Full Press Release Details
100,000,000 SERIES A UNITS
CONSISTING OF 100,000,000 COMMON SHARES
AND WARRANTS TO PURCHASE 50,000,000 COMMON SHARES
33,333,334 SERIES B UNITS
CONSISTING OF 33,333,334 PRE-FUNDED WARRANTS TO PURCHASE 33,333,334 COMMON SHARES AND WARRANTS TO
PURCHASE 16,666,667 COMMON SHARES
UNDERWRITING AGREEMENT
Canaccord Genuity LLC
As Representative of the Several Underwriters
99 High Street, Suite 1200
Boston, Massachusetts 02110
Ladies and Gentlemen:
Sundial Growers Inc., an
Alberta corporation (the Company ), confirms its agreement with Canaccord Genuity LLC ( Canaccord ) and each of the other underwriters named in Schedule A hereto (collectively, the
Underwriters, which term shall also include any underwriter substituted as provided in Section 10 hereof), for whom Canaccord is acting as representative (in such capacity, the
Representative ) with respect to the sale by the Company and the purchase by the Underwriters, acting severally and not jointly, on a best efforts basis, of an aggregate of (A) 100,000,000 Series A units (the
Series A Units ), with each Series A Unit consisting of (i) one common share (each, a Common Share ), and (ii) one-half of a warrant, with each whole
warrant entitling the holder to purchase one Common Share (each, a Warrant ), and (B) 33,333,334 Series B units (the Series B Units and together with the Series A Units, the
Units ), with each Series B Unit consisting of (i) one pre-funded warrant to purchase one Common Share (the Pre-Funded
Warrants ), and (ii) one-half of a Warrant. The 100,000,000 Common Shares to be issued under this Agreement are herein referred to as the Shares. The Common Shares
issuable upon exercise of the Warrants and Pre-Funded Warrants are collectively referred to as the Warrant Shares. The Units, the Shares, the Warrants, the Pre-Funded Warrants and, where applicable, the Warrant Shares, are collectively referred to as the Securities.
It is understood that the several Underwriters are to make a best efforts public offering of the Securities as soon as the
Representative deems it advisable to do so. The Securities are to be initially offered to the public at the public offering price set forth in the Prospectus (as defined below). The Representative may from time to time thereafter change the public
offering price and other selling terms. The Company recognizes that best efforts does not assure that the offering of the Securities will be consummated and it is understood between the parties that there is no firm commitment by the
Underwriters to purchase any or all of the Securities.
SECTION 1. Representations and Warranties. The Company represents and
warrants to, and agrees with, the Underwriters that, as of the date of this Agreement:
(a) Registration Statement and Prospectus.
The Common Shares are registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act ), and the Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the Commission (the Commission Documents ) since the Company has been subject to the requirements of Section 12 of the Exchange Act, and all of such filings required to be filed within
the last 12 months have been made on a timely basis. The Common Shares are currently quoted on the Nasdaq Capital Market ( Principal Trading Market ) under the trading symbol SNDL . The Company and the transactions
contemplated hereby meet the requirements for use of Form F-3 under the Securities Act of 1933, as amended (the Securities Act ) and the rules and regulations thereunder
( Rules and Regulations ), including but not limited to the transaction requirements for an offering made by the issuer set forth in Instruction I.B.5 to Form F-3. The Company has
prepared and filed with the
Commission a registration statement on Form F-3 (File No. 333-252278) with respect to the Securities to be
offered and sold by the Company pursuant to this Agreement. Such registration statement, at any given time, including the amendments thereto at such time, the exhibits and any schedules thereto at such time, the documents incorporated by reference
therein pursuant to Item 12 of Form F-3 under the Securities Act at such time and the documents otherwise deemed to be a part thereof or included therein by the rules and regulations under the Securities Act,
is herein called the Registration Statement. The Registration Statement, including the base prospectus contained therein (the Base Prospectus ) was prepared by the Company in conformity, in all
material respects, with the requirements of the Securities Act and all applicable Rules and Regulations. One or more prospectus supplements relating to the Shares (the Prospectus Supplements, and together with the Base
