Document:

Exhibit 4.6

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE ►.

Void after 5:00 p.m. (Toronto time) on ►.

	
Number of Unit Compensation Options: ►

 

	
Compensation Option Certificate No. CO-►

 

NUTRITIONAL HIGH INTERNATIONAL INC.

(Incorporated under the laws of Canada)

This is to certify that, for value received, ► (the "Holder"), shall have the right to purchase from Nutritional High International Inc. (the "Corporation"), at any time and from time to time up to 5:00 p.m. (Toronto time) on ► (the "Expiry Time"), one unit of the Corporation (a "Unit") for each Compensation Option (individually, a "Unit Compensation Option") represented hereby at a price of ► per Unit (the "Exercise Price"), upon and subject to the terms and conditions set forth herein.  Each Unit shall be comprised of one fully paid and non-assessable common share in the capital of the Corporation (a "Broker Share") and one-half of one non-transferable common share purchase warrant (a "Unit Warrant"), with each Unit Warrant entitling the holder thereof to purchase one additional common share (a "Unit Warrant Share") at a price of ► per Unit Warrant Share at any time and from time to time up to the Expiry Time.

The Unit Warrants issuable upon exercise of the Unit Compensation Options evidenced hereby shall be issued pursuant to and governed by a warrant certificate, the form of which is attached hereto as Schedule "B" (the "Warrant Certificate").  The number of Broker Shares comprising part of each Unit (but not the number of Unit Warrants) which the Holder is entitled to purchase upon exercise of the Unit Compensation Options and the Exercise Price shall be subject to adjustment as hereinafter provided.  Adjustments to the Unit Warrants will be governed by the terms of the Warrant Certificate as if the Unit Warrants were issued on the date of this certificate.

	1.	For the purposes of this certificate (the "Unit Compensation Option Certificate"), the term:

		(a)	"Common Shares" means common shares without par value in the capital of the Corporation as constituted as of the date hereof, provided that in the event of a subdivision, redivision, reduction, combination or consolidation thereof or any other adjustment under section 8 herein, or successive such subdivisions, redivisions, reductions, combinations, consolidations or other adjustments, then subject to the adjustments, if any, having been made in accordance with the provisions of this Unit Compensation Option Certificate, "Common Shares" shall thereafter mean the shares, other securities or other property resulting from such subdivision, redivision, reduction, combination or consolidation or other adjustment.

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	2.	All Unit Compensation Option Certificates shall be signed by an officer of the Corporation holding office at the time of signing, or any successor or replacement of such person and notwithstanding any change in any of the persons holding said offices between the time of actual signing and the delivery of the Unit Compensation Option Certificate, the Unit Compensation Option Certificate so signed shall be valid and binding upon the Corporation.

	3.	All rights under any of the Unit Compensation Option Certificates in respect of which the right of subscription and purchase therein provided for shall not theretofore have been exercised shall wholly cease and such Unit Compensation Option Certificates and the Unit Compensation Options evidenced thereby shall be wholly void and of no valid or binding effect after the Expiry Time.

	4.	The right to purchase Units pursuant to the Unit Compensation Options may only be exercised by the Holder at or before the Expiry Time by:

		(a)	duly completing and executing a subscription substantially in the form attached as Schedule "A" (the "Subscription Form"), in the manner therein indicated; and

		(b)	surrendering this Unit Compensation Option Certificate and the duly completed and executed Subscription Form to the Corporation prior to the Expiry Time at its principal office, 77 King Street West, Suite 2905, Toronto, Ontario M5K 1H1 together with payment of the purchase price for the Units subscribed for in the form of cash or a certified cheque payable to the Corporation in an amount equal to the then applicable Exercise Price multiplied by the number of Units subscribed for.

	5.	Upon delivery and payment as set forth in section 4 herein, the Corporation shall cause to be issued to the Holder the number of Units subscribed for by the Holder and the Holder shall become a shareholder of the Corporation in respect of the Broker Shares comprised in such Units with effect from the date of such delivery and payment and shall be entitled to delivery of certificates evidencing the Broker Shares and Unit Warrants comprising the Units.  The Corporation shall cause such certificates to be mailed to the Holder at the address or addresses specified in the Subscription Form within five (5) business days of such delivery and payment as set forth in section 4 herein or, if so instructed by the Holder, held for pick-up by the Holder at the principal office of the Corporation. Notwithstanding any adjustment provided for in section 8 herein, the Corporation shall not be required upon the exercise of any Unit Compensation Options to issue fractional Broker Shares or Unit Warrants in satisfaction of its obligations hereunder and the Holder understands and agrees that it will not be entitled to any cash payment or other form of compensation in respect of a fractional Broker Share or Unit Warrant that might otherwise have been issued.

	6.	The holding of a Unit Compensation Option shall not constitute the Holder a shareholder of the Corporation nor entitle him to any right or interest in respect thereof except as herein expressly provided.

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	7.	The Corporation covenants and agrees that until the Expiry Time, while any of the Unit Compensation Options shall be outstanding, it shall reserve and there shall remain unissued out of its authorized capital a sufficient number of Broker Shares to satisfy the right of purchase herein provided, as such right of purchase may be adjusted pursuant to sections 8 and 9 herein. The Corporation further covenants and agrees that while any of the Unit Compensation Options shall be outstanding, the Corporation shall (a) comply with the securities legislation applicable to it, not in default of any requirements of such legislation; (b) use its commercially reasonable best efforts to do or cause to be done all things necessary to preserve and maintain its corporate existence; and (c) at its own expense expeditiously use its commercially reasonable best efforts to obtain the listing of such Broker Shares (subject to issue or notice of issue) on each stock exchange or over-the-counter market on which the Broker Shares may be listed from time to time. All Broker Shares which shall be issued upon the exercise of the right to purchase herein provided for, upon payment therefor of the amount at which such Broker Shares may at the time be purchased pursuant to the provisions hereof, shall be issued as fully paid and non‐assessable shares and the holders thereof shall not be liable to the Corporation or its creditors in respect thereof.

	8.            	(a)            	For the purpose of this section 8, unless there is something in the subject matter or context inconsistent therewith, the words and terms defined below shall have the respective meanings specified therefor:

"Current Market Price" of the Common Shares at any date means the price per share equal to the weighted average price at which the Common Shares have traded on the Canadian Stock Exchange (the "CSE") or, if the Common Shares are not then listed on the CSE, on such other Canadian stock exchange on which the shares trade as may be selected by the directors of the Corporation for such purpose or, if the Common Shares are not then listed on any Canadian stock exchange, in the over-the-counter market, during the period of any twenty consecutive trading days ending not more than five (5) business days before such date; provided that the weighted average price shall be determined by dividing the aggregate sale price of all Common Shares sold on the said exchange or market, as the case may be, during the said twenty consecutive trading days by the total number of Common Shares so sold; and provided further that if the Common Shares are not then listed on any Canadian stock exchange or traded in the over-the counter market, then the Current Market Price shall be determined by such national firm of independent chartered accountants as may be selected by the directors of the Corporation;

"director" means a director of the Corporation for the time being and, unless otherwise specified herein, a reference to action "by the directors" means action by the directors of the Corporation as a board or, whenever empowered, action by the executive committee of such board; and

"trading day" with respect to a stock exchange or over-the-counter market means a day on which such stock exchange or market is open for business.

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		(b)	If and whenever at any time after the date hereof and prior to the Expiry Time the Corporation shall (i) subdivide or redivide its then outstanding common shares ("Common Shares") into a greater number of Common Shares, (ii) reduce, combine or consolidate its then outstanding Common Shares into a lesser number of Common Shares or (iii) issue Common Shares (or securities exchangeable for or convertible into Common Shares) to the holders of all or substantially all of its then outstanding Common Shares by way of a stock dividend or other distribution (any of such events herein called a "Common Share Reorganization"), then the Exercise Price shall be adjusted effective immediately after the effective date of any such event in (i) or (ii) above or the record date at which the holders of Common Shares are determined for the purpose of any such dividend or distribution in (iii) above, as the case may be, by multiplying the Exercise Price in effect on such effective date or record date, as the case may be, by a fraction, the numerator of which shall be the number of Common Shares outstanding on such effective date or record date, as the case may be, before giving effect to such Common Share Reorganization and the denominator of which shall be the number of Common Shares outstanding immediately after giving effect to such Common Share Reorganization including, in the case where securities exchangeable for or convertible into Common Shares are distributed, the number of Common Shares that would be outstanding if such securities were exchanged for or converted into Common Shares.

		(c)	If at any time after the date hereof and prior to the Expiry Time the Corporation shall fix a record date for the issue or distribution to the holders of all or substantially all of the outstanding Common Shares, of rights, options or warrants pursuant to which such holders are entitled, during a period expiring not more than 45 days after the record date for such issue (such period being the "Rights Period"), to subscribe for or purchase Common Shares or securities exchangeable for or convertible into Common Shares at a price per share (or in the case of securities exchangeable for or convertible into Common Shares at an exchange or conversion price per share at the date of issue of such securities) of less than 95% of the Current Market Price of the Common Shares on such record date (any of such events being herein called a "Rights Offering"), the Exercise Price shall be adjusted effective immediately after the record date for the Rights Offering to the amount determined by multiplying the Exercise Price in effect on such record date by a fraction:

		(i)	the numerator of which shall be the aggregate of

		(A)	the number of Common Shares outstanding on the record date for the Rights Offering; and

		(B)	the quotient determined by dividing

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		(1)	either (a) the product of the number of Common Shares offered during the Rights Period pursuant to the Rights Offering and the price at which such Common Shares are offered, or, (b) the product of the exchange or conversion price of the securities so offered and the number of Common Shares for or into which the securities offered pursuant to the Rights Offering may be exchanged or converted, as the case may be, by

		(2)	the Current Market Price of the Common Shares as of the record date for the Rights Offering; and

		(ii)	the denominator of which shall be the aggregate of the number of Common Shares outstanding on such record date and the number of Common Shares offered pursuant to the Rights Offering (including in the case of the issue or distribution of securities exchangeable for or convertible into Common Shares the number of Common Shares for or into which such securities may be exchanged or converted).

If by the terms of the rights, options, or warrants referred to in this section 8(c), there is more than one purchase, conversion or exchange price per Common Share, the aggregate price of the total number of additional Common Shares offered for subscription or purchase, or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered, shall be calculated for purposes of the adjustment on the basis of the lowest purchase, conversion or exchange price per Common Share, as the case may be.  Any Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any such calculation.  To the extent that any adjustment in the Exercise Price occurs pursuant to this section 8(c) as a result of the fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants referred to in this section 8(c), the Exercise Price shall be readjusted immediately after the expiry of any relevant exchange, conversion or exercise right to the Exercise Price which would then be in effect based upon the number of Common Shares actually issued and remaining issuable after such expiry and shall be further readjusted in such manner upon the expiry of any further such right.

