Unit Purchase Agreement
This Unit Purchase Agreement (this “Agreement”) is entered into effective as of January 19, 2024 (the “Effective Date”), and is made by and between WDB Holding CA, Inc., a Delaware corporation (the “Buyer”) and _____________ (the “Seller”).
RECITALS
Now, therefore, in consideration of the foregoing statements and the mutual promises made in this Agreement and for other valuable consideration, it is hereby agreed as follows:
AGREEMENT
At each Determination Date, if the aggregate value of the Determination Value is less than the amount due under this agreement to such Seller (the “Minimum Proceeds”), then the Buyer Parent shall issue to the Seller an amount of common shares of Buyer Parent (“Additional Seller Shares") equal to the difference, if greater than zero, of the Minimum Proceeds minus the Determination Value, based on the trailing 20-day VWAP as of the Trading Day prior to the issuance date of the Additional Seller Shares, subject to the approval of the Toronto Stock Exchange, which approval Buyer shall diligently pursue. The Determination Dates shall occur on the 6 month, 12 month, 18 month and 24 month anniversary of the Effective Date (each a “Determination Date” and collectively, the “Determination Dates”).
A Seller requesting the issuance of Additional Seller Shares shall provide the written notice required by this section to Buyer on or before the 35th day following the applicable Determination Date, in which the Seller shall include the Seller’s calculation of the value of the Additional Seller Shares requested, the issuance price for the TA Shares sold, the sale price for the TA Shares sold, the number of all TA Shares sold, the issuance price for any Additional Seller Shares sold, the sale price for any Additional Seller Shares sold, the number of Additional Seller Shares sold, and a certification by the Seller attesting to the accuracy of the information provided to the best of the Seller’s knowledge without investigation (collectively, the "Seller's Notice").
Buyer shall deliver a response to the Seller's Notice within 7 days following receipt of the Seller’s Notice (the “Buyer's Response Date”) notifying the Seller that it either accepts or rejects the Seller’s determination that Additional Seller Shares are required to be issued and the value of the Additional Seller Shares (“Buyer’s Response”) as set forth in the Seller's Notice and specifying with reasonable particularity the information required to complete the Seller's Notice. If additional supporting evidence is reasonably required to validate the Seller’s calculation of the value of the Additional Seller Shares to be issued, then the Seller shall provide the reasonably requested information within 5 days of receipt of the Buyer's Response. The parties shall have 30 days from the Buyer's Response Date to negotiate in good faith and agree upon the value of the Additional Seller Shares, if any, to be issued for that Determination Date. If the parties cannot so agree within those 30 days, then the parties shall appoint an independent accounting firm or a qualified and independent firm, to render a final determination regarding the value of the Additional Seller Shares, if any, to be issued for that Determination Date (the "Independent Determination"). The Independent Determination shall be final and binding upon the parties and the value of the Seller Additional Shares contained therein shall be issued within 21 days of the Independent Determination date. Each party shall bear one-half of the Independent Determination fee and shall bear its own attorneys’ fees and other costs incurred in connection therewith; however, if the Independent Determination is within 15% of either the Seller’s or the Buyer’s determination, then that party, as the substantially prevailing party, shall be reimbursed by the other party for its reasonable legal fees and costs associated with the Independent Determination (including fees paid for the Independent Determination). If the Buyer accepts the Seller’s calculation of the value of the Additional Seller Shares, or if Buyer fails to timely respond to Seller’s notice, then the value of the Additional Seller Shares as set forth on the Seller’s notice shall be issued within 21 days of the Response Date.
By way of example and not limitation, if (i) the Minimum Proceeds are $100,000, and (ii) Sellers transfer twenty percent (20%) of the TA Shares by the 12 month Determination Date for gross proceeds of $16,000, and (iii) at the 6-month Determination Date, the Buyer issued $1,000 of Additional Seller Shares which the Seller currently owns, and (iv) the Seller has sold none of the Additional Seller Shares issued and (v) the remaining TA Shares have a market value of $70,000, then (vi) Buyer Parent shall issue Seller the number of Additional Seller Shares that equal $13,000 [ie. (vi) = (i) – (ii) – (iii) – (iv) – (v)].
[(vi)=(i) – (ii) – (iii) – (iv) – (v)]
(i)= 100,000 = Minimum Proceeds
(ii)= $16,000 = (Number TA Shares Sold x Price Sold)
(iii)= $1,000 = (Number of Additional Shares from the 6-month Determination Date Issuance currently held by the Seller x 20-day VWAP)
(iv)=$0 = (Number of Additional Seller Shares issued at the 6-month Determination Date sold x Price Sold)
(v)= $70,000 = (Number of TA Share currently held by the Seller x 20-day VWAP)
(vi)= $13,000 = ($13,000 of Additional Shares would be issued based on a 20-day VWAP)
($100,000)-($16,000)-($70,000)-($1,000)-($0)= $13,000 -> $13,000 worth of shares would
be issued based on a 20-VWAP as of the Trading Day prior to the issuance date of the Additional Seller Shares.
Nothing in this Agreement shall be interpreted to require any Seller to transfer any Shares concurrently with any other Seller or party or upon the happening of any event. For clarity, Price Protection may be sought by one Seller without requiring another Seller to exercise their Price Protection rights.
[signature pages follow]
IN WITNESS WHEREOF, the parties hereto have executed this Unit Purchase Agreement effective as of the Effective Date.
BUYER: WDB HOLDING CA, INC. SELLER: _____________________
By: By:
Appendix A
ASSIGNMENT
For value received, ___________ (“Assignor”) hereby assigns and transfers unto (“Buyer”) __________ Preferred Units of _____________ (the “Company”), registered in Assignor’s name on the books of the Company, and does hereby irrevocably constitute and appoint the secretary of the Company to transfer the said stock on the books of the Company with full power of substitution in the premises.
Dated:
___________________________
ASSIGNOR
Schedule I
Entity Name | Seller | Buyer | Number of Preferred Units Purchased | Aggregate Purchase Price |
Deep Thought, LLC | Anthony and Jamie Shira | WDB Holding CA, Inc.* | 9.1482 | $225,184.68 |
Deep Thought, LLC | Arion Luce | WDB Holding CA, Inc.* | 12.4499 | $306,456.65 |
Deep Thought, LLC | Michael Thomsen | WDB Holding CA, Inc.* | 13.9729 | $343,945.58 |
Deep Thought, LLC | Ryan Hudson | WDB Holding CA, Inc.* | 14.529 | $357,634.09 |
Howard Street Partners, LLC | Anthony and Jamie Shira | WDB Holding CA, Inc.* | 9.1482 | $225,184.68 |
Howard Street Partners, LLC | Arion Luce | WDB Holding CA, Inc.* | 12.4499 | $306,456.65 |
Howard Street Partners, LLC | Michael Thomsen | WDB Holding CA, Inc.* | 13.9729 | $343,945.58 |
Howard Street Partners, LLC | Ryan Hudson | WDB Holding CA, Inc.* | 14.529 | $357,634.09 |
RHMT, LLC | Anthony and Jamie Shira | WDB Holding CA, Inc.* | 9.1482 | $225,184.68 |
RHMT, LLC | Arion Luce | WDB Holding CA, Inc.* | 12.4499 | $306,456.65 |
RHMT, LLC | Michael Thomsen | WDB Holding CA, Inc.* | 13.9729 | $343,945.58 |
RHMT, LLC | Ryan Hudson | WDB Holding CA, Inc.* | 14.529 | $357,634.09 |
*A Delaware corporation wholly-owned by TerrAscend Corp.