Full Press Release Details
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of the 6th day of August, 2019 between Sundial Growers Inc., an Alberta corporation
(the Company ), and Edward Hellard, an individual residing in the Province of Alberta (the Investor ).
the Company has completed an underwritten initial public offering of its common shares pursuant to an effective registration statement filed with the Securities and Exchange Commission on Form F-1 in the
United States and a prospectus filed with the securities regulatory authorities in each of the provinces and territories of Canada, other than Quebec (the IPO );
AND WHEREAS, the parties believe that it is in the best interests of the Company and the Investor to set forth their agreements
regarding the Investor s registration rights in the Company;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
For purposes of this Agreement:
Affiliate means, with respect to any specified Person, any other Person which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with, such specified Person. For purposes of this definition, a Person is controlled by another Person or other Persons if: (i) in the case of a company
or other body corporate wherever or however incorporated: (A) securities entitled to vote in the election of directors carrying in the aggregate at least a majority of the votes for the election of directors and representing in the aggregate at
least a majority of the participating (equity) securities are held, other than by way of security only, directly or indirectly, by or solely for the benefit of the other Person or Persons; and (B) the votes carried in the aggregate by such
securities are entitled, if exercised, to elect a majority of the board of directors of such company or other body corporate; or (ii) in the case of a Person that is not a company or other body corporate, at least a majority of the
participating (equity) and voting interests of such Person are held, directly or indirectly, by or solely for the benefit of the other Person or Persons; and controls , controlling and under common
control with shall be interpreted accordingly.
Canadian Prospectus means a (final) Prospectus filed by the
Company under Canadian Securities Laws.
Canadian Securities Commissions means the securities commissions or other
securities regulatory authorities in each of the provinces and territories of Canada, other than Quebec.
Laws means the securities legislation of the applicable provinces or territories of Canada, other than Quebec, and the rules, regulations and policies of the applicable Canadian Securities Commissions.
Canadian Short Form Registration Procedure means the procedures for the distribution of securities by way of a short form
Prospectus available under Canadian Securities Laws, including NI 44-101.
Shares means the common shares of the Company.
Company has the meaning given to it in the Preamble.
Damages means any loss, damage, or liability (joint or several) to which a party hereto may become subject under the
Securities Act, the Exchange Act, Canadian Securities Laws or other federal, provincial or state law, insofar as such loss, damage, or liability (or any action in respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any Registration Statement or Prospectus of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an
omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents
or Affiliates) of the Securities Act, the Exchange Act, Canadian Securities Laws, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, Canadian Securities Laws or any state securities law.
Demand Notice has the meaning given to it in Section 2.1(a).
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Excluded Registration means (i) a registration relating to the sale of securities to employees of the Company or
a subsidiary pursuant to a stock option, stock purchase, or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be
required to be included in a Registration Statement or Prospectus covering the sale of the Registrable Securities; or (iv) a registration in which the only securities being registered are Common Shares issuable upon conversion of debt
securities that are also being registered.
Form F-1 means a registration
statement on Form F-1 as promulgated under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.
Form F-3/10 means either a
registration statement on Form F-3 or Form F-10 as promulgated under the Securities Act as in effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC or the Canadian Securities Commissions, as applicable.
Holder means the Investor and any Permitted Transferee.
Initiating Holders means Holders of at least ten percent (10%) of the Registrable Securities then outstanding, on a non-diluted basis, who initiate a registration request pursuant to Section 2.1(a) of this Agreement.
Investor has the meaning given to it in the Preamble.
IPO has the meaning given to it in the Recitals.
Members of the Immediate Family means with respect to any individual, each parent (whether by birth or adoption), spouse
(whether by marriage or civil union) or common law partner (as defined in the Income Tax Act (Canada)) or child or other descendants (whether by birth or adoption) of such individual, each spouse (whether by marriage or civil union) or common
law partner (as defined in the Income Tax Act (Canada)) of any of the aforementioned Persons, each trust created solely for the benefit of such individual and/or one or more of the aforementioned Persons, and each legal representative of such
individual or of any aforementioned Persons (including without limitation a tutor, curator, mandatary due to incapacity, custodian, guardian or testamentary executor), acting in such capacity under the authority of the law, an order from a competent
tribunal, a will or a mandate in case of incapacity or similar instrument. For the purposes of this definition, a Person shall be considered the spouse of an individual if such Person is legally married to such individual, lives in a civil union
with such individual or is the common law partner (as defined in the Income Tax Act (Canada) as amended from time to time) of such individual. A Person who was the spouse of an individual within the meaning of this paragraph immediately
before the death of such individual shall continue to be considered a spouse of such individual after the death of such individual.
