Exhibit 10.12
DEBT SETTLEMENT AGREEMENT
THIS AGREEMENT is made as of December 9, 2022 (the “Settlement Date”) BETWEEN:
TERRASCEND CORP., a corporation incorporated under the laws of the Province of Ontario (“TerrAscend”)
ARISE BIOSCIENCE, INC., a corporation existing under the laws of the State of Delaware (“Arise”)
TERRASCEND CANADA INC., a corporation incorporated under the laws of the Province of Ontario (“TerrAscend Canada” and together with Arise, the “Debt Issuers”)
CANOPY USA, LLC, a limited liability company existing under the laws of the State of Delaware (“Canopy USA”)
CANOPY USA I LIMITED PARTNERSHIP, a limited partnership existing under the laws of the Province of Ontario (“Canopy USA LP I”)
CANOPY USA III LIMITED PARTNERSHIP, a limited partnership existing under the laws of the Province of Ontario (“Canopy USA LP III”, together with Canopy USA LP I, the “Canopy USA LPs” and, together with Canopy USA, the “Canopy USA Entities”)
WHEREAS:
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for an aggregate exercise price of $1.00 (the “TerrAscend Option”);
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principal amount bearing interest at 6% per annum and maturing on October 2, 2024 or such earlier date in accordance with the terms of the TerrAscend Loan.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and of the covenants, agreements, representations and warranties set out below, the parties covenant and agree as follows:
As used in this Agreement, the following terms have the following meanings:
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Any reference in this Agreement to gender shall include all genders, and words importing the singular number only shall include the plural and vice versa.
The division of this Agreement into Articles, Sections, Subsections, Exhibits and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in the construction or interpretation of this Agreement.
All references in this Agreement to dollars, unless otherwise specifically indicated, are expressed in the currency of Canada.
Any article, section, subsection, exhibit or other subdivision of this Agreement or any other provision of this Agreement which is, or becomes, illegal, invalid or unenforceable shall be severed from this
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Agreement and be ineffective to the extent of such illegality, invalidity or unenforceability and shall not affect or impair the remaining provisions hereof or thereof.
This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. For the purposes of legal proceedings, this Agreement shall be deemed to have been made in the said Province and to be performed therein and the courts of that Province shall have jurisdiction over all disputes which may arise under this Agreement. The Parties hereby irrevocably and unconditionally submit to the non-exclusive jurisdiction of such courts.
Unless otherwise expressly provided in this Agreement, if any matter in this Agreement is subject to the determination, consent or approval of the Canopy USA Entities or is to be acceptable to the Canopy USA Entities, such determination, consent, approval or determination of acceptability will be in the sole discretion of the Canopy USA Entities, which means the Canopy USA Entities shall have sole and unfettered discretion, without any obligation to act reasonably. If any provision in this Agreement refers to any action taken or to be taken by a Person, or which a Person is prohibited from taking, such provision will be interpreted to include any and all means, direct or indirect, of taking, or not taking, such action. When used in the context of a general statement followed by a reference to one or more specific items or matters, the term “including” shall mean “including, without limitation” and the use of the term “includes” shall mean “includes, without limitation”.
In consideration of the premises and of the covenants, agreements, representations and warranties set out herein, TerrAscend and the Canopy USA Entities agree that on the Settlement Date:
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In accordance with the terms of this Agreement, in consideration for and only upon the issuance of the New Securities to the Canopy USA Entities, as applicable, the Canopy USA LPs, as applicable, acknowledge and agree that:
Notwithstanding the foregoing or any other provision contained in this Agreement, TerrAscend and its subsidiaries (including, for greater certainty, each of the Debt Issuers and each other person obligated under the Debt Obligations, Security or the other documents delivered in connection therewith) shall remain liable for any and all indemnification and other provisions of the Debt Obligations, Security and
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the other documents delivered in connection therewith which by their terms survive termination of the Debt Obligations.
Each of the Canopy USA LPs, as applicable, represents and warrants that, since the date of the Reorganization, it has not sold, assigned, encumbered or granted any interest in any of the Debt Obligations or the Security, or agreed to do any of the foregoing.
