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[FORM OF SERIES [A][B] WARRANT]
NUMBER OF COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a) OF THIS WARRANT.
SUNDIAL GROWERS INC.
SERIES [A][B] WARRANT TO PURCHASE COMMON SHARES
Warrant No.: [A][B]-[ ]
of Issuance: [ ], 2020 ( Issuance Date )
Sundial Growers Inc., a company incorporated under the laws of the Province of Alberta, Canada (the Company ), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [BUYER], the registered holder hereof or its permitted assigns (the Holder ), is entitled, subject to the terms set
forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Shares (including any Warrants to Purchase Common Shares issued in exchange, transfer or replacement
hereof, the Warrant ), at any time or times on or after the Issuance Date, but not after 5:00 p.m., New York time, on the Expiration Date (as defined below), _________________ (subject to adjustment as provided herein) fully
paid and non-assessable Common Shares (as defined below) (the Warrant Shares , and such number of Warrant Shares, the Warrant Number ). Except as otherwise defined
herein, capitalized terms in this Warrant shall have the meanings set forth in Section 19. This Warrant is one of the Warrants to Purchase Common Shares (the Registered Warrants ) issued pursuant to (i) Section 1 of
that certain Underwriting Agreement, dated as of August 14, 2020 (the Subscription Date ), by and among the Company and the underwriter(s) referred to therein, as amended from time to time (the Underwriting
Agreement ), (ii) the Company s Registration Statement on Form F-3 (File number 333-240339) (the Registration Statement ) and
(iii) the Company s prospectus supplement dated August 14, 2020
[INSERT IN SERIES B WARRANT ONLY: Notwithstanding
anything herein to the contrary, the Aggregate Exercise Price (as defined below) of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share, was pre-funded to the Company on or prior to
the initial Issuance Date and, consequently, no additional consideration (other than the nominal exercise price of $0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant.]
1. EXERCISE OF WARRANT.
(a) Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the
limitations set forth in Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date (an Exercise Date ), in whole or in part, by delivery (whether via facsimile or otherwise) of a
written notice, in the form attached hereto as Exhibit A (the Exercise Notice ), of the Holder s election to exercise this Warrant. Within one
(1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise Price in effect on the date of such exercise
multiplied by the number of Warrant Shares as to which this Warrant was so exercised (the Aggregate Exercise Price ) in cash or via wire transfer of immediately available funds if the Holder did not notify the Company in such
Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery
of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant
Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On
or before the first (1st) Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit by facsimile or electronic mail a treasury direction and
acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder and the Company s transfer agent (the Transfer Agent ), which confirmation
shall constitute an instruction to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading Day following the date on which the Company has received such Exercise Notice (or such
earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise Date), the Company shall (i) provided that the Transfer
Agent is participating in The Depository Trust Company ( DTC ) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of Common Shares to which the Holder is entitled pursuant to
such exercise to the Holder s or its designee s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (ii) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of Common Shares to which the
Holder shall be entitled pursuant to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date such Warrant Shares are credited to the Holder s DTC account or the date of delivery of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection with
any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise and upon surrender of this Warrant to
the Company by the Holder, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than two (2) Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its
designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which
this Warrant is exercised. No fractional Common Shares are to be issued upon the exercise of this Warrant, but rather the number of Common Shares to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all
transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant. Notwithstanding the foregoing, except in the case where an exercise of this Warrant is validly made pursuant to a Cashless Exercise, the Company s failure to
deliver Warrant Shares to the Holder on or prior to the later of (A) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for
the settlement of a trade of such Warrant Shares initiated on the applicable Exercise Date) and (B) one (1) Trading Day after the Company s receipt of the Aggregate Exercise Price (or valid notice of a Cashless Exercise) (such later date,
the Share Delivery Date ) shall not be deemed to be a breach of this Warrant. From the Issuance Date through and including the Expiration Date, the Company shall maintain a transfer agent that participates in the DTC s Fast
Automated Securities Transfer Program. Notwithstanding any other provision in this Agreement, if the Holder delivers one or more Exercise Notices to the Company on or prior to the time of issuance of this Warrant, the Company shall honor each such
Exercise Notice as if such Warrant was outstanding as of the time such Exercise Notice was delivered to the Company, except that if a Share Delivery Date as so calculated hereunder would be earlier than the Issuance Date, such Share Delivery Date
shall alternatively occur on the Issuance Date of this Warrant.
(b) Exercise Price. For purposes of this
Warrant, Exercise Price means $[ ], subject to adjustment as provided herein.
