Full Press Release Details
[Certain portions of this exhibit have been redacted as they are both not material and are of the type of
information that the Company treats as private or confidential. The Company agrees to furnish
supplementally an unredacted copy of the exhibit to the SEC upon its request.]
UNDERWRITING AGREEMENT
Organigram Holdings Inc.
1400-145 King Street West
Toronto, Ontario M5H 1J8
Attention: Beena G. Goldenberg, Chief Executive Officer
Based on and subject to the terms and conditions set out in this Agreement (as defined herein), ATB Securities Inc. (the "Lead Underwriter") and A.G.P. Canada Investments ULC (collectively with the Lead Underwriter, the "Underwriters") hereby offer to purchase on an underwritten basis, severally and not jointly, in their respective proportions set out in Section 16 of this Agreement, from Organigram Holdings Inc. (the "Corporation"), and the Corporation hereby agrees to sell to the Underwriters on the Closing Date (as defined herein), 7,740,000 units of the Corporation (the "Offered Units"), at a price of $3.23 per Offered Unit (the "Offering Price"), for aggregate gross proceeds to the Corporation of $25,000,200. Each Offered Unit shall consist of one Common Share (as defined herein) (each a "Unit Share") and one-half of one Common Share purchase warrant (each whole Common Share purchase warrant, a "Warrant"). The Warrants will be issued on the Closing Date pursuant to a warrant indenture to be dated as of the Closing Date between TSX Trust Company (the "Warrant Agent") and the Corporation (the "Warrant Indenture"). Each Warrant will entitle the holder to purchase one Common Share (a "Warrant Share") at a price of $3.65 until the date that is 48 months following the Closing Date.
In addition, the Corporation hereby grants an option (the "Over-Allotment Option") to the Underwriters entitling the Underwriters to purchase from the Corporation, on and subject to the terms and conditions contained herein, in whole or in part at any time, until 11:59 p.m. (Toronto time) on the 30th day following the Closing Date, up to 1,161,000 additional Offered Units (the "Additional Units") at the Offering Price for additional gross proceeds of up to $3,750,030. If the Lead Underwriter, on behalf of the Underwriters, elects to exercise such Over-Allotment Option, in whole or in part, the Lead Underwriter shall notify the Corporation in writing, which notice shall specify the number of Additional Units to be purchased by the Underwriters and the date or dates (each, an "Option Closing Date") on which such securities are to be purchased. The Option Closing Date may be the same as the Closing Date but not earlier than the later of (i) the Closing Date and (ii) two Business Days (as defined herein) after the date of receipt by the Corporation of such notice. Additional Units may be purchased solely for the purpose of covering over-allotments and for market stabilization purposes. If any Additional Units are purchased, each Underwriter agrees, severally and not jointly, to purchase the percentage of such securities equal to the percentage set out opposite the name of such Underwriter in Section 16 of this Agreement.
Unless otherwise specifically referenced or unless the context otherwise requires, the Offered Units and the Additional Units are collectively referred to herein as the "Offered Securities", all references to "Offered Units" herein shall include the Additional Units, all references to "Unit Shares" herein shall include the Common Shares comprising the Additional Units, all references to "Warrants" herein shall include the Warrants comprising the Additional Units and the offering of the Offered Securities by the Corporation is hereinafter referred to as the "Offering".
The Offered Units may be distributed to Purchasers (as defined herein) resident in: (i) each of the provinces and territories of Canada (other than Qu bec) (the "Canadian Qualifying Jurisdictions") pursuant to the Canadian Prospectus (as defined herein); (ii) the United States (as defined herein) in a public offering pursuant to the Registration Statement (as defined herein) and the U.S. Prospectus (as defined herein); and (iii) jurisdictions other than the Canadian Qualifying Jurisdictions and the United States as may be mutually agreed by the Corporation and the Lead Underwriter, provided that the Offered Units may lawfully be sold in such jurisdictions on a basis exempt from the prospectus, registration and similar requirements of any such jurisdictions (collectively with the Canadian Qualifying Jurisdictions and the United States, the "Selling Jurisdictions").
