escrow Agreement”) between Hexo Corp (the “Issuer”), the Escrow Agent and the Subscriber. Unless otherwise defined herein, capitalized words and terms used herein shall have the meanings given to such words and terms in the Escrow Agreement.

The Escrow Agent is hereby notified that:

(a)

the Escrow Release Condition has been satisfied in full in accordance with the Escrow Agreement, and,

(b)

the Issuer has been notified by its legal counsel that the filing of the Articles of Arrangement contemplated under the Arrangement Agreement that are required to be filed in order to make the plan of arrangement thereunder effective, will be filed within 24 hours from the time of delivery of this Escrow Release Notice to the Escrow Agent and the Subscriber,

accordingly, the Escrow Agent is hereby irrevocably directed and authorized to, in accordance with Section 3.4(a) of the Escrow Agreement, to release the Escrowed Amount to the Issuer by means of a wire transfer to the bank account provided by the Issuer to the Escrow Agent.

This Escrow Release Notice, which may be delivered by email or facsimile, is irrevocable and shall constitute your good and sufficient authority for taking the actions described herein.

DATED this _____ day of __________________, 2023.


HEXO CORP.
By:
		Name:
		Title:

EX-99.3 4 d517519dex993.htm EX-99.3 EX-99.3

Exhibit 99.3

ARRANGEMENT AGREEMENT AMENDMENT

THIS AMENDMENT (this “Amendment”) is made as of June 1, 2023.

BETWEEN:

TILRAY BRANDS, INC., a corporation existing under the laws of the State of Delaware

(the “Purchaser”)

AND:

HEXO CORP., a corporation existing under the laws of the Province of Ontario

(the “Company”, and together with the Purchaser, the “Parties”).

WHEREAS:

On April 10, 2023, the Parties entered into an arrangement agreement (the “Arrangement Agreement”), pursuant to which, and subject to the conditions set out in the Plan of Arrangement attached thereto (the “Plan of Arrangement”), the Purchaser agreed to acquire all of the issued and outstanding shares of HEXO under a court approved arrangement under Section 182 of the Business Corporations Act (Ontario) (the “Arrangement”);

B.	The Company and the Purchaser wish to enter into this Amendment to amend certain provisions of the Arrangement Agreement and the Plan of Arrangement as contemplated herein; and

C.	All capitalized terms used in this Amendment but not defined herein shall have the meaning attributed to such terms in the Arrangement Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby confirm, acknowledge and agree as follows:

Amendments to the Arrangement Agreement

1.	The definition of “Company Securityholders” in Section 1.1 of the Arrangement Agreement is hereby deleted and replaced with the following:

“Company Securityholders” means, collectively, the Company Shareholders, the holders of Company Preferred Shares, the holders of the Company Awards, and the holders of Company Warrants.

2.	The definition of “Company Preferred Shares” in Section 1.1 of the Arrangement

Agreement is hereby deleted and replaced with the following:

“Company Preferred Shares” means the series of shares designated as the “Series 1 Preferred Shares” within the class of special shares in the capital of the Company.

3.	The definition of “Consideration” in Section 1.1 of the Arrangement Agreement is hereby deleted and replaced with the following:

“Consideration” means (A) in respect of the Company Shares, that portion of a Purchaser Share to be received by each holder of Company Shares (other than Dissenting Shareholders) pursuant to the Plan of Arrangement in respect of each Company Share, which is equal to the product obtained when (i) the Exchange Ratio, is multiplied by (ii) one (1) Company Share, and (B) in respect of the Company Preferred Shares, that portion of a Purchaser Share to be received by each holder of Company Preferred Shares pursuant to the Plan of Arrangement in respect of each Company Preferred Share, which is equal to the product obtained when (i) the Preferred Share Exchange Ratio, is multiplied by (ii) one (1) Company Preferred Share.

4.	The definition of “Consideration Shares” in Section 1.1 of the Arrangement Agreement is hereby deleted and replaced with the following:

“Consideration Shares” means the Consideration, in the form of Purchaser Shares, to be received by (i) Company Shareholders (other than Dissenting Shareholders) in exchange for their Company Shares, and (ii) holders of Company Preferred Shares in exchange for their Company Preferred Shares, pursuant to the Plan of Arrangement.

5.	The following definitions are hereby added to Section 1.1 of the Arrangement Agreement:

“Preferred Share Exchange Ratio” means such fraction of a Purchaser Share equal to the quotient obtained from dividing: (1) the Liquidation and Redemption Price, by (2) the lower of (a) the closing price of the Purchaser Shares on the Nasdaq, and (b) the five day volume-weighted average trading price of a Purchaser Share on the Nasdaq, each calculated as of the end of the third Business Day immediately prior to the Effective Date.

“Liquidation and Redemption Price” means US$1.22 per Company Preferred Share.

6.	The words “and Company Preferred Shares” be added after each reference to “Company Shares” in each of the following sections of the Arrangement Agreement: First Recital, and Section 2.1 (Arrangement).

7.	The words “or Company Preferred Share” be added after each reference to “Company Share” in Section 2.10 (Adjustment of Consideration).

8.	The words “or Company Preferred Shares” be added after each reference to “Company Share” in each of the following sections: Section 2.14(g) (U.S. Securities Laws Matters) and Section 4.1(4)(b) (Conduct of Business of the Company).

9.	The Plan of Arrangement attached to the Arrangement Agreement as Schedule “A” is hereby deleted and replaced with the amended and restated plan of arrangement attached to this Amendment as Schedule “A”.

General Matters

10.

The Purchaser hereby expressly consents, pursuant to each of the Company Senior Secured Note and the Arrangement Agreement, to the Company amending its Organizational Documents in order to create and issue the Company Preferred Shares. The Purchaser hereby further confirms, represents and warrants that the issuance of the Company Preferred Shares is on terms acceptable to its board of directors.

11.	Except for the amendments contemplated in this Amendment, no other amendments to the Arrangement Agreement will be made by the Parties pursuant to this Amendment, and the Arrangement Agreement shall otherwise remain outstanding on identical terms and conditions.

12.

This Amendment may be executed in counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. The Parties shall be entitled to rely upon delivery of an executed facsimile or similar executed electronic copy of this Amendment, and such facsimile or similar executed electronic copy shall be legally effective to create a valid and binding agreement between the Parties.

13.

This Amendment shall be governed, including as to validity, interpretation and effect, by the laws of the Province of Ontario and the federal laws of Canada applicable therein. Each of the parties hereby irrevocably attorns to the non-exclusive jurisdiction of the Courts of the Province of Ontario situated in the City of Toronto in respect of all matters arising under and in relation to this Amendment and waives objection to venue of any proceeding in such court or that such court provides an inconvenient forum.

