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Turnium Technology Group Inc. — Capital/Financing Update 2022
Apr 9, 2022
47515_rns_2022-04-08_c9e6e166-4f44-4ff2-876c-12180d36e3f1.pdf
Capital/Financing Update
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AGENCY AGREEMENT
April 8, 2022
Turnium Technology Group Inc.
1127-15[th] Street West North Vancouver, British Columbia V7P 1M7
Attention: Johan Arnet, Chief Executive Officer
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RMR Science Technologies Inc.
3500-157A Street Surrey, British Columbia V3Z 3V7
Attention: Robin Hutchison, Chief Executive Officer
Dear Sirs:
The undersigned, Eight Capital (“ Eight ”) and Canaccord Genuity Corp. (“ Canaccord ”), as co-lead agents and joint bookrunners (the “ Co-Lead Agents ”), and iA Private Wealth Inc. and Echelon Wealth Partners Inc. (collectively, with the Co-Lead Agents, the “ Agents ”) as agents, understand that Turnium Technology Group Inc. (the “ Company ”) proposes to create, issue and sell up to 5,910,627 subscription receipts of the Company (each, a “ Subscription Receipt ” and collectively, the “ Subscription Receipts ”) at the Offering Price (as defined below), for aggregate gross proceeds of up to approximately $3,309,951.12 (the “ Offering ”), subject to the terms and conditions set out below.
Upon and subject to the terms and conditions set forth herein, the Agents hereby agree to act, and upon acceptance hereof, the Company hereby appoint the Agents, as the Company’s exclusive agents, to offer for sale by way of private placement on a “commercially reasonable efforts” basis, without underwriter liability, the Subscription Receipts and the Agents agree to arrange for purchasers of the Subscription Receipts in the Selling Jurisdictions (as defined below) and in those jurisdictions outside of Canada as mutually agreed by the Company and the Co-Lead Agents (on their own behalf and for and on behalf of the Agents) where the Subscription Receipts may be lawfully sold pursuant to the Offering.
The Company hereby grants to the Agents an option (the “ Agents’ Option ”), exercisable up to 48 hours prior to the Closing Date (as defined below), to arrange for the purchase of up to an additional 15% of the number of Subscription Receipts sold under the Offering (being up to an additional 886,594 Subscription Receipts) (the “ Additional Subscription Receipts ”) on the same terms as the Offering as described herein. Unless the context otherwise requires, all references herein to the “Subscription Receipts” shall include the “Additional Subscription Receipts” sold pursuant to the Agents’ Option and all references herein to the “Offering” shall include the issuance and sale of the Additional Subscription Receipts. If the Agents’ Option is
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exercised in full, the total gross proceeds of the Offering to the Company shall be up to approximately $3,806,443.79.
In addition, the Agents understand that the Company shall offer and sell 3,145,643 subscription receipts of the Company at the Offering Price on a non-brokered basis (the “ NonBrokered Offering ”). The gross proceeds of the Non-Brokered Offering, when combined with the gross proceeds of the Offering (including any gross proceeds raised upon exercise of the Agents’ Option), shall not exceed $3,806,443.79. The Agents undertake no obligation to the Company or to the purchasers under the Non-Brokered Offering. The Company acknowledges and agrees that purchasers under the Non-Brokered Offering do not and will not have any recourse to or any rights against the Agents, and the Agents do not and will not have any liability whatsoever to purchasers under or in connection with the Non-Brokered Offering.
The Subscription Receipts are being issued or sold in connection with the proposed business combination involving the Company and RMR Science Technologies Inc. (“ RMR ”), a capital pool company listed on the TSX-V (as defined below), that will constitute a “Qualifying Transaction” as such term is defined in the CPC Policy (as defined below) for RMR (the “ Business Combination ”). The Business Combination will be implemented by way of a “three-cornered” amalgamation whereby, inter alia , 1333633 B.C. Ltd. (“ RMR Subco ”), a newly incorporated wholly-owned subsidiary of RMR, will amalgamate with the Company and holders of Turnium Shares (as defined below) will receive Class A common shares (the “ Resulting Issuer Shares ”) in the capital of the Resulting Issuer (as defined below) on a post-Consolidation (as defined below) one for one basis and the holders of Turnium Warrants (as defined below) will receive Resulting Issuer Warrants (as defined below) on a one for one basis. Following closing of the Business Combination, RMR will be known as “ Turnium Technology Group Inc. ” (the “ Resulting Issuer ”), or such similar name as may be accepted by the relevant regulatory authorities and approved by the board of directors and shareholders of RMR.
The Business Combination will be effected pursuant to the Amalgamation Agreement (as defined below).
In connection with the completion of the Business Combination, the Resulting Issuer Shares will be listed on the TSX-V (as defined below), and the conditional approval of the listing is a condition to completion of the Business Combination. The completion of the Offering will be subject to receipt of all necessary regulatory and corporate approvals.
Pursuant to and in accordance with the Subscription Receipt Agreement (as defined below), immediately prior to the completion of the Business Combination, each Subscription Receipt shall be automatically converted into, without payment of any additional consideration and without any further action by the holder thereof, one unit of the Company (a “ Turnium Unit ”), each Unit consisting of one common share in the capital of the Company (each, a “ Turnium Share ” and collectively the “ Turnium Shares ”) and one-half of one (1/2) Turnium Share purchase warrant (each, a “ Turnium Warrant ”) upon the satisfaction of the following conditions (collectively, the “ Escrow Release Conditions ”) on or prior to the Escrow Release Deadline (as defined below):
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(i) a certificate from a senior officer of each of the Company and RMR certifying that all conditions to the completion of the Business Combination in accordance with the Amalgamation Agreement have been satisfied or waived, other than the release of the Escrowed Funds and the closing of the Business Combination, each of which will be completed forthwith upon release of the Escrowed Funds;
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(ii) the receipt of all required shareholder, third party (as applicable) and regulatory approvals including, without limitation, the conditional approval of the TSX-V for the Business Combination and the Offering, if applicable, and the conditional approval of the TSX-V for the listing of the Resulting Issuer Common Shares and the Resulting Issuer Warrant Shares (as defined below) (issuable upon exercise of the Resulting Issuer Warrants) issuable upon conversion of the Subscription Receipts after giving effect to the Business Combination;
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(iii) a certificate from a senior officer of the Company (in the case of the Amalgamation Agreement) and each of the Company and RMR (in the case of this Agreement) certifying that it is not in breach or default of any of its respective covenants or obligations under the Amalgamation Agreement or this Agreement, as applicable, except (in the case of this Agreement only) for those breaches or defaults that have been waived by the Co-Lead Agents on behalf of the Agents, and all conditions set out in this Agreement have been fulfilled; and
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(iv) the Company and the Co-Lead Agents (on their own behalf and on behalf of the Agents) having delivered a joint notice to the Subscription Receipt Agent (as defined below) confirming that the conditions set forth in (i) through (iii) above have been met or waived.
The Company and RMR and the Co-Lead Agents shall, upon satisfaction or waiver of the Escrow Release Conditions, deliver the prescribed notice under the Subscription Receipt Agreement to the Subscription Receipt Agent (the “ Release Notice ”).
Each whole Turnium Warrant shall entitle the holder thereof to acquire one Turnium Warrant Share (as defined below) at a price of $0.75 per share for a period of 24 months from the Closing Date (as defined below).
If: (i) the Release Notice is not delivered to the Subscription Receipt Agent on or before August 6, 2022 (the “ Escrow Release Deadline ”); (ii) a Termination Notice (as defined below) is delivered on or prior to 5:00 p.m. (Vancouver time) on the Escrow Release Deadline; or (iii) the Amalgamation Agreement is terminated (any such event being a “ Termination Event ”), within three Business Days following the Termination Event, the Subscription Receipt Agent shall pay to the holders of Subscription Receipts in an amount per Subscription Receipt equal to their pro rata share of the Offered Receipts Escrowed Funds (which includes Subscription Receipt Interest (as defined below)). The Company shall deposit with the Subscription Receipt Agent, prior to the time that the payment is required, any shortfall between the amount of the holders’ pro rata share of the Offered Receipts Escrowed Funds and the aggregate Offering Price of the Subscription Receipts held by them (the “ Shortfall ”).
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The gross proceeds of the Offering, less an amount equal to: (i) the costs and expenses of the Agents incurred up to Closing (including legal expenses); and (ii) fifty percent (50%) of the total Cash Commission (as defined below) and any other cash compensation payable to Eight and/or the Agents in connection with the Offering and the Non-Brokered Offering which will be paid to the Agents at Closing (collectively, the “ Agents’ Closing Compensation ”), will be delivered to and held in escrow on behalf of the Purchasers by the Subscription Receipt Agent (such amount being the “ Offered Receipts Escrowed Proceeds ”) and invested by the Subscription Receipt Agent or held in an interest bearing account pursuant to the Subscription Receipt Agreement (the Offered Receipts Escrowed Proceeds, together with any Subscription Receipt Interest (as defined below) derived directly or indirectly from time to time from holding and investing the Offered Receipts Escrowed Proceeds, are referred to herein as the “ Offered Receipts Escrowed Funds ”). The Offered Receipts Escrowed Funds less an amount equal to the remaining fifty percent (50%) of the Cash Commission and any other cash compensation payable to Eight and/or the Agents in connection with the Offering and the Non-Brokered Offering plus the costs and expenses of the Agents (including legal expenses), if any, in connection with the Offering in excess of those deducted and paid to the Agents from the Offered Receipts Escrow Proceeds at Closing (the “ Remaining Agents’ Compensation ”), will be released to, or as directed by, the Company and the Remaining Agents’ Compensation will be released to Eight, upon satisfaction of the Escrow Release Conditions on or prior to the Escrow Release Deadline.
The Subscription Receipts shall be created and issued pursuant to a subscription receipt agreement (the “ Subscription Receipt Agreement ”) to be entered into on the Closing Date among the Company, RMR, the Co-Lead Agents and Computershare Trust Company of Canada in its capacity as subscription receipt agent thereunder (the “ Subscription Receipt Agent ”). The specific attributes of the Subscription Receipts shall be set forth in the Subscription Receipt Agreement. The Resulting Issuer Warrants will be created and issued pursuant to a warrant indenture (the “ Warrant Indenture ”) to be entered into on the Closing Date among the Company, RMR and Computershare Trust Company of Canada as warrant agent thereunder (the “ Warrant Agent ”). The description of the Subscription Receipts, the Turnium Shares, the Turnium Warrants, the Resulting Issuer Shares and the Resulting Issuer Warrants contained in this Agreement is a summary only and is subject to the provisions of the certificates evidencing the Subscription Receipts, if any, the constating documents of the Company and the Resulting Issuer, respectively, and the Subscription Receipt Agreement and the Warrant Indenture.
The Company, RMR, the Resulting Issuer and the Business Combination is described in greater detail in the Filing Statement (as defined below).
In consideration of the services to be rendered by the Agents in connection with the Offering and subject to the terms of this Agreement, the Company shall pay to the Agents at Closing the Agents’ Closing Compensation, and the Remaining Agents’ Compensation will be payable in cash on satisfaction of the Escrow Release Conditions on or prior to the Escrow Release Deadline. For greater certainty, the Remaining Agents’ Compensation will not be payable to the Agents if the Escrow Release Conditions are not satisfied. The Agents will also be entitled to reimbursement for reasonable out-of-pocket expenses of the Agents and the reasonable fees and disbursements of the Agents’ counsel (subject to a maximum of $125,000, excluding taxes and disbursements) incurred in connection with the Offering regardless of whether the Escrow Release Conditions are satisfied. In addition, at Closing, the Agents shall be issued Compensation Options
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(as defined below) which, subject to the terms and conditions set forth in the Compensation Options, will entitle the Agents to subscribe to that number of Turnium Units underlying the Subscription Receipts that is equal to 7.0% of the total number of Subscription Receipts issued pursuant to the Offering (3.5% of the number of Subscription Receipts sold to President’s List Purchasers (as defined herein) investing in the Offering), including, for the avoidance of doubt, Turnium Units underlying the Additional Subscription Receipts, with all such Compensation Options to be replaced by an equivalent number of compensation options of the Resulting Issuer to acquire an equivalent number of Resulting Issuer Units pursuant to the Business Combination. No Compensation Options shall be issuable in respect of the Non-Brokered Offering.
The Agents shall be entitled to appoint a soliciting dealer group consisting of other registered dealers (each a “ Selling Firm ”) acceptable to the Company for the purpose of arranging for purchasers of the Subscription Receipts. The Agents have the exclusive right to determine the remuneration payable by the Agents to such other registered dealers appointed by it out of the compensation payable by the Company to the Agents, provided, however, in no case shall such remuneration exceed that payable to the Agents hereunder
The parties acknowledge that the Subscription Receipts, the Turnium Shares, the Turnium Warrants, the Turnium Warrant Shares (as defined below), the Resulting Issuer Shares, the Resulting Issuer Warrants and the Resulting Issuer Warrant Shares (as defined below), have not been and will not be registered under the U.S. Securities Act (as defined below) and may only be offered or sold in the United States (as defined below) or to, or for the account or benefit of, U.S. Persons (as defined below) or persons in the United States pursuant to and in accordance with U.S. Securities Laws (as defined below) and the provisions of Schedule “A” to this Agreement. The parties acknowledge that Schedule “A” forms part of this Agreement. All actions to be undertaken by the Agents in the United States or for the account or benefit of a U.S. Person in connection with the matters contemplated herein shall be undertaken through the U.S. Affiliates (as defined below).
It is understood and agreed that the Agents are under no obligation to purchase any of the Subscription Receipts, although the Agents may subscribe for Subscription Receipts if they so desire.