The Corporation has prepared and filed with the securities regulatory authorities in each of the provinces and territories of Canada (the "Canadian Securities Regulators") a preliminary short form base shelf prospectus dated September 25, 2023 (together with the documents incorporated by reference therein and any supplements or amendments thereto, the "Canadian Preliminary Base Shelf Prospectus") and a (final) short form base shelf prospectus dated October 6, 2023 (together with the documents incorporated by reference therein and any supplements or amendments thereto, the "Canadian Final Base Shelf Prospectus") in respect of the offering of Common Shares, debt securities, subscription receipts, warrants or units comprised of one or more of the other securities, in one or more offerings from time to time, for an aggregate offering price of up to $500,000,000 (or the equivalent thereof in other currencies), omitting the Shelf Information (as defined herein) in accordance with the Shelf Procedures (as defined herein).
The Corporation has also prepared and filed with the United States Securities and Exchange Commission (the "SEC") pursuant to the Canada/United States Multi-Jurisdictional Disclosure System adopted by the Canadian Securities Regulators and the SEC, a registration statement on Form F-10/A (File No. 333-274686) for the registration of the Offering under the U.S. Securities Act (as defined herein) including the Canadian Preliminary Base Shelf Prospectus with such changes thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the SEC. Such prospectus used in the United States, including the documents incorporated by reference therein and any supplements or amendments thereto, is herein called the "U.S. Preliminary Base Shelf Prospectus"; and such registration statement on Form F-10/A, including the U.S. Preliminary Base Shelf Prospectus, is herein called the "Initial Registration Statement". The Corporation has also prepared and filed with the SEC an Appointment of Agent for Service of Process and Undertaking on Form F-X (the "Form F-X") that was filed concurrently with the Initial Registration Statement. In addition, the Corporation has prepared and filed with the SEC an amendment to the Initial Registration Statement to include the Canadian Final Base Shelf Prospectus (with such changes thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the SEC) omitting the Shelf Information, such most recently filed prospectus being referred to herein as the "U.S. Final Base Shelf Prospectus", and which such amendment to the Initial Registration Statement containing the U.S. Final Base Shelf Prospectus was declared effective by the SEC pursuant to Rule 467(b) ("Rule 467(b)") under the U.S. Securities Act on November 29, 2023 (as so amended, and including the exhibits thereto and the documents incorporated by reference therein, the "Registration Statement").
The Corporation will prepare and file, concurrently with the execution of this Agreement: (i) with the Canadian Securities Regulators, in accordance with the Shelf Procedures, a prospectus supplement relating to the Offering setting forth the Shelf Information (including as the context may require any documents incorporated therein by reference and any supplements or amendments thereto, the "Canadian Prospectus Supplement"), and (ii) with the SEC as a prospectus supplement to the U.S. Final Base Shelf Prospectus, and including the Canadian Prospectus Supplement (with such changes thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the SEC) (the "U.S. Prospectus Supplement").
The Underwriters shall be entitled (but not obligated) to appoint a soliciting dealer group consisting of other registered dealers for the purposes of arranging for purchases of the Offered Units. The Underwriters shall ensure that any investment dealer who is a member of any soliciting dealer group formed by the Underwriters pursuant to the provisions of this Agreement or with whom any Underwriter has a contractual relationship with respect to the Offering (each, a "Selling Firm"), if any, agrees with such Underwriter to comply with the covenants and obligations given by the Underwriters herein.
In consideration of the Underwriters' services to be rendered in connection with the Offering, the Corporation shall pay to the Underwriters at Closing (as defined herein) and any Over-Allotment Closing (as defined herein) a cash commission (the "Commission") equal to 4.75% of the gross proceeds realized by the Corporation from the Offering (including any gross proceeds from the sale of the Additional Units). The Lead Underwriter will be entitled to a work fee (the "Work Fee") which shall be calculated as 5.0% of the Commission and extracted from the Commission. For avoidance of doubt, the Corporation shall not be liable to pay any amount of such Work Fee (apart from any obligation hereunder to pay the Commission from which the Work Fee is to be extracted.