14.	This Amendment is binding upon and will enure to the benefit of each Party and its respective successors and permitted assigns.

[Signature page follows]

IN WITNESS WHEREOF the Parties have executed this Amendment as of the date first written above.


HEXO CORP.

By:		(signed) Rob Godfrey
		Name: Rob Godfrey
		Title: Chair, Special Committee

TILRAY BRANDS, INC.

By:		(signed) Mitchell Gendel
		Name: Mitchell Gendel
		Title: Global General Counsel

SCHEDULE A

AMENDED AND RESTATED PLAN OF ARRANGEMENT

[Attached]

SCHEDULE “A”

AMENDED AND RESTATED PLAN OF ARRANGEMENT

UNDER THE PROVISIONS OF SECTION 182

OF THE BUSINESS CORPORATIONS ACT (ONTARIO)

ARTICLE 1

INTERPRETATION

Section 1.1 Definitions

In this Plan of Arrangement, unless there is something in the subject matter or context clearly inconsistent therewith, the following terms shall have the respective meanings set out below and grammatical variations of those terms shall have corresponding meanings:

(a)

“48North” means 48North Cannabis Corp.;

(b)

“Arrangement Agreement” means the agreement made as of April 10, 2023 between the Company and the Purchaser, including the schedules thereto, together with the Company Disclosure Letter, as amended by that certain Arrangement Agreement Amendment between the Parties made as of June 1, 2023 and as the same may be further amended, supplemented, restated or otherwise modified from time to time in accordance with its terms;

(c)

“Arrangement” means the arrangement under Section 182 of the OBCA on the terms and subject to the conditions set out in this Plan of Arrangement, subject to any amendments or variations thereto made in accordance with the terms of the Arrangement Agreement and Section 7.1 of this Plan of Arrangement or made at the direction of the Court in the Final Order with the consent of the Company and the Purchaser, each acting reasonably;

(d)

“Arrangement Resolution” means the special resolution approving the Arrangement to be considered, and, if thought advisable, passed by the Company Shareholders at the Meeting to be substantially in the form and content set out in Schedule “B” to the Arrangement Agreement;

(e)

“Articles of Arrangement” means the articles of arrangement of the Company in respect of the Arrangement, required by the OBCA to be sent to the Director after the Final Order is made, which will include the Plan of Arrangement and be in form and content satisfactory to the Company and the Purchaser, each acting reasonably;

(f)

“Business Day” means any day of the year, other than a Saturday, Sunday or any day on which major commercial banking institutions in Toronto, Ontario or New York, New York are required by Law to be closed for business;

(g)

“Certificate of Arrangement” means the certificate of arrangement giving effect to the Arrangement, issued by the Director pursuant to the OBCA in respect of the Articles of Arrangement;

(h)

“Code” means the United States Internal Revenue Code of 1986, as amended;

(i)

“Company” means HEXO Corp., a corporation existing under the OBCA;

(j)

“Company April 2019 Warrant Indenture” means the warrant indenture dated April 2, 2019 between 48North and Computershare Trust Company of Canada, as supplemented by that first supplemental warrant indenture dated as of September 1, 2021 among the Company, 48North and Computershare Trust Company of Canada;

(k)

“Company April 2019 Warrants” means the warrants to purchase Company Shares issued pursuant to the Company April 2019 Warrant Indenture, listed on the TSX as “HEXO.WT.A”;

(l)

“Company April 2020 Warrant Indenture” means the warrant indenture dated as of April 13, 2020 between HEXO Corp. and TSX Trust Company;

(m)

“Company April 2020 Warrants” means the warrants to purchase Company Shares issued pursuant to the Company April 2020 Warrant Indenture;

(n)

“Company April 2021 Warrant Indenture” means the warrant indenture dated April 16, 2019 between 48North and Computershare Trust Company of Canada, as supplemented by that first supplemental warrant indenture dated as of September 1, 2021 among the Company, 48North and Computershare Trust Company of Canada;

(o)

“Company April 2021 Warrants” means the warrants to purchase Company Shares issued pursuant to the Company April 2021 Warrant Indenture;

(p)

“Company August 2021 Warrant Indenture” means the warrant indenture dated as of August 24, 2021 between HEXO Corp. and TSX Trust Company;

(q)

“Company August 2021 Warrants” means the warrants to purchase Company Shares issued pursuant to the Company August 2021 Warrant Indenture;

(r)

“Company Certificated Warrants” means the certificated warrants of the Company issued to certain holders on December 31, 2019 and January 22, 2020;

(s)

“Company DSUs” means the deferred share units issued under the Company Omnibus Plan;

(t)

“Company Disclosure Letter” means the disclosure letter delivered to the Purchaser by the Company concurrently with the Arrangement Agreement;

(u)

“Company June 2018 Warrant Certificates” means the warrant certificates issued by Newstrike Resources Ltd. to various holders on June 19, 2018;

(v)

“Company June 2018 Warrant Indenture” means the warrant indenture dated as of June 19, 2018, between Newstrike Resources Ltd. and TSX Trust Company, as supplemented by that warrant indenture dated as of May 24, 2019 among the Company, Newstrike Brands Ltd. and TSX Trust Company;

(w)

“Company June 2018 Warrants” means the warrants to purchase Company Shares issued pursuant to (i) the Company June 2018 Warrant Indenture, listed on the TSXV as “HIP.WT.A” and (ii) the Company June 2018 Warrant Certificates;

(x)

“Company June 2020 Warrant Indenture” means the warrant indenture dated as of June 5, 2020 between the Company and TSX Trust Company;

(y)

“Company June 2020 Warrants” means the warrants to purchase Company Shares issued pursuant to the Company June 2020 Warrant Indenture;

(z)

“Company May 2020 Warrant Indenture” means the warrant indenture dated as of May 21, 2020 between HEXO Corp. and TSX Trust Company;

(aa)

“Company May 2020 Warrants” means the warrants to purchase Company Shares issued pursuant to the Company May 2020 Warrant Indenture;

(bb)

“Company November 2020 Warrants” means the warrants to purchase Company Shares issued by 48North to various holders on November 4, 2020;

(cc)

“Company Omnibus Plan” means the Company’s omnibus long-term incentive plan approved by the Company Shareholders on August 28, 2018, as further amended and restated on March 12, 2021;

(dd)

“Company Options” means the outstanding options to purchase Company Shares, issued pursuant to the Company Omnibus Plan and the Previous Company Stock Option Plan;

(ee)

“Company Preferred Shares” means the series of shares designated as the “Series 1 Preferred Shares” within the class of special shares in the capital of the Company;

(ff)

