Document:

ex_142236.htm

Exhibit 4.2

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into as of [ ● ], 2019 by and among Better Choice Company Inc., a Delaware corporation (the “Company”), and the “Investors” named in the Subscription Agreements, dated April 25, 2019, by and among the Company and the Investors identified on the signature pages thereto (the “Subscription Agreements”). Capitalized terms used herein have the respective meanings ascribed thereto in the Subscription Agreements unless otherwise defined herein.

 

The parties hereby agree as follows:

 

1.     Certain Definitions.

 

As used in this Agreement, the following terms shall have the following meanings:

 

“1933 Act” means the Securities Act of 1933, as amended, and all of the rules and regulations promulgated thereunder..

 

“1934 Act” means the Securities Exchange Act of 1934, as amended, and all of the rules and regulations promulgated thereunder.

 

“Common Stock” means the common stock, par value $0.001 per share, of the Company.

 

“JOBS Act” means The Jumpstart Our Business Startups Act of 2012, as amended, and the rules and regulations promulgated by the SEC thereunder.

 

“Investors” means the Investors identified in the Subscription Agreements and any Affiliate or permitted transferee of any such Investor who is a subsequent holder of Registrable Securities.

 

“Prospectus” means (i) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and (ii) any “free writing prospectus” as defined in Rule 405 under the 1933 Act.

 

“Register,” “registered” and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act, and the declaration or ordering of effectiveness of such Registration Statement or document.

 

“Registrable Securities” means (i) the Shares, (ii) the Common Stock issuable upon the exercise of the Warrants and (iii) any other shares of Common Stock issued pursuant to a stock split, as a dividend or other distribution with respect to, in exchange for or in replacement of the Shares or the Warrant Shares; provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) upon the first to occur of (A) a Registration Statement with respect to the sale all of such Registrable Securities

 

 

 

 

being declared effective by the SEC under the 1933 Act and such Registrable Securities having been disposed of or transferred by the holder thereof in accordance with such effective Registration Statement, (B) such Registrable Securities having been previously sold or transferred in accordance with Rule 144 (or another exemption from the registration requirements of the 1933 Act), (C) such securities becoming eligible for resale without volume or manner-of-sale restrictions and without current public information requirements pursuant to Rule 144 and (D) the third anniversary of the Closing Date.

 

“Registration Statement” means any registration statement of the Company under the 1933 Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

 

“Required Investors” means the Investors holding a majority of the Registrable Securities outstanding from time to time.

 

“Rule 144” means Rule 144 promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“Rule 172” means Rule 172 promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“Rule 415” means Rule 415 promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“Rule 416” means Rule 416 promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“Rule 424” means Rule 424 promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“SEC Guidance” means (i) any publicly-available written or oral guidance of the SEC staff, or any comments, requirements or requests of the SEC staff and (ii) the 1933 Act.

 

“Warrants” means the warrants to purchase Common Stock acquired by the Investors pursuant to the Subscription Agreements.

 

“Warrant Exercise Price” means $4.25 per share.

 

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants at the Warrant Exercise Price.

 

 

 

 

2.     Registration.

 

(a)     Registration Statement.

 

(i)     By [ ● ]1, 2019 (the “Filing Deadline”), the Company shall prepare and file with the SEC one Registration Statement covering the resale of all of the Registrable Securities which, for the avoidance of doubt, may also register the sale of primary securities. Subject to any SEC comments, such Registration Statement shall include the plan of distribution, substantially in the form and substance, set forth in each Investor’s Selling Stockholder Questionnaire. Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities. Upon request, such Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 3(c) to the Investors prior to its filing or other submission. If a Registration Statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline, at the election of each Investor, the Company will make pro rata payments to each electing Investor, as liquidated damages and not as a penalty, in an amount equal to 1% of the aggregate amount paid pursuant to the Subscription Agreements by such Investor for such Registrable Securities then held by such Investor for each 30-day period or pro rata for any portion thereof following the Filing Deadline for which no Registration Statement is filed with respect to the Registrable Securities. For each Investor that elects to receive such liquidated damages, such payments shall constitute such Investors’ exclusive monetary remedy for such events, and shall be in addition to any other rights the Investors may have hereunder or under applicable law and shall not affect the right of the Investors to seek injunctive relief. Such payments shall be made to each electing Investor in cash no later than ten (10) Business Days after the end of each 30-day period (the “Payment Date”). Interest shall accrue at the rate of 1% per month on any such liquidated damages payments that shall not be paid by the Payment Date until such amount is paid in full.

 

(ii)     The Company shall take commercially reasonable efforts to register the Registrable Securities on Form S-3 following the date such form is available for use by the Company, provided that if at such time the Registration Statement is on Form S-1, the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.

 

(b)     Expenses. The Company will pay all expenses associated with each Registration Statement, including filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Registrable Securities for sale under applicable state securities laws and listing fees, but excluding discounts, commissions, fees of

 

 

1 NTD: To be date that is 60 days from the date of this agreement.

 

 

 

 

underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Registrable Securities being sold. Except as provided in Section 6 hereof, the Company shall not be responsible for legal fees incurred by holders of Registrable Securities in connection with the performance of its rights and obligations under the Transaction Documents.

 

(c)     Effectiveness.

 

(i)     The Company shall use commercially reasonable efforts to have the Registration Statements declared effective as soon as practicable. The Company shall notify the Investors by facsimile or e-mail as promptly as practicable, and in any event, within forty-eight (48) hours, after (x) the SEC notified the Company that it has no further comments to the Registration Statement and (y) any Registration Statement is declared effective, and shall simultaneously provide the Investors with access to a copy of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby. Subject to Section 2(d), if (A) a Registration Statement covering the Registrable Securities is not declared effective by the SEC prior to the 120th day after the Closing Date (or the 150th day if the SEC reviews such Registration Statement) (the “Effectiveness Deadline”), or (B) after a Registration Statement has been declared effective by the SEC, sales cannot be made pursuant to such Registration Statement for any reason (including without limitation by reason of a stop order, or the Company’s failure to update such Registration Statement), but excluding any Allowed Delay (as defined below) or, if the Registration Statement is on Form S-1, for a period of twenty (20) days following the date on which the Company files a post-effective amendment to incorporate the Company’s Annual Report on Form 10-K (a “Maintenance Failure”), then, at the election of each Investor, the Company will make pro rata payments to each electing Investor then holding Registrable Securities, as liquidated damages and not as a penalty, in an amount equal to 1% of the aggregate amount paid pursuant to the Subscription Agreements by such Investor for such Registrable Securities then held by such Investor for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should have been effective (the “Blackout Period”). For each Investor that elects to receive liquidated damages, such payments shall constitute such Investors’ exclusive monetary remedy for such events and shall be in addition to any other rights the Investors may have hereunder or under applicable law and shall not affect the right of the Investors to seek injunctive relief. The amounts payable as liquidated damages pursuant to this paragraph shall be paid no later than ten (10) Business Days after each such 30-day period following the commencement of the Blackout Period until the termination of the Blackout Period. Such payments shall be made to each electing Investor in cash. Interest shall accrue at the rate of 1% per month on any such liquidated damages payments that shall not be paid by the Blackout Payment Date until such amount is paid in full.

 

(ii)     Notwithstanding anything to the contrary contained herein, the Company may, upon written notice to any holder of Registrable Securities included in a Registration Statement, suspend the use of any Registration Statement, including any Prospectus that forms a part of a Registration Statement, if the Company (X) determines that it would be required to make disclosure of material information in the Registration Statement that the Company has a bona fide business purpose for preserving as confidential, (Y) the Company determines it must amend or supplement the Registration Statement or the related Prospectus so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements

 

 

 

 

therein, in the case of the Prospectus in light of the circumstances under which they were made, not misleading or (Z) the Company has experienced or is experiencing some other material non-public event, including a pending transaction involving the Company, the disclosure of which at such time, in the good faith judgment of the Company, would adversely affect the Company; provided, however, in no event shall holders of Registrable Securities be suspended from selling Registrable Securities pursuant to the Registration Statement for a period that exceeds 120 calendar days (which need not be consecutive) in any 360-day period (any such suspension contemplated by this Section 2(c)(ii), an “Allowed Delay”). Upon disclosure of such information or the termination of the condition described above, the Company shall provide prompt notice to holders whose Registrable Securities are included in the Registration Statement, and shall promptly terminate any suspension of sales it has put into effect and shall take such other reasonable actions to permit registered sales of Registrable Securities as contemplated hereby.