Each of the Canopy USA LPs, as applicable, authorizes TerrAscend and its agents (including, without limitation, Bennett Jones LLP) (collectively, the “Designees”) to prepare and/or file on behalf of the applicable Canopy USA LPs discharge statements and termination statements with respect to those registrations and filings made pursuant to the Debt Obligations and the Security (and each of the Canopy USA LPs acknowledges and agrees that such Designees may rely on the provisions of this Agreement as their good and sufficient authority for so doing). All filings, termination statements, discharges, releases, notices and any other instruments or actions proposed to be signed, completed, filed, registered, notified or otherwise taken by the Designees shall be subject to the prior written approval of the applicable Canopy USA LP or its counsel, acting reasonably. Each Designee shall, promptly after completion, provide the applicable Canopy USA LP and its counsel with copies of all filings, termination statements, discharges, releases, notices and any other instruments or actions so signed, completed, filed, registered, notified or otherwise taken by it pursuant hereto.
Upon the reasonable request of TerrAscend and as soon as reasonably practicable following such request, in each case at the expense of TerrAscend, the Canopy USA LPs, as applicable, shall execute and deliver to TerrAscend additional terminations and discharges of the Security and each of the Canopy USA LPs’ security interests on, and in, TerrAscend’s and its subsidiaries’ assets and personal property as are necessary to evidence the termination and discharge of such security interests of or in favour of the Canopy USA LPs as they relate to the Debt Obligations.
Each of the Canopy USA Entities hereby represents and warrants to TerrAscend that it is purchasing the New Securities as principal for its own account and that it is an “accredited investor” within the meaning of the Securities Act (Ontario) and applicable Canadian securities laws.
The Canopy USA Entities understand and acknowledge that the Securities have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state of the United States and the offer and sale of the Securities to each Canopy USA Entity is being made on the basis of such Canopy USA Entity being an “accredited investor” as defined in Rule 501(a) of Regulation D and/or a "qualified institutional buyer" as defined in Rule 144A of the Securities Act in reliance on the private placement exemption provided by Rule 506(b) of Regulation D under the Securities Act and/or under Section 4(a)(2) of the Securities Act and similar exemption applicable under state securities laws.
The Canopy USA Entities acknowledge that:
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TerrAscend, the Debt Issuers, and the Canopy USA Entities acknowledge that:
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to any other person. It is the intent of the Parties that this Agreement does not result in any change of ownership and control (as defined by Applicable Law) of TerrAscend or in a lease, sublease or subcontract of any license owned by the TerrAscend Licensees to the Canopy USA Entities; and
Each of the Canopy USA Entities hereby makes the following representations and warranties (individually and not jointly or severally) and acknowledge that TerrAscend is relying upon the accuracy of each such representation and warranty in connection with the matters and transactions contemplated herein:
TerrAscend and each of the Debt Issuers hereby makes the following representations and warranties (individually and not jointly or severally) and acknowledge that the Canopy USA Entities are relying
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upon the accuracy of each such representations and warranties in connection with the matters and transactions contemplated herein:
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than restrictions on transfer set forth under applicable securities legislation.
Each representation, warranty, and covenant contained in this Agreement shall survive for 12 months after the completion of the transactions contemplated herein.
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so long as, in each case, prior to receiving any such information the recipient enters into a confidentiality agreement with the disclosing Party pursuant to which the recipient provides a confidentiality undertaking in favour of TerrAscend and the Canopy USA Entities to maintain the confidentiality of the Confidential Information in a manner consistent with this Agreement; and
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advisors of Canopy Growth and its Affiliates, as well as any contractors and subcontractors of Canopy Growth.
The provisions of this Section 7.1 shall apply indefinitely.