“Company RSUs” means the restricted share units issued under the Company Omnibus Plan;

(gg)

“Company Securityholders” means, collectively, the Company Shareholders, the holders of Company Preferred Shares, the holders of Company Options, the holders of Company RSUs, the holders of Company DSUs, the holders of Company Warrants, and the holders of Zenabis Replacement Options;

(a)

“Company Senior Secured Note” means the amended and restated senior secured convertible note of the Company held by the Purchaser dated July 12, 2022;

(b)

“Company Shareholders” means the registered and/or beneficial holders of the Company Shares, as the context requires;

(c)

“Company Shares” means the common shares in the capital of the Company;

(d)

“Company Warrant Indentures” means, collectively, (i) the Company June 2018 Warrant Indenture, (ii) the Company April 2019 Warrant Indenture, (iii) the Company April 2020 Warrant Indenture, (iv) the Company May 2020 Warrant Indenture, (v) the Company June 2020 Warrant Indenture, (vi) the Company August 2021 Warrant Indenture, (vii) the Company April 2021 Warrant Indenture, and (viii) the Zenabis Supplemental Warrant Indentures;

(e)

“Company Warrants” means, collectively, (i) the Company June 2018 Warrants, (ii) the Company April 2019 Warrants, (iii) the Company April 2020 Warrants, (iv) the Company May 2020 Warrants, (v) the Company June 2020 Warrants, (vi) the Company August 2021 Warrants, (vii) the Company April 2021 Warrants, (viii) the Zenabis Replacement Warrants, (ix) the Company Certificated Warrants and (x) the Company November 2020 Warrants;

(f)

(g)

“Court” means the Ontario Superior Court of Justice (Commercial List) or any other court with jurisdiction to consider and issue the Interim Order and the Final Order;

(h)

“Depositary” means Odyssey Trust Company, or such other person as the Parties may agree in writing to appoint to act as depositary for the purposes of the Arrangement;

(i)

“Director” means the Director appointed under section 278 of the OBCA;

(j)

“Dissent Rights” means the rights of dissent of registered Company Shareholders in respect of the Arrangement described in Article 4 of this Plan of Arrangement;

(k)

“Dissenting Shareholder” means a registered holder of Company Shares who has duly and validly exercised the Dissent Rights in respect of the Arrangement Resolution in strict compliance with the Dissent Rights and who has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights and whose Dissent Rights remain valid immediately prior to the Effective Time, but only in respect of the Company Shares in respect of which Dissent Rights are duly and validly exercised by such registered Company Shareholder;

(l)

“Dissenting Shares” means the Company Shares held by Dissenting Shareholders in respect of which such Dissenting Shareholders have given Notice of Dissent;

(m)

“Effective Date” means the date shown on the Certificate of Arrangement giving effect to the Arrangement;

(n)

“Effective Time” means 12:01 a.m. (Toronto time) on the Effective Date or such other time as the Parties agree in writing before the Effective Date;

(o)

“Exchange Ratio” means 0.4352;

(p)

“Final Order” means the final order of the Court in a form acceptable to the Company and the Purchaser, each acting reasonably, approving the Arrangement under section 182(5) of the OBCA, as such order may be affirmed, amended, modified, supplemented or varied by the Court with the consent of the Parties, each acting reasonably, at any time prior to the Effective Date or, if appealed and a stay of the final order is obtained pending appeal, then, unless such appeal is withdrawn, abandoned or denied, as affirmed or as amended (provided that any such amendment is acceptable to both the Company and the Purchaser, each acting reasonably) on appeal;

(q)

“Governmental Entity” means: (i) any international, multinational, national, federal, provincial, territorial, state, regional, municipal, local or other government, governmental or public body, authority or department, central bank, court, tribunal, arbitral body, commission, board, bureau, commissioner, ministry, governor in council, agency or instrumentality, domestic or foreign; (ii) any subdivision or authority of any of the above; (iii) any quasi-governmental, administrative or private body, including any tribunal, commission, committee, regulatory agency or self-regulatory organization, exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing; or (iv) any stock exchange;

(r)

“holder” means, when used with reference to any securities of the Company, the holder of such securities shown from time to time in the central securities register maintained by or on behalf of the Company in respect of such securities;

(s)

“Interim Order” means the interim order of the Court pursuant to Section 182(5) of the OBCA in a form acceptable to the Company and the Purchaser, each acting reasonably, providing for, among other things, the calling and holding of the Meeting, as such order may be amended, modified, supplemented or varied by the Court with the consent of the Company and the Purchaser, each acting reasonably, at any time prior to the Final Order or, if appealed, then unless such appeal is withdrawn or denied, as affirmed or as amended on appeal;

(t)

“In-The-Money Amount” in respect of an option means the amount, if any, by which the fair market value at that time of the securities subject to the option exceeds the exercise price of the option;

(u)

“Law” means any and all laws, statutes, codes, ordinances, decrees, rules, regulations, by-laws, notices, judicial, arbitral, administrative, ministerial, departmental or regulatory judgments, injunctions, orders, decisions, rulings, determinations or awards, decrees or other requirements of any Governmental Entity having the force of law and any legal requirements arising under the common law or principles of law or equity and the term “applicable” with respect to such Laws and, in the context that refers to any Person, means such Laws as are applicable at the relevant time or times to such Person or its business, undertaking, property or securities and emanate from a Governmental Entity having jurisdiction over such Person or its business, undertaking, property or securities;

(v)

“Letters of Transmittal” means the letters of transmittal delivered by the Company Shareholders and the holders of Company Preferred Shares to the Depositary as described therein;

(w)

“Liquidation and Redemption Price” means U.S.$1.22 per Company Preferred Share;

(x)

“Meeting” means the special meeting of the Company Shareholders, including any adjournment or postponement thereof, called and held in accordance with the Interim Order for the purpose of approving the Arrangement Resolution;

(y)

“Notice of Dissent” means a notice of dissent duly and validly given by a registered holder of Company Shares exercising Dissent Rights as contemplated in the Interim Order and as described in Article 4 of this Plan of Arrangement;

(z)

“OBCA” means the Business Corporations Act (Ontario) and all regulations made thereunder, as promulgated or amended from time to time;

(aa)

“Parties” means the Company and the Purchaser;

(bb)

“Payout Value” means $1.25, being the product of (i) the Exchange Ratio, multiplied by (ii) the volume weighted average price on the Nasdaq of a Purchaser Share for the 60 trading day period ending on April 5, 2023;

(cc)

“Plan of Arrangement” means this amended and restated plan of arrangement proposed under Section 182 of the OBCA, subject to any amendments or variations to such plan made in accordance with the Arrangement or this plan of arrangement or made at the direction of the Court in the Final Order with the prior written consent of the Company and the Purchaser, each acting reasonably;

(dd)

“Preferred Share Exchange Ratio” means such fraction of a Purchaser Share equal to the quotient obtained from dividing: (1) the amount of the Liquidation and Redemption Price, by (2) the lower of (a) the closing price of the Purchaser Shares on the Nasdaq, and (b) the five day volume-weighted average trading price of a Purchaser Share on the Nasdaq, each calculated as of the end of the third Business Day immediately prior to the Effective Date;

(ee)

“Previous Company Stock Option Plan” means the Hydropothecary Corporation stock option plan as approved by the shareholders of The Hydropothecary Corporation on January 17, 2018 and any amendments thereto.

