Village Farms International, Inc. (Form: 8-K, Received: 09/10/2020 08:22:27)

VILLAGE FARMS INTERNATIONAL, INC.

Address for Notice:

Name:

Title:

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 8, 2020

VILLAGE FARMS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Canada

001-38783

98-1007671

(State or Other Jurisdiction

of Incorporation)

(Commission

File No.)

(IRS Employee

Identification No.)

4700-80th Street

Delta, British Columbia, Canada

V4K 3N3

(Address of Principal Executive Offices) (Zip Code)

(604) 940-6012

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading

Symbol(s)

Name of Each Exchange

on Which Registered

Common Shares, without par value

VFF

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01.

Entry into a Material Definitive Agreement.

Acquisition of Remaining Interest in Pure Sunfarms Corp.

On September 8, 2020, Village Farms International, Inc. (the “Company”) entered into a purchase agreement (the “Purchase Agreement”) with Emerald Health Therapeutics, Inc. (“Emerald”) to purchase from Emerald 36,958,500 common shares in the capital of Pure Sunfarms Corp. (“Pure Sunfarms”), representing 41.3% of the issued and outstanding common shares of Pure Sunfarms and all of the remaining common shares of Pure Sunfarms not held by the Company, for a purchase price of C$79.9 million, subject to certain adjustments (the “Acquisition”). Pursuant to the Purchase Agreement, the closing date for the Acquisition (the “Closing Date”) will occur on the fifth business day following the satisfaction or waiver of all the conditions to the closing of the Purchase Agreement (except for the payment of the purchase price thereunder and those conditions that are to be satisfied on the Closing Date) or such other date as the parties may agree. The Company and Emerald may terminate the Purchase Agreement if the Closing Date has not occurred on or before November 30, 2020. The Company’s management anticipates that the Closing Date will occur during the fourth quarter of 2020.

The Purchase Agreement contains representations and warranties customary for transactions of this nature negotiated between sophisticated purchasers and sellers acting at arm’s length, certain of which are qualified as to materiality and knowledge and subject to reasonable exceptions. Subject to certain exceptions, the representations and warranties of the Company and Emerald in the Purchase Agreement will survive for a period of 18 months from the Closing Date. Certain “fundamental” representations, however, will survive the closing of the Acquisition for a period of six years.

Pursuant to the Purchase Agreement, each of the Company and Emerald have agreed, following closing, to indemnify the other party and its affiliates against any loss arising from a breach of a representation, warranty, or covenant given by the Company or Emerald, respectively, under the Purchase Agreement. The indemnity is subject to certain limitations, including that neither the Company nor Emerald are required to indemnify the other party unless and until losses exceed C$500,000, at which point Village Farms or Emerald, as the case may be, will be entitled to recover the full amount of such losses from the first dollar. The indemnity is also capped at 100% of the purchase price under the Purchase Agreement and no party is liable for any losses resulting from any breach of any representation or warranty in the Purchase Agreement if the party seeking indemnification knew about the inaccuracy or breach before closing.

The closing of the Acquisition is subject to customary closing conditions, including (i) the accuracy in all material respects as of the Closing Date of the representations and warranties of the parties, (ii) the performance in all material respects of all covenants and agreements of the parties, (iii) the absence of any law or change in law that would make the consummation of the Acquisition illegal or otherwise restrain or prohibit closing, (iv) the absence of any proceeding by any person or entity that seeks to enjoin or prohibit the Acquisition, (v) Emerald shareholders having approved the Acquisition, (vi) Pure Sunfarms’ lenders, Village Farms’ lenders and the TSX Venture Exchange having provided their consent to the Acquisition, (vii) dissent rights not having been validly exercised, and not withdrawn, in respect of more than 5% of the issued and outstanding common shares of Emerald, (viii) the voting and support agreements provided in connection with the Acquisition not having been materially breached by any party other than the Company and (ix) delivery by each party of certain documents and agreements in connection with the Acquisition.

The Company and Emerald have given mutual covenants customary for transactions of this nature negotiated between sophisticated purchasers and sellers acting at arm’s length, including mutual covenants to (i) use commercially reasonable efforts to satisfy all closing conditions in the Purchase Agreement and obtain any regulatory approvals or consents and (ii) co-operate in good faith in managing and funding the day to day operations of Pure Sunfarms. Emerald has also agreed to customary covenants in favor of Village Farms to (i) convene a shareholder meeting to approve the Acquisition by October 30, 2020 and (ii) not solicit or participate in negotiations with any other person relating to an alternative transaction proposal regarding the common shares of Pure Sunfarms.

The Purchase Agreement and the transactions covered thereby can be terminated by either party in certain situations, including (i) a breach by the other party of its representations, warranties or covenants that cannot reasonably be cured by the Closing Date, (ii) the written agreement of the parties, (iii) Emerald holding its shareholder meeting and failing to obtain the requisite shareholder approval and (iv) the closing not occurring on or prior to November 30, 2020. The Purchase Agreement can be terminated by the Company in the event that (i) the board of directors of Emerald makes certain changes to its recommendation to its shareholders to approve the Acquisition or (ii) Emerald breaches its obligation not to solicit alternative proposals or fails to hold a shareholders meeting to approve the Acquisition.

In the event of the termination of the Purchase Agreement pursuant to certain specified termination fee events, Emerald has agreed to pay to Village Farms a termination fee in the amount of C$3 million. In the event of the termination of the Purchase Agreement pursuant to certain specified expense reimbursement fee events, Emerald has agreed to pay to Village Farms an expense reimbursement fee of up to C$1 million to be credited against any termination fee that may be payable.

The Company and Emerald will enter into a non-solicitation agreement on the Closing Date pursuant to which Emerald will agree not to solicit or hire any employees of Pure Sunfarms or the Company for a period of three years following the Closing Date, subject to customary exceptions.

The Company and Emerald will also enter into a termination agreement on the Closing Date pursuant to which the shareholders agreement governing the business and affairs of Pure Sunfarms will be terminated and certain intellectual property will be assigned to Pure Sunfarms and licensed to Emerald.

The foregoing description of the Acquisition and Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.

Registered Direct Offering of Securities

On September 8, 2020, the Company entered into securities purchase agreements (each, a “Securities Purchase Agreement”) with institutional investors pursuant to which the Company agreed to sell a total of 9,396,226 units (each, a “Unit”), with each Unit consisting of one common share in the capital stock of the Company (each, a “Common Share”) and 0.50 of a warrant to purchase one Common Share (each, a “Warrant”). Each Unit is being sold at a public offering price of $5.30 per Unit. The transaction to be effected pursuant to each Securities Purchase Agreement is referred to herein as the “Offering.”

The Warrants included in the Units will initially be exercisable on March 10, 2021, at an exercise price of $5.80 per share, subject to adjustment in certain circumstances, and will expire five years from the date of issuance (subject to the call right provided for in the Warrants). The Common Shares and the Warrants are being offered together, but the securities comprising the Units will be issued separately and will be immediately separable upon issuance.

The Offering is expected to close on or about September 10, 2020, subject to the satisfaction of customary closing conditions. The proceeds to the Company after deducting placement agent fees are expected to be approximately $46.8 million, excluding the proceeds, if any, from the exercise of the Warrants, and prior to deducting estimated offering expenses payable by the Company. The Company intends to use up to $40 million of the net proceeds from the Offering to finance the Acquisition. The remaining net proceeds from the Offering are intended to be used for general working capital. The Offering is being made pursuant to the Company’s existing shelf registration statement on Form S-3 (File No. 333-237792), which was filed with the Securities and Exchange Commission (the “Commission”) on April 22, 2020 and declared effective by the Commission on May 6, 2020.

The representations, warranties and covenants contained in each Securities Purchase Agreement were made solely for the benefit of the parties to the Securities Purchase Agreement. In addition, such representations, warranties and covenants (i) are intended as a way of allocating the risk between the parties to the Securities Purchase Agreement and not as statements of fact, and (ii) may apply standards of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company. Accordingly, a form of Securities Purchase Agreement is filed with this report only to provide investors with information regarding the terms of transaction, and not to provide investors with any other factual information regarding the Company. Shareholders should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Securities Purchase Agreement, which subsequent information may or may not be fully reflected in public disclosures.

A.G.P./Alliance Global Partners (the “Placement Agent”) acted as sole placement agent for the Offering pursuant to a placement agency agreement, dated September 8, 2020 (the “Placement Agency Agreement”). Beacon Securities Limited acted as financial advisor for the Offering. Pursuant to the Placement Agency Agreement, the Placement Agent agreed to use commercially reasonable “best efforts” to arrange for the sale of the Units and the Company agreed to pay the Placement Agent a cash fee equal to 6% of the gross proceeds of the Offering. The Placement Agency Agreement contains customary representations, warranties and indemnification by the Company and provides for the reimbursement of up to $100,000 in expenses incurred by the Placement Agent in connection with the Offering.

In addition, the Company and each purchaser entered into a leak-out agreement (each, a “Leak-Out Agreement”) wherein each purchaser (together with certain of its affiliates) agreed, on any trading day from the date of the Leak-Out Agreement until November 10, 2020 (a “Restricted Period”), to not sell, dispose or otherwise transfer, directly or indirectly (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions), Common Shares or any equivalent thereof in an amount greater than 25% of the trading volume of the Common Shares on the Nasdaq Capital Market on such trading day, subject to certain exceptions, during any trading day during the Restricted Period that the price of the Common Shares is less than $5.75 per share.

The foregoing descriptions of the Placement Agency Agreement, the Units, the Warrants, the Securities Purchase Agreement and the Leak-Out Agreement do not purport to be complete and are qualified in its entirety by reference to the full text of the Placement Agency Agreement and the forms of the Warrant, Securities Purchase Agreement and Leak-Out Agreement, which are filed as Exhibits 1.1, 4.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.


Exhibit		Title

1.1		Placement Agency Agreement, dated September 8, 2020, among Village Farms International, Inc. and A.G.P./Alliance Global Partners

4.1		Form of Warrant

5.1		Opinion of Torys LLP, dated September 10, 2020

10.1		Purchase Agreement, dated September 8, 2020, between Village Farms International Inc. and Emerald Health Therapeutics Inc.*

10.2		Form of Securities Purchase Agreement among Village Farms International, Inc. and certain investors

10.3		Form of Leak-Out Agreement among Village Farms International, Inc. and certain investors

23.1		Consent of Torys LLP (contained in Exhibit 5.1 above)

99.1		Press Release relating to the Offering, dated September 8, 2020

99.2		Press Release relating to the Acquisition, dated September 8, 2020

*	The schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished to the Commission upon request.

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 hereunto duly authorized.

Date: September 10, 2020


VILLAGE FARMS INTERNATIONAL, INC.

By:		/s/ Stephen C. Ruffini
Name:		Stephen C. Ruffini
Title:		Executive Vice President and Chief Financial Officer

Exhibit 1.1

PLACEMENT AGENCY AGREEMENT

September 8, 2020

Village Farms International, Inc.

4700-80th Street

Delta, British Columbia

Canada, V4K 3N3

Dear Mr. DeGiglio:

This letter (the “Agreement”) constitutes the agreement between A.G.P./Alliance Global Partners (the “Placement Agent”) and Village Farms International, Inc., a Canadian corporation (the “Company”), that the Placement Agent shall serve as the exclusive placement agent for the Company, on a “reasonable best efforts” basis, in connection with the proposed placement (the “Placement”) of (i) shares (the “Shares”) of the Company’s Common Shares, no par value (the “Common Shares”) and (ii) warrants, each to purchase one-half (0.5) Common Shares (the “Warrants” and together with the Shares, the “Securities”). The Securities actually placed by the Placement Agent are referred to herein as the “Placement Agent Securities.”). The terms of the Placement shall be mutually agreed upon by the Company and the purchasers (each, a “Purchaser” and collectively, the “Purchasers”), and nothing herein constitutes that the Placement Agent would have the power or authority to bind the Company or any Purchaser, or an obligation for the Company will issue any Securities or complete the Placement. The Company expressly acknowledges and agrees that the Placement Agent’s obligations hereunder are on a reasonable best efforts basis only and that the execution of this Agreement does not constitute a commitment by the Placement Agent to purchase the Securities and does not ensure the successful placement of the Securities or any portion thereof or the success of the Placement Agent with respect to securing any other financing on behalf of the Company. The Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Placement. Certain affiliates of the Placement Agent may participate in the Placement by purchasing some of the Placement Agent Securities. The sale of Placement Agent Securities to any Purchaser will be evidenced by a securities purchase agreement (the “Purchase Agreement”) between the Company and such Purchaser, in a form reasonably acceptable to the Company and the Purchaser. Capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Purchase Agreement. Prior to the signing of any Purchase Agreement, officers of the Company will be available to answer inquiries from prospective Purchasers.

SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY.

A. Representations of the Company. With respect to the Placement Agent and the Securities, each of the representations and warranties (together with any related disclosure schedules thereto) and covenants made by the Company to the Purchasers in the Purchase Agreement in connection with the Placement, is hereby incorporated herein by reference into this Agreement (as though fully restated herein) and is, as of the date of this Agreement and as of the Closing Date, hereby made to, and in favor of, the Placement Agent. In addition to the foregoing, the Company represents and warrants that there are no affiliations with any member firm of the Financial Industry Regulatory Authority, Inc. (“FINRA”) among the Company’s officers, directors or, to the knowledge of the Company, any five percent (5.0%) or greater securityholder of the Company, except as set forth in the Purchase Agreement.

B. Covenants of the Company. The Company covenants and agrees to continue to retain (i) a firm of independent PCAOB registered public accountants for a period of at least five (5) years after the Closing Date and (ii) a competent transfer agent with respect to the Common Shares for a period of five (5) years after the Closing Date. In addition, from the date hereof until 75 days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of Common Shares or Common Share Equivalents, except that such restriction shall not apply with respect to an Exempt Issuance.

SECTION 2. REPRESENTATIONS OF THE PLACEMENT AGENT. Each of the Placement Agent represents and warrants that it (i) is a member in good standing of FINRA, (ii) is registered as a broker/dealer under the Exchange Act, (iii) is licensed as a broker/dealer under the laws of the United States of America, applicable to the offers and sales of the Placement Agent Securities by the Placement Agent, (iv) is and will be a corporate body validly existing under the laws of its place of incorporation, (v) has full power and authority to enter into and perform its obligations under this Agreement. The Placement Agent will immediately notify the Company in writing of any change in its status with respect to subsections (i) through (v) above. The Placement Agent covenants that it will use its reasonable best efforts to conduct the Placement hereunder in compliance with the provisions of this Agreement and the requirements of applicable law. The Placement Agent further covenants that it will provide the Company with any information that it reasonably requires to fulfill any securities law filings in Canada or the United States, including in respect of Purchaser information.

SECTION 3. COMPENSATION. In consideration of the services to be provided for hereunder, the Company shall pay to the Placement Agent and/or its respective designees a cash fee of 6 % of the aggregate gross proceeds raised from the sale of the Placement Agent Securities (the “Cash Fee”). The Cash Fee shall be paid on the Closing Date. The Company shall not be required to pay the Placement Agent any fees or expenses except for the Cash Fee, the reimbursement of up to US$100,000 in legal expenses and clearing agent fees and expenses, with respect to the engagement hereunder. The Placement Agent reserve the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Placement Agent’s aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.

SECTION 4. INDEMNIFICATION.

A. To the extent permitted by law, with respect to the Placement Agent Securities, the Company will indemnify the Placement Agent and its affiliates, directors, officers, employees, members and controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) against all losses, claims, damages, expenses and liabilities, as the same are incurred (including the reasonable fees and expenses of counsel), relating to or arising out of its activities hereunder or pursuant to this Agreement, except to the extent that any losses, claims, damages, expenses or liabilities (or actions in respect thereof) are found in a final judgment (not subject to appeal) by a court of law to have resulted primarily and directly from the Placement Agent’s’ willful misconduct or gross negligence in performing the services described herein.

B. Promptly after receipt by the Placement Agent of notice of any claim or the commencement of any action or proceeding with respect to which the Placement Agent is entitled to indemnity hereunder, the Placement Agent will notify the Company in writing of such claim or of the commencement of such action or proceeding, but failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder, except and only to the extent such failure results in the forfeiture by the Company of substantial rights and defenses. If the Company so elects or is requested by the Placement Agent, the Company will assume the defense of such action or proceeding and will

employ counsel reasonably satisfactory to the Placement Agent and will pay the fees and expenses of such counsel. Notwithstanding the preceding sentence, the Placement Agent will be entitled to employ counsel separate from counsel for the Company and from any other party in such action if counsel for the Placement Agent reasonably determines that it would be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both the Company and the Placement Agent. In such event, the reasonable fees and disbursements of no more than one such separate counsel will be paid by the Company, in addition to fees of local counsel. The Company will have the right to settle the claim or proceeding provided that the Company will not settle any such claim, action or proceeding without the prior written consent of the Placement Agent, which will not be unreasonably withheld.

C. The Company agrees to notify the Placement Agent promptly of the assertion against it or any other person of any claim or the commencement of any action or proceeding relating to a transaction contemplated by this Agreement.

D. If for any reason the foregoing indemnity is unavailable to the Placement Agent or insufficient to hold the Placement Agent harmless, then the Company shall contribute to the amount paid or payable by the Placement Agent as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and the Placement Agent on the other, but also the relative fault of the Company on the one hand and the Placement Agent on the other that resulted in such losses, claims, damages or liabilities, as well as any relevant equitable considerations. The amounts paid or payable by a party in respect of losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees and expenses incurred in defending any litigation, proceeding or other action or claim. Notwithstanding the provisions hereof, the Placement Agent’s share of the liability hereunder shall not be in excess of the amount of fees actually received, or to be received, by the Placement Agent under this Agreement (excluding any amounts received as reimbursement of expenses incurred by the Placement Agent).

E. These indemnification provisions shall remain in full force and effect whether or not the transaction contemplated by this Agreement is completed and shall survive the termination of this Agreement, and shall be in addition to any liability that the Company might otherwise have to any indemnified party under this Agreement or otherwise.

SECTION 5. ENGAGEMENT TERM. The Placement Agent’s engagement hereunder will be until the earlier of (i) September 11, 2020 and (ii) the Closing Date. The date of termination of this Agreement is referred to herein as the “Termination Date.” The Company may elect to terminate the engagement hereunder for any reason prior to the Termination Date but will remain responsible for fees and expenses pursuant to Section 3 hereof and fees with respect to the Placement Agent Securities if sold in the Placement. Notwithstanding anything to the contrary contained herein, the provisions concerning the Company’s obligation to pay any fees actually earned pursuant to Section 3 hereof, to pay expenses actually incurred pursuant to Section 3 hereof, and the provisions concerning confidentiality, indemnification and contribution contained herein will survive any expiration or termination of this Agreement. If this Agreement is terminated prior to the completion of the Placement, all fees and expenses due to the Placement Agent shall be paid by the Company to the Placement Agent as soon as practicable after the Termination Date (in the event such fees are earned or owed as of the Termination Date). The Placement Agent agrees not to use any confidential information concerning the Company provided to the Placement Agent by the Company for any purposes other than those contemplated under this Agreement.

SECTION 6. PLACEMENT AGENT INFORMATION. The Company agrees that any information or advice rendered by the Placement Agent in connection with this engagement is for the confidential use of the Company only in their evaluation of the Placement and, except as otherwise required by law, the Company will not disclose or otherwise refer to the advice or information in any manner without the Placement Agent’s prior written consent.

SECTION 7. NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall not be construed as creating rights enforceable by any person or entity not a party hereto, except those entitled hereto by virtue of the indemnification provisions hereof. The Company acknowledges and agrees that the Placement Agent is not and shall not be construed as a fiduciary of the Company and shall have no duties or liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention of the Placement Agent hereunder, all of which are hereby expressly waived.

SECTION 8. CONDITIONS OF THE OBLIGATIONS OF THE PLACEMENT AGENT. The obligations of the Placement Agent, and the closing of the sale of the Placement Agent Securities hereunder are subject to the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company contained herein and in the Purchase Agreement, to the performance by the Company of its obligations hereunder and in the Purchase Agreement, and to each of the following additional terms and conditions, except as otherwise disclosed to and acknowledged and waived by the Placement Agent:

A. All corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and validity of each of this Agreement, the Placement Agent Securities, and all other legal matters relating to this Agreement and the transactions contemplated hereby with respect to the Placement Agent Securities shall be reasonably satisfactory in all material respects to the Placement Agent.

B. The Placement Agent shall have received from outside US counsel to the Company each such counsel’s written opinion with respect to the Placement Agent Securities, addressed to the Placement Agent and dated as of the Closing Date, in form and substance reasonably satisfactory to the Placement Agent.

C. The Placement Agent shall have received customary certificates of the Company’s executive officers, as to the accuracy of the representations and warranties contains in the Purchase Agreement, and a certificate of the Company’s secretary certifying that the Company’s charter documents are true and complete, have not been modified and are in full force and effect; (ii) that the resolutions of the Company’s Board of Directors relating to the Placement are in full force and effect and have not been modified; and (iii) as to the incumbency of the officers of the Company.