If the Holder has exercised this Warrant Certificate in accordance herewith during the period beginning after the record date for a Rights Offering and ending on the last day of the Rights Period thereunder, the Holder will, in addition to the Broker Shares to which it is otherwise entitled upon such exercise, be entitled to that number of additional Broker Shares equal to the difference, if any, between (x) the result obtained when the Exercise Price in effect immediately prior to the end of such Rights Offering pursuant to this subsection is multiplied by the number of Common Shares received upon the exercise of this Warrant Certificate during such period, and the resulting product is divided by the Exercise Price as adjusted for such Rights Offering pursuant to this subsection provided that the provisions of section 9 herein will be applicable to any fractional interest in a Broker Share to which such Holder might otherwise be entitled and (y) the number of Broker Shares received upon the exercise of this Unit Compensation Option Certificate during such period. Such additional Common Shares will be deemed to have been issued to the Holder immediately following the end of the Rights Period and a certificate for such additional Common Shares will be delivered to such Holder within ten (10) business days following the end of the Rights Period.

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		(d)	If at any time after the date hereof and prior to the Expiry Time, the Corporation shall fix a record date for the issue or distribution to the holders of all or substantially all of the Common Shares of:

		(i)	shares of the Corporation of any class other than Common Shares;

		(ii)	rights, options or warrants to acquire Common Shares or securities exchangeable for or convertible into Common Shares (other than rights, options or warrants pursuant to which holders of Common Shares are entitled, during a period expiring not more than 45 days after the record date for such issue, to subscribe for or purchase Common Shares at a price per share (or in the case of securities exchangeable for or convertible into Common Shares at an exchange or conversion price per share at the date of issue of such securities) of at least 95% of the Current Market Price of the Common Shares on such record date);

		(iii)	evidences of indebtedness of the Corporation; or

		(iv)	any property or assets of the Corporation (for greater certainty, excluding a cash dividend in the ordinary course);

and if such issue or distribution does not constitute a Common Share Reorganization or a Rights Offering (any of such non-excluded events being herein called a "Special Distribution"), the Exercise Price shall be adjusted effective immediately after the record date for the Special Distribution to the amount determined by multiplying the Exercise Price in effect on the record date for the Special Distribution by a fraction:

		(A)	the numerator of which shall be the difference between

		(1)	the product of the number of Common Shares outstanding on such record date and the Current Market Price of the Common Shares on such record date, and

		(2)	the fair value, as determined by the directors of the Corporation, to the holders of the Common Shares of the shares, rights, options, warrants, evidences of indebtedness or property or assets to be issued or distributed in the Special Distribution, and

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		(B)	the denominator of which shall be the product obtained by multiplying the number of Common Shares outstanding on such record date by the Current Market Price of the Common Shares on such record date.

Any Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of such calculation.  To the extent that any adjustment in the Exercise Price occurs pursuant to this section 8(d) as a result of the fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants to acquire Common Shares or securities exchangeable for or convertible into Common Shares referred to in this section 8(d), the Exercise Price shall be readjusted immediately after the expiry of any relevant exercise, exchange or conversion right to the amount which would then be in effect if the fair market value had been determined on the basis of the number of Common Shares issued and remaining issuable immediately after such expiry, and shall be further readjusted in such manner upon the expiry of any further such right.

		(e)	If and whenever at any time after the date hereof and prior to the Expiry Time there is a capital reorganization of the Corporation or a reclassification or other change in the Common Shares (other than a Common Share Reorganization) or a consolidation or merger or amalgamation of the Corporation with or into any other corporation or other entity (other than a consolidation, merger or amalgamation which does not result in any reclassification of the outstanding Common Shares or a change of the Common Shares into other securities), or a transfer of all or substantially all of the Corporation's undertaking and assets to another corporation or other entity in which the holders of Common Shares are entitled to receive shares, other securities or other property (any of such events being called a "Capital Reorganization"), after the effective date of the Capital Reorganization the Holder shall be entitled to receive, and shall accept, for the same aggregate consideration, upon exercise of the Unit Compensation Options, in lieu of the number of Broker Shares to which the Holder was theretofore entitled upon the exercise of the Unit Compensation Options, the kind and aggregate number of Broker Shares and other securities or property resulting from the Capital Reorganization which the Holder would have been entitled to receive as a result of the Capital Reorganization if, on the effective date thereof, the Holder has been the registered holder of the number of Broker Shares to which the Holder was theretofore entitled to purchase or receive upon the exercise of the Unit Compensation Options.  If necessary, as a result of any Capital Reorganization, appropriate adjustments shall be made in the application of the provisions of this Unit Compensation Option Certificate with respect to the rights and interest thereafter of the Holder to the end that the provisions of this Unit Compensation Option Certificate shall thereafter correspondingly be made applicable as nearly as may reasonably be possible in relation to any shares or other securities or property thereafter deliverable upon the exercise of this Unit Compensation Option Certificate.

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		(f)	If and whenever at any time after the date hereof and prior to the Expiry Time, any of the events set out in sections 8(a), (b), (c), (d) or (e) herein shall occur and the occurrence of such event results in an adjustment of the Exercise Price pursuant to the provisions of this section 8, then the number of Broker Shares purchasable pursuant to the Unit Compensation Options shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of Broker Shares then otherwise purchasable on the exercise thereof by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to the adjustment and the denominator of which shall be the Exercise Price resulting from such adjustment.

		(g)	If the Corporation takes any action affecting its Common Shares to which the foregoing provisions of this section 8, in the opinion of the board of directors of the Corporation, acting in good faith, are not strictly applicable, or if strictly applicable would not fairly adjust the rights of the Holder against dilution in accordance with the intent and purposes hereof, or would otherwise materially affect the rights of the Holder hereunder, then the Corporation shall, subject to the approval of the CSE (or such other stock exchange or quotation system on which the Common Shares are then listed and posted (or quoted) for trading, as applicable), execute and deliver to the Holder an amendment hereto providing for an adjustment in the application of such provisions so as to adjust such rights as aforesaid in such manner as the board of directors of the Corporation may determine to be equitable in the circumstances, acting in good faith.  The failure of the taking of action by the board of directors of the Corporation to so provide for any adjustment on or prior to the effective date of any action or occurrence giving rise to such state of facts will be conclusive evidence that the board of directors has determined that it is equitable to make no adjustment in the circumstances.

		(h)	For greater certainty, the number of Unit Warrants comprising part of each Unit issuable upon the exercise of each Unit Compensation Option will not be adjusted pursuant to the provisions of this section 8 and sections 9 and 10.

	9.	The following rules and procedures shall be applicable to the adjustments made pursuant to section 8 herein:

		(a)	any Common Shares owned or held by or for the account of the Corporation shall be deemed not be to outstanding except that, for the purposes of section 8 herein, any Common Shares owned by a pension plan or profit sharing plan for employees of the Corporation or any of its subsidiaries shall not be considered to be owned or held by or for the account of the Corporation;

		(b)	no adjustment in the Exercise Price or the number of Common Shares purchasable pursuant to this Unit Compensation Option Certificate shall be required unless a change of at least 1% of the prevailing Exercise Price or the number of Broker Shares purchasable pursuant to this Unit Compensation Option Certificate would result, provided, however, that any adjustment which, except for the provisions of this section 9(b), would otherwise have been required to be made, shall be carried forward and taken into account in any subsequent adjustment;

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		(c)	the adjustments provided for in section 8 herein are cumulative and shall apply to successive subdivisions, consolidations, dividends, distributions and other events resulting in any adjustment under the provisions of such item;

		(d)	in the absence of a resolution of the board of directors of the Corporation fixing a record date for any dividend or distribution referred to in section 8(a)(iii) herein, the Corporation shall be deemed to have fixed as the record date therefor the date on which such dividend or distribution is effected;

		(e)	if the Corporation sets a record date to take any action and thereafter and before the taking of such action abandons its plan to take such action, then no adjustment to the Exercise Price will be required by reason of the setting of such record date;

		(f)	as a condition precedent to the taking of any action which would require any adjustment to the Unit Compensation Options evidenced hereby, including the Exercise Price, the Corporation must take any corporate action which may be necessary in order that the Corporation shall have unissued and reserved in its authorized capital and may validly and legally issue as fully paid and non-assessable all of the shares or other securities which the Holder is entitled to receive on the full exercise thereof in accordance with the provisions hereof;

		(g)	forthwith, but no later than fourteen (14) days, after any adjustment to the Exercise Price or the number of Broker Shares purchasable pursuant to the Unit Compensation Options, the Corporation shall provide to the Holder a certificate of an officer of the Corporation certifying as to the amount of such adjustment and, in reasonable detail, describing the event requiring and the manner of computing or determining such adjustment;

		(h)	any question that at any time or from time to time arises with respect to the amount of any adjustment to the Exercise Price or other adjustment pursuant to section 8 herein shall be conclusively determined by a firm of independent chartered accountants (who may be the Corporation's auditors) and shall be binding upon the Corporation and the Holder;

		(i)	any adjustment to the Exercise Price under the terms of this Unit Compensation Option Certificate shall be subject to the prior approval of the CSE (or such other stock exchange or quotation system on which the Common Shares are then listed and posted (or quoted) for trading, as applicable); and

		(j)	in case the Corporation, after the date of issue of this Unit Compensation Option Certificate, takes any action affecting the Common Shares, other than an action described in section 8 herein, which in the opinion of the directors of the Corporation would materially affect the rights of the Holder, the Exercise Price will be adjusted in such manner, if any, and at such time, by action by the directors of the Corporation but subject in all cases to any necessary regulatory approval, including approval of the CSE (or such other stock exchange or quotation system on which the Common Shares are then listed and posted (or quoted) for trading, as applicable). Failure of the taking of action by the directors of the Corporation so as to provide for an adjustment on or prior to the effective date of any action by the Corporation affecting the Common Shares will be conclusive evidence that the board of directors of the Corporation has determined that it is equitable to make no adjustment in the circumstances.

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	10.	At least 21 days prior to the effective date or record date, as the case may be, of any event referred to in section 8 herein, the Corporation shall notify the Holder of the particulars of such event and the estimated amount of any adjustment required as a result thereof.

	11.	On the happening of each and every such event set out in section 8 herein, the applicable provisions of this Unit Compensation Option Certificate, including the Exercise Price, shall, ipso facto, be deemed to be amended accordingly and the Corporation shall take all necessary action so as to comply with such provisions as so amended.

	12.	The Corporation shall not be required to deliver certificates for Broker Shares or Unit Warrants while the share transfer books of the Corporation are properly closed, having regard to the provisions of sections 8 and 9 herein, prior to any meeting of shareholders or for the payment of dividends or for any other purpose and in the event of the surrender of any Unit Compensation Option in accordance with the provisions hereof and the making of any subscription and payment for the Units called for thereby during any such period, delivery of certificates for Broker Shares or Unit Warrants may be postponed for not more than five (5) business days after the date of the re‐opening of said share transfer books; provided, however, that any such postponement of delivery of certificates shall be without prejudice to the right of the Holder so surrendering the same and making payment during such period to receive after the share transfer books shall have been re-opened such certificates for the Broker Shares or Unit Warrants called for, as the same may be adjusted pursuant to sections 8 and 9 herein as a result of the completion of the event in respect of which the transfer books were closed.

	13.	Subject as hereinafter provided, all or any of the rights conferred upon the Holder by the terms hereof may be enforced by the Holder by appropriate legal proceedings.  No recourse under or upon any obligation, covenant or agreement contained herein shall be had against any shareholder or officer of the Corporation either directly or through the Corporation, it being expressly agreed and declared that the obligations under the Unit Compensation Options are solely corporate obligations and that no personal liability whatever shall attach to or be incurred by the shareholders or officers of the Corporation or any of them in respect thereof, any and all rights and claims against every such shareholder, officer or director being hereby expressly waived as a condition of and as a consideration for the issue of the Unit Compensation Options.

