Exhibit 5
WARRANTS
TO PURCHASE
COMMON SHARES OF Terrascend CORP.
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Date:
[●]
Warrant
Certificate Number:
[●]–
W – [●]
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Number
of Warrants:
[●]
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THIS
IS TO CERTIFY THAT for value received [Name and address of holder] (the "Warrantholder")
has the right to purchase in respect of each whole warrant (individually, a "Warrant" and, collectively, the
"Warrants") represented by this certificate or by a replacement certificate (in either case, this "Warrant
Certificate"), at any time up to [5:00 p.m.] (Toronto time), on [l]
(the "Expiry Time"), one fully paid and non-assessable common share (individually, a "Common Share"
and, collectively, the "Common Shares" and which terms shall include any shares or other securities to be issued
in addition thereto or in substitution or replacement therefor as provided herein) of TerrAscend Corp. (the "Corporation"),
a corporation existing under the Business Corporations Act (Ontario), as constituted on the date hereof at a purchase price
(the purchase price in effect from time to time being called the "Exercise Price") of US$[l]
per Common Share, subject to adjustment as provided herein.
The Corporation
agrees that the Common Shares purchased pursuant to the exercise of the Warrants shall be and be deemed to be issued to the Warrantholder
as of the close of business on the date on which this Warrant Certificate shall have been surrendered and payment or cashless
exercise made for such Common Shares as aforesaid.
Nothing
contained herein shall confer any right upon the Warrantholder to subscribe for or purchase any Common Shares at any time after
the Expiry Time and from and after the Expiry Time the Warrants and all rights under this Warrant Certificate shall be void and
of no value.
The above
provisions are subject to the following:
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1. |
Exercise:
In the event that the Warrantholder desires to exercise the right to purchase Common
Shares conferred hereby, the Warrantholder shall (a) complete, to the extent possible
in the manner indicated, and execute a subscription form in the form attached as Schedule
"A" to this Warrant Certificate, (b) surrender this Warrant Certificate to
the Corporation in accordance with section 13 of this Warrant Certificate, and (c) unless
electing cashless exercise pursuant to the provisions of this Warrant Certificate, pay
the amount payable upon the exercise of such Warrants in respect of the Common Shares
subscribed for by certified cheque, bank draft or money order in lawful money of Canada
payable to the Corporation or by transmitting same day funds in lawful money of Canada
by wire to such account as the Corporation shall direct the Warrantholder. Upon such
surrender and payment as aforesaid, the Warrantholder shall be deemed for all purposes
to be the holder of record of the number of Common Shares to be so issued and the Warrantholder
shall be entitled to delivery of a certificate or certificates representing such Common
Shares and the Corporation shall cause such certificate or certificates to be delivered
to the Warrantholder at the address specified in the subscription form within three business
days after such surrender and payment as aforesaid. No fractional Common Shares will
be issuable upon any exercise of the Warrants and the Warrantholder will not be entitled
to any cash payment or compensation in lieu of a fractional Common Share. |
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(1) |
U.S.
Registration Restrictions: Neither the Warrants represented by this Warrant Certificate
nor the Common Shares issuable upon exercise hereof have been or will be registered under
the United States Securities Act of 1933, as amended (the “U.S. Securities Act”)
nor under the securities laws of any state of the United States. The Warrants represented
by this Certificate may only be exercised by or on behalf of a holder who, at the time
of exercise, either: |
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(a) |
(i)
is not, and is not exercising the Warrant for the account or benefit of, a U.S. Person
or a person in the United States; |
(ii)
did not execute or deliver the exercise form while in the United States;
(iii)
delivery of the Common Shares will not be to an address in the United States; and
(iv)
has in all other respects complied with the terms of Regulation S of the U.S. Securities Act; or
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(b) |
is
the original subscriber for the Warrants, on its own behalf or on behalf of the original
beneficial purchaser (if any), it and such beneficial purchaser (if any) are “accredited
investors” that satisfy one or more of the criteria set forth in Rule 501(a) of
Regulation D under the U.S. Securities Act, it delivered a United States Accredited Investor
Certificate to the Corporation in connection with the subscription for the Warrants,
and the representations, warranties and covenants made by the undersigned therein are
true and correct on the date of exercise of the Warrants in respect to the exercise of
the Warrants and it represents to the Corporation as such; or |
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(c) |
is
the original subscriber of the Warrants and 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; each of it and
any beneficial owner was on the date the Warrants were received from the Corporation,
and is on the date of exercise of the Warrants, is 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 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
of the date of exercise; or |
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(d) |
is
tendering with the exercise form a written opinion of counsel of recognized standing
in form and substance reasonably satisfactory to the Corporation to the effect that the
Common Shares to be delivered upon exercise of the Warrants have been registered under
the U.S. Securities Act and all applicable state securities laws of the United States
or are exempt from such registration requirements. |
As
used herein, the terms "United States" and "U.S. Person" have the meaning assigned to them in Regulation S
under the U.S. Securities Act.