D. The Common Shares shall be registered under the Exchange Act and, as of the Closing Date, Company shall have received approval to list or quote all Shares sold in the offering on the Trading Markets for which such approvals are required, and the Common Shares and shares issuable upon exercise of the Warrants shall be listed and admitted and authorized for trading on the Trading Markets for which such admission and authorizations are required, and satisfactory evidence of such action shall have been provided to the Placement Agent. The Company shall have taken no action designed to, or likely to have the effect of terminating the registration of the Common Shares under the Exchange Act or delisting or suspending from trading the Common Shares from the applicable Trading Markets, nor has the Company received any information suggesting that the Commission or the applicable Trading Markets are contemplating terminating such registration or listings.

E. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Placement Agent Securities or materially and adversely affect or potentially and adversely affect the business or operations of the Company; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Placement Agent Securities or materially and adversely affect or potentially and adversely affect the business or operations of the Company.

F. The Company shall have entered into a Purchase Agreement with each of the Purchasers of the Placement Agent Securities and such agreements shall be in full force and effect and shall contain representations, warranties and covenants of the Company as agreed upon between the Company and the Purchasers.

G. FINRA shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this Agreement. In addition, the Company shall, if requested by the Placement Agent, make or authorize Placement Agent’s counsel to make on the Company’s behalf, any filing with the FINRA Corporate Financing Department pursuant to the applicable FINRA Rules with respect to the offering and pay all filing fees required in connection therewith.

If any of the conditions specified in this Section 8 shall not have been fulfilled when and as required by this Agreement, all obligations of the Placement Agent hereunder may be cancelled by the Placement Agent at, or at any time prior to, the Closing Date. Notice of such cancellation shall be given to the Company in writing or orally. Any such oral notice shall be confirmed promptly thereafter in writing.

SECTION 9. GOVERNING LAW. This Agreement will be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely in such State. This Agreement may not be assigned by either party without the prior written consent of the other party. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Any right to trial by jury with respect to any dispute arising under this Agreement or any transaction or conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought into the courts of the State of New York or into the Federal Court located in New York, New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

SECTION 10. ENTIRE AGREEMENT/MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by both the Placement Agent and the Company. The representations, warranties, agreements and

covenants contained herein shall survive the Closing Date of the Placement and delivery of the Placement Agent Securities. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof.

SECTION 12. NOTICES. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is sent to the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is sent to the email address on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c) the third business day following the date of mailing, if sent by U.S. internationally recognized air courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages hereto.

SECTION 13. PRESS ANNOUNCEMENTS. The Company agrees that the Placement Agent shall, on and after the Closing Date, have the right to reference the Placement and the Placement Agent’s role in connection therewith in the Placement Agent’s marketing materials and on its website and to place advertisements in financial and other newspapers and journals, in each case at its own expense.

[The remainder of this page has been intentionally left blank.]

Please confirm that the foregoing correctly sets forth our agreement by signing and returning to the Placement Agent the enclosed copy of this Agreement.


Very truly yours,

A.G.P./ALLIANCE GLOBAL PARTNERS

By:		/s/ Thomas T. Higgins
		Name: Thomas T. Higgins
		Title: Managing Director

		Address for notice:
		590 Madison Avenue 36^th Floor New York, New York 10022 Attn: Thomas Higgins Email: thiggins@allianceg.com

Accepted and Agreed to as of

the date first written above:


VILLAGE FARMS INTERNATIONAL, INC.

By:	/s/ Stephen C. Ruffini
	Name:	Stephen C. Ruffini
	Title:	Executive Vice President and Chief Financial Officer

Address for notice:

4700-80th Street

Delta, British Columbia

Canada, V4K 3N3

Exhibit 4.1

COMMON SHARE PURCHASE WARRANT

VILLAGE FARMS INTERNATIONAL, INC.


Warrant Shares: _______		Initial Exercise Date: March [__] 2021¹

		Issue Date: September [__], 2020

THIS COMMON SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [_________________] or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after March [__], 2021² (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on September [___], 2025 (the “Termination Date”), but not thereafter, to subscribe for and purchase from Village Farms International, Inc., a Canadian corporation (the “Company”), up to [______]common shares, without par value (the “Common Shares”) (as subject to adjustment hereunder, the “Warrant Shares”). This Warrant is one of the Warrants to Purchase Common Stock (the “Warrants”) issued pursuant to (i) that certain Securities Purchase Agreement, dated as of September [8], 2020 (the “Subscription Date”) by and between the Company and investors party thereto, (ii) the Company’s Registration Statement on Form S-3 (File number 333-237792) (the “Registration Statement”) and (iii) the Company’s prospectus supplement, dated as of September [8], 2020, and the related base prospectus, included in the Registration Statement (collectively, the “Prospectus”).

The purchase price of one Common Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated September [__], 2020, among the Company and the Holder.

Section 2. Exercise.

a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy (or.pdf copy via e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the unpaid portion of the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

¹	6 months after the issuance date.

²	6 months after the issuance date.

b) Exercise Price. The exercise price per Common Share under this Warrant shall be $5.80, subject to adjustment hereunder (the “Exercise Price”).

c) Cashless Exercise. If at any time during the term of this Warrant, there is no effective registration statement (which may be the Registration Statement) registering, or no current prospectus available for, the issuance or resale of the Warrant Shares by the Holder, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares determined according to the following formula (a “Cashless Exercise”):

Net Number = (A x B) - (A x C)

For purposes of the foregoing formula:

(A) = the total number of shares with respect to which the Warrants are then being exercised.

(B) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Share on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; and

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c). Notwithstanding anything to the contrary, without limiting the rights of the Holder to receive liquidated damages pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in the event the Company does not have or maintain an effective registration statement, there are no circumstances that would require the Company to make any cash payments or net cash settle the purchase warrants to the holders.

“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Share is then listed or quoted on a Trading Market, the bid price of the Common Share for the time in question (or the nearest preceding date) on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Share for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Share are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Share for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Shares so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

Notwithstanding anything herein to the contrary, (i) on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c), and (ii) so long as the Common Shares are listed on the Toronto Stock Exchange (the “TSX”), all calculations contemplated in this subsection 2(c) shall utilize the definitions of “market price” and “VWAP” (or their equivalents) and any related definitions and related calculation concepts then contained in the TSX Company Manual.

d) Mechanics of Exercise.

i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Shares on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Shares as in effect on the date of delivery of the Notice of Exercise.

ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Common Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Common Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver the Common Shares upon exercise of the Warrant as required pursuant to the terms hereof.

v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Common Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Shares Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding Common Shares, a Holder may rely on the number of outstanding Common Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Common Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Common Shares was reported. The “Beneficial Ownership Limitation” shall be [9.99/4.99%] of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of the Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61^st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. For greater certainty, notwithstanding that this subsection 2(e) expressly provides that in no event shall the Beneficial Ownership Limitation exceed 9.99% of the number of the Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of this Warrant, the holder of this Warrant shall never utilize the exercise of this Warrant to cause it to acquire beneficial ownership of 10% or more of the Common Shares without prior notice to the Company and without providing a personal information form to the TSX, if requested by the TSX, following such notice to the Company.

f) Call Provision. Subject to the provisions of Section 2(e) and this Section 2(f), if, at any time after 12 months from the Initial Exercise Date, (i) the VWAP for each of 30 consecutive Trading Days (the “Measurement Period,” which 30 consecutive Trading Day period shall not have commenced until after the Initial Exercise Date) exceeds $9.50 (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and the like after the Initial Exercise Date), (ii) the average daily volume for such Measurement Period exceeds $1,000,000 per Trading Day, and (iii) the Holder is not in possession of any information that constitutes, or might constitute, material non-public information which was provided by the Company, any of its Subsidiaries, or any of their officers, directors, employees, agents or Affiliates, then the Company may, within 1 Trading Day of the end of such Measurement Period, call for cancellation of all or any portion of this Warrant for which a Notice of Exercise has not yet been delivered (such right, a “Call”) for consideration equal to $.001 per Warrant Share. To exercise this right, the Company must deliver to the Holder an irrevocable written notice (a “Call Notice”), indicating therein the portion of unexercised portion of this Warrant to which such notice applies. If the conditions set forth below for such Call are satisfied from the period from the date of the Call Notice through and including the Call Date (as defined below), then any portion of this Warrant subject to such Call Notice for which a Notice of Exercise shall not have been received by the Call Date will be cancelled at 6:30 p.m. (New York City time) on the thirtieth Trading Day after the date the Call Notice is received by the Holder (such date and time, the “Call Date”). Any unexercised portion of this Warrant to which the Call Notice does not pertain will be unaffected by such Call Notice. In furtherance thereof, the Company covenants and agrees that it will honor all Notices of Exercise with respect to Warrant Shares subject to a Call Notice that are tendered through 6:30 p.m. (New York City time) on the Call Date. The parties agree that any Notice of Exercise delivered following a Call Notice which calls less than all of the Warrants shall first reduce to zero the number of Warrant Shares subject to such Call Notice prior to reducing the remaining Warrant Shares available for purchase under this Warrant. For example, if (A) this Warrant then permits the Holder to acquire 100 Warrant Shares, (B) a Call Notice pertains to 75 Warrant Shares, and (C) prior to 6:30 p.m. (New York City time) on the Call Date the Holder tenders a Notice of Exercise in respect of 50 Warrant Shares, then (x) on the Call Date the right under this Warrant to acquire 25 Warrant Shares will be automatically cancelled, (y) the Company, in the time and manner required under this Warrant, will have issued and delivered to the Holder 50 Warrant Shares in respect of the exercises following receipt of the Call Notice, and (z) the Holder may, until the Termination Date, exercise this Warrant for 25 Warrant Shares (subject to adjustment as herein provided and subject to subsequent Call Notices). Subject again to the provisions of this Section 2(f), the Company may deliver subsequent Call Notices for any portion of this Warrant for which the Holder shall not have delivered a Notice of Exercise. Notwithstanding anything to the contrary set forth in this Warrant, the Company may not deliver a Call Notice or require the cancellation of this Warrant (and any such Call Notice shall be void), unless, from the beginning of the Measurement Period through the Call Date, (1) the Company shall have honored in accordance with the terms of this Warrant all Notices of Exercise delivered by 6:30 p.m. (New York City time) on the Call Date, and (2) a registration statement shall be effective as to all Warrant Shares and the prospectus thereunder available for use by the Company for the sale of all such Warrant Shares to the Holder, and (3) the Common Stock shall be listed or quoted for trading on the Trading Market, and (4) there is a sufficient number of authorized shares of Common Stock for issuance of all Securities under the Transaction Documents, and (5) the issuance of all Warrant Shares subject to a Call Notice shall not cause a breach of any provision of Section 2(e) herein. The Company’s right to call the Warrants under this Section 2(f) shall be exercised ratably among the Holders based on each Holder’s initial purchase of Warrants.

Section 3. Certain Adjustments.

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Shares or any other equity or equity equivalent securities payable in Common Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Common Shares into a smaller number of shares, or (iv) issues by reclassification of Common Shares any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Common Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number

of Common Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

b) Reserved.

c) Subsequent Rights Offerings. Upon the Company receiving the prior written approval of the TSX (so long as the Common Shares are then listed on the TSX), in addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Shares Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Common Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). For greater certainty, the Company has not applied for, nor received, the prior written approval of the TSX in respect of the matters contemplated by this subsection 3(c).

d) Pro Rata Distributions. Upon the Company receiving the prior written approval of the TSX (so long as the Common Shares are then listed on the TSX), during such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, plan of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Common Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). For greater certainty, the Company has not applied for, nor received, the prior written approval of the TSX in respect of the matters contemplated by this subsection 3(d).

e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares or any compulsory share exchange pursuant to which the Common Shares are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or plan of arrangement) with

another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Common Shares (not including any Common Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Common Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Common Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Shares in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to

the Common Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Common Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

f) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.

g) Notice to Holder.

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C) the Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 5 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or stock exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Shares of record shall be entitled to exchange their Common Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or stock exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice and provided, further that no notice shall be required if the information is disseminated in a press release or document filed with the Securities and Exchange Commission . To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Section 4. Transfer of Warrant.

a) Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

Section 5. Miscellaneous.

a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

d) Authorized Shares.

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Shares a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Shares may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that the Holder’s right to exercise this Warrant terminates on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant or the Purchase Agreement, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Shares or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

(Signature Page Follows)

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.


VILLAGE FARMS INTERNATIONAL, INC.

By:
		Name:
		Title:

NOTICE OF EXERCISE

TO: VILLAGE FARMS INTERNATIONAL, INC.

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2) Payment shall take the form of (check applicable box):

☐ in lawful money of the United States; or

☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:


		_____________________

The Warrant Shares shall be delivered to the following DWAC Account Number:


		_____________________

		_____________________

		_____________________

(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

_____________________

[SIGNATURE OF HOLDER]

Name of Investing Entity: ____________________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: ______________________________________________________________

Name of Authorized Signatory: ________________________________________________________________________________

Title of Authorized Signatory: ________________________________________________________________________________

Date: _____________________________________________________________________________________________________

Exhibit B

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to


Name:
		(Please Print)

Address:
		(Please Print)

Phone Number:

Email Address:

Dated: _______________ __, ______

Holder’s Signature:______________________

Holder’s Address:______________________

Exhibit 5.1

1114 Avenue of the Americas, 23rd Floor

New York, New York 10036.7703 USA

P. 212.880.6000 | F. 212.682.0200

www.torys.com

September 10, 2020

Village Farms International, Inc.

4700-80th Street

Delta, British Columbia, Canada

V4K 3N3

Dear Sirs/Mesdames:

Re:

Village Farms International, Inc. – Public Offering of Units

We have acted as U.S. and Canadian counsel for Village Farms International, Inc., a corporation organized under the laws of Canada (the “Corporation”), in connection with the registration of 9,396,226 units (each, a “Unit”), with each Unit consisting of one common share in the capital of the Corporation (each, a “Common Share”) and a warrant to purchase one-half (0.5) Common Shares (each, a “Warrant” and each Common Share underlying a Warrant, a “Warrant Share”), pursuant to the prospectus supplement, dated September 8, 2020 (the “Prospectus Supplement”), to the prospectus included as part of a registration statement (the “Registration Statement”) on Form S-3 (No. 333-237792), filed on April 22, 2020 with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended. The Units will be sold, and the Common Shares and Warrants issued, all in accordance with one or more Securities Purchase Agreements, each dated September 8, 2020, by and among the Corporation and the purchasers identified therein (the “Securities Purchase Agreements”).

We are qualified to practice law in the Province of Ontario and the State of New York, and we do not express any opinion with respect to the laws of any jurisdiction other than (a) the laws of the Province of Ontario and the federal laws of Canada applicable therein (including in respect of the Canada Business Corporations Act (“CBCA”), and (b) the laws of the State of New York, in each case, in force at the date of this opinion letter. All opinions with respect to the laws of the Province of Ontario and the federal laws of Canada applicable therein are given by members of the Law Society of Ontario and all opinions with respect to the laws of the State of New York are given by members of the New York State Bar. Notwithstanding the foregoing and our opinions set forth below, we express no opinion with respect to the compliance or non-compliance with applicable privacy laws in connection with the issuance and sale of any Units.

As counsel for the Corporation, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary for the purposes of rendering this opinion and we are familiar with the proceedings taken and proposed to be taken by the Corporation in connection with the authorization, issuance and sale of the Units. In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies.

Based upon the foregoing, and subject to the foregoing qualifications, assumptions and limitations and the further limitations set forth below, we are of the opinion that:

1. The Common Shares have been duly authorized for issuance and, when issued and paid for in accordance with the terms set forth in the Securities Purchase Agreements, will be validly issued, fully paid and non-assessable.

2. The Warrants have been duly authorized and, when issued and paid for in accordance with the terms set forth in the Securities Purchase Agreements, will constitute valid and legally binding obligations of the Corporation enforceable against the Corporation in accordance with their terms.

3. The Warrant Shares issuable upon exercise of the Warrants have been duly authorized for issuance and, when issued upon exercise of the Warrants in accordance with the terms thereof, will be validly issued, fully paid and non-assessable.

Our opinion expressed in paragraph 2 is subject to the following qualifications and exceptions:

(a)

any applicable bankruptcy, insolvency, moratorium, arrangement, winding-up laws or similar laws affecting the enforcement of creditors’ rights generally including laws regarding limitations of action;

(b)

concepts of reasonableness and general principles of equity, including the principle that the granting of equitable remedies such as specific performance and injunctive relief is within the discretion of a court of competent jurisdiction;

(c)

the powers of a court of competent jurisdiction to grant relief from forfeiture, to stay proceedings before it and to stay execution on judgments;

(d)

the qualification that the costs of and incidental to all proceedings authorized to be taken in court are in the discretion of the court and the court has full power to determine by whom and to what extent such costs shall be paid;

(e)

the qualification that a court may require the discretionary powers expressed to be conferred on any party to such agreement or certificate to be exercised reasonably and in good faith notwithstanding any provisions to the contrary and may decline to accept as conclusive factual or legal determinations described as conclusive therein;

(f)

the qualification that any provision in such agreement or certificate which purports to sever from such agreement or certificate, as the case may be, any provision therein which is prohibited or unenforceable under applicable law without affecting the validity of the remainder of the agreement or certificate, as the case may be, would be enforced only to the extent that the court determined that such prohibited or unenforceable provision could be severed without impairing the interpretation and application of the remainder of the agreement or certificate, as the case may be; and

(g)

the qualification that any provision in such agreement or certificate which purports to exculpate a party from liability or duty otherwise owed by it to another and certain remedial terms and waivers of equitable defenses provided for in such agreement or certificate are limited by law.

We express no opinion as to (i) the enforceability of any waiver of rights under any usury or stay law or (ii) the effect of fraudulent conveyance, fraudulent transfer or similar provision of applicable law on the conclusions expressed above.

In addition, in connection with the opinion expressed in paragraph 2 above, we have assumed that the Warrants are a valid, binding and enforceable agreement of each party thereto (other than the Corporation). We have also assumed that neither the issuance and delivery of the Warrants, nor the compliance by the Corporation with the terms of the Warrants, will violate any applicable law or public policy or will result in a violation of any provision of any instrument or agreement then binding upon the Corporation, or any restriction imposed by any court or governmental body having jurisdiction over the Corporation.

Further, our opinions expressed in paragraphs 1, 2 and 3 above are subject to the qualifications that we express no opinion as to the applicability of, compliance with, or effect of any laws except the CBCA.

We consent to the use of this opinion as an exhibit to the Current Report on Form 8-K to be filed by the Corporation with the Commission on September 10, 2020 and its incorporation by reference in the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.

Very truly yours,

/s/ Torys LLP

Exhibit 10.1

EXECUTION VERSION

VILLAGE FARMS INTERNATIONAL, INC.

and

EMERALD HEALTH THERAPEUTICS, INC.