"Additional Units" has the meaning ascribed thereto in the second paragraph of this Agreement;
"affiliate", "associate", "distribution", "material change", "material fact" and "misrepresentation" have the respective meanings ascribed thereto in the Securities Act (Ontario);
"Agreement" means the agreement resulting from the acceptance by the Corporation of the offer made hereby;
"Annual Financial Statements" means the audited consolidated financial statements of the Corporation for the thirteen months ended September 30, 2023 and the year ended August 31, 2022;
"Applicable IP Laws" means all applicable federal, provincial, state and local laws and regulations applicable to Intellectual Property in Canada, the United States and the jurisdictions in which the Corporation and/or the Subsidiaries has registered Intellectual Property;
"Applicable Securities Laws" means Canadian Securities Laws and U.S. Securities Laws;
"Applicable Time" means 5:30 p.m. (Toronto time) on the date hereof;
"Business Day" means a day on which the major banks are open in Toronto, Ontario and which is not a Saturday, a Sunday or a statutory or civic holiday in Toronto, Ontario;
"Canadian Final Base Shelf Prospectus" has the meaning ascribed thereto in the fifth paragraph of this Agreement;
"Canadian Offering Documents" means the Canadian Final Base Shelf Prospectus, the Canadian Prospectus Supplement and any Prospectus Amendment that is filed with the Canadian Securities Regulators, including, for greater certainty, the Documents Incorporated by Reference as the context may require;
"Canadian Preliminary Base Shelf Prospectus" has the meaning ascribed thereto in the fifth paragraph of this Agreement;
"Canadian Prospectus" means the Canadian Prospectus Supplement, together with the Canadian Final Base Shelf Prospectus, including, for greater certainty, the Documents Incorporated by Reference as the context may require and any supplements thereto;
"Canadian Prospectus Supplement" has the meaning ascribed thereto in the seventh paragraph of this Agreement;
"Canadian Qualifying Jurisdictions" has the meaning ascribed thereto in the fourth paragraph of this Agreement;
"Canadian Securities Laws" means, collectively, all applicable securities laws, regulations, rules, rulings and orders in each of the Canadian Qualifying Jurisdictions together with applicable published policy statements, notices, orders, blanket rulings and other regulatory instruments of the Canadian Securities Regulators in the Canadian Qualifying Jurisdictions;
"Canadian Securities Regulators" has the meaning ascribed thereto in the fifth paragraph of this Agreement;
"Cannabis Regulations" means the regulations made under the Cannabis Act (Canada);
"CBCA" means the Canada Business Corporations Act;
"CDD Rule" has the meaning ascribed thereto in subsection 1(q);
"CIPO" means the Canadian Intellectual Property Office;
"Claims" has the meaning ascribed thereto in Section 13;
"Closing" means the completion of the issue and sale by the Corporation on the Closing Date of the Offered Units as contemplated by this Agreement;
"Closing Date" means April 2, 2024 or such other date as the Corporation and the Lead Underwriter may agree upon in writing;
"Closing Time" means 8:00 a.m. (Toronto time) on the Closing Date or such other time on the Closing Date as the Corporation and the Lead Underwriter may agree upon in writing;
"Commission" has the meaning ascribed thereto in the nineth paragraph of this Agreement;
"Common Shares" means the common shares in the capital of the Corporation;
"comparables" has the meaning ascribed thereto in NI 44-101;
"Continuing Underwriters" has the meaning ascribed thereto in Section 16;
"Corporation" has the meaning ascribed thereto in the first paragraph of this Agreement;
"Corporation IP" means the Intellectual Property that has been developed by or for or is being developed by or for the Corporation and/or a Subsidiary or that is being used by the Corporation and/or a Subsidiary, other than Licensed IP;
"Corporation's Auditors" means such firm of chartered accountants as the Corporation may have appointed or may from time to time appoint as auditors of the Corporation;
"Disclosure Record" means, collectively, all of the documents that have been filed by or on behalf of the Corporation with the relevant securities regulatory authorities pursuant to the requirements of Applicable Securities Laws, including all material change reports (excluding any confidential material change reports), annual information forms, management information circulars, business acquisition reports, marketing materials, press releases, financial statements and management's discussion and analysis of the Corporation;