	14.	The Holder may subscribe for and purchase any lesser number of Units than the number of Units expressed in any Unit Compensation Option Certificate.  In the case of any subscription for a lesser number of Units than expressed in any Unit Compensation Option Certificate, the Holder hereof shall be entitled to receive, at no cost to the Holder, a new Unit Compensation Option Certificate in respect of the balance of Unit Compensation Options not then exercised.  Such new Unit Compensation Option Certificate shall be mailed to the Holder by the Corporation or, at its direction, the transfer agent of the Corporation, contemporaneously with the mailing of the certificate or certificates representing the Broker Shares and Unit Warrants issued pursuant to section 5 herein.

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	15.	If any Unit Compensation Option Certificate becomes stolen, lost, mutilated or destroyed, the Corporation shall, on such terms as it may in its discretion impose, acting reasonably, issue and sign a new Unit Compensation Option Certificate of like denomination, tenor and date as the Unit Compensation Option Certificate so stolen, lost, mutilated or destroyed for delivery to the Holder.

	16.	The Holder may not transfer or assign the Unit Compensation Options represented hereby.

	17.	Neither the Unit Compensation Options represented by this Unit Compensation Option Certificate nor the Broker Shares issuable upon exercise hereof have been or will be registered under the United States Securities Act of  1933, as amended (the "1933 Act") nor under the laws of any state of the United States.  Subject to certain limited exceptions, (i) Unit Compensation Options may not be exercised within the United States and (ii) no Broker Shares issuable upon exercise of Unit Compensation Options will be delivered to any address in the United States.  The Holder acknowledges that a legend to that effect may be placed on any certificates representing the Broker Shares issued on exercise of the rights represented by this Unit Compensation Option Certificate. Terms used in this paragraph have the meanings given to them in Regulation S under the 1933 Act.

	18.	Any certificate representing Broker Shares or Unit Warrants issued upon the exercise of this Unit Compensation Option prior to the date which is four months and one day after the date hereof will bear the following legend:

"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE ►."

provided that at any time subsequent to the date which is four months and one day the date hereof any certificate representing such Broker Shares or Unit Warrants may be exchanged for a certificate bearing no such legends.  The Corporation hereby covenants and agrees that it will use the best efforts thereof to deliver or to cause to be delivered a certificate or certificates representing such Broker Shares or Unit Warrants bearing no such legends within five business days after receipt of the legended certificate.

	19.	The Corporation will maintain a register of holders of Unit Compensation Options at its principal office.  The Corporation may deem and treat the registered holder of any Unit Compensation Option Certificate as the absolute owner of the Unit Compensation Options represented thereby for all purposes, and the Corporation shall not be affected by any notice or knowledge to the contrary except where the Corporation is required to take notice by statute or by order of a court of competent jurisdiction.  A Holder shall be entitled to the rights evidenced by such Unit Compensation Option free from all equities or rights of set-off or counterclaim between the Corporation and the original or any intermediate holder thereof and all persons may act accordingly and the receipt by any such Holder of the Broker Shares and Unit Warrants purchasable pursuant to such Unit Compensation Option shall be a good discharge to the Corporation for the same and the Corporation shall not be bound to inquire into the title of any such Holder except where the Corporation is required to take notice by statute or by order of a court of competent jurisdiction.

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	20.	The Corporation shall notify the Holder forthwith of any change of the Corporation's address.

	21.	All notices to be sent hereunder shall be deemed to be validly given to the registered holders of the Unit Compensation Options if delivered personally or if sent by registered letter through the post addressed to such holders at their post office addresses appearing in the register of Unit Compensation Option holders caused to be maintained by the Corporation, and such notice shall be deemed to have been given, if delivered personally when so delivered, and if sent by post on the fifth business day next following the post thereof.

	22.	If for any reason, other than the failure or default of the Holder, the Corporation is unable to issue and deliver the Units or other securities as contemplated herein to the Holder upon the proper exercise by the Holder of the right to purchase any of the Units purchasable upon exercise of the Unit Compensation Options represented hereby, the Corporation may pay, at its option and in complete satisfaction of its obligations and the rights of the Holder hereunder, to the Holder, in cash, an amount equal to the difference between the Exercise Price and the Current Market Price of such Units or other securities on the date of exercise by the Holder, and upon such payment the Corporation shall have no liability or other obligation to the Holder relating to or in respect of the Unit Compensation Options or this Unit Compensation Option Certificate.

	23.	This Unit Compensation Option Certificate shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable herein.

	24.	All Unit Compensation Options shall rank pari passu, whatever may be the actual date of issue of the same.

	25.	This Unit Compensation Option Certificate shall enure to the benefit of and shall be binding upon the Holder and the Corporation and their respective successors and assigns.

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IN WITNESS WHEREOF the Corporation has caused this Unit Compensation Option Certificate to be signed by its duly authorized officer.

DATED as of the ►.

	
NUTRITIONAL HIGH INTERNATIONAL INC.

 

	
 

Per:

	 
	 	
Authorized Signatory

	 	
Title:

 

 

 Schedule "A"

SUBSCRIPTION FORM

TO BE COMPLETED IF BROKER OPTIONS ARE TO BE EXERCISED:

		TO:	NUTRITIONAL HIGH INTERNATIONAL INC.

 77 King Street West, Suite 2905, Toronto, Ontario  M5K 1H1

The undersigned hereby subscribes for                           Units of Nutritional High International Inc. according to the terms and conditions set forth in the annexed Unit Compensation Option Certificate (or such number of other securities or property to which such Unit Compensation Option Certificate entitles the undersigned to acquire under the terms and conditions set forth in such Unit Compensation Option Certificate).

Address for Delivery of Units:                                                                                                                                                                                                                                                                                                                                                            

                                                                                    

Attention:                                                                                                               

Exercise Price

Tendered (Cdn.$ ►per

Unit

or as adjusted)                                                                                    $                                                                                                              

Dated at                                        , this      day of                              ,     201        .

	 	
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Witness:

 

	
Holder's Name

 

 

	
Authorized Signature

 

 

	
Title (if applicable)

 

Signature guaranteed1

	
 

                                                                                                                  

	1	If the Units are to be registered in a name other than the name of the registered Unit Compensation Option Holder, the signature of the Unit Compensation Option Holder must be medallion guaranteed by a bank, trust company or a member of a stock exchange in Canada.

 Schedule "B"

FORM OF UNIT WARRANT

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE ►.

Void after 5:00 p.m. (Toronto time) on ►.

	
Number of Unit Warrants: ►

 

	
Unit Warrant Certificate No. WA-2014-►

 

NUTRITIONAL HIGH INTERNATIONAL INC.

(Incorporated under the laws of Canada)

This is to certify that, for value received, [insert name and address] (the "Holder"), shall have the right to purchase from Nutritional High International Inc. (the "Corporation"), at any time and from time to time up to 5:00 p.m. (Toronto time) on ► (the "Expiry Time"), one fully paid and non-assessable common share in the capital of the Corporation (a "Common Share") for each Unit Warrant (individually, a "Warrant") represented hereby at a price of Cdn$► per share (the "Exercise Price"), upon and subject to the terms and conditions set forth herein.

	1.	For the purposes of this Unit Warrant Certificate, the term:

		(a)	"Common Shares" means common shares without par value in the capital of the Corporation as constituted as of the date hereof, provided that in the event of a subdivision, redivision, reduction, combination or consolidation thereof or any other adjustment under item 8 hereof, or successive such subdivisions, redivisions, reductions, combinations, consolidations or other adjustments, then subject to the adjustments, if any, having been made in accordance with the provisions of this Unit Warrant Certificate, "Common Shares" shall thereafter mean the shares, other securities or other property resulting from such subdivision, redivision, reduction, combination or consolidation or other adjustment.

	2.	All Unit Warrant Certificates shall be signed by an officer of the Corporation holding office at the time of signing, or any successor or replacement of such person and notwithstanding any change in any of the persons holding said offices between the time of actual signing and the delivery of the Unit Warrant Certificate, the Unit Warrant Certificate so signed shall be valid and binding upon the Corporation.

	3.	All rights under any of the Unit Warrants in respect of which the right of subscription and purchase therein provided for shall not theretofore have been exercised shall wholly cease and such Unit Warrants shall be wholly void and of no valid or binding effect after the Expiry Time.

	4.	The right to purchase Common Shares of the Corporation pursuant to the Unit Warrants may only be exercised by the Holder at or before the Expiry Time by:

		(a)	duly completing and executing a subscription substantially in the form attached as Schedule "A" (the "Subscription Form"), in the manner therein indicated; and

		(b)	surrendering this Unit Warrant Certificate and the duly completed and executed Subscription Form to the Corporation prior to the Expiry Time at its principal office, 77 King Street West, Suite 2905, Toronto, Ontario  M5K 1H1, together with payment of the purchase price for the Common Shares subscribed for in the form of cash or a certified cheque payable to the Corporation in an amount equal to the then applicable Exercise Price multiplied by the number of Common Shares subscribed for.

	5.	Upon delivery and payment as set forth in item 4, the Corporation shall cause to be issued to the Holder the number of Common Shares subscribed for by the Holder and the Holder shall become a shareholder of the Corporation in respect of such Common Shares with effect from the date of such delivery and payment and shall be entitled to delivery of a certificate or certificates evidencing such shares.  The Corporation shall cause such certificate or certificates to be mailed to the Holder at the address or addresses specified in the Subscription Form within five (5) business days of such delivery and payment as set forth in item 4 or, if so instructed by the Holder, held for pick-up by the Holder at the principal office of the Corporation. Notwithstanding any adjustment provided for in item 8 hereof, the Corporation shall not be required upon the exercise of any Unit Warrants to issue fractional Common Shares in satisfaction of its obligations hereunder and the Holder understands and agrees that it will not be entitled to any cash payment or other form of compensation in respect of a fractional Common Share that might otherwise have been issued.

	6.	The holding of an Unit Warrant shall not constitute the Holder a shareholder of the Corporation nor entitle him to any right or interest in respect thereof except as herein expressly provided.

	7.	The Corporation covenants and agrees that until the Expiry Time, while any of the Unit Warrants shall be outstanding, it shall reserve and there shall remain unissued out of its authorized capital a sufficient number of Common Shares to satisfy the right of purchase herein provided, as such right of purchase may be adjusted pursuant to items 8 and 9 hereof. The Corporation further covenants and agrees that while any of the Unit Warrants shall be outstanding, the Corporation shall (a) comply with the securities legislation applicable to it in order that the Corporation not be in default of any requirements of such legislation; (b) use its commercially reasonable best efforts to do or cause to be done all things necessary to preserve and maintain its corporate existence; and (c) at its own expense expeditiously use its commercially reasonable best efforts to obtain the listing of such Common Shares (subject to issue or notice of issue) on each stock exchange or over-the-counter market on which the Corporation's Common Shares may be listed from time to time. All Common Shares which shall be issued upon the exercise of the right to purchase herein provided for, upon payment therefor of the amount at which such Common Shares may at the time be purchased pursuant to the provisions hereof, shall be issued as fully paid and non‐assessable shares and the holders thereof shall not be liable to the Corporation or its creditors in respect thereof.