All notices, requests, demands or other communications (collectively, “Notices”) by the terms hereof required or permitted to be given by one Party to another Party, or to any other Person shall be given by e- mail as the primary and required form of notice with return receipt confirmed and, as a supplemental form of notice only, in writing by personal delivery or by registered mail, postage prepaid, or by facsimile transmission to such other party at:
Canopy USA, LLC
35715 US Hwy 40, Ste D102
Evergreen, CO 80439
Attention: Legal
Email: contracts@canopycannabis.com with a copy to:
Cassels Brock & Blackwell LLP 40 King Street West, Suite 2100 Toronto, Ontario
M5H 3C2
Attention: Jonathan Sherman Email: jsherman@cassels.com
3610 Mavis Road,
Mississauga, Ontario L5C 1W2
Attention: Lynn Gefen, Chief Legal Officer Email: legal@terrascend.com
and
Attention: Jason Wild
Email: jwild@jwfunds.com with a copy to:
Bennett Jones LLP
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One First Canadian Place, Suite 3400 Toronto, Ontario
M5X 1A4
Attention: Aaron Sonshine
Email: sonshinea@bennettjones.com
or at such other address as may be given by such Party to the other Parties hereto in writing from time to time. All such Notices shall be deemed to have been received when delivered or transmitted, or, if mailed, 72 hours after 12:01 a.m. on the day following the day of the mailing thereof. If any Notice shall have been mailed and if regular mail service shall be interrupted by strikes or other irregularities, such Notice shall be deemed to have been received 72 hours after 12:01 a.m. on the day following the resumption of normal mail service, provided that during the period that regular mail service shall be interrupted, all Notices shall be given by personal delivery, by facsimile transmission or by e-mail.
Any provision of this Agreement which is prohibited by the laws of any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition without invalidating the remaining terms and provisions hereof or thereof.
This Agreement may only be amended by written agreement signed by each of the Parties hereto.
Each of the Parties shall execute and deliver such further documents and do such further acts and things as may be reasonably required from time to time to carry out the full intent and meaning of this Agreement.
This Agreement, including the Exhibits attached hereto, sets forth the entire understanding of the Parties with respect to the subject matter hereof and supersedes all existing agreements between them concerning such subject matter.
The Canopy USA Entities or its legal representative will be regarded as exclusively entitled to the benefit of this Agreement and all Persons may act accordingly and TerrAscend shall not be bound to enter in the register notice of any trust or, except as by some court of competent jurisdiction ordered, to recognize any trust or equity affecting the title to this Agreement.
Whether or not the transactions contemplated by this Agreement shall be consummated, each Party shall pay its own expenses incurred in connection herewith.
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THE CULTIVATION, PRODUCTION AND DISTRIBUTION OF CANNABIS IS ILLEGAL UNDER U.S. FEDERAL LAW. NO PARTY WILL ARGUE THAT THIS AGREEMENT IS INVALID FOR PUBLIC POLICY REASONS AND/OR BASED ON ITS VIOLATION OF
U.S. FEDERAL CANNABIS LAWS. EACH PARTY EXPRESSLY WAIVES THE RIGHT TO PRESENT ANY DEFENSE RELATED TO THE FEDERAL ILLEGALITY OF CANNABIS AND AGREES THAT SUCH DEFENSE SHALL NOT BE ASSERTED, AND WILL NOT APPLY, IN ANY DISPUTE OR CLAIM ARISING OUT OF THIS AGREEMENT.
[Signature Page Follows]
IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and year first above written.
TERRASCEND CORP. |
By: /s/ Keith Stauffer |
Name: Keith Stauffer |
Title: Chief Financial Officer |
ARISE BIOSCIENCE, INC. |
By: /s/ Keith Stauffer |
Name: Keith Stauffer |
Title: Chief Financial Officer |
TERRASCEND CANADA INC. |
By: /s/ Keith Stauffer |
Name: Keith Stauffer |
Title: Chief Financial Officer |
CANOPY USA, LLC | |
By: /s/ David Klein |
|
Name: | David Klein |
Title: | Authorized Signatory |
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CANOPY USA I LIMITED PARTNERSHIP, by its general partner CANOPY USA, LLC | |
By: /s/ David Klein |
|
Name: | David Klein |
Title: | Authorized Signatory |
CANOPY USA III LIMITED PARTNERSHIP, by its general partner CANOPY USA, LLC | |
By: /s/ David Klein |
|
Name: | David Klein |
Title: | Authorized Signatory |
EXHIBIT “A” FORM OF NEW WARRANT
WSLEGAL\088037\00012\32932857v20
THESE WARRANTS AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE APRIL 10, 2023.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE CANADIAN SECURITIES EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL APRIL 10, 2023 AND THEN ONLY IN ACCORDANCE WITH ALL APPLICABLE LAWS.
