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EXECUTION VERSION SUBSCRIPTION AGREEMENT by and among CRONOS GROUP INC., ALTRIA SUMMIT LLC and, solely for the purposes specified herein, ALTRIA GROUP, INC. Dated as of

Key Takeaway: and, solely for the purposes specified herein, Page ARTICLE 1 DEFINITIONS AND TERMS 1 Section 1.1 Definitions 1 Section 1.2 Other Terms 16 Section 1.3 Interpretation and Construction 16 ARTICLE 2 SUBSCRIPTION, ISSUANCE AND SALE; CLOSING 18 Section 2.1 Sub

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and, solely for the purposes specified herein,
Page
ARTICLE 1 DEFINITIONS AND TERMS 1
Section 1.1 Definitions 1
Section 1.2 Other Terms 16
Section 1.3 Interpretation and Construction 16
ARTICLE 2 SUBSCRIPTION, ISSUANCE AND SALE; CLOSING 18
Section 2.1 Subscription and Sale of the Purchased Shares 18
Section 2.2 Issuance of Warrant 18
Section 2.3 Securities Purchase Price; Allocation; Top-Up Shares 18
Section 2.4 Use of Proceeds 19
Section 2.5 Adjustment 19
Section 2.6 The Closing 20
ARTICLE 3 REPRESENTATION AND WARRANTIES 20
Section 3.1 Representations of Purchaser and Parent 20
Section 3.2 Representations and Warranties of the Company 20
ARTICLE 4 CONDITIONS PRECEDENT 21
Section 4.1 Conditions of the Parties 21
Section 4.2 Conditions of the Company 21
Section 4.3 Conditions of Purchaser 22
ARTICLE 5 COVENANTS 23
Section 5.1 Company Circular; Other Regulatory Matters 23
Section 5.2 Status and Notifications 27
Section 5.3 Third-Party Consents 27
Section 5.4 Company Meeting 27
Section 5.5 Information and Access 29
Section 5.6 Governance 31
Section 5.7 Interim Operations 31
Section 5.8 Acquisition Proposals; Change of Recommendation 36
Section 5.9 Transaction Litigation 41
Section 5.10 Transaction Documents 41
Section 5.11 Company Budget 42
Section 5.12 Financing Cooperation 42
Section 5.13 Tax Covenants 42
Section 5.14 Employee Benefits 43
ARTICLE 6 TERMINATION 43
Section 6.1 Termination by Mutual Written Consent 43
Section 6.2 Termination by Either Purchaser or the Company 43
Section 6.3 Termination by the Company 44
Section 6.4 Termination by Purchaser 44
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Section 6.5 Effect of Termination and Abandonment 45
ARTICLE 7 INDEMNIFICATION 46
Section 7.1 Survival 46
Section 7.2 Indemnification by the Company 47
Section 7.3 Indemnification by Purchaser 47
Section 7.4 Limitations 48
Section 7.5 Direct Claim Indemnification Procedures 49
Section 7.6 Third-Party Claim Procedures 50
Section 7.7 Characterization of Indemnification Payments 52
Section 7.8 Adjustment to Losses 52
Section 7.9 Payments 53
Section 7.10 Exclusive Remedy 53
ARTICLE 8 GENERAL PROVISIONS 53
Section 8.1 Notices 53
Section 8.2 Expenses 55
Section 8.3 Severability 55
Section 8.4 Entire Agreement 56
Section 8.5 No Third-Party Beneficiaries 56
Section 8.6 Successors and Assigns 57
Section 8.7 Amendment or Other Modification; Waiver 57
Section 8.8 Governing Law and Venue; Submission to Jurisdiction; Selection of Forum; Waiver of Trial by Jury 57
Section 8.9 Injunctive Relief 58
Section 8.10 Non-Recourse 59
Section 8.11 Further Assurances 59
Section 8.12 Publicity 59
Section 8.13 Parent Guarantee 59
Section 8.14 Counterparts 60
EXHIBITS AND SCHEDULES
Exhibit A Form of Approval Resolution
Exhibit B Form of Investor Rights Agreement
Exhibit C Principal Terms of Commercial Agreements
Exhibit D Form of Purchased Warrant Certificate
Representations and Warranties of Purchaser and Parent
Schedule B Representations and Warranties of the Company
[Redacted Company Disclosure Letter]
Purchaser Disclosure Letter]
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT, dated as of December 7, 2018 (this Agreement ), is entered into by and among Cronos Group
Inc., a corporation organized and existing under the Laws of the Province of Ontario (the Company ), Altria Summit LLC, a limited liability company organized and existing under the Laws of Virginia and a Wholly Owned Subsidiary of
Parent ( Purchaser ), and, solely for purposes of Article 1, Section 3.1, Section 5.1, Section 5.5(a), Section 5.5(e), Section 5.7(b), Section 5.7(c), Section 6.5(c), Article 8, Schedule A1 and
Schedule A8 (the Guaranteed Sections ), Altria Group, Inc., a corporation duly organized and existing under the Laws of Virginia ( Parent and, together with the Company and Purchaser, the
Parties and each, a Party (it being understood that, for the avoidance of doubt, Parent shall be a Party solely for such provisions)).