	8.            	(b)            	For the purpose of this item 8, unless there is something in the subject matter or context inconsistent therewith, the words and terms defined below shall have the respective meanings specified therefor:

"Current Market Price" of the Common Shares at any date means the price per share equal to the weighted average price at which the Common Shares have traded on the Canadian Stock Exchange (the "CSE") or, if the Common Shares are not then listed on the CSE, on such other Canadian stock exchange on which the shares trade as may be selected by the directors of the Corporation for such purpose or, if the Common Shares are not then listed on any Canadian stock exchange, in the over-the-counter market, during the period of any twenty consecutive trading days ending not more than five (5) business days before such date; provided that the weighted average price shall be determined by dividing the aggregate sale price of all Common Shares sold on the said exchange or market, as the case may be, during the said twenty consecutive trading days by the total number of Common Shares so sold; and provided further that if the Common Shares are not then listed on any Canadian stock exchange or traded in the over-the counter market, then the Current Market Price shall be determined by such national firm of independent chartered accountants as may be selected by the directors of the Corporation;

"director" means a director of the Corporation for the time being and, unless otherwise specified herein, a reference to action "by the directors" means action by the directors of the Corporation as a board or, whenever empowered, action by the executive committee of such board; and

"trading day" with respect to a stock exchange or over-the-counter market means a day on which such stock exchange or market is open for business.

		(b)	If at any time after ► and prior to the Expiry Time the Corporation shall (i) subdivide or redivide its then outstanding Common Shares into a greater number of Common Shares, (ii) reduce, combine or consolidate its then outstanding Common Shares into a lesser number of Common Shares or (iii) issue Common Shares (or securities exchangeable for or convertible into Common Shares) to the holders of all or substantially all of its then outstanding Common Shares by way of a stock dividend or other distribution (any of such events herein called a "Common Share Reorganization"), then the Exercise Price shall be adjusted effective immediately after the effective date of any such event in (i) or (ii) above or the record date at which the holders of Common Shares are determined for the purpose of any such dividend or distribution in (iii) above, as the case may be, by multiplying the Exercise Price in effect on such effective date or record date, as the case may be, by a fraction, the numerator of which shall be the number of Common Shares outstanding on such effective date or record date, as the case may be, before giving effect to such Common Share Reorganization and the denominator of which shall be the number of Common Shares outstanding immediately after giving effect to such Common Share Reorganization including, in the case where securities exchangeable for or convertible into Common Shares are distributed, the number of Common Shares that would be outstanding if such securities were exchanged for or converted into Common Shares.

		(c)	If at any time after ► and prior to the Expiry Time the Corporation shall fix a record date for the issue or distribution to the holders of all or substantially all of the outstanding Common Shares, of rights, options or warrants pursuant to which such holders are entitled, during a period expiring not more than 45 days after the record date for such issue (such period being the "Rights Period"), to subscribe for or purchase Common Shares or securities exchangeable for or convertible into Common Shares at a price per share (or in the case of securities exchangeable for or convertible into Common Shares at an exchange or conversion price per share at the date of issue of such securities) of less than 95% of the Current Market Price of the Common Shares on such record date (any of such events being herein called a "Rights Offering"), the Exercise Price shall be adjusted effective immediately after the record date for the Rights Offering to the amount determined by multiplying the Exercise Price in effect on such record date by a fraction:

		(i)	the numerator of which shall be the aggregate of

		(A)	the number of Common Shares outstanding on the record date for the Rights Offering; and

		(B)	the quotient determined by dividing

		(1)	either (a) the product of the number of Common Shares offered during the Rights Period pursuant to the Rights Offering and the price at which such Common Shares are offered, or, (b) the product of the exchange or conversion price of the securities so offered and the number of Common Shares for or into which the securities offered pursuant to the Rights Offering may be exchanged or converted, as the case may be, by

		(2)	the Current Market Price of the Common Shares as of the record date for the Rights Offering; and

		(ii)	the denominator of which shall be the aggregate of the number of Common Shares outstanding on such record date and the number of Common Shares offered pursuant to the Rights Offering (including in the case of the issue or distribution of securities exchangeable for or convertible into Common Shares the number of Common Shares for or into which such securities may be exchanged or converted).

If by the terms of the rights, options, or warrants referred to in this item 8(c), there is more than one purchase, conversion or exchange price per Common Share, the aggregate price of the total number of additional Common Shares offered for subscription or purchase, or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered, shall be calculated for purposes of the adjustment on the basis of the lowest purchase, conversion or exchange price per Common Share, as the case may be.  Any Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any such calculation.  To the extent that any adjustment in the Exercise Price occurs pursuant to this item 8(c) as a result of the fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants referred to in this item 8(c), the Exercise Price shall be readjusted immediately after the expiry of any relevant exchange, conversion or exercise right to the Exercise Price which would then be in effect based upon the number of Common Shares actually issued and remaining issuable after such expiry and shall be further readjusted in such manner upon the expiry of any further such right.

		(d)	If at any time after ► and prior to the Expiry Time, the Corporation shall fix a record date for the issue or distribution to the holders of all or substantially all of the Common Shares of:

		(i)	shares of the Corporation of any class other than Common Shares;

		(ii)	rights, options or warrants to acquire Common Shares or securities exchangeable for or convertible into Common Shares (other than rights, options or warrants pursuant to which holders of Common Shares are entitled, during a period expiring not more than 45 days after the record date for such issue, to subscribe for or purchase Common Shares at a price per share (or in the case of securities exchangeable for or convertible into Common Shares at an exchange or conversion price per share at the date of issue of such securities) of at least 95% of the Current Market Price of the Common Shares on such record date);

		(iii)	evidences of indebtedness of the Corporation; or

		(iv)	any property or assets of the Corporation (for greater certainty, excluding a cash dividend in the ordinary course);

and if such issue or distribution does not constitute a Common Share Reorganization or a Rights Offering (any of such non-excluded events being herein called a "Special Distribution"), the Exercise Price shall be adjusted effective immediately after the record date for the Special Distribution to the amount determined by multiplying the Exercise Price in effect on the record date for the Special Distribution by a fraction:

		(A)	the numerator of which shall be the difference between

		(1)	the product of the number of Common Shares outstanding on such record date and the Current Market Price of the Common Shares on such record date, and

		(2)	the fair value, as determined by the directors of the Corporation, to the holders of the Common Shares of the shares, rights, options, warrants, evidences of indebtedness or property or assets to be issued or distributed in the Special Distribution, and

		(B)	the denominator of which shall be the product obtained by multiplying the number of Common Shares outstanding on such record date by the Current Market Price of the Common Shares on such record date.

Any Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of such calculation.  To the extent that any adjustment in the Exercise Price occurs pursuant to this item 8(d) as a result of the fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants to acquire Common Shares or securities exchangeable for or convertible into Common Shares referred to in this item 8(d), the Exercise Price shall be readjusted immediately after the expiry of any relevant exercise, exchange or conversion right to the amount which would then be in effect if the fair market value had been determined on the basis of the number of Common Shares issued and remaining issuable immediately after such expiry, and shall be further readjusted in such manner upon the expiry of any further such right.

		(e)	If at any time after ►and prior to the Expiry Time there is a capital reorganization of the Corporation or a reclassification or other change in the Common Shares (other than a Common Share Reorganization) or a consolidation or merger or amalgamation of the Corporation with or into any other corporation or other entity (other than a consolidation, merger or amalgamation which does not result in any reclassification of the outstanding Common Shares or a change of the Common Shares into other securities), or a transfer of all or substantially all of the Corporation's undertaking and assets to another corporation or other entity in which the holders of Common Shares are entitled to receive shares, other securities or other property (any of such events being called a "Capital Reorganization"), after the effective date of the Capital Reorganization the Holder shall be entitled to receive, and shall accept, for the same aggregate consideration, upon exercise of the Unit Warrants, in lieu of the number of Common Shares to which the Holder was theretofore entitled upon the exercise of the Unit Warrants, the kind and aggregate number of Common Shares and other securities or property resulting from the Capital Reorganization which the Holder would have been entitled to receive as a result of the Capital Reorganization if, on the effective date thereof, the Holder has been the registered holder of the number of Common Shares to which the Holder was theretofore entitled to purchase or receive upon the exercise of the Unit Warrants.  If necessary, as a result of any Capital Reorganization, appropriate adjustments shall be made in the application of the provisions of this Unit Warrant Certificate with respect to the rights and interest thereafter of the Holder to the end that the provisions of this Unit Warrant Certificate shall thereafter correspondingly be made applicable as nearly as may reasonably be possible in relation to any shares or other securities or property thereafter deliverable upon the exercise of this Unit Warrant Certificate.

		(f)	If at any time after ► and prior to the Expiry Time, any of the events set out in item 8(a), (b), (c), (d) or (e) shall occur and the occurrence of such event results in an adjustment of the Exercise Price pursuant to the provisions of this item 8, then the number of Common Shares purchasable pursuant to this Unit Warrant shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of Common Shares then otherwise purchasable on the exercise thereof by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to the adjustment and the denominator of which shall be the Exercise Price resulting from such adjustment.

		(g)	If the Corporation takes any action affecting its Common Shares to which the foregoing provisions of this item 8, in the opinion of the board of directors of the Corporation, acting in good faith, are not strictly applicable, or if strictly applicable would not fairly adjust the rights of the Holder against dilution in accordance with the intent and purposes hereof, or would otherwise materially affect the rights of the Holder hereunder, then the Corporation shall, subject to the approval of the CSE (or such other stock exchange or quotation system on which the Common Shares are then listed and posted (or quoted) for trading, as applicable), execute and deliver to the Holder an amendment hereto providing for an adjustment in the application of such provisions so as to adjust such rights as aforesaid in such manner as the board of directors of the Corporation may determine to be equitable in the circumstances, acting in good faith.  The failure of the taking of action by the board of directors of the Corporation to so provide for any adjustment on or prior to the effective date of any action or occurrence giving rise to such state of facts will be conclusive evidence that the board of directors has determined that it is equitable to make no adjustment in the circumstances.