DEFINITIONS
1. In this Agreement, in addition to the terms defined above, the following terms shall have the following meanings:
“ Additional Subscription Receipts ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Advisory Agreement ” means the advisory agreement between the Company, RMR and the Agents dated April 8, 2022;
“ Agents ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Agents’ Closing Compensation ” has the meaning ascribed to such term in the preamble to this Agreement;
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“ Agents’ Option ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Agreement ” means the agreement resulting from the acceptance by the Company and RMR of the offer made by the Agents hereby, including all schedules hereto, as the same may be amended or supplemented from time to time;
“ Alternative Transaction ” means the issuance of securities of the Company in excess of 5% (on an as-converted basis, if applicable) of the total number of Common Shares currently issued and outstanding, or the completion of a business transaction involving a change in control of the Company or any material subsidiary thereof, including a merger, amalgamation, arrangement, take-over bid, insider bid, reorganization, joint venture, sale of all or substantially all assets, exchange of assets or any similar transaction, excluding the issuance of securities pursuant to the exercise of convertible securities of the Company outstanding on the date hereof and excluding any transaction in which Eight is retained as agent or advisor and excluding any Alternative Transaction which is covered by the Valeo IBK Agreement;
“ Amalgamation Agreement ” means the amalgamation agreement among the Company, RMR and RMR Subco in respect of the Business Combination dated December 21, 2021;
“ Applicable Anti-Money Laundering Laws ” has the meaning ascribed to such term in Section 5(lvi);
“ BCBCA ” means the Business Corporations Act (British Columbia), as from time to time amended or re-enacted and includes any regulations heretofore or hereafter made pursuant thereto;
“ Business Combination ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Business Combination Closing ” means the closing of the Business Combination;
“ Business Combination Opinions ” has the meaning ascribed to such term in Section 8 hereof;
“ Business Day ” means any day, other than a Saturday, Sunday or statutory holiday in the Province of Ontario and British Columbia, on which commercial banks in Toronto, Ontario and Vancouver, British Columbia are open for business;
“ Canaccord ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Cash Commission ” has the meaning ascribed to such term in Section 15 hereof;
“ Claims ” has the meaning ascribed to such term in Section 12 hereof;
“ Closing ” means the completion of the issue and sale by the Company, through the Agents, of the Subscription Receipts pursuant to the provisions of this Agreement, the Subscription Receipt Agreement and Subscription Agreements;
“ Closing Date ” means April 8, 2022 or such other date or dates as may be mutually agreed upon by the Co-Lead Agents and the Company;
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“ Closing Time ” means 8:00 a.m. (Toronto time) on the Closing Date or such other time on the Closing Date as may be mutually agreed upon by the Co-Lead Agents and the Company;
“ Co-Lead Agents ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Common Shares ” means the common shares in the capital of the Company and includes, for greater certainty, the Turnium Shares;
“ Company ” means Turnium Technology Group Inc.;
“ Company IP ” means the Intellectual Property that has been developed, or that is being developed, by or for the Company or the Turnium Subsidiary, or that is being used, or is proposed to be used, by the Company or the Turnium Subsidiary, other than Licensed IP;
“ Company’s Auditors ” means Manning Elliott LLP;
“ Compensation Option Certificates ” means the certificates representing the Compensation Options, which certificates shall govern the terms and conditions of the Compensation Options and shall be substantially in the form attached as Schedule “D”;
“ Compensation Option Shares ” means the Common Shares issuable on exercise of the Compensation Options;
“ Compensation Option Units ” means the Turnium Units issuable upon the exercise of the Compensation Options;
“ Compensation Option Warrants ” means the Turnium Warrants or the Resulting Issuer Warrants, as applicable, issuable on exercise of the Compensation Options;
“ Compensation Option Warrants Underlying Shares ” means the Common Shares underlying the Turnium Warrants issuable on exercise of the Compensation Options;
“ Compensation Options ” means the transferable compensation options to be issued to the Agents as provided for in Section 15, each Compensation Option entitling the holder thereof to acquire one Turnium Unit at the Offering Price at any time on or before the date which is 24 months following the Closing Date all pursuant to the terms and conditions of the Compensation Option Certificates;
“ Consolidation ” means, collectively, the consolidation of the Class A common shares of RMR on a 5 for 1 basis to be effected as part of the Business Combination;
“ Corporate Presentation ” means the corporate presentation of the Company dated February, 2022 prepared and delivered in connection with the Offering;
“ COVID-19 Outbreak ” has the meaning ascribed to such term in Section 5(a)(lxix);
“ CPC Policy ” means the Policy 2.4 – Capital Pool Companies of the TSX-V;
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“ Customer Data ” means all data, meta data, information or other content (i) transmitted to the Company by users or customers of the Company’s products; or (ii) otherwise stored or hosted by the Company, including Personally Identifiable Information, but excluding any confidential information and anonymized data;
“ Debt Instrument ” means any note, loan, bond, debenture, indenture, promissory note or other instrument evidencing indebtedness (demand or otherwise) for borrowed money;
“ Developers ” has the meaning ascribed to such term in Section 5(xxxix);
“ Director, Officer and Significant Shareholder Lock-Up Period ” has the meaning ascribed to such term in Section 3(a)(xv) hereof;
“ Disqualification Event ” has the meaning ascribed to such term in Section 12;
“ Effective Time ” means the time immediately before the effective time of the Business Combination Closing;
“ Eight ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Employee Plans ” has the meaning ascribed to such term in Section 5(a)(lvii);
“ Encumbrances ” means any hypothec, priority, mortgage, pledge, assignment, charge, lien, claim, security interest, adverse interest, other third person interest or encumbrance of any kind, whether contingent or absolute, and any agreement, option, right or privilege (whether by law, contract or otherwise) capable of becoming any of the foregoing;
“ Engagement Letter ” means the engagement letter between the Company and Eight dated July 27, 2021, as amended and replaced on February 14, 2022;
“ Environmental Laws ” means any federal, provincial, local or municipal statute, law, rule, regulation, ordinance, code, policy or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to pollution or protection of human health, the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including Laws and regulations relating to the release or threatened release of Hazardous Substances or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances;
“ Escrow Release Conditions ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Escrow Release Date ” means the date on which the Release Notice is provided to the Subscription Receipt Agent;
“ Escrow Release Deadline ” means at or prior to 5:00 p.m. (Vancouver time) on August 6, 2022, being the date that is 120 days after the Closing Date, subject to extension as the Company, RMR and the Co-Lead Agents may agree in writing or the holders of Subscription Receipts may approve as provided by the Subscription Receipt Agreement;
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“ Filing Statement ” means the Filing Statement of RMR dated February 14, 2022 in respect of the Business Combination;
“ Financial Statements ” means the (i) the audited consolidated and combined financial statements of the Company as of and for the years ended September 30, 2021 and September 30, 2020, and related notes thereto, (ii) the audited consolidated financial statements of the Company for as of and for the eight-month period ended September 30, 2020, and related notes thereto, (iii) the audited financial statements of Tenacious Networks Inc. as of and for the year ended January 31, 2021, and related notes thereto, and (iv) the audited financial statements of Multapplied Networks Inc. as of and for the year ended September 30, 2020, and related notes thereto, and provided to the Agents in connection with the Offering;
“ General Solicitation ” and “ General Advertising ” means “general solicitation” and “general advertising”, respectively, as used in Rule 502(c) of Regulation D, including, advertisements, articles, notices or other communications published on the Internet or in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees had been invited by general solicitation or general advertising or any public offering within the meaning of Regulation D;
“ Governmental Authority ” means and includes any domestic or foreign federal, provincial, regional, state, municipal or other government, governmental department, agency, authority or body (whether administrative, legislative, executive or otherwise), court, tribunal, commission or commissioner, bureau, minister or ministry, board or agency, or other regulatory authority, including any securities regulatory authorities;
“ Government Official ” means (a) any official, officer, employee, or representative of, or any person acting in an official capacity for or on behalf of, any Governmental Authority, (b) any salaried political party official, elected member of political office or candidate for political office, or (c) any company, business, enterprise or other entity owned or controlled by any person described in the foregoing clauses;
“ Hazardous Substances ” means any substance, material or waste that is defined, judicially interpreted or identified in, or regulated, listed or prohibited by Environmental Laws, including pollutants, contaminants, chemicals, deleterious substances, dangerous goods, hazardous or industrial toxic wastes or substances, tailings, wasterock, radioactive materials, flammable substances, explosives, petroleum and petroleum products, polychlorinated biphenyls, chlorinated solvents and asbestos;
“ IFRS ” means International Financial Reporting Standards;
“ including ” or “ includes ” means including or includes without limitation;
“ Indemnified Party ” and “ Indemnified Parties ” has the meaning ascribed to such term in Section 12 hereof;
“ Indemnitor ” has the meaning ascribed to such term in Section 12 hereof;
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“ Intellectual Property ” means all registered and unregistered trade or brand names, business names, trademarks, service marks, copyrights, patents, patent rights, licenses, industrial designs, know-how (including trade secrets and other unpatented or unpatentable proprietary or confidential information, systems or procedures), computer software, formulae, processes, inventions, designs and other industrial or intellectual property of any nature whatsoever, including the Intellectual Property rights set out in Schedule “B” hereto;
“ Laws ” means Securities Laws and all other statutes, regulations, statutory rules, orders, by-laws, codes, ordinances, decrees, the terms and conditions of any grant of approval, permission, authority or license, or any judgment, order, decision, ruling, award, policy or guideline, of any Governmental Authority; the term “applicable” with respect to such Laws and in the context that refers to one or more persons, means that such Laws apply to such person or persons or its or their business, undertaking, property or securities and emanate from a Governmental Authority, having jurisdiction over the person or persons or its or their business, undertaking, property or securities;
“ Leased Premises ” means the premises which the Company or the Turnium Subsidary occupies as a tenant;
“ Licensed IP ” means the Intellectual Property owned by any person other than the Company or a subsidiary and which the Company or a subsidiary licenses or uses;
“ Lock-Up Agreements ” has the meaning ascribed to such term in Section 3(a)(xv) hereof;
“ Locked-Up Persons ” has the meaning ascribed to such term in Section 3(a)(xv) hereof;
“ Material Adverse Effect ” or “ Material Adverse Change ” means any fact, effect, change, event, occurrence, or any development involving a change, that is or is reasonably likely to be materially adverse to the results of operations, financial condition, assets, properties, capital, liabilities (contingent or otherwise), cash flows, income or business operations of the Company or RMR, as applicable;
“ Material Agreement ” means any contract, commitment, agreement (written or oral), instrument, lease or other document (including option agreements), to which the Company is a party or otherwise bound and which is material to the Company, and includes the Amalgamation Agreement, this Agreement, the Subscription Receipt Agreement and the Warrant Indenture;
“ misrepresentation ”, “ material fact ”, “ material change ”, “ affiliate ”, “ associate ”, and “distribution” have the respective meanings ascribed to such terms in the Securities Act (Ontario) in effect on the date hereof;
“ Money Laundering Laws ” has the meaning ascribed to such term in Section 5(a)(lxvii) hereof;
“ NI 45-106 ” means National Instrument 45-106 Prospectus Exemptions , or in Québec, means Regulation 45-106 respecting Prospectus Exemptions ;
“ Non-Brokered Offering ” has the meaning ascribed thereto in the preamble to this Agreement;
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“ Non-Brokered Purchasers ” means purchasers of subscription receipts of the Company under the Non-Brokered Offering;
“ Offered Receipts Escrowed Funds ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Offered Receipts Escrowed Proceeds ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Offering ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Offering Price ” means $0.56 per Subscription Receipt;
“ Permit ” has the meaning ascribed to such term in Section 5(a)(v) hereof;
“ person ” includes any individual (whether acting as an executor, trustee administrator, legal representative or otherwise), corporation, firm, partnership, sole proprietorship, syndicate, joint venture, trustee, trust, unincorporated organization or association, and pronouns have a similar extended meaning;
“ Personally Identifiable Information ” means any information that, alone or in combination with other information held by the Company, can be used to specifically identify a person including a natural person’s name, street address, telephone number, e-mail address, photograph, social insurance number, driver’s license number, passport number, credit or debit card number or customer or financial account number or any similar information that is treated as personally identifiable information under any applicable Laws;
“ President’s List Purchasers ” has the meaning ascribed to such term in Section 14 hereof;
“ Purchasers ” means the persons who, as purchasers or beneficial purchasers, acquire the Subscription Receipts by duly completing, executing and delivering a Subscription Agreement and any other required documentation;
“ Qualified Institutional Buyer ” has the meaning ascribed thereto in Schedule “A” attached to this Agreement;
“ Registered IP ” means all Company IP that is the subject of registration for Intellectual Property or applications for such registration;
“ Regulation D ” has the meaning ascribed thereto in Schedule “A” attached to this Agreement;
“ Release Event ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Release Notice ” has the meaning ascribed thereto in the Subscription Receipt Agreement;
“ Remaining Agents’ Compensation ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Resulting Issuer ” has the meaning ascribed to such term in the preamble to this Agreement;
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“ Resulting Issuer Compensation Options ” means the compensation options of the Resulting Issuer to be issued in exchange for the Compensation Options pursuant to the Business Combination substantially similar, in all material respects, to the Compensation Options;
“ Resulting Issuer Compensation Shares ” means the class A common shares of the Resulting Issuer forming part of the Resulting Issuer Compensation Units;
“ Resulting Issuer Compensation Units ” means the units of the Resulting Issuer issuable on exercise of the Resulting Issuer Compensation Options, each consisting of one Resulting Issuer Compensation Share and one half of one (1/2) Resulting Issuer Compensation Warrant;
“ Resulting Issuer Compensation Warrant Shares ” means the Resulting Issuer Shares issuable on exercise of the Resulting Issuer Compensation Warrants;
“ Resulting Issuer Compensation Warrants ” means the Resulting Issuer class A common share purchase warrants forming part of the Resulting Issuer Compensation Units, each whole Resulting Issuer Compensation Warrant entitling the holder to acquire one Resulting Issuer Compensation Warrant Share for $0.75 for a period of 24 months from the Closing Date;
“ Resulting Issuer Shares ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Resulting Issuer Warrant Shares ” means the Resulting Issuer Shares underlying the Resulting Issuer Warrants;
“ Resulting Issuer Warrants ” means class A common share purchase warrants of the Resulting Issuer entitling the holder to purchase Resulting Issuer Shares, with each whole Resulting Issuer Warrant exercisable to acquire one Resulting Issuer Share at a price of $0.75 at any time prior to the date that is 24 months from the Closing Date pursuant to terms of the Warrant Indenture;
“ RMR ” has the meaning ascribed to such term in the preamble to this Agreement;
“ RMR Common Shares ” means the Class A common shares in the capital of RMR;
“ RMR Disclosure Documents ” has the meaning ascribed to such term in Section 5(b)(ix);
“ RMR Financial Statements ” means (i) the audited financial statements of RMR for the years ended September 30, 2021 and September 30, 2020 and related notes thereto, and (ii) the unaudited amended condensed consolidated interim financial statements of RMR for the three months ended December 31, 2021 and December 31, 2020, amended and re-filed on February 14, 2022, each prepared in accordance with IFRS and provided to the Agents in connection with the Offering;
“ RMR Subco ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Securities Laws ” means all applicable securities laws in each of the Selling Jurisdictions and the respective regulations made thereunder, together with applicable published fee schedules, prescribed forms, policy statements, notices, orders, blanket rulings and other regulatory
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instruments (whether local, multilateral or national) of the securities regulatory authorities in such jurisdictions;
“ Securities Regulators ” means, collectively, the securities regulators or other securities regulatory authorities in the Selling Jurisdictions;
“ Selling Firm ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Selling Jurisdictions ” means each of the provinces of Canada and such other jurisdictions which are agreed to by the Company and the Agents and where Purchasers are resident or located, as applicable;
“ Shortfall ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Significant Shareholder ” means any shareholder of the Company holding more than 5% of the issued and outstanding equity securities of the Company (on a fully-diluted basis, prior to giving effect to the Business Combination);
“ Subscription Agreements ” means, collectively, the subscription agreements for the Subscription Receipts in the form agreed upon by the Company and the Co-Lead Agents (on its own behalf and for and on behalf of the Agents) pursuant to which Purchasers agree to subscribe for and purchase the Subscription Receipts as therein contemplated and shall include, for greater certainty, all schedules thereto; and “ Subscription Agreement ” means any one of them, as the context requires;
“ Subscription Receipt Agent ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Subscription Receipt Agreement ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Subscription Receipt Interest ” has the meaning ascribed to such term in the Subscription Receipt Agreement;
“ Subscription Receipts ” has the meaning ascribed to such term in the preamble to this Agreement;
“ subsidiary ” shall have the meaning ascribed to such term in the BCBCA;
“ Systems ” has the meaning ascribed to such term in Section 5(a)(xxxvi);
“ Tax Act ” means the Income Tax Act (Canada) and any other applicable corresponding provincial legislation;
“ Taxes ” has the meaning ascribed to such term in Section 5(a)(xxvii);
“ Termination Event ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Termination Notice ” has the meaning ascribed thereto in the Subscription Receipt Agreement;
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“ Turnium Shares ” has the meaning ascribed to such term in the preamble to this Agreement;
“ Turnium Subsidiary ” means Tenacious Networks Inc.;
“ Turnium Units ” means units of the Company underlying the Subscription Receipts, each consisting of one Turnium Share and one half (1/2) of one Turnium Warrant;
“ Turnium Warrants ” means common share purchase warrants of the Company, each entitling the holder to purchase one Turnium Share for $0.75 at any time prior to the date that is 24 months form the Closing Date;
“ Turnium Warrant Shares ” means the Turnium Shares underlying the Turnium Warrants;
“ TSX-V ” means the TSX Venture Exchange;
“ United States ” and “ U.S. ” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia;
“ U.S. Accredited Investors ” has the meaning ascribed thereto in Schedule “A” attached to this Agreement;
“ U.S. Person ” means a “U.S. person” as that term is defined in Rule 902(k) of Regulation S under the U.S. Securities Act;
“ U.S. Securities Act ” means the United States Securities Act of 1933 , as amended, and the rules and regulations promulgated thereunder;
“ Valeo IBK Agreement ” means the engagement agreement among the Company and Valeo Corporate Finance Ltd. dated May 1, 2021;
“ Warrant Agent ” has the meaning ascribed to such term in the preamble to this Agreement; and
“ Warrant Indenture ” has the meaning ascribed to such term in the preamble to this Agreement.