"Documents Incorporated by Reference" means all financial statements, management's discussion and analysis, management information circulars, annual information forms, material change reports, business acquisition reports, marketing materials or other documents filed by the Corporation on SEDAR+ and/or EDGAR, whether before or after the date of this Agreement, that are incorporated by reference, or deemed to be incorporated by reference, into the Prospectuses, the Prospectus Supplements, the Time of Sale Prospectus and the Registration Statement, as the case may be, (and for these purposes references to the Prospectuses, the Prospectus Supplements, the Time of Sale Prospectus and the Registration Statement shall be read to include the Documents Incorporated by Reference therein);
"EDGAR" means the system for Electronic Data Gathering, Analysis and Retrieval maintained by the SEC;
"Effective Date" means the date on which the latest amendment to the Registration Statement that was declared effective by the SEC pursuant to Rule 467(b);
"Eligible Issuer" means an issuer that meets the criteria and has complied with the requirements of NI 44-101 so as to allow it to offer its securities using a short form prospectus;
"Enforceability Qualifications" means (a) bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting the rights of creditors generally, (b) the application of equitable principles when equitable remedies are sought, including the remedies of specific performance and injunctive relief, (c) applicable laws limiting rights to indemnity, contribution, waiver, and the ability to sever unenforceable terms, and (d) the opinion of the SEC that indemnification for liabilities under the U.S. Securities Act is against public policy and therefore unenforceable, as set forth in Part II of Form F-10;
"Engagement Letter" means the engagement letter dated March 26, 2024, between the Corporation and the Lead Underwriter relating to the Offering;
"Environmental Laws" has the meaning ascribed thereto in subsection 5(ii);
"FDA" means the U.S. Food and Drug Administration of the U.S. Department of Health & Human Services;
"Final Passport System Decision Document" means the receipt issued by the Ontario Securities Commission (in its capacity as principal regulator under the Passport System) evidencing that final receipts of the Canadian Securities Regulators have been issued in respect of the Canadian Final Base Shelf Prospectus;
"Financial Statements" means, collectively, the Annual Financial Statements and the Interim Financial Statements;
"FinCEN" has the meaning ascribed thereto in subsection 1(q);
"FINRA" means the Financial Industry Regulatory Authority, Inc.;
"Form F-X" has the meaning ascribed thereto in the sixth paragraph of this Agreement;
"free writing prospectus" has the meaning set forth in Rule 405 under the U.S. Securities Act;
"Governmental Authority" means any (a) multinational, federal, national, provincial, state, regional, municipal, local or other government, governmental or public department, ministry, central bank, court, tribunal, arbitral body, bureau or agency, (b) any subdivision, agent, commission, board, or authority of any of the foregoing, or (c) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing, and any stock exchange or self-regulatory authority and, for greater certainty, includes the FDA, the Canadian Securities Regulators, the SEC and FINRA;
"IFRS" means International Financial Reporting Standards, which are issued by the International Accounting Standards Board, as adopted in Canada;
"Indemnified Party" or "Indemnified Parties" has the meaning ascribed thereto in Section 13;
"Initial Registration Statement" has the meaning ascribed thereto in the sixth paragraph of this Agreement;
"Intellectual Property" means intellectual property rights, including: (i) all inventions, patents and patent applications, including all continuations, continuations-in-part, divisionals, provisionals, non-provisionals, re-examinations, re-issues and extensions, and all improvements and modifications thereto, regardless of the jurisdiction in which the rights are registered, applied for or used ("Patents"); (ii) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans, industrial designs and Internet domain names, including all registrations, applications and renewals for any of the foregoing, together with all goodwill associated with each of the foregoing; (iii) copyrights and copyrightable works in whatever form or medium, including all registrations, applications and renewals for any of the foregoing; (iv) proprietary computer software (including source and object code, data, data bases and documentation); and (v) trade secrets, confidential information and know-how;