(c) Company s Failure to Timely Deliver Securities. If the Company shall fail, for any reason
or for no reason, on or prior to the Share Delivery Date, either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, to issue and deliver to the Holder (or its designee) a certificate for the
number of Warrant Shares to which the Holder is entitled and register such Warrant Shares on the Company s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, to credit the balance
account of the Holder or the Holder s designee with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder s exercise of this Warrant (as the case may be) or (II) if after the Issuance Date, a
registration statement covering the issuance or resale of the Warrant Shares that are the subject of the Exercise Notice (the Unavailable Warrant Shares ) is not available for the issuance of such Unavailable Warrant Shares and the
Company fails to promptly, (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such
exercise to the Holder s or its designee s balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a Notice
Failure and together with the event described in clause (I) above, a Delivery Failure ), then, in addition to all other remedies available to the Holder, (X) the Company shall pay in cash to the Holder on each
day after the Share Delivery Date and during such Delivery Failure an amount equal to 1.0% of the product of (A) the sum of the number of Common Shares not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is
entitled, multiplied by (B) any trading price of the Common Shares selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise Date and ending on the applicable Share Delivery Date, and
(Y) the Holder, upon written notice to the Company, may void its Exercise Notice with respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice;
provided that the voiding of an Exercise Notice shall not affect the Company s obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section
1(c) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Date either (I) the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer
Program, the Company shall fail to issue and deliver to the Holder (or its designee) a certificate and register such Common Shares on the Company s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, the Transfer Agent shall fail to credit the balance account of the Holder or the Holder s designee with DTC for the number of Common Shares to which the Holder is entitled upon the Holder s exercise hereunder or pursuant
to the Company s obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Share Delivery Date the Holder purchases (in an open market transaction or otherwise) Common Shares corresponding to
all or any portion of the number of Common Shares issuable upon such exercise that the Holder is entitled to receive from the Company and has not received from the Company in connection with such Delivery Failure or Notice Failure, as applicable (a
Buy-In ), then, in addition to all other remedies available to the Holder, the Company shall, within two (2) Business Days after the Holder s request and in the Holder s
discretion, either (i) pay cash to the Holder in an amount equal to the Holder s total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any) for the Common Shares so purchased (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the Buy-In Price ), at which point the
Company s obligation to so issue and deliver such certificate (and to issue such Common Shares) or credit the balance account of such Holder or such Holder s designee, as applicable, with DTC for the number of Warrant Shares to which the
Holder is entitled upon the Holder s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates
representing such Warrant Shares or credit the balance account of such Holder or such Holder s designee, as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder s exercise hereunder (as the
case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Warrant Shares multiplied by (B) the lowest Closing Sale
Price of the Common Shares on any Trading Day during the period commencing on the date of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii) (the
Buy-In Payment Amount ). Nothing shall limit the Holder s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company s failure to timely deliver certificates representing Common Shares (or to electronically deliver such Common Shares) upon the exercise of this Warrant as required
pursuant to the terms hereof. In addition to the foregoing rights, (i) if the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1(a) by the applicable Share Delivery Date, then the Holder
shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission
of an exercise shall not affect the Company s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement (which may be the
Registration Statement) covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares and the Holder has submitted an
Exercise Notice prior to receiving notice of the non-availability of such registration statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically
without any restrictive legend by crediting such aggregate
number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder s or its designee s balance account with DTC through its Deposit / Withdrawal At
Custodian system, the Holder shall have the option, by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any portion of this Warrant that has not been
exercised pursuant to such Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c)
or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless Exercise.
(d) Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f)
below), if at the time of exercise hereof, at any time on or after the six month anniversary of the Issuance Date, a Registration Statement is not effective (or the prospectus contained therein is not available for use) for the resale by the Holder
of all of the Warrant Shares, then the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, elect instead to receive upon such exercise the Net Number of Warrant Shares determined according to the following formula (a Cashless Exercise ):
Net Number = (A x B) - (A x C)
For purposes of the foregoing formula:
A= the total number of shares with respect to which this Warrant is then being exercised.
B = as applicable: (i) the Closing Sale Price of the Common Shares on the Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day
prior to the opening of regular trading hours (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the U.S. federal securities laws) on such Trading Day, (ii) the Bid Price of the Common Shares as of the time of the
Holder s execution of the applicable Exercise Notice if such Exercise Notice is executed during regular trading hours on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a) hereof, or
(iii) the Closing Sale Price of the Common Shares on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof
after the close of regular trading hours on such Trading Day.