The following are the schedules attached to this Agreement, which schedules are deemed to be a part hereof and are hereby incorporated by reference herein:
Schedule “A” - Compliance with U.S. Securities Laws
Schedule “B” – List of Intellectual Property Rights
Schedule “C” – List of Options, Warrants and Convertible Securities
Schedule “D” – Form of Compensation Option Certificate
Schedule “E” – Form of Insider Lock-Up Agreement
Schedule “F” – List of Locked-Up Persons
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TERMS AND CONDITIONS
2. (a) Sale on Exempt Basis. The Agents shall, and shall require any Selling Firm to, offer for sale and sell the Subscription Receipts pursuant to the Offering:
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(i) in the Selling Jurisdictions on a private placement basis to purchasers (which, for greater certainty, does not include Non-Brokered Purchasers) in compliance in all material respects with all applicable Securities Laws such that the offer and sale of the Subscription Receipts does not obligate the Company to file a prospectus, a registration statement or other offering document or deliver an offering memorandum or other offering document in any jurisdiction, or become subject to continuous disclosure filing obligations in any jurisdiction;
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(ii) in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person through the U.S. Affiliates to Purchasers who are Qualified Institutional Buyers or U.S. Accredited Investors, pursuant to available exemptions from the registration requirements of the U.S. Securities Act and any applicable state securities Laws and in compliance with Schedule “A” hereto; and
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(iii) notwithstanding any other provision hereof, it is understood and agreed that the Agents are not acting as agents or in any other capacity in connection with the subscription receipts sold by the Company to Non-Brokered Purchasers and expressly disclaim any fiduciary or similar obligations to the Non-Brokered Purchasers (either in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions) and any and all liability arising out of or in connection with the offer and sale by the Company of subscription receipts to the NonBrokered Purchasers.
(b) Filings. The Company undertakes to file or cause to be filed, all forms or undertakings required to be filed by the Company in connection with the issue and sale of the Subscription Receipts so that the distribution of the Subscription Receipts may lawfully occur without the necessity of filing a prospectus, a registration statement or an offering memorandum under applicable Securities Laws. The Agents undertake on their own behalf, and on behalf of any Selling Firm, to use commercially reasonable efforts to cause Purchasers to complete any forms required by Securities Laws, so that the distribution of the Subscription Receipts may lawfully occur without the necessity of filing a prospectus, a registration statement or an offering memorandum under applicable Securities Laws. All fees payable in connection with such filings shall be at the expense of the Company.
(c) No Offering Memorandum. Other than the Corporate Presentation, neither the Company nor the Agents shall: (i) provide to prospective purchasers of the Subscription Receipts any document or other material that would constitute an offering memorandum or future
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oriented financial information within the meaning of Securities Laws; or (ii) engage in any form of General Solicitation or General Advertising in connection with the offer and sale of the Subscription Receipts, including causing the sale of the Subscription Receipts to be advertised in any newspaper, magazine, printed public media, printed media or similar medium of general and regular paid circulation, broadcast over radio, television or telecommunications, including electronic display and social media, or conduct any seminar or meeting relating to the offer and sale of the Subscription Receipts whose attendees have been invited by general solicitation or advertising.
(d) Business Combination. The Company shall: (i) take all actions reasonably necessary or required to complete the Business Combination as soon as practicable and, in any event on or before the Escrow Release Deadline, subject only to such matters to be performed by RMR in connection with the Business Combination; (ii) take all actions reasonably necessary to ensure that the TSX-V conditionally approve the listing of the Resulting Issuer Shares (including Resulting Issuer Shares issuable in connection with the Resulting Issuer Warrants and the Compensation Options) on the TSX-V prior to the Escrow Release Deadline; and (iii) prepare and file all documents required by the Securities Regulators in connection with the issuance and sale of the Subscription Receipts by the Company and the issuance of the Turnium Shares and Turnium Warrants upon the exchange of the Subscription Receipts and the issuance of Turnium Warrant Shares, in each case, so as to permit and enable such securities to be lawfully distributed on a prospectus exempt basis in the Selling Jurisdictions, the United States and any other jurisdictions where Subscription Receipts are offered and sold in accordance with this Agreement and the Subscription Agreements.
3. (a) Covenants of the Company . The Company hereby covenants to the Agents and to the Purchasers (and acknowledges that each of them is relying on such covenants in connection with the Closing), that it will:
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(i) following the Business Combination Closing, use its commercially reasonable efforts to maintain the Resulting Issuer’s status as a “reporting issuer” (or the equivalent thereof) not in default of the requirements of the Securities Laws in British Columbia, Alberta and Ontario until the date that is two years following the Escrow Release Date, provided that this covenant shall not prevent the Resulting Issuer from completing any transaction which would result in the Resulting Issuer ceasing to be a “reporting issuer” so long as the holders of Resulting Issuer Shares have approved the transaction in accordance with the requirements of applicable corporate laws and the rules and policies of the TSX-V, as the case may be;
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(ii) allow the Agents and their representatives the opportunity to conduct all due diligence which the Agents may reasonably require to be conducted prior to the Escrow Release Date in connection with the Offering and the satisfaction of the Escrow Release Conditions. The Company will provide to the Agents (and Agents’ counsel) reasonable access to its offices, senior management personnel and corporate, financial and other records as the Agents and their representatives may reasonably request, for the purposes of conducting such due diligence. Without limiting the scope of the due
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diligence inquiry the Agents (or Agents’ counsel) may conduct, the Company shall use its commercially reasonable efforts to make available its directors, senior management, auditors and counsel to answer any questions which the Agents may reasonably have and to participate in one or more due diligence sessions to be held prior to the Closing Time;
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(iii) allow the Agents and their representatives, acting reasonably, the opportunity to review and comment on all documents, within three Business Days of receipt of such documents, to be prepared and filed in connection with the Business Combination as the Agents and their representatives may require to review, and notwithstanding the generality of the foregoing, provide the Agents, for review by the Agents and their representatives, before execution, filing or issuance, (a) any financial statements of the Company, including any pro forma financial statements, (b) any material document to be filed with any Securities Regulator or the TSX-V, including any filing statement, (c) any document to be sent to securityholders of the Company (including any management information circular), or (c) any agreements entered into in connection with the Business Combination;
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(iv) promptly inform the Agents of the full particulars of:
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A) any request of any Securities Regulators or similar regulatory authority (including the TSX-V) for any amendment to any previously provided information or for any additional information which may be material to the distribution of the Subscription Receipts or the issuance of the Turnium Shares, the Turnium Warrants, the Turnium Warrant Shares or the Resulting Issuer Shares, the Resulting Issuer Warrants, the Resulting Issuer Warrant Shares or the Compensation Options or the securities issuable in connection therewith, as the case may be;
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B) the issuance by any Securities Regulators or similar regulatory authority (including the TSX-V) or by any other competent authority of any order to cease or suspend trading of any securities of the Company or RMR or, to the Company’s knowledge, any securities of RMR or the Resulting Issuer, or of the institution or threat of institution of any proceedings for either purpose (and except as otherwise agreed by the Agents, the Company will use its commercially reasonable efforts to prevent the issuance of any such cease trading order or suspension order of any securities of the Company and, if issued, to obtain the withdrawal thereof as soon as reasonably practicable); or
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C) the receipt by the Company of any material communication from any Securities Regulators or stock exchange (including the TSX-V) or any other competent authority relating to the distribution of the Subscription Receipts or the issuance of the Turnium Shares, the
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Turnium Warrants, the Turnium Warrant Shares, the Resulting Issuer Shares, the Resulting Issuer Warrants, the Resulting Issuer Warrant Shares or the Compensation Options or any securities issuable in connection therewith, as the case may be;
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(v) duly execute and deliver the Subscription Agreements, the Subscription Receipt Agreement, the Warrant Indenture and the Compensation Option Certificates at the Closing Time and comply with and satisfy all terms, conditions and covenants therein contained to be complied with or satisfied by the Company;
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(vi) use its commercially reasonable efforts to fulfil or cause to be fulfilled, at or prior to the Closing Date, each of the conditions required to be fulfilled by the Company set out in Section 7 hereof;
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(vii) duly and validly create, authorize, and on payment of the Offering Price therefor, issue, the Subscription Receipts, and ensure that the Subscription Receipts have the attributes corresponding to the description thereof set forth in this Agreement, the Subscription Agreements and the Subscription Receipt Agreement;
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(viii) prior to the Escrow Release Date, have a sufficient number of Turnium Shares, Turnium Warrants and Turnium Warrant Shares available for issuance upon the exchange in full of the Subscription Receipts and exercise of the Turnium Warrants, as applicable;
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(ix) ensure that upon the issuance of the Turnium Shares and Turnium Warrants in exchange for the Subscription Receipts, such Turnium Shares and Turnium Warrants shall be duly issued as fully paid and non-assessable securities of the Company and have the attributes corresponding in all material respects to the description thereof set forth in this Agreement and the Subscription Agreements;
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(x) duly and validly create and authorize the grant of the Compensation Options and authorize and reserve all securities underlying the Compensation Options, and the Resulting Issuer Compensation Options, as applicable, for issuance, and ensure that the Compensation Options have the attributes corresponding to the description set forth in this Agreement and the Compensation Option Certificates;
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(xi) ensure that upon the issuance of any securities underlying the Compensation Options upon the exercise of the Compensation Options and any such underlying securities, such securities be duly issued as fully paid and nonassessable securities of the Company or the Resulting Issuer, as the case may be;
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(xii) use its commercially reasonable efforts to ensure that any Resulting Issuer Compensation Shares and Resulting Issuer Compensation Warrant Shares
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underlying the Resulting Issuer Compensation Options and the Resulting Issuer Compensation Warrants are conditionally approved for listing and trading on the TSX-V on or prior to the Escrow Release Date and remain listed for trading on the TSX-V for a period of two years following the Escrow Release Date, provided that this covenant shall not prevent the Resulting Issuer from completing any transaction which would result in the Resulting Issuer Shares being delisted so long as the holders of Resulting Issuer Shares receive cash, marketable securities or a combination thereof in connection with the transaction or the holders of the Resulting Issuer Shares have approved the transaction in accordance with the requirements of applicable corporate laws and the rules and policies of the TSX-V, subject only to such matters to be performed by RMR in connection with the Business Combination;
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(xiii) execute and file with the Securities Regulators all forms, notices and certificates required to be filed by the Company pursuant to the Securities Laws in the time required by the applicable Securities Laws, including a Form 45-106F1 – Report of Exempt Distribution and any other forms, notices and certificates identified as being required to be filed by the Company pursuant to Securities Laws in the opinions delivered to the Agents pursuant to the closing conditions set forth in Section 7 hereof;
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(xiv) if the Offering is completed, until the date which is 120 days after the Escrow Release Date, the Company and the Resulting Issuer will not, without the prior written consent of Eight (on their own behalf and for and on behalf of the Agents), which consent may not be unreasonably withheld or delayed, issue, agree to issue, or announce intention to issue, any additional debt (except related to any bank debt in the normal course), Turnium Shares or Resulting Issuer Shares any securities convertible into or exchangeable for Turnium Shares or Resulting Issuer Shares (except in connection with the exchange, transfer, conversion, or exercise rights of existing outstanding securities and in connection with the issuance of options granted to new board members, new employees, and the Company’s existing IR firm (provided that in the case of new option grants, the exercise price of such stock options will be no less than the Offering Price) and in connection with an arm’s length acquisition). In any event, no securities will be issued with a conversion price less than the Offering Price. For greater certainty, this shall not restrict the Company from issuing Turnium Shares upon conversion of any convertible securities outstanding prior to the date of the Engagement Letter;
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(xv) to use its commercially reasonable efforts to cause its officers, directors, and Significant Shareholders (as set out in Schedule “F” hereto, the “ Locked-Up Persons ”) to enter into an agreement (as set out in Schedule “E” hereto, the “ Lock-Up Agreement ”) with the Agents pursuant to which each of such individuals will agree not to sell, transfer or pledge, or otherwise dispose of, any securities of the Company or the Resulting Issuer,
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as applicable, until the date which is 120 days after the satisfaction of the Escrow Release Conditions (the “ Director, Officer and Significant Shareholder Lock-Up Period ”), in each case without the prior consent of the Eight (on behalf of the Agents), such consent not to be unreasonably withheld or delayed;
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(xvi) to use the net proceeds of the Offering to fund the Business Combination and for working capital and general corporate purposes;
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(xvii) in the case of the Company, remit the amount of the Shortfall, if any, to the Subscription Receipt Agent forthwith following the date of the Termination Event, in priority to any payments to the Company’s shareholders creditors or debt holders or persons not dealing at arm’s length (within the meaning of the Tax Act) with the Company;
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(xviii) at the Effective Time, to duly execute and deliver each of the agreements, contracts and instruments required by the Amalgamation Agreement to give effect to the Business Combination to be executed and delivered by the Company and the other respective parties thereto, and cause such agreements, contracts and instruments to be valid and binding obligations of the Company, enforceable against the Company, in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency, liquidation, reorganization, moratorium or similar laws affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought;
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(xix) upon satisfaction of the Escrow Release Conditions (other than delivery of the Release Notice) and prior to the Co-Lead Agent executing and acknowledging the Release Notice, execute and deliver a certificate addressed to the Agents and executed by the Chief Executive Officer and the Chief Financial Officer of the Company (or such other director(s) or officer(s) of each such entity as may be acceptable to the Co-Lead Agent, acting reasonably) confirming that the Escrow Release Conditions have been satisfied (other than the delivery of the Release Notice to the Subscription Receipt Agent);
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(xx) promptly notify the Agents in writing of any material breach of any covenant of this Agreement by the Company and upon it becoming aware that any representation or warranty of the Company contained in this Agreement, the Subscription Agreements, the Subscription Receipt Agreement, the Warrant Indenture, the Compensation Option Certificates or the Amalgamation Agreement is or has become untrue or inaccurate in any material respect (except for representations and warranties of the Company qualified by materiality or which refer to a Material Adverse Effect (or similar effect), which shall be true and correct in all respects); and
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(xxi) comply with the provisions of Schedule “A” to this Agreement.