the terms and conditions set forth herein, at the Closing, the Company desires to issue, sell and deliver to Purchaser the Purchased Securities, and Purchaser desires to subscribe for and purchase, acquire, accept and receive from the Company, the
Purchased Securities;
WHEREAS, subject to the terms and conditions set forth herein and in connection with the Parties desire to
address certain corporate governance matters, contemporaneously with the Closing, the Parties will enter into the Investor Rights Agreement;
WHEREAS, subject to the terms and conditions set forth herein, the Parties intend to enter into or to cause one or more of their respective
Affiliates, as the case may be, to enter into the other Transaction Documents contemporaneously with, or as promptly as practicable after, the Closing; and
WHEREAS, the Parties desire to make certain representations, warranties, covenants and agreements in connection with this Agreement and the
transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the representations,
warranties, covenants and agreements set forth in this Agreement, the Parties, intending to be legally bound, agree as follows:
DEFINITIONS AND TERMS
Section 1.1 Definitions. Whenever used in this Agreement, except as otherwise specifically provided herein, the following terms
shall have the meanings set forth in this Section 1.1.
Acquisition Proposal means any proposal,
offer, inquiry or indication of interest (written or oral) (a) relating to a merger, joint venture, partnership, exclusive license, amalgamation, consolidation, dissolution, liquidation, tender offer, take-over bid,
recapitalization, reorganization, spin-off, share exchange, plan of
arrangement, business combination, sale, disposition, transfer or similar transaction involving the Company or any of its Subsidiaries or (b) to make an acquisition by any Person or Persons acting Jointly/In Concert with each other, that, in
each of the foregoing clauses (a) and (b), if consummated, would result in any Person or Persons acting Jointly/In Concert with each other becoming the beneficial owner of, directly or indirectly, in one or a series of related transactions, of:
(i) equity securities (including securities convertible into or exercisable or exchangeable for equity securities) representing five percent or more of the total voting power of the equity securities of the Company; or (ii) assets to which
five percent or more of the consolidated revenues or net income of the Company is attributable, or representing five percent or more of the consolidated total assets of the Company (it being understood that assets include equity securities of
Subsidiaries of the Company), in each case other than the transactions contemplated by this Agreement.
means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person as of the date on which, or at any time during the period for which, the determination of affiliation is
being made (for purposes of this definition, the term control (including the correlative meanings of the terms controlled by and under common control with ), as used with respect to any Person, means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by Contract or otherwise); provided, however, that:
(a) with respect to the Company and its Subsidiaries, Affiliate at all times excludes (i) Cronos Growing Company Inc., NatuEra S. r.l., MedMen Canada Inc., Cronos Australia Pty. Ltd. and their respective Subsidiaries,
and (ii) Purchaser, Parent and any Person that directly or indirectly controls or is under common control with Purchaser or Parent (other than, from and following the Closing, the Company and its Subsidiaries); and (b) with respect to
Purchaser and Parent and any Person that directly or indirectly controls or is under common control with Purchaser or Parent, Affiliate at all times excludes the Company and its Subsidiaries.
Agreement has the meaning ascribed to such term in the Preamble.
Alternative Acquisition Agreement means any letter of intent, agreement in principle, acquisition agreement, merger
agreement, arrangement agreement, option agreement, joint venture agreement, partnership agreement, license agreement, subscription agreement, or other similar agreement (other than a Permitted Confidentiality Agreement) relating to any Acquisition
Applicable Date means December 31, 2017.
Approval Resolution means the ordinary resolution of the Company Shareholders to be considered at the Company Meeting by
the Company Shareholders entitled to vote thereon with respect to the transactions contemplated by this Agreement, substantially in the form of Exhibit A.
Bankruptcy and Equity Exception means bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar
Laws of general applicability relating to or affecting creditors rights and to general equity principles.