(ff)

“Purchaser” means Tilray Brands, Inc., a corporation existing under the laws of the State of Delaware;

(gg)

“Purchaser Shares” means the shares of Common Stock in the capital of the Purchaser;

(hh)

“Tax Act” means the Income Tax Act (Canada) and the regulations thereunder, as amended;

(ii)

“U.S. Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;

(jj)

“Zenabis” means Zenabis Ltd. (formerly Zenabis Global Inc.);

(kk)

“Zenabis Incentive Plan” means the Zenabis omnibus incentive plan, as approved by the shareholders of Zenabis on June 25, 2019 and any amendments thereto and restatements thereof;

(ll)

“Zenabis Replacement Options” means the stock options issued by the Company in replacement of certain stock options which had been issued by Zenabis pursuant to the Zenabis Incentive Plan, in connection with the Company’s acquisition of Zenabis, exercisable for Company Shares;

(mm)

“Zenabis Replacement Warrants” means, collectively, (i) the outstanding certificated warrants to purchase common shares of Zenabis, as exchanged for warrants to purchase common shares of the Company pursuant to the warrant exchange agreement made as of October 31, 2022 between Zenabis Ltd. and the Company; and (ii) the warrants to purchase Company Shares issued pursuant to the Zenabis Supplemental Warrant Indentures; and

(nn)

“Zenabis Supplemental Warrant Indenture” means, collectively, (i) the second supplemental indenture dated October 31, 2022 between the Company and Computershare Trust Company of Canada supplementing the warrant indenture dated June 25, 2020, between Zenabis Global Inc. and Computershare Trust Company of Canada, as supplemented by that first supplemental indenture dated June 1, 2021, among the Company, Zenabis Global Inc. and Computershare Trust Company of Canada, and (ii) the second supplemental warrant indenture dated as of October 31, 2022 between the Company and Computershare Trust Company of Canada supplementing the warrant indenture dated September 23, 2020, between Zenabis Global Inc. and Computershare Trust Company of Canada, as supplemented by that first supplemental indenture dated June 1, 2021, among the Company, Zenabis Global Inc. and Computershare Trust Company of Canada.

Any capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Arrangement Agreement. In addition, words and phrases used herein and defined in the OBCA and not otherwise defined herein or in the Arrangement Agreement shall have the same meaning herein as in the OBCA unless the context otherwise clearly requires.

Section 1.2 Interpretation Not Affected by Headings

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

Section 1.3 Number, Gender and Persons

Any reference to gender includes all genders. Words importing the singular number also include the plural and vice versa. Words imparting persons shall include individuals, partnerships, limited liability companies, associations, corporations, funds, unincorporated organizations, governments, regulatory authorities and other entities.

Section 1.4 Certain Phrases, etc.

The words: (i) “including”, “includes” and “include” mean “including (or includes or include) without limitation”; (ii) “day” means “calendar da”, (iii) “hereof”, “herein”, “hereunder” and words of similar import, will refer to this Plan of Arrangement as a whole and not to any particular provision of this Plan of Arrangement; (iv) “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”; and (v) unless stated otherwise, “Article” and

“Section” followed by a number or letter mean and refer to the specified Article or Section of this Plan of Arrangement.

Section 1.5 Date of Any Action

If any date on which any action is required to be taken hereunder by any of the Parties is not a Business Day, then such action shall be required to be taken on the next succeeding day which is a Business Day.

Section 1.6 Time

Time shall be of the essence in every matter or action contemplated hereunder. All times expressed herein or in the Letter of Transmittal refer to the local time of the Company (being the time in Toronto, Ontario) unless otherwise stipulated herein or therein. A period of time is to be computed as beginning on the day following the event that began the period and ending at 4:30 p.m. on the next Business Day if the last day of the period, if the last day of the period is a Business Day, or at 4:30 p.m. on the next Business Day if the last day of the period is not a Business Day.

Section 1.7 Statutory References

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

Section 1.8 Currency

All references to dollars or to “$” are references to United States dollars unless otherwise indicated.

ARTICLE 2

EFFECT OF THE ARRANGEMENT

Section 2.1 Arrangement Agreement

This Plan of Arrangement is made pursuant to, is subject to the provisions of, and forms a part of the Arrangement Agreement, except in respect of the sequence of the steps comprising the Arrangement, which shall occur in the order set forth herein. This Plan of Arrangement constitutes an arrangement as referred to in Section 182 of the OBCA.

Section 2.2 Binding Effect

This Plan of Arrangement will become effective commencing at the Effective Time and shall be binding upon the Company, the Purchaser, the Company Securityholders (including Dissenting Shareholders), the holders of Company Preferred Shares, the Depositary, the transfer agents and registrars in respect of the Company Shares and the Purchaser Shares and all other Persons without any further act or formality required on the part of any Person.

Section 2.3 Transfers Free and Clear

Any transfer of securities pursuant to this Plan of Arrangement shall be free and clear of all Liens, claims and encumbrances.

ARTICLE 3

ARRANGEMENT

Section 3.1 The Arrangement

Commencing at the Effective Time, each of the events set out below shall occur and be deemed to occur in the following sequence, in each case without any further authorization, act or formality on the part of any Person:

(a)

at the Effective Time:

(i)

the Company Senior Secured Note, without any further action by or on behalf of the holder thereof or the Company, shall convert into such number of Company Shares (the “Note Shares”) as the outstanding amount of the Company Senior Secured Note is then convertible into in accordance with the terms of Section 8 thereof, and the Company shall be deemed to have issued to the Purchaser such number of Company Shares issuable upon such conversion;

(ii)

the Company shall make appropriate entries in its securities registers to reflect the matters referred to in Section 3.1(a)(i);

(b)

immediately after the steps in Section 3.1(a)(i) occur:

(i)

each Dissenting Share held by a Dissenting Shareholder shall be deemed to be, transferred by the holder thereof, without any further act or formality on its part, to the Company (free and clear of all Liens) and such Dissenting Shareholder will cease to be the holder thereof or to have any rights as a holder in respect of such Dissenting Share other than the right to be paid the fair value of such Dissenting Share determined and payable in accordance with Article 4;