THE WARRANTS EVIDENCED HEREBY ARE EXERCISABLE AT OR BEFORE 5:00 P.M. (TORONTO TIME) ON THE EXPIRY DATE (AS DEFINED HEREIN) AFTER WHICH TIME THE WARRANTS EVIDENCED HEREBY SHALL BE DEEMED TO BE VOID AND OF NO FURTHER FORCE OR EFFECT.
WARRANTS TO PURCHASE UP TO [●] COMMON SHARES OF
TerrAscend Corp. (existing under the laws of Ontario)
Warrant Certificate Number – 2022-12-[●] | Number of Warrants represented by this certificate: [●] |
THIS CERTIFIES that, for value received, [Name and registered address of Holder] (the "Holder"), is the registered holder of [●] warrants (collectively, the "Warrants"; each a "Warrant"), each Warrant entitling the Holder, subject to the terms and conditions set forth in this Warrant Certificate (the "Certificate"), to purchase from TerrAscend Corp. (the "Corporation"), one common share in the capital of the Corporation (a "Common Share"), at any time prior to 5:00 p.m. (Toronto time) on December 31, 2032 (the "Expiry Date"), at which time the Warrants evidenced by this Certificate shall become wholly void and the unexercised portion of the subscription right represented hereby will expire and terminate (the "Time of Expiry"), on payment of a price per Common Share equal to CAD$[●], subject to adjustment as set forth herein (the "Exercise Price"). The number of Common Shares which the Holder is entitled to acquire upon exercise of the Warrants and the Exercise Price are subject to adjustment as hereinafter provided.
The Holder shall be entitled to the rights evidenced by this Certificate free from all equities and rights of set-off or counterclaim between the Corporation and the original or any interim holder and all persons may act accordingly and the receipt by the Holder of the Common Shares issuable upon exercise hereof shall be a good discharge to the Corporation.
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The Corporation shall, within two trading days after receiving a duly executed Election to Purchase and the Exercise Price for the number of Common Shares specified in the Election to Purchase (the "Exercise Date"), issue that number of Common Shares specified in the Election to Purchase.
(i) issue and deliver to the Holder, registered in the name of the Holder, a certificate for the number of Common Shares issuable on exercise of the Warrants so exercised and a Certificate representing the balance of any unexercised Warrants, or (ii) in the case of the Common Shares, issue and cause to be deposited electronically with CDS Clearing and Depository Services Inc. ("CDS") through the book-based system administered by CDS using the "non- certificated inventory" issue process that number of Common Shares issuable on exercise of the Warrants so exercised and, in the case of the Warrants, a Certificate representing the balance of any unexercised Warrants. To the extent permitted by law, such exercise shall be deemed to have been effected as of the close of business on the Exercise Date, and at such time the rights of the Holder with respect to the number of Warrants which have been exercised as such shall cease, and the Common Shares and any unexercised Warrants shall then be issuable upon such exercise as outlined above and the Holder shall be deemed to have become the holder of record of the Common Shares and unexercised Warrants represented thereby. Notwithstanding the above, all Common Shares issued to a United States "accredited investor" as defined in Rule 501(a) of Regulation D under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), who is not a "qualified institutional buyer" (as that term
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is used in Rule 144A of the U.S. Securities Act), will be evidenced by physical certificates.