Business Day means any day other than a Saturday, Sunday or other day on
which commercial banks in Toronto, Ontario, New York, New York or Richmond, Virginia are authorized or required by Law to close.
Canadian Securities Regulators means, collectively, the securities commissions or other securities regulatory authorities
in each of the Qualifying Provinces.
Cannabis means: (a) any plant or seed, whether live or dead, from any
species or subspecies of genus Cannabis, including Cannabis sativa, Cannabis indica and Cannabis ruderalis, Marijuana and Industrial Hemp and any part, whether live or dead, of the plant or seed thereof, including any
stalk, branch, root, leaf, flower, or trichome; (b) any material obtained, extracted, isolated, or purified from the plant or seed or the parts contemplated by clause (a) of this definition, including any oil, cannabinoid, terpene, genetic
material or any combination thereof; (c) any organism engineered to biosynthetically produce the material contemplated by clause (b) of this definition, including any micro-organism engineered for such purpose; (d) any biologically or
chemically synthesized version of the material contemplated by clause (b) of this definition or any analog thereof, including any product made by any organism contemplated by clause (c) of this definition; and (e) any other meaning
ascribed to the term cannabis under applicable Law, including the CDSA and the Cannabis Act.
means the Cannabis Act, S.C. 2018, c.16.
Cap has the meaning ascribed to such term in Section 7.4(c).
Capitalization Date means December 5, 2018.
CDS means CDS Clearing and Depository Services Inc.
CDSA means the Controlled Drugs and Substances Act, S.C. 1996, c. 19.
Change of Recommendation means any of the actions set forth in clauses (A) through (E) of Section 5.8(d)(i).
Chosen Court means the Ontario Superior Court of Justice (Commercial List).
Claim means any claim, cause of action, action, demand, lawsuit, investigation, review, grievance, citation, summons,
subpoena, inquiry, audit, hearing, originating application to a tribunal, arbitration or other similar proceeding of any nature, civil, criminal, regulatory, administrative or otherwise, whether in equity or at law, in contract, in tort or
Claim Notice has the meaning ascribed to such term in Section 7.6(a).
Claim Notice Period has the meaning ascribed to such term in Section 7.6(a).
Closing means the closing of the transactions contemplated by this Agreement.
Closing Date means such date on which the Closing actually occurs.
Code means the U.S. Internal Revenue Code of 1986.
Commercial Agreements has the meaning ascribed to such term in Section 5.10(a).
Common Share means any common shares in the capital of the Company, no par value.
Company has the meaning ascribed to such term in the Preamble.
Company Approvals has the meaning ascribed to such term in Schedule B4(a).
Company Board means the board of directors of the Company.
Company Board Recommendation has the meaning ascribed to such term in Schedule B3(e).
Company Budget means, with respect to the six-month period ending June 30,
2019, the capital expenditure budget for the Company and its Subsidiaries set forth in Section 1.1(a) of the Company Disclosure Letter, as it may be amended, supplemented or otherwise modified from time to time pursuant to the terms and
conditions set forth in this Agreement, or the Post-Closing Budget as may be adopted or amended, supplemented or otherwise modified by the Company Board from time to time following the Closing pursuant to the terms and conditions of the Investor
Company Circular means the notice of the Company Meeting and accompanying management information and
proxy circular, including, for the avoidance of doubt, all schedules, appendices and exhibits thereto and other enclosures therewith, and all information incorporated by reference thereto, to be sent to the Company Shareholders in connection with
the Company Meeting, as amended, supplemented or otherwise modified from time to time pursuant to the terms and conditions set forth in this Agreement.
Company Disclosure Letter means the confidential disclosure letter delivered to Purchaser by the Company prior to or
concurrently with the execution and delivery of this Agreement.
Company Indemnified Parties means the Company and its
Affiliates and their respective directors, managers, officers or other Persons acting in a similar capacity, successors and permitted assigns, in each case, in their capacity as such.
Company Meeting means a meeting of the Company Shareholders duly called and held in connection with the transactions
contemplated by this Agreement.
Company Option means any outstanding option to purchase Common Shares.
Company Shareholders means the holders of Common Shares.
Confidentiality Agreement means the Mutual Confidentiality Agreement,
dated September 4, 2018, between the Company and Altria Client Services, LLC.
Contract means any legally binding
contract, agreement, indenture, lease, deed of trust, license, option, instrument, arrangement, understanding or other obligation.
Controlled Substances Act means the Controlled Substances Act of the United States, 21 U.S.C. 801 et seq.
Deductible has the meaning ascribed to such term in Section 7.4(a).
Last updated: Dec 7, 2018