Prospectus and any amendment thereto and all documents incorporated therein by reference, the Prospectus ) have been or will be prepared by the Company in conformity, in all material respects, with the requirements of the
Securities Act and all applicable Rules and Regulations and have been or will be filed with the Commission in the manner and time frame required by the Securities Act and the Rules and Regulations. Any amendment or supplement to the Registration
Statement or Prospectus required by this Agreement will be so prepared and filed by the Company and, as applicable, the Company will use commercially reasonable efforts to cause it to become effective as soon as reasonably practicable. No stop order
suspending the effectiveness of the Registration Statement has been issued, and no proceeding for that purpose has been instituted or, to the knowledge of the Company, threatened by the Commission. No order preventing or suspending the use of the
Base Prospectus, the Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus (as defined herein) has been issued by the Commission. Copies of all filings made by the Company under the Securities Act and all Commission Documents
that were filed with the Commission have either been delivered to the Underwriter or are available to the Underwriter on the Commission s Electronic Data Gathering, Analysis, and Retrieval system ( EDGAR ). Any reference
herein to the Registration Statement, the Prospectus, or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated (or deemed to be incorporated) by reference therein pursuant to Item 12 of Form F-3 under the Securities Act, and any reference herein to the terms amend, amendment or supplement with respect to the Registration Statement or Prospectus shall be deemed to
refer to and include the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein. For the purposes of this Agreement, the Applicable Time means 6:00 a.m. New York
City time on the date of this Agreement.
(b) No Misstatement or Omission. The Registration Statement, when such part became or
becomes effective, at any deemed effective date pursuant to Rule 430B(f)(2) on the date of filing thereof with the Commission and the Applicable Time and the Closing Date, and the Prospectus, on the date of filing thereof with the Commission and at
the Applicable Time and the Closing Date, conformed or will conform in all material respects with the requirements of the Securities Act and the Rules and Regulations; each part of the Registration Statement, when such part became or becomes
effective, did not or will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading; and the Prospectus, on the date of filing thereof with the Commission, and the
Prospectus and any applicable Issuer Free Writing Prospectus(es) issued at or prior to such Applicable Time, taken together (collectively with the pricing information set forth on Schedule B-2, the
Disclosure Package ) and at the Applicable Time and Closing Date, did not or will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; except that the foregoing shall not apply to statements or omissions in any such document made in reliance on information furnished in writing to the Company by the Representative expressly
stating that such information is intended for use in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or in any Issuer Free Writing Prospectus(es).
(c) Conformity with Securities Act and Exchange Act. The documents incorporated by reference in the Registration Statement or the
Prospectus, or any amendment or supplement thereto, when they became effective under the Securities Act or were filed with the Commission under the Exchange Act, as the case may be, conformed in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make the
statements therein not misleading; and any further documents so filed and incorporated by reference in the Registration Statement or the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material
omit to state a material fact necessary to make the statements therein not misleading; provided however, that this representation and warranty shall not apply to any statements or omissions
(a) that have been corrected in a filing that has been incorporated by reference in the Prospectus prior to the Applicable Time or (b) made in reliance on information furnished in writing to the Company by the Representative expressly
stating that such information is intended for use in any such document.