SHARE PURCHASE AGREEMENT

September 8, 2020

TABLE OF CONTENTS


		Page
ARTICLE 1 INTERPRETATION			1

1.1	Definitions		1
1.2	Gender and Number		8
1.3	Certain Phrases and Calculation of Time		8
1.4	Headings, etc.		8
1.5	References to the Schedules and Exhibits		9
1.6	Currency		9
1.7	Knowledge		9
1.8	Statutory References		9
1.9	No Presumption		9
1.10	Governing Law		9

ARTICLE 2 PURCHASED SHARES AND PURCHASE PRICE			10

2.1	Purchase and Sale		10
2.2	Purchase Price Adjustment		10
2.3	Closing and the Closing Date		10
2.4	Closing Procedures		10

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF EMERALD			11

3.1	Board Approval		11
3.2	Corporate Power and Due Authorization of Emerald		11
3.3	No Conflict		12
3.4	Consents and Authorizations		12
3.5	Litigation		12
3.6	Bankruptcy		12
3.7	Title to Purchased Shares		12
3.8	No Other Agreements		13

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF VILLAGE FARMS			13

4.1	Corporate Power and Due Authorization of Village Farms		13
4.2	No Conflict		13
4.3	Consents and Authorizations		14
4.4	Litigation		14
4.5	Bankruptcy		14
4.6	Corporate Records		14

ARTICLE 5 COVENANTS OF THE PARTIES			15

5.1	Conduct of Business Prior to Closing		15
5.2	Actions to Satisfy Closing Conditions		15
5.3	Emerald Meeting		15
5.4	Emerald Circular		16

- i -

TABLE OF CONTENTS

(continued)


		Page
5.5	Transfer of the Purchased Shares		17
5.6	Consents		18
5.7	Regulatory Approvals		18
5.8	Ancillary Agreements		20
5.9	Notice of Certain Events		20
5.10	Pre-Closing Reorganizations		20

ARTICLE 6 ADDITIONAL COVENANTS REGARDING NON-SOLICITATION			23

6.1	Non-Solicitation		23
6.2	Acquisition Proposals		24

ARTICLE 7 CONDITIONS PRECEDENT TO VILLAGE FARMS’ OBLIGATION TO CLOSE			25

7.1	Truth and Accuracy of Representations and Warranties at Closing		25
7.2	Compliance with Covenants		25
7.3	Change in Law		26
7.4	No Actions or Proceedings		26
7.5	Shareholder Approvals		26
7.6	PSF Lender Consent		26
7.7	Village Farms Lender Consent		26
7.8	Regulatory Approvals		26
7.9	Dissent Rights		26
7.10	Ancillary Agreements		26
7.11	Voting and Support Agreements		27
7.12	Closing Documents		27

ARTICLE 8 CONDITIONS PRECEDENT TO EMERALD’S OBLIGATION TO CLOSE			27

8.1	Truth and Accuracy of Representations and Warranties at Closing		27
8.2	Compliance with Covenants		28
8.3	No Actions or Proceedings		28
8.4	Change in Law		28
8.5	Emerald Shareholder Approval		28
8.6	Regulatory Approvals		28
8.7	PSF Lender Consent		28
8.8	Dissent Rights		28
8.9	Ancillary Agreements		29
8.10	Closing Documents		29

ARTICLE 9 TERMINATION AND EFFECT OF TERMINATION			29

9.1	Termination		29
9.2	Effect of Termination		30
9.3	Termination Fee		31

- ii -

TABLE OF CONTENTS

(continued)


		Page
ARTICLE 10 INDEMNIFICATION			32

10.1	Indemnification by Emerald		32
10.2	Indemnification by Village Farms		32
10.3	Survival		33
10.4	Calculation of Liability; Limitations		34
10.5	Third Party Claims		34
10.6	Indemnification Adjustment to Purchase Price		37

ARTICLE 11 GENERAL PROVISIONS			37

11.1	Notices		37
11.2	Public Announcements		38
11.3	Expenses		39
11.4	Further Assurances		39
11.5	Equitable Relief		39
11.6	No Third-Party Beneficiaries		39
11.7	Successors and Assigns		39
11.8	Entire Agreement		40
11.9	Amendment and Waiver		40
11.10	Severability		40
11.11	Counterparts		40

Schedules


Schedule 2.1(c)(ii)	–	Form of Promissory Note

Schedule 5.8(a)	–	List of Resigning Directors and Officers and Form of Resignation and Mutual Release

Schedule 5.8(b)	–	Form of SHAG Termination Agreement

Schedule 5.8(c)	–	Form of Non-Solicitation Agreement

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THIS SHARE PURCHASE AGREEMENT is dated September 8, 2020 and made among VILLAGE FARMS INTERNATIONAL, INC., a corporation formed under the laws of Canada (“Village Farms”), and EMERALD HEALTH THERAPEUTICS, INC., a corporation formed under the laws of British Columbia (“Emerald”).

RECITALS

WHEREAS Village Farms and Emerald Health Therapeutics Canada Inc. (“Emerald Canada”), a wholly-owned subsidiary of Emerald, are the sole shareholders of Pure Sunfarms Corp., a corporation formed under the laws of the province of British Columbia (“PSF”);

AND WHEREAS on June 6, 2017, Village Farms, Emerald, Emerald Canada and PSF entered into a shareholders agreement (the “Shareholders Agreement”) to govern the business and affairs of PSF;

AND WHEREAS Village Farms wishes to purchase from Emerald, and Emerald wishes to sell to Village Farms, 36,958,500 common shares in the capital of PSF, representing 41.3% of the issued and outstanding shares of PSF on a fully-diluted basis and all of the remaining shares of PSF not held by Village Farms (the “Purchased Shares”), upon the terms and subject to the conditions set forth herein (the “Transaction”);

AND WHEREAS the board of directors of Emerald has unanimously determined, after receiving financial and legal advice and following receipt of the Fairness Opinion (as defined herein) that the Transaction is fair and in the best interests of Emerald and to recommend to the Emerald Shareholders (as defined herein) that they vote their common shares of Emerald in favour of the Emerald Resolution (as defined herein), upon the terms and subject to the conditions set forth herein;

AND WHEREAS Emerald Health Sciences Inc., Anson Funds and all members of the board of directors and senior officers of Emerald, prior to or concurrently with the execution of this Agreement, entered into Voting and Support Agreements (as defined herein);

NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are acknowledged), the Parties agree as follows:

ARTICLE 1

INTERPRETATION

1.1

Definitions

In this Agreement, the following terms have the following meanings:

“Acquisition Proposal” means, other than the transactions contemplated by this Agreement, any offer, proposal, inquiry or expression of interest (written or oral) from any Person or group of Persons other than Village Farms (or any Affiliate of Village Farms or any Person acting jointly or in concert with Village Farms or any Affiliate of Village Farms) after the date of this Agreement relating to, in each case whether in a single transaction or a series of related transactions:

(a)

any direct or indirect sale or disposition or purchase or joint venture (or any lease, long-term supply agreement or other arrangement having the same economic effect as a sale or disposition or purchase), in a single transaction or series of transactions, of voting or equity securities of PSF (or rights or interests therein); or

(b)

any plan of arrangement, merger, amalgamation, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution, winding up, joint venture, partnership, amendment to constating documents, redemption of securities, transfer, purchase, issuance, distribution or other transaction or series of transactions involving PSF that would have the same effect as the foregoing.

“Affiliate” means, as applied to any Person, (a) any other Person directly or indirectly Controlling, Controlled by or under common Control with that Person, or (b) any other Person that owns or controls 50% or more of any class of voting equity securities (including any equity securities issuable upon the exercise of any option or convertible security) of that Person or any of its affiliates. For greater certainty, for purposes of this Agreement, PSF (i) shall not be considered an Affiliate of Emerald, and (ii) prior to Closing, shall not be considered an Affiliate of Village Farms (but shall be considered an Affiliate of Village Farms from and after Closing).

“Agreement” means this share purchase agreement and the schedules and exhibits attached to it or otherwise forming part of it, as the same may be amended, restated, replaced, supplemented or novated from time to time; and the words “Article” and “Section” followed by a number or letter mean and refer to the specified Article or Section of this share purchase agreement.

“Ancillary Agreements” means, collectively, the D&O Mutual Releases, the SHAG Termination Agreement and the Non-Solicitation Agreement.

“Applicable Laws” means any and all applicable (a) laws, constitutions, treaties, statutes, codes, ordinances, orders, decrees, rules, regulations, by-laws and ordinances of any Governmental Authority, including all Cannabis Laws and Securities Laws, (b) judicial, arbitral, administrative, ministerial, departmental or regulatory judgments, orders, decisions, rulings or awards of any Governmental Authority, and (c) policies, guidelines, notices and protocols, to the extent that they have the force of law.

“Authorization” means, with respect to any Person, any order, permit, registration, approval, consent, waiver, licence or other authorization issued, granted, given or authorized by, or made applicable under the authority of, any Governmental Authority having jurisdiction over such Person.

“Board Recommendation” has the meaning specified in Section 5.4(b).

“Business” means the business of PSF as currently conducted.

“Business Day” means any day, other than a Saturday, Sunday or statutory or civic holiday in Toronto, Ontario or Vancouver, British Columbia.

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“Cannabis Laws” means the Cannabis Act (Canada) and any other law, statute, rule or regulation in Canada or any other applicable jurisdiction (including any province, territory or other sub-jurisdiction) relating in any way to the production, cultivation, possession, storage, transportation, distribution, sale or use of cannabis and related substances and products, and including all regulations, official directives, orders, judgments and decrees promulgated under any of the foregoing.

“Change in Recommendation” has the meaning specified in Section 9.1(f).

“Closing” means the completion of the transaction of sale contemplated in this Agreement.

“Closing Date” means the date that is five (5) Business Days after the date on which the last of the conditions set out in Article 7 and Article 8 has been satisfied (or, to the extent permitted, waived by the Party or Parties entitled to the benefit thereof), other than conditions with respect to actions that by their terms the Parties will take at Closing itself, or such other date as the Parties may agree in writing.

“Closing Documents” means, collectively, the documents listed in Section 7.12 to be delivered by Emerald at Closing and the documents listed in Section 8.10 to be delivered by Village Farms at Closing.

“Consent” means any consent, approval, permit, waiver, ruling or exemption that is required from, and any notice that is required to be provided to, any Person in connection with the transactions contemplated by this Agreement, other than any Regulatory Approval.

“Control” (and the terms “Controlling”, “Controlled”, and “under common Control with”) means, as applied to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through ownership of voting securities, by contract or otherwise.

“Corporate Records” means, with respect to any Person, the corporate records of such Person, including (a) all constating documents, articles and by-laws, (b) all minutes of meetings and resolutions of shareholders and directors, and (c) the share certificate books, securities register, register of transfers and register of directors (or equivalent).

“D&O Mutual Releases” has the meaning specified in Section 5.8(a).

“Dissent Rights” means the rights of dissent exercisable by registered Emerald Shareholders in respect of the Emerald Resolution pursuant to and in the manner set forth in Division 2 of Part 8 of the Business Corporations Act (British Columbia).

“Emerald” has the meaning specified in the preamble to this Agreement.

“Emerald Canada” has the meaning specified in the Recitals.

“Emerald Circular” means the notice of the Emerald Meeting and accompanying management information circular, including all schedules, appendices and exhibits thereto, and information incorporated by reference in, such management information circular, to be sent to, among others, the Emerald Shareholders and each other Person as required by Applicable Laws in connection with the Emerald Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement.

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“Emerald Fundamental Representations” has the meaning specified in Section 10.3(b).

“Emerald Indemnified Parties” has the meaning specified in Section 10.2.

“Emerald Meeting” means the annual and special meeting of Emerald Shareholders, including any adjournment or postponement of such meeting in accordance with the terms of this Agreement, to be called and held in accordance with Applicable Laws and the Corporate Records of Emerald to consider and, if deemed advisable, approve the Emerald Resolution and the annual meeting business.

“Emerald Note” means the promissory note dated March 6, 2020 issued by Emerald Canada in favour of PSF in the principal amount of $952,237.

“Emerald Resolution” means the special resolution of the Emerald Shareholders approving the Transaction to be considered at the Emerald Meeting.

“Emerald Shareholder” means a registered or beneficial holder of a common share of Emerald.

“Encumbrance” means (a) any mortgage, charge, pledge, hypothec, security interest, assignment, encumbrance (statutory or otherwise), privilege, easement, servitude, pre-emptive right or right of first refusal, ownership or title retention agreement, restrictive covenant or conditional sale agreement, and (b) any other encumbrance of any nature or any arrangement or condition which, in substance, secures payment or performance of an obligation.

“Expense Reimbursement Fee” has the meaning specified in Section 9.3(d).

“Fairness Opinion” means the opinion of the Financial Advisor, delivered to the board of directors of Emerald, to the effect that, as of the date of such opinion, the Transaction is fair, from a financial point of view, to Emerald.

“Financial Advisor” means Haywood Securities Inc.

“Governmental Authority” means any (a) international, multinational, national, federal, provincial, territorial, state, municipal, local or other governmental or public department, central bank, court, commission, board, tribunal, bureau or agency, domestic or foreign, including Health Canada, (b) any self-governed body with authority to regulate the activities carried out or performed in the course of the Business and the conduct of Village Farms, Emerald or PSF, as applicable, (c) any subdivision or authority of any of the above, or (d) any quasi-governmental or private body exercising any regulatory, expropriation or Tax Authority under or for the account of any of the above.

“IFRS” means Independent Financial Reporting Standards as issued by the International Accounting Standards Board.

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“Indemnified Person” has the meaning specified in Section 10.5(a).

“Indemnifying Party” has the meaning specified in Section 10.5(a).

“Interim Period” means the period between the entering into of this Agreement by the Parties and Closing.

“Losses” means any and all deficiencies, damages, claims, losses, liabilities, judgments, settlements, awards, fines, costs, obligations, Taxes, loss of value (including losses or damages calculated based on diminution of value, lost profits or a multiple of lost earnings), interest, penalties, expense or assessments of any kind, including reasonable attorney’s fees and the cost of enforcing any right to indemnification hereunder.

“Mailing Deadline” means September 30, 2020.

“Meeting Deadline” means October 30, 2020.

“Misrepresentation” has the meaning ascribed thereto under Securities Laws.

“Non-Solicitation Agreement” has the meaning specified in Section 5.8(c).

“Notice” has the meaning specified in Section 11.1.

“Order” means any decision, injunction, order, directive, ruling, subpoena, decree, judgement, award, writ or verdict entered, issued, made or rendered by any Governmental Authority.

“Ordinary Course” means, with respect to an action taken by a Person, that (a) the action is consistent in nature, scope and magnitude with the past customs, practices and procedures of such Person or its business, as the case may be, and is taken in the ordinary course of the normal day-to-day operations of such Person or its business and (b) the action is not required to be authorized by the board of directors, managers or members of such Person (or by any Person or group of Persons exercising similar authority) and does not require any other separate or special authorization of any nature.

“Outside Date” means November 30, 2020 or such later date as may be agreed to in writing by the Parties.

“Parties” means Village Farms and Emerald and their respective successors and permitted assigns; and “Party” means any one of the Parties.

“Permitted Encumbrances” means (a) Encumbrances for Taxes, assessments or governmental charges or levies which relate to obligations not yet due or delinquent and for which adequate reserves have been recorded in accordance with IFRS, (b) easements, servitudes, right of way, encroachments and other minor imperfections of title, zoning, land use, development agreements, subdivision agreements, building restrictions, ordinances or other restrictions, bylaws or regulations which do not and will not, materially adversely affect the value of any leased or owned real property of PSF affected thereby or impair the use of such real property affected thereby for the purpose for which it is used, (c) undetermined or inchoate Encumbrances arising or potentially

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arising under statutory provisions which have not at the time been filed or registered in accordance with Applicable Laws or of which written notice has not been given in accordance with Applicable Laws, (d) mechanics’, carriers’, workmen’s, repairmen’s, service provider’s or other like Encumbrances for sums that are not overdue, or if overdue, that are being contested in good faith, arising or incurred in the Ordinary Course, (e) the rights of any landlord or any Person under any lease of real property occupied by such Person as tenant and Encumbrances, reservations and renewals of freehold interest in any such property having priority to any such leases and (f) Encumbrances or title retention arrangements arising under conditional sales contracts, leases (including capital leases, those relating to equipment, vehicles or otherwise) or to secure the payments of the purchase price or repayment of monies borrowed to pay the purchase price of any assets or property hereafter or previously acquired by such Person.

“Person” means a natural person, partnership, limited partnership, limited liability partnership, syndicate, sole proprietorship, corporation or company (with or without share capital), limited liability company, stock company, trust, unincorporated association, joint venture or other entity or Governmental Authority.

“Pre-Closing Reorganization” has the meaning specified in Section 5.10(a).

“Proceeding” means civil, criminal or administrative actions, claims, suits, inquiries, investigations, complaints, or proceedings, at law or in equity, by any Person, or any arbitration, administrative or other proceeding by or before (or any investigation by) any court, administrative agency, arbitrator, tribunal, board, Governmental Authority or other competent authority.

“PSF” has the meaning specified in the Recitals.

“PSF Credit Agreement” means the second amended and restated credit agreement dated June 30, 2020 among PSF, as borrower, the Lenders and Bank of Montreal, as administrative agent, lead arranger and sole bookrunner.

“PSF Lenders” means the lenders party to the PSF Credit Agreement.

“Purchase Price” has the meaning specified in Section 2.1(b).

“Purchased Shares” has the meaning specified in the Recitals.

“Regulatory Approval” means any consent, approval, permit, waiver, ruling, or exemption that is required from, and any notice that is required to be provided to, any Governmental Authority pursuant to any Applicable Law or the conditions of any applicable Order, in each case in connection with the transactions contemplated by this Agreement.

“Representative” means, with respect to any Person, any officer, director, employee, representative (including any financial or other advisor) or agent of such Person or of any of its Affiliates.

“Securities Authority” means the Ontario Securities Commission and any other applicable securities commissions or securities regulatory authority of a province or territory of Canada.

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“Securities Laws” means the securities Laws of each of the provinces and territories of Canada, the policies and regulations of any stock exchange on which the applicable Party’s securities are listed and posted for trading, and all other applicable securities laws, rules, regulations, instruments and published policies thereunder, as now in effect and as they may be promulgated or amended from time to time.

“SHAG Termination Agreement” has the meaning specified in Section 5.8(b).

“Shareholders Agreement” has the meaning specified in the Recitals.

“Subsidiary” means, with respect to any Person, any other Person that is Controlled, directly or indirectly, through one or more intermediaries, by such person or, where such Person is a limited partnership, by the general partner of such Person.

“Tax Authority” means any local, municipal, governmental, state, provincial, territorial, federal or other fiscal, customs or excise authority, body or officials anywhere in the world with responsibility for, and competent to impose, collect or administer, any form of Tax.

“Taxes” means: (a) any and all taxes, duties, fees, excises, premiums, assessments, imposts, levies and other charges or assessments of any kind whatsoever imposed by any Governmental Authority, whether computed on a separate, consolidated, unitary, combined or other basis, including those levied on, or measured by, or described with respect to, income, gross receipts, profits, gains, windfalls, capital, capital stock, production, recapture, transfer, land transfer, license, gift, occupation, wealth, environment, net worth, indebtedness, surplus, sales, goods and services, harmonized sales, use, value-added, excise, special assessment, stamp, withholding, business, franchising, real or personal property, health, employer health, payroll, workers’ compensation, employment or unemployment, severance, social services, social security, education, utility, surtaxes, customs, import or export, and including all license and registration fees and all employment insurance, health insurance and government pension plan premiums or contributions; and (b) all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Authority on or in respect of amounts of the type described in clause (a) or this clause (b).

“Termination Fee” has the meaning specified in Section 9.3(b)(i).

“Termination Fee Event” has the meaning specified in Section 9.3(b)(ii).

“Third Party Claim” has the meaning specified in Section 10.5(a).

“Transaction” means has the meaning specified in the Recitals.

“Village Farms” has the meaning specified in the preamble to this Agreement.

“Village Farms Credit Facilities” means collectively, (i) the term facility among Village Farms and certain Affiliates, as guarantors, and Farm Credit Canada entered into on March 28, 2013, as amended from time to time, (ii) the operating credit facility among Village Farms and a Canadian chartered bank dated August 29, 2013, as amended from time to time, and (iii) the loan agreement between VF Clean Energy, Inc. and a Canadian chartered bank dated July 31, 2014, as amended from time to time.

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“Village Farms Fundamental Representations” has the meaning specified in Section 10.3(c).

“Village Farms Indemnified Parties” has the meaning specified in Section 10.1.

“Village Farms Lenders” means the lenders under the Village Farms Credit Facilities.

“Voting and Support Agreement” has the meaning specified in Section 3.1.

“Willful Breach” means a breach that is a consequence of any act undertaken by the breaching Party with the actual knowledge that the taking of such act would, or would be reasonably expected to, cause a breach of this Agreement.

1.2

Gender and Number

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

1.3

Certain Phrases and Calculation of Time

(a)

In this Agreement (i) the words “including” and “includes” mean “including (or includes) without limitation”, and (ii) in the computation of periods of time from a specified date to a later specified date, unless otherwise expressly stated, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”. If the last day of any such period is not a Business Day, such period will end on the next Business Day.

(b)

When calculating the period of time “within” which or “following” which any act or event is required or permitted to be done, notice given or steps taken, the date which is the reference date in calculating such period is to be excluded from the calculation. If the last day of any such period is not a Business Day, such period will end on the next Business Day.

(c)

Any reference to a number of days shall refer to calendar days unless Business Days are specified.

1.4

Headings, etc.

The inclusion of a table of contents, the division of this Agreement into Articles and Sections and the insertion of headings are for convenient reference only and are not to affect or be used in the construction or interpretation of this Agreement.

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1.5

References to the Schedules and Exhibits

Unless otherwise indicated, all references herein to sections, articles, exhibits or schedules shall be deemed to refer to Sections, Articles, Exhibits or Schedules of or to this Agreement, as applicable.

1.6

Currency

All monetary amounts in this Agreement, unless otherwise specifically indicated, are stated in Canadian dollar currency.

1.7

Knowledge

(a)

Where any representation or warranty in this Agreement is qualified by reference “to the knowledge of Emerald” or “of which Emerald becomes aware”, it is deemed to refer to the actual knowledge of Avtar Dhillon, Jim Heppell, Riaz Bandali and Jenn Hepburn after reasonable inquiry.

(b)

Where any representation or warranty in this Agreement is qualified by reference “to the knowledge of Village Farms” or “of which Village Farms becomes aware”, it is deemed to refer to the actual knowledge of Michael DiGiglio and Stephen Ruffini, after reasonable inquiry.

1.8

Statutory References

Unless otherwise specifically indicated, any reference to a statute in this Agreement refers to that statute and to the regulations made under that statute.