 

(d)     Rule 415; Cutback. If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in a Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the 1933 Act (provided, however, the Company shall be obligated to use commercially reasonable efforts to advocate with the SEC for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09) or requires any Investor to be named as an “underwriter,” the Company shall (i) promptly notify each holder of Registrable Securities thereof and (ii) make commercially reasonable efforts to persuade the SEC that the offering contemplated by such Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and that none of the Investors is an “underwriter.” The Investors shall have the right to select one legal counsel, at the Investors’ expense, designated by the holders of a majority of the Registrable Securities to review and oversee any registration or matters pursuant to this Section 2(d), including participation in any meetings or discussions with the SEC regarding the SEC’s position and to comment on any written submission made to the SEC with respect thereto. No such written submission with respect to this matter shall be made to the SEC to which the Investors’ counsel reasonably objects. In the event that, despite the Company’s commercially reasonable efforts and compliance with the terms of this Section 2(d), the SEC refuses to alter its position, the Company shall (i) remove from such Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”); provided, however, that the Company shall not agree to name any Investor as an “underwriter” in such Registration Statement without the prior written consent of such Investor. In the event of a cutback hereunder, the Company shall give the Investor prompt written notice along with the calculations as to such Investor’s allotment. Any cut-back imposed on the Investors pursuant to this Section 2(d) shall be allocated among the Investors on a pro rata basis and shall be applied first to any of the Registrable Securities of such Investor as such Investor shall designate, unless the SEC Restrictions otherwise require or provide or the Investors otherwise agree. No liquidated damages shall accrue as to any Cut Back Shares until such date as the Company is able to effect the registration of such Cut Back Shares in accordance with any SEC Restrictions applicable to such Cut Back Shares (such date, the “Restriction Termination Date”). In furtherance of the foregoing, each Investor shall provide the Company with prompt written notice of its sale of substantially all of the Registrable Securities under such Registration Statement such that the Company will be able to file one or more

 

 

 

 

additional Registration Statements covering the Cut Back Shares. From and after the Restriction Termination Date applicable to any Cut Back Shares, all of the provisions of this Section 2 (including the Company’s obligations with respect to the filing of a Registration Statement and its obligations to use commercially reasonable efforts to have such Registration Statement declared effective within the time periods set forth herein and the liquidated damages provisions relating thereto) shall again be applicable to such Cut Back Shares; provided, however, that (i) the Filing Deadline for such Registration Statement including such Cut Back Shares shall be ten (10) Business Days after such Restriction Termination Date, and (ii) the date by which the Company is required to obtain effectiveness with respect to such Cut Back Shares shall be the 60th day immediately after the Restriction Termination Date (or the 90th day if the SEC reviews such Registration Statement).

 

(e)     Other Limitations. Notwithstanding any other provision herein or in the Subscription Agreements, (i) the Filing Deadline and each Effectiveness Deadline for a Registration Statement shall be extended and any Maintenance Failure shall be automatically waived by no action of the Investors, in each case, without default by or liquidated damages payable by the Company hereunder in the event that the Company’s failure to make such filing or obtain such effectiveness or a Maintenance Failure results from the failure of an Investor to timely provide the Company with information requested by the Company and necessary to complete a Registration Statement in accordance with the requirements of the 1933 Act (in which case any such deadline would be extended, and a Maintenance Failure waived, with respect to all Registrable Securities until such time as the Investor provides such requested information) and (ii) in no event shall the aggregate amount of liquidated damages (or interest thereon) paid to an Investor hereunder exceed, in the aggregate, 6% of the aggregate purchase price of the Shares and Warrants purchased by such Investor under the Subscription Agreements.

 

(f)     JOBS ACT Submissions. For purposes of this Agreement, if the Company elects to confidentially submit a draft of the Registration Statement with the SEC pursuant to the JOBS Act, the date on which the Company makes such confidential submission will be deemed the initial filing date of such Registration Statement.

 

3.     Company Obligations. The Company will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:

 

(a)     use commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective until such time as there are no longer Registrable Securities held by the Investors (the “Effectiveness Period”) and advise the Investors promptly in writing when the Effectiveness Period has expired;

 

(b)     prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement and the related Prospectus as may be necessary to keep such Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934 Act with respect to the distribution of all of the Registrable Securities covered thereby;

 

 

 

 

(c)     permit, upon request, any counsel designated by the Investors to review each Registration Statement and all amendments and supplements thereto prior to their filing with the SEC and shall use commercially reasonable efforts to reflect in such documents any comments as such counsel may reasonably propose;

 

(d)     furnish to each Investor whose Registrable Securities are included in any Registration Statement (i) promptly after the same is prepared and filed with the SEC, if requested by the Investor, one (1) copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as each Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Investor (it being understood and agreed that such documents, or access thereto, may be provided electronically);

 

(e)     use commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest possible moment;

 

(f)     prior to any public offering of Registrable Securities, use commercially reasonable efforts to assist or cooperate with the Investors and their counsel in connection with their registration or qualification of such Registrable Securities for the offer and sale under the securities or blue sky laws of such jurisdictions reasonably requested by the Investors; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this Section 3(f), or (iii) file a general consent to service of process in any such jurisdiction;

 

(g)     use commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on the primary securities exchange, interdealer quotation system or other market on which the Common Stock is then listed;

 

(h)     promptly notify the Investors, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly prepare, file with the SEC and furnish to such holder a supplement to or an amendment of such Prospectus as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

 

 

 

 

(i)     otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act, including, without limitation, Rule 172 under the 1933 Act, file any final Prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the 1933 Act, promptly inform the Investors in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Investors are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder;

 

(j)     with a view to making available to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Investors to sell shares of Common Stock to the public without registration, the Company covenants and agrees to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) six months after such date as all of the Registrable Securities may be sold without restriction by the holders thereof pursuant to Rule 144 or any other rule of similar effect or (B) such date as there are no longer Registrable Securities; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the 1934 Act; and (iii) furnish electronically to each Investor upon request, as long as such Investor owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the 1934 Act, (B) a copy of or electronic access to the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q in which the Company has furnished its annual or quarterly financial statements, and (C) such other information as may be reasonably requested in order to avail such Investor of any rule or regulation of the SEC that permits the selling of any such Registrable Securities without registration; and

 

(k)      if requested by an Investor, cooperate with such Investor to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to an effective Registration Statement, which certificates shall be free, to the extent permitted by applicable law, of all restrictive legends, and to enable such certificates to be in such denominations and registered in such names as any such Investor may request.

 

4.     Due Diligence Review; Information. If any Investor is required under applicable securities laws to be described in a Registration Statement as an “underwriter,” the Company shall, upon reasonable prior notice, make available, during normal business hours, for inspection and review by the Investors, advisors to and representatives of the Investors (who may or may not be affiliated with the Investors and who are reasonably acceptable to the Company) (collectively, the “Inspectors”), all pertinent financial and other records, and all other corporate documents and properties of the Company (collectively, the “Records”) as may be reasonably necessary for the purpose of such review, and cause the Company’s officers, directors and employees, within a reasonable time period, to supply all such information reasonably requested by the Inspectors (including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of such Registration Statement for the sole purpose of enabling such Investor and its accountants and attorneys to conduct such due diligence solely for the purpose of establishing a due diligence defense to underwriter liability under the 1933 Act; provided, however, that each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except to such Investor) or

 

 

 

 

use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this Section 4, the Subscription Agreements or any confidentiality agreement between the Company and each Investor. Each Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and any Investor) shall be deemed to limit the Investors’ ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

 

Notwithstanding the foregoing, the Company shall not disclose material nonpublic information to the Investors, or to advisors to or representatives of the Investors, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Investors, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic information for review and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with respect thereto.

 

5.     Obligations of the Investors.

 

(a)     Each Investor shall execute and deliver a Selling Stockholder Questionnaire prior to the Closing Date. Each Investor shall additionally furnish in writing to the Company such other information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. At least three (3) Business Days prior to the first anticipated filing date of any Registration Statement, the Company shall notify each Investor of the additional information the Company requires from such Investor if such Investor elects to have any of the Registrable Securities included in such Registration Statement (the “Registration Information Notice”). An Investor shall provide such information to the Company no later than two (2) Business Days following receipt of a Registration Information Notice if such Investor elects to have any of the Registrable Securities included in such Registration Statement. It is agreed and understood that it shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that (i) such Investor furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the effectiveness of the registration of such Registrable Securities, and (ii) the Investor execute such documents in connection with such registration as the Company may reasonably request, including, without limitation, a waiver of its registration rights hereunder to the extent an Investor elects not to have any of its Registrable Securities included in a Registration Statement.

 

 

 

 

(b)     Each Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder, unless such Investor has notified the Company in writing of its election to exclude all of its Registrable Securities from such Registration Statement.

 

(c)     Each Investor agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h) hereof, such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement covering such Registrable Securities, until the Investor is advised by the Company that such dispositions may again be made.

 

(d)     Each Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to any Registration Statement.

 

6.     Indemnification.

 

(a)     Indemnification by the Company. The Company will indemnify and hold harmless each Investor and its officers, directors, members, employees and agents, successors and assigns, and each other person, if any, who controls such Investor within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which they may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Investor or any such controlling person in writing specifically for use in such Registration Statement or Prospectus, (ii) the use by an Investor of an outdated or defective Prospectus after the Company has notified such Investor in writing that such Prospectus is outdated or defective or (iii) an Investor’s failure to send or give a copy of the Prospectus or supplement (as then amended or supplemented), if required (and not exempted) to the Persons asserting an untrue statement or omission or alleged untrue statement or omission at or prior to the written confirmation of the sale of Registrable Securities.

