Tilray Enters Amended And Restated Profit Participation Agreement With ABG

On January24, 2020, Tilray, Inc. (“Tilray”) entered into (i)an Amended and Restated Profit Participation Agreement (the “A&R Profit Participation Agreement”) withABGIntermediate Holdings 2,

Benzinga · 01/30/2020 22:08

On January24, 2020, Tilray, Inc. (“Tilray”) entered into (i)an Amended and Restated Profit Participation Agreement (the “A&R Profit Participation Agreement”) withABGIntermediate Holdings 2, LLC (“ABG”), which amended and restated in its entirety the Profit Participation Agreement, dated January14, 2019, by and between Tilray and ABG (the “Original Profit Participation Agreement”) and (ii)the First Amendment to Payment Agreement with ABG (the “Payment Agreement Amendment”), which amends the Payment Agreement, dated January14, 2019, by and between Tilray and ABG (the “Original Payment Agreement”). The Original Profit Participation Agreement and the Original Payment Agreement were previously disclosed on Tilray’s Form 8-K filed on January14, 2019 with the U.S. Securities and Exchange Commission.

Pursuant to the A&R Profit Participation Agreement and the Payment Agreement Amendment, Tilray and ABG agreed that Tilray will no longer have any obligation to pay the additional consideration with an aggregate value of $83,333,333 in cash or in shares of Tilray’s Class2 Common Stock, which were previously subject to certain triggers pertaining to the regulatory status of tetrahydrocannibinol in the United States or the receipt of $5,000,000 in distributions to Tilray from the Original Profit Participation Agreement derived from cannabis products that contain tetrahydrocannibinol outside of the United States, in accordance with the terms and conditions set forth in, the Original Payment Agreement.

In addition, as previously disclosed, under the Original Profit Participation Agreement, Tilray purchased fromABGparticipation rights in up to 49% ofthe net (i.e., post-expense) royalties from cannabis products bearing certain brands within theABGportfolio (ratably based on the portion of the aggregate amount of consideration received byABG) thatABGreceives from the exploitation of certainABGbrands in connection with the development, marketing and sale of cannabis-related products. Pursuant to the A&R Profit Participation Agreement, beginning January1, 2020 through December31, 2028, Tilray agreed that it will not be entitled to any participation rights unless and until such participation rights payable to Tilray with respect to each contract year exceeds $10,000,000 (the “Participation Rights Threshold”), and in the event the Participation Rights Threshold is achieved, Tilray will be entitled to its 49% participation right for the contract year for all amounts in excess of the Participation Rights Threshold. In addition, pursuant to the A&R Profit Participation Agreement, Tilray agreed, beginning January1, 2020 through December31, 2028, Tilray will not be entitled to any guaranteed minimum participation rights with respect to each contract year, other than amounts payable by ABG for 2019 in the amount of $1,666,667, which is payable by ABG on or before February15, 2020.

The foregoing descriptions of the transactions contemplated by the A&R Profit Participation Agreement and the Payment Agreement Amendment do not purport to be complete and are subject to, and are qualified in their entirety by, the full text of the A&R Profit Participation Agreement and the Payment Agreement Amendment, which will be filed as exhibits to Tilray’s Annual Report on Form 10-K for the year ended December31, 2019.