1.9

No Presumption

The Parties and their counsel have participated jointly in the negotiation and drafting of this Agreement and the Ancillary Agreements. If an ambiguity or a question of intent or interpretation arises, this Agreement and each of the Ancillary Agreements are to be construed as if drafted jointly by the Parties. No presumption or burden of proof should arise in favour of any Party by virtue of the authorship of any provision of this Agreement or any of the Ancillary Agreements.

1.10

Governing Law

(a)

This Agreement is governed by and is to be interpreted, construed and enforced in accordance with the laws of the province of Ontario and the federal laws of Canada applicable therein, without regard to conflict of law principles.

(b)

Each of the Parties irrevocably attorns and submits to the exclusive jurisdiction of the Ontario courts situated in the City of Toronto in any action or proceeding arising out of or relating to this Agreement. Each of the Parties waives objection to the venue of any action or proceeding in such court or any argument that such court provides an inconvenient forum.

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ARTICLE 2

PURCHASED SHARES AND PURCHASE PRICE

2.1

Purchase and Sale

(a)

Subject to the terms and conditions of this Agreement, Village Farms agrees to purchase at Closing, and Emerald agrees to cause Emerald Canada to sell to Village Farms at Closing, the Purchased Shares, free and clear of all Encumbrances.

(b)

Subject to Section 2.2, the purchase price payable by Village Farms to Emerald for the Purchased Shares shall be $79,900,000 (the “Purchase Price”).

(c)

At Closing, the Purchase Price for the Purchased Shares shall be satisfied in full as follows:

(i)

Village Farms shall pay an amount in cash equal to no less than $60,000,000, and shall use commercially reasonable efforts to pay an amount in cash equal to the full Purchase Price, via wire transfer of immediately available funds to an account specified by Emerald; and

(ii)

to the extent that the amount paid pursuant to Section 2.1(c)(i) is less than the full Purchase Price, Village Farms shall deliver to Emerald a promissory note substantially in the form of Schedule 2.1(c)(ii) in an amount equal to the difference between the Purchase Price and such amount paid pursuant to Section 2.1(c)(i).

2.2

Purchase Price Adjustment

The Purchase Price shall be increased by the principal amount of the Emerald Note, plus any accrued and unpaid interest thereon, to the extent that the obligation to repay the Emerald Note has not been assumed by Village Farms at Closing.

2.3

Closing and the Closing Date

Closing shall take place remotely via the exchange of documents and signatures at 8:00 a.m. (Toronto time) on the Closing Date or at such other place, on such other date and at such other time as may be agreed upon in writing by the Parties.

2.4

Closing Procedures

At Closing, subject to satisfaction or waiver by the relevant Party of the conditions of Closing, Emerald shall deliver or cause to be delivered to Village Farms share certificates representing the Purchased Shares endorsed in blank for transfer or accompanied by irrevocable share transfer powers of attorney executed in blank, in either case, by the holders of record or a valid power of attorney.

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ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF EMERALD

Emerald represents and warrants to Village Farms as follows, and Emerald acknowledges that Village Farms is relying upon the accuracy of the following representations and warranties in entering into this Agreement and purchasing the Purchased Shares:

3.1

Board Approval

The board of directors of Emerald, after receiving financial and legal advice, has unanimously determined that the Transaction is in the best interests of Emerald and has resolved to unanimously recommend to the Emerald Shareholders that they vote their common shares in favour of the Emerald Resolution at the Emerald Meeting and such approvals and resolutions have not been withdrawn, amended or rescinded. The board of directors of Emerald has received the verbal Fairness Opinion and such verbal Fairness Opinion has not been withdrawn, amended, modified or rescinded. Prior to the Mailing Deadline, the board of directors of Emerald will receive the written Fairness Opinion (a copy of which will be provided to Village Farms prior to the Mailing Deadline) and such written Fairness Opinion shall not be withdrawn, amended, modified or rescinded. The board of directors of Emerald has approved the Transaction and the execution and performance of this Agreement. Each of the directors and senior officers of Emerald have entered into a voting and support agreement (each, a “Voting and Support Agreement”) pursuant to which he or she will vote all the common shares of Emerald held by him or her in favour of the Emerald Resolution in accordance with the terms thereof and will, accordingly, so represent in the Emerald Circular.

3.2

Corporate Power and Due Authorization of Emerald

Emerald has been duly incorporated and organized and is validly existing and in good standing under the laws of the province of British Columbia. Emerald has the corporate power, authority and capacity to enter into, and to perform its obligations under, this Agreement and each of the Ancillary Agreements to which it is a party. This Agreement has been, and the Ancillary Agreements have been, duly authorized by Emerald. This Agreement has been duly executed and delivered by Emerald and constitutes, and each of the Ancillary Agreements to which Emerald is a party when executed by Emerald will constitute, a legal, valid and binding obligation of Emerald, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights generally and to the applicability of equitable principles. No other corporate proceedings on the part of Emerald or its Affiliates are necessary to authorize the consummation of the transactions contemplated by this Agreement and each of the Ancillary Agreements to which Emerald is a party other than the approval of the board of directors of Emerald of the Emerald Circular and the approval by the Emerald Shareholders of the Emerald Resolution.

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3.3

No Conflict

None of the entering into of this Agreement or any Ancillary Agreement, the sale of the Purchased Shares or the performance by Emerald of any of its obligations under this Agreement or any Ancillary Agreement shall (i) contravene, breach or result in any default under the articles, by-laws, constating documents or other organizational documents of Emerald or Emerald Canada, (ii) conflict with, constitute a breach or violation of, or a default under, or give rise to any Encumbrance (other than Permitted Encumbrances) or any acceleration of remedies, penalty, increase or decrease in benefit payable or right of termination, unilateral modification, suspension, revocation or cancellation under, or forfeiture of, or result in or constitute a circumstance which, with or without notice or lapse of time or both would constitute any of the foregoing under, as applicable, any Authorization or any agreement, contract or instrument of Emerald or Emerald Canada or any agreement, contract or instrument to which any assets of Emerald or Emerald Canada are subject, or (iii) violate, conflict with or result in the breach of any Applicable Law or any order, writ, injunction, subpoena, ruling, stipulation, decision, determination, award or decree issued by any court or Governmental Authority applicable to Emerald or Emerald Canada or any of their respective assets or properties.

3.4

Consents and Authorizations

No Regulatory Approval or Consent is required to be obtained or made by Emerald or Emerald Canada in connection with the execution, delivery or performance of this Agreement or any Ancillary Agreement, except (a) the Consent from the PSF Lenders pursuant to the PSF Credit Agreement to the transfer of the Purchased Shares; (b) Consent from PSF to the assumption by Village Farms of Emerald Canada’s obligations under the Emerald Note; (c) Regulatory Approval from the TSX Venture Exchange to the transfer of the Purchased Shares; (d) Consents already obtained pursuant to the Voting and Support Agreements; and (e) any Regulatory Approval or Consent where failure to obtain such Regulatory Approval or Consent would not be material to PSF.

3.5

Litigation

There are no Proceedings current or pending or, to the knowledge of Emerald, threatened against Emerald or Emerald Canada or their respective businesses enjoining, restricting or prohibiting any of the transactions contemplated herein; no event has occurred or circumstance exists which may reasonably (with or without the passage of time) give rise to or serve as a basis for the commencement of any such Proceeding by, against or affecting Emerald or Emerald Canada or their respective businesses; and none of Emerald or Emerald Canada have entered into any Proceeding, settlement agreement or other arrangement that challenges, or that may reasonably be expected to have the effect of preventing, delaying, making illegal or otherwise materially interfering with, any of the transactions contemplated herein.

3.6

Bankruptcy

There are no bankruptcy, reorganization or arrangement proceedings pending against, being contemplated by or, to the knowledge of Emerald, threatened against Emerald or Emerald Canada.

3.7

Title to Purchased Shares

The Purchased Shares are owned by Emerald Canada as the registered and beneficial owner thereof, with good and valid title thereto, free and clear of all Encumbrances other than transfer restrictions under Securities Laws and the Shareholders Agreement. Upon completion of the transactions contemplated by this Agreement, Emerald will cause Emerald Canada to transfer to Village Farms legal and beneficial and good and valid title to each of the Purchased Shares, free and clear of all Encumbrances.

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3.8

No Other Agreements

Except for the rights of Village Farms under this Agreement and the shareholders’ rights under the Shareholders Agreement, no Person has any written or oral agreement, option, warrant, understanding or commitment or any right or privilege (whether by law, contractual or otherwise) capable of becoming such for:

(a)

the purchase or acquisition from Emerald Canada of any of the Purchased Shares; or

(b)

the purchase, subscription, allotment or issuance of any of the unissued shares or other securities of PSF.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF VILLAGE FARMS

Village Farms represents and warrants to Emerald as follows, and Village Farms acknowledges that Emerald is relying upon the accuracy of the following representations and warranties in entering into this Agreement and selling the Purchased Shares:

4.1

Corporate Power and Due Authorization of Village Farms

Village Farms has been duly incorporated and organized and is validly existing and in good standing under the laws of Canada. Village Farms has the corporate power, authority and capacity to enter into, and to perform its obligations under, this Agreement and each of the Ancillary Agreements to which it is a party. This Agreement has been, and the Ancillary Agreements have been, duly authorized by Village Farms. This Agreement has been duly executed and delivered by Village Farms and constitutes, and each of the Ancillary Agreements to which Village Farms is a party when executed by Village Farms will constitute, a legal, valid and binding obligation of Village Farms, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws now or hereafter in effect relating to creditors’ rights generally and to the applicability of equitable principles. No other corporate proceedings on the part of Village Farms or its Affiliates are necessary to authorize the consummation of the transactions contemplated by this Agreement and each of the Ancillary Agreements to which Village Farms is a party.

4.2

No Conflict

Assuming the Consent in Section 4.3(c) is obtained, none of the entering into of this Agreement or any Ancillary Agreement, the purchase of the Purchased Shares or the performance by Village Farms of any of its obligations under this Agreement or any Ancillary Agreement shall (i) contravene, breach or result in any default under the articles, by-laws, constating documents or other organizational documents of Village Farms, (ii) conflict with, constitute a breach or violation of, or a default under, or give rise to any Encumbrance (other than Permitted Encumbrances) or any acceleration of remedies, penalty, increase or decrease in benefit payable or right of

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termination, unilateral modification, suspension, revocation or cancellation under, or forfeiture of, or result in or constitute a circumstance which, with or without notice or lapse of time or both would constitute any of the foregoing under, as applicable, any Authorization or any agreement, contract or instrument of Village Farms or any agreement, contract or instrument to which any assets of Village Farms are subject, or (iii) violate, conflict with or result in the breach of any Applicable Law or any order, writ, injunction, subpoena, ruling, stipulation, decision, determination, award or decree issued by any court or Governmental Authority applicable to Village Farms or any of its assets or properties.

4.3

Consents and Authorizations

No Regulatory Approval or Consent is required to be obtained or made by Village Farms in connection with the execution, delivery or performance of this Agreement or any Ancillary Agreement except (a) the Consent from the PSF Lenders pursuant to the PSF Credit Agreement to the transfer of the Purchased Shares; (b) the Consent from PSF to the assumption by Village Farms of Emerald Canada’s obligations under the Emerald Note; (c) the Consent from the Village Farms Lenders pursuant to the terms of the Village Farms Credit Facilities to the Transaction; and (d) where failure to obtain such Regulatory Approval or Consent would not be material to PSF.

4.4

Litigation

There are no Proceedings current or pending or, to the knowledge of Village Farms, threatened against Village Farms or its business enjoining, restricting or prohibiting any of the transactions contemplated herein; no event has occurred or circumstance exists which may reasonably (with or without the passage of time) give rise to or serve as a basis for the commencement of any such Proceeding by, against or affecting Village Farms or its business; and Village Farms has not entered into any Proceeding, settlement agreement or other arrangement that challenges, or that may reasonably be expected to have the effect of preventing, delaying, making illegal or otherwise materially interfering with, any of the transactions contemplated herein. Village Farms is not subject to or in breach of any Order and, to the Knowledge of Village Farms, Village Farms has never been in breach of any Order.

4.5

Bankruptcy

There are no bankruptcy, reorganization or arrangement proceedings pending against, being contemplated by, or to the knowledge of Village Farms, threatened against Village Farms.

4.6

Corporate Records

All Corporate Records of Village Farms have been properly prepared and filed, accurately kept, and are true and complete in each case in all material respects. To the knowledge of Village Farms, it has not received any notice or allegation that any of the Corporate Records is incorrect or incomplete or should be rectified.

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ARTICLE 5

COVENANTS OF THE PARTIES

5.1

Conduct of Business Prior to Closing

During the Interim Period, each of the Parties agrees to co-operate in good faith with the other Party in managing and funding the day to day operations of PSF, including funding any capital contributions and securing any debt financing arrangements on behalf of PSF, all in accordance with the terms of the Shareholders Agreement.

5.2

Actions to Satisfy Closing Conditions

(a)

Emerald shall take all such reasonable actions as are within its power to control and shall use commercially reasonable efforts to cause other actions to be taken which are not within its power to control, so as to ensure compliance with all of the conditions set forth in Article 7, including ensuring that during the Interim Period and at Closing, there is no breach of any of its representations and warranties.

(b)

Village Farms shall take all such reasonable actions as are within its power to control and shall use commercially reasonable efforts to cause other actions to be taken which are not within its power to control, so as to ensure compliance with all of the conditions set forth in Article 8, including ensuring that during the Interim Period and at Closing, there is no breach of any of its representations and warranties.

5.3

Emerald Meeting

Emerald shall:

(a)

use commercially reasonable efforts to convene and conduct the Emerald Meeting in accordance with Applicable Laws and its Corporate Records as soon as reasonably practicable and, in any event, on or before the Meeting Deadline, including by virtual means, and not adjourn, postpone or cancel (or propose the adjournment, postponement or cancellation of) the Emerald Meeting without the prior written consent of Village Farms, except (i) in the case of a postponement or adjournment, if requested by Village Farms, for quorum purposes or for the purpose of obtaining the approval of Emerald Shareholders of the Emerald Resolution, or (ii) as required by Applicable Laws or by a Governmental Authority;

(b)

not, except for annual meeting business, propose or submit for consideration at the Emerald Meeting any business other than the Emerald Resolution without Village Farms’ prior written consent, such consent not to be unreasonably withheld, conditioned or delayed;

(c)

solicit proxies in favour of the approval of the Emerald Resolution and against any resolution submitted by any Emerald Shareholder that is inconsistent with the Emerald Resolution;

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(d)

provide Village Farms with copies of or access to information regarding the Emerald Meeting that has been provided to Emerald generated by any proxy solicitation services firm retained by Emerald, as requested from time to time by Village Farms;

(e)

consult with Village Farms in fixing and publishing a record date for the purposes of determining Emerald Shareholders entitled to receive notice of and vote at the Emerald Meeting (which record date shall be no later than September 14, 2020);

(f)

consult with Village Farms in fixing the date of the Emerald Meeting, give notice to Village Farms of the Emerald Meeting and allow the Representatives of Village Farms and its legal counsel to attend the Emerald Meeting;

(g)

not change the record date for the Emerald Shareholders entitled to vote at the Emerald Meeting in connection with any adjournment or postponement of the Emerald Meeting unless required by Applicable Laws;

(h)

promptly advise Village Farms, at such times as Village Farms may reasonably request and at least on a daily basis on each of the last ten (10) Business Days prior to the Emerald Meeting, as to the aggregate tally of the proxies received by Emerald in respect of the Emerald Resolution;

(i)

promptly advise Village Farms of any communication (written or oral) from any Emerald Shareholder in opposition to the Transaction and/or any purported exercise or withdrawal of Dissent Rights by Emerald Shareholders and provide Village Farms with an opportunity to review and comment upon any written communications sent by or on behalf of Emerald to any such Emerald Shareholder and to participate in any discussions, negotiations or proceedings with or including any such persons; and

(j)

not, prior to Closing, settle or compromise or agree to settle or compromise any purported exercise of Dissent Rights by Emerald Shareholders, or acknowledge the valid exercise of or make any payments with respect to any Dissent Right, without the prior written consent of Village Farms, not to be unreasonably withheld, conditioned or delayed, provided that nothing in this Section 5.3(j) shall prevent Emerald from complying with its obligations under section 243 of the Business Corporations Act (British Columbia).

5.4

Emerald Circular

(a)

Promptly after the execution of this Agreement and in any event prior to the Mailing Deadline, Emerald shall use commercially reasonable efforts to promptly prepare and complete, in consultation with Village Farms, the Emerald Circular together with any other documents required by Applicable Laws in connection with the Emerald Meeting and the Transaction, and Emerald shall use commercially reasonable efforts to promptly cause the Emerald Circular and such other documents to be filed with the applicable Securities Authorities and sent to each Emerald Shareholder and other Persons as required by Applicable Laws, in each case so as to permit the Emerald Meeting to be held as specified in Section 5.3(a).

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(b)

Emerald shall ensure that the Emerald Circular complies in all material respects with Applicable Laws and does not contain any Misrepresentation. Without limiting the generality of the foregoing, the Emerald Circular will include: (a) a statement that the board of directors of Emerald, after consulting with outside legal counsel and financial advisors, has unanimously determined that the Transaction is in the best interests of Emerald and Emerald Shareholders and unanimously recommends that Emerald Shareholders vote their common shares of Emerald in favour of the Emerald Resolution (the “Board Recommendation”); (b) a copy of the Fairness Opinion; and (c) a statement that each director and executive officer of Emerald intends to vote all of such person’s common shares of Emerald in favour of the Emerald Resolution in accordance with the terms of the Voting and Support Agreements.

(c)

Emerald shall give Village Farms and its legal counsel a reasonable opportunity to review and comment on drafts of the Emerald Circular and other related documents, and shall give reasonable consideration to any comments made by Village Farms and its counsel, and agrees that all information relating solely to Village Farms and/or its affiliates included in the Emerald Circular must be in a form and content satisfactory to Village Farms, acting reasonably. Emerald shall provide Village Farms with a final copy of the Emerald Circular prior to mailing to Emerald Shareholders.

(d)

Village Farms shall provide to Emerald in writing all necessary information concerning Village Farms and its Affiliates as may reasonably be required by Applicable Laws to be included by Emerald in the Emerald Circular or other related documents and shall ensure that any information so provided to Village Farms does not contain, or cause the Emerald Circular to contain, any Misrepresentation.

(e)

Each Party shall promptly notify the other Party if it becomes aware that the Emerald Circular contains a Misrepresentation, or otherwise requires an amendment or supplement. The Parties shall cooperate in the preparation of any such amendment or supplement as required or appropriate, and Emerald shall promptly mail, file or otherwise publicly disseminate any such amendment or supplement to Emerald Shareholders and, if required by Applicable Laws, file the same with the Securities Authority or any other Governmental Authority as required.

5.5

Transfer of the Purchased Shares

At or prior to Closing, (i) Emerald and Village Farms shall cause PSF to take all necessary corporate action for purposes of approving and authorizing the transfer of Purchased Shares to Village Farms at Closing, and (ii) Emerald shall cause Emerald Canada to take all necessary corporate action for purposes of approving and authorizing the transfer of the Purchased Shares to Village Farms at Closing.

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5.6

Consents

Prior to Closing:

(a)

Emerald shall use its commercially reasonable efforts to obtain all Consents that are required to be obtained by Emerald, including Consents required from the PSF Lenders. Emerald shall bear its own costs and expenses and all fees associated with obtaining such Consents. Village Farms shall use its commercially reasonable efforts to furnish to Emerald such information and assistance as Emerald may reasonably request in connection therewith.

(b)

Village Farms shall use its commercially reasonable efforts to obtain all Consents that are required to be obtained by Village Farms or any Affiliate thereof, including Consents required from the PSF Lenders. Village Farms shall bear its own costs and expenses and all fees associated with obtaining such Consents. Emerald shall use its commercially reasonable efforts to furnish to Village Farms such information and assistance as Village Farms may reasonably request in connection therewith.

(c)

Each of Emerald and Village Farms shall cause PSF to use its commercially reasonable efforts to obtain all Consents that are required to be obtained by PSF, including Consents required from the PSF Lenders, and shall cause PSF to consent to the assumption by Village Farms of Emerald Canada’s obligations under the Emerald Note. PSF shall bear all costs and expenses and all fees associated with obtaining such Consents. Each of Emerald and Village Farms shall use its commercially reasonable efforts to furnish such information and assistance as PSF may reasonably request in connection therewith.

5.7

Regulatory Approvals

(a)

As soon as reasonably practicable following the date hereof and within the time limits prescribed by Applicable Law, Emerald and Village Farms shall make, and shall cause PSF to make, such applications to obtain all Regulatory Approvals and thereafter shall use commercially reasonable efforts to obtain all Regulatory Approvals as promptly as practicable, and in any event at or before the Outside Date, and in doing so will keep each other reasonably informed as to the status of those proceedings.

(b)

Emerald and Village Farms shall, and shall cause PSF to, furnish to the other such information and reasonable assistance as the other may reasonably request in order to obtain the Regulatory Approvals. Subject to Applicable Law, all requests and enquiries from any Governmental Authority in relation to such Regulatory Approvals shall be addressed by Emerald and Village Farms in consultation with each other.