 

(b)     Indemnification by the Investors. Each Investor agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, stockholders and each person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in any Registration Statement or Prospectus or preliminary Prospectus or amendment or supplement thereto or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information regarding such Investor and furnished in writing by such Investor to the Company specifically for inclusion in such Registration Statement or Prospectus or

 

 

 

 

amendment or supplement thereto. In no event shall the liability of an Investor be greater than the dollar amount of the proceeds received by such Investor upon the sale of the Registrable Securities included in such Registration Statement giving rise to such indemnification obligation.

 

(c)     Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (A) the indemnifying party has agreed to pay such fees or expenses, (B) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (C) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, which shall not be unreasonably withheld or conditioned, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

 

(d)     Contribution. If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation. In no event shall the contribution obligation of a holder of Registrable Securities be greater in amount than the dollar amount of the proceeds received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.

 

7.     Miscellaneous.

 

(a)     Amendments and Waivers. This Agreement may be amended only by a writing signed by the Company and the Required Investors. The Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such amendment, action or omission to act,

 

 

 

 

of the Required Investors. Notwithstanding the foregoing, this Agreement may not be amended and the observance of any term hereof may not be waived with respect to any Investor without the written consent of such Investor, unless such amendment or waiver applies to all Investors in the same fashion.

 

(b)     Notices. All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 8(c) of the Subscription Agreements.

 

(c)     Assignments and Transfers by Investors. The provisions of this Agreement shall be binding upon and inure to the benefit of the Investors and their respective successors and assigns. An Investor may transfer or assign, in whole or from time to time in part, to one or more persons its rights hereunder in connection with the transfer of Registrable Securities by such Investor to such person, provided that (i) the Investor agrees in writing with the transferee or assignee to assign such rights and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (A) the name and address of such transferee or assignee and (B) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act or applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein and (v) such transfer shall have been made in accordance with the applicable requirements of the Subscription Agreements.

 

(d)     Assignments and Transfers by the Company. This Agreement may not be assigned by the Company (whether by operation of law or otherwise) without the prior written consent of the Required Investors, provided, however, that in the event that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the shares of Common Stock are converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Registrable Securities” shall be deemed to include the securities received by the Investors in connection with such transaction unless such securities are otherwise freely tradable by the Investors after giving effect to such transaction.

 

(e)     Benefits of the Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

(f)     Counterparts; Faxes. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed via facsimile or e-mail, which shall be deemed an original.

 

 

 

 

(g)     Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

(h)     Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable in any respect.

 

(i)     Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

 

(j)     Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

(k)     Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof (other than sections 5-1401 and 5-1402 of the General Obligations Law). Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

(l)     Filing Restrictions. The Company will register the resale of Registrable Securities representing Cut Back Shares on an effective Registration Statement prior to or concurrent with registering the resale of its securities by a selling security holder not holding Registrable Securities; provided, however, that this Section 7(l) shall not apply to Registrable Securities representing Cut Back Shares that were excluded from any such Registration Statement

 

 

 

 

 

on account of the failure of a holder of such Registrable Securities to comply with the provisions hereof, including, but not limited to, the requirement of a holder to provide information required to be included in a Registration Statement.

 

[remainder of page intentionally left blank]

 

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

 

 

 

	
			COMPANY:

				
			BETTER CHOICE COMPANY INC.

			 

			
	 	
			By:

				
			______________________________

			
	 	 	
			Name:

			
	 	 	
			Title:  

			

 

 

 

 

 

 

 

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

 

INVESTOR:

 

[investor names and addresses to be inserted once known]

 

 

 

 

 

 

 

[Signature Page to Registration Rights Agreement]ex_142237.htm

Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

This subscription agreement (this “Subscription Agreement”) is made as of April 25, 2019, by and among the Investor identified on the signature pages hereto (“Investor”), and Better Choice Company Inc., a Delaware corporation (the “Company”), and the parties hereto agree as follows:

 

	
			1.

				
			Definitions.

			

 

In addition to the words and terms defined elsewhere in this Subscription Agreement, for all purposes of this Subscription Agreement, the following terms have the meanings set forth in this Section 1:

 

“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 3.

 

“Closing Date” means the earlier to occur of (a) May 10, 2019 and (b) the day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to Closing have been satisfied or waived.

 

“Common Stock” means the common stock, par value $0.001 per share, of the Company.

 

“Escrow Agent” means Franklin Synergy Bank.

 

“Placement Agent” means Canaccord Genuity LLC.

 

“Registration Rights Agreement” means the Registration Rights Agreement, to be dated the Closing Date, among the Company, the Investor and any additional investors party thereto, substantially in the form attached hereto as Exhibit A.

 

“Securities” means the Shares, the Warrants and the Warrant Shares.

 

“Transaction Documents” means this Subscription Agreement, the Warrants, the Registration Rights Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Warrants” means, collectively, the Common Stock purchase warrants delivered to the Investor at the Closing in accordance with Section 3 hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to two (2) years from such initial exercise date, substantially in the form attached hereto as Exhibit B.

 

“Warrant Exercise Price” means $4.25 per share.

 

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants at the Warrant Exercise Price.

 

	
			2.

				
			Subscription.

			

 

 

 

 

(a) The Company has authorized the sale and issuance to the Investor (the “Offering”) of the number of shares of Common Stock set forth on the signature page hereto (the “Shares”) for a purchase price of $3.00 per share and an aggregate purchase price set forth on the signature page hereto (the “Purchase Price”), and at no additional cost a number of Warrants equal to the number of Shares on a one-to-one basis, and the Company desires to issue and sell to Investor the Shares and Warrants in consideration of the payment of the Purchase Price by or on behalf of Investor on or prior to the Closing (as defined below).

 

(b) At the Closing (as defined in Section 3 below), the Company and the Investor agree that the Investor will purchase from the Company and the Company will issue and sell to the Investor, upon the terms and conditions set forth herein, the number of Shares and Warrants as determined pursuant to Section 2(a). The Investor acknowledges that the Offering is not being underwritten.

 

(c) The Company proposes to enter into similar agreements with one or more other investors and expects to complete sales of shares of Common Stock and warrants to purchase Common Stock to them at substantially the same time as the issuance of the Shares and Warrants at the Closing. The Company reserves the right to reject any subscription made hereby, in whole or in part, in its sole discretion.

 

	
			3.

				
			Closing and Delivery of the Shares and Funds.

			

 

(a) On or prior to April 29, 2019, upon the terms and conditions set forth herein, (a) the Investor shall deliver to the Escrow Agent, via wire transfer immediately available funds equal to the Investor’s Purchase Price. On the Closing Date, upon the terms and conditions set forth herein, the Company shall deliver to the Investor the Investor’s Shares and Warrants as determined pursuant to Section 2(a). Upon satisfaction of the covenants and conditions set forth herein, the Closing shall occur at the offices of Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022, or such other location as the parties shall mutually agree.

 

(b) At the Closing the Company shall cause the Company’s transfer agent to register in book-entry form the Shares, in the name of the Investor.

  

	
			4.

				
			Representations, Warranties and Covenants of the Company. The Company acknowledges, represents and warrants to, and agrees with, the Investor that:

			

 

(a)     The Company is duly incorporated and validly existing under the laws of the State of Delaware, with full power and authority to conduct its business as it is currently being conducted and to own its assets; and has secured any other authorizations, approvals, permits and orders required by law for the conduct by the Company of its business as it is currently being conducted.

 

(b) The Company has the requisite corporate power and authority and has taken all requisite corporate action necessary for, and no further action on the part of the Company, its officers, directors and shareholders is necessary for, (i) the authorization, execution and delivery

 

 

 

 

of the Transaction Documents, (ii) the authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the issuance and delivery of the Shares and Warrants.

 

(c) The Shares and Warrant Shares (when issued in accordance with the terms of the Warrants) to be issued and sold by the Company to the Investor under this Subscription Agreement have been duly authorized and the Shares and Warrant Shares (when issued in accordance with the terms of the Warrants) when issued and delivered against payment therefor as provided in this Subscription Agreement, will be validly issued, fully paid and non-assessable and free of any preemptive or similar rights.

 

(d) The execution and delivery of this Subscription Agreement and the consummation of the transactions contemplated hereby will not: (i) result in a breach or violation of any of the terms and provisions of, or constitute a default under, any law, rule or regulation to which the Company or any subsidiary is subject, or by which any property or asset of the Company or any subsidiary is bound or affected, (ii) conflict with, result in any violation or breach of, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, lease, credit facility, debt, note, bond, mortgage, indenture or other instrument or obligation or other understanding to which the Company or any subsidiary is a party or by which any property or asset of the Company or any subsidiary is bound or affected, or (iii) result in a breach or violation of any of the terms and provisions of, or constitute a default under, the Company’s Articles of Incorporation, except in the case of clauses (i) and (ii) such breaches, violations, defaults, or conflicts which are not, individually or in the aggregate, reasonably likely to result in a material adverse effect upon the business, properties, operations, condition (financial or otherwise) or results of operations of the Company and its subsidiaries, taken as a whole, or in its ability to perform its obligations under this Subscription Agreement.