(any of such events in subsections 1(e)(i)(A), 1(e)(i)(B) or 1(e)(i)(C) being called a "Common Share Reorganization") then, in each such event, the Exercise Price shall be adjusted as of the effective date or record date of such Common Share Reorganization, as the case may be, and shall, in the case of the events referred to in (A) or (C) above, be decreased in proportion to the increase in the number of outstanding Common Shares and/or Exchangeable Shares resulting from such subdivision, re-division, change or distribution, or shall, in the case of the events referred to in (B) above, be increased in proportion to the decrease in the number of outstanding Common Shares and/or Exchangeable Shares resulting from such reduction, combination or consolidation, in each case by multiplying the Exercise Price in effect immediately prior to such effective date or record date by a fraction, the numerator of which shall be the number of Common Shares outstanding on such effective date or record date before giving effect to such Common Share Reorganization and the denominator of which shall be the number of Common Shares outstanding as of the effective date or record date after giving effect to such Common Share Reorganization. Such
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adjustment shall be made successively whenever any event referred to in this subsection 1(e)(i) shall occur. Upon any adjustment of the Exercise Price pursuant to subsection 1(e)(i), the Exchange Rate (as defined below) shall be contemporaneously adjusted by multiplying the number of Common Shares theretofore obtainable on the exercise thereof by a fraction of which the numerator shall be the Exercise Price in effect immediately prior to such adjustment and the denominator shall be the Exercise Price resulting from such adjustment. "Exchange Rate" means the number of Common Shares subject to the right of purchase under each Warrant, which, as of the date hereof, is one (1) Common Share for one (1) Warrant.
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will be adjusted immediately after such record date so that it will equal the rate determined by multiplying the Exchange Rate in effect on such record date by a fraction, of which the numerator shall be the Exercise Price in effect immediately prior to such adjustment and the denominator shall be the Exercise Price resulting from such adjustment.
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Exchangeable Shares for all or any portion of the Common Shares and/or Exchangeable Shares where the cash and the value of any other consideration included in such payment per Common Share and/or Exchangeable Shares exceeds the Current Market Price on the trading day immediately preceding the commencement of the issuer bid or tender or exchange offer (any such issuer bid or tender or exchange offer being called an "Issuer Bid"), the Exercise Price shall be adjusted to a price determined by multiplying the applicable Exercise Price in effect on the date of the completion of such Issuer Bid by a fraction, the numerator of which shall be the product of (A) the number of Common Shares and/or Exchangeable Shares outstanding immediately prior to the completion of the Issuer Bid (without giving effect to any reduction in respect of any tendered or exchanged shares) and (B) the Current Market Price on the trading day immediately preceding the commencement of the Issuer Bid, and the denominator of which shall be the sum of (A) the fair market value (determined by the board of directors of the Corporation, acting reasonably and in good faith) of the aggregate consideration paid by the Corporation or subsidiary to holders of Common Shares and/or Exchangeable Shares upon the completion of such Issuer Bid, and (B) the product of (I) the difference between the number of Common Shares and/or Exchangeable Shares outstanding immediately prior to the completion of the Issuer Bid (without giving effect to any reduction in respect of tendered or exchanged shares) and the number of Common Shares and/or Exchangeable Shares actually purchased by the Corporation or subsidiary pursuant to the Issuer Bid, and
(II) the Current Market Price on the trading day immediately preceding the commencement of the Issuer Bid.
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subject to any required stock exchange or regulatory approval, the rights or warrants referred to in subsection 1(e)(i)(C), subsection 1(e)(ii) or the shares, rights, options, warrants, evidences of indebtedness or assets referred to in subsection 1(e)(iii), as the case may be, in such kind and number as they would have received if they had been holders of Common Shares on the applicable record date or effective date, as the case may be, by virtue of their outstanding Warrants having then been exercised into Common Shares at the Exercise Price in effect on the applicable record date or effective date, as the case may be.
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securities the Holder is entitled to receive, as a result of such adjustment and all prior adjustments pursuant to this subsection 1(e), upon the full exercise of a Warrant.
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notice shall be given not less than 14 days in each case prior to such applicable record date or effective date.
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as are within its power to ensure that all such Common Shares may be so issued without violation of any applicable law.
