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

Exhibit 10.1

EXECUTION VERSION

VILLAGE FARMS INTERNATIONAL, INC.

and

EMERALD HEALTH THERAPEUTICS, INC.

SHARE PURCHASE AGREEMENT

September 8, 2020

TABLE OF CONTENTS

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TABLE OF CONTENTS

(continued)

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TABLE OF CONTENTS

(continued)

Schedules

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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

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:

“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.

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

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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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.

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

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

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.

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ARTICLE 2

PURCHASED SHARES AND PURCHASE PRICE

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.

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.

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:

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.

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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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.

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.

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.

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.

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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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:

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:

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.

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.

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.

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.

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

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

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.

Emerald shall:

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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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Prior to Closing:

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At Closing,

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.

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ARTICLE 6

ADDITIONAL COVENANTS REGARDING NON-SOLICITATION

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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:

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.

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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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.

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.

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.

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

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.

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

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.

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

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

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:

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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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.

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.

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.

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.

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

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

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

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

ARTICLE 9

TERMINATION AND EFFECT OF TERMINATION

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

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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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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”.

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ARTICLE 10

INDEMNIFICATION

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:

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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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

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]

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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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.

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.

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.

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.

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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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.

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.

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.

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.

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)