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(c)

With respect to obtaining the Regulatory Approvals, subject to Applicable Law, each of Emerald and Village Farms shall, and shall cause PSF to:

(i)

promptly notify such other Party of material written communications it or any of its Affiliates receives of any nature from any applicable Governmental Authority relating to the transactions contemplated by this Agreement and provide such other Party with copies thereof, except to the extent of competitively sensitive information, which competitively sensitive information will be provided only to the external legal counsel or external expert of such other Party and shall not be shared by such counsel or expert with any other Person;

(ii)

respond as promptly as reasonably practicable to any inquiries or requests received from any applicable Governmental Authority or any other Person in connection with this Agreement or the transactions contemplated hereby;

(iii)

reasonably cooperate with such other Party in connection with any filing under any Applicable Law and in connection with resolving any investigation or other inquiry concerning the transactions contemplated by this Agreement initiated by any Governmental Authority;

(iv)

to the extent permitted under Applicable Law and the applicable Governmental Authority, permit such other Party to review in advance, and consider in good faith any comments reasonably proposed by the other Party in connection with, any proposed written communications of any nature with any applicable Governmental Authority relating to the transactions contemplated by this Agreement, and provide such other Party with final copies thereof, except to the extent of competitively sensitive information, which competitively sensitive information will be provided only to the external legal counsel or external expert of such other Party and shall not be shared by such counsel or expert with any other Person; and

(v)

to the extent reasonably practicable, not participate in any substantive meeting, hearing or discussion (whether in person, by telephone or otherwise) with any applicable Governmental Authority (other than (i) for routine or ministerial matters or (ii) communications by such other Party or any of its Affiliates with applicable Governmental Authorities in its jurisdiction of domicile) in respect of the transactions contemplated by this Agreement unless it consults with such other Party in advance and gives such other Party the opportunity to attend and participate thereat (except where any applicable Governmental Authority expressly requests that such other Party should not be present at the meeting, hearing or discussion or part or parts of the meeting, hearing or discussion, or except where competitively sensitive information may be discussed).

(d)

The Parties and PSF shall bear their own costs and expenses and all fees associated with obtaining the Regulatory Approvals.

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5.8

Ancillary Agreements

At Closing,

(a)

Village Farms and Emerald shall cause PSF to enter into a written resignation and mutual release substantially in the form set forth in Schedule 5.8(a) with each director and officer of Emerald listed in Schedule 5.8(a) (collectively, the “D&O Mutual Releases”);

(b)

Village Farms and Emerald shall enter into, and each shall cause PSF to enter into and Emerald shall cause Emerald Canada to enter into, a written termination of the Shareholders Agreement in the form set forth in Schedule 5.8(b) (the “SHAG Termination Agreement”); and

(c)

Village Farms and Emerald shall enter into a non-solicitation agreement in the form set forth in Schedule 5.8(c) (the “Non-Solicitation Agreement”).

5.9

Notice of Certain Events

During the Interim Period, Emerald shall promptly notify Village Farms in writing of (i) any event, occurrence, change, circumstance, effect or state of facts or knowledge of information that, when considered individually or in the aggregate (A) could reasonably be expected to cause or constitute a material breach of or inaccuracy in any representation or warranty made by Emerald herein becoming untrue or incorrect or a breach by Emerald of, or a failure by Emerald to perform, any of its covenants set forth herein, or (B) could reasonably be expected to cause any condition set forth in Article 7 not to be satisfied prior to the Outside Date, (ii) any Proceeding commenced or threatened relating to or involving Emerald or any of its Affiliates with respect to this Agreement or the transactions contemplated by this Agreement, in each case, of which Emerald becomes aware prior to Closing, (iii) any notice from any Person alleging that the Consent of such person is or may be required in connection with the transactions contemplated by this Agreement, or (iv) any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement. No notification to Village Farms made pursuant to this Section 5.9 shall have the effect of satisfying any condition in Article 7, nor shall any such notification have any effect for the purposes of determining the right of any Village Farms Indemnified Party to bring a claim in respect of this Agreement.

5.10

Pre-Closing Reorganizations

(a)

The Parties will and will cause PSF to use commercially reasonable efforts to effect such steps or transactions (each, a “Pre-Closing Reorganization”) as Emerald may reasonably request in order to effect the Transaction in a more tax-effective manner; provided, however, such Pre-Closing Reorganization shall not occur unless all elements of such Pre-Closing Reorganization shall, in the opinion of Village Farms, acting reasonably,

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(i)

not impede, delay or prevent the consummation of the Transaction (including by giving rise to litigation to or by third parties) or the ability of Village Farms to obtain or maintain any financing required by it in connection with the Transaction and the transactions contemplated by this Agreement;

(ii)

be effective no earlier than immediately prior to Closing on the Closing Date;

(iii)

not require Village Farms or Emerald to obtain the approval of their respective securityholders;

(iv)

not unreasonably interfere in the business or operations of Village Farms or PSF prior to the Closing;

(v)

not require Village Farms or PSF to contravene any applicable Laws, their respective organizational documents or any agreement, contract or instrument to which they are party;

(vi)

not result in any Taxes being imposed on, or any adverse Tax or other consequences to, Village Farms or PSF and for greater certainty and without limitation, adverse Tax or other consequence includes any Tax or other consequence that would not have arisen but for the Pre-Closing Reorganization;

(vii)

not require any filings with, notifications to or approvals of any Governmental Authority;

(viii)

not require a director, officer, employee or agent of PSF or Village Farms to, in connection with a Pre-Closing Reorganization, take any action in any capacity other than as a director, officer, employee or agent of PSF or Village Farms, as the case may be;

(ix)

not result in the withdrawal or material modification of the Fairness Opinion;

(x)

not result in any material adverse accounting impact on Village Farms or PSF;

(xi)

not result in a default or acceleration under the PSF Credit Agreement or Village Farms Credit Facilities, or a consent requirement under the Village Farms Credit Facilities;

(xii)

not become effective unless the Parties will have confirmed in writing the satisfaction or waiver of all conditions in their favour set forth in Article 7 and Article 8 and will have confirmed in writing that they are prepared to promptly and without condition proceed with the Transaction; and

(xiii)

not otherwise prejudice PSF or Village Farms in any material respect.

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(b)

Except as set forth in Section 5.10(a) and subject to Section 5.10(e), the Parties will use commercially reasonable efforts to obtain all necessary consents, approvals or waivers from any persons to effect each Pre-Closing Reorganization.

(c)

Any Pre-Closing Reorganization shall not be considered in determining whether a representation, warranty or covenant of any Party has been breached or whether a condition precedent to the Transaction has been satisfied.

(d)

Emerald must provide written notice to Village Farms of any proposed Pre-Closing Reorganization, together with draft copies of all documents necessary to implement the Pre-Closing Reorganization, at least twenty (20) Business Days prior to the date of the Emerald Meeting in order to provide Village Farms and PSF and their respective advisors with a reasonable opportunity to review and comment on such documents. Emerald shall give reasonable consideration to any comments made by Village Farms and PSF and their respective advisors and agrees that the Pre-Closing Reorganization shall not proceed unless all documents are in a form and content satisfactory to Village Farms and PSF, acting reasonably. Emerald agrees that Village Farms and PSF shall not be responsible for preparing any documentation necessary to give effect to such Pre-Closing Reorganization.

(e)

Emerald shall upon request by Village Farms advance all reasonable out-of-pocket expenses incurred by Village Farms or PSF in connection with any actions taken by such parties or, promptly upon request by Village Farms, reimburse Village Farms and PSF for all reasonable fees and expenses (including any professional fees and expenses) and Taxes incurred by Village Farms and PSF in effecting any Pre-Closing Reorganization. For greater certainty, Village Farms will not be liable for the failure of Emerald to benefit from any anticipated Tax efficiency as a result of a Pre-Closing Reorganization.

(f)

Emerald shall indemnify Village Farms and PSF and their respective Representatives for any and all Taxes, liabilities, losses, loss of opportunity, damages, claims, costs, expenses (including any professional fees and expenses), interest awards, judgments and penalties suffered or incurred by any of them in connection with or as a result of their co-operation or assistance with or participation in any Pre-Closing Reorganization or in the reversing or unwinding of any Pre-Closing Reorganization in the event the Transaction does not proceed. For greater certainty, Village Farms and PSF shall have no liability arising as a result of, or the failure of Emerald to realize any benefit from, any Pre-Closing Reorganization. For greater certainty, Article 10 shall not apply to this Section 5.10. The indemnification and expense reimbursement and advancement provisions of this Section 5.10 shall survive the consummation of the Transaction and are intended to be for the benefit of, and shall be enforceable not only by Village Farms but also by PSF and each of the Representatives of Village Farms and PSF and their respective heirs, executors, administrators, and personal representatives and shall be binding on Emerald and its successors and assigns and, for such purpose, Emerald confirms that it is acting as agent and trustees on behalf of such Persons.

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ARTICLE 6

ADDITIONAL COVENANTS REGARDING NON-SOLICITATION

6.1

Non-Solicitation

(a)

Emerald shall not, and shall cause its Affiliates not to, directly or indirectly, through any of its or its Affiliates’ Representatives and shall not permit any Person to:

(i)

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

(ii)

enter into or otherwise engage or participate in any discussions or negotiations with any Person regarding any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to an Acquisition Proposal, other than with Village Farms and its Affiliates;

(iii)

make a Change in Recommendation;

(iv)

make any public announcement or take any other action inconsistent with, or that could reasonably be regarded as detracting from, the recommendation of the board of directors of Emerald that the Emerald Shareholders vote in favour of the Emerald Resolution;

(v)

accept, approve, endorse or recommend, or publicly propose to accept, approve, endorse or recommend any Acquisition Proposal, or take no position or remain neutral with respect to, any Acquisition Proposal that has been made public (it being understood that publicly taking no position or a neutral position with respect to a publicly announced or otherwise publicly disclosed Acquisition Proposal for a period of two (2) Business Days shall not be considered a breach of this Section 6.1 provided that the board of directors of Emerald has rejected such Acquisition Proposal and affirmed the Board Recommendation before the end of such two (2) Business Day period); or

(vi)

enter into, any letter of intent, agreement in principle, agreement, arrangement or understanding (i) in respect of or in any way related to any Acquisition Proposal; (ii) requiring Emerald to abandon, terminate or fail to consummate the Transaction or (iii) providing for the payment of any break, termination or other fees or expenses (no matter how characterized) or conferring any other rights or options to acquire the Purchased Shares upon any Person including in the event that Emerald or any of its Affiliates completes the transactions contemplated by this Agreement or any other transaction with Village Farms agreed to prior to any termination of this Agreement.

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(b)

Emerald shall, and shall direct and cause its Affiliates and its and their Representatives to, immediately cease and terminate, and cause to be terminated, any solicitation, encouragement, discussion, negotiations or other activities commenced prior to the date of this Agreement with any Person (other than Village Farms and its affiliates) with respect to any inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, an Acquisition Proposal, and in connection therewith shall:

(i)

discontinue access to and disclosure of all information regarding PSF, including any data room and any other confidential information, properties, facilities, books or records of Emerald, PSF or any Affiliate of Emerald that includes any such information; and

(ii)

to the extent that such information has not previously been returned or destroyed, within two (2) Business Days of the date hereof request, and use its commercially reasonable efforts to require, (i) the return or destruction of all copies of any confidential information regarding PSF, and (ii) the destruction of all material including or incorporating or otherwise reflecting such confidential information regarding PSF provided to any Person (other than Village Farms and its affiliates), and use its commercially reasonable efforts to ensure that such requests are fully complied with in accordance with the terms of such rights or entitlements.

(c)

Emerald represents and warrants that neither it nor any of its Representatives or Affiliates has waived any standstill or similar agreement or restriction with respect to the Purchased Shares in effect as of the date of this Agreement to which it is a party. Emerald further covenants and agrees that (a) it and its Representatives shall take all commercially reasonable action to enforce each confidentiality, standstill, non-disclosure, non-solicitation, use, business purposes or similar agreement or covenant with respect to the Purchased Shares, and (b) it shall not release, and shall cause its agents and Affiliates not to release, any Person from, or waive, amend, suspend or otherwise modify any provision of, or grant permission under or fail to enforce, any standstill, non-disclosure, non-solicitation, use, business purpose or similar agreement or covenant with respect to the Purchased Shares.

(d)

Any violation of the restrictions set forth in this Article 6 by Emerald, its Affiliates or their respective Representatives shall be deemed to be a breach of this Article 6 by Emerald.

6.2

Acquisition Proposals

(a)

If Emerald or any of its Affiliates or any of their respective Representatives receives any written or oral inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, an Acquisition Proposal, or any request in connection with any written or oral inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, an Acquisition Proposal for copies of, access to, or disclosure of, confidential information relating to PSF,

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including information, access, or disclosure relating to the properties, facilities, books or records of PSF, Emerald shall promptly notify Village Farms, at first orally (promptly and in any event within 24 hours), and then in writing (promptly and in any event within 48 hours), of such Acquisition Proposal, inquiry, proposal, offer or request, including a description of the material terms and conditions of the Acquisition Proposal, inquiry, proposal, offer or request and the identity of all Persons making the Acquisition Proposal, inquiry, proposal, offer or request and shall provide Village Farms with copies of all written agreements, documents, correspondence or other materials received in respect of, from or on behalf of any such Person(s).

(b)

The board of directors of Emerald shall promptly reaffirm the Board Recommendation by press release after any Acquisition Proposal is publicly announced or publicly disclosed. Emerald shall provide Village Farms and its outside legal counsel with a reasonable opportunity to review the form and content of any such press release and shall make all reasonable amendments to such press release as requested by Village Farms and its counsel.

(c)

Emerald hereby waives its rights under sections 10.3, 10.4 and 10.5 of the Shareholders Agreement with respect to any Acquisition Proposal until the termination of this Agreement in accordance with its terms.

ARTICLE 7

CONDITIONS PRECEDENT TO VILLAGE FARMS’ OBLIGATION TO CLOSE

The sale of the Purchased Shares is subject to the following conditions to be satisfied on or prior to the Closing Date, which conditions are for the exclusive benefit of Village Farms and which may be waived, in whole or in part, by Village Farms in its sole discretion:

7.1

Truth and Accuracy of Representations and Warranties at Closing

The representations and warranties of Emerald contained in Article 3 of this Agreement shall be true, complete and accurate in all material respects (except for the Emerald Fundamental Representations and those representations and warranties qualified by materiality or material, which shall be true, complete and accurate in all respects) as of the Closing Date (except that those representations and warranties which are made as of an earlier specific date shall be true, complete and accurate only as of such date) with the same force and effect as though such representations and warranties had been made on and as of such date, and Village Farms shall have received a certificate signed by an authorized officer of Emerald as to the satisfaction of the foregoing condition.

7.2

Compliance with Covenants

The covenants and obligations of Emerald to be performed or to be complied with at or prior to Closing pursuant to this Agreement shall have been duly performed or complied with in all material respects and Village Farms shall have received a certificate signed by an authorized officer of Emerald as to the satisfaction of the foregoing condition.

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7.3

Change in Law

Since the date of this Agreement, no Applicable Law or any change in any Applicable Law shall have been introduced, enacted or announced, the effect of which would make the consummation of the transactions contemplated in this Agreement or any of the Ancillary Agreements illegal or otherwise restrain or prohibit Closing.

7.4

No Actions or Proceedings

The consummation of any of the transactions contemplated in this Agreement or in any of the Ancillary Agreements shall not have been restrained, enjoined or otherwise prohibited by any Applicable Law and no action, litigation, demand, claim or other proceedings brought by any Governmental Authority shall be pending to enjoin or prohibit: (a) the sale of the Purchased Shares as contemplated in this Agreement, (b) the consummation of any of the transactions contemplated in this Agreement or in any of the Ancillary Agreements or (c) the ability of Village Farms to continue to operate PSF in materially the same manner as operated by Village Farms and Emerald as of the date hereof.

7.5

Shareholder Approvals

The Emerald Resolution shall have been approved and adopted by Emerald Shareholders at the Emerald Meeting in accordance with Applicable Laws and the Corporate Records of Emerald and shall be in full force and effect.

7.6

PSF Lender Consent

Each of the PSF Lenders shall have provided its consent to the Transaction in accordance with the terms of the PSF Credit Agreement.

7.7

Village Farms Lender Consent

Each of the Village Farms Lenders shall have provided its consent to the Transaction in accordance with the terms of the Village Farms Credit Facilities.

7.8

Regulatory Approvals

The TSX Venture Exchange shall have provided its consent to the Transaction in accordance with applicable Securities Laws.

7.9

Dissent Rights

Dissent Rights shall not have been validly exercised, and not withdrawn or deemed to have been withdrawn, in respect of more than 5% of the issued and outstanding common shares of Emerald.

7.10

Ancillary Agreements

Each of the Ancillary Agreements shall have been executed and delivered by the parties thereto (other than Village Farms or any of its Affiliates).

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7.11

Voting and Support Agreements

There shall have been no material breach of the Voting and Support Agreements by any party thereto other than Village Farms.

7.12

Closing Documents

Emerald shall have delivered or caused to be delivered to Village Farms the following, in form and substance satisfactory to Village Farms, acting reasonably:

(a)

share certificates representing the Purchased Shares endorsed in blank for transfer or accompanied by irrevocable share transfer powers of attorney executed in blank, in either case, by the holders of record or a valid power of attorney;

(b)

the certificates referred to in Sections 7.1 (Truth and Accuracy of Representations and Warranties at Closing) and 7.2 (Compliance with Covenants);

(c)

the D&O Mutual Releases referred to in Section 5.8(a), duly executed by PSF and each director and officer of Emerald listed in Schedule 5.8(a);

(d)

the SHAG Termination Agreement referred to in Section 5.8(b), duly executed by Emerald, Emerald Canada and PSF; and

(e)

the Non-Solicitation Agreement referred to in Section 5.8(c), duly executed by Emerald.

ARTICLE 8

CONDITIONS PRECEDENT TO EMERALD’S OBLIGATION TO CLOSE

The sale of the Purchased Shares is subject to the following conditions to be satisfied on or prior to the Closing Date which conditions are for the exclusive benefit of Emerald and which may be waived, in whole or in part, by Emerald in its sole discretion:

8.1

Truth and Accuracy of Representations and Warranties at Closing

The representations and warranties of Village Farms contained in Article 4 of this Agreement shall be true, complete and accurate in all material respects (except for the Village Farms Fundamental Representations and those representations and warranties qualified by materiality or material, which shall be true, complete and accurate in all respects) on and as of the Closing Date (except that those representations and warranties which are made as of an earlier specific date shall be true, complete and accurate only as of such date) with the same force and effect as though such representations and warranties had been made on and as of such date, and Emerald shall have received a certificate signed by an authorized officer of Village Farms as to the satisfaction of the foregoing condition.

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8.2

Compliance with Covenants

The covenants and obligations of Village Farms to be performed or to be complied with at or prior to Closing pursuant to the Agreement shall have been duly performed on and complied with in all material respects and Emerald shall have received a certificate signed by an authorized officer of Village Farms as to the satisfaction of the foregoing condition.

8.3

No Actions or Proceedings

The consummation of any of the transactions contemplated in this Agreement or in any of the Ancillary Documents shall not have been restrained, enjoined or otherwise prohibited by any Applicable Law and no action, litigation, demand, claim or other proceeding brought by any Governmental Authority shall be pending to enjoin or prohibit: (a) the sale of the Purchased Shares as contemplated in this Agreement, (b) the consummation of any of the transactions contemplated in this Agreement or in any of the Ancillary Agreements or (c) the ability of Village Farms to operate PSF in materially the same manner as operated by Village Farms and Emerald as of the date hereof.

8.4

Change in Law

Since the date of this Agreement, no Applicable Law or any change in any Applicable Law shall have been introduced, enacted or announced, the effect of which would make consummation of the transactions contemplated in this Agreement or any of the Ancillary Agreements illegal or otherwise restrain or prohibit Closing.

8.5

Emerald Shareholder Approval

8.6

Regulatory Approvals

The TSX Venture Exchange shall have provided its consent to the Transaction in accordance with applicable Securities Laws.

8.7

PSF Lender Consent

Each of the PSF Lenders shall have provided its consent to the Transaction in accordance with the terms of the PSF Credit Agreement.

8.8

Dissent Rights

Dissent Rights shall not have been validly exercised, and not withdrawn or deemed to have been withdrawn, in respect of more than 5% of the issued and outstanding common shares of Emerald.

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8.9

Ancillary Agreements

Each of the Ancillary Agreements shall have been executed and delivered by the parties thereto (other than Emerald or any of its Affiliates).

8.10

Closing Documents

Village Farms shall have delivered or caused to be delivered to Emerald the following, in form and substance satisfactory to Emerald, acting reasonably:

(a)

the certificates referred to in Sections 8.1 (Truth and Accuracy of Representations and Warranties) and 8.2 (Compliance with Covenants);

(b)

the D&O Mutual Releases referred to in Section 5.8(a), duly executed by PSF;

(c)

the SHAG Termination Agreement referred to in Section 5.8(b), duly executed by PSF and Village Farms; and

(d)

the Non-Solicitation Agreement referred to in Section 5.8(c), duly executed by Village Farms.