	9.	The following rules and procedures shall be applicable to the adjustments made pursuant to item 8:

		(a)	any Common Shares owned or held by or for the account of the Corporation shall be deemed not be to outstanding except that, for the purposes of item 8, any Common Shares owned by a pension plan or profit sharing plan for employees of the Corporation or any of its subsidiaries shall not be considered to be owned or held by or for the account of the Corporation;

		(b)	no adjustment in the Exercise Price or the number of Common Shares purchasable pursuant to this Unit Warrant shall be required unless a change of at least 1% of the prevailing Exercise Price or the number of Common Shares purchasable pursuant to this Unit Warrant would result, provided, however, that any adjustment which, except for the provisions of this item 9(b), would otherwise have been required to be made, shall be carried forward and taken into account in any subsequent adjustment;

		(c)	the adjustments provided for in item 8 are cumulative and shall apply to successive subdivisions, consolidations, dividends, distributions and other events resulting in any adjustment under the provisions of such item;

		(d)	in the absence of a resolution of the board of directors of the Corporation fixing a record date for any dividend or distribution referred to in item 8(a)(iii) above, the Corporation shall be deemed to have fixed as the record date therefor the date on which such dividend or distribution is effected;

		(e)	if the Corporation sets a record date to take any action and thereafter and before the taking of such action abandons its plan to take such action, then no adjustment to the Exercise Price will be required by reason of the setting of such record date;

		(f)	as a condition precedent to the taking of any action which would require any adjustment to the Unit Warrants evidenced hereby, including the Exercise Price, the Corporation must take any corporate action which may be necessary in order that the Corporation shall have unissued and reserved in its authorized capital and may validly and legally issue as fully paid and non-assessable all of the shares or other securities which the Holder is entitled to receive on the full exercise thereof in accordance with the provisions hereof;

		(g)	forthwith, but no later than fourteen (14) days, after any adjustment to the Exercise Price or the number of Common Shares purchasable pursuant to the Unit Warrants, the Corporation shall provide to the Holder a certificate of an officer of the Corporation certifying as to the amount of such adjustment and, in reasonable detail, describing the event requiring and the manner of computing or determining such adjustment;

		(h)	any question that at any time or from time to time arises with respect to the amount of any  adjustment to the Exercise Price or other adjustment pursuant to item 8 shall be conclusively determined by a firm of independent chartered accountants (who may be the Corporation's auditors) and shall be binding upon the Corporation and the Holder;

		(i)	any adjustment to the Exercise Price under the terms of this Unit Warrant Certificate shall be subject to the prior approval of the CSE (or such other stock exchange or quotation system on which the Common Shares are then listed and posted (or quoted) for trading, as applicable); and

		(j)	in case the Corporation, after the date of issue of this Unit Warrant Certificate, takes any action affecting the Common Shares, other than an action described in Section 8, which in the opinion of the directors of the Corporation would materially affect the rights of the Holder, the Exercise Price will be adjusted in such manner, if any, and at such time, by action by the directors of the Corporation but subject in all cases to any necessary regulatory approval, including approval of the CSE (or such other stock exchange or quotation system on which the Common Shares are then listed and posted (or quoted) for trading, as applicable). Failure of the taking of action by the directors of the Corporation so as to provide for an adjustment on or prior to the effective date of any action by the Corporation affecting the Common Shares will be conclusive evidence that the board of directors of the Corporation has determined that it is equitable to make no adjustment in the circumstances.

	10.	On the happening of each and every such event set out in item 8, the applicable provisions of this Unit Warrant Certificate, including the Exercise Price, shall, ipso facto, be deemed to be amended accordingly and the Corporation shall take all necessary action so as to comply with such provisions as so amended.

	11.	The Corporation shall not be required to deliver certificates for Common Shares while the share transfer books of the Corporation are properly closed, having regard to the provisions of items 8 and 9 hereof, prior to any meeting of shareholders or for the payment of dividends or for any other purpose and in the event of the surrender of any Unit Warrant in accordance with the provisions hereof and the making of any subscription and payment for the Common Shares called for thereby during any such period, delivery of certificates for Common Shares may be postponed for not more than five (5) business days after the date of the re‐opening of said share transfer books; provided, however, that any such postponement of delivery of certificates shall be without prejudice to the right of the Holder so surrendering the same and making payment during such period to receive after the share transfer books shall have been re-opened such certificates for the Common Shares called for, as the same may be adjusted pursuant to items 8 and 9 hereof as a result of the completion of the event in respect of which the transfer books were closed.

	12.	Subject as hereinafter provided, all or any of the rights conferred upon the Holder by the terms hereof may be enforced by the Holder by appropriate legal proceedings.  No recourse under or upon any obligation, covenant or agreement contained herein shall be had against any shareholder or officer of the Corporation either directly or through the Corporation, it being expressly agreed and declared that the obligations under the Unit Warrants are solely corporate obligations and that no personal liability whatever shall attach to or be incurred by the shareholders or officers of the Corporation or any of them in respect thereof, any and all rights and claims against every such shareholder, officer or director being hereby expressly waived as a condition of and as a consideration for the issue of the Warrants.

	13.	The Holder may subscribe for and purchase any lesser number of Common Shares than the number of Common Shares expressed in any Unit Warrant Certificate.  In the case of any subscription for a lesser number of Common Shares than expressed in any Unit Warrant Certificate, the Holder hereof shall be entitled to receive, at no cost to the Holder, a new Unit Warrant Certificate in respect of the balance of Unit Warrants not then exercised.  Such new Unit Warrant Certificate shall be mailed to the Holder by the Corporation or, at its direction, the transfer agent of the Corporation, contemporaneously with the mailing of the certificate or certificates representing the Common Shares issued pursuant to item 5.

	14.	If any Unit Warrant Certificate becomes stolen, lost, mutilated or destroyed, the Corporation shall, on such terms as it may in its discretion impose, acting reasonably, issue and sign a new Unit Warrant Certificate of like denomination, tenor and date as the Unit Warrant Certificate so stolen, lost, mutilated or destroyed for delivery to the Holder. The applicant for the issue of a new Unit Warrant Certificate pursuant to this section shall bear the cost of the issue thereof and in the case of mutilation shall as a condition precedent to the issue thereof, deliver to the Corporation the mutilated Unit Warrant Certificate, and in case of loss, destruction or theft shall, as a condition precedent to the issue thereof, furnish to the Corporation such evidence of ownership and of the loss, destruction or theft of the Unit Warrant Certificate so lost, destroyed or stolen as shall be satisfactory to the Corporation in its discretion and the applicant shall also be required to furnish an indemnity and surety bond in amount and form satisfactory to the Corporation in its discretion and shall pay the reasonable charges of the Corporation in connection therewith.

	15.	The Holder may not transfer or assign the Unit Warrants represented hereby.

	16.	Neither the Unit Warrants represented by this Unit Warrant Certificate nor the Common Shares issuable upon exercise hereof have been or will be registered under the United States Securities Act of  1933, as amended (the "1933 Act") nor under the laws of any state of the United States.  Subject to certain limited exceptions, (i) Warrants may not be exercised within the United States and (ii) no Common Shares issuable upon exercise of Unit Warrants will be delivered to any address in the United States.  The Holder acknowledges that a legend to that effect may be placed on any certificates representing the Common Shares issued on exercise of the rights represented by this Unit Warrant Certificate. Terms used in this paragraph have the meanings given to them in Regulation S under the 1933 Act.

	17.	Any certificate representing Common Shares issued upon the exercise of this Unit Warrant prior to the date which is four months and one day after ► will bear the following legend:

"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE ►"

provided that at any time subsequent to the date which is four months and one day after ► any certificate representing such Common Shares may be exchanged for a certificate bearing no such legends.  The Corporation hereby covenants and agrees that it will use the best efforts thereof to deliver or to cause to be delivered a certificate or certificates representing such Common Shares bearing no such legends within five business days after receipt of the legended certificate.

	18.	The Corporation will maintain a register of holders of Unit Warrants at its principal office.  The Corporation may deem and treat the registered holder of any Unit Warrant Certificate as the absolute owner of the Unit Warrants represented thereby for all purposes, and the Corporation shall not be affected by any notice or knowledge to the contrary except where the Corporation is required to take notice by statute or by order of a court of competent jurisdiction.  A Holder shall be entitled to the rights evidenced by such Unit Warrant free from all equities or rights of set-off or counterclaim between the Corporation and the original or any intermediate holder thereof and all persons may act accordingly and the receipt by any such Holder of the Common Shares purchasable pursuant to such Unit Warrant shall be a good discharge to the Corporation for the same and the Corporation shall not be bound to inquire into the title of any such Holder except where the Corporation is required to take notice by statute or by order of a court of competent jurisdiction.

	19.	The Corporation shall notify the Holder forthwith of any change of the Corporation's address.

	20.	The registered holders of Unit Warrants shall have the power from time to time by an extraordinary resolution (as hereinafter defined):

		(a)	to sanction any modification, abrogation, alteration or compromise of the rights of the registered holders of Unit Warrants against the Corporation which shall be agreed to by the Corporation; and/or

		(b)	to assent to any modification of or change in or omission from the provisions contained herein or in any instrument ancillary or supplemental hereto which shall be agreed to by the Corporation; and/or

		(c)	to restrain any registered holder of an Unit Warrant from taking or instituting any suit or proceedings against the Corporation for the enforcement of any of the covenants on the part of the Corporation conferred upon the registered holders of Unit Warrants by the terms of the Unit Warrants.

 

Any such extraordinary resolution as aforesaid shall be binding upon all the registered holders of Unit Warrants whether or not assenting in writing to any such extraordinary resolution, and each registered holder of any of the Unit Warrants shall be bound to give effect thereto accordingly.  Such extraordinary resolution shall, where applicable, be binding on the Corporation which shall give effect thereto accordingly.

The Corporation shall forthwith upon receipt of an extraordinary resolution provide notice to all registered holders of Unit Warrants of the date and text of such resolution.  The registered holders of Unit Warrants assenting to an extraordinary resolution agree to provide the Corporation forthwith with a copy of any extraordinary resolution passed.

The expression "extraordinary resolution" when used herein shall mean a resolution assented to in writing, in one or more counterparts, by the registered holders of Unit Warrants calling in the aggregate for not less than seventy-five per cent (75%) of the aggregate number of Common Shares called for by all of the Warrants which are, at the applicable time, outstanding.

	21.	All notices to be sent hereunder shall be deemed to be validly given to the registered holders of the Unit Warrants if delivered personally or if sent by registered letter through the post addressed to such holders at their post office addresses appearing in the register of Unit Warrant holders caused to be maintained by the Corporation, and such notice shall be deemed to have been given, if delivered personally when so delivered, and if sent by post on the fifth business day next following the post thereof.

	22.	If for any reason, other than the failure or default of the Holder, the Corporation is unable to issue and deliver the Common Shares or other securities as contemplated herein to the Holder upon the proper exercise by the Holder of the right to purchase any of the Common Shares purchasable upon exercise of the Unit Warrants represented hereby, the Corporation may pay, at its option and in complete satisfaction of its obligations and the rights of the Holder hereunder, to the Holder, in cash, an amount equal to the difference between the Exercise Price and the Current Market Price of such Common Shares or other securities on the date of exercise by the Holder, and upon such payment the Corporation shall have no liability or other obligation to the Holder relating to or in respect of the Unit Warrants or this Unit Warrant Certificate.

	23.	This Unit Warrant Certificate shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable herein.

	24.	All Unit Warrants shall rank pari passu, whatever may be the actual date of issue of the same.

	25.	This Unit Warrant Certificate shall enure to the benefit of and shall be binding upon the Holder and the Corporation and their respective successors and assigns.

IN WITNESS WHEREOF the Corporation has caused this Unit Warrant Certificate to be signed by its duly authorized officer.

DATED as of the ___ day of _________________________________________  , _________.

	

 NUTRITIONAL HIGH INTERNATIONAL INC.

 

	
 

Per:

	 
	 	
Authorized Signatory

	 	
Title:

 

 

 

Schedule "A"

SUBSCRIPTION FORM

TO BE COMPLETED IF WARRANTS ARE TO BE EXERCISED:

TO:            NUTRITIONAL HIGH INTERNATIONAL INC.

                          77 King Street West, Suite 2905, Toronto, Ontario  M5K 1H1

The undersigned hereby subscribes for                           Common Shares of Nutritional High International Inc. according to the terms and conditions set forth in the annexed Unit Warrant Certificate (or such number of other securities or property to which such Unit Warrant Certificate entitles the undersigned to acquire under the terms and conditions set forth in such Unit Warrant Certificate).