(ii)

at the same time as the step in Section 3.1(b)(i) occurs, the name of each Dissenting Shareholder shall be, and shall be deemed to be, removed from the register of the Company Shares in respect of such Dissenting Shares and such Dissenting Shares shall be automatically cancelled as of the Effective Date;

(c)

at the same time as the steps in Section 3.1(b) occur:

(i)

each Company Preferred Share outstanding immediately prior to the Effective Time shall be, and shall be deemed to be, transferred by the holder thereof to the Purchaser (free and clear of all Liens) in exchange for issuance of the Consideration;

(ii)

at the same time as the step in Section 3.1(c)(i) occurs, the holder of each Company Preferred Share transferred to the Purchaser pursuant to Section 3.1(c)(i) shall cease to be the holder thereof, or to have any rights as a holder thereof other than the right to receive the Consideration issuable in respect of each Company Preferred Share held pursuant to Section 3.1(c)(i) and shall be removed from the register of the Company Preferred Shares and legal and beneficial title to each such Company Preferred Share shall be transferred to the Purchaser and the Purchaser will be and be deemed to be the transferee and legal and beneficial owner of such Company Preferred Share (free and clear of any Liens) and will be entered in the central securities register of the Company as the sole holder thereof;

(iii)

the Purchaser will be the holder of all of the outstanding Company Preferred Shares;

(d)

at the same time as the steps in Section 3.1(c) occur:

(i)

each Company Share outstanding immediately prior to the Effective Time (other than the Dissenting Shares held by Dissenting Shareholders who are ultimately determined to be entitled to be paid the fair value of their Dissenting Shares as determined in accordance with Article 4), other than the Note Shares, shall be, and shall be deemed to be, transferred by the holder thereof to the Purchaser (free and clear of all Liens) in exchange for issuance of the Consideration;

(ii)

at the same time as the step in Section 3.1(d)(i) occurs, the holder of each Company Share transferred to the Purchaser pursuant to Section 3.1(c)(i) shall cease to be the holder thereof, or to have any rights as a holder thereof other than the right to receive the Consideration issuable in respect of each Company Share held pursuant to Section 3.1(d)(i) and shall be removed from the register of the Company Shares and legal and beneficial title to each such Company Share shall be transferred to the Purchaser and the Purchaser will be and be deemed to be the transferee and legal and beneficial owner of such Company Share (free and clear of any Liens) and will be entered in the central securities register of the Company as the sole holder thereof;

(iii)

the Purchaser will be the holder of all of the outstanding Company Shares;

(e)

immediately after the steps in Section 3.1(d)(i) occur:

(i)

the terms of each Company Option outstanding immediately prior to the Effective Time shall be adjusted so that, upon exercise of such Company Option, the holder shall, upon payment of the exercise price under such Company Option, be entitled to receive, in substitution for the number of Company Shares subject to such Company Option, that number of Purchaser Shares equal to the product obtained when the number of Company Shares subject to such Company Option immediately prior to the Effective Time is multiplied by the Exchange Ratio (rounded down to the next whole number of Purchaser Shares). For greater certainty, the exercise price per Purchaser Share under such Company Option immediately following the adjustment pursuant to this Section 3.1(e)(i) shall equal the exercise price per Company Share under such Company Option immediately prior to the Effective Time divided by the Exchange Ratio, rounded up to the nearest whole cent. The Company Options shall not be exchanged or otherwise replaced by this Plan of Arrangement, and, subject to this Section 3.1(e)(i), shall continue to be governed by the Company Omnibus Plan or Previous Stock Option Plan, as applicable, on the same terms and conditions as were applicable to such Company Options immediately prior to the Effective Time. Notwithstanding the foregoing, if necessary to satisfy the requirements of subsection 7(1.4) of the Tax Act, the exercise price of a Company Option adjusted in accordance with the foregoing shall be increased such that the In-The-Money Amount of the Company Option immediately after such adjustment does not exceed the In-The-Money Amount of the Company Option immediately before such adjustment. For any Company Option that is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code, it is intended that such adjustment will comply with Treasury Regulation Section 1.424(1)(a). For any Company Option that is a nonqualified option held by a U.S. taxpayer, it is intended that such adjustment will be implemented in a manner intended comply with Section 409A of the Code;

(ii)

each Company DSU outstanding immediately prior to the Effective Time shall be deemed to be unconditionally redeemed by the holder thereof and such Company DSU, without any further action by or on behalf of the holder thereof, shall be assigned and transferred by such holder to the Company (free and clear of all Liens) in exchange for a cash payment equal to the number of Company DSUs credited to such holder multiplied by the Payout Value, and thereafter each such Company DSU shall immediately be cancelled and terminated;

(iii)

each Company RSU outstanding immediately prior to the Effective Time, whether vested or unvested shall be deemed to be unconditionally vested and such Company RSU, without any further action by or on behalf of the holder thereof, shall be assigned and transferred by such holder to the Company (free and clear of all Liens) in exchange for a cash payment equal to the number of Company RSUs credited to such holder multiplied by the Payout Value, and thereafter each such Company RSU shall immediately be cancelled and terminated;

(iv)

the terms of each Zenabis Replacement Option outstanding immediately prior to the Effective Time shall be adjusted so that, upon exercise of such Zenabis Replacement Option, the holder shall, upon payment of the exercise price under such Zenabis Replacement Option, be entitled to receive, in substitution for the number of Company Shares subject to such Zenabis Replacement Option, that number of Purchaser Shares equal to the product obtained when the number of Company Shares subject to such Zenabis Replacement Option immediately prior to the Effective Time is multiplied by the Exchange Ratio (rounded down to the next whole number of Purchaser Shares). For greater certainty, the exercise price per Purchaser Share under such Zenabis Replacement Option immediately following the adjustment pursuant to this Section 3.1(d)(iv) shall equal the exercise price per Company Share under such Zenabis Replacement Option immediately prior to the Effective Time divided by the Exchange Ratio, rounded up to the nearest whole cent. The Zenabis Replacement Options shall not be exchanged or otherwise replaced by this Plan of Arrangement, and, subject to this Section 3.1(d)(iv), shall continue to be governed by the Zenabis Incentive Plan on the same terms and conditions as were applicable to such Zenabis Replacement Options immediately prior to the Effective Time. Notwithstanding the foregoing, if necessary to satisfy the requirements of subsection 7(1.4) of the Tax Act, the exercise price of a Zenabis Replacement Option adjusted in accordance with the foregoing shall be increased such that the In-The-Money Amount of the Zenabis Replacement Option immediately after such adjustment does not exceed the In-The-Money Amount of the Zenabis Replacement Option immediately before such adjustment. For any Zenabis Replacement Option that is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code, it is intended that such adjustment will comply with Treasury Regulation Section 1.424(1)(a). For any Zenabis Replacement Option that is a nonqualified option held by a U.S. taxpayer, it is intended that such adjustment will be implemented in a manner intended comply with Section 409A of the Code; and

(f)

no person shall have any rights, liabilities or other obligations in respect of the share capital of the Company other than the Purchaser and each holder of Company Shares, Company Preferred Shares, Company Options, Company RSUs, Company DSUs, Company Warrants and Zenabis Replacement Options outstanding immediately prior to the Effective Time, with respect to each step set out above applicable to such holder, shall be deemed, at the time such step occurs, to have executed and delivered all consents, releases, assignments and waivers, statutory or otherwise, required for the completion of such step.