ARTICLE 9

TERMINATION AND EFFECT OF TERMINATION

9.1

Termination

This Agreement may be terminated at any time on or prior to the Closing Date:

(a)

by Village Farms upon written notice to Emerald, if there has been a violation or breach by Emerald of any covenant, representation and warranty or other agreement contained in this Agreement such that any condition specified in Article 7 would be incapable of being satisfied by the Outside Date, and such violation or breach is not waived by Village Farms, or cured by Emerald within the earlier of (x) fifteen (15) days from notice of such breach or such longer period of time as may be required provided Emerald is diligently pursuing such cure after written notice thereof by Village Farms and (y) the Outside Date, which date may be extended by written agreement of the Parties;

(b)

by Emerald upon written notice to Village Farms, if there has been a violation or breach by Village Farms of any covenant, representation and warranty or other agreement contained in this Agreement such that any condition specified in Article 8 would be incapable of being satisfied by the Outside Date, and such violation or breach is not waived by Emerald or cured by Village Farms within the earlier of (x) fifteen (15) days from notice of such breach or such longer period of time as may be required provided Village Farms is diligently pursuing such cure after written notice thereof by Emerald and (y) the Outside Date, which date may be extended by written agreement of the Parties;

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(c)

by written agreement of the Parties;

(d)

by either Party if the Emerald Meeting is duly convened and held and the Emerald Resolution is voted upon by Emerald Shareholders and the Emerald Resolution is not approved by Emerald Shareholders at the Emerald Meeting in accordance with Applicable Laws;

(e)

by notice from any of Emerald or Village Farms, if Closing has not occurred by the Outside Date (unless the failure of Closing to occur by such date is due to a breach of this Agreement by the Party purporting to exercise this termination right), which date may be extended by written agreement of the Parties;

(f)

by Village Farms if the board of directors of Emerald or a committee thereof: (A) fails to unanimously recommend or withdraws, amends, modifies or qualifies, or publicly proposes or states an intention to withdraw, amend, modify or qualify, the Board Recommendation in a manner materially adverse to Village Farms; (B) accepts, approves, endorses or recommends, or publicly proposes to accept, approve, endorse or recommend, any Acquisition Proposal or publicly takes no position or publicly remains neutral with respect to a publicly announced, or otherwise publicly disclosed, Acquisition Proposal for more than two (2) Business Days; (C) accepts or enters into or publicly proposes to accept or enter into any written agreement, commitment or arrangement in respect of an Acquisition Proposal; or (D) fails to publicly reaffirm the Board Recommendation within two (2) Business Days after having been requested in writing by Village Farms to do so ((A) through (D) a “Change in Recommendation”); or

(g)

by Village Farms if (i) Emerald shall have breached Article 6 in any material respect, (ii) the Emerald Meeting is not convened and held in accordance with Section 5.3 or (iii) the Emerald Meeting is cancelled, postponed or adjourned by Emerald in breach of Section 5.3.

9.2

Effect of Termination

If this Agreement is terminated pursuant to Section 9.1 all further rights and obligations of the Parties under this Agreement shall terminate and no Party shall have any liability in respect thereof, except that (i) the rights and obligations under Article 1 (Interpretation), Section 5.7(d) (Regulatory Approvals), Section 5.10(e) (Pre-Closing Reorganization Expenses), Section 5.10(f) (Pre-Closing Reorganization Indemnity), this Section 9.2 (Effect of Termination), Section 9.3 (Termination Fee) and Article 11 (General Provisions) shall survive termination, and (ii) the termination of this Agreement shall not relieve any Party from any liability for any breach of this Agreement or for fraud, Willful Breach or intentional misrepresentation prior to the date of such termination. Notwithstanding anything to the contrary herein, (a) no Party is obligated to terminate this Agreement in the circumstances contemplated by Section 9.1 and (b) if any Party fails to perform or comply with any of the terms and conditions in this Agreement on its part to be performed or complied with, any other Party may seek an injunction and an order to enforce specifically the terms of this Agreement.

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9.3

Termination Fee

(a)

Despite any other provision in this Agreement relating to the payment of fees and expenses, if a Termination Fee Event occurs, Emerald shall pay or cause to be paid to Village Farms the Termination Fee in accordance with Section 9.3(c) as liquidated damages. For the avoidance of doubt, Emerald shall not be obligated to make more than one payment under this Section 9.3 if one or more Termination Fee Events occurs.

(b)

For the purposes of this Agreement:

(i)

“Termination Fee” means three million dollars ($3,000,000) payable in cash; and

(ii)

“Termination Fee Event” means the termination of this Agreement:

(A)

by Village Farms, pursuant to Section 9.1(f);

(B)

by Village Farms pursuant to Section 9.1(a) as a result of a Willful Breach; or

(C)

by either Party pursuant to Section 9.1(d), Section 9.1(e) or Section 9.1(g) if, in the case of this paragraph (C), the Agreement is terminated and on and prior to such termination (i) an Acquisition Proposal shall have been made to the board of directors of Emerald (or any committee thereof) or any person shall have publicly announced an intention to make an Acquisition Proposal and (ii) within 12 months following the date of such termination, (a) such Acquisition Proposal is consummated, or (b) Emerald or one or more of its Subsidiaries, directly or indirectly, in one or more transactions, enters into a definitive agreement in respect of such Acquisition Proposal and such Acquisition Proposal is later consummated (whether or not within 12 months after such termination).

For purposes of the foregoing, the term “Acquisition Proposal” shall have the meaning assigned to such term in Section 1.1 above, except that references to “voting or equity securities of PSF” shall be deemed to be references to “20% or more of the Purchased Shares”.

(c)

If a Termination Fee Event occurs due to a termination of this Agreement pursuant to Section 9.1(a) or Section 9.1(f), the Termination Fee shall be paid within two (2) Business Days following such Termination Fee Event. If a Termination Fee Event occurs in the circumstances set out in Section 9.3(b)(ii)(C), the Termination Fee shall be paid within two (2) Business Days following the consummation/closing of the Acquisition Proposal referred to therein. Any Termination Fee shall be paid, or caused to be paid, by Emerald to Village Farms by wire transfer in immediately available funds to an account designated by Village Farms.

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(d)

If this Agreement has been terminated by Village Farms or Emerald pursuant to Section 9.1(d), then Emerald shall, within two (2) Business Days following the termination of this Agreement, pay or cause to be paid to Village Farms by wire transfer of immediately available funds an expense reimbursement fee (the “Expense Reimbursement Fee”) for reasonable, documented out-of-pocket third party transaction expenses incurred by Village Farms in connection with this Agreement, in an amount not to exceed one million dollars ($1,000,000), provided that in no event shall Emerald be required to pay under Section 9.3(a) and this Section 9.3(d), in the aggregate, an amount in excess of the Termination Fee. For greater certainty, any payment by Emerald under this Section 9.3(d) will be credited against a payment under Section 9.3(a).

(e)

In lieu of a cash payment in respect of any Termination Fee or Expense Reimbursement Fee payable to Village Farms, Village Farms shall be entitled, to the extent Emerald has not made or is unable to make such cash payment within thirty (30) days following termination, to cause PSF to issue such number of common shares of PSF as are equal in value to the amount of such Termination Fee or Expense Reimbursement Fee (as the case may be) based on a value per share equal to the Purchase Price divided by the total number of Purchased Shares, and the Parties hereby agree that this shall be PSF’s good and sufficient authority for so doing.

ARTICLE 10

INDEMNIFICATION

10.1

Indemnification by Emerald

Subject to the limitations set forth in Section 10.4, following Closing, Emerald shall indemnify and save harmless Village Farms and its Affiliates and their respective successors and assigns, and their respective directors, officers, employees, agents and representatives (the “Village Farms Indemnified Parties”) of, from and against any Losses, suffered by, imposed upon or asserted against any of the Village Farms Indemnified Parties directly or indirectly as a result of, arising from, in connection with or in respect of:

(a)

any inaccuracy in, misrepresentation of, or breach of any representation or warranty of Emerald made in Article 3 of this Agreement or in any certificate or other document delivered by Emerald pursuant to this Agreement; or

(b)

any failure of Emerald to perform or fulfill any covenant, undertaking, obligation or agreement on the part of Emerald under this Agreement.

10.2

Indemnification by Village Farms

Subject to the limitations set forth in Section 10.4, following Closing, Village Farms shall indemnify and save harmless Emerald and its Affiliates and their respective successors and assigns, and their respective directors, officers, employees, agents and representatives (the “Emerald Indemnified Parties”) of, from and against any Losses, suffered by, imposed upon or asserted against any of the Emerald Indemnified Parties directly or indirectly as a result of, arising from, in connection with or in respect of:

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(a)

any inaccuracy in, misrepresentation of, or breach of any representation or warranty of Village Farms made in Article 4 of this Agreement or in any certificate or other document delivered by Village Farms pursuant to this Agreement; or

(b)

any failure of Village Farms to perform or fulfill any covenant, undertaking, obligation or agreement on the part of Village Farms under this Agreement.

10.3

Survival

(a)

Except as set forth in this Section 10.3(a) and in Section 10.3(b), liability for breaches or non-fulfillment of the representations and warranties of each Party contained in this Agreement or in any certificate delivered hereunder will terminate (and such representations, warranties, obligations and covenants shall survive for) eighteen (18) months following the Closing Date, except:

(i)

in the case of fraud, in which case liability will survive and continue in full force and effect without limitation of time in accordance with Applicable Law; or

(ii)

to the extent that, during such period, the Indemnified Person has given notice to the Indemnifying Party of a claim in respect of any such representation, warranty, obligation, condition or covenant in accordance with this Article 10, in which case liability therefor will survive and continue in full force and effect until the final determination of such claim in accordance with this Article 10.

(b)

The representations and warranties of Emerald contained in Section 3.2 (Corporate Power and Due Authorization of Emerald), Section 3.3 (No Conflict), Section 3.4 (Consents and Authorizations) and 3.7 (Title to Purchased Shares) (collectively, the “Emerald Fundamental Representations”) and Emerald’s obligation to indemnify Village Farms hereunder in connection with a breach thereof will survive and continue in full force and effect for six (6) years following the Closing Date.

(c)

The representations and warranties of Village Farms contained in Section 4.1 (Corporate Power and Due Authorization of Emerald), Section 4.2 (No Conflict) and Section 4.3 (Consents and Authorizations) (collectively, the “Village Farms Fundamental Representations”) and Village Farms’ obligation to indemnify Emerald hereunder in connection with a breach thereof will survive and continue in full force and effect for six (6) years following the Closing Date.

(d)

Except as otherwise expressly provided in this Agreement, all covenants and agreements of the Parties contained in this Agreement or any Ancillary Agreement shall survive and continue indefinitely.

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(e)

No Party or other Person is entitled to indemnification pursuant to this Article 10 unless such Party or other Person has given written notice of its claim for indemnification pursuant to Section 10.5(a) within the survival periods specified in the foregoing provisions of this Section 10.3.

10.4

Calculation of Liability; Limitations

(a)

For purposes of determining and calculating the amount of any Losses pursuant to this Article 10 in respect of any inaccuracy in, misrepresentation of, or breach of any representation or warranty of either Party contained in this Agreement, all qualifications as to materiality where the words or phrases “material”, “immaterial”, “in all material respects” or words or phrases of similar import are used shall be disregarded, such that the amount of damages payable to an Indemnified Person is not subject to any deduction in respect of amounts below the level of materiality stated in the relevant representation and warranty. Further, but subject to Section 10.4(d), the calculation of such amount shall not be affected by any inspection or inquiries made by or on behalf of the party entitled to be indemnified under this Article 10.

(b)

Notwithstanding the foregoing provisions of this Article 10, the aggregate liability of Emerald or Village Farms, as applicable, of all claims for Losses of Village Farms and any Village Farms Indemnified Party, or Emerald and any Emerald Indemnified Party, as applicable, in respect of matters described in Section 10.1(a) or Section 10.2(a) of this Agreement, as applicable, shall not in any event exceed, in the aggregate, the Purchase Price.

(c)

No indemnification in respect of matters described in Section 10.1(a) or Section 10.2(a) of this Agreement, as applicable, shall be payable by Emerald or Village Farms, as applicable, unless and until the aggregate amount of Losses from all claims against Emerald or Village Farms, as applicable, exceeds $500,000, in which event the Village Farms Indemnified Parties or Emerald Indemnified Parties, as applicable, shall be entitled to recover the full amount of such Losses from the first dollar.

(d)

Notwithstanding anything to the contrary in this Agreement, no Party shall be liable for any Losses pursuant to this Article 10 resulting from or relating to any inaccuracy in or breach of any representation or warranty in this Agreement if the party seeking indemnification for such Losses had knowledge of such inaccuracy or breach before Closing.

10.5

Third Party Claims

(a)

If Village Farms or a Village Farms Indemnified Party (each, an “Indemnified Person”) shall be entitled to any indemnification provided for under this Article 10 in respect of, arising out of or involving any claim, assertion or proceeding by a third party against the Indemnified Person (a “Third Party Claim”), and in respect of which the Indemnified Person proposes to demand indemnification from

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Emerald (the “Indemnifying Party”) in accordance with the terms hereof, the Indemnified Person shall give notice to that effect together with particulars of the nature and basis of such claim (including the breach, inaccuracy, non-performance or provision of this Agreement to which such claim relates), together with a reasonable estimate of the Losses relating thereto and copies of any and all relevant pleadings and other demands to the Indemnifying Party with reasonable promptness. The failure to give, or delay in giving, such notice will not relieve the Indemnifying Party of its obligations except and only to the extent of any prejudice caused to the Indemnifying Party by such failure or delay.

(b)

The Indemnifying Party may, by notice to the Indemnified Person given not later than thirty (30) days after receipt of the notice described in Section 10.5(a) relating to a Third Party Claim, assume control of the defence, compromise or settlement of the Third Party Claim provided that:

(i)

the Third Party Claim involves only money damages and does not seek any injunctive or other equitable relief;

(ii)

if the named parties in any Third Party Claim include both the Indemnifying Party and the Indemnified Person, representation by the same counsel would, in the reasonable opinion of external counsel for the Indemnified Person, still be appropriate notwithstanding any actual or potential differing interests between them (including the availability of different defences); and

(iii)

the Indemnifying Party, at the Indemnified Person’s request, provides reasonable assurance to the Indemnified Person of its financial ability to defend the Third Party Claim and to provide indemnification in respect thereof.

(c)

If the Indemnifying Party assumes control of the Third Party Claim it is conclusively established for purposes of this Agreement that the Third Party Claim is within the scope of, and entitled to, indemnification pursuant to this Article 10.

(d)

Upon assumption of control by the Indemnifying Party:

(i)

the Indemnifying Party shall proceed with the defence, compromise or settlement of the Third Party Claim at its sole cost and expense, retaining counsel that is reasonably satisfactory to the Indemnified Person;

(ii)

the Indemnifying Party shall keep the Indemnified Person reasonably advised with respect to the status of the Third Party Claim (including supplying copies of all material documents promptly as they become available) and shall arrange for its counsel to inform the Indemnified Person on a reasonably regular basis of the status of the Third Party Claim; and

(iii)

the Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim unless consented to by the Indemnified Person (which consent may not be unreasonably or arbitrarily withheld, conditioned or delayed).

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(e)

The Indemnified Person may retain separate co-counsel at its sole cost and expense, and may participate in the defence of the Third Party Claim.

(f)

The Indemnified Person shall, at the expense of the Indemnifying Party, cooperate with the Indemnifying Party and use its commercially reasonable efforts to make available to the Indemnifying Party all relevant information in its possession or under its control (provided that it does not cause it to breach any confidentiality obligations), including documentation necessary to support and verify the Losses giving rise to the indemnity claim, and shall give the Indemnifying Party reasonable access to all premises and personnel of the Indemnified Person which would have any bearing on the claim, and shall take such other steps as are, in the reasonable opinion of counsel for the Indemnifying Party, necessary to enable the Indemnifying Party to conduct such defence; provided always that:

(i)

no admission of fault may be made by or on behalf of Village Farms or any Village Farms Indemnified Party without the prior written consent of Village Farms; and

(ii)

the Indemnified Person is not obligated to take any measures which, in the reasonable opinion of the Indemnified Person’s external legal counsel, could be materially prejudicial or unfavourable to the Indemnified Person.

(g)

If (i) the Indemnifying Party fails to give the Indemnified Person the notice required in Section 10.5(b) or any of the conditions in Section 10.5(b) have not been satisfied or (ii) the Indemnifying Party breaches any of its other obligations under this Section 10.5 in a manner that is materially prejudicial to the Indemnified Person, the Indemnified Person may assume control of the defence, compromise or settlement of the Third Party Claim and retain counsel as in its sole discretion is reasonably advisable, the whole at the Indemnifying Party’s sole cost and expense; provided that the Indemnified Person only retains one counsel per applicable jurisdiction. Any settlement or other final determination of the Third Party Claim will be binding upon the Indemnifying Party provided that such settlement has been consented to in writing by Village Farms. The Indemnifying Party shall, at its sole cost and expense, reasonably cooperate with the Indemnified Person and use commercially reasonable efforts to make available to the Indemnified Person all relevant information in its possession or under its control and take such other steps as are, in the reasonable opinion of external counsel for the Indemnified Person, necessary to enable the Indemnified Person to conduct the defence. The Indemnifying Party shall reimburse the Indemnified Person for the costs of defending against the Third Party Claim (including reasonable legal fees and expenses), and shall remain responsible for any Losses the Indemnified Person may suffer resulting from, arising out of, or relating to, the Third Party Claim, in each case, to the extent the Indemnified Person is entitled to indemnify hereunder and in such case, to the fullest extent provided in this Article 10. The Indemnified Person

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shall keep the Indemnifying Party reasonably advised with respect to the status of the Third Party Claim (including supplying copies of all material documents promptly as they become available) and shall arrange for its counsel to inform the Indemnifying Party on a reasonably regular basis of the status of the Third Party Claim.

(h)

If the Indemnifying Party has provided written notice to the Indemnified Person disputing its liability with respect to any claim for indemnification made hereunder, the Indemnifying Party and Indemnified Person shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, either Party may seek a resolution of such dispute by litigation in a court of competent jurisdiction in accordance with Section 10.1 or Section 10.2, as the case may be.

(i)

Any amount of Losses required or agreed by the Parties to be paid in accordance with this Article 10 shall be paid to the Indemnified Person on demand following the final determination thereof, whether by agreement of the Parties, settlement with any third party or by a court of competent jurisdiction, in each case, in accordance with the terms hereof.

10.6

Indemnification Adjustment to Purchase Price

To the fullest extent permitted under Applicable Law, any amounts payable under this Article 10 shall constitute an adjustment in the Purchase Price.

ARTICLE 11

GENERAL PROVISIONS

11.1

Notices

Any notice or other communication (a “Notice”) given pursuant to or in connection with this Agreement shall be in writing and shall be sufficiently given to a Party to whom it is addressed if transmitted by email or delivered in person to or for such Party at the address of such Party indicated below or at such other address as such Party shall have theretofore notified to the other Parties in accordance herewith. Any Notice so addressed and transmitted or delivered as aforesaid shall be deemed to have been sufficiently given or made on the date on which it was so transmitted by email or delivered (provided that if such day is not a Business Day, the Notice shall be deemed given or made on the Business Day following transmission or delivery).

To Village Farms

Village Farms International, Inc.

4700-80th Street

Delta, British Columbia

V4K 3N3

Attention: Stephen C. Ruffini

Email: [Redacted]

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With a copy to:

Torys LLP

79 Wellington Street West

TD Centre, Suite 3000

Toronto, Ontario

M5K 1N2

Attention: John Emanoilidis and Michael Zackheim

Email: [Redacted]

To Emerald:

Emerald Health Therapeutics, Inc.

210-800 West Pender Street

Vancouver, British Columbia

V6C 1J8

Attention: Avtar Dhillon and Riaz Bandali

Email: [Redacted]

With a copy to:

Bennett Jones LLP

2500 Park Place

666 Burrard Street

Vancouver, British Columbia

V6C 2X8

Attention: James Beeby

Email: [Redacted]

11.2

Public Announcements

Emerald and Village Farms shall publicly announce the Transaction promptly following the execution of this Agreement by the Parties hereto, the text and timing of such announcements to be approved by each Party in advance, acting reasonably and in good faith. Without first consulting with the other Party, a Party must not issue any press release or make any other public statement or disclosure with respect to this Agreement or the Transaction, or make any filing with any third party or Governmental Authority (other than as required by Applicable Laws, including Securities Laws, or by the request of any Governmental Authority, provided that any Party making such required disclosure shall use its commercially reasonable efforts to give the other Party prior oral or written notice and a reasonable opportunity to review and comment on the disclosure) with respect to this Agreement or the Transaction without the consent of the other Party. Without limiting the generality of the foregoing and for greater certainty, each of the Parties acknowledges and agrees that the Parties shall file, in accordance with Securities Laws, this Agreement under their respective profiles on SEDAR without any further notice to the other Party. The Parties further acknowledge and agree to continue to be bound by the confidentiality provisions in article 12 of the Shareholders Agreement, except following Closing as provided in the SHAG Termination Agreement.