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(2) |
Restrictive
Legends: All certificates representing Common Shares issued to persons who exercise
the Warrants pursuant to subsections (1)(b) or (1)(c) above on the exercise of the rights
represented by this Warrant Certificate will, unless such Common Shares are registered
under the U.S. Securities Act and the securities laws of all applicable states of the
United States, bear the following legend: |
“THE
securities represented hereby HAVE NOT BEEN REGISTERED, NOR IS THERE ANY INTENTION TO REGISTER SUCH SECURITIES, UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “u.s. SECURITIES ACT”), OR any APPLICABLE STATE SECURITIES LAWS. THEREFORE,
THE SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD, OFFERED, DELIVERED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES UNLESS SUCH SECURITIES HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS
AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE, AND THE HOLDER HAS DELIVERED AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE CORPORATION TO SUCH EFFECT.”
provided
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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3. |
Voting
Support and Lock-Up Restrictive Legend: As at the date hereof, the Warrants are
subject to trading restrictions agreed to by the Warrantholder pursuant to a voting support
and lock-up agreement between the Warrantholder and the Corporation dated August 31,
2021 (the “Lock-up Agreement”). To the extent that the Lock-up Agreement
remains in full force and effect at the time the Warrants are exercised pursuant to subsections
(1)(b) or (1)(c) above, all certificates representing Common Shares issued shall bear
the following legend: |
“THE
securities represented hereby are subject to the restrictions stated in, and are transferable only upon compliance with the provisions
of the Voting Support and Lock-Up Agreement dated August 31, 2021 by and among TerrAscend Corp. and [WARRANTHOLDER NAME] (the
“Lock-Up Agreement”), a copy of which is on file at the principal office of TerrAscend Corp., and the provisions of
which are incorporated herein by reference. Except as set forth in the Lock-Up Agreement, the shares evidenced by this share certificate
may not be sold, transferred, gifted, assigned, conveyed, pledged, hypothecated, subject to a security interest, participation
interest, forward sale, repurchase agreement option or other arrangement or monetization transaction or otherwise disposed of
and/or encumbered and may not be transferred to persons not qualified to be holders of record as provided in the Lock-Up Agreement.”
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4. |
Partial
Exercise: The Warrantholder may from time to time subscribe for and purchase
any lesser number of Common Shares than the number of Common Shares expressed in this
Warrant Certificate. In the event that the Warrantholder subscribes for and purchases
any such lesser number of Common Shares prior to the Expiry Time, the Warrantholder shall
be entitled to receive a replacement certificate representing the unexercised balance
of the Warrants. |
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(1) |
Definitions:
For the purposes of this section 5, unless there is something in the subject matter or
context inconsistent therewith, the words and terms defined below shall have the respective
meanings specified therefor in this subsection 5(1): |
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(a) |
"Canadian
Dollars" means the lawful money of Canada; |
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(b) |
"USD
Equivalent Amount" means on any date with respect to the specified amount of
Canadian Dollars, the U.S. Dollar equivalent amount after giving effect to the conversion
of Canadian Dollars to U.S. Dollars at the Bank of Canada daily average exchange rate
(as quoted or published from time to time by the Bank of Canada) on that date; |
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(2) |
Calculation:
The Warrantholder shall be entitled to elect a “cashless exercise” on the
form attached as Schedule “A” and exchange its warrants to the Corporation
in exchange for the issuance of the number of Common Shares equal to the quotient (if
greater than zero) obtained by dividing [(A-B) (X)] by (A), where: |
X =
the number of Warrants being exercised;
A =
the USD Equivalent Amount of the Current Market Price (as defined in section 8) of one Common Share on the trading day immediately
preceding the date of exercise of such Warrant;
B
= the Exercise Price (as adjusted to the date of such calculation).
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(3) |
Issue
Price: The issue price for each Common Share to be issued pursuant to the cashless
exercise of a Warrant will be equal to (B), as defined above, and the total issue price
for the aggregate number of Common Shares issued pursuant to the cashless exercise of
a Warrant will be paid and satisfied in full by the surrender to the Corporation of such
Warrant. |
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6. |
Not
a Shareholder: The holding of the Warrants shall not constitute the Warrantholder
a shareholder of the Corporation nor entitle the Warrantholder to any right or interest
in respect thereof except as expressly provided in this Warrant Certificate. |
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7. |
Covenants,
Representations and Warranties: |
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(1) |
The
Corporation hereby represents and warrants that: |
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(a) |
The
Corporation is duly authorized and has the corporate and lawful authority to create and
issue the Warrants and the Common Shares issuable upon the exercise hereof and perform
its obligations hereunder. |
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(b) |
The
Corporation hereby further represents and warrants that such Common Shares have been
conditionally approved for listing on the Canadian Securities Exchange (the "CSE"),
subject only to customary deliveries to be made by the Corporation to the CSE (which
deliveries the Corporation covenants and agrees that it will, at its expense, expeditiously
use its best efforts to deliver). |
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(c) |
All
Common Shares which are issued upon the exercise of the right of purchase provided in
this Warrant Certificate, upon payment therefor of the Exercise Price at which such Common
Shares may be purchased pursuant to the provisions of this Warrant Certificate, or upon
cashless exercise in accordance with the terms of this Warrant Certificate, shall be
deemed to be fully paid and non-assessable shares and free from all taxes, liens and
charges with respect to the issue thereof. |
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(d) |
This
Warrant Certificate is a valid and enforceable obligation of the Corporation, enforceable
in accordance with the provisions of this Warrant Certificate. |
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(2) |
The
Corporation hereby covenants and agrees that: |
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(a) |
So
long as any Common Shares evidenced hereby remain outstanding, the Corporation will cause
the Common Shares from time to time subscribed for and purchased in the manner provided
in this Warrant Certificate and the certificate or certificates representing such Common
Shares to be issued and that, at all times prior to the Expiry Time, it has authorized
and will reserve and there will remain unissued a sufficient number of Common Shares
to satisfy the right of purchase provided for in this Warrant Certificate. |
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(b) |
The
Corporation shall use commercially reasonable efforts to preserve and maintain its corporate