(b) Covenants of the RMR . RMR hereby covenants to the Agents and to the Purchasers (and acknowledges that each of them is relying on such covenants in connection with the Closing), that it will:
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(i) subject to completion of the Business Combination, use its commercially reasonable efforts to maintain RMR’s status as a “reporting issuer” (or the equivalent thereof) not in default of the requirements of the Securities Laws in British Columbia, Alberta and Ontario until the date that is two years following the Escrow Release Date, provided that this covenant shall not prevent the Resulting Issuer from completing any transaction which would result in the Resulting Issuer ceasing to be a “reporting issuer” so long as the holders of Resulting Issuer Shares have approved the transaction in accordance with the requirements of applicable corporate laws and the rules and policies of the TSX-V, as the case may be;
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(ii) allow the Agents and their representatives the opportunity to conduct all due diligence which the Agents may reasonably require to be conducted prior to the Escrow Release Date in connection with the Offering and the satisfaction of the Escrow Release Conditions. RMR will provide to the Agents (and Agents’ counsel) reasonable access to their offices, senior management personnel and corporate, financial and other records as the Agents and their representatives may reasonably request, for the purposes of conducting such due diligence. Without limiting the scope of the due diligence inquiry the Agents (or Agents’ counsel) may conduct, RMR shall use its commercially reasonable efforts to make available their directors, senior management, auditors and counsel to answer any questions which the Agents may reasonably have and to participate in one or more due diligence sessions to be held prior to the Closing Time;
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(iii) allow the Agents and their representatives, acting reasonably, the opportunity to review and comment on all documents, within three Business Days of receipt of such documents, to be prepared and filed in connection with the Business Combination as the Agents and their representatives may require to review, and notwithstanding the generality of the foregoing, provide the Agents, for review by the Agents and their representatives, before execution, filing or issuance, (a) any financial statements of RMR, including any pro forma financial statements, (b) any material document to be filed with any Securities Regulator or the TSX-V, including any filing statement, (c) any document to be sent to securityholders of or RMR (including any management information circular), or (c) any agreements entered into in connection with the Business Combination;
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(iv) promptly inform the Agents of the full particulars of:
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A) any request of any Securities Regulators or similar regulatory authority (including the TSX-V) for any amendment to any previously provided information or for any additional information which may be material to the distribution of the Subscription Receipts or the issuance of the Resulting Issuer Shares, the Resulting Issuer Warrants, the Resulting Issuer Warrant Shares or the Resulting Issuer Compensation Options or the securities issuable in connection therewith, as the case may be;
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B) the issuance by any Securities Regulators or similar regulatory authority (including the TSX-V) or by any other competent authority of any order to cease or suspend trading of any securities of RMR, or of the institution or threat of institution of any proceedings for either purpose (and except as otherwise agreed by the Agents, RMR will use its commercially reasonable efforts to prevent the issuance of any such cease trading order or suspension order of any securities of RMR and, if issued, to obtain the withdrawal thereof as soon as possible); and
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C) the receipt by RMR of any material communication from any Securities Regulators or stock exchange (including the TSX-V) or any other competent authority relating to the distribution of the Subscription Receipts the Resulting Issuer Shares, the Resulting Issuer Warrants, the Resulting Issuer Warrant Shares or any securities issuable in connection therewith, as the case may be;
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(v) duly execute and deliver the Subscription Agreements, the Subscription Receipt Agreement and the Warrant Indenture at the Closing Time and comply with and satisfy all terms, conditions and covenants therein contained to be complied with or satisfied by the Company;
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(vi) use its commercially reasonable efforts to fulfil or cause to be fulfilled, at or prior to the Closing Date, each of the conditions required to be fulfilled by RMR set out in Section 7 hereof;
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(vii) take all necessary corporate action to authorize the issuance of the Resulting Issuer Shares and the Resulting Issuer Warrants in exchange for the Turnium Shares and Turnium Warrants;
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(viii) duly and validly create and authorize the grant of the Resulting Issuer Compensation Options, as applicable, for issuance, and ensure that the Resulting Issuer Compensation Options have the attributes corresponding to the description set forth in this Agreement;
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(ix) use its commercially reasonable efforts to ensure that any Resulting Issuer Compensation Shares and Resulting Issuer Compensation Warrant Shares underlying the Resulting Issuer Compensation Options and the Resulting
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Issuer Compensation Warrants are conditionally approved for listing and trading on the TSX-V on or prior to the Escrow Release Date;
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(x) execute and file with the Securities Regulators all forms, notices and certificates required to be filed by RMR pursuant to the Securities Laws in the time required by the applicable Securities Laws;
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(xi) at the Effective Time, to duly execute and deliver each of the agreements, contracts and instruments required by the Amalgamation Agreement to give effect to the Business Combination to be executed and delivered by RMR and the other respective parties thereto, and cause such agreements, contracts and instruments to be valid and binding obligations of RMR, enforceable against RMR, in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency, liquidation, reorganization, moratorium or similar laws affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought;
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(xii) upon satisfaction of the Escrow Release Conditions (other than delivery of the Release Notice) and prior to the Co-Lead Agents executing and acknowledging the Release Notice, execute and deliver a certificate addressed to the Agents and executed by the Chief Executive Officer and the Chief Financial Officer of RMR (or such other director(s) or officer(s) of each such entity as may be acceptable to the Co-Lead Agents, acting reasonably) confirming that the Escrow Release Conditions have been satisfied (other than the delivery of the Release Notice to the Subscription Receipt Agent); and
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(xiii) promptly notify the Agents in writing of any material breach of any covenant of this Agreement by RMR and upon it becoming aware that any representation or warranty of RMR contained in this Agreement, the Subscription Agreements, the Subscription Receipt Agreement, the Warrant Indenture or the Amalgamation Agreement is or has become untrue or inaccurate in any material respect (except for representations and warranties of RMR qualified by materiality or which refer to a Material Adverse Effect (or similar effect), which shall be true and correct in all respects).
(c) Covenants of the Agents. Each of the Agents hereby severally (and not jointly and severally) covenants and agrees: (i) to conduct all activities in connection with the Offering in compliance with Securities Laws and all other laws applicable to such Agent; (ii) to obtain from each Purchaser a completed and executed Subscription Agreement (including all certifications, forms and other documentation contemplated thereby or as may be required by the Securities Regulators), as applicable, in a form acceptable to the Company, RMR and the Agents; (iii) that it shall require any Selling Firm retained by it to agree, for the benefit of the Company and RMR, to comply with and shall use commercially reasonable efforts to ensure that such Selling Firm complies with, the same provisions of this Section 3(b) hereof as apply to the Agents as if such provisions applied to such selling group member; (iv) to comply with the provisions of
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Schedule “A” to this Agreement; and (v) to execute and deliver to the Company, subject to the terms and conditions of this Agreement, any certificate required to be executed by it under applicable Securities Laws in connection with the Offering.
4. (a) Material Changes. From the date hereof to the earlier to occur of the (i) Escrow Release Date and (ii) the Escrow Release Deadline, the Company or RMR shall promptly notify the Agents (and, if requested by the Agents, confirm such notification in writing) of any material change or change in a material fact (in either case whether actual, anticipated, contemplated or threatened, financial or otherwise) or any event or development involving a prospective material change or change in a material fact in the business, affairs, operations, assets, liabilities (contingent or otherwise) or capital of the Company.
(b) Press Releases. The Company agrees that it shall obtain the prior approval of the Agents as to the content and form of any press release relating to the Offering or the Business Combination issued by the Company on or after the date hereof, such approval not to be unreasonably withheld or delayed, and that any press release relating to the Offering will include a reference to the Agents acting as agents of the Company in connection with the Offering and shall include the below language that restricts the dissemination and distribution of any such press releases to jurisdictions inside the United States and to U.S. newswire services:
“Not for distribution to United States newswire services or for dissemination in the United States.”
“This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, a person in the United States or a U.S. person unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. “United States” and “U.S. person” are as defined in Regulation S under the U.S. Securities Act.”
Following the Closing Date, the Co-Lead Agents shall with the consent of the Company, which consent shall not be unreasonably withheld, be permitted to publish or place, at their own expense, such advertisements or announcements relating to the services provided hereunder in such newspaper or other publications as they consider appropriate after consultation with the Company, acting reasonably.
