Agreement to Issue Shares for Cash to Verityhurst (Pty) Ltd and Extension of Bookbuild Closing Date LABAT AFRICA LIMITED (Incorporated in the Republic of South Africa) (Registration number 1986/001616/06) (“Labat Africa” or “the Company”) ISIN Code: ZAE 000018354 Share code: LAB AGREEMENT TO ISSUE SHARES FOR CASH TO VERITYHURST PROPRIETARY LIMITED ("VERITYHURST”) AND EXTENSION OF BOOKBUILD CLOSING DATE 1. Introduction Shareholders are referred to the announcement released on the Stock Exchange News Service (“SENS”) on 5 May 2020 relating to the Company’s intention to raise up to R112 million through the issue of shares by way of a bookbuild (the “Bookbuild”) under and in accordance with the Company’s existing General Authority to issue share for cash granted by shareholders at the annual general meeting held on 17 March 2020 (“General Authority”). The Board is pleased to announce that the Company has entered into a share subscription agreement with Verityhurst (“Share Subscription Agreement”) in terms of which Verityhurst has agreed to subscribe for up to 70 000 000 ordinary shares in Labat (“Subscription Shares”) for cash in two separate and divisible tranches. 2 Subscription In term of the Share Subscription Agreement, Verityhurst will subscribe for up to 40 000 000 ordinary shares (“Tranche 1 Subscription Shares”) on or before 10 July 2020 (“Tranche 1 Subscription Effective Date”) at a subscription price of 50 (fifty) cents per share (“Tranche 1 Subscription Consideration”) for a total consideration of R20 000 000 and will thereafter subscribe for a further 30 000 000 ordinary shares (“Tranche 2 Subscription Shares”) on or before 31 August 2020 (“Tranche 2 Subscription Effective Date”) at a subscription price of R1.00 per share (“Tranche 2 Subscription Consideration”). The issue of shares will be at a premium to the 30-day Volume-Weighted-Average Price prior to the board approval of the General Authority to issue shares for cash. The Company shall obtain approval from the JSE for the listing of the Tranche 1 Subscription shares and the Tranche 2 Subscription Shares as soon as possible after receipt of written confirmation that the respective consideration has been received into its bank account. Notwithstanding this, should less than the full Tranche 1 Subscription Consideration be received by the Company by the Tranche 1 Subscription Effective Date or less than the full Tranche 2 Subscription Consideration by the Tranche 2 Subscription Effective Date, then the Company shall apply to list such number of shares at 50 cents per ordinary share up to R20 000 000 and such number of shares at R1.00 per ordinary share, calculated based on the cash received by the Company. 3. Intended use of funds The Company will use the proceeds of the Subscription Shares for the capital expenditure and working capital requirements relating to its medical cannabis and industrial hemp strategic initiatives. 4. Extension of Bookbuild In light of the interest received by the Company for the Bookbuild and presentations still ongoing due to COVID-19, the Board has elected to extend the date of the Bookbuild to 31 August 2020 or such earlier date once the full funding has been raised. Johannesburg 26 June 2020 Designated Advisor Arbor Capital Sponsors Date: 26-06-2020 05:03:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.