 

(e) To the extent offer and sale of the Securities pursuant to this Subscription Agreement is intended to be exempt from registration pursuant to Regulation S promulgated under the Securities Act (as defined below) (“Regulation S”), the Company has not engaged, nor will engage, in any directed selling efforts (as such term is defined in Regulation S) in the United States with respect to the Securities.

 

	
			5.

				
			Representations, Warranties and Covenants of the Investor. The Investor acknowledges, represents and warrants to, and agrees with, the Company that:

			

 

(a) The Investor has full right, power, authority and capacity to enter into this Subscription Agreement and to consummate the transactions contemplated hereby and has taken all necessary corporate action to authorize the execution, delivery and performance of this Subscription Agreement.

 

(b) The Investor acknowledges its understanding and agreement that the Shares and Warrants are being offered in a transaction not involving any public offering within the Unites States within the meaning of Section 4(a)(2) of the Securities Act of 1933, as amended (the

 

 

 

 

“Securities Act”), and that the Securities have not been registered under the Securities Act or the securities laws of any other jurisdiction and, unless so registered, may not be sold except in a transaction exempt from or not subject to the registration requirements under the Securities Act.

 

(c) The Investor acknowledges that each of the Company and the Placement Agent is relying on the Investor’s representations and warranties below in connection with this subscription. The Investor represents and warrants to the Company and the Placement Agent as follows:

 

	 	
			i.

				
			The Investor has all requisite power and authority to enter into this Subscription Agreement and perform all obligations required to be performed by the Investor hereunder. The signature on this Subscription Agreement is genuine, and the signatory has been duly authorized to execute the same, and this Subscription Agreement constitutes a legal, valid and binding obligation of the Investor, enforceable in accordance with its terms.

			

 

	 	
			ii.

				
			The Investor is an “accredited investor” as defined in Rule 501(a) under the Securities Act and has completed, executed and delivered to the Company, the Investor Questionnaire in the form attached hereto as Exhibit C. If the Investor is resident in Canada and is subject to applicable securities laws of any jurisdiction of Canada, the Investor is an accredited investor as such term is defined in Section 73.3(1) of the Securities Act (Ontario) or National Instrument 45-106 – Prospectus Exemptions (“NI 45-106”), as applicable, and has completed, executed and delivered to the Company, the Canadian Accredited Investor Certificate in the form attached hereto as Exhibit D (and Appendix 1 to Exhibit D, if applicable) indicating that the Investor fits within one of the prospectus exemption categories under the securities laws and regulations in each of the provinces and territories of Canada and all written instruments, rules and orders having the force of law of the securities regulators or regulatory authorities in each of the provinces and territories of Canada (“Canadian Securities Laws”) as set forth therein, and confirms the truth and accuracy of all representations, warranties and covenants made in such certificate as of the date of this Subscription Agreement and as of the Closing Date.

			

 

	 	
			iii.

				
			The Investor realizes that the basis for exemption would not be available if the Offering was part of a plan or scheme to evade registration provisions of the Securities Act or any applicable state or federal securities laws.

			

 

	 	
			iv.

				
			The Investor is acquiring the Securities solely for the Investor’s own beneficial account (and not for the account of others), for investment purposes, and not with a view to, or for resale in connection with, any distribution of such Securities in violation of the Securities Act.

			

 

	 	
			v.

				
			The Investor acknowledges and understands that the Securities may not be resold by the Investor unless such resale is registered under the Securities Act or such resale is effected pursuant to a valid exemption from the registration requirements of the Securities Act.

			

 

 

 

 

	 	
			vi.

				
			The Investor has adequately analyzed the risks of an investment in the Company and the Securities and determined, based upon the Investor’s own judgment, due diligence and advice from any advisor as the Investor has deemed necessary and not upon any view expressed by any other person or entity, that an investment in the Company and the Securities are a suitable investment for the Investor and that the Investor has the financial ability at this time and in the foreseeable future to bear the economic risk of a total loss of the Investor’s investment in the Company and the Securities, has adequate means for providing for its current needs and contingencies, and has no need for liquidity with respect to an investment in the Company.

			

 

	 	
			vii.

				
			The Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Company and the Securities (and has sought such accounting, legal and tax advice as the Investor has considered necessary to make an informed investment decision) and is aware that there are substantial risks incident to the purchase of the Securities.

			

 

	 	
			viii.

				
			The Investor has had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the Offering and the business, financial condition, results of operations and prospects of the Company. The Investor has had access to such information concerning the Company and the Securities as it deems necessary to make an informed investment decision concerning the purchase of the Securities.

			

 

	 	
			ix.

				
			In making its investment decision to purchase the Securities, the Investor has relied solely upon independent investigation made by the Investor. The Investor understands that the Placement Agent has acted solely as the agent of the Company in this placement of the Securities and such Investor has not relied on the business or legal advice of the Placement Agent or any of its agents, counsel or affiliates in making its investment decision hereunder, and confirms that none of such persons has made any representations or warranties to such Investor in connection with the transactions contemplated by this Subscription Agreement.

			

 

	 	
			x.

				
			The Investor is unaware of, and is in no way relying on, any form of general solicitation or general advertising, including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or electronic mail over the Internet, in connection with the Offering and is not subscribing for Shares and Warrants and did not become aware of the Offering through or as a result of any seminar or meeting to which the Investor was invited by, or any solicitation of a subscription by, a person not previously known to the Investor in connection with investments in securities generally.

			

 

	 	
			xi.

				
			The Investor hereby acknowledges and agrees that it has received and reviewed the disclosure set forth on Annex I attached hereto a reasonable time prior to the time that the Investor has agreed to purchase the Securities.

			

 

 

 

 

	 	
			xii.

				
			To the extent the offer and sale of the Securities pursuant to this Subscription Agreement is intended to be exempt from registration pursuant to Regulation S, the Investor represents, warrants and agrees that the Investor: (i) is not a U.S. Person, as such term is defined in Regulation S; (ii) is outside the United States at the time the buy order pursuant to this Agreement is originated and this Agreement is executed and delivered; (iii) will not, during the period commencing on the date hereof and ending on the six (6) months anniversary of such date, or such shorter period as may be permitted by Regulation S or other applicable securities law (“Compliance Period”), offer, sell, pledge or otherwise transfer the Securities in the United States, or to a U.S. Person for the account or benefit of a U.S. Person, or otherwise in a manner that is not in compliance with Regulation S; (iv) after the expiration of the Compliance Period, will offer, sell, or otherwise transfer the Securities only pursuant to registration under the Securities Act or an available exemption therefrom and, in accordance with all applicable state and foreign securities laws; and (v) has not engaged in, and prior to the expiration of the Compliance Period will not engage in, any short selling of or any hedging transaction with respect to the Securities in the United States.

			

 

(d) The Investor will not sell or otherwise transfer any Securities except pursuant to a registration of the Securities under the Securities Act or in a transaction exempt from, the registration requirements of the Securities Act. In particular, the Investor is aware that the Securities are “restricted securities,” as such term is defined in Rule 144 promulgated under the Securities Act (“Rule 144”), and they may not be sold pursuant to Rule 144 unless all of the conditions of Rule 144 are met. The Company covenants that it will use its commercially reasonable efforts to timely file all reports and other documents required to be filed by it under the Securities Act and the US Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated by the Securities and Exchange Commission (or, if the Company is not required to file such reports, it will, upon the request of the Investor, make publicly available such information as necessary to permit sales pursuant to Rule 144 under the Securities Act), and it will use commercially reasonable efforts to take such further action as Investor may reasonably request, in each case to the extent required from time to time to enable Investor to sell its Shares without registration under the Securities Act within the limitation of the exemptions provided by (A) Rule 144 under the Securities Act, as such rule may be amended from time to time, or (B) any similar rule or regulation hereafter adopted by the Securities and Exchange Commission having substantially the same effect as such Rule. The Investor understands that the Company or its transfer agent may establish procedures for approval of transfers, including transfers sought to be permitted under Rule 144, which may result in delays in desired sales or transfers by Investor.

 

(e) The Investor understands and agrees that the Securities shall bear substantially the following legend (the “Restrictive Legend”) for as long as such Securities are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER

 

 

 

 

THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144 OR OTHER AVAILABLE EXEMPTION, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

(f) If the Investor is resident in Canada and is subject to applicable securities laws of any jurisdiction of Canada, the Investor acknowledges that the Company is not a “reporting issuer” under the securities laws of any province or territory of Canada, the Company has no obligation to become a reporting issuer and there is no guarantee that it will become a reporting issuer in the future. The Investor further acknowledges that as a result of the Company not being a reporting issuer the Securities will be subject to an indefinite “restricted period” under applicable Canadian Securities Laws of 4 months and a day from the later of the Closing Date and the date the Company becomes a reporting issuer under the Canadian Securities Laws of any province or territory of Canada, unless a prospectus is filed in accordance with applicable Canadian Securities Laws qualifying their distribution. The Investor further acknowledges that during such indefinite “restricted period”, the Investor may not trade the Securities under applicable Canadian Securities Laws without filing a prospectus in accordance with such laws or being able to rely on one of the limited exemptions under applicable Canadian Securities Laws. The certificates evidencing the Securities (and any replacement certificate issued prior to the expiration of the applicable hold periods), or ownership statements issued under a direct registration system or other electronic book entry system, which it shall receive will bear a legend referring to such restrictions on resale and neither the Company nor any transfer agent of the Company will register any transfers of such Securities not made in compliance with such restrictions on resale. For purposes of complying with applicable securities laws and National Instrument 45-102 – Resale of Securities, the Investor understands and acknowledges that the certificates evidencing the Securities (and any replacement certificate issued prior to the expiration of the applicable hold periods), or ownership statements issued under a direct registration system or other electronic book entry system, which it shall receive will bear a legend, substantially in the following form (and with the necessary information inserted), referring to such restrictions on resale and neither the Company nor any transfer agent of the Company will register any transfers of such Securities not made in compliance with such restrictions on resale:

 

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF (I) [CLOSING DATE] AND (II) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY.”