ARTICLE 4

DISSENT RIGHTS

Section 4.1 Rights of Dissent

(a)

Pursuant to the Interim Order, each registered Company Shareholder may exercise rights of dissent (“Dissent Rights”) pursuant to and in the manner set forth in Section 185 of the OBCA, as modified by this Article 4 and the Interim Order; provided, however, that, notwithstanding Section 185(6) of the OBCA, the written objection to the Arrangement Resolution in the manner contemplated by Subsection 185(6) of the OBCA, must be received by the Company by no later than 4:00 p.m. (Toronto time) at least two Business Days prior to the Meeting. Company Shareholders who duly exercise such rights of dissent and who:

(i)

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

(ii)

are ultimately not entitled, for any reason, to be paid by the Company, the fair value for Company Shares in respect of which they have exercised Dissent Rights will be deemed to have participated in the Arrangement on the same basis as a Company Shareholder who has not exercised Dissent Rights, as at and from the time specified in Section 3.1(c)(i) and be entitled to receive only the consideration set forth in Section 3.1(c)(i) that such holder would have received if such holder had not exercised Dissent Rights,

but in no case will the Company or the Purchaser or any other person be required to recognize Dissenting Shareholders as holders of Company Shares after the completion of the steps set forth in Section 3.1(d)(i), and each Dissenting Shareholder will cease to be entitled to the rights of a Company Shareholder in respect of Company Shares in relation to which such Dissenting Shareholder has exercised Dissent Rights and the central securities register of the Company will be amended to reflect that such former holder is no longer the holder of such Company Shares as and from the Effective Time and that such Company Shares have been cancelled. For greater certainty, and in addition to any other restriction under Section 185 of the OBCA, a Company Shareholder who has voted, or instructed a proxyholder to vote, in favour of the Arrangement Resolution shall not be entitled to exercise Dissent Rights with respect to the Arrangement.

(b)

For greater certainty in accordance with the OBCA, none of the following are entitled to exercise Dissent Rights: (i) holders of Company Options, (ii) holders of Company RSUs, (iii) holders of Company DSUs, (iv) holders of Company Warrants, (v) holders of Zenabis Replacement Options, and (vi) holders of Company Shares who vote in favour of the Arrangement Resolution. In addition, in accordance with the terms and conditions upon which the Company Preferred Shares were issued and the rights, privileges, restrictions and conditions attaching thereto and as expressly agreed to and accepted by the purchasers and holders of the Company Preferred Shares, the holders of Company Preferred Shares shall not benefit from or be entitled to exercise Dissent Rights.

ARTICLE 5

COMPANY WARRANTS

Section 5.1 Company Warrants

(a)

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

(b)

Each Company Warrant, if applicable, shall continue to be governed by and be subject to the terms of the applicable warrant indenture or applicable warrant certificate.

Section 5.2 Idem

(a)

This Article 5 is subject to adjustment in accordance with the terms of the applicable warrant indentures and warrant certificates.

ARTICLE 6

DELIVERY OF PURCHASER SHARES

Section 6.1 Delivery of Purchaser Shares

(a)

Upon return to the Depositary of a properly completed Letter of Transmittal by a registered former Company Shareholder or holder of Company Preferred Shares together with certificate(s) or, in the case of the Company Shares, a direct registration statement (DRS) Advice, representing one or more Company Shares or Company Preferred Shares that such Company Shareholder or holder of Company Preferred Shares, respectively, held immediately before the Effective Time and such additional documents and instruments as the Depositary may reasonably require, the holder of Company Preferred Shares or Company Shareholder shall be entitled to receive the applicable Consideration in accordance with Section 3.1(c) and Section 3.1(d) hereof, respectively, and the holder of such surrendered certificate or DRS Advice shall be entitled to receive in exchange therefor, and the Depositary shall deliver to such holder following the Effective Time, certificate(s) or DRS Advice recorded on a book-entry basis representing the Purchaser Shares that such holder is entitled to receive in accordance with Section 3.1(c) and Section 3.1(d) hereof.

(b)

After the Effective Time and until surrendered for cancellation as contemplated by Section 6.1(a) hereof, each certificate or DRS Advice, if any, that immediately prior to the Effective Time represented one or more Company Preferred Shares or Company Shares shall be deemed at all times to represent only the right to receive in exchange therefor the Consideration that the holder of such certificate, if any, is entitled to receive in accordance with Section 3.1(c) and Section 3.1(d) hereof, respectively.

(c)

For greater certainty, none of the Company Securityholders shall be entitled to receive any consideration with respect to such Company securities other than consideration such holder is entitled to receive in accordance with Section 3.1 and, for greater certainty, no such former holder will be entitled to receive any interest, dividends, premium or other payment in connection therewith.

Section 6.2 Dividends and Distributions

No dividends or other distributions declared or made after the Effective Time with respect to Purchaser Shares with a record date after the Effective Time shall be paid to the holder of any unsurrendered certificate which immediately prior to the Effective Time represented outstanding Company Preferred Shares or Company Shares that were exchanged pursuant to Section 3.1(c) or Section 3.1(d), respectively, unless and until the holder of record of such certificate shall surrender such certificate (or affidavit in accordance with Section 6.5) in accordance with Section 6.1(a). Subject to applicable law, at the time of such surrender of any such certificate (or in the case of clause (B) below, at the appropriate payment date), there shall be paid to the holder of record of the certificates formerly representing whole Company Shares or Company Preferred Shares, without interest, (A) the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to each whole Purchaser Share issued to such holder, and (B) on the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time but prior to surrender and a payment date subsequent to surrender payable with respect to such whole Purchaser Share.