5. (a) Representations and Warranties of the Company. The Company represents and warrants to the Agents and the Purchasers (and acknowledges that each of them is relying upon such representations and warranties in connection with the completion of the Offering and that such representations and warranties have been incorporated by reference in the Subscription Agreements for the benefit of the Purchasers), that:
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(i) the Company and the Turnium Subsidiary are entities duly organized and validly existing under the Laws of British Columbia, and each of them has all requisite corporate power and authority and is duly qualified and holds
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all Permits, licenses and authorizations required to carry on its business as now conducted and proposed to be conducted, to own, lease or operate its properties and assets and to carry out its obligations under the Material Agreements to which it is a party, and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution, liquidation or winding up;
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(ii) except for the Turnium Subsidiary, the Company has no direct or indirect subsidiary or any investment or proposed investment in any person that is material to the business of the Company;
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(iii) the authorized capital of the Company consists of an unlimited number of Common Shares and an unlimited number of preferred shares, of which (prior to the completion of the Offering) 58,498,965 Common Shares are issued and outstanding as fully paid and non-assessable shares of the Company and no preferred shares are outstanding. The authorized capital of the Turnium Subsidiary consists of 1,000,000 Class A voting common shares, 1,000,000 Class B non-voting common shares, 1,000,000 Class C non-voting common shares, 1,000,000 Class D non-voting common shares, 1,000,000 Class E non-voting preferred shares, 1,000,000 Class F nonvoting preferred shares and 1,000,000 Class H non-voting preferred shares. As of the date hereof, 600 Class A voting common shares, 300 Class B nonvoting common shares and 300 Class C non-voting common shares are validly issued and outstanding as fully paid and non-assessable representing 100% of the total issued shares, all of which are held by the Company. Other than the securities set forth in Schedule “C” to this Agreement, no person now has any agreement or option or right or privilege (whether at law, preemptive or contractual) and there are no outstanding rights, warrants, options, convertible debt or any other securities or rights capable of being converted into, or exchanged or exercised for, any shares or securities of the Company or of the Turnium Subsidiary;
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(iv) the Company has all requisite corporate power, authority and capacity to enter into each of this Agreement, the Subscription Agreements, the Subscription Receipt Agreement, the Warrant Indenture and the Compensation Option Certificates and to perform the transactions contemplated herein and therein, including the creation, issue and sale of the Subscription Receipts, the issue of the Turnium Shares, the issue of the Turnium Warrants, the issue of the Turnium Warrant Shares, the grant of the Compensation Options and the issue and sale of all Company securities underlying the Compensation Options and securities underlying such securities in accordance with the respective provisions thereof;
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(v) each of the Company and the Turnium Subsidiary has conducted and is conducting its businesses in compliance with all applicable Laws of each jurisdiction in which it carries on business or holds assets (including all applicable federal, state, municipal and local Laws, regulations and other
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lawful requirements of any governmental or regulatory body, including all Governmental Authorities), holds all permits, licenses, certificates, consents and like authorizations necessary for it to carry on (collectively, the “ Permits ”) under all such Laws and is in compliance with all terms of such Permits, all such Permits are valid and in good standing, and neither the Company nor the Turnium Subsidiary has received any notice of noncompliance, and does not know of, any facts that would be reasonably likely to give rise to a notice of non-compliance with any such Laws;
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(vi) each of the Company and the Turnium Subsidiary is the absolute legal and beneficial owner of, and has good and marketable title to, all of its respective material properties and assets, and no other property or assets are necessary for the conduct of the business of the Company and the Turnium Subsidiary as currently conducted. Any and all of the agreements and other documents and instruments pursuant to which the Company or the Turnium Subsidiary holds any material property and assets thereof (including any interest in, or right to earn an interest in, any Intellectual Property) are valid and subsisting agreements, documents and instruments in full force and effect, enforceable in accordance with the terms thereof against the Company or the relevant Turnium Subsidiary, as applicable, and to the knowledge of the Company the other party or parties thereto, in accordance with the terms thereof except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other Laws relating to or affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought, and by the fact that rights to indemnity, contribution and waiver, and the ability to sever unenforceable terms, may be limited by applicable Law, and all material leases, licenses and other agreements pursuant to which the Company or the Turnium Subsidiary derives the interests in such property are in good standing. The Company does not know of any claim or the basis for any claim that would reasonably be expected to have a Material Adverse Effect on the right of the Company or the Turnium Subsidiary to use, transfer or otherwise exploit its assets, none of the material properties (or any interest in, or right to earn an interest in, any property) of the Company or the Turnium Subsidiary is subject to any right of first refusal or purchase or acquisition right, and neither the Company nor the Turnium Subsidiary has any responsibility or obligation to pay any material commission, royalty, licence fee or similar payment to any person with respect to the material property and assets thereof other than in the ordinary course of business;
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(vii) there are no suits, actions, investigations, or litigation or arbitration proceedings or governmental proceedings in progress, pending or, to the knowledge of the Company, contemplated or threatened, to which the Company or the Turnium Subsidiary is a party or to which the property (including any Permits) of the Company or the Turnium Subsidiary is subject, except where such suit, action, investigation or litigation or
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arbitration proceeding or governmental proceeding would not, individually or in the aggregate, have a Material Adverse Effect in respect of the Company. There is not presently outstanding against the Company or the Turnium Subsidiary any material judgment, injunction, decree, rule or order of any court, governmental department, including Governmental Authority, commission, agency or arbitrator;
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(viii) neither the Company nor the Turnium Subsidiary is in violation of its constating documents or in default in any material respect in the performance or observance of any obligation, agreement, covenant or condition contained in any Material Agreement;
-
(ix) all of the Material Agreements are valid, subsisting, in good standing and in full force and effect, enforceable in accordance with the terms thereof in all material respects, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other Laws relating to or affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought, and by the fact that rights to indemnity, contribution and waiver, and the ability to sever unenforceable terms, may be limited by applicable Law. The Company and the Turnium Subsidiary has performed all obligations (including payment obligations) in a timely manner under, and is in compliance with all terms, conditions and covenants contained in each Material Agreement and, to the knowledge of the Company, no other party is in breach, violation or default of any Material Agreement;
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(x) at the Closing Time, all Permits and filings as may be required to be made or obtained by the Company under applicable Laws necessary for the execution and delivery of this Agreement, the Subscription Receipt Agreement, the Subscription Agreements, the Warrant Indenture, the Compensation Option Certificates and the creation, issuance, sale and authorization of transfer, as applicable, the Subscription Receipts and the Compensation Options and the consummation of the Offering, will have been made or obtained, as applicable, (other than the filing of post-Closing reports and other documents required under Securities Laws, which documents shall be filed as soon as practicable after the Closing Date and, in any event, within the deadline imposed by Securities Laws);
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(xi) the Subscription Receipts, the Turnium Shares, the Turnium Warrants, the Turnium Warrant Shares, the Resulting Issuer Shares, the Resulting Issuer Warrants, the Resulting Issuer Warrant Shares, the Compensation Options and the securities of Turnium underlying the Compensation Options and any securities of Turnium or the Resulting Issuer underlying such underlying securities will not be subject to a statutory hold period under Securities Laws which extends beyond four months and one day after the day the Company becomes a reporting issuer in a jurisdiction of Canada in
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accordance with and subject to the conditions set out in National Instrument 45-102 Resale of Securities ;
-
(xii) the Company has provided to the Agents copies of (including all material correspondence relating to) all material licenses and Permits held by it and the Turnium Subsidiary and any renewals thereof as of the date hereof. The Company and the Turnium Subsidiary has all material Permits necessary for the conduct of its business as presently conducted;
-
(xiii) each of the execution and delivery of this Agreement, the Amalgamation Agreement, the Subscription Receipt Agreement, the Warrant Indenture, the Subscription Agreements and the Compensation Option Certificates by the Company and the performance by the Company of its obligations hereunder or thereunder, including the creation, issue and sale of the Subscription Receipts, the issue and sale of the Turnium Shares, the Turnium Warrants, the Turnium Warrant Shares, the grant of the Compensation Options and the issue and sale of the securities of Turnium underlying the Compensation Options and any securities of Turnium underlying such underlying securities, in so far as the Compensation Option Shares relate to Turnium Shares, and the consummation of the transactions contemplated in this Agreement, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default in a manner that would have a Material Adverse Effect with respect to the Company or which would impede or delay the transactions contemplated hereby, under, (whether after notice or lapse of time or both): (A) subject to receipt of the approval of the Company’s shareholders for the Business Combination, and the approvals under the BCBCA in connection therewith, any Laws applicable to the Company and the constating documents, by-laws or resolutions of the Company, which are in effect at the date hereof; (B) any Material Agreement or Debt Instrument; or (C) any judgment, decree or order binding the Company or the Turnium Subsidiary or the property or assets of the Company or the Turnium Subsidiary;
-
(xiv) at the Closing Time, each of this Agreement, the Subscription Agreements, the Compensation Option Certificates, the Warrant Indenture and the Subscription Receipt Agreement shall have been duly authorized, executed and delivered by the Company, and upon such execution and delivery each shall constitute a valid and binding obligation of the Company and each shall be enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other Laws relating to or affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought, and by the fact that rights to indemnity, contribution and waiver, and the ability to sever unenforceable terms, may be limited by applicable Law;
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-
(xv) upon execution of the Subscription Receipt Agreement, the Compensation Option Certificates and the Warrant Indenture, the Subscription Receipts, Compensation Options, and the Turnium Warrants, respectively, to be issued and sold as hereinbefore described will have been duly created and authorized for issuance and upon issuance, delivery and payment of the Offering Price, the Subscription Receipts and the Compensation Options will be validly issued. The Subscription Receipts, the Compensation Options and the Turnium Warrants will not be issued in violation of or subject to any pre-emptive rights or contractual rights to purchase securities granted by the Company;
-
(xvi) at the Closing Time on the Closing Date the Subscription Receipt Agent and the Warrant Agent shall have been duly appointed as the subscription receipt agent and the warrant agent in respect of the Subscription Receipts and the Turnium Warrants, respectively;
-
(xvii) at the Closing Time, all necessary corporate action will have been taken by the Company to allot and authorize the issuance of (A) the Turnium Shares and Turnium Warrants issuable upon conversion of the Subscription Receipts, (B) the Turnium Warrant Shares issuable upon exercise of the Turnium Warrants, (C) the Compensation Options, and (D) and all Turnium securities issuable upon the exercise of the Compensation Options and the Turnium securities underlying such securities;
-
(xviii) the attributes of the Compensation Options conform in all respects with the description thereof in the Compensation Option Certificate, a form of which is attached hereto as Schedule “D”;
-
(xix) no order, ruling or determination having the effect of suspending the sale or ceasing the trading in any securities of the Company or the Turnium Subsidiary has been issued by any regulatory authority and is continuing in effect and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are pending, contemplated or threatened by any regulatory authority;
-
(xx) to the extent applicable, the form and terms of any definitive certificates representing the Subscription Receipts and the Turnium Shares have been duly approved and adopted by the Company and comply with all legal requirements relating thereto;
-
(xxi) the Company is not a party to any agreement, nor is the Company aware of any agreement, which in any manner affects the voting control of any of the securities of the Company;
-
(xxii) other than the Business Combination and the transactions related thereto, the Company has not approved, and has not entered into any agreement in respect of: (A) the purchase of any material property or assets or any interest
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therein, or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Company whether by asset sale, transfer of shares or otherwise; (B) the change in control (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Company) of the Company; or (C) a proposed or planned disposition of shares by any shareholder who owns, directly or indirectly, 5% or more of the outstanding shares of the Company;
-
(xxiii) the Financial Statements have been prepared in accordance with IFRS, contain no misrepresentations and present fairly, in all material respects, the assets, liabilities venues, expenses and financial condition of the Company as at the respective dates thereof and the results of the operations and cash flows of the Company for the periods then ended and contain and reflect adequate provisions or allowance for all liabilities, expenses and losses of the Company that are required to be disclosed in such Financial Statements;
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(xxiv) there are no material off-balance sheet transactions, arrangements or obligations (including contingent obligations) of the Company or the Turnium Subsidiary which are required to be disclosed or reflected, and are not disclosed or reflected, in the Financial Statements and the Company does not have any material liabilities, obligations, indebtedness or commitments, whether accrued, absolute, contingent or otherwise, which are not disclosed or referred to in the Financial Statements;
-
(xxv) there has been no change in accounting policies or practices of the Company or the Turnium Subsidiary since October 1, 2020 , other than as disclosed in the Financial Statements, or in connection with changes in accounting policies in connection with the Business Combination;
-
(xxvi) since October 1, 2021,other than as disclosed in the Filing Statement and other than the entering into of this Agreement, the Subscription Agreements, the Amalgamation Agreement, the Compensation Option Certificates, the Warrant Indenture and the Subscription Receipt Agreement and the performance of its obligations hereunder and thereunder: (A) to the knowledge of the Company, there has not been any material change in the assets, liabilities, obligations (absolute, accrued, contingent or otherwise), business, condition (financial or otherwise) or results of operations of the Company and the Turnium Subsidiary, taken as a whole; (B) there has not been any material change in the share capital or long-term debt of the Company or the Turnium Subsidiary; and (C) the Company and the Turnium Subsidiary has carried on businesses in the ordinary course;
-
(xxvii) all taxes (including income tax, capital tax, sales taxes, goods and services taxes, payroll taxes, employer health tax, workers’ compensation payments, property taxes, custom and land transfer taxes), duties, royalties, levies, imposts, assessments, deductions, charges or withholdings and all liabilities
-
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with respect thereto including any penalty and interest payable with respect thereto (collectively, “ Taxes ”) due and payable by the Company and the Turnium Subsidiary have been paid. All tax returns, declarations, remittances and filings required to be filed by the Company and the Turnium Subsidiary have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading. To the knowledge of the Company, no examination of any tax return of the Company or the Turnium Subsidiary is currently in progress and there are no disputes outstanding with any Governmental Authority respecting any Taxes;
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(xxviii)the Company and the Turnium Subsidiary maintains a system of internal accounting controls sufficient to provide reasonable assurances that: (A) transactions are executed in accordance with management’s general or specific authorization, and (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain accountability for assets;
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(xxix) the Company is the sole legal and beneficial owner of, has good and marketable title to, and owns all right, title and interest in all Company IP, all of which is set forth in Schedule “B”, free and clear of all Encumbrances, charges, covenants, conditions, options to purchase and restrictions or other adverse claims or interests of any kind or nature and the Company has no knowledge of any claim of adverse ownership in respect thereof. No consent of any person is necessary to make, use, reproduce, license, sell, modify, update, enhance or otherwise exploit any Company IP and no Company IP comprises an improvement to Licensed IP that would give any person any rights to Company IP including, without limitation, rights to license Company IP;
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(xxx) neither the Company nor the Turnium Subsidiary has received any notice or claim (whether written, oral or otherwise) challenging its ownership or right to use of any Company IP or suggesting that any other person has any claim of legal or beneficial ownership or other claim or interest with respect thereto, nor, to the Company’s knowledge, is there a reasonable basis for any claim that any person other than the Company or the Turnium Subsidiary have any claim of legal or beneficial ownership or other claim or interest in any Company IP;
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(xxxi) to the knowledge of the Company, the conduct of the business of the Company and the Turnium Subsidiary has not infringed, violated, misappropriated or otherwise conflicted with any Intellectual Property right of any person;
-
(xxxii) neither the Company nor the Turnium Subsidiary is a party to any action or proceeding, nor, to the knowledge of the Company, has any action or
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proceeding been threatened that alleges that any current or proposed conduct of its business has or will infringe, violate or misappropriate or otherwise conflict with any Intellectual Property right of any person;
-
(xxxiii)to the knowledge of the Company, no person has infringed or misappropriated, or is infringing or misappropriating, any rights of the Company or the Turnium Subsidiary in or to any Company IP;
-
(xxxiv)all applications for registration of any Registered IP are in good standing in all material respects, stand in the name of the Company and have been filed in a timely manner in the appropriate offices to preserve the rights thereto and, in the case of a provisional application, the Company confirms that all right, title and interest in and to the Intellectual Property disclosed in such application have been assigned in writing (without any right to revoke such assignment) to the Company. The Company has prosecuted, and is prosecuting, such applications diligently. To the knowledge of the Company, there has been no public disclosure, sale or offer for sale of any Company IP anywhere in the world that may prevent the valid issue of all available Intellectual Property rights in such Company IP. All material information has been disclosed to the appropriate offices as required according to the local laws in the jurisdictions where the applications are pending;