existence. |
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(c) |
The
Corporation covenants and agrees that it will, at its expense, expeditiously use commercially
reasonable efforts to obtain the listing of such Common Shares (subject to issue or notice
of issue) on each stock exchange or over-the-counter market on which the Common Shares
may be listed or quoted for trading from time to time, if any; provided the foregoing
shall not, in any manner, preclude the Corporation from pursuing or completing a transaction
that would result in the delisting of the Common Shares from the CSE or ceasing to be
a reporting issuer or the equivalent in each of the Reporting Jurisdictions where the
board of directors of the Corporation, acting in good faith and in accordance with applicable
laws, determines that such a transaction is in the best interests of the Corporation. |
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(d) |
If,
in the opinion of counsel for the Corporation, any prospectus or other filing is required
to be filed with or any permission is required to be obtained from any securities regulatory
body or any other step is required under any federal or provincial law before any Common
Shares which the Warrantholder is entitled to purchase pursuant to the Warrant may properly
and legally be issued upon exercise thereof, the Corporation covenants that it will use
commercially reasonable efforts to take such action. |
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8. |
Anti-Dilution
Protection: |
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(1) |
Definitions:
For the purposes of this section 8 and section 5, unless there is something in the subject
matter or context inconsistent therewith, the words and terms defined below shall have
the respective meanings specified therefor in this subsection 8(1): |
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(a) |
"Adjustment
Period" means the period commencing on the date of issue of the Warrants and
ending at the Expiry Time; |
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(b) |
"Current
Market Price" of the Common Shares at any date means the price per share equal
to the weighted average price at which the Common Shares have traded on the CSE or, if
the Common Shares are not then listed on the CSE, on such other Canadian stock exchange
as may be selected by the directors of the Corporation for such purpose or, if the Common
Shares are not then listed on any Canadian stock exchange, in the over-the-counter market,
during the period of 20 consecutive trading days ending on the third business day before
such date; provided that the weighted average price shall be determined by dividing the
aggregate sale price of all Common Shares sold on the said exchange or market, as the
case may be, during such 20 consecutive trading days by the total number of Common Shares
so sold; and provided further that if the Common Shares are not then listed on any Canadian
stock exchange or quoted for trading in the over the counter market, then the Current
Market Price shall be determined by a firm of independent chartered accountants selected
by the directors of the Corporation; |
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(c) |
"director"
or "director of the Corporation" means a director of the Corporation
for the time being and, unless otherwise specified herein, a reference to action "by
the directors" means action by the directors of the Corporation as a board or, whenever
empowered, action by any committee of the directors of the Corporation; and |
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(d) |
"trading
day" with respect to a stock exchange or over-the-counter market means a day
on which such stock exchange or market is open for business. |
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(2) |
Adjustments:
The Exercise Price and the number of Common Shares issuable to the Warrantholder pursuant
to this Warrant Certificate shall be subject to adjustment from time to time in the events
and in the manner provided as follows: |
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(a) |
If,
at any time during the Adjustment Period, the Corporation shall: |
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(i) |
fix
a record date for the issue of, or issue Common Shares, or securities exchangeable or
exercisable for or convertible into Common Shares to the holders of all or substantially
all of the outstanding Common Shares by way of a stock dividend; |
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(ii) |
fix
a record date for the distribution to, or make a distribution to, the holders of all
or substantially all of the outstanding Common Shares payable in Common Shares or securities
exchangeable or exercisable for or convertible into Common Shares; |
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(iii) |
subdivide,
re-divide or otherwise change the outstanding Common Shares into a greater number of
Common Shares; or |
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(iv) |
reduce,
combine or consolidate the outstanding Common Shares into a lesser number of Common Shares, |
(any
of such events in subclauses 8(2)(a)(i), 8(2)(a)(ii), 8(2)(a)(iii) and 8(2)(a)(iv) above being herein called a "Common
Share Reorganization"), the Exercise Price shall be adjusted on the earlier of the record date on which holders of Common
Shares are determined for the purposes of the Common Share Reorganization and the effective date of the Common Share Reorganization
to the amount determined by multiplying the Exercise Price in effect immediately prior to such record date or effective date,
as the case may be, by a fraction:
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A. |
the
numerator of which shall be the number of Common Shares outstanding on such record date
or effective date, as the case may be, before giving effect to such Common Share Reorganization;
and |
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B. |
the
denominator of which shall be the number of Common Shares which will be outstanding immediately
after giving effect to such Common Share Reorganization (including, in the case of a
distribution of securities exchangeable or exercisable for or convertible into Common
Shares, the number of Common Shares that would have been outstanding had all such securities
been exchanged or exercised for or converted into Common Shares on such effective date
or record date). |
To
the extent that any adjustment in the Exercise Price occurs pursuant to this clause 8(2)(a) as a result of the fixing by the Corporation
of a record date for the distribution of securities exchangeable or exercisable for or convertible into Common Shares, the Exercise
Price shall be readjusted immediately after the expiry of any relevant exchange, exercise or conversion right to the Exercise
Price which would then be in effect based upon the number of Common Shares actually issued and remaining issuable after such expiry
and shall be further readjusted in such manner upon the expiry of any further such right. Any Warrantholder who has not exercised
his right to subscribe for and purchase Common Shares on or prior to the record date of such stock dividend or distribution or
the effective date of such subdivision or consolidation, as the case may be, upon the exercise of such right thereafter shall
be entitled to receive and shall accept in lieu of the number of Common Shares then subscribed for and purchased by such Warrantholder,
at the Exercise Price determined in accordance with this clause 8(2)(a), the aggregate number of Common Shares that such Warrantholder
would have been entitled to receive as a result of such Common Share Reorganization, if, on such record date or effective date,
as the case may be, such Warrantholder had been the holder of record of the number of Common Shares so subscribed for and purchased.