 

(g) The Investor acknowledges being notified that if the Investor is resident or otherwise subject to the applicable securities legislation of a jurisdiction in Canada: (i) the Company will deliver to the applicable securities regulatory authority or regulator certain personal information pertaining to the Investor, including such Investor’s full name, residential address and telephone number,

 

 

 

 

email address, the number of Securities purchased by such Investor, the total purchase price paid for such Securities, the prospectus and/or registration exemption relied on and the date of distribution of the Securities; (ii) such information is being collected indirectly by the applicable securities regulatory authority or regulator under the authority granted to it in securities legislation; (iii) such information is being collected for the purposes of the administration and enforcement of the securities legislation of the local Canadian jurisdiction; and (iv) the Investor may contact the public officials listed on Exhibit E with respect to questions about the security regulatory authority’s or regulator’s indirect collection of such information;

 

(h) The Investor’s signature page sets forth all securities of the Company held or beneficially owned by such Investor as of the date hereof. Such Investor does not hold or beneficially own any other securities of the Company, except as indicated on the signature page hereto.

 

	
			6.

				
			Company Lock-Up

			

 

During the period commencing on the date of this Subscription Agreement and ending on the date that is thirty (30) days after the effective date of any registration statement to be filed pursuant to the Registration Rights Agreement, the Company will not, without the prior written consent of the Placement Agent, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock (collectively, “Lock-Up Securities”), or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of Lock-Up Securities, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise. The restrictions set forth in this Section 6 shall not apply to (A) the Shares and Warrants to be sold hereunder, (B) the registration and sale of the Shares in accordance with the terms of the Registration Rights Agreement, (C) upon the exercise of the Warrant, (D) any shares of Common Stock issued by the Company upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof or granted by the Closing, (E) any shares of Common Stock issued or options, restricted stock or other stock-based awards to purchase Common Stock pursuant to existing incentive plans or employee stock purchase plans, and (F) the issuance or sale of, or entry into an agreement to issue or sell, shares of Common Stock in connection with acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

 

	
			7.

				
			Conditions to Obligations of the Company and the Investor.

			

 

(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

	 	
			i.

				
			the accuracy in all material respects on the Closing Date of the representations and

			

 

 

 

 

warranties of the Investor contained herein;

 

	 	
			ii.

				
			the delivery to the Company of the audited financial statements of TruPet LLC;

			

	 	
			iii.

				
			the approval by the Board of Directors of the Company of a 2019-2020 Business Plan and Budget prepared by the Company;

			

	 	
			iv.

				
			all obligations, covenants and agreements of the Investor required to be performed at or prior to the Closing Date shall have been performed; and

			

	 	
			v.

				
			the delivery by the Investor of duly executed copies of the Transactions Documents and delivery to the Company of the Purchase Price.

			

 

(b) The obligations of the Investor hereunder in connection with the Closing are subject to the following conditions being met:

 

	 	
			i.

				
			the accuracy in all material respects on the Closing Date of the representations and warranties of the Company contained herein;

			

	 	
			ii.

				
			the delivery to the Investor of the audited financial statements of TruPet LLC;

			

	 	
			iii.

				
			all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

			

	 	
			iv.

				
			the delivery by the Company of duly executed copies of the Transactions Documents and evidence, reasonably acceptable to the Investor, that the Shares and Warrants have been issued in book-entry or certificated form, as applicable; and

			

	 	
			v.

				
			the delivery of an opinion from Latham & Watkins LLP, counsel to the Company, dated the Closing Date and reasonably satisfactory in form and substance to counsel for the Investor.

			

 

	
			8.

				
			Miscellaneous.

			

 

(a) Entire Agreement; Modifications. Except as otherwise provided herein, this Subscription Agreement constitutes the entire understanding and agreement between the parties with respect to its subject matter and there are no agreements or understandings with respect to the subject matter hereof which are not contained in this Subscription Agreement. This Subscription Agreement may be modified only in writing signed by the Company and the Investor.

 

(b) Counterparts. This Subscription Agreement may be executed in any number of counterparts, all of which shall be deemed an original, but all of which together shall constitute one and the same instrument and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all parties need not sign the same counterpart. Execution may also be made by delivery of a facsimile or e-mail, which shall be deemed an original.

 

(c) Notices. All notices or other communications required or permitted to be provided hereunder shall be in writing and shall be deemed effectively given (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed e-mail or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one

 

 

 

 

day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company or the Investor, as applicable, at the address for such recipient listed on the signature pages hereto or at such other address as such recipient has designated by two days advance written notice to the other parties hereto.

 

(d)      Third Party Beneficiaries. This Subscription Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person, except that the Placement Agent is an intended third party beneficiary of Section 4 and Section 5 hereof.

 

(e)     Governing Law. This Subscription Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof (other than sections 5-1401 and 5-1402 of the General Obligations Laws).

 

(f) WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

[Signature pages follow]

 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Subscription Agreement effective as of the date first written above.

 

	 	
			BETTER CHOICE COMPANY INC.

			 

			
	 	
			By:

				 
	 	
			Name:

				 
	 	
			Title:

				 
	 	
			Address:

				 
	 	 	 
	 	
			Email Address:

				 
	 	 	 

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Subscription Agreement effective as of the date first written above.

 

	 	
			 

			INVESTOR:

			
	 	
			[investor name]

			
	 	 
	 	
			By:

				 
	 	
			Name:

				 
	 	
			Title:

				 
	 	
			Share Amount:

				 
	 	
			Purchase Price:

				 
	 	
			Beneficially Owned Securities of the Company:

				 
	 	
			Address:

				 
	 	 	 
	 	
			Email Address:

				 
	 	 	 

 

 

 

 

 

ANNEX I

 

 

 

 

 

Regulation D Rule 506 Disclosure

 

On March 24, 2016, the Securities and Exchange Commission (“SEC”) Division of Corporation Finance, pursuant to delegated authority, granted a waiver to Canaccord Genuity Inc. (“Canaccord”) from the bad actor provisions of Rule 506(d) of Regulation D and Rule 262 of Regulation A under the Securities Act of 1933 (“Securities Act”) that would otherwise apply to Canaccord due to an SEC administrative order issued on the same day. In the administrative order, Canaccord, without admitting or denying any allegations, was ordered to cease and desist from violations of Section 5 of the Securities Act based on the initiation of research coverage for an issuer after Canaccord had been invited by the issuer to participate as an underwriter for a secondary stock offering that was planned for at least one month later. Canaccord also was ordered to pay $407,481 in disgorgement, $42,717 in prejudgment interest and $100,000 in civil money penalties.

 

 

 

 

 

Exhibit A

 

Form of Registration Rights Agreement

 

 

 

 

 

Exhibit B

 

Form of Warrants

 

 

 

 

 

 

Exhibit C

 

INVESTOR QUESTIONNAIRE

 

To: Better Choice Company Inc.

 

This Investor Questionnaire (“Questionnaire”) must be completed by each potential investor in connection with the offer and sale of the common stock, par value $0.001 per share (the “Securities”), of Better Choice Company Inc., a Delaware corporation (the “Company”). The Securities are being offered and sold by the Company in the United States without registration under the Securities Act of 1933, as amended (the “Securities Act”), and the securities laws of certain states, in reliance on the exemptions contained in Section 4(a)(2) of the Securities Act and on Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. The Company must determine that a potential investor meets certain suitability requirements before offering or selling the Securities to such investor. The purpose of this Questionnaire is to assure the Company that each investor will meet the applicable suitability requirements. The information supplied by you will be used in determining whether you meet such criteria, and reliance upon the private offering exemptions from registration is based in part on the information herein supplied.

 

This Questionnaire does not constitute an offer to sell or a solicitation of an offer to buy any security. By signing this Questionnaire, you will be authorizing the Company to provide a completed copy of this Questionnaire to such parties as the Company deems appropriate in order to ensure that the offer and sale of the Securities will not result in a violation of the Securities Act or the securities laws of any state and that you otherwise satisfy the suitability standards applicable to purchasers of the Securities. All potential investors must answer all applicable questions and complete, date and sign this Questionnaire. Please print or type your responses and attach additional sheets of paper if necessary to complete your answers to any item.