(5) trading days prior to the relevant date on the most senior stock exchange in Canada on which the Common Shares may then be listed and on which there is the greatest volume of trading of the Common Shares for such 20 day period, or, if the Common Shares or any other security in respect of which a determination of Current Market Price is being made are not listed on any stock exchange, which includes the Canadian Securities Exchange, the Current Market Price shall be determined in good faith by the directors of the Corporation, which determination shall be conclusive, absent fraud or manifest error. The VWAP shall be determined by dividing the aggregate sale price of all such Common Shares sold on the said exchange during the said 20 consecutive trading days by the total number of such Common Shares so sold.
U.S. Securities Act or any applicable state securities laws. No transfer of the Warrants represented by this Certificate shall be made if in the opinion of counsel to the Corporation such transfer would result in the violation of any applicable securities laws. Subject to the foregoing, the Corporation shall issue and mail as soon as practicable, and in any event within five business days of such delivery, a new Certificate registered in the name of the
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transferee or as the transferee may direct and shall take all other necessary actions to effect the transfer as directed. Upon the transfer of any Warrant in accordance with the terms hereof, the Corporation shall enter the name of the transferee in the register as the registered holder of such transferred Warrants.
U.S. person or a person in the United States;
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from the Corporation continue to be true and correct as of the date of exercise; or
"U.S. person" and "United States" are as defined in Regulation S under the U.S. Securities Act.
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT") OR U.S. STATE SECURITIES LAWS. BY PURCHASING OR OTHERWISE HOLDING SUCH SECURITIES, THE HOLDER AGREES FOR THE BENEFIT OF TERRASCEND CORP. (THE "CORPORATION") THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, ONLY (A) TO THE CORPORATION; OR (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS; OR (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT PROVIDED BY (I) RULE 144 OR (II) RULE 144A THEREUNDER, IF AVAILABLE, AND IN EACH CASE IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS; OR
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CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA."
provided, that if the Common Shares are being sold outside the United States in compliance with the requirements of Rule 904 of Regulation S, the legend set forth above may be removed by providing an executed declaration to the registrar and transfer agent of the Corporation and to the Corporation, in such form as the Corporation may prescribe from time to time and, if requested by the Corporation or the registrar and transfer agent, an opinion of counsel of recognized standing in form and substance satisfactory to the Corporation and the registrar and transfer agent to the effect that such sale is being made in compliance with Rule 904 of Regulation S; and
provided further, that if any of the Common Shares are being sold pursuant to Rule 144 under the U.S. Securities Act and in compliance with any applicable state securities laws, the legend may be removed by delivery to the Corporation's registrar and transfer agent of an opinion satisfactory to the Corporation and its registrar and transfer agent to the effect that the legend is no longer required under applicable requirements of the U.S. Securities Act or applicable state securities laws.
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[Remainder of page intentionally left blank. Signature page follows.]
IN WITNESS WHEREOF the Corporation has caused this Certificate to be signed by a duly authorized officer.
DATED as of December , 2022.
TERRASCEND CORP. |
Per: |
Authorized Signing Officer |
[Signature Page – Second Tranche Warrant Certificate]
SCHEDULE 1
ELECTION TO PURCHASE
TO: TerrAscend Corp.
The undersigned hereby irrevocably elects to exercise the number of Warrants of TerrAscend Corp. for the number of Common Shares (or other property or securities subject thereto) as set forth below:
Payment of Exercise Price
and hereby tenders a certified cheque, bank draft or cash for such aggregate purchase price, and directs such Common Shares to be registered and a certificate therefor, if applicable, to be issued as directed below.