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(b) |
If,
at any time during the Adjustment Period, the Corporation shall fix a record date for
the issue or distribution to the holders of all or substantially all of the outstanding
Common Shares of rights, options or warrants pursuant to which such holders are entitled,
during a period expiring not more than 90 days after the record date for such issue (such
period being the "Rights Period"), to subscribe for or purchase Common
Shares or securities exchangeable or exercisable for or convertible into Common Shares
at a price per share to the holder (or, in the case of securities exchangeable or exercisable
for or convertible into Common Shares, at an exchange, exercise or conversion price per
share) at the date of issue of such securities of less than 95% of the Current Market
Price of the Common Shares on such record date (any of such events being called a "Rights
Offering"), the Exercise Price shall be adjusted effective immediately after
the record date for such Rights Offering to the amount determined by multiplying the
Exercise Price in effect on such record date by a fraction: |
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(i) |
the
numerator of which shall be the aggregate of |
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A. |
the
number of Common Shares outstanding as of the record date for the Rights Offering, and |
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B. |
the
quotient determined by dividing |
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(1) |
either
(a) where the event giving rise to the application of this section 6(2)(b) was the issue
or distribution of rights, options or warrants to the holders of Common Shares under
which such holders are entitled to subscribe for or purchase additional Common Shares,
the product of the maximum number of Common Shares offered during the Rights Period pursuant
to the Rights Offering and the price at which such Common Shares are offered, or (b)
where the event giving rise to the application of this Section 6(2)(b) was the issue
or distribution of rights, options or warrants to the holders of Common Shares under
which such holders are entitled to subscribe for or purchase securities exchangeable
or exercisable for or convertible into Common Shares, the product of the exchange, exercise
or conversion price of the securities so offered and the maximum number of Common Shares
for or into which the securities offered pursuant to the Rights Offering may be exchanged,
exercised or converted, as the case may be, by |
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(2) |
the
Current Market Price of the Common Shares as of the record date for the Rights Offering;
and |
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(ii) |
the
denominator of which shall be the aggregate of the number of Common Shares outstanding
on such record date and the number of Common Shares offered pursuant to the Rights Offering
(including, in the case of the issue or distribution of securities exchangeable or exercisable
for or convertible into Common Shares, the number of Common Shares for or into which
such securities may be exchanged, exercised or converted). |
If,
by the terms of the rights, options or warrants referred to in this clause 8(2)(b), there is more than one purchase, exchange,
exercise or conversion price per Common Share, the aggregate price of the total number of additional Common Shares offered for
subscription or purchase, or the aggregate exchange, exercise or conversion price of the exchangeable, exercisable or convertible
securities so offered, shall be calculated for purposes of the adjustment on the basis of the lowest purchase, exchange, exercise
or conversion price per Common Share, as the case may be. Any Common Shares owned by or held for the account of the Corporation
shall be deemed not to be outstanding for the purpose of any such calculation. To the extent that any adjustment in the Exercise
Price occurs pursuant to this clause 8(2)(b) as a result of the fixing by the Corporation of a record date for the issue or distribution
of rights, options or warrants referred to in this clause 8(2)(b), the Exercise Price shall be readjusted immediately after the
expiry of any relevant exchange, exercise or conversion right to the Exercise Price which would then be in effect based upon the
number of Common Shares actually issued and remaining issuable after such expiry and shall be further readjusted in such manner
upon the expiry of any further such right.