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(xxxv) all registrations of Registered IP are in good standing in all material respects and are recorded in the name of the Company in the appropriate offices to preserve the rights thereto, and all such registrations have been filed, prosecuted and obtained in accordance with all applicable legal requirements. No registration of Registered IP has expired, become abandoned, been cancelled or expunged, or has lapsed for failure to be renewed or maintained;
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(xxxvi)in respect of the hardware equipment and software components of the information management, technology and computer systems (collectively, the “ Systems ”) of the Company and the Turnium Subsidiary:
-
A) the Systems have been maintained and supported in accordance with prudent industry practices in all material respects;
-
B) there is a commercially reasonable disaster recovery plan in place in respect of such Systems;
-
C) commercially reasonable controls are in place to control access and security to such Systems and there are appropriate firewalls, virus protection programs and other cybersecurity measures in place that are consistent with current standards and practices of a reasonably prudent business operating in a similar industry and that such
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measures and policies reasonably safeguards proper access to and the security of, the data of the Company;
-
D) all software being used is supported by valid licenses and all licenses in respect of such software are in good standing in all material respects and not in default in any material respect; and
-
E) all related data, content and programs are backed-up regularly with copies stored safely and securely off-site;
-
(xxxvii) to the knowledge of the Company, the computer and data processing systems, facilities and services used by the Company and the Turnium Subsidiary are free of any material defects, bugs and errors, and do not contain any disabling codes or instructions, spyware, trojan horses, worms, viruses or other software routines that permit or cause unauthorized access to, or disruption, impairment, disablement, or destruction of, software, data or other materials wherein any trade secrets or proprietary information of the Company or the Turnium Subsidiary has been disclosed to a third party;
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(xxxviii) there have been no written complaints relating to any improper use or disclosure of any information involving the Company or the Turnium Subsidiary, nor any breach in the information security, cybersecurity or similar systems in respect of the Company or the Turnium Subsidiary in the past three years;
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(xxxix)all Company IP was created or developed only by individuals during the course of their employment with the Company or by contractors or consultants in the course of their engagements with the Company (hereinafter referred to in this Section as “ Developers ”);
-
(xl) all Developers, at the time they created or developed the Company IP, were either full-time employees of the Company or were contractors who assigned all rights in the Company IP, including any and all worldwide proprietary rights, to the Company pursuant to written agreements, and to the knowledge of the Company, the Developers did not incorporate any previously existing work product or other materials proprietary to the Developers or any third party (other than Licensed IP) in such creation or development;
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(xli) all Developers have waived in writing their moral rights in and to the Company IP to the extent the applicable jurisdiction in which such Developers were located protects moral rights;
-
(xlii) the Company and the Turnium Subsidiary have entered into valid and enforceable written agreements pursuant to which the Company and the Turnium Subsidiary have been granted all licenses and permissions to use, reproduce, sub-license, sell, modify, update, enhance or otherwise exploit the Licensed IP to the extent required to operate all aspects of the business
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of the Company and the Turnium Subsidiary currently conducted or proposed to be conducted (including, if required, the right to incorporate such Licensed IP into Company IP). All license agreements in respect of Licensed IP are in full force and effect and neither the Company nor the Turnium Subsidiary, nor, to the knowledge of the Company, any other person, is in default of its obligations thereunder except for any default which would not materially impact the Company nor the Turnium Subsidiary or their property or assets;
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(xliii) to the extent that any Company IP is licensed or disclosed to any person or any person has access to such Company IP (including any employee, officer, shareholder or consultant of the Company) the Company has entered into a valid and enforceable written agreement which contains terms and conditions prohibiting the unauthorized use, reproduction, disclosure, reverse engineering or transfer of such Company IP by such person. All such agreements are in full force and effect and neither the Company nor the Turnium Subsidiary, nor, to the knowledge of the Company, any other person, is in default of its obligations thereunder;
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(xliv) neither the Company’s nor the Turnium Subsidiary’s use or handling of Customer Data in the previous five (5) years violates or violated any applicable Law in a manner that could reasonably be expected to result in a Material Adverse Effect in respect of the Company;
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(xlv) except as disclosed in writing to the Agents prior the date of this Agreement, to the knowledge of the Company, none of the directors, officers or employees of the Company, any person who owns, directly or indirectly, more than 10% of any class of securities of the Company or securities of any person exchangeable for more than 10% of any class of securities of the Company, or any associate or affiliate of any of the foregoing, had or has any material interest, direct or indirect, in any transaction (other than in connection with the Offering and/or the Business Combination) or any proposed transaction (including any loan made to or by any such person) with the Company which, as the case may be, materially affects, is material to or will materially affect the Company;
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(xlvi) neither the Company nor the Turnium Subsidiary is a party to, or bound by any commitment, agreement or document containing any covenant which expressly and materially limits the freedom of the Company or the Turnium Subsidiary to compete in any line of business, transfer or move any of its assets or operations or which would have a Material Adverse Effect on the business practices, operations or condition of the Company or the Turnium Subsidiary;
-
(xlvii) to the knowledge of the Company, neither the Company nor the Turnium Subsidiary has been in violation of, in connection with the ownership, use,
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maintenance or operation of the property and assets thereof, any applicable Laws relating to environmental, health or safety matters;
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(xlviii) with respect to each of the Leased Premises, each of the leases pursuant to which the Company and the Turnium Subsidiary occupies the Leased Premises is in good standing and in full force and effect, and the Company and or the Turnium Subsidiary, as applicable, has the exclusive right to occupy and use the Leased Premises to conduct the business of the Company or the Turnium Subsidiary, as applicable. The performance of obligations pursuant to and in compliance with the terms of this Agreement and the completion of the transactions, including the Business Combination, will not afford any of the parties to such leases or any other person the right to terminate such leases and to the knowledge of the Company, no parties to such leases intend to terminate same;
-
(xlix) to the knowledge of the Company, neither the Company nor the Turnium Subsidiary has been in violation of, in connection with the ownership, use, maintenance or operation of the Leased Premises and assets, any Environmental Laws;
-
(l) to the knowledge of the Company, there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of non-compliance or violation, investigation or proceedings relating to any Environmental Laws against the Company or the Turnium Subsidiary;
-
(li) neither the Company nor the Turnium Subsidiary has used the Leased Premises, or any facility which it previously owned or leased, to generate, manufacture, process, distribute, use, treat, store, dispose of, transport or handle any Hazardous Substances other than in compliance with Environmental Laws;
-
(lii) neither the Company nor the Turnium Subsidiary owns or has ever owned any real property;
-
(liii) to the knowledge of the Company, there exists no claim or basis for any claim that might or could have a Material Adverse Effect on the right of the Company to use, transfer or otherwise exploit the Leased Premises;
-
(liv) to the knowledge of the Company, no director, officer, employee, consultant, representative or agent of the Company or the Turnium Subsidiary has (A) violated any anti-bribery or anti-corruption Laws applicable to the Company, including the United States Foreign Corrupt Practices Act of 1977 and Corruption of Foreign Public Officials Act (Canada), or (B) offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give, or authorized the giving of anything of value, that goes beyond what is reasonable and customary
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and/or of modest value: (i) to any Government Official, whether directly or through any other person, for the purpose of influencing any act or decision of a Government Official in his or her official capacity; inducing a Government Official to do or omit to do any act in violation of his or her lawful duties; securing any improper advantage; inducing a Government Official to influence or affect any act or decision of any Governmental Authority; or assisting any representative of the Company in obtaining or retaining business for or with, or directing business to, any person; or (ii) to any person in a manner which would constitute or have the purpose or effect of public or commercial bribery, or the acceptance of or acquiescence in extortion, kickbacks, or other unlawful or improper means of obtaining business or any improper advantage;
-
(lv) to the knowledge of the Company, no director, officer, employee, consultant, representative or agent of the Company or the Turnium Subsidiary, has (A) conducted or initiated any review, audit, or internal investigation that concluded the Company or the Turnium Subsidiary or any director, officer, employee, consultant, representative or agent thereof, violated any anti-bribery or anti-corruption Laws applicable to the Company or the Turnium Subsidiary or committed any material wrongdoing, or (B) made a voluntary, directed, or involuntary disclosure to any Governmental Authority responsible for enforcing anti-bribery or anticorruption Laws, in each case, with respect to any alleged act or omission arising under or relating to non-compliance with any such Laws, or received any notice, request, or citation from any person alleging non-compliance with any such Laws;
-
(lvi) the operations of the Company and the Turnium Subsidiary are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority (collectively, the “ Applicable Anti-Money Laundering Laws ”) and no action, suit or proceeding by or before any Governmental Authority involving the Company or the Turnium Subsidiary with respect to Applicable Anti-Money Laundering Laws is, to the knowledge of the Company, pending or threatened;
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(lvii) each material plan or agreement providing for retirement, bonus, stock purchase, profit sharing, stock option, fringe benefit, change of control benefit, deferred compensation, severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick leave, disability, salary continuation, legal benefits, unemployment benefits, vacation, incentive or otherwise contributed to or required to be contributed to, by the Company or the Turnium Subsidiary for the benefit of any current or former director, officer, employee or consultant of the Company or the Turnium Subsidiary (collectively, the “ Employee Plans ”) has been maintained in all material
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respects in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations that are applicable to such Employee Plans;
-
(lviii) no union representation exists, no certified association holds bargaining rights respecting the employees of the Company or the Turnium Subsidiary and, to the knowledge of the Company, no association of employees has applied to be certified as the bargaining agent of any of the employees of the Company or the Turnium Subsidiary. Neither the Company nor the Turnium Subsidiary is a party to any collective bargaining agreement, letter of understanding or letter of intent with any certified association or association of employees and no collective bargaining agreement, letter of understanding or letters or intent is currently being negotiated by the Company or the Turnium Subsidiary. No other action has been taken or, to the knowledge of the Company, is contemplated to organize or unionize any employees of the Company or the Turnium Subsidiary. There are no existing or, to the knowledge of the Company, threatened, labour strikes or labour disputes, work stoppages or slowdowns, controversies, material disputes or other labour troubles affecting the Company or the Turnium Subsidiary. The Company and the Turnium Subsidiary is currently in compliance with all Laws, regulations and orders relating to labour and employment, including those related to employment standards practices, workers’ compensation, pay equity, occupational health and safety, human rights and accommodation obligations, employment immigration, employee privacy, language of labour relations (French language requirements) and similar legislation, including payment in full of all amounts owing thereunder. No material labour dispute, complaint, grievance or other conflict with the employees of the Company or the Turnium Subsidiary currently exists, or to the knowledge of the Company is threatened or pending. There are no pending claims or outstanding orders against the Company or the Turnium Subsidiary under applicable workers’ compensation legislation, occupational health and safety or similar legislation, nor has any similar event occurred, which would reasonably be expected to give rise to any Material Adverse Effect in respect of the Company or the Turnium Subsidiary;
-
(lix) there are no actual complaints, made by employees, former employees or independent contractors, or to the Company’s knowledge, threatened complaints against the Company or the Turnium Subsidiary before any employment standards commission or tribunal or human rights commission or tribunal, nor, to the knowledge of the Company, has there been any occurrence which would reasonably be expected to lead to a complaint under any human rights legislation or employment standards legislation or civil law principle, in each case, that would have a Material Adverse Effect in respect of the Company or the Turnium Subsidiary. There are no outstanding decisions or settlements or pending settlements under applicable employment standards or human rights Laws which place any
-
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material obligation upon the Company or the Turnium Subsidiary to do or refrain from doing any act;
-
(lx) the Company and the Turnium Subsidiary maintain insurance against such losses, risks and damages to its properties and assets in such amounts that are customary for the business in which it is engaged and on a basis consistent with reasonably prudent persons in comparable businesses, and all of the policies in respect of such insurance coverage are in good standing, in full force and effect in all material respects and not in material default. Each of the Company and the Turnium Subsidiary is in compliance with the terms of such policies and instruments in all material respects and there are no material claims by the Company or the Turnium Subsidiary under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause. Neither the Company nor the Turnium Subsidiary has reason to believe that it will not be able to renew such existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect in respect of the Company or the Turnium Subsidiary;
-
(lxi) the minute books and corporate records of the Company and the Turnium Subsidiary for the period from incorporation to the date hereof made available to the Agents and Agents’ counsel are complete in all respects, contain copies of all proceedings (or certified copies thereof or drafts thereof pending approval) of the shareholders and the directors (or any committee thereof) or members and managers, as applicable, thereof and there have been no other meetings, resolutions or proceedings of the shareholders, directors, members or managers, as applicable, of the Company or the Turnium Subsidiary to the date hereof not reflected in such records;
-
(lxii) all information which has been prepared by the Company relating to the Company and the Turnium Subsidiary and their respective business, properties and liabilities and made available to the Agents was, as of the date of such information, true and correct in all material respects, taken as a whole, (excluding any future-oriented financial information or such information which is forward-looking or relates to projections or forecasts) and no material fact(s) known to the Company have been omitted therefrom which are necessary to make such information not misleading in light of the circumstances under which it was made available;
-
(lxiii) as of the date of the Corporate Presentation and the Filing Statement and any amendments to either, as applicable, the information and statements set forth in the Corporate Presentation and the Filing Statement (in the case of the Filing Statement insofar as it relates to the Company and the Business Combination) are true and correct in all material respects (excluding any future-oriented financial information or information or statements which are
-
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forward-looking or relate to projections or forecasts) and do not contain a misrepresentation;
-
(lxiv) all forward-looking information and statements of the Company contained in the Corporate Presentation and the Filing Statement and any amendments to either, as applicable, including any forecasts, projections and estimates, future-oriented financial information, expressions of opinion, intention and expectation, subject to any qualifications contained therein, as at the time they were made, were based on or derived from sources which the Company believes to be reliable and accurate, were made based on assumptions that the Company believed were reasonable in the circumstances and were identified as such in compliance with applicable Securities Laws;
-
(lxv) the statistical, industry and market related data included, or incorporated by reference, in the Corporate Presentation and the Filing Statement and any amendments to either, as applicable, are derived from sources which the Company reasonably believes to be accurate, reasonable and reliable and the Company has no reason to believe that such data is inconsistent with the sources from which it was derived;
-
(lxvi) the Company has not withheld, and will not withhold from the Agents prior to the Closing Time, any material fact relating to the Company, the Turnium Subsidiary the Offering or the Business Combination;
-
(lxvii) the operations of the Company and the Turnium Subsidiary are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any Governmental Authority (collectively, the “ Money Laundering Laws ”) and no action, suit or proceeding by or before any court or Governmental Authority or any arbitrator involving the Company or the Turnium Subsidiary with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened;
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(lxviii) there is no person acting or purporting to act at the request or on behalf of the Company that is entitled to any brokerage or finder’s fee or other compensation in connection with the transactions contemplated by this Agreement (including the Non-Brokered Offering), except the Agents, and except as disclosed in writing to the Agents, no person shall be entitled to any other amount in connection with the transactions contemplated by this Agreement;
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(lxix) as of the date hereof, no closure or suspension to the operations currently in effect or previously mandated by a Governmental Authority or otherwise implemented by the Company as a result of the novel coronavirus disease
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(COVID-19) outbreak (the “ COVID-19 Outbreak ”) has had a Material Adverse Effect on the Company; and
- (lxx) (A) the Subscription Receipts, (B) the Turnium Shares and Turnium Warrants issuable upon conversion of the Subscription Receipts and (C) the Turnium Warrant Shares issuable upon exercise of the Turnium Warrants are qualified investments at the Closing Time and will be qualified investments at the date of issuance thereof, as applicable, for trusts governed by registered retirement savings plans, registered retirement income funds, registered education savings plans, registered disability savings plans, or tax-free savings accounts.