NI 41-101 means National Instrument 41-101
General Prospectus Requirements of the Canadian Securities Administrators.
44-101 means National Instrument 44-101 Short Form Prospectus Distributions of the Canadian Securities Administrators.
Permitted Holder means, in respect of a Holder that is an individual, the Members of the Immediate Family of such
individual and any Person controlled, directly or indirectly, by any such holder, and in respect of a Holder that is not an individual, an Affiliate of that holder.
Permitted Transferee means, in each case to the extent such Person agrees to be bound by the terms of this Agreement, any
Person means any individual, corporation, partnership, trust, limited
liability company, association or other entity.
Prospectus means, with respect to a public offering or distribution in
the United States, the prospectus included in any Registration Statement, or, with respect to a public offering or distribution in Canada, a Canadian Prospectus, as such documents may be amended or supplemented by an amendment or prospectus
supplement, including post-effective amendments, and all material incorporated by reference in such prospectus.
Securities means Common Shares that are beneficially owned by the Investor or its Affiliates, provided that such Common Shares shall cease to be Registrable Securities: (a) when their registration has become effective and such Common
Shares have been disposed of pursuant to such registration; or (b) when such Common Shares cease to be outstanding.
Registrable Securities then outstanding means the number of shares determined by adding (without duplication) the number of
outstanding Common Shares that are Registrable Securities and the number of Common Shares issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that, when issued, will be Registrable Securities.
Registration Statement means with respect to a public offering in the United States, a Registration Statement filed by the
Company with the SEC for a public offering and sale of securities of the Company for cash in which the Registrable Securities may be included, other than a Registration Statement on Form S-8, Form S-4 or Form F-4, or their successors, or any form for a similar limited purpose, or any Registration Statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation.
SEC means the Securities and Exchange Commission.
SEC Rule 144 means Rule 144 promulgated by the SEC under the Securities Act.
SEC Rule 145 means Rule 145 promulgated by the SEC under the Securities Act.
Securities Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
Selling Expenses means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of
Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Section 2.6.
Selling Holder Counsel has the meaning given to it in Section 2.6.
Transfer Undertaking means the transfer undertaking attached as schedule A to the plan of arrangement in the
articles of amendment of the Company effective July 31, 2019.
The Company covenants and agrees as follows:
If the Company proposes to register or qualify (including, for this purpose, a Registration Statement effected or Prospectus filed by the
Company for shareholders other than the Holders) any of its securities under the Securities Act or Canadian Securities Laws in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the
Company shall, at such time, subject to the Transfer Undertaking, promptly give each Holder notice of such registration or qualification. Upon the request of each Holder given within twenty (20) days after such notice is given by the Company,
the Company shall, subject to the provisions of Section 2.3, use reasonable commercial efforts to cause to be registered or qualified all of the Registrable Securities that each such Holder has requested to be included in such Registration
Statement or Prospectus. The Company shall have the right to terminate or withdraw any registration or qualification initiated by it under this Section 2.2 before the effective date of such registration or qualification, whether or not any
Holder has elected to include Registrable Securities in such registration or qualification. The expenses (other than Selling Expenses) of such withdrawn registration or qualification shall be borne by the Company in accordance with Section 2.6.
2.4 Obligations of the Company. Whenever required under this Section 2 to effect the
registration or qualification of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:
It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required
to effect the registration or qualification of such Holder s Registrable Securities.
All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to this
Section 2 including all registration, filing, and qualification fees; printers and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements of one counsel for the selling Holders
( Selling Holder Counsel ), shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration or qualification proceeding begun pursuant to
Section 2.1 if the registration or qualification request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata
based upon the number of Registrable Securities that were to be included in the withdrawn registration or qualification), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration or
qualification pursuant to Section 2.1(a); provided further that if, at the time of such withdrawal, the Holders shall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to
the Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information then the Holders shall not be required to pay any of such expenses and shall not forfeit their right to one
registration or qualification pursuant to Section 2.1(a). All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis of the number of