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(c) |
If,
at any time during the Adjustment Period, the Corporation shall fix a record date for
the issue or distribution to the holders of all or substantially all of the outstanding
Common Shares of: |
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(i) |
shares
of the Corporation of any class other than Common Shares; |
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(ii) |
rights,
options or warrants to acquire Common Shares or securities exchangeable or exercisable
for or convertible into Common Shares (other than rights, options or warrants pursuant
to which holders of Common Shares are entitled, during a period expiring not more than
90 days after the record date for such issue, to subscribe for or purchase Common Shares
or securities exchangeable or exercisable for or convertible into Common Shares at a
price per share (or, in the case of securities exchangeable or exercisable for or convertible
into Common Shares, at an exchange, exercise or conversion price per share) on the record
date for the issue of such securities to the holder of at least 95% of the Current Market
Price of the Common Shares on such record date); |
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(iii) |
evidences
of indebtedness of the Corporation; or |
|
(iv) |
any
property or assets of the Corporation; |
and
if such issue or distribution does not constitute a Common Share Reorganization or a Rights Offering (any of such non-excluded
events being herein called a "Special Distribution"), the Exercise Price shall be adjusted effective immediately
after the record date for the Special Distribution to the amount determined by multiplying the Exercise Price in effect on such
record date for the Special Distribution by a fraction:
|
A. |
the
numerator of which shall be the difference between |
|
(1) |
the
product of the number of Common Shares outstanding on such record date and the Current
Market Price of the Common Shares on such record date, and |
|
(2) |
the
aggregate fair market value, as determined by action by nationally or internationally
recognized and independent firm of chartered accountants as may be selected by action
by the directors of the Corporation, and subject to the approval of any stock exchange
on which the Shares may then be listed, where required, to the holders of Common Shares
of the shares, rights, options, warrants, evidences of indebtedness or property or assets
to be issued or distributed in the Special Distribution, and |
|
B. |
the
denominator of which shall be the product obtained by multiplying the number of Common
Shares outstanding on such record date by the Current Market Price of the Common Shares
on such record date. |
Any
Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of such
calculation. To the extent that any adjustment in the Exercise Price occurs pursuant to this clause 8(2)(c) as a result of the
fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants to acquire Common Shares
or securities exchangeable or exercisable for or convertible into Common Shares referred to in this clause 8(2)(c), the Exercise
Price shall be readjusted immediately after the expiry of any relevant exchange, exercise or conversion right to the amount which
would then be in effect based upon the number of Common Shares issued and remaining issuable after such expiry and shall be further
readjusted in such manner upon the expiry of any further such right. To the extent that such Special Distribution is not ultimately
so made, the Exercise Price shall then be readjusted to the Exercise Price which would then be in effect if such record date had
not been fixed.
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(d) |
If,
at any time during the Adjustment Period, there shall occur: |
|
(i) |
a
reclassification or redesignation of the Common Shares, a change of the Common Shares
into other shares or securities or any other capital reorganization involving the Common
Shares other than a Common Share Reorganization; |
|
(ii) |
a
consolidation, amalgamation, arrangement or merger of the Corporation with or into another
body corporate which results in a reclassification or redesignation of the Common Shares
or a change of the Common Shares into other shares or securities; or |
|
(iii) |
the
transfer of the undertaking or assets of the Corporation as an entirety or substantially
as an entirety to another corporation or entity; |
(any
of such events being called a "Capital Reorganization"), after the effective date of the Capital Reorganization,
the Warrants shall remain outstanding and the Warrantholder shall be entitled to receive, upon exercising any of the Warrants
after the effective date of such Capital Reorganization, in lieu of the number of Common Shares to which the Warrantholder was
theretofore entitled upon the exercise of the Warrants, the kind and aggregate number of shares and other securities or property
resulting from the Capital Reorganization which the Warrantholder would have been entitled to receive as a result of the Capital
Reorganization if, on the effective date thereof, the Warrantholder had been the registered holder of the number of Common Shares
which the Warrantholder was theretofore entitled to purchase or receive upon the exercise of the Warrants. If necessary, as a
result of any such Capital Reorganization, appropriate adjustments shall be made in the application of the provisions of this
Warrant Certificate with respect to the rights and interests thereafter of the Warrantholder to the end that the provisions of
this Section 6 shall thereafter correspondingly be made applicable as nearly as may reasonably be possible in relation to any
shares or other securities or property thereafter deliverable upon the exercise of the Warrants and the Corporation or any successor
corporation or entity shall be entitled to deliver a replacement certificate representing the rights and interests of the Warrantholder
as a result of such Capital Reorganization.