Address for Delivery of Units:                                                                                                                                                                                                                                                                                                                                                            

  __________________________________________________

                                                                                   

Attention:                                                                                                                                            

Exercise Price

Tendered (Cdn.$ ►per

Unit

or as adjusted)                                                                                    $                                                                                                              

Dated at                                        , this      day of                              ,     201        .

	 	
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)

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)

)

)

)

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Witness:

 

	
Holder's Name

 

 

	
Authorized Signature

 

 

	
Title (if applicable)

 

Signature guaranteed1:

	1	If the Common Shares are to be registered in a name other than the name of the registered Unit Warrant Holder, the signature of the Unit Warrant Holder must be medallion guaranteed by a bank, trust company or a member of a stock exchange in Canada.Exhibit 4.7

  

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 NOVEMBER 17, 2014.

CONVERTIBLE DEBENTURE

	
PRINCIPAL:

	
 

	►
	
 

	
 

	
 

	
ISSUER: 

	
 

	NUTRITIONAL HIGH INTERNATIONAL INC.
	
 

	
 

	
 

	
HOLDER:  

	
 

	►
	
 

	
 

	
 

	
DEBENTURE#:      

	
 

	
 2014-1

	
 

	
 

	
 

	
DATE OF ISSUE:         

	
 

	
November 17, 2014

	
 

	
 

	
 

 

 

ARTICLE 1

 DEFINITIONS

	1.1	Defined Terms. In this Debenture, the following terms shall have the following meanings:

		(a)	"Assets" means all of the following personal property and fixtures, and all of the leasehold interests and other property described in Section 1.1(a)(x) below:

		(i)	all goods now or hereafter comprising part of the inventory of the Issuer and all interests, rights and benefits, both present and future of the Issuer in or to inventory including, without limitation, goods now or hereafter held for sale or lease or furnished or to be furnished under a contract of service or that are raw materials, work in process or materials used or consumed in a business or profession or finished goods;

		(ii)	all equipment now or hereafter owned by the Issuer and all interests, rights and benefits, both present and future, of the Issuer in or to equipment including, without limitation, office, warehouse and other furniture, fixtures, machinery, tools, rolling stock, vehicles, accessories, spare parts, supplies and other tangible personal property;

		(iii)	all fixtures now or hereafter owned by the Issuer and all interests, rights and benefits, both present and future, of the Issuer in or to fixtures;

		(iv)	all chattel paper now or hereafter owned or held by the Issuer and all interests, rights and benefits, both present and future, of the Issuer in, under or to chattel paper;

		(v)	each and every document of title now or hereafter owned by the Issuer or of which the Issuer is or becomes a holder, whether negotiable or non-negotiable, including, without limitation, each and every warehouse receipt and bill of lading, and all interests, rights and benefits, both present and future, of the Issuer in, under or to each and every document of title;

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		(vi)	each and every instrument now or hereafter owned by the Issuer or of which the Issuer is or becomes a holder, and all interests, rights and benefits, both present and future, of the Issuer in, under or to each and every instrument;

		(vii)	all investment property, security certificates and each and every security now or hereafter owned by the Issuer or of which the Issuer is or becomes a holder including, without limitation, all shares, stocks, warrants, bonds, debentures, debenture stock or the like issued by a corporation or other Person, or a partnership, association or government, each and every option on futures, clearing house option, every financial asset and all interests, rights and benefits, both present and future, of the Issuer in, under or to each and every one of the foregoing;

		(viii)	all money of the Issuer and all money hereafter acquired by the Issuer and each and every account, debt, claim and demand of every nature and kind which is now due, owing or accruing due or which may hereafter become due, owing or accruing due to the Issuer, or which the Issuer now has or may hereafter have and all interests, rights and benefits, both present and future of the Issuer in or to each and every account, debt, claim and demand including, without limitation, claims against the Crown and claims under insurance policies, a US$900,000 promissory note made by NHC Edible LLC ("NHC") and a first ranking general security agreement supported by a Uniform Commercial Code registration in Colorado over NHC;

		(ix)	all patents, industrial designs, trade-marks, trade secrets and know-how including without limitation, environmental technology and biotechnology, confidential information, trade-names, goodwill, copyrights, personality rights, plant breeders' rights, integrated circuit topographies, software and all other forms of intellectual and industrial property, and any registrations and applications for registration of any of the foregoing (collectively, "Intellectual Property");

		(x)	each and every lease, agreement to lease and leasehold interest of the Issuer and all interests, rights and benefits, both present and future, of the Issuer, in, under or to the same, except the last day of any term of years reserved by any such lease or agreement therefor of which reversion of one day the Issuer shall stand possessed upon trust to assign and dispose of the same as the Secured Party shall direct;

		(xi)	each and every intangible now or hereafter owned by the Issuer or of which the Issuer is or becomes a holder, and all interests, rights and benefits, both present and future, of the Issuer in, under or to each and every intangible;

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		(xii)	with respect to the property described in each of Subsections 1(a)(i) to 1(a)(xi) inclusive, all substitutions and replacements thereof, improvements, increases, additions and accessions thereto and all interests, rights and benefits, both present and future, of the Issuer in, under or to the same;

		(xiii)	with respect to the property described in each of Subsections 1(a)(i) to 1(a)(xii) inclusive, identifiable or traceable personal property in any form derived directly or indirectly from any dealing with such property or the proceeds therefrom and includes any payment representing indemnity or compensation for loss of or damage to such property or proceeds therefrom; and

		(xiv)	with respect to the property described in each of Subsections 1(a)(i) to 1(a)(xiii) inclusive, all books, accounts, invoices, letters, deeds, contracts, security, securities, instruments, bills, notes, writings, papers, documents and records in any form evidencing or relating thereto, and all other rights and benefits to which the Issuer is now or may hereafter become entitled in respect thereof.

		(b)	"Change of Control" means:

		(i)	the acquisition, directly or indirectly, by any Person or any Persons acting jointly or in concert (as determined in accordance with the Securities Act (Ontario)) of voting securities of the Corporation which, together with all other voting securities of the Corporation held by such Person or Persons, constitute, in the aggregate, more than fifty percent (50%) of all outstanding voting securities of the Corporation;

		(ii)	an amalgamation, reorganization, arrangement or other form of business combination of the Corporation with another Person which results in the holders of voting securities of that other Person holding, in the aggregate, fifty percent (50%) or more of all outstanding voting securities of the Corporation (including a merged or successor company) resulting from the business combination;

		(iii)	the sale, lease, exchange, exclusive licensing or other disposition of all or substantially all of the assets of the Corporation to another Person; or

		(iv)	the liquidation, dissolution or winding up of the Corporation.

		(c)	"Charged Property" means the property of the Issuer described in Section 8.1 hereof and charged with a security interest in favour of the Holder under this Debenture.

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		(d)	"Common Shares" means the common shares in the capital of the Issuer.

		(e)	"Conversion Price" has the meaning attributed to it in Section 5.2 hereof.

		(f)	"Date of Issue" means the date indicated as the date of issue on the first page of this Debenture.

		(g)	"Debenture" means this Convertible Debenture and all schedules and appendices hereto.

		(h)	"Encumbrance" means any mortgage, lien, pledge, assignment, charge, security interest, title retention agreement, hypothec, levy, execution, seizure, attachment, garnishment, right of distress or other claim in respect of property of the Issuer of any nature or kind whatsoever howsoever arising (whether consensual, statutory or arising by operation of law or otherwise) and includes arrangements known as sale and lease-back, sale and buy-back and sale with option to buy-back.

		(i)	"Event of Default" has the meaning attributed to it in Section 12.1 of this Debenture.

		(j)	"Fully Diluted Basis" means, at any given time, all issued and outstanding Common Shares together with all Common Shares issuable by the Issuer upon the exercise, conversion or exchange of all options, warrants, rights and any other convertible or exchangeable securities of the Issuer which are issued and outstanding, provided that "Fully Diluted Basis" shall excluded Common Shares issuable by the Issuer upon the conversion of the Convertible Debenture.

		(k)	"Going Public Transaction" means the occurrence of either:

		(i)	a business combination between the Issuer and a public company pursuant to a reverse take-over, merger, amalgamation, arrangement, take-over bid, insider bid, reorganization, joint venture, sale or exchange of assets or similar transaction; or

		(ii)	an initial public offering by the Issuer.

		(l)	"Holder" means the Person indicated to be the holder on the first page of this Debenture.

		(m)	"Interest" means, subject to Section 12.3, interest on the outstanding Principal at a rate equal to twelve percent (12%) per annum, compounded and calculated quarterly, in arrears.

		(n)	"Issuer" means Nutritional High International Inc. and its successors and permitted assigns.

		(o)	"Maturity Date" has the meaning attributed to it in Section 2.3 of this Debenture.

 

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		(p)	"Ordinary Course of Business" means the business of the Issuer as presently conducted and as proposed to be conducted.

		(q)	"Person" means any individual, legal person, corporation or company with or without share capital, cooperative, partnership, firm, unincorporated association, sole proprietorship, joint venture, syndicate, trust, trustee, executor, administrator or other legal personal representative, estate, succession, governmental entity, or other form of entity or organization of any nature whatsoever.

		(r)	"PPSA" means the Personal Property Security Act (Ontario) and the regulations thereto as the same may be amended from time to time.

		(s)	"Principal" means the principal amount paid by the Holder for this Debenture, being the sum indicated to be the principal on the first page of this Debenture.

		(t)	"Purchase Money Security Interest" has the meaning ascribed to such term in the Personal Property Security Act (Ontario).

		(u)	"Secondary Loan" has the meaning attributed to it in Section 10.1 of this Debenture.

		(v)	"Subscription Agreement" means the Subscription Agreement made between the Issuer and the Holder dated the date hereof, providing inter alia for the issuance of this Debenture.

	1.2	Other Terms.

		(a)	In this Agreement, the words "accessions", "account", "chattel paper", "clearing house option", "document of title", "equipment", "financial asset", "goods", "instrument", "intangible", "inventory", "investment property", "money", "option on futures", "personal property", "proceeds", "security", and "security certificate" shall have the same meanings as their defined meanings in the PPSA.

		(b)	In this Agreement, each reference to "Assets" shall, unless the context otherwise requires, include and be read as "Assets or any part thereof".

		(c)	All other capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Subscription Agreement.

ARTICLE 2

 PROMISE TO PAY AND MATURITY

	2.1	Indebtedness.  For value received, the Issuer hereby acknowledges itself indebted and promises to pay to the Holder or to its order:

		(a)	the amount of Principal outstanding from time to time; and

		(b)	such amounts of Interest as may accrue on the Principal from time to time.

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	2.2	Amounts Due.  The outstanding Principal, Interest and any other amounts payable by the Issuer pursuant to this Debenture, unless previously converted pursuant to Sections 5.1 hereof, shall become due and payable on the Maturity Date.

	2.3	Maturity Date. The maturity date of this Debenture shall be the date that is 2 years from the Date of Issue (the "Maturity Date").

	2.4	Prepayment. The Issuer may not prepay Principal prior to the Maturity Date or accrued and unpaid Interest prior to the dates set out in Section 3.1 below without the consent of the Holder.

ARTICLE 3

 INTEREST

	3.1	Accrual of Interest.  Interest shall commence to accrue on the amount of the Principal outstanding hereunder from time to time, as of the date of this Debenture. Except as otherwise provided under the Subscription Agreement, accrued and outstanding Interest shall be payable by the Issuer on a quarterly basis.