The undersigned represents, warrants and certifies as follows (one (only) of the following must be checked):
� (A) the undersigned holder at the time of exercise of the Warrants (i) is not present in the United States, (ii) is not a U.S. Person (as defined under Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act")), (iii) is not exercising the Warrants on behalf of, or for the account or benefit of, a U.S. Person or a person in the United States, (iv) did not acquire the Warrants in the United States or on behalf of, or for the account or benefit of, a U.S. Person or a person in the United States;
� (B) the undersigned holder
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written opinion of U.S. counsel, in form and substance reasonably satisfactory to the Corporation, or such other evidence reasonably satisfactory to the Corporation to that effect; OR
� (C) the undersigned holder is the original purchaser of the Warrants and (a) purchased the Warrants directly from the Corporation pursuant to the terms and conditions of the Offering; (b) is exercising the Warrants solely for its own account or for the account of the original beneficial owner, if any; (c) each of it and any beneficial owner was on the date the Warrants were purchased from the Corporation, and is on the date of exercise of the Warrants, an "accredited investor" within the meaning of Rule 501(a) under the U.S. Securities Act; and (d) all the representations, warranties and covenants agreed upon or made by the Warrantholder during the purchase of the Warrants from the Corporation continue to be true and correct as if duly executed as of the date hereof; OR
� (D) the undersigned holder is the original purchaser of the Warrants and (a) purchased the Warrants directly from the Corporation pursuant to the terms and conditions of the Offering; (b) is exercising the Warrants solely for its own account or for the account of the original beneficial owner, if any, and for whose account such original purchaser exercises sole investment discretion; (c) each of it and any beneficial owner was on the date the Warrants were purchased from the Corporation, and is on the date of exercise of the Warrants, a "qualified institutional buyer" (as that term is used in Rule 144A of the U.S. Securities Act and is also an "accredited investor" that satisfies one or more of the criteria set forth in Rule 501(a) of Regulation D under the U.S. Securities Act); and (d) all the representations, warranties and covenants agreed upon or made by the Warrantholder, or any beneficial purchaser, as the case may be during the purchase of the Warrants from the Corporation continue to be true and correct as if duly executed as of the date hereof.
The undersigned holder understands that unless Box A or Box D above is checked, the certificate representing the Common Shares may be issued in definitive physical certificated form and bear a legend restricting transfer without registration under the U.S. Securities Act and applicable state securities laws unless an exemption from registration is available (as described in the Warrant Certificate and the subscription documents). If Box B above is checked, holders are encouraged to consult with the Corporation in advance to determine that the legal opinion tendered in connection with the exercise will be satisfactory in form and substance to the Corporation. "U.S. Person" and "United States" are as defined under Regulation S under the U.S. Securities Act.
If Box B or Box C is checked, any certificate representing the Common Shares issuable upon exercise of these Warrants will bear an applicable United States restrictive legend.
The undersigned hereby acknowledges that the undersigned is aware that the Common Shares received on exercise may be subject to restrictions on resale under applicable securities legislation. The undersigned hereby further acknowledges that the Corporation will rely upon the confirmations, acknowledgements and agreements set forth herein, and agrees to notify the Corporation promptly in writing if any of the representations or warranties herein ceases to be accurate or complete.
[Remainder of page intentionally left blank. Signature page follows.]
DATED this day of , 20 .
●
Per: | Address of Registered Holder |
Name of Registered Holder: |
|
SCHEDULE 2
TRANSFER FORM
TO: TerrAscend Corp.
FOR VALUE RECEIVED, the undersigned transferor hereby sells, assigns and transfers unto
(Transferee) |
(Address) |
of the Warrants registered in the name of the undersigned transferor represented by the attached Certificate.
THE UNDERSIGNED TRANSFEROR HERBY CERTIFIES AND DECLARES that the
Warrants are not being offered, sold or transferred to, or for the account or benefit of, a U.S. person (as defined in Rule 902(k) of Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act")) or a person within the United States unless registered under the U.S. Securities Act and any applicable state securities laws or unless an exemption from such registration is available, subject to the requirements for the transfer of the Warrants as set out in the Warrant Certificate.
DATED this day of , .
Signature of Registered Holder (Transferor) |
Print name of Registered Holder |
|
Address |
NOTE: The signature on this transfer form must correspond with the name as recorded on the face of the Certificate in every particular without alteration or enlargement or any change whatsoever or this transfer form must be signed by a duly authorized trustee, executor, administrator, curator, guardian, attorney of the Holder or a duly authorized signing officer in the case of a corporation. If this transfer form is signed by any of the foregoing, or any person acting in a fiduciary or representative capacity, the Certificate must be accompanied by evidence of authority to sign.