|
(e) |
If,
at any time during the Adjustment Period, any adjustment or readjustment in the Exercise
Price shall occur pursuant to the provisions of clause 8(2)(a), 8(2)(b) or 8(2)(c) of
this Warrant Certificate, then the number of Common Shares purchasable upon the subsequent
exercise of the Warrants shall be simultaneously adjusted or readjusted, as the case
may be, by multiplying the number of Common Shares purchasable upon the exercise of the
Warrants immediately prior to such adjustment or readjustment by a fraction which shall
be the reciprocal of the fraction used in the adjustment or readjustment of the Exercise
Price. |
|
(3) |
Rules:
The following rules and procedures shall be applicable to adjustments made pursuant to
subsection 8(2) of this Warrant Certificate: |
|
(a) |
If
any event of the type contemplated by the provisions of this Section 6 but not expressly
provided for by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features) occurs,
then the board of directors of the Corporation shall promptly make an appropriate adjustment
in the Exercise Price and the number of Common Shares issuable upon exercise of this
Warrant so as to protect the rights of the Warrantholder in a manner consistent with
the provisions of this Section 8; provided, that no such adjustment pursuant to this
Section 8 shall increase the Exercise Price or decrease the number of Common Shares issuable
as otherwise determined pursuant to this Section 8. |
|
(b) |
If
more than one subsection of Section 8 is applicable to a single event, the subsection
shall be applied that produces the largest adjustment and no single event shall cause
an adjustment under more than one subsection of Section 8 so as to result in duplication. |
|
(c) |
Subject
to the following clauses of this subsection 8(3), any adjustment made pursuant to subsection
8(2) hereof shall be made successively whenever an event referred to therein shall occur,
and will, in the case of adjustments to the Exercise Price, be computed to the nearest
one-tenth of one cent and will be made successively whenever an event referred to therein
occurs, subject to the following subsections of this Section 8. |
|
(d) |
Notwithstanding
any other provision of subsection 8(2) hereof, no adjustment of the Exercise Price shall
be made which would result in an increase in the Exercise Price or a decrease in the
number of Common Shares issuable upon the exercise of the Warrants (except in respect
of the Common Share Reorganization described in subclause 8(2)(a)(iv) hereof or a Capital
Reorganization described in subclause 8(2)(d)(ii) hereof). |
|
(e) |
No
adjustment in the Exercise Price or in the number or kind of securities purchasable upon
the exercise of the Warrants shall be made in respect of any event described in section
8 hereof if the Warrantholder is entitled to participate in such event on the same terms
mutatis mutandis as if the Warrantholder had exercised the Warrants prior to or
on the record date or effective date, as the case may be, of such event. |
|
(f) |
No
adjustment in the Exercise Price or in the number of Common Shares purchasable upon the
exercise of the Warrants shall be made pursuant to subsection 8(2) hereof in respect
of the issue from time to time of Common Shares pursuant to this Warrant Certificate
or pursuant to any stock option, stock purchase or stock bonus plan in effect from time
to time for directors, officers or employees of the Corporation and any such issue, and
any grant of options in connection therewith, shall be deemed not to be a Common Share
Reorganization, a Rights Offering nor any other event described in subsection 8(2) hereof. |
|
(g) |
If,
at any time during the Adjustment Period, the Corporation shall take any action affecting
the Common Shares, other than an action or event described in subsection 8(2) hereof,
which, in the opinion of the directors of the Corporation, would have a material adverse
effect upon the rights of Warrantholders, either or both the Exercise Price and the number
of Common Shares purchasable upon exercise of the Warrants shall be adjusted in such
manner and at such time by action by the directors of the Corporation, in their sole
discretion, as may be equitable in the circumstances. Failure of the taking of action
by the directors of the Corporation so as to provide for an adjustment prior to the effective
date of any action by the Corporation affecting the Common Shares shall be deemed to
be conclusive evidence that the directors of the Corporation have determined that it
is equitable to make no adjustment in the circumstances. |
|
(h) |
If
the Corporation shall set a record date to determine holders of Common Shares for the
purpose of entitling such holders to receive any dividend or distribution or any subscription
or purchase rights and shall, thereafter and before the distribution to such holders
of any such dividend, distribution or subscription or purchase rights, legally abandon
its plan to pay or deliver such dividend, distribution or subscription or purchase rights,
then no adjustment in the Exercise Price or the number of Common Shares purchasable upon
the exercise of the Warrants shall be required by reason of the setting of such record
date. |
|
(i) |
In
any case in which this Warrant Certificate shall require that an adjustment shall become
effective immediately after a record date for an event referred to in subsection 8(2)
hereof, the Corporation may defer, until the occurrence of such event: |
|
(i) |
issuing
to the Warrantholder, to the extent that the Warrants are exercised after such record
date and before the occurrence of such event, the additional Common Shares or other securities
issuable upon such exercise by reason of the adjustment required by such event; and |
|
(ii) |
delivering
to the Warrantholder any distribution declared with respect to such additional Common
Shares or other securities after such record date and before such event; |
provided,
however, that the Corporation shall deliver to the Warrantholder an appropriate instrument evidencing the right of the Warrantholder
upon the occurrence of the event requiring the adjustment, to an adjustment in the Exercise Price or the number of Common Shares
purchasable upon the exercise of the Warrants and to such distribution declared with respect to any such additional Common Shares
issuable upon the exercise of the Warrants.
|
(j) |
In
the absence of a resolution of the directors of the Corporation fixing a record date
for a Rights Offering, the Corporation shall be deemed to have fixed as the record date
therefor the date of the issue of the rights, options or warrants issued pursuant to
the Rights Offering. |
|
(k) |
If
a dispute shall at any time arise with respect to adjustments of the Exercise Price or
the number of Common Shares purchasable upon the exercise of the Warrants, such disputes
shall be conclusively determined by the auditors of the Corporation or if they are unable
or unwilling to act, by such other firm of independent chartered accountants as may be
selected by the directors of the Corporation and any such determination shall be conclusive
evidence of the correctness of any adjustment made pursuant to subsection 8(2) hereof
and shall be binding upon the Corporation and the Warrantholder. |
|
(l) |
As
a condition precedent to the taking of any action which would require an adjustment pursuant
to subsection 8(2) hereof, including the Exercise Price and the number or class of Common
Shares or other securities which are to be received upon the exercise thereof, the Corporation
shall take any action which may, in the opinion of counsel to the Corporation, be necessary
in order that the Corporation may validly and legally issue as fully paid and non-assessable
shares all of the Common Shares or other securities which the Warrantholder is entitled
to receive in accordance with the provisions of this Warrant Certificate |
|
(m) |
As
promptly as reasonably practicable following any adjustment of the Exercise Price, the
Corporation shall furnish to the Warrantholder a certificate of an executive officer
setting forth in reasonable detail such adjustment and the facts upon which it is based
and certifying the calculation thereof. |
|
(4) |
Notice:
At least 21 days prior to the earlier of the record date or effective date of any event
which requires or might require an adjustment in any of the rights of the Warrantholder
under this Warrant Certificate, including the Exercise Price or the number of Common
Shares which may be purchased under this Warrant Certificate, the Corporation shall deliver
to the Warrantholder a certificate of the Corporation specifying the particulars of such
event and, if determinable, the required adjustment and the calculation of such adjustment.