ARTICLE 4

 USE OF PROCEEDS

	4.1	Loan.  The Principal shall be used by the Issuer to provide a secured loan to its subsidiary, NHC Edibles LLC, for the purchase of the real property located at 78 N Silicon Drive #80, Pueblo West, CO, 81007-1462, Pueblo County, United States of America.  Without limiting the generality of the foregoing, the Principal shall not be used for any purpose expressly prohibited under the Subscription Agreement.

ARTICLE 5

 CONVERSION

	5.1	Conversion Option. The Holder shall have the option, exercised by the delivery of a written notice by the Holder to the Issuer no later than fifteen (15) days prior to the proposed conversion date (the "Conversion Notice") to convert, at the applicable Conversion Price, the outstanding Principal and accrued and unpaid Interest owing hereunder into Common Shares.

	5.2	Conversion Price.  The price set for the conversion of this Debenture (the "Conversion Price") shall be a 20% premium to the price per Common Share at which the Issuer completes its Going Public Transaction, subject to the following adjustment:

		(a)	if the Issuer fails to complete the Going Public Transaction on or before January 31, 2015, the Conversion Price shall be reduced to the lower of: (a) $0.05 per Share; and (b) the financing price of a Going Public Transaction completed by the Issuer after January 31, 2015, as applicable; and

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		(b)	if the Issuer completes the Going Public Transaction on or before January 31, 2015, but less than $1,000,000 is raised in connection with such transaction, the Conversion Price shall be equal to price per Common Share at which the Issuer completes its Going Public Transaction. In such event and upon conversion of this Debenture pursuant to Sections 5.1, the Issuer shall also issue to the Holder 450,000 Common Shares in addition to the Common Shares the Holder shall be entitled to receive upon conversion of this Debenture pursuant to Sections 5.1.

	5.3	Mechanics of Conversion.  At the date fixed for the conversion of this Debenture, the Issuer shall deliver to the Holder a certificate representing the number of securities obtained by dividing the sum of the outstanding Principal and accrued and unpaid Interest being converted by the Conversion Price (rounded down to the nearest whole number of securities) as well as such other documentation as the Holder may reasonably require to attest that the securities are duly and properly issued and no amount of Principal or accrued and unpaid Interest remains outstanding and owing to the Holder hereunder. The Holder shall deliver the originally executed Debenture to the Issuer for cancellation.

	5.4	Conversion Date. The conversion of this Debenture is deemed to occur on the proposed conversion date set out in the Conversion Notice. At such time, the Holder will be treated as having become the holder of record of the securities issuable upon the conversion at that time.  Notwithstanding the foregoing or the surrender of this Debenture, if the Issuer fails to issue the aforesaid securities to the Holder within fifteen (15) days of the dated fixed for conversion, the Holder retains all rights contained in this Debenture until such shares are issued.

ARTICLE 6

 ADJUSTMENT PROVISIONS

	6.1	Reclassification of Common Shares. In the case of any reclassification of, or other change in, the Common Shares, the Holder shall be entitled to receive upon conversion of this Debenture pursuant to Sections 5.1 (and 5.2(b), as applicable) and shall accept in lieu of the number of Common Shares to which it was theretofore entitled upon such conversion, the kind and amount of shares and other securities or property which the Holder would have been entitled to receive as a result of such reclassification if, on the effective date thereof, it had been the registered holder of the number of Common Shares to which it was theretofore entitled upon conversion.

	6.2	Determination of Adjustments. If any question arises with respect to the adjustment provided for in Section 6.1, such question shall be conclusively determined by a firm of chartered accountants appointed by the board of directors of the Issuer acting in good faith.  Such chartered accountants shall have for such purposes access to all necessary records of the Issuer and such determination shall be binding upon the Issuer and the Holder.

	6.3	No Requirement to Issue Fractional Shares. The Issuer shall not be required to issue fractional shares upon the conversion of this Debenture. If any fractional interest in a share would, except for the provisions of this Section, be deliverable upon the conversion of this Debenture, the Issuer shall, in lieu of delivering any certificate representing such fractional interest, satisfy such fractional interest by paying to the Holder an amount of lawful money of Canada equal to the value of such fractional interest.

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	6.4	Certificate as to Adjustment. The Issuer shall immediately after the occurrence of any event which requires an adjustment or re-adjustment as provided for in this Article 6, deliver a certificate signed by an officer of the Issuer to the Holder specifying the nature of the event requiring such adjustment and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based, which certificate and the adjustment specified therein shall, if so requested by the Holder, be verified by an opinion of a firm of chartered accountants in accordance with Section 6.2, and any determination shall be binding upon the Issuer and the Holder.

ARTICLE 7

 INFORMATION RIGHTS

	7.1	Reporting Requirements. The Issuer shall provide the Holder with such financial information of the Issuer as may be reasonably requested by the Holder from time to time, including, without limitation, annual and quarterly financial statements and monthly management prepared reports.

ARTICLE 8

 SECURITY

	8.1	Charge.  As security for the repayment of the Issuer's indebtedness hereunder as well as all costs and expenses (including reasonable legal fees) incurred by the Holder to preserve the Charged Property (as defined below), enforce its security interest and protect the Holder from liability in connection with its security interest, the Issuer hereby grants a security interest in favour of the Holder over all of the Assets of the Issuer (collectively referred to herein as the "Charged Property").

	8.2	Value Given. The Issuer hereby acknowledges that value has been given to the Issuer by the Holder and that: (i) except as set out in Schedule A hereto, the Issuer owns (or, with respect to any leased or licensed property forming part of the Charged Property, holds a valid leasehold or licensed interest in) the Charged Property free and clear of any security interests; (ii) except as set out in Schedule A hereto, no security agreement, financing statement or other notice with respect to any or all of the Charged Property is on file or on record in any public office except for filings in favour of the Holder; (iii) the security interests, mortgages and charges granted hereby shall attach forthwith upon the Date of Issue with respect to each and every property included in the Charged Property and in which the Issuer then has rights and forthwith upon the Issuer first acquiring rights in each and every property included in the Charged Property and in which the Issuer first acquires such rights subsequent to the Date of Issue; and (iv) without in any way limiting the foregoing, the parties have not agreed to postpone the time of attachment of the security interest granted hereunder.

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	8.3	Continuing Charge.  The Issuer shall not be entitled to a release and discharge of this Debenture unless and until full payment of the outstanding Principal and accrued and unpaid Interest owing hereunder has been made to the Holder or the Debenture has been converted to Common Shares or such other class and/or series of securities to which the Holder is entitled hereunder upon the conversion of this Debenture.  Upon full payment of the Principal and accrued and unpaid Interest to the Holder or the conversion of the Debenture to shares and providing that no other monies are then owing by the Issuer to the Holder, the Issuer shall automatically be deemed to have been released and discharged of the obligations arising pursuant to and under this Debenture with no further action required to be taken by any party. The Holder agrees to do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, such further acts, deeds, transfers and assurances as the Issuer shall reasonably require for releasing and discharging all of the Issuer's obligations arising pursuant to and under this Debenture, including, without limitation, cancelling all security interests and related financing statements filed with all applicable government agencies.

	8.4	Further Assurances. The Issuer shall do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, such further acts, deeds, mortgages, transfers and assurances as the Holder shall reasonably require for better assuring, charging, assigning and conferring unto the Holder the Charged Property or for the purpose of fully accomplishing and effecting the intention of this Debenture.

ARTICLE 9

 GENERAL COVENANTS

So long as this Debenture remains outstanding, the Issuer covenants and agrees as follows:

	9.1	To Pay Certain Debts.  The Issuer shall punctually pay and discharge every obligation, the failure to pay or discharge of which might result in any Encumbrance or right of distress, forfeiture, termination or sale or any other remedy being enforced against the Charged Property. The Issuer shall provide to the Holder when requested by the Holder satisfactory evidence of the payment and discharge of such obligations, provided that the Issuer may, on giving the Holder such security (if any) as the Holder may require, refrain from paying or discharging any obligation the liability for which is being contested in good faith.

	9.2	To Comply with Obligations and Maintain Corporate Existence and Security.  The Issuer shall:

		(a)	comply with its obligations hereunder and under the Subscription Agreement;

		(b)	maintain its corporate existence and observe, pay and perform all of its obligations and liabilities as they become due and comply with all conditions under leases, licenses and other agreements to which it is a party or upon or under which any of the Charged Property is held;

 

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		(c)	defend the Charged Property against all claims and demands of all persons at any time charging the same or any interest thereon;

		(d)	carry on and conduct its business in a proper and efficient manner so as to preserve and protect the Charged Property and income therefrom;

		(e)	keep proper books of account with correct entries of all transactions in relation to its business;

		(f)	allow the Holder, four times a year, on reasonable notice and during normal business hours, but without any disruption to the business of the Issuer, to examine and make copies of all books and records of the Issuer, and allow the Holder to discuss the affairs, finances and accounts of the Issuer with the Issuer's officers and accountants;

		(g)	repair and keep in repair and good order and condition, in all material respects, all Assets of the Issuer, including the Charged Property, the use of which is necessary or advantageous in connection with the Issuer's business;

		(h)	keep all tangible Assets of the Charged Property insured to full insurable value against loss or damage by fire, explosion, theft and such other risks as are customarily insured against by persons carrying on similar businesses or owning similar property within the vicinity in which the Issuer's business or property is located;

		(i)	immediately notify the Holder in writing of any proposed change of name of the Issuer or of its chief place of business;

		(j)	pay all rents, rates and taxes levied, assessed or imposed upon it or its property as and when the same become due and payable save and except where it contests in good faith the validity thereof by proper legal proceedings and for which provision for payment and security adequate in the reasonable opinion of the Holder has been made;

		(k)	forthwith notify the Holder of the occurrence of any event, claim or occurrence that could reasonably be expected to have a material adverse effect on the value of the Charged Property or on the security interests created by this Debenture;

		(l)	forthwith notify the Holder of any default (or event, condition or occurrence which with the giving of notice and/or the lapse of time would constitute a default) in connection with any indebtedness of the Issuer; and

		(m)	collect all accounts receivable in the Ordinary Course of Business.

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ARTICLE 10

 NEGATIVE COVENANTS

At all times, the Corporation hereby covenants and agrees that for so long as this Debenture is in force and any portion of the indebtedness hereunder remains unpaid, unfulfilled and/or unsatisfied, in the absence of the prior written consent of the Holder, which consent shall not be unreasonably delayed or withheld, the Corporation shall not:

	10.1	Encumber Property. Create, grant, assume or suffer to exist any Encumbrance upon the Charged Property other than: (i) any Encumbrance upon the Charged Property in favour of David Posner, Statis Rizas and Adam Szweras securing a loan in the principal amount of CAD$150,000 (the "Secondary Loan") which Encumbrance(s) is/are subordinate to the Encumbrances upon the Charged Property in favour of the Holder; and (ii) as otherwise contemplated herein.

	10.2	Sell.  Remove, destroy, lease, transfer, assign, sell or otherwise dispose of any material part of the Charged Property, other than sales made or licenses granted in the Ordinary Course of Business. For the purposes of this Section 10.2, any portion of the Corporation's Intellectual Property is deemed to be a material part of the Charged Property.

	10.3	Dividends.  Declare and/or pay dividends or make any other distribution, whether in cash or other property, on any class or series of shares or other payment or distribution to any of the Corporation's shareholders.