(b) Representations and Warranties of RMR. RMR represents and warrants to the Agents and the Purchasers (and acknowledges that each of them is relying upon such representations and warranties in connection with the completion of the Offering and that such representations and warranties have been incorporated by reference in the Subscription Agreements for the benefit of the Purchasers), that:
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(i) RMR is a corporation duly incorporated, continued or amalgamated and validly existing under the Laws of the jurisdiction in which it was incorporated, continued or amalgamated, as the case may be, and has all requisite corporate power and authority and is duly qualified and holds all Permits, licenses and authorizations required to carry on its business as now conducted, to own, lease or operate its properties and assets and to carry out its obligations under the material agreements to which it is a party, and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution, liquidation or winding up;
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(ii) except for RMR Subco, which was incorporated for the sole purpose of effecting the Business Combination, RMR has no direct or indirect subsidiary or any investment or proposed investment in any person or any agreement, option or commitment to acquire any such investment and RMR is the registered and beneficial owner of 100% of the issued and outstanding shares of RMR Subco;
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(iii) no person has any written or oral agreement, option or warrant or any right or privilege (whether by Law, pre-emptive or contractual) capable of becoming such for the purchase or acquisition of any securities of RMR, other than pursuant to the Business Combination;
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(iv) RMR is a reporting issuer in each of the provinces of Ontario, British Columbia and Alberta and is not in default of the requirements of the Securities Laws in such jurisdictions;
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(v) the authorized capital of RMR consists of an unlimited number of Class A common shares without par value, and an unlimited number of Class B preferred shares without par value, of which, as at the date hereof,
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10,235,775 pre-Consolidation RMR Shares are issued and outstanding as fully paid and non-assessable shares in the capital of RMR and no Class B preferred shares are issued and outstanding;
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(vi) the minute books and records of RMR and RMR Subco from the date of incorporation to the date hereof, which RMR has made available to the Agents and Agents’ counsel in connection with their due diligence investigation of RMR, are complete contain copies of all proceedings (or certified copies thereof or drafts thereof pending approval) of the shareholders and the directors (or any committee thereof), as applicable, thereof and there have been no other meetings, resolutions or proceedings of the shareholders, directors, members or managers, as applicable, of RMR or RMR Subco to the date hereof not reflected in such records;
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(vii) RMR has all requisite corporate power, authority and capacity to enter into this Agreement, the Subscription Receipt Agreement, the Warrant Indenture and the Amalgamation Agreement and to perform the transactions contemplated herein and therein, including to issue the Resulting Issuer Shares, the Resulting Issuer Warrants and the Resulting Issuer Warrant Shares in connection with the Offering, the Business Combination and the Resulting Issuer Compensation Options, as applicable, and to perform its obligations hereunder and thereunder;
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(viii) all information which has been prepared by RMR relating to RMR and RMR Subco and their business and liabilities and made available to the Agents was, as of the date of such information and is as of the date hereof, true and correct in all material respects, taken as a whole, and no fact or facts known to RMR have been omitted therefrom which would make such information misleading;
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(ix) RMR and RMR Subco have filed all forms, reports, documents and information required to be filed by it, whether pursuant to Securities Laws or otherwise, with the applicable Securities Regulators (the “ RMR Disclosure Documents ”) except where the failure to so file would not have a Material Adverse Effect in respect of RMR, and RMR does not have any confidential filings with any applicable Securities Regulators. As of the time the RMR Disclosure Documents were filed with the applicable Securities Regulators and on SEDAR (System for Electronic Document Analysis and Retrieval) (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (A) each of the RMR Disclosure Documents complied with the requirements of the Securities Laws in the jurisdictions they were filed; and (B) none of the RMR Disclosure Documents contained any untrue statement of material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except where there would not be a Material Adverse Effect in respect of RMR;
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(x) each of the execution and delivery of this Agreement, the Subscription Receipt Agreement, the Warrant Indenture and the Amalgamation Agreement and the closing of the Business Combination, the performance by RMR or RMR Subco of its obligations hereunder or thereunder, the issuance of the Resulting Issuer Shares and Resulting Issuer Warrants issuable upon the exchange of the Turnium Shares and Turnium Warrants upon the completion of the Business Combination and the issuance of the Resulting Issuer Warrant Shares and the Resulting Issuer Compensation Options, the Resulting Issuer Compensation Units, and the Resulting Issuer Compensation Warrant Shares to, and, subject to receipt of the approvals referenced in Subsection 5(b)(xvi) hereto, the consummation of the transactions contemplated in this Agreement, the Subscription Receipt Agreement, the Warrant Indenture and the Amalgamation Agreement, including the Business Combination, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, (whether after notice or lapse of time or both), (A) any Law, statute, rule or regulation applicable to RMR or RMR Subco, including Securities Laws; (B) the constating documents, by-laws or resolutions of RMR or RMR Subco which are in effect at the date hereof and the date of the closing of the Business Combination; (C) any material agreement of RMR or RMR Subco; or (D) any judgment, decree or order binding RMR or RMR Subco or its assets and properties;
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(xi) at the Closing Time, each of this Agreement, the Warrant Indenture and the Subscription Receipt Agreement shall have been duly authorized, executed and delivered by RMR and upon such execution and delivery each shall constitute a valid and binding obligation of RMR and each will be enforceable against RMR in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other Laws relating to or affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought, and by the fact that rights to indemnity, contribution and waiver, and the ability to sever unenforceable terms, may be limited by applicable Law;
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(xii) each of RMR and RMR Subco: (A) is and at all times has been in compliance with all applicable Laws except where such failure to comply would not have a Material Adverse Effect in respect of RMR; (B) has not received any correspondence or notice from any Governmental Authority alleging or asserting material non-compliance with any applicable Laws; (C) has not received notice of any pending or threatened claim, suit, proceeding, charge, hearing, enforcement, audit, investigation, arbitration or other action from any Governmental Authority or third party alleging that any operation or activity of RMR or RMR Subco or any of its directors and/or officers is in violation of any applicable Laws and has no knowledge or reason to believe that any such Governmental Authority or third party is considering or would have reasonable grounds to consider any such claim,
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suit, proceeding, charge, hearing, enforcement, audit, investigation, arbitration or other action; and (D) has, or has had on its behalf, filed, declared, obtained, maintained or submitted all reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any applicable Laws and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were materially complete and correct on the date filed (or were corrected or supplemented by a subsequent submission);
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(xiii) there are no actions, suits, judgments, investigations or proceedings of any kind whatsoever outstanding or, to RMR’s knowledge, pending or threatened against or affecting RMR or RMR Subco at Law or in equity or before or by any commission, board, bureau or agency of any kind whatsoever and, to the knowledge of RMR, there is no basis therefor and neither RMR nor RMR Subco is subject to any judgment, order, writ, injunction, decree, award, rule, policy or regulation of any Governmental Authority;
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(xiv) except as set forth in the RMR Disclosure Documents, RMR is not a party to any material agreement other than the Warrant Indenture, the Amalgamation Agreement and the Subscription Receipt Agreement;
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(xv) the RMR Financial Statements have been prepared in accordance with IFRS and present fairly, in all material respects, the financial position (including the assets and liabilities, whether absolute, contingent or otherwise, revenues and expenses as required by IFRS) of RMR as at such date and the results of its operations and its cash flows for the period then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of RMR in accordance with IFRS and, unless disclosed in the RMR Financial Statements, there has been no change in accounting policies or practices of RMR since incorporation;
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(xvi) except for the written consent of the TSX-V, there are no third party consents required to be obtained in order for RMR or RMR Subco to complete the Business Combination;
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(xvii) the RMR Common Shares are currently listed on the TSX-V and on no other stock exchange, and the RMR Common Shares are currently halted from trading pending completion of the Business Combination;
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(xviii) all Taxes due and payable by RMR and RMR Subco have been paid. All tax returns, declarations, remittances and filings required to be filed by RMR and RMR Subco have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading. No examination of any tax return of RMR or RMR Subco is currently in progress and there are
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no issues or disputes outstanding with any Governmental Authority respecting any Taxes;
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(xix) aside from the escrow agreement entered into pursuant to the policies of the TSX-V, there are no securityholders’ agreements to which RMR or RMR Subco is a party, and to the knowledge of RMR there are no pooling agreements, voting trusts or other similar agreements with respect to the ownership or voting of any of the securities of RMR;
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(xx) there is no person acting or purporting to act at the request or on behalf of RMR or RMR Subco that is entitled to any brokerage or finder’s fee or other compensation in connection with the transactions contemplated by this Agreement;
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(xxi) none of RMR, any predecessor of RMR, any affiliate of RMR, nor any director, executive officer or other officer of RMR, nor any beneficial owner of 20% or more of RMR’s outstanding securities is subject to any of the “bad actor” disqualification event described in Rule 506(d)(1)(i) to (viii) under the U.S. Securities Act, other than any such disqualification event that is covered by Rule 506(d)(2) or (d)(3) under the U.S. Securities Act; and
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(xxii) as of the date of the Filing Statement and any amendments thereto, as applicable, the information and statements set forth in the Filing Statement as they relate solely to RMR are true and correct in all material respects (excluding any future-oriented financial information or information or statements which are forward-looking or relate to projections or forecasts) and do not contain a misrepresentation.
(c) Representations, Warranties and Covenants of the Agents. Each of the Agents hereby severally (and not jointly and severally) represents, warrants and covenants to the Company and RMR and acknowledges that the Company and RMR are relying upon such representations, warranties and covenants, that:
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(i) the Agent is a validly organized corporation or limited partnership, as the case may be, and has good and sufficient right and authority to enter into this Agreement and to complete the transactions contemplated in this Agreement and any other documents in connection with the Offering to which it is a party;
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(ii) in respect of the offer and sale of the Subscription Receipts, the Agent has complied and will comply in all material respects with all Securities Laws and the terms of this Agreement in all material respects;
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(iii) the Agent and its representatives have not engaged in or authorized, and will not engage in or authorize, any form of General Solicitation or General Advertising in connection with or in respect of the Subscription Receipts in any newspaper, magazine, printed media of general and regular paid
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circulation or any similar medium, or broadcast over radio or television or otherwise or conducted any seminar or meeting concerning the offer or sale of the Subscription Receipts whose attendees have been invited by any General Solicitation or General Advertising;
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(iv) the Agent has not and will not solicit offers to purchase or sell the Subscription Receipts so as to require the filing of a prospectus, registration statement or offering memorandum with respect thereto or the provision of a contractual right of action under the laws of any jurisdiction or result in the Company becoming subject to continuous disclosure filing obligations in any jurisdictions;
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(v) the Agent will obtain from each Purchaser an executed Subscription Agreement and will use its commercially reasonable efforts to obtain all other applicable forms, reports, undertakings and documentation required under the Securities Laws or required by the Company, acting reasonably; and
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(vi) the Agent is duly registered as a dealer pursuant to the provisions of the Securities Laws, is a member in good standing of the Investment Industry Regulatory Organization of Canada, and is duly registered or licensed as a dealer in those jurisdictions in Canada in which it is required to be so registered or licensed in order to perform the services contemplated by this Agreement, or if or where not so registered or licensed, the Agent will act only through members of a selling group who are so registered or licensed.
6. Closing Deliveries. The issuance and sale of the Subscription Receipts shall be completed at the Closing Time at the offices of Harper Grey LLP, Vancouver, British Columbia, counsel to the Company, or at such other place as the Co-Lead Agents, on behalf of the Agents and the Company may agree upon in writing. At the Closing Time, the Company shall cause the Subscription Receipt Agent to deliver to the Agents the Subscription Receipts in electronic and/or certificated form, as directed by the Co-Lead Agents (on their own behalf and for and on behalf of the Agents) and shall deliver to the Agents the Compensation Options, against payment by (i) the Agents to the Subscription Receipt Agent in lawful money of Canada by wire transfer of the proceeds from the sale of Subscription Receipts less the Agents’ Closing Compensation and the costs and expenses of the Agents incurred up to Closing (including legal expenses); and (ii) the Company to the Subscription Receipt Agent in lawful money of Canada by wire transfer of the proceeds from the sale of Subscription Receipts under the Non-Brokered Offering and to President’s List Purchasers, as applicable.