 

PART A. BACKGROUND INFORMATION

 

Name of Beneficial Owner of the Securities: _________________________________________________

 

Business Address:______________________________________________________________________

                                                                              (Number and Street)

 

City: _________________     State: _____     Zip Code: ___________

 

Telephone Number: _______________________

 

If a corporation, partnership, limited liability company, trust or other entity:

 

Type of entity: _________________________

 

Country/State of formation: _____________________     Approximate Date of formation: __________________

 

 

Were you formed for the purpose of investing in the securities being offered? Yes ☐          No ☐

 

If an individual:

 

Residence Address: ___________________________________________________________________

                                                                                  (Number and Street)

 

City: _________________     State: _____     Zip Code: ___________

 

Telephone Number: _______________________

 

 

 

 

 

Age: _________________     Citizenship: _________     Where registered to vote: _______

 

Set forth in the space provided below the state(s), if any, in the United States in which you maintained your residence during the past two years and the dates during which you resided in each state:

 

Are you a director or executive officer of the Company?      Yes ☐          No ☐

 

Social Security or Taxpayer Identification No.: ________________

 

PART B. ACCREDITED INVESTOR QUESTIONNAIRE

 

In order for the Company to offer and sell the Securities in conformance with state and federal securities laws, the following information must be obtained regarding your investor status. Please initial each category applicable to you as a purchaser of Securities of the Company.

 

	 	
			☐ (1)

				
			A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;

			

 

	 	
			☐ (2)

				
			A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

			

 

	 	
			☐ (3)

				
			An insurance company as defined in Section 2(a)(13) of the Securities Act;

			

 

	 	
			☐ (4)

				
			An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that act;

			

 

	 	
			☐ (5)

				
			A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;

			

 

	 	
			☐ (6)

				
			A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

			

 

	 	
			☐ (7)

				
			An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

			

 

	 	
			☐ (8)

				
			A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

			

 

	 	
			☐ (9)

				
			An organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000;

			

 

 

 

 

 

	 	
			☐ (10)

				
			A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Corporation;

			

 

	 	
			☐ (11)

				
			A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000 (exclusive of the value of that person’s primary residence);

			

 

	 	
			☐ (12)

				
			A natural person who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with that person’s spouse in excess of $300,000, in each of those years, and has a reasonable expectation of reaching the same income level in the current year;

			

 

	 	
			☐ (13)

				
			An executive officer or director of the Company;

			

 

	 	
			☐ (14)

				
			An entity in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies.

			

 

PART C. BAD ACTOR QUESTIONNAIRE

 

	
			1.

				
			During the past ten years, have you been convicted of any felony or misdemeanor that is related to any securities matter?

			

 

Yes ☐                               (If yes, please continue to Question 1.a)

 

No ☐                                (If no, please continue to Question 2)

 

	 	
			a)

				
			If your answer to Question 1 was “yes”, was the conviction related to: (i) the purchase or sale of any security; (ii) the making of any false filing with the Securities and Exchange Commission (the “SEC”); or (iii) the conduct of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities?

			

 

Yes ☐                               No ☐

 

	
			2.

				
			Are you subject to any court injunction or restraining order entered during the past five years that is related to any securities matter?

			

 

Yes ☐                               (If yes, please continue to Question 2.a)

 

No ☐                                (If no, please continue to Question 3)

 

	 	
			a)

				
			If your answer to Question 2 was “yes”, does the court injunction or restraining order currently restrain or enjoin you from engaging or continuing to engage in any conduct or practice related to: (i) the purchase or sale of any security; (ii) the making of any false filing with the SEC; or (iii) the conduct of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities?

			

 

Yes ☐                               No ☐

 

 

 

 

 

	
			3.

				
			Are you subject to any final order1 of any governmental commission, authority, agency or officer2(2) related to any securities, insurance or banking matter?

			

 

Yes ☐                               (If yes, please continue to Question 3.a)

 

No ☐                                (If no, please continue to Question 4)

 

a)                                     If your answer to Question 3 was “yes”:

 

	 	
			i)

				
			Does the order currently bar you from: (i) associating with an entity regulated by such commission, authority, agency or officer; (ii) engaging in the business of securities, insurance or banking; or (iii) engaging in savings association or credit union activities?

			

 

Yes ☐                               No ☐

 

	 	
			ii)

				
			Was the order (i) entered within the past ten years and (ii) based on a violation of any law or regulation that prohibits fraudulent, manipulative or deceptive conduct?

			

 

Yes ☐                               No ☐

 

	
			4.

				
			Are you subject to any SEC disciplinary order?3(3)

			

 

Yes ☐                               (If yes, please continue to Question 4.a)

 

No ☐                                (If no, please continue to Question 5)

 

	 	
			a)

				
			If your answer to Question 4 was “yes”, does the order currently: (i) suspend or revoke your registration as a broker, dealer, municipal securities dealer or investment adviser; (ii) place limitations on your activities, functions or operations; or (iii) bar you from being associated with any particular entity or class of entities or from participating in the offering of any penny stock?

			

 

	
			5.

				
			Are you subject to any SEC cease and desist order entered within the past five years?

			

 

Yes ☐                               (If yes, please continue to Question 5.a)

 

No ☐                                (If no, please continue to Question 6)

 

	 	
			a)

				
			If your answer to Question 5 was “yes”, does the order currently require you to cease and desist from committing or causing a violation or future violation of (i) any knowledge-based anti-fraud provision of the U.S. federal securities laws4 or (ii) Section 5 of the Securities Act?

			

 

Yes ☐                               No ☐

 

 

1 A “final order” is defined under Rule 501(g) as a written directive or declaratory statement issued by a federal or state agency described in Rule 506(d)(1)(iii) under applicable statutory authority that provides for notice and an opportunity for a hearing, and that constitutes a final disposition or action by such federal or state agency.

2You may limit your response to final orders of: (i) state securities commissions (or state agencies/officers that perform a similar function); (ii) state authorities that supervise or examine banks, savings associations or credit unions; (iii) state insurance commissions (or state agencies/officers that perform a similar function); (iv) federal banking agencies; (v) the U.S. Commodity Futures Trading Commission; or (vi) the U.S. National Credit Union Administration.

3 You may limit your response to disciplinary orders issued pursuant to Sections 15(b) or 15B(c) of the Exchange Act or Section 203(e) or (f) of the Investment Advisers Act of 1940 (the “Advisers Act”).

 

 

 

 

	
			6.

				
			Have you been suspended or expelled from membership in, or suspended or barred from association with a member of, a registered national securities exchange or a registered national or affiliated securities association?

			

 

	 	
			Yes ☐

				
			(If yes, please describe the basis of any such suspension or expulsion and any related details in the space provided under Question 10 below)5

			

 

	 	
			No ☐

				
			(If no, please continue to Question 7)

			

 

	
			7.

				
			Have you registered a securities offering with the SEC, made an offering under Regulation A or been named as an underwriter in any registration statement or Regulation A offering statement filed with the SEC?

			

 

Yes ☐                               (If yes, please continue to Question 7.a)

 

No ☐                                (If no, please continue to Question 8)

 

a)                                     If your answer to Question 7 was “yes”:

 

	 	
			i)

				
			During the past five years, was any such registration statement or Regulation A offering statement the subject of a refusal order, stop order or order suspending the Regulation A exemption?

			

 

Yes ☐                               No ☐

 

	 	
			ii)

				
			Is any such registration statement or Regulation A offering statement currently the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued?

			

 

Yes ☐                               No ☐

 

	
			8.

				
			Are you subject to a U.S. Postal Service false representation order entered within the past five years?

			

 

Yes ☐                               No ☐

 

	
			9.

				
			Are you currently subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the U.S. Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations?

			

 

Yes ☐                               No ☐

 

	
			10.

				
			In the space provided below, describe any facts or circumstances that caused you to answer “yes” to any Question (indicating the corresponding Question number). Attach additional pages if necessary.

			

 

4 Including (but not limited to) Section 17(a)(1) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, Section 15(c)(1) of the Exchange Act, and Section 206(1) of the Advisers Act or any other rule or regulation thereunder.

5 In providing additional information, please explain whether or not the suspension or expulsion resulted from “any act or omission to act constituting conduct inconsistent with just and equitable principles of trade.”

 

 

 

 

 

 

	
			A.

				
			FOR EXECUTION BY AN INDIVIDUAL:

			

 

By:                                                                              

 

Print Name:                                                               

 

                       

Date

 

 

B.     FOR EXECUTION BY AN ENTITY:

 

	 	
			Entity Name:

				                                                                            
	 	By:  	                                                                            
	 	Print Name:  	                                                                            
	 	Title:  	                                                                            

 

                       

Date

 

	
			C.

				
			ADDITIONAL SIGNATURES (if required by partnership, corporation or trust document):

			

 

 

	 	
			Entity Name:

				                                                                            
	 	By:  	                                                                            
	 	Print Name:  	                                                                            
	 	Title:  	                                                                            

 

                       

Date

 

 

	 	
			Entity Name:

				                                                                            
	 	By:  	                                                                            
	 	Print Name:  	                                                                            
	 	Title:  	                                                                            

 

                       

Date

 

 

 

 

Exhibit D

 

CANADIAN ACCREDITED INVESTOR CERTIFICATE

 

To:           BETTER CHOICE COMPANY INC. (the “Corporation”)

The categories listed herein contain certain specifically defined terms. If you are unsure as to the meanings of those terms, or are unsure as to the applicability of any category below, please contact your broker and/or legal advisor before completing this certificate.