	10.4	Make Certain Changes.

		(a)	create or grant any senior or pari passu security;

		(b)	acquire or redeem any securities of the Corporation, other than securities of the Corporation held by an employee, officer or director whose employment or engagement with the Corporation is being terminated;

		(c)	other than the Secondary Loan, create a new credit facility or increase any existing credit facility or bank operating line of the Corporation;

		(d)	make any loans to, or any investments in, or guarantees of any obligations of, any other Person, other than the giving of trade credit;

		(e)	purchase, establish or acquire in any manner any new business undertaking;

		(f)	change in a material manner the nature of its business as presently carried on and as proposed to be carried on;

		(g)	engage in any transactions with persons not dealing at arm's length with the Corporation other than in the Ordinary Course of Business;

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		(h)	amend, waive or repeal any provision of its by-laws or articles of incorporation, as amended;

		(i)	materially change its accounting policies or change its financial year-end;

		(j)	relocate the Charged Property within Ontario or remove any of the Charged Property or any of the books of account or other records of the Corporation to a location outside of Ontario;

		(k)	authorize any transaction outside the Ordinary Course of Business, including: (i) any Change of Control (other than in respect of a Going Public Transaction), (ii) any exclusive lease, transfer, sale or disposal of technology or Intellectual Property of the Corporation, and (iii) any partnership or joint venture (other than joint business arrangements with arm's length third parties in the Ordinary Course of Business);

		(l)	initiate any reorganization, liquidation, dissolution or winding-up of the Corporation; and

		(m)	enter into any agreement or arrangement to effect any of the foregoing.

ARTICLE 11

 RELEASE AND SUBORDINATION

	11.1	Release by Holder.  The Holder may, at its sole discretion, at any time release from the security interest hereby created any part or parts of the Charged Property either with or without consideration therefor, without responsibility therefor, and without thereby releasing any other part of the Charged Property or any Person from this Debenture.

	11.2	Subordination by Holder.  Nothing herein, including Section 11.1, shall operate to subordinate the security interest provided for in this Debenture to or in favour of any Encumbrance, or to postpone any of the obligations of the Issuer hereunder to any of the obligations, indebtedness or liabilities owed by the Issuer to the holder of any Encumbrance.

	11.3	The security interest hereby evidenced may not be subordinated in favour of a bank or similar financial institution providing operating credit facilities to the Issuer in the absence of the prior written consent of the Holder, which consent shall not be unreasonably delayed or withheld, provided that in no event will the Holder subordinate its security interest, from time to time, in the real property located at 78 N Silicon Drive #80, Pueblo West, CO, 81007-1462, Pueblo County, United States of America. The costs and expenses of any such subordination shall be borne by the Issuer.

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ARTICLE 12

 DEFAULT

	12.1	This Debenture shall be in default upon the occurrence of the following events (each an "Event of Default"):

		(a)	if the Issuer makes any default in payment of any part of the Principal or Interest owing under this Debenture when the same shall become due and payable and such default continues for a period of fifteen (15) days following delivery of written notice of such default by the Holder;

		(b)	if default occurs in the performance of any covenant of the Issuer in favour of the Holder under this Debenture or the Subscription Agreement and such default continues for a period of thirty (30) days following delivery of written notice of such default by the Holder;

		(c)	if a default occurs under the terms of the Intercreditor Agreement dated November 17, 2014 and made between the Holder, the Issuer, David Posner, Statis Rizas and Adam Szweras (the "Intercreditor Agreement") or in the performance by the Issuer of any of the Junior Obligations (as defined in the Intercreditor Agreement) or any terms of the Junior Convertible Debenture (as defined in the Intercreditor Agreement);

		(d)	if default occurs in the payment or performance of any obligation in favour of any Person from whom the Issuer has borrowed money which would entitle the creditor to accelerate repayment of the borrowed money, and such default is not waived by such creditor in writing within thirty (30) days of the occurrence of such default;

		(e)	if any representation or warranty made by the Issuer herein, in the Subscription Agreement or in any certificate, statement or report furnished in connection herewith is found to be false or incorrect in any way so as to make it materially misleading when made or when deemed to have been made and, if the error is capable of correction, such error is not corrected for a period of thirty (30) days following delivery of written notice of such default by the Holder;

		(f)	if any act, matter or thing is done toward the termination of, or any action or proceeding is launched or taken to terminate the corporate existence of the Issuer, whether by winding-up, surrender of charter or otherwise;

		(g)	if the Issuer ceases to carry on its business, commits an act of bankruptcy, becomes insolvent, makes an assignment or bulk sale of its Assets without the prior written approval of the Holder, or makes a proposal, compromise or arrangement with or to its creditors; or

		(h)	the failure by the Issuer or any of its subsidiaries to make all required contributions and to comply in all material respects with the requirements of the Employee Retirement Income Security Act;

		(i)	if any execution, sequestration, seizure, distress or other analogous process becomes enforceable or is enforced against the Issuer or the Charged Property or any part thereof unless such process is released, bonded, satisfied, discharged, vacated or stayed within thirty (30) days after its entry, commencement or levy or is being contested in good faith by the Issuer, as applicable, by proper proceedings.

 

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	12.2	Upon the occurrence of an Event of Default, at the option of the Holder, all monies secured hereby shall become forthwith due and payable and all of the rights and remedies hereby conferred in respect of the Charged Property shall become immediately enforceable and the Issuer and the Holder shall have, in addition to any other rights and remedies provided by law, the rights and remedies of a debtor and a secured party respectively under the PPSA and those provided by this Convertible Debenture.  In addition, the Issuer may take possession of the Charged Property and enforce any rights of the Issuer in respect of the Charged Property by any method available in or permitted by law and may require the Issuer to assemble the Charged Property and deliver or make the Charged Property available to the Holder at any place as may be designated by the Issuer. In furtherance of the foregoing, the Holder, or any receiver appointed hereunder is hereby irrevocably constituted, effective upon the occurrence of an Event of Default, as the duly appointed lawful attorney of the Issuer in accordance with the Powers of Attorney Act (Ontario), with full power to make, do, execute and deliver all such documents, assignments, acts, matters or things on behalf of the Issuer with the right to use the name of the Issuer whenever and wherever it may be deemed necessary or expedient. The power of attorney hereby granted is a power coupled with an interest and shall survive the dissolution, liquidation, winding-up or other termination of existence of the Issuer.  The Issuer agrees to and does hereby ratify all acts done and all documents executed and delivered by the Holder pursuant to the power of attorney hereby granted and the Issuer hereby confirms that the Holder and all third parties are entitled to rely upon such ratification.

	12.3	Following the occurrence of an Event of Default, to the extent permitted by applicable law, Interest on the outstanding Principal shall accrue at a rate equal to twenty percent (20%) per annum, compounded and calculated monthly, in arrears.

	12.4	Upon the occurrence of an Event of Default, the Holder may require the Issuer to engage a consultant of the Holder's choice for the sole purpose of exploring such Event of Default and possible remedies to such Event of Default.  Subject to the execution and delivery of a non-disclosure agreement in a form reasonably satisfactory to the Issuer, such consultant shall receive the full cooperation and support of the Issuer and its employees, including unrestricted access to the premises, books and records of the Issuer during reasonable business hours.

	12.5	Upon the occurrence of an Event of Default, the Holder may take proceedings in any court of competent jurisdiction for the appointment of a receiver, interim receiver or a receiver and manager (the "receiver") of the Charged Property or of any part thereof or may by instrument in writing appoint any person to be a receiver of the Charged Property or of any part thereof and may remove any receiver so appointed by the Holder and appoint another in his stead.  Any receiver appointed hereunder by instrument in writing shall have power (a) to take possession of the Charged Property or any part thereof and, without liability or obligation to the Issuer, to maintain, preserve and protect the same; (b) to carry on or concur in carrying on all or any part of the business or businesses of the Issuer; (c) to borrow money which such receiver, in its sole discretion, determines is required in connection with either or both of the powers provided for in paragraph (a) and (b); and (d) to dispose of the Charged Property in whole or in part, and any such disposition may be by public sale (whether by auction, tender or otherwise), private sale, lease or otherwise, and at such time and place and on such terms and for such price and manner of payment thereof, all as such receiver may, in its sole discretion, determine; provided that any such receiver shall be and is deemed to be the agent of the Issuer and the Holder shall not in any way be responsible for any misconduct, negligence or nonfeasance of any such receiver.

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ARTICLE 13

 INDEMNIFICATION

	13.1	The Issuer shall pay, and shall indemnify and save harmless the Holder against all Losses (including legal fees on a full indemnity basis) resulting from the exercise of any or all of the rights, remedies and powers of the Holder under this Debenture (other than the right of conversion hereunder), the taking, recovering or possessing of any or all of the Charged Property, and of any other proceedings taken for the purpose of enforcing the remedies provided to the Holder, or otherwise in relation to the Charged Property, or by reason of non-payment of the obligations hereby secured, including, without limitation, the appointment of a receiver (collectively, the "Expenses"). Any proceeds of any disposition of any of the Charged Property shall be applied by the Holder firstly on account of the Expenses, and any balance of such proceeds shall be applied by the Holder on account of the outstanding Principal and accrued and unpaid Interest in such order of application as the Holder may from time to time effect and the same shall not be subject to dispute by the Issuer.  If such proceeds fail to satisfy the amount, the Issuer shall be liable for the full amount of the deficiency resulting to the Holder.

ARTICLE 14

 ASSIGNMENT

	14.1	The Holder may, upon giving notice to the Issuer, but for greater certainty without the consent of the Issuer, sell, assign or otherwise dispose of this Debenture or of any shares obtained pursuant to the conversion hereof to any Person provided that any such sale, assignment or disposition is made in accordance with the terms and conditions of the Issuer's articles of incorporation, the Shareholders' Agreement and applicable securities laws.

ARTICLE 15

 AMALGAMATION

	15.1	The Issuer acknowledges that if it amalgamates or is otherwise combined or arranged with any other corporation or corporations (a) the Charged Property and the security interests granted hereby shall extend to and include all the like property and assets of each of such corporation(s) and the amalgamated, combined or arranged corporation(s) and to any like property or assets of the amalgamated corporation thereafter owned or acquired, (b) the term "Corporation" where used herein shall extend to and include each of such predecessor corporations and the amalgamated, combined or arranged corporation.  Nothing in this Section 15.1 shall permit or authorize an amalgamation that is otherwise prohibited by the provisions of this Debenture.

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ARTICLE 16

 CURRENCY

	16.1	All sums of money referred to herein are expressed in the currency of Canada.

ARTICLE 17

 GOVERNING LAW

	17.1	This Debenture shall be governed by and interpreted in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.  The Issuer and the Holder hereby attorn to the exclusive jurisdiction of the courts of the Province of Ontario.

<Signature page follows>

 

[DEBENTURE SIGNATURE PAGE]

IN WITNESS WHEREOF the Issuer has, by its duly authorized representative, signed, and delivered this Debenture as of the date first written above.

	
NUTRITIONAL HIGH INTERNATIONAL INC.

 

	
By:

	
 /"Signed"/

	 	
Name:       David Posner

	
Title:          CEO

  

[DEBENTURE SIGNATURE PAGE]

 

  

 

SCHEDULE A

 ENCUMBRANCES

Nil.

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