In case any adjustment for which a notice in this subsection 8(4) has been given is not
then determinable, the Corporation shall promptly after such adjustment is determinable
deliver to the Warrantholder a certificate providing the calculation of such adjustment.
The Corporation hereby covenants and agrees that the register of transfers and share
transfer books for the Common Shares will be open, and that the Corporation will not
take any action which might deprive the Warrantholder of the opportunity of exercising
the rights of subscription contained in this Warrant Certificate, during such 21 day
period. |
|
9. |
Consolidation
and Amalgamation. |
|
(1) |
In
the case of the Corporation entering into a transaction whereby all or substantially
all of its undertaking, property and assets would become the property of any other corporation
and/or its securities exchanged for the securities of another corporation (herein called
a “successor corporation”) whether by way of reorganization, reconstruction,
consolidation, amalgamation, merger, transfer, sale, disposition or otherwise, the successor
corporation shall be bound by all of the provisions hereof including the due and punctual
performance of all covenants of the Corporation and forthwith following the occurrence
of such event, the successor corporation resulting from such reorganization, reconstruction,
consolidation, amalgamation, merger, transfer, sale, disposition or otherwise (if not
the Corporation), shall expressly assume, by supplemental certificate satisfactory in
form to the Warrantholder, acting reasonably, and executed and delivered to the Warrantholder,
the due and punctual performance and observance of this Warrant Certificate to be performed
and observed by the Corporation and these securities and the terms set forth in this
Warrant certificate will be a valid and binding obligation of the successor corporation
entitling the Warrantholder, as against the successor corporation, to all the rights
of the Warrantholder under this Warrant Certificate. |
|
(2) |
Whenever
the conditions of Section 7(1) shall have been duly observed and performed the successor
corporation shall possess, and from time to time may exercise, each and every right and
power of the Corporation under this Warrant Certificate in the name of the Corporation
or otherwise and any act or proceeding by any provision hereof required to be done or
performed by any director or officer of the Corporation may be done and performed with
like force and effect by the like directors or officers of the successor corporation. |
|
10. |
No
Obligation to Purchase. Nothing herein contained or done pursuant hereto shall
obligate the Warrantholder to purchase or pay for or the Corporation to issue any Common
Shares except those Common Shares in respect of which the Warrantholder shall have exercised
its right to purchase in the manner provided hereunder. |
|
11. |
Change;
Waiver. Subject to the approval of the Canadian Securities Exchange (or such
other stock exchange on which the Common Shares are listed or posted for trading), the
provisions of these Warrants may from time to time be amended, modified or waived, if
such amendment, modification or waiver is in writing and consented to in writing by the
Corporation and the Warrantholder. |
|
12. |
Further
Assurances: The Corporation hereby covenants and agrees that it will do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, all
and every such other act, deed and assurance as the Warrantholder shall reasonably require
for the better accomplishing and effectuating of the intentions and provisions of this
Warrant Certificate. |
|
13. |
Time
of Essence: Time shall be of the essence of this Warrant Certificate. |
|
14. |
Governing
Laws: This Warrant Certificate shall be construed in accordance with the laws
of the Province of Ontario and the federal laws of Canada applicable therein. |
|
15. |
Notices:
All notices or other communications to be given under this Warrant Certificate shall
be delivered by hand, courier, ordinary prepaid mail, facsimile or by electronic transmission
and, if delivered by hand, shall be deemed to have been given on the delivery date, if
delivered by ordinary prepaid mail shall be deemed to have been given on the fifth day
following the delivery date and, if sent by facsimile or electronic transmission, on
the date of transmission if sent before 5:00 p.m., Toronto time, on a business day or,
if sent after 5:00 p.m., Toronto time, or such day is not a business day, on the first
business day following the date of transmission. |
Notices
to the Corporation shall be addressed to:
TerrAscend
Corp.
P. O.
Box 43125
Mississauga,
Ontario, Canada
L5B
4A7
| Attention: |
General Counsel |
| Email: |
legal@terrascend.com |
with
a copy (which shall not constitute notice) to:
Norton
Rose Fulbright Canada LLP
222
Bay Street – Suite 3000
P.O.
Box 53
Toronto,
Ontario, M5K 1E7
| Attention: |
Andrea Brewer |
| Email: |
andrea.brewer@nortonrosefulbright.com |
Notices
to the Warrantholder shall be addressed to the address of the Warrantholder set out on the face page of this Warrant Certificate.