Capitalized terms not specifically defined in this Exhibit D have the meanings ascribed to them in the Subscription Agreement to which this Exhibit D is attached.

In connection with the purchase by the undersigned Subscriber of the Purchased Subscription Receipts, the Subscriber hereby represents, warrants, covenants and certifies to the Corporation and the Agents (and acknowledges that the Corporation, the Agents and their respective counsel are relying thereon) that:

	
			(a)

				
			the Subscriber is resident in or otherwise subject to the securities laws of one of the Provinces or Territories of Canada;

			

 

	
			(b)

				
			the Subscriber is purchasing the Purchased Subscription Receipts as principal for its own account and not for the benefit of any other person or is deemed to be purchasing as principal pursuant to NI 45-106;

			

 

	
			(c)

				
			the Subscriber is, and at the Closing Time, will be, an “accredited investor” within the meaning of NI 45-106 or Section 73.3 of the Securities Act (Ontario) on the basis that the undersigned fits within one of the categories of an “accredited investor” reproduced below beside which the undersigned has indicated the undersigned belongs to such category;

			

 

	
			(d)

				
			the Subscriber was not created or is not used, solely to purchase or hold securities as an accredited investor as described in paragraph (m) below; and

			

 

	
			(e)

				
			upon execution of this Exhibit D by the Subscriber, including, if applicable, Appendix 1 to this Exhibit D, this Exhibit D shall be incorporated into and form a part of the Subscription Agreement.

			

 

(PLEASE CHECK THE BOX OF THE APPLICABLE CATEGORY OF ACCREDITED INVESTOR)

NOTE: If you check the box beside paragraphs (j), (k) or (l) below, you must complete and execute Appendix 1 to this Schedule “B”.

	 	
			(a)a Canadian financial institution, or a Schedule III bank (or in Ontario, a bank listed in Schedule I, II, or III of the Bank Act (Canada));

			
	 	
			 

			
	 	 
	 	
			(b)the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada);

			
	 	 
	 	 
	 	
			(c)a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary;

			
	 	 

 

 

 

 

	 	 	 
	 	
			(d)a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer;

				 
	 	 	 
	 	 	 
	 	
			(e)an individual registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d);

				 
	 	 	 
	 	 	 
	 	
			(e.1) an individual formerly registered under the securities legislation of a jurisdiction of Canada, other than an individual formerly registered solely as a representative of a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador);

				 
	 	 	 
	 	 	 
	 	
			(f)the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly-owned entity of the Government of Canada or a jurisdiction of Canada;

				 
	 	
			 

				 
	 	
			 

				 
	 	
			(g)a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l’”le de Montréal or an intermunicipal management board in Québec;

				 
	 	
			 

				 
	 	
			 

				 
	 	
			(h)any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government;

				 
	 	
			 

				 
	 	 	 
	 	
			(i)a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction of Canada;

				 
	 	
			 

				 
	 	
			 

				 
	 	
			(j)an individual who, either alone or with a spouse, beneficially owns, financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $1,000,000;

			 

				 
	 	 	 
	 	
			If you check beside paragraph (j) above, you must complete and execute Appendix 1 to this Exhibit D.

				 
	 	 	 
	 	
			(j.1) an individual who beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $5,000,000;

				 
	 	 	 
	 	 	 
	 	
			(k)an individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year;

				 
	 	 	 
	 	If you check beside paragraph (k) above, you must complete and execute Appendix 1 to this Exhibit D.	 

 

 

 

 

 

	 	
			(l)an individual who, either alone or with a spouse, has net assets of at least $5,000,000;

			 

				 
	 	
			 

				 
	 	If you check beside paragraph (l) above, you must complete and execute Appendix 1 to this Exhibit D.	 
	 	
			 

				 
	 	 	 
	 	
			(m)a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements;

				 
	 	
			 

				 
	 	 	 
	 	
			(n)an investment fund that distributes or has distributed its securities only to (i) a person that is or was an accredited investor at the time of the distribution, (ii) a person that acquires or acquired securities in the circumstances referred to in sections 2.10 [Minimum amount investment], or 2.19 [Additional investment in investment funds] of NI 45-106, or (iii) a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 [Investment fund reinvestment] of NI 45-106;

				 
	 	 	 
	 	 	 
	 	
			(o)an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt;

				 
	 	
			 

				 
	 	
			 

				 
	 	
			(p)a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be;

				 
	 	
			 

				 
	 	
			 

				 
	 	
			(q)a person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction;

				 
	 	
			 

				 
	 	
			 

				 
	 	
			(r)a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded;

				 
	 	
			 

				 
	 	
			 

				 
	 	
			(s)an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function;

				 
	 	
			 

				 
	 	
			 

				 
	 	
			(t)a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors;

				 
	 	
			 

				 
	 	
			 

				 
	 	
			(u)an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser;

				 
	 	
			 

				 

 

 

 

 

	 	
			(v)a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as an accredited investor; or

				 
	 	
			 

				 
	 	 	 
	 	
			(w)a trust established by an accredited investor for the benefit of the accredited investor’s family members of which a majority of the trustees are accredited investors and all of the beneficiar ies are the accredited investor’s spouse, a former spouse of the accredited investor or a parent, grandparent, brother, sister, child or grandchild of that accredited investor, of that accredited investor’s spouse or of that accredited investor’s former spouse.

				 
	 	
			 

				 
	 	
			 

				 
	 	 	 
	
			For the purposes hereof, the following definitions are included for convenience:

				 

 

	 	
			A.

				
			“bank” means a bank named in Schedule I or II of the Bank Act (Canada);

			

 

	 	
			B.

				
			“Canadian financial institution” means (i) an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of that Act, or (ii) a bank, loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or credit union league or federation that, in each case, is authorized by an enactment of a statute of Canada or a jurisdiction of Canada to carry on business in Canada or a jurisdiction of Canada;

			

 

	 	
			C.

				
			“company” means any corporation, incorporated association, incorporated syndicate or other incorporated organization;

			

 

	 	
			D.

				
			“entity” means a company, syndicate, partnership, trust or unincorporated organization;

			

 

	 	
			E.

				
			“financial assets” means (i) cash, (ii) securities, or (iii) a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation;

			

 

	 	
			F.

				
			“founder” means, in respect of an issuer, a person who, (i) acting alone, in conjunction, or in concert with one or more persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the issuer, and (ii) at the time of the distribution or trade is actively involved in the business of the issuer;

			

 

	 	
			G.

				
			“fully managed account” means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client’s express consent to a transaction;

			

 

 

 

 

	 	
			H.

				
			“individual” means a natural person, but does not include a partnership, unincorporated association, unincorporated organization, trust, or a natural person in his or her capacity as trustee, executor, administrator or other legal personal representative;

			

 

	 	
			I.

				
			“investment fund” means a mutual fund or a non-redeemable investment fund, and, for greater certainty in British Columbia, includes an employee venture capital corporation that does not have a restricted constitution, and is registered under Part 2 of the Employee Investment Act (British Columbia), R.S.B.C. 1996 c. 112, and whose business objective is making multiple investments and a venture capital corporation registered under Part 1 of the Small Business Venture Capital Act (British Columbia), R.S.B.C. 1996 c. 429 whose business objective is making multiple investments;

			

 

	 	
			J.

				
			“person” includes (a) an individual, (b) a corporation, (c) a partnership, trust, fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not, and (d) an individual or other person in that person’s capacity as a trustee, executor, administrator or personal or other legal representative;

			

 

	 	
			K.

				
			“related liabilities” means (i) liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets or (ii) liabilities that are secured by financial assets;=

			

 

	 	
			L.

				
			“Schedule III bank” means an authorized foreign bank named in Schedule III of the Bank Act (Canada);

			

 

	 	
			M.

				
			“spouse” means an individual who (i) is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual, (ii) is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender, or (iii) in Alberta, is an individual referred to in paragraph (i) or (ii), or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta); and

			

 

	 	
			N.

				
			“subsidiary” means an issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary.

			

 

In NI 45-106 a person or company is an affiliate of another person or company if one is a subsidiary of the other, or if each of them is controlled by the same person or company.

In NI 45-106 and except in Part 2 Division 4 of NI 45-106, a person (first person) is considered to control another person (second person) if (a) the first person beneficially owns or directly or indirectly exercises control or direction over securities of the second person

 

 

 

 

carrying votes which, if exercised, would entitle the first person to elect a majority of the directors of the second person, unless that first person holds the voting securities only to secure an obligation, (b) the second person is a partnership, other than a limited partnership, and the first person holds more than 50% of the interests of the partnership, or (c) the second person is a limited partnership and the general partner of the limited partnership is the first person.