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11.3

Expenses

Except as otherwise set forth in this Agreement, each Party shall be responsible for its own costs, expenses and all legal, tax and financial advisory fees, investment banking or brokerage fees and commissions incurred by it in connection with the transactions contemplated in this Agreement and the Ancillary Agreements.

11.4

Further Assurances

Each Party shall, upon the reasonable request of the other Party, whether before, at or after Closing, do, execute, acknowledge and deliver or cause to be done, executed, acknowledged or delivered all such further acts, deeds, assignments, transfers, conveyances, agreements or other documents as, in the reasonable opinion of the requesting Party, may be necessary or desirable to effectuate the complete consummation of the transactions contemplated herein.

11.5

Equitable Relief

Each Party agrees that irreparable damage to the other Party for which monetary damages, even if available, would not be an adequate remedy in the event that any of the provisions of this Agreement or the Ancillary Agreements (including the failure by any Party to take such actions as are required of it hereunder to consummate the transactions contemplated by this Agreement or the Ancillary Agreements) was not performed in accordance with its specified terms or was otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or other equitable relief to prevent breaches of this Agreement or the Ancillary Agreements and to enforce specifically the terms and provisions hereof or thereof in any court of competent jurisdiction, this being in addition to any other remedy to which any Party is entitled at law or in equity, and any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief is hereby waived.

11.6

No Third-Party Beneficiaries

Except as provided in Section 5.10(e), Section 5.10(f) and Article 10, nothing contained in this Agreement or any other agreement entered into pursuant hereto is intended, or should be interpreted as having been intended, to create any right or assume any obligation in favour of, or grant any waiver or release from any obligation to, or otherwise constitute a stipulation in favour of any Person, other than the parties hereto or thereto, as the case may be, and the respective legal successors and permitted assigns of such parties.

11.7

Successors and Assigns

This Agreement shall enure to the benefit of and be binding upon the Parties and their respective legal successors, heirs, representatives and permitted assigns; provided, however, that neither this Agreement nor any benefit hereunder may be voluntarily assigned by Emerald, unless the prior written consent of Village Farms shall have been obtained. Village Farms shall be entitled, without the consent of Emerald, to assign any or part of its rights or obligations under this Agreement to any of its Affiliates, provided that if such assignment takes place, Village Farms or a successor shall continue to be liable jointly and severally for all of its obligations hereunder.

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11.8

Entire Agreement

This Agreement and each of the Ancillary Agreements constitute the entire agreement between the Parties with respect to the subject matter hereof or thereof and supersede all prior agreements among the Parties with respect to such subject matter.

11.9

Amendment and Waiver

No supplement or amendment of this Agreement shall be binding upon the Parties unless expressly provided in a document duly executed by each of the Parties. Any waiver of any term or condition or any breach of any covenant of this Agreement shall not operate as a waiver of any other such term or condition or breach, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof.

11.10

Severability

If any provision of this Agreement shall be held illegal, invalid or unenforceable by any competent court in any relevant jurisdiction, such illegality, invalidity or unenforceability shall attach only to such provision in such jurisdiction and such provision shall be severed herefrom and be ineffective to the extent of such illegality, invalidity or unenforceability and shall not affect or impair or render illegal, invalid or unenforceable such provision in any other jurisdiction or any other provision of this Agreement in any jurisdiction.

11.11

Counterparts

This Agreement may be executed by the Parties in several counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall constitute but one and the same instrument.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF the Parties have executed this Agreement.


VILLAGE FARMS INTERNATIONAL, INC.

By:		/s/ Stephen C. Ruffini
		Name: Stephen C. Ruffini Title: Chief Financial Officer

EMERALD HEALTH THERAPEUTICS, INC.

By:		/s/ Jim Heppell
		Name: Jim Heppell Title: Director

SCHEDULE 2.1(c)(ii)

FORM OF PROMISSORY NOTE

(See attached)

SCHEDULE 5.8(a)

LIST OF RESIGNING DIRECTORS AND OFFICERS

Riaz Bandali

Punit Dhillon

Jim Heppell

FORM OF RESIGNATION AND MUTUAL RELEASE

(See attached)

SCHEDULE 5.8(b)

FORM OF SHAG TERMINATION AGREEMENT

(See attached)

SCHEDULE 5.8(c)

FORM OF NON-SOLICITATION AGREEMENT

(See attached)

Exhibit 10.2

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of September 8, 2020, between Village Farms International, Inc., a Canadian corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to (i) an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”) as to the Securities, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

ARTICLE I.

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York or Vancouver, British Columbia are authorized or required by law or other governmental action to close.

“Canadian Jurisdictions” means each of the provinces and territories of Canada.

“Canadian Authorities” means the Canadian securities regulatory authorities in each of the Canadian Jurisdictions.

“Canadian Securities Laws” means the rules and procedures established under all applicable securities laws in each of the Canadian Jurisdictions and the respective regulations and rules under such laws together with applicable published policies, policy statements, instruments, blanket orders, blanket rulings and notices of the securities regulatory authorities in the Canadian Jurisdictions.

“CFPOA” means the Corruption of Foreign Public Officials Act (Canada).

“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.

“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the second (2^nd) Trading Day following the date hereof.

“Commission” means the United States Securities and Exchange Commission.

“Common Shares” means the common shares of the Company, no par value, and any other class of securities into which such securities may hereafter be reclassified or changed.

“Common Shares Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Shares.

“Company Counsel” means Torys LLP, with offices located at New York, New York and Toronto, Canada.

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

“Disclosure Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent.

“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(s).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Exempt Issuance” means the issuance of (a) Common Shares and Warrants (and Common Shares issuable upon exercise thereof) as contemplated by this Agreement and each other securities purchase agreement executed and delivered in connection with the placement of Common Shares and Warrants by the Placement Agent in accordance with the Placement Agent Agreement, (b) Common Shares or options to employees, officers,

consultants or directors of the Company pursuant to any stock or option plan or arrangement duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (c) non-registered equity or debt securities in connection with strategic transactions, (d) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into Common Shares issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations or anti-dilution provisions contained therein and disclosed in the SEC Reports) or to extend the term of such securities, and (e) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

“FDA” shall have the meaning ascribed to such term in Section 3.1(hh).

“FDCA” shall have the meaning ascribed to such term in Section 3.1(hh).

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

“Health Canada” means the Canadian federal Department of Health and any successor thereof.

“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(aa).

“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).

“Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).

“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

“Material Permits” shall have the meaning ascribed to such term in Section 3.1(n).

“Per Unit Purchase Price” equals $5.30, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Shares that occur after the date of this Agreement.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Pharmaceutical Product” shall have the meaning ascribed to such term in Section 3.1(hh).

“Placement Agent” means A.G.P./Alliance Global Partners.

“Placement Agent Agreement” means that certain placement agent agreement dated as of the date hereof between the Company and the Placement Agent.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition) pending or, to the Company’s knowledge, threatened in writing against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign).

“Prospectus” means the Company’s base prospectus included in the Registration Statement.

“Prospectus Supplement” means the Company’s supplement to the Prospectus in respect of the Placement complying with Rule 424(b) of the Securities Act that is filed with the Commission and delivered by the Company to each Purchaser at the Closing.

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.

“Registration Statement” means the Company’s effective registration statement with Commission File No. 333-237792, which registers the offer and sale from time to time of Common Shares and the other securities identified therein.

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

“Securities” means the Shares, the Warrants and the Warrant Shares.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Shares” means the Common Shares issued or issuable to each Purchaser pursuant to this Agreement.

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Common Shares).

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.

“Subsidiary” means any subsidiary of the Company as set forth on the SEC Reports, and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

“Sullivan” means Sullivan & Worcester LLP, with offices located at 1633 Broadway, New York, New York 10019.

“Trading Day” means a day on which the principal Trading Market is open for trading.

“Trading Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on the date in question: The Nasdaq Stock Market LLC (“Nasdaq”) and the Toronto Stock Exchange (“TSX”) (or any successors to either of the foregoing).

“Transaction Documents” means this Agreement, the Placement Agent Agreement, the Warrants, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

“Transfer Agent” means Computershare Investor Services Inc., the current transfer agent of the Company, at its principal offices in Vancouver, British Columbia or Toronto, Ontario, and any successor transfer agent of the Company.

Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Shares so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

“Warrants” means, collectively, the Common Shares purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be exercisable on or after the six (6) month anniversary of date of issuance and have a term of exercise equal to five (5) years from date of initial exercisability, in the form of Exhibit A attached hereto.

“Warrant Shares” means the Common Shares issuable upon exercise of the Warrants.

“Wholly-Owned Subsidiaries” means the Subsidiaries that are 100% owned by the Company, as indicated in the SEC Reports.

1.2 Currency. All references in this Agreement to “$” shall refer to the currency of the United States of America, unless otherwise specified.

ARTICLE II.

PURCHASE AND SALE

2.1 Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of approximately $49.8 million units, each consisting of one Share and one Warrant. Each Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser shall be made available for “Delivery Versus Payment” settlement with the Company or its designees. The Company shall deliver to each Purchaser its respective Shares and a Warrant as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of Sullivan or such other location as the parties shall mutually agree. Unless otherwise directed by the Placement Agent, settlement of the Shares shall occur via “Delivery Versus Payment” (i.e., on the Closing Date, the Company shall issue the Shares registered in the Purchasers’ names and addresses and released by the Transfer Agent directly to the account(s) at the Placement Agent identified by each Purchaser; upon receipt of such Shares, the Placement Agent shall promptly electronically deliver such Shares to the applicable Purchaser, and payment therefor shall be made by the Placement Agent (or a clearing firm) by wire transfer to the Company).

2.2 Deliveries.

(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

(i) this Agreement duly executed by the Company;

(ii) a legal opinion of Company Counsel, in a form reasonably acceptable to the Purchaser and the Placement Agent;

(iii) the Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Chief Executive Officer or Chief Financial Officer;

(iv) subject to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) Shares equal to such Purchaser’s Subscription Amount divided by the Per Unit Purchase Price, registered in the name of such Purchaser;

(v) a Warrant registered in the name of such Purchaser to purchase up to a number of Common Shares equal to 50% of such Purchaser’s Shares, with an exercise price equal to $5.80, subject to adjustment therein;

(vi) the Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).

(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:

(i) this Agreement duly executed by such Purchaser; and

(ii) such Purchaser’s Subscription Amount, which shall be made available for “Delivery Versus Payment” settlement with the Company or its designees.

2.3 Closing Conditions.

(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

(ii) all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and

(iii) the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.

(b) The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:

(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

(iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

(iv) there shall have been no Material Adverse Effect with respect to the Company since the date hereof;

(v) the Shares and the Warrant Shares have been conditionally listed or approved for listing on the TSX subject only to the customary and standard post-closing conditions imposed by the TSX in similar circumstances and set forth in a letter of the TSX addressed to the Company; and

(vi) from the date hereof to the Closing Date, trading in the Common Shares shall not have been suspended by the Commission or the Company’s principal Trading Market (other than a normal course temporary market halt in connection with the public announcement of the matters contemplated by this agreement), and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited (other than a normal course temporary market halt in connection with the public announcement of the matters contemplated by this agreement), or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. Except as set forth in the SEC Reports, or in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or warranty otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:

(a) Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth in the SEC Reports. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Wholly-Owned Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Wholly-Owned Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities, other than such preemptive rights that have been waived.

(b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”); provided that a change in the market price or trading volume of the Common Shares alone shall not be deemed, in and of itself, to constitute a Material Adverse Effect. No Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(d) No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

(e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) application(s) to each applicable Trading Market for the listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby, (iv) such filings as are required to be made under applicable state securities laws, and (v) any ordinary course report of distribution and similar filings with certain Canadian Authorities related hereto (collectively, the “Required Approvals”).

(f) Issuance of the Securities; Registration. The Securities have been duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number Common Shares issuable pursuant to this Agreement and the Warrants The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on May 6, 2020 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this

Agreement. The Company was at the time of the filing of the Registration Statement eligible to use Form S-3. The Company is eligible to use Form S-3 under the Securities Act and it meets the transaction requirements as set forth in General Instruction I.B.1 of Form S-3. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus Supplement with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, at the time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(g) Capitalization. The capitalization of the Company as of the date hereof is set forth in the SEC Reports, which also includes the number of Common Shares owned beneficially, and of record, by Affiliates of the Company as of the date hereof. The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of Common Shares to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Share Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities and as set forth in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any Common Shares or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional Common Shares or Common Share Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue Common Shares or other securities to any Person (other than the Purchasers and the Placement Agent) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any

Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all applicable federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except for the Required Approvals, no further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

(h) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports complied in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

(i) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as set forth on Schedule 3.1(i)1, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

(j) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority , Canadian, United States or foreign, including any proceeding before Health Canada or any other governmental authority in Canada or any other country performing functions similar to those performed by Health Canada (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

(k) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract,

confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(l) Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all applicable federal, provincial, territorial, state, municipal, local and foreign laws, regulations, orders and decrees governing its business as prescribed by Health Canada, or any other federal, provincial, territorial, state, municipal, local or foreign agencies or bodies in Canada or any other country engaged in the regulation of cannabis, controlled drugs and substances or pharmaceuticals, except where noncompliance would not, singularly or in the aggregate, have a Material Adverse Effect.

(m) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all applicable federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

(n) Regulatory Permits. The Company and the Subsidiaries (excluding Pure Sunfarms Corp.) possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

(o) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries, and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance, except where the failure to be in compliance would not reasonably be expected to have a Material Adverse Effect.

(p) Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports (collectively, the “Intellectual Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has no knowledge of any facts that would preclude it from having valid license rights or clear title to the Intellectual Property Rights. The Company has no knowledge that it lacks or will be unable to obtain any rights or licenses to use all Intellectual Property Rights that are necessary to conduct its business.

(q) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

(r) Transactions With Affiliates and Employees. None of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

(s) Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

(t) Certain Fees. Except as set forth in the Prospectus, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

(u) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

(v) Registration Rights. Except as set forth on the SEC Reports, no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

(w) Listing and Maintenance Requirements. The Common Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except as set forth on the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Shares are or have been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Shares are currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.

(x) Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s articles of incorporation (or similar charter documents) or the laws of its jurisdiction of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

(y) Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed in the Prospectus Supplement. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the SEC Reports, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

(z) No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

(aa) Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year

from the Closing Date. The SEC Reports sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

(bb) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all Canadian, United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

(cc) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA or the CFPOA, as applicable.

(dd) Accountants. The Company’s independent registered public accounting firm is PricewaterhouseCoopers LLP. To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2020.

(ee) Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser

is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

(ff) Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(e) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Shares, and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities (in material compliance with applicable laws) at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Warrant Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

(gg) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement of the Securities.

(hh) FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested and/or distributed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested and/or distributed by the Company in compliance with all applicable requirements under

FDCA and similar laws, rules and regulations relating to registration, investigational use, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company’s knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product produced or marketed by the Company nor has the FDA halted any approved investigational device exemption, clinical program or other trial of the Company.

(ii) Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan, or as an inducement grant outside of a stock option plan, was granted (i) in accordance with the terms of the Company’s stock option plan or under its terms, respectively, and (ii) with an exercise price at least equal to the fair market value of the Common Shares on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

(jj) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

(kk) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.

(ll) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

(mm) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and the money laundering statutes of all other applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

(nn) Other Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.

(oo) Canadian Reporting Issuer; SEC Registration. The Company is a “reporting issuer” or the equivalent thereof in each of the Canadian Jurisdictions where such concept exists, is not on the list of defaulting reporting issuers maintained by the Canadian Authorities in each such Canadian Jurisdiction that maintains such a list and is not in breach of any filing requirement under Canadian Securities Laws which could have a Material Adverse Effect on the Company. The Company is subject to the reporting requirements of Section 13 of the Exchange Act and files periodic reports with the SEC; the Shares are registered with the SEC under Section 12(b) of the Exchange Act and the Company is not in breach of any filing or other requirements under the Exchange Act.

3.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):

(a) Organization; Authority. Such Purchaser is not resident in Canada and is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into

and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(b) Understandings or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such purchaser acknowledges that the Company may be required to file a report of exempt distribution on Form 45-106F1 with certain of the Canadian Authorities and consents to the Company providing reasonable purchaser information to such Canadian Authorities, where required by applicable law. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.

(c) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.

(d) Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

(e) Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense

that is necessary to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it. In connection with the issuance of the Securities to such Purchaser, neither the Placement Agent nor any of their Affiliates has acted as a financial advisor or fiduciary to such Purchaser.

(f) Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or securing of, securities of the Company in order for such Purchaser (or its broker or other financial representative) to effect Short Sales or similar transactions in the future.

(g) General Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.

(h) 20% Ownership Limitation. In no event will the issuance of any Shares or Warrants hereunder cause the Purchaser, either alone or together with any parties that it is acting jointly and in concert with in respect of the Common Shares, to beneficially own or control a number of Common Shares that is equal to or greater than 20% of the issued and outstanding Common Shares (on a non-diluted basis).

The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1 Warrant Shares. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the issuance or resale of the Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant Shares issued pursuant to any such exercise shall be issued free of all legends. If at any time following the date hereof the Registration Statement (or any subsequent registration statement registering the sale or resale of the Warrant Shares) is not effective or is not otherwise available for the sale or resale of the Warrant Shares, the Company shall immediately notify the holders of the Warrants in writing that such registration statement is not then effective and thereafter shall promptly notify such holders when the registration statement is effective again and available for the sale or resale of the Warrant Shares (it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or any Purchaser to sell, any of the Warrant Shares in compliance with applicable federal and state securities laws). The Company shall use commercially reasonable best efforts to keep a registration statement (including the Registration Statement) registering the issuance or resale of the Warrant Shares effective during the term of the Warrants.

4.2 Furnishing of Information. Until the earlier of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

4.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

4.4 Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company

or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).

4.5 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.

4.6 Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such material non-public information with the Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

4.7 Use of Proceeds. Except as set forth in the Prospectus Supplement, the Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption of any Common Shares or Common Share Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.

4.8 Indemnification of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct), or (c) in connection with any registration statement of the Company providing for the resale by the Purchasers of the Warrant Shares issued and issuable upon exercise of the Warrants, the Company will indemnify each Purchaser Party, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses, as incurred, arising out of or relating to (i) any untrue or alleged untrue statement of a material fact contained in such registration statement, any prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Purchaser Party furnished in writing to the Company by such Purchaser Party expressly for use therein, or (ii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder in connection therewith. If any action shall be brought

against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (x) the employment thereof has been specifically authorized by the Company in writing, (y) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (z) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (1) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (2) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

4.9 Reservation of Common Shares. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of Common Shares for the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.

4.10 Listing of Common Shares. For as long as the Warrants are outstanding and exercisable, the Company hereby agrees to use commercially reasonable best efforts to maintain the listing or quotation of the Common Shares on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares and the Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares and the Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Shares traded on any other Trading Market, it will then include in such application all of the Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Shares and the Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its Common Shares on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. For so long as the Company maintains a listing or quotation of the Common Shares on a Trading Market, the Company agrees to maintain the eligibility of the Common Shares for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.

4.11 Reservation of Shares. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights which have not been waived, a sufficient number of Shares and Warrant Shares for the purpose of enabling the Company to issue Shares and Warrant Shares pursuant to this Agreement.

4.12 Subsequent Equity Sales. From the date hereof until 75 days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Common Shares or Common Share Equivalents, except for any Exempt Issuance.

4.13 Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered to all of the parties to such Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

4.14 Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules. Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.

4.15 Capital Changes. Until the one year anniversary of the Closing Date, the Company shall not undertake a reverse or forward stock split or reclassification of the Common Shares without the prior written consent of the Purchasers holding a majority in interest of the Shares, provided that no consent shall be required in the event the Company undertakes a reverse stock split for purposes of maintaining the listing of the Common Shares on the Trading Market.

4.16 Exercise Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures required of the Purchasers in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers to exercise their Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to exercise the Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

ARTICLE V.

MISCELLANEOUS

5.1 Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before the fifth (5^th) Trading Day following the date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).

5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.

5.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

5.4 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth

on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2^nd)Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

5.5 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers which purchased at least a majority in interest of the Shares based on the initial Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.

5.6 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”

5.8 No Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and warranties of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.

5.9 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action or proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing party in such action or proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

5.10 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities for a period of five (5) years from the Closing.

5.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

5.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

5.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of an exercise of a Warrant, the applicable Purchaser shall be required to return any Common Shares subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).

5.14 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

5.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to seek specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate. Each party agrees that it shall not have a remedy of punitive or consequential damages against the other and hereby waives any right or claim to punitive or consequential damages it may now have or may arise in the future.