Section 6.3 Fractional Shares

In no event shall any holder of Company Shares or Company Preferred Shares be entitled to a fractional Purchaser Share. Where the aggregate number of Purchaser Shares to be issued to a holder of Company Shares or Company Preferred Shares as consideration under this Plan of Arrangement would result in a fraction of a Purchaser Share being issuable, the number of Purchaser Shares to be received by such holder shall be rounded down to the nearest whole Purchaser Share without any additional compensation.

Section 6.4 Adjustment to Share Consideration

THE NUMBER OF PURCHASER SHARES FORMING THE CONSIDERATION, IF ANY, THAT A HOLDER OF COMPANY PREFERRED SHARES OR A COMPANY SHAREHOLDER IS ENTITLED TO RECEIVE PURSUANT TO SECTION 3.1(C) OR SECTION 3.1(D), RESPECTIVELY, SHALL BE ADJUSTED TO REFLECT FULLY THE EFFECT OF ANY STOCK SPLIT, REVERSE SPLIT OR STOCK DIVIDEND (INCLUDING ANY DIVIDEND OR DISTRIBUTION OF SECURITIES CONVERTIBLE INTO PURCHASER SHARES), CONSOLIDATION, REORGANIZATION, RECAPITALIZATION OR OTHER LIKE CHANGE WITH RESPECT TO PURCHASER SHARES OCCURRING AFTER THE DATE OF THE ARRANGEMENT AGREEMENT AND PRIOR TO THE EFFECTIVE TIME.

Section 6.5 Effective Time Procedures

Following the receipt of the Final Order and prior to the Effective Date, the Purchaser shall deliver or arrange to be delivered to the Depositary the Purchaser Shares required to be issued to the Company Shareholders and holders of Company Preferred Shares in accordance with the provisions of Section 3.1, which Purchaser Shares shall be held by the Depositary as agent and nominee for such Company Shareholders and holders of Company Preferred Shares for delivery to such Company Shareholders and holders of Company Preferred Shares in accordance with the provisions of Article 6.

Section 6.6 Loss of Certificates

In the event any certificate which immediately prior to the Effective Time represented any outstanding Company Preferred Shares or Company Shares that were acquired by the Purchaser pursuant to Section 3.1(c) and Section 3.1(d), respectively, has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the former holder of such Company Preferred Shares or Company Shares, the Depositary will, in exchange for such lost, stolen or destroyed certificate, deliver to such former holder of Company Preferred Shares or Company Shares, or make available for pick up at its offices, the Purchaser Shares such former holder is entitled to receive in respect of such Company Preferred Shares or Company Shares pursuant to Section 3.1(c) or Section 3.1(d), respectively, together with any distributions or dividends which such holder is entitled to receive pursuant to Section 6.2 and less, in each case, any amounts withheld pursuant to Section 6.7. When authorizing such delivery in relation to any lost, stolen or destroyed certificate, the former holder of such Company Preferred Shares or Company Shares will, as a condition precedent to the delivery of Purchaser Shares, give a bond satisfactory to the Purchaser and the Depositary (acting reasonably) in such sum as the Purchaser may direct or otherwise indemnify the Company, the Purchaser and the Depositary against any claim that may be made against any of them with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 6.7 Extinction of Rights

Any certificate or book-entry advice statements which immediately prior to the Effective Time represented one or more outstanding Company Preferred Shares or Company Shares that were acquired by the Purchaser pursuant to Section 3.1(c) or Section 3.1(d) which is not deposited with the Depositary in accordance with the provisions of Section 6.1(a) on or before the sixth (6th) anniversary of the Effective Date shall, on the sixth (6th) anniversary of the Effective Date, cease to represent a claim or interest of any kind or nature whatsoever, whether as a securityholder or otherwise and whether against the Company, the Purchaser or the Depositary or any other person. On such date, the Consideration such former holder of Purchaser Shares would otherwise have been entitled to receive, together with any distributions or dividends such holder would otherwise have been entitled to receive pursuant to Section 6.2, shall be deemed to have been surrendered for no consideration to the Purchaser. Neither the Company nor the Purchaser will be liable to any person in respect of any cash or securities (including any cash or securities previously held by the Depositary in trust for any such former holder) which is forfeited to the Purchaser or delivered to any public official pursuant to any applicable abandoned property, escheat or similar law.

Section 6.8 Withholding Rights

The Company, the Purchaser or the Depositary, as applicable, shall be entitled to deduct or withhold, from any amounts payable or otherwise deliverable to any person pursuant to the Arrangement or this Agreement (including, without limitation, any payments to Dissenting Shareholders) such amounts as the Company, the Purchaser or the Depositary, as applicable, determines, acting reasonably, are required to be deducted or withheld with respect to such payment or delivery under the Tax Act, the Code or any provision of any other applicable Laws. To the extent that such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the person to whom such amounts would otherwise have been paid, provided that such deducted or withheld amounts are actually remitted to the appropriate tax authority. Each of the Company, the Purchaser or the Depositary, as applicable, is hereby authorized to sell or otherwise dispose of, on behalf of such person, such portion of any share or other security deliverable to such person as is necessary to provide sufficient funds to the Company, the Purchaser or the Depositary, as the case may be, to enable it to comply with such deduction or withholding requirement and the Company, the Purchaser or the Depositary shall notify such person thereof and remit the applicable portion of the net proceeds of such sale to the appropriate taxing authority and, if applicable, any portion of such net proceeds that is not required to be so remitted shall be paid to such person.

Section 6.9 U.S. Securities Laws Exemption

Notwithstanding any provision herein to the contrary, the parties each agree that the Plan of Arrangement will be carried out with the intention that all Purchaser Shares to be issued by the Purchaser to Company Shareholders or holders of Company Preferred Shares in exchange for their Company Shares and Company Preferred Shares pursuant to the Plan of Arrangement will be issued and exchanged in reliance on the exemption from the registration requirements of the U.S. Securities Act as provided by Section 3(a)(10) thereof and applicable state securities laws, and pursuant to the terms, conditions and procedures set forth in the Arrangement Agreement.

ARTICLE 7

AMENDMENTS

Section 7.1 Amendments to Plan of Arrangement

(a)

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

(b)

Any amendment, modification or supplement to this Plan of Arrangement pursuant to Section 7.1(a) may be proposed by the Company at any time prior to the Meeting (provided that the Purchaser shall have consented thereto, such consent not to be unreasonably withheld or delayed) with or without any other prior notice or communication and, if so proposed and accepted by the persons voting at the Meeting (other than as may be required under the Interim Order), will become part of this Plan of Arrangement for all purposes.

(c)

Any amendment, modification or supplement to this Plan of Arrangement that is approved or directed by the Court following the Meeting will be effective only if such amendment, modification or supplement (i) is consented to by each of the Company and the Purchaser and (ii) if required by the Court or applicable law, is consented to by Company Shareholders voting in the manner directed by the Court.