The
Corporation and the Warrantholder may change its address for service by notice in writing to the other of them specifying its
new address for service under this Warrant Certificate.
|
16. |
Lost
Certificate: If this Warrant Certificate or any replacement hereof becomes stolen,
lost, mutilated or destroyed, the Corporation shall, on such terms as it may in its discretion
impose, acting reasonably, issue and deliver a new certificate, in form identical hereto
but with appropriate changes, representing any unexercised portion of the subscription
rights represented hereby to replace the certificate so stolen, lost, mutilated or destroyed. |
|
17. |
Language:
The parties hereto acknowledge and confirm that they have requested that this Warrant
Certificate as well as all notices and other documents contemplated hereby be drawn up
in the English language. Les parties aux présentes reconnaissent et confirment
qu'elles ont exigé que la présente convention ainsi que tous les avis et
documents qui s'y rattachent soient rédigés en langue anglaise. |
|
18. |
Non-Transferable:
The Warrants evidenced hereby (or any portion thereof) may not be assigned or transferred
by the Warrantholder. |
|
19. |
Successors
and Assigns: This Warrant Certificate shall enure to the benefit of the Warrantholder
and the successors and assignees thereof and shall be binding upon the Corporation and
the successors thereof. |
|
20. |
United
States Dollars: All references herein to monetary amounts are references to lawful
money of the United States of America (“U.S. Dollars” or “US$”). |
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF
the Corporation has caused this Warrant Certificate to be signed by its duly authorized officer as of the _____ day of _______________,
20__.
| |
TERRASCEND
CORP. |
| |
|
|
|
By: |
|
| |
|
Authorized
Officer |
SCHEDULE "A"
SUBSCRIPTION
FORM
The undersigned
hereby subscribes for _______________ common shares ("Common Shares") of TerrAscend Corp. (the "Corporation")
(or such other number of Common Shares or other securities to which such subscription entitles the undersigned in lieu thereof
or in addition thereto pursuant to the provisions of the warrant certificate (the "Warrant Certificate") dated
[●] issued by the Corporation) at the purchase price of US$[l]
per Common Share (or at such other purchase price as may be in effect under the provisions of the Warrant Certificate)
and on and subject to the other terms and conditions specified in the Warrant Certificate and hereunder as follows (please check
ONE applicable box):
| This subscription form is accompanied
by a certified cheque, bank draft or money order in lawful money of Canada payable to the Corporation or has transmitted same
day funds by wire to such account as the Corporation directed the undersigned in payment of the subscription price. |
|
o |
|
| |
|
|
|
| OR |
|
|
|
| |
|
|
|
| The Warrants are being exercised pursuant
to the cashless exercise provisions set forth in Section 4 of the Warrant Certificate. |
|
o |
|
The undersigned
hereby represents and warrants to the Corporation that the undersigned (check one):
|
o |
1.
at the time of exercise of these warrants (i) is not in the United States; (ii) is not
a U.S. Person as defined in Regulation S under the U.S. Securities Act of 1933, as amended
(the "U.S. Securities Act"); (iii) is not exercising these warrants
on behalf of, or for the account of, a U.S. Person or a person in the United States;
(iv) did not acquire these 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; (v) did not execute
or deliver this exercise form in the United States; (vi) is not requesting delivery in
the United States of the Common Shares issuable upon such exercise; and (vii) represents
and warrants that the exercise of these warrants and acquisition of the Common Shares
occurred in an “offshore transaction” (as defined in Regulation S under the
U.S. Securities Act); OR |
(A)
(i) present in the United States, (ii) a U.S. Person, (iii) a person exercising these warrants for the account or benefit of a
U.S. Person or a person in the United States, or (iv) requesting delivery in the United States of the Common Shares issuable upon
such exercise; and
(B)
the undersigned has an exemption from the registration requirements of the U.S. Securities Act and all applicable state securities
laws available for the exercise of these warrants, and has delivered to the Corporation a 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
|
o |
3.
is the original purchaser of these warrants and (a) purchased these warrants directly
from the Corporation pursuant to the terms and conditions of a subscription agreement
for the purchase of units from the Corporation; (b) is exercising these 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 these warrants were purchased from
the Corporation, and is on the date of exercise of these 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 undersigned
during the purchase of these warrants from the Corporation continue to be true and correct
as if duly executed as of the date thereof; OR |
|
o |
4.
is the original purchaser of these warrants and (a) purchased these warrants directly
from the Corporation pursuant to the terms and conditions of a subscription agreement
for the purchase of units from the Corporation; (b) is exercising these 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 direction; (c) each
of it and any beneficial owner was on the date these warrants were purchased from the
Corporation, and is on the date of exercise of these 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 undersigned, or any beneficial purchaser,
as the case may be during the purchase of these warrants from the Corporation continue
to be true and correct as if duly executed as of the date thereof. |
“United
States” and “U.S. Person” are as defined in Regulation S under the U.S. Securities Act.
The undersigned
holder understands that unless Box 1 or 4 above is checked, the certificate representing the Common Shares issued upon exercise
of the warrants represented by this Warrant Certificate will 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 2 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.
If Box 2 or
Box 3 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 directs that the Common Shares subscribed for be registered and delivered as follows:
| Name
in Full |
Address |
Number
of Common Shares |
| |
|
|
|
|
|
|
DATED
this _____ day of _______________, 20_____.