5.16 Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

5.17 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers

are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through the legal counsel of the Placement Agent. The legal counsel of the Placement Agent does not represent any of the Purchasers and only represents the Placement Agent. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.

5.18 Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.

5.19 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

5.20 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and Common Shares in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Shares that occur after the date of this Agreement.

5.21 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

(Signature Pages Follow)

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

[PURCHASER SIGNATURE PAGES TO VFF SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser: ______________________________________________________

Signature of Authorized Signatory of Purchaser: _________________________________

Name of Authorized Signatory: _______________________________________________

Title of Authorized Signatory: ________________________________________________

Email Address of Authorized Signatory:_________________________________________

Facsimile Number of Authorized Signatory: __________________________________________

Address for Notice to Purchaser:

Address for Delivery of Warrants to Purchaser (if not same as address for notice):

DWAC for Shares:

Subscription Amount: $_________________

Shares: _________________

Warrant Shares: _________________

EIN Number: ____________________

Exhibit 10.3

LEAK-OUT AGREEMENT

September [•], 2020

This agreement (the “Leak-Out Agreement”) is being delivered to you in connection with an understanding by and between Village Farms International, Inc., a Canadian corporation (the “Company”), and the person or persons named on the signature pages hereto (collectively, the “Holder”).

Reference is hereby made to (a) the Placement Agent Agreement, dated September [•], 2020, by and among the Company and A.G.P./Alliance Global Partners, in connection with a registered direct offering (the “Offering”) of the Company, (b) those certain Securities Purchase Agreements by and between the Company, the Holder and other purchasers signatories thereto, dated September [•], 2020 (the “Purchase Agreement”), pursuant to which the Holder and certain other purchasers acquired (i) Common Shares of the Company (“Shares”) and (ii) warrants of the Company to purchase Shares, the “Warrants,” and together with the Shares, the “Securities”) and (c) the registration statement on Form S-3 (File No. 333-237792) (“Registration Statement”) and the prospectus supplement filed thereunder relating to the Offering. Capitalized terms not defined herein shall have the meaning as set forth in the Purchase Agreement, unless otherwise set forth herein.

The Holder agrees solely with the Company that starting at the time of the public announcement of the final pricing (the “Effective Date”) and ending at 4:00 pm (New York City time) on [•], 2020¹ (such period, the “Restricted Period”), neither the Holder, nor any affiliate of such Holder which (x) had or has knowledge of the transactions contemplated by the Purchase Agreement, (y) has or shares discretion relating to such Holder’s investments or trading or information concerning such Holder’s investments, including in respect of the Securities, or (z) is subject to such Holder’s review or input concerning such affiliate’s investments or trading (together, the “Holder’s Trading Affiliates”), collectively, shall sell, dispose or otherwise transfer, directly or indirectly, (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions) on any Trading Day during the Restricted Period (any such date, a “Date of Determination”),Common Shares, Common Share Equivalents, or Warrant Shares (collectively, the “Restricted Securities”), in an amount representing more than [•]²% of the trading volume of Common Shares on the Nasdaq Capital Market as reported by Bloomberg, LP for the applicable Date of Determination (“Leak-Out Percentage”); provided, that the foregoing restriction shall not apply to any actual “long” (as defined in Regulation SHO of the Securities Exchange Act of 1934, as amended) sales by the Holder or any of the Holder’s Trading Affiliates at a price per share greater than US$[5.75] (in each case, as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar events occurring after the date hereof);. All accounts purchasing Securities in the Offering in an amount exceeding US$10,000 shall be subject to an agreement restricting the sale of Securities substantially in the form of this Leak-Out Agreement provided that the Leak-Out Percentage shall be proportional to the corresponding purchase amount of such purchaser.

¹	45 Trading days

²	Limited to 25% of volume on a pro rata basis for such holders

Notwithstanding anything herein to the contrary, during the Restricted Period, the Holder may, directly or indirectly, sell or transfer all, or any part, of any Restricted Securities to any Person (an “Assignee”) in a transaction which does not need to be reported on the consolidated tape on the Trading Market, without complying with (or otherwise limited by) the restrictions set forth in this Leak-Out Agreement; provided, that as a condition to any such sale or transfer an authorized signatory of the Company and such Assignee duly execute and deliver a leak-out agreement in the form of this Leak-Out Agreement (an “Assignee Agreement”, and each such transfer a “Permitted Transfer”) and, subsequent to a Permitted Transfer, sales of the Holder and the Holder’s Trading Affiliates and all Assignees (other than any such sales that constitute Permitted Transfers) shall be aggregated for all purposes of this Leak-Out Agreement and all Assignee Agreements.

Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Leak-Out Agreement must be in writing and shall be given in accordance with the terms of the Purchase Agreement; provided that with respect to any notices, consents, waivers or other communications to be made by the Company to the Holder, such notice, consent, waiver or other communication shall be delivered to the Holder at the facsimile number or e-mail address provided on the signature page hereto.

This Leak-Out Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior negotiations, letters and understandings relating to the subject matter hereof and are fully binding on the parties hereto.

This Leak-Out Agreement may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument. This Leak-Out Agreement may be executed and accepted by facsimile or PDF signature and any such signature shall be of the same force and effect as an original signature.

The terms of this Leak-Out Agreement shall be binding upon and shall inure to the benefit of each of the parties hereto and their respective successors and assigns.

This Leak-Out Agreement may not be amended or modified except in writing signed by each of the parties hereto.

All questions concerning the construction, validity, enforcement and interpretation of this Leak-Out Agreement shall be governed by the applicable provisions of the Purchase Agreement.

Each party hereto acknowledges that, in view of the uniqueness of the transactions contemplated by this Leak-Out Agreement, the other party or parties hereto may not have an adequate remedy at law for money damages in the event that this Leak-Out Agreement has not been performed in accordance with its terms, and therefore agrees that such other party or parties shall be entitled to seek specific enforcement of the terms hereof in addition to any other remedy it may seek, at law or in equity.

Neither this Leak-Out Agreement nor the transactions contemplated hereby are material to the Company and no material, non-public information has been provided to the Holder by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents in connection with the transactions contemplated hereby. As of the date hereof, the

Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, if any, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and the Holder or any of its affiliates, on the other hand, with respect to this Leak-Out Agreement and the transactions contemplated hereby shall terminate. Notwithstanding anything contained in this Leak-Out Agreement to the contrary and without implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees that the Holder shall not have (unless expressly agreed to by the Holder after the date hereof in a written definitive and binding agreement executed by the Company and the Holder), any duty of confidentiality with respect to, or a duty to the Company not to trade on the basis of, any material, non-public information regarding the Company or any of its Subsidiaries.

The obligations of the Holder under this Leak-Out Agreement are several and not joint with the obligations of any other holder of any of the Securities issued under the Purchase Agreement (each, an “Other Holder”) or any other holder of any of the Securities issued under Purchase Agreement (each, a “Purchaser Other Holder”) under any other agreement, and the Holder shall not be responsible in any way for the performance of the obligations of any Other Holder or any Purchaser Other Holder under any such other agreement, and the Company agrees to use reasonable best efforts to enforce the terms of any Settlement Document (as hereinafter defined). Nothing contained herein or in this Leak-Out Agreement, and no action taken by the Holder pursuant hereto, shall be deemed to constitute the Holder and Other Holders or any Purchaser Other Holder as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holder and the Other Holders or any Purchaser Other Holder are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Leak-Out Agreement and the Company acknowledges that the Holder and the Other Holders or any Purchaser Other Holder are not acting in concert or as a group with respect to such obligations or the transactions contemplated by this Leak-Out Agreement or any other agreement. The Company and the Holder confirm that the Holder has independently participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. The Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Leak-Out Agreement, and it shall not be necessary for any Other Holder or any Purchaser Other Holder to be joined as an additional party in any proceeding for such purpose.

The Company hereby represents and warrants as of the date hereof and covenants and agrees from and after the date hereof that none of the terms offered to any Other Holder or any Purchaser Other Holder that purchases in excess of US$10,000 of the Securities in the Offering with respect to any restrictions on the sale of Securities substantially in the form of this Leak-Out Agreement (or any amendment, modification, waiver or release thereof) (each a “Settlement Document”), is or will be more favorable to such Other Holder than those of the Holder and this Leak-Out Agreement. If, and whenever on or after the date hereof, the Company enters into a Settlement Document with terms that are materially different from this Leak-Out Agreement, then (i) the Company shall provide notice thereof to the Holder promptly following the occurrence thereof and (ii) the terms and conditions of this Leak-Out Agreement shall be, without any further action by the Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such Settlement Document, provided that

upon written notice to the Company at any time the Holder may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this Leak-Out Agreement shall apply to the Holder as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to the Holder. The provisions of this paragraph shall apply similarly and equally to each Settlement Document.

[The remainder of the page is intentionally left blank]

The parties hereto have executed this Leak-Out Agreement as of the date first set forth above.


Sincerely,
VILLAGE FARMS INTERNATIONAL, INC.
By:
		Name:
		Title:


AGREED TO AND ACCEPTED:
“HOLDER”

By:
		Name:
		Title:
		Fax Number:
		Email Address:


ACKNOWLEDGED:
A.G.P./Alliance Global Partners By: A.G.P./Alliance Global Partners
By:
Name:
Title:

Exhibit 99.1

LOGO

FOR IMMEDIATE RELEASE

Village Farms International Announces US$49.8 Million

Registered Direct Offering

Vancouver, BC, September 8, 2020 – Village Farms International, Inc. (“Village Farms” or the “Company”) (NASDAQ: VFF) (TSX: VFF), announced today that it has entered into definitive agreements with certain institutional investors for the purchase and sale of an aggregate of 9,396,226 units in a registered direct offering, for expected gross proceeds of approximately US$49.8 million before placement agent fees and other offering expenses payable by Village Farms.

Each unit is being sold at a public offering price of US$5.30 and consists of one common share and a warrant to purchase one half of a common share at an exercise price of US$5.80. The warrants will be exercisable beginning on March 10, 2021 and will expire five years from the date of issuance.

The closing of the offering is subject to customary closing conditions, including applicable stock exchange approvals, and is expected to close on or about September 10, 2020. Village Farms intends to use up to US$40 million of the net proceeds from this offering to finance a portion of the acquisition of 36,958,500 common shares in the capital of Pure Sunfarms Corp. (“Pure Sunfarms”), representing 41.3% of the issued and outstanding common shares of Pure Sunfarms and all of the remaining common shares of Pure Sunfarms not held by the Company, as separately announced by the Company today. The remaining net proceeds from this offering are intended to be used for general working capital.

A.G.P./Alliance Global Partners is acting as sole placement agent for the offering. Beacon Securities Limited is acting as financial advisor for the offering.

The securities described above are being offered by Village Farms pursuant to a registration statement on Form S-3 (File No. 333-237792) that was declared effective by the Securities and Exchange Commission (“SEC”) on May 6, 2020. A final prospectus supplement relating to the offering will be filed with the SEC and will be available on the SEC’s web site at www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus relating to this offering may be obtained, when available, by contacting A.G.P./Alliance Global Partners, 590 Madison Avenue, 28th Floor, New York, NY 10022 or via telephone at 212-624-2006 or email: prospectus@allianceg.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Village Farms International, Inc.

Village Farms is one of the largest and longest-operating greenhouse growers in North America, and is leveraging its decades of experience as a large-scale, low-cost intensive agriculture and vertically integrated produce supplier to pursue high-value, high-growth plant-based Consumer Packaged Goods opportunities in cannabis and CBD in North America and selected markets internationally.

In Canada, British-Columbia-based Pure Sunfarms is one of the single largest cannabis operations in the world, the lowest-cost greenhouse producer, one of the best-selling brands, and has generated profitability for six consecutive quarters.

In the U.S., subject to compliance with all applicable U.S. federal and state laws, Village Farms is pursuing a strategy to become a leading developer and supplier of branded and white-labeled CBD products targeting “big box” and other major retailers and consumer packaged goods companies, and with one the largest greenhouse operations in country, is well positioned for the potential federal legalization of high-THC cannabis.

Internationally, Village Farms is strategically targeting selected, nascent, legal cannabis and CBD opportunities with significant long-term potential, with an initial focus on the Asia-Pacific region through its investment in Australia-based Altum International.

Cautionary Statement Regarding Forward-Looking Information

This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created by those sections. This press release also contains “forward-looking information” within the meaning of applicable Canadian securities law. We refer to such forward-looking statements and forward-looking information collectively as “forward-looking statements”. Particularly, statements regarding the intended use of proceeds, the closing of the offering, future results, performance, achievements, prospects or opportunities for the Company, the greenhouse vegetable industry, the cannabis industry or other risks discussed in the Company’s Form 10-K filed on April 1, 2020 and its other filings with the SEC are forward-looking statements. In some cases, forward-looking information can be identified by such terms as “outlook”, “may”, “might”, “will”, “could”, “should”, “would”, “occur”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “try”, “estimate”, “predict”, “potential”, “continue”, “likely”, “schedule”, “objectives”, or the negative or grammatical variation thereof or other similar expressions concerning matters that are not historical facts. When relying on forward-looking statements to make decisions, the Company cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future results, performance, achievements, prospects and opportunities. The forward-looking statements made in this press release relate only to events or information as of the date on which the statements are made in this press release. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Investor Contact:

Stephen Ruffini

Executive Vice President & Chief Financial Officer

(407) 936.1190, Ext. 340

-3-

Exhibit 99.2

LOGO

FOR IMMEDIATE RELEASE

Village Farms International to Acquire All Pure Sunfarms’ Shares it Does Not

Currently Own – Will Own 100% of Canada’s Premier Cannabis Supplier

Upon Completion of Transaction

Vancouver, British Columbia, September 8, 2020 – Village Farms International, Inc. (“Village Farms” or the “Company”) (NASDAQ: VFF; TSX: VFF) today announced it has entered into a definitive purchase and sale agreement with Emerald Health Therapeutics, Inc. (“Emerald”) to acquire 36,958,500 common shares of Pure Sunfarms Corp. (“Pure Sunfarms”) owned by Emerald, representing approximately 41.3% of the issued and outstanding common shares of Pure Sunfarms (the “Pure Sunfarms Transaction”). Upon completion of the Pure Sunfarms Transaction, Village Farms will own 100% of the common shares of Pure Sunfarms. The total purchase price of C$79.9 million (US$61.0 million) will be satisfied through a C$60.0 million (US$45.8 million) cash payment and a C$19.9 million (US$15.2 million) promissory note due six months from the closing date of the Pure Sunfarms Transaction. The Pure Sunfarms Transaction will be immediately accretive to Village Farms’ net income.

“With this transaction, Village Farms and its shareholders will fully participate in the financial success of Canada’s premier cannabis supplier, and Village Farms will be able to fully leverage the success of Pure Sunfarms, as well as our decades of experience and deep organizational capabilities, for our cannabis and CBD ambitions in the U.S and selected markets internationally,” said Michael DeGiglio, CEO, Village Farms. “Our ownership of all of Pure Sunfarms is a major next step in building on Village Farms’ foundation as one of North America’s leading, vertically-integrated produce suppliers to become a diversified, plant-based consumer packaged goods business to expand into high value, high-growth opportunities in legal cannabis and CBD.”

“As the low-cost greenhouse cannabis producer in Canada, Pure Sunfarms has generated seven consecutive quarters of positive EBITDA and six consecutive quarters of net income, and with high-quality products that consumers want at an affordable price, remains the leading dried flower brand with the OCS since launching its branded retail products¹. Owning the entirety of this coveted asset comes at an opportune time as Pure Sunfarms, looking to leverage its dried flower success, has just started to roll out its cannabis 2.0 products based on the very same value proposition that has resonated so well with dried flower consumers. As Village Farms’ single largest shareholder, I am thrilled to bring this transaction to fruition, and look forward to the additional opportunities that it creates for our Company going forward.”

For the six-month period ended June 30, 2020, Pure Sunfarms generated total net sales of C$30.9 million, with gross margin of 44%, net income of C$9.6 million and EBITDA of C$9.2 million. Retail branded sales volumes for the second quarter of 2020 increased 89% compared to the first quarter of 2020. In August 2020, Pure Sunfarms was the top-selling brand of dried flower products with the Ontario Cannabis Store (“OCS”), the provincial wholesaler and only online retailer in Canada’s most populous province¹. Since launching its retail branded products last fall, Pure Sunfarms is the top-selling brand of dried flower products² with the OCS, with a market share (by kilograms sold) of 13.4%.

The Pure Sunfarms Transaction, which is subject to customary closing conditions, approval by Pure Sunfarms’ and Village Farms’ lenders and approval by Emerald shareholders, is expected to be completed in late October 2020. Upon completion of the Pure Sunfarms Transaction, the existing Pure Sunfarms shareholders agreement between Village Farms and Emerald will terminate, Pure Sunfarms’ management and employees will become part of the Village Farms organization and Village Farms will immediately begin fully consolidating the financial results of Pure Sunfarms. With the date of closing of the Pure Sunfarms Transaction expected to occur after conclusion of Village Farms’ third quarter of 2020, Village Farms’ financial results for the three and nine months ended September 30, 2020 will continue to reflect Village Farms’ 58.3% ownership of Pure Sunfarms as an investment in a joint venture.

Origin Merchant Partners acted as financial advisor to Village Farms for the Pure Sunfarms Transaction.

Notes

1. By dollars sold. Data is based on calculations by Pure Sunfarms from sales information provided by the Ontario Cannabis Store (OCS).

2. By both dollar sales and kilograms sold. For 11-month period ended August 31, 2020. Data is based on calculations by Pure Sunfarms from sales information provided by the Ontario Cannabis Store (OCS).

About Village Farms International, Inc.

Cautionary Statement Regarding Forward-Looking Information

This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is subject to the safe harbor created by those sections. This press release also contains “forward-looking information” within the meaning of applicable Canadian securities law. We refer to such forward-looking statements and forward-looking information collectively as “forward-looking statements”. Forward-looking statements may relate to the Company’s future outlook or financial position and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, expansion plans, litigation, projected production, projected costs, capital expenditures, financial results, taxes, plans and objectives of or involving the Company. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the Company, the greenhouse vegetable industry or the cannabis industry are forward-looking statements. In some cases, forward-looking information can be identified by such terms as “outlook”, “may”, “might”, “will”, “could”, “should”, “would”, “occur”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “try”, “estimate”, “predict”, “potential”, “continue”, “likely”, “schedule”, “objectives”, or the negative or grammatical variation thereof or other similar expressions concerning matters that are not historical facts. The forward-looking statements in this press release are subject to risks that may include, but are not limited to: the closing of the Pure Sunfarms Transaction; our limited operating history, including that of our Pure Sunfarms Corp. joint venture for the production of cannabis in Canada (our “Joint Venture”) and our start-up operations of growing hemp in the United States; the legal status of our Joint Venture; risks relating to obtaining additional financing, including our dependence upon credit facilities; potential difficulties in achieving and/or maintaining profitability; variability of product pricing; risks inherent in the cannabis, hemp and agricultural businesses; the ability of our Joint Venture to cultivate and distribute cannabis in Canada; existing and new governmental regulations, including risks related to regulatory compliance and licenses (e.g., our Joint Venture’s ability to obtain licenses for its Delta 2 greenhouse facility as well as additional licenses under the Canadian Act Respecting Cannabis To Amend to the Controlled Drugs and Substances Act, the Criminal Code and other Acts, S.C. 2018, c. 16 (Canada) for its Delta 3 greenhouse facility), and changes in our regulatory requirements; risks relating to conversion of our greenhouses to cannabis production for our Joint Venture; risks related to rules and regulations at the U.S. federal (Food and Drug Administration and United States Department of Agriculture), state and municipal levels with respect to produce and hemp; retail consolidation, technological advances and other forms of competition; transportation disruptions; product liability and other potential litigation; retention of key executives; labor issues; uninsured and underinsured losses; vulnerability to rising energy costs; environmental, health and safety risks, foreign exchange exposure, risks associated with cross-border trade; difficulties in managing our growth; restrictive covenants under our credit facilities; natural catastrophes; the ongoing and developing COVID-19 pandemic; and tax risks.

The Company has based these forward-looking statements on factors and assumptions about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. Although the forward-looking statements contained in this press release are based upon assumptions that management believes are reasonable based on information currently available to management, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond the Company’s control, that may cause the Company’s or the industry’s actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the factors contained in the Company’s filings with securities regulators, including our most recent Annual Report on Form 10-K, our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each of which is available at www.sec.gov, as well as our filings on SEDAR, available at www.sedar.com. In particular, we caution you that our forward-looking statements are subject to the ongoing and developing circumstances related to the COVID-19 pandemic, which may have a material adverse effect on our business, operations and future financial results.

When relying on forward-looking statements to make decisions, the Company cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future results, performance, achievements, prospects and opportunities. The forward-looking statements made in this press release relate only to events or information as of the date on which the statements are made in this press release. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Contact Information

Lawrence Chamberlain

Investor Relations

(416) 519-4196

lawrence.chamberlain@loderockadvisors.com