"Interim Financial Statements" means the interim consolidated financial statements of the Corporation for the three months ended December 31, 2023;
"knowledge of the Corporation" (or similar phrases) means, with respect to the Corporation, the knowledge of its directors and officers after due and diligent inquiry;
"Lead Underwriter" has the meaning ascribed thereto in the first paragraph of this Agreement;
"Leased Premises" has the meaning ascribed thereto in subsection 5(z);
"Licences" has the meaning ascribed thereto in subsection 5(nn);
"Licensed IP" means the Intellectual Property owned by any person other than the Corporation and the Subsidiaries and which the Corporation and/or a Subsidiary uses;
"March 26 Term Sheet" means the term sheet dated March 26, 2024 relating to the Offering and filed on SEDAR+;
"March 27 Term Sheet" means the term sheet dated March 27, 2024 relating to the Offering and filed on SEDAR+;
"marketing materials" has the meaning ascribed thereto in NI 41-101;
"Material Adverse Effect" means any change, effect, event, occurrence or change in a state of facts that is, or would reasonably be expected to be, individually or in the aggregate, material and adverse to the business, operations, financial condition, results, assets, properties, rights, liabilities or prospects of the Corporation and the Subsidiaries (taken as a whole) or that is or is reasonably likely to be materially adverse to the completion of the transactions contemplated by this Agreement;
"Material Agreement" means any material mortgage, note, indenture, contract, agreement (written or oral), instrument, lease or other document to which the Corporation or a Subsidiary is a party or by which the Corporation, a Subsidiary or a material portion of the assets of the Corporation or a Subsidiary is bound;
"Material Subsidiary" means Organigram Inc.;
"MI 11-102" means Multilateral Instrument 11-102 - Passport System;
"Money Laundering Laws" has the meaning ascribed thereto in subsection 5(qqq);
"NASDAQ" means The NASDAQ Stock Market LLC;
"NI 41-101" means National Instrument 41-101 - General Prospectus Requirements;
"NI 44-101" means National Instrument 44-101 - Short Form Prospectus Distributions;
"NI 44-102" means National Instrument 44-102 - Shelf Distributions;
"Notice" has the meaning ascribed thereto in Section 23;
"NP 11-202" means National Policy 11-202 - Process for Prospectus Reviews in Multiple Jurisdictions and its related memorandum of understanding;
"OFAC" has the meaning ascribed thereto in subsection 5(sss);
"Offered Securities" has the meaning ascribed thereto in the third paragraph of this Agreement;
"Offered Units" has the meaning ascribed thereto in the first paragraph of this Agreement;
"Offering" has the meaning ascribed thereto in the third paragraph of this Agreement;
"Offering Documents" means the Registration Statement, Time of Sale Prospectus, Prospectuses, Prospectus Supplements and any Prospectus Amendment, including, for greater certainty, the Documents Incorporated by Reference as the context may require;
"Offering Price" has the meaning ascribed thereto in the first paragraph of this Agreement;
"Option Closing Date" has the meaning ascribed thereto in the second paragraph of this Agreement;
"Option Closing Time" means 8:00 a.m. (Toronto time) on the Option Closing Date or such other time on the Option Closing Date as the Corporation and the Lead Underwriter may agree in writing;
"Over-Allotment Closing" has the meaning ascribed thereto in Section 8;
"Over-Allotment Option" has the meaning ascribed thereto in the second paragraph of this Agreement;
"Owned Real Property" means the properties located at: (i) 35 English Drive, Moncton, New Brunswick; (ii) 300 Edinburgh Drive, Moncton, New Brunswick; (iii) 160 Eagle Drive, Winnipeg, Manitoba; and (iv) 225 Chemin Fleurant, Lac-Superieur, Quebec, owned by the Material Subsidiary;
"Passport System" means the system and procedures for prospectus filing and review under MI 11-102 and NP 11-202;