(d) Financial Information. The financial statements
(including the related notes thereto and the supporting schedules) of the Company and its consolidated subsidiaries (at the respective times such financial statements were prepared) (the Company s consolidated subsidiaries as of the date of
this Agreement, being those listed on Schedule C hereto, the Subsidiaries ), set forth or incorporated by reference in the Registration Statement, Prospectus and Disclosure Package, have been and will be prepared in
accordance with Regulation S-X under the Securities Act, in all material respects, and with International Financial Reporting Standards ( IFRS ) consistently applied at the times and
during the periods covered thereby (except (i) as may be otherwise indicated in such financial statements or the notes thereto, and (ii) in the case of unaudited interim statements, subject to normal
year-end audit adjustments and the exclusion or condensing of certain footnotes), and fairly present in all material respects and will fairly present in all material respects the financial position of the
Company as of the dates indicated and the results of its operations and the changes in its cash flows for the periods specified (subject, in the case of unaudited statements, to normal year-end adjustments);
and the other financial information included or incorporated by reference in the Registration Statement, the Prospectus and the Disclosure Package has been derived from the accounting records of the Company and its Subsidiaries and presents fairly
in all material respects the information shown thereby. The Company does not have any material liabilities or obligations, direct or contingent, which are not disclosed in the Registration Statement, Prospectus and Disclosure Package, as of the date
of filing of those documents. Except as included therein, no historical or pro forma financial statements or supporting schedules are required to be included in the Registration Statement, the Disclosure Package or the Prospectus under the
Securities Act or the Rules and Regulations.
(f) Emerging Growth Company Status. As of the date hereof, the Company is an emerging growth company as defined in
Section 2(a) of the Securities Act (an Emerging Growth Company ).
(g) Organization. The Company is
duly organized and validly existing under the laws of the province of Alberta and has all requisite power and authority to carry on its business as is currently being conducted as described in the Prospectus, and to own, lease and operate its
properties. The Company is duly qualified as a foreign entity to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure, individually or in the aggregate, to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a material adverse effect on (i) the assets,
properties, condition, financial or otherwise or in the results of operations, business affairs or business prospects of the Company and its Subsidiaries taken as a whole, (ii) the transactions contemplated hereby or (iii) the ability of
the Company to perform its obligations under this Agreement (collectively, a Material Adverse Effect ).
Encumbrances. Except as described in the Registration Statement, Prospectus and Disclosure Package, each of the Company and its Subsidiaries has (i) good and marketable title to all of the properties and assets owned by it that are
material to the business of the Company and the Subsidiaries taken as a whole, free and clear of all material liens, charges, claims, security interests or encumbrances (collectively, Encumbrances ), except those that
(i) do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries or (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect,
(iii) possession under all material leases to which it is party as lessee, and (iv) such other Encumbrances executed by the Company and its Subsidiaries in ordinary course of business or as or may be required to conduct their business
(including without limitation, under the existing offices and lease agreements of the Company and its Subsidiaries, and other Encumbrances executed with commercial banks in order to secure ongoing payments under credit cards and/or corporate cards).
All leases and contracts to which the Company or its Subsidiaries is a party are valid and binding and no material default has occurred and is continuing thereunder, and no event or circumstance that with the passage of time or giving of notice, or
both, would constitute such a material default has occurred and is continuing, and, to the knowledge of the Company, no defaults by the counterparties exist under any such leases or contracts.
(i) No Improper Practices. (i) Neither the Company nor the Subsidiaries, nor to
the knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or the Subsidiaries, has, in the past five years, used any corporate funds of Company for any unlawful
contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds of Company, violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment; (ii) no relationship, direct or indirect, exists between or among the Company or,
to the knowledge of the Company, the Subsidiaries, on the one hand, and the directors, officers and shareholders of the Company or, to the knowledge of the Company, the Subsidiaries, on the other hand, that is required by the Securities Act to be
described in the Registration Statement and the Prospectus that is not so described; (iii) no relationship, direct or indirect, exists between or among the Company or the Subsidiaries or any affiliate of them, on the one hand, and the
directors, officers, shareholders or directors of the Company or, to the knowledge of the Company, the Subsidiaries, on the other hand, that is required by the rules of the Financial Industry Regulatory Authority, Inc.
( FINRA ) to be described in the Registration Statement and the Prospectus that is not so described; and (iv) except as described in the Prospectus, there are no material outstanding loans or advances or material
guarantees of indebtedness by the Company or, to the knowledge of the Company, the Subsidiaries to or for the benefit of any of their respective officers or directors or any of the members of the families of any of them.
(j) Investment Company Act. The Company is not now and, after giving effect to the offering and sale of the Securities, will not be