(d)

Any amendment, modification or supplement to this Plan of Arrangement may be made following the Effective Date but shall only be effective if it is consented to by each of the Company and the Purchaser provided that such amendment, modification or supplement concerns a matter which, in the reasonable opinion of the Company and the Purchaser, is of an administrative nature required to better give effect to the implementation of this Plan of Arrangement and is not adverse to the financial or economic interests of the Company and the Purchaser or any former Company Securityholder.

ARTICLE 8

TERMINATION

This Plan of Arrangement may be withdrawn prior to the Effective Time upon the termination of the Arrangement Agreement pursuant to Section 7.2 thereof and in such event, no Party shall have any liability or further obligation to any other Party hereunder other than as set out in the Arrangement Agreement.

ARTICLE 9

FURTHER ASSURANCES

Section 9.1 Further Assurances

Notwithstanding that the transactions and events set out herein will occur and be deemed to occur in the order set out in this Plan of Arrangement without any further act or formality, each of the Parties to the Arrangement Agreement will make, do and execute, or cause to be made, done and executed, any such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by any of them in order to further document or evidence any of the transactions or events set out herein.

Section 9.2 Paramountcy

From and after the Effective Time:

(a)

this Plan of Arrangement shall take precedence and priority over any and all rights related to the securities of the Company issued prior to the Effective Time;

(b)

the rights and obligations of the holders of the securities of the Company and any trustee and transfer agent and registrar therefor, shall be solely as provided for in this Plan of Arrangement; and

(c)

all actions, causes of actions, claims or proceedings (actual or contingent, and whether or not previously asserted) based on or in any way relating to securities of the Company shall be deemed to have been settled, compromised, released and determined without liability except as set forth herein.

EX-99.4 5 d517519dex994.htm EX-99.4 EX-99.4

Exhibit 99.4

June 1, 2023

To: HEXO Corp.

Ladies and Gentlemen:

RE: Amendment to the Letter Agreement Dated April 10, 2023 providing for the waiver and amendment of certain covenants under the Amended and Restated Senior Secured Convertible Note due 2026 (the “Waiver and Amendment Agreement”)

Reference is made to (i) the Waiver and Amendment Agreement, (ii) that certain Amended and Restated Senior Secured Convertible Note due 2026 (the “HEXO Note”), dated as of July 12, 2022, issued by HEXO Corp. (“HEXO”) and held by Tilray Brands, Inc. (“Tilray”), and (iii) the arrangement agreement between HEXO and Tilray dated April 10, 2023 (the “Arrangement Agreement”). Any term used herein but not defined shall have the meaning ascribed to it in the Waiver and Amendment Agreement. Any reference in this letter agreement to “Dollars”, “dollars” or “$” shall be deemed to be a reference to lawful money of the United States of America.

WHEREAS, concurrently with the entry into this letter agreement, HEXO has closed a private placement offering structured in the following manner: (i) US$11.5 million, consisting of 11,500,000 Series 1 Special Shares to be issued by HEXO on closing of the Offering (Tranche 1), and (ii) US$13.5 million, to be held in escrow and entitling the holder to receive, without any additional consideration, 13,500,000 Series 1 Special Shares of the Company immediately following the satisfaction or waiver of the applicable release conditions (Tranche 2), representing in the aggregate and subject to satisfaction of said release conditions 25,000,000 Series 1 shares of special stock in the capital of HEXO (the “Series 1 Special Shares”) for aggregate gross proceeds of up to $25,000,000 (the “Offering”);

AND WHEREAS, pursuant to the Arrangement Agreement, the Offering cannot be completed by HEXO without the prior written consent of Tilray;

AND WHEREAS Tilray is prepared to agree to provide its consent to the consummation of the Offering in accordance with, and subject to, the provisions of this letter agreement;

NOW THEREFORE, Tilray hereby consents to the Offering subject to the following terms and conditions:

1. Amendments to the Waiver and Amendment Agreement and HEXO Note.

In consideration for the payment of $100,000, for the duration of the Waiver Period, Tilray agrees to and does hereby amend the following: (i) Section 9(M) (Minimum Liquidity) of the HEXO Note, and (ii) Section 1 a.iii of the Waiver and Amendment Agreement, such that references to “$20,000,000” and “$4,000,000” respectively set out therein shall be deleted and replaced with references to “$1” for the Waiver Period.

2. Required Payments.

Pursuant to Section 2b. of the Waiver and Amendment Agreement, an amount equal to $6,400,000 shall be paid immediately by HEXO to Tilray out of the gross proceeds received by HEXO under Tranche 1 of the Offering on the closing date of the Offering, and shall be applied in accordance with Section 2b. of the Waiver and Amendment Agreement. The parties acknowledge and agree that notwithstanding any provision of the Waiver and Amendment Agreement, as amended, HEXO shall not be required to make any further payment to Tilray from the aggregate gross proceeds received under Tranche 1 of the Offering.

Upon satisfaction of the applicable release conditions under the Offering documents, an additional amount equal to $6,000,000 shall be paid by HEXO to Tilray under Tranche 2 of the Offering and shall be applied in accordance with Section 2b. of the Waiver and Amendment Agreement. The parties acknowledge and agree that notwithstanding any provision of the Waiver and Amendment Agreement, as amended, HEXO shall not be required to make any further payment to Tilray from the aggregate gross proceeds received under Tranche 1 or Tranche 2 of the Offering.

3. Miscellaneous

Notices. All notices, requests and other communications given in connection with this letter agreement shall be in writing and provided to the other parties hereto at the addresses indicated in the HEXO Note.

No Waiver or Amendment. Except for the terms and provisions set forth in this letter agreement, nothing herein shall be construed as a waiver or amendment of any of the terms and conditions under the HEXO Note or the Waiver and Amendment Agreement, all of which shall remain in full force and effect.

Governing Law. This letter agreement shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

Counterparts. This letter agreement may be executed in counterparts, manually or electronically, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. A copy transmitted via facsimile or e-mail as a portable document format (.pdf) of this letter agreement, bearing the signature of any party shall be deemed to be of the same legal force and effect as an original of this letter agreement bearing such signature(s) as originally written of such one or more parties.

IN WITNESS WHEREOF, the parties hereto have caused this letter agreement to be signed by their respective officers thereunto duly authorized all as of the date first written above.


TILRAY BRANDS, INC.		HEXO CORP.

By:	(signed) Mitchell Gendel	By:	(signed) Rob Godfrey
Name: Mitchell Gendel		Name: Rob Godfrey
Title: Global General Counsel		Title: Chair, Special Committee