In NI 45-106 a trust company or trust corporation described in paragraph (p) above of the definition of “accredited investor” (other than in respect of a trust company or trust corporation registered under the laws of Prince Edward Island that is not registered or authorized under the Trust and Loan Companies Act (Canada) or under comparable legislation in another jurisdiction of Canada) is deemed to be purchasing as principal.

In NI 45-106 a person described in paragraph (q) above of the definition of “accredited investor” is deemed to be purchasing as principal.

The foregoing representations contained in this certificate are true and accurate as of the date of this certificate and will be true and accurate as of the Closing Time. If any such representations shall not be true and accurate prior to the Closing Time, the undersigned shall give immediate written notice of such fact to the Corporation and the Agents prior to the Closing Time.

	DATED:	 	 	SIGNED:	 
	 	 	 	 	 
	 	 	 	 	 
	
			Witness (if Subscriber is an individual)

				 	 
	 	 	 	 	 
	 	 	 	 	 
	
			Print the name of Witness

				 	
			Print the name of Subscriber

			
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
			If Subscriber is not an Individual print name and title of Authorized Signing Officer

			

 

 

 

 

 

 

APPENDIX 1 TO EXHIBIT D

RISK ACKNOWLEDGEMENT CERTIFICATE

Form 45-106F9

Form for Individual Accredited Investors

 

	
			WARNING!

			This investment is risky. Don’t invest unless you can afford to lose all the money you pay for this investment.

			

 

	
			SECTION 1 TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER

			
	
			1. About your investment

			
	
			Type of securities: Subscription Receipts

				
			Issuer: Better Choice Company Inc.

			
	
			Purchased from: Better Choice Company Inc.

			
	
			SECTIONS 2 TO 4 TO BE COMPLETED BY THE SUBSCRIBER

			
	
			2. Risk acknowledgement

			
	
			This investment is risky. Initial to the right of each category that you understand that:

				
			Your

			initials

			
	
			Risk of loss – You could lose your entire investment of $ _________. [Instruction: Insert the total dollar amount of the investment.]

				 
	
			Liquidity risk – You may not be able to sell your investment quickly – or at all.

				 
	
			Lack of information – You may receive little or no information about your investment.

				 
	
			Lack of advice – You will not receive advice from the salesperson about whether this investment is suitable for you unless the salesperson is registered. The salesperson is the person who meets with, or provides information to, you about making this investment. To check whether the salesperson is registered, go to www.aretheyregistered.ca.

				 
	
			3. Accredited investor status

			
	
			You must meet at least one of the following criteria to be able to make this investment. Initial the statement that applies to you. (You may initial more than one statement.) The person identified in section 6 is responsible for ensuring that you meet the definition of accredited investor. That person, or the salesperson identified in section 5, can help you if you have questions about whether you meet these criteria.

				
			Your initials

			

 

 

 

 

 

	
			•Your net income before taxes was more than $200,000 in each of the 2 most recent calendar years, and you expect it to be more than $200,000 in the current calendar year. (You can find your net income before taxes on your personal income tax return.)

				 
	
			•Your net income before taxes combined with your spouse’s was more than $300,000 in each of the 2 most recent calendar years, and you expect your combined net income before taxes to be more than $300,000 in the current calendar year.

				 
	
			•Either alone or with your spouse, you own more than $1 million in cash and securities, after subtracting any debt related to the cash and securities.

				 
	
			•Either alone or with your spouse, you have net assets worth more than $5 million. (Your net assets are your total assets (including real estate) minus your total debt.)

				 
	
			4. Your name and signature

			
	
			By signing this form, you confirm that you have read this form and you understand the risks of making this investment as identified in this form.

			
	
			First and last name (please print):

			
	
			Signature:

				
			Date: ___________, 2018

			
	
			SECTION 5 TO BE COMPLETED BY THE SALESPERSON

			
	
			5. Salesperson information

			
	
			[Instruction: The salesperson is the person who meets with, or provides information to, the subscriber with respect to making this investment. That could include a representative of the issuer or selling security holder, a registrant or a person who is exempt from the registration requirement.]

			
	
			First and last name of salesperson (please print):

			
	
			Telephone:

				
			E-mail:

			
	
			Name of firm (if registered):

			 

			

 

 

 

 

 

 

	
			SECTION 6 TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER

			
	
			6. For more information about this investment

			
	
			Better Choice Company Inc.

			 

			Attention:

			Email:

			For more information about prospectus exemptions, contact your local securities regulator. You can find contact information at www.securities-administrators.ca.

			

 

Form instructions:

1. The information in sections 1, 5 and 6 must be completed before the subscriber completes and signs the form.

2. The subscriber must sign this form. Each of the subscriber and the issuer or selling security holder must receive a copy of this form signed by the subscriber. The issuer or selling security holder is required to keep a copy of this form for 8 years after the distribution.

 

 

 

 

 

Exhibit E

 

CONTACT INFORMATION – PROVINCIAL AND TERRITORIAL SECURITIES REGULATORY AUTHORITIES

 

	
			The contact information of the public official in the local jurisdiction who can answer questions about the security regulatory authority’s or regulator’s indirect collection of information is as follows:

			Alberta Securities Commission

			Suite 600, 250 – 5th Street SW

			Calgary, Alberta T2P 0R4

			Telephone: (403) 297-6454

			Toll free in Canada: 1-877-355-0585

			Facsimile: (403) 297-2082

				
			 

			Government of the Northwest Territories

			Office of the Superintendent of Securities

			P.O. Box 1320

			Yellowknife, Northwest Territories X1A 2L9

			Attention: Deputy Superintendent, Legal & Enforcement

			Telephone: (867) 920-8984

			Facsimile: (867) 873-0243

			
	
			British Columbia Securities Commission

			P.O. Box 10142, Pacific Centre

			701 West Georgia Street

			Vancouver, British Columbia V7Y 1L2

			Inquiries: (604) 899-6854

			Toll free in Canada: 1-800-373-6393

			Facsimile: (604) 899-6581

			Email: inquiries@bcsc.bc.ca

				
			Nova Scotia Securities Commission

			Suite 400, 5251 Duke Street

			Duke Tower

			P.O. Box 458

			Halifax, Nova Scotia B3J 2P8

			Telephone: (902) 424-7768

			Facsimile: (902) 424-4625

			
	
			The Manitoba Securities Commission

			500 – 400 St. Mary Avenue

			Winnipeg, Manitoba R3C 4K5

			Telephone: (204) 945-2548

			Toll free in Manitoba 1-800-655-5244

			Facsimile: (204) 945-0330

				
			Government of Nunavut

			Department of Justice

			Legal Registries Division

			P.O. Box 1000, Station 570

			1st Floor, Brown Building

			Iqaluit, Nunavut X0A 0H0

			Telephone: (867) 975-6590

			Facsimile: (867) 975-6594

			
	
			Financial and Consumer Services Commission

			(New Brunswick)

			85 Charlotte Street, Suite 300

			Saint John, New Brunswick E2L 2J2

			Telephone: (506) 658-3060

			Toll free in Canada: 1-866-933-2222

			Facsimile: (506) 658-3059

			Email: info@fcnb.ca

				
			Ontario Securities Commission

			20 Queen Street West, 22nd Floor

			Toronto, Ontario M5H 3S8

			Telephone: (416) 593- 8314

			Toll free in Canada: 1-877-785-1555

			Facsimile: (416) 593-8122

			Email: exemptmarketfilings@osc.gov.on.ca

			Public official contact regarding indirect collection of

			information: Inquiries Officer

			
	
			Government of Newfoundland and Labrador

			Financial Services Regulation Division

			P.O. Box 8700

			Confederation Building

			2nd Floor, West Block

			Prince Philip Drive

			St. John’s, Newfoundland and Labrador A1B 4J6

			Attention: Director of Securities

			Telephone: (709) 729-4189

			Facsimile: (709) 729-6187

				
			Prince Edward Island Securities Office

			95 Rochford Street, 4th Floor Shaw Building

			P.O. Box 2000

			Charlottetown, Prince Edward Island C1A 7N8

			Telephone: (902) 368-4569

			Facsimile: (902) 368-5283

			

 

 

 

 

 

	
			Financial and Consumer Affairs Authority

			of Saskatchewan

			Suite 601 - 1919 Saskatchewan Drive

			Regina, Saskatchewan S4P 4H2

			Telephone: (306) 787-5879

			Facsimile: (306) 787-5899

			 

			Office of the Superintendent of Securities

			Government of Yukon

			Department of Community Services

			307 Black Street, 1st floor

			Box 2703, C-6

			Whitehorse, Yukon Y1A 2C6

			Telephone: (867) 667-5466

			Facsimile: (867) 393-6251

			Email:Securities@gov.yk.ca

				
			Autorité des marchés financiers

			800, Square Victoria, 22e étage

			C.P. 246, Tour de la Bourse

			Montréal, Québec H4Z 1G3

			Telephone: (514) 395-0337 or 1-877-525-0337

			Facsimile: (514) 873-6155

			(For filing purposes only)

			Facsimile: (514) 864-6381

			(For privacy requests only)

			Email: financementdessocietes@lautorite.qc.ca

			(For corporate finance issuers);

			Email: fonds_dinvestissement@lautorite.qc.ca

			(For investment fund issuers)

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