7. Closing Conditions. Each Purchaser’s obligation to purchase the Subscription Receipts shall be conditional upon the fulfilment at or before the Closing Time of the following conditions:
(a) the board of directors of the Company shall have authorized and approved (i) the execution and delivery of this Agreement, the Amalgamation Agreement, the Compensation Option Certificates, the Subscription Receipt Agreement, the Warrant Indenture and the
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acceptance of the Subscription Agreements, (ii) the creation, issuance, sale and delivery of the Subscription Receipts, (iii) the creation and grant of the Compensation Options, and (iv) the allotment, issuance and delivery of the Turnium Shares and Turnium Warrants issuable upon the exchange of the Subscription Receipts, the Turnium Warrant Shares and all Turnium securities issuable in connection with the Compensation Options and all matters relating thereto;
(b) the board of directors of RMR shall have authorized and approved (i) the execution and delivery of this Agreement, the Amalgamation Agreement, the Subscription Receipt Agreement and the Warrant Indenture; and (ii) the allotment and reservation for issuance and delivery of the Resulting Issuer Shares and the Resulting Issuer Warrants issuable upon the exchange of the Turnium Shares and the Turnium Warrants, the Resulting Issuer Warrant Shares and all Resulting Issuer securities issuable in connection with the Compensation Options and all matters relating thereto;
(c) the Agents shall have received at the Closing Time certificates dated the Closing Date, signed by the Chief Executive Officer of the Company and the Chief Financial Officer of each of the Company and RMR, addressed to the Agents with respect to (i) the articles and by-laws of the Company and RMR, as applicable, (ii) all resolutions of the Company’s and RMR’s board of directors relating to this Agreement and the transactions contemplated hereby, as applicable (iii) the incumbency and specimen signatures of signing officers in the form of a certificate of incumbency, and (iv) such other matters as the Agents may reasonably request;
(d) each of the Subscription Receipt Agent and the Warrant Agent shall have been duly appointed as the subscription receipt agent and the warrant agent under the Subscription Receipt Agreement and the Warrant Indenture, respectively;
(e) all requisite approvals have been obtained by the Company as required to be obtained by the Company in order to complete the Offering;
(f) the Company shall have granted the Compensation Options to the Agents;
(g) the Company shall have paid all reasonable expenses and disbursements of the Agents (including all applicable taxes and legal expenses) in connection with the Offering as of the Closing Time, as set forth in Section 10 hereof;
(h) the Agents shall have received legal opinions in respect of certain corporate, securities law matters, addressed to the Agents, their counsel and the Purchasers, in form and substance satisfactory to the Agents’ counsel, acting reasonably, dated the Closing Date, from Harper Grey LLP, counsel to the Company, and where appropriate as it relates to certain additional matters, including securities laws matters, counsel in the other Selling Jurisdictions, as it relates to the enforceability of, inter alia , this Agreement, the Amalgamation Agreement, the Subscription Agreements, the Compensation Option Certificates, the Subscription Receipt Agreement, the Warrant Indenture and securities laws matters which counsel in turn may rely, as to matters of fact, on certificates of public officials and officers of the Company, with respect to the following matters:
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(i) as to the incorporation and valid existence of the Company and the Turnium Subsidiary under the laws of British Columbia and as to the corporate power of
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the Company to carry out its obligations under this Agreement, the Amalgamation Agreement, the Subscription Agreements, the Compensation Option Certificates, the Warrant Indenture and the Subscription Receipt Agreement and to create, issue, sell and grant the Subscription Receipts, the Turnium Shares, the Turnium Warrants, the Turnium Warrant Shares, the Compensation Options and all securities of Turnium issuable in respect of the Compensation Options and the Turnium securities underlying such securities;
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(ii) as to the authorized and issued capital of the Company and the Turnium Subsidiary;
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(iii) that the Company and the Turnium Subsidiary has all requisite corporate power and authority to carry on its business as presently carried on and to own or lease its properties and assets;
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(iv) that none of the execution and delivery of this Agreement, the Amalgamation Agreement, the Subscription Agreements, the Compensation Option Certificates, the Warrant Indenture or the Subscription Receipt Agreement, the performance by the Company of its obligations hereunder and thereunder, or the creation, issuance, grant, sale or authorization of transfer, as the case may be, of the Subscription Receipts or the Turnium Shares, the Turnium Warrants, the Turnium Warrant Shares, the Compensation Options or the securities of Turnium issuable in respect of the Compensation Options and the Turnium securities underlying such securities, will conflict with or result in any breach of the constating documents or by-laws of the Company or the resolutions of the directors and shareholders of the Company;
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(v) that each of this Agreement, the Amalgamation Agreement, the Subscription Agreements, the Compensation Option Certificates, the Warrant Indenture and the Subscription Receipt Agreement has been duly authorized and executed and delivered by the Company, and constitutes a valid and legally binding obligation of the Company enforceable against it in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, liquidation, reorganization, moratorium or similar laws affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought, and the qualification that the enforceability of rights of indemnity and contribution may be limited by applicable law. Such opinions may also include qualifications and limitations customary for transactions of this nature;
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(vi) that the Subscription Receipts have been duly and validly created and issued and are valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms;
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(vii) that the Turnium Shares forming part of the Turnium Units have been duly and validly authorized and allotted for issuance to the Purchasers and, upon the exchange of the Subscription Receipts in accordance with the provisions of the
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Subscription Receipt Agreement, will be duly and validly issued as fully paid and non-assessable Common Shares;
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(viii) that the Turnium Warrants forming part of the Turnium Units have been duly and validly authorized for issuance to the Purchasers and have the attributes corresponding to the description set forth herein and in the Subscription Agreements and, upon the exchange of the Subscription Receipts in accordance with the provisions of the Subscription Receipt Agreement, will be duly and validly issued and will be valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms;
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(ix) that the Turnium Warrant Shares have been duly and validly authorized and allotted for issuance to holders of Turnium Warrants and, upon the due exercise of the Turnium Warrants, will be duly and validly issued as fully paid and nonassessable Common Shares;
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(x) that the Compensation Options have been duly and validly created, granted and authorized that the Compensation Options have the attributes corresponding to the description set forth in the Compensation Option Certificates and are valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms;
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(xi) that the Compensation Option Shares, the Compensation Option Warrants and the Compensation Option Warrants Underlying Shares issuable in connection with the Compensation Options have been validly reserved for issuance and, upon the exercise of the Compensation Options in accordance with the provisions of the Compensation Option Certificates, will be duly and validly issued as fully paid and non-assessable;
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(xii) that the issuance and sale by the Company of the Subscription Receipts to the Purchasers in the Selling Jurisdictions and the grant by the Company of the Compensation Options to the Agents are exempt from the prospectus requirements of applicable Securities Laws and no documents are required to be filed (other than specified post-closing forms pursuant to NI 45-106 accompanied by requisite filing fees), proceedings taken or approvals, permits, consents or authorizations obtained under the applicable Securities Laws to permit such issuance, sale and grant;
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(xiii) that the issuance of the Turnium Shares and the Turnium Warrants upon the exchange of the Subscription Receipts in accordance with the provisions of the Subscription Receipt Agreement, the issuance of the Turnium Warrant Shares and the issuance of the Compensation Option Shares, the Compensation Option Warrants and the Compensation Option Warrants Underlying Shares, in connection with the exercise of the Compensation Options will be exempt from the prospectus requirements of applicable Canadian Securities Laws and no documents will be required to be filed, proceedings taken or approvals, permits,
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consents or authorizations obtained under the applicable Canadian Securities Laws to permit such issuance;
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(xiv) that no other documents will be required to be filed, proceedings taken or approvals, permits, consents or authorizations obtained under the applicable Canadian Securities Laws in connection with the first trade of the Subscription Receipts, the Turnium Shares, the Turnium Warrants and the Turnium Warrant Shares in the Selling Jurisdictions, or the Compensation Options or the Compensation Option Shares, the Compensation Option Warrants and the Compensation Option Warrants Underlying Shares in connection with the exercise of the Compensation Options provided that the Subscription Receipts or Compensation Options, as applicable, have been held for a period of four months following the later of (a) the Closing Date, and (b) the date the Company became a reporting issuer in any province or territory of Canada, subject to the usual qualifications;
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(xv) that Computershare Trust Company of Canada has been duly and validly appointed as the Subscription Receipt Agent and the Warrants Agent;
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(xvi) that the Subscription Receipts, the Turnium Shares, and the Turnium Warrants are qualified investments at the Closing Time under the Tax Act and the regulations thereunder and will be qualified investments at the date of issuance thereof, as applicable, for trusts governed by registered retirement savings plans, registered retirement income funds, registered education savings plans, registered disability savings plans and tax-free savings accounts; and
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(xvii) as to such other matters as the Agents’ legal counsel may reasonably request prior to the Closing Time;
(i) if any Subscription Receipts are being sold in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person pursuant to this Agreement and Schedule “A” hereto, the Agents shall have received an opinion from special U.S. legal counsel to the Company, in form and substance reasonably satisfactory to the Agents, to the effect that (i) registration under the U.S. Securities Act is not required in connection with the offer and sale of the Subscription Receipts, and (ii) provided no compensation is paid to solicit such exchange, registration under the U.S. Securities Act is not required for the Turnium Shares or Turnium Warrants issued upon conversion of the Subscription Receipts, provided that such offers and sales are made in compliance with Schedule “A” to this Agreement and provided further that it being understood that no opinion is expressed as to any subsequent resale of any Subscription Receipts or Turnium Shares or Turnium Warrants;
(j) the Agents shall have received a legal opinion addressed to the Agents, their counsel and the Purchasers, in form and substance satisfactory to the Agents, acting reasonably, dated as of the Closing Date, from Borden Ladner Gervais LLP, which counsel, in turn may rely, only as to matters of fact, on certificates of officers of RMR, as appropriate and subject to confirmation by the Agents, with respect to the following matters:
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(i) RMR is duly incorporated and validly existing under the laws of the Province of British Columbia;
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(ii) RMR has all requisite corporate capacity, power and authority to own its properties and assets and carry on its business and to execute and deliver this Agreement, the Subscription Agreements, the Amalgamation Agreement, the Subscription Receipt Agreement and the Warrant Indenture and to perform all transactions contemplated hereby and thereby;
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(iii) each of the this Agreement, the Subscription Agreements, the Amalgamation Agreement, the Subscription Receipt Agreement and the Warrant Indenture have been authorized, executed and delivered by RMR and RMR Subco, as applicable, and constitute legal, valid and binding obligations of RMR and RMR Subco, as applicable, enforceable in accordance with their terms (subject to bankruptcy, insolvency or other laws affecting the rights of creditors generally, general equitable principles including the availability of equitable remedies and the qualification that no opinion need be expressed as to rights to indemnity, or contribution);
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(iv) the execution and delivery by RMR or RMR Subco, as applicable, of this Agreement, the Subscription Agreements, the Amalgamation Agreement, the Subscription Receipt Agreement and the Warrant Indenture to which it is a party and the performance of the transactions contemplated thereby, do not and will not result in a breach of, and do not create a state of facts which, after notice or lapse of time or both, will result in a breach of and do not and will not conflict with, any of the terms, conditions or provisions of the constating documents of RMR and RMR Subco, as applicable, or any resolutions of the directors or shareholders of RMR or RMR Subco, as applicable;
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(v) the authorized and issued capital of RMR;
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(vi) all necessary corporate action has been taken by RMR to authorize the creation and issue of the Resulting Issuer Shares, the Resulting Issuer Warrants, the Resulting Issuer Warrant Shares and Resulting Issuer Compensation Options (including the underlying securities of the Resulting Issuer);
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(vii) the Resulting Issuer Shares, Resulting Issuer Warrants and Resulting Issuer Warrant Shares have been authorized, allotted and reserved for issue to the holders of Turnium Shares and Turnium Warrants upon the exchanges contemplated by the Business Combination and, upon the such exchanges, the Resulting Issuer Shares and Resulting Issuer Warrants will be validly issued as fully-paid and nonassessable, and upon due exercise of the Resulting Issuer Warrants, the Resulting Issuer Warrant Shares will be validly issued as fully-paid and non-assessable;
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(viii) the Resulting Issuer Compensation Options have been authorized for issue to the holders of Compensation Options upon the exchange of the Compensation Options in connection with the Business Combination, and upon the exchange of the
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Compensation Options in connection with the Business Combination, will constitute legal, valid and binding obligations of the Resulting Issuer enforceable in accordance with their terms subject to the usual qualifications;
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(ix) the Resulting Issuer Compensation Units and the Resulting Issuer Compensation Warrant Shares have been authorized, allotted and reserved for issue to the holders of the Resulting Issuer Compensation Options upon the exercise of the Resulting Issuer Compensation Options in accordance with the provisions thereof and, upon the exercise of the Resulting Issuer Compensation Options in accordance with the terms thereof, such securities will be validly issued as fully-paid and nonassessable securities of the Resulting Issuer; and
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(x) (A) the incorporation and existence of RMR Subco; (B) the authorized capital of RMR Subco; (C) the capacity of RMR Subco; and (D) the registered holders of all of the issued and outstanding shares of RMR Subco;
(k) the Agents shall have received a certificate of status (or the equivalent) with respect to the Company and the Turnium Subsidiary;
(l) the Subscription Agreements shall have been executed and delivered by the parties thereto in form and substance satisfactory to the Agents and their counsel, acting reasonably;
(m) the Lock-Up Agreements, in substantially the form attached hereto as Schedule “E”, shall have been executed and delivered to the Agents by the Significant Shareholders, senior officers and the directors of the Company and their respective associates, as applicable;
(n) the Agents shall have received satisfactory evidence of the completion of the Non-Brokered Offering; and
(o) the Agents shall, in their sole discretion, and acting reasonably, be satisfied with their due diligence review with respect to the respective business, operations, assets, liabilities, financial condition, affairs and prospects and market conditions of the Company, the Turnium Subsidiary and RMR and RMR Subco.
8. Business Combination Opinions. On the Escrow Release Date, the Company shall cause the Agents to receive legal opinions in respect of corporate and securities law matters (the “ Business Combination Opinions ”), addressed to the Agents and the Purchasers, in form and substance satisfactory to the Agents’ counsel, acting reasonably, dated the Escrow Release Date, from Harper Grey LLP, counsel to the Company, and where appropriate, counsel in the other Selling Jurisdictions, which counsel in turn may rely, as to matters of fact, on certificates of public officials and officers of the Company, with respect to the following matters:
(a) as to the due amalgamation and existence of the Company and RMR Subco and the incorporation and existence of the Resulting Issuer and the Turnium Subsidiary, in each case, under the laws of British Columbia;
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(b) as to the authorized and issued capital of the Company and the Turnium
Subsidiary;
- (c) as to the appointment of a transfer agent for the Resulting Issuer Shares;
(d) that the issuance of the Resulting Issuer Shares and the Resulting Issuer Warrants upon the exchange of the Turnium Shares and the Turnium Warrants, respectively, in accordance with the provisions of the Amalgamation Agreement and the issuance of Resulting Issuer Warrant Shares upon the due exercise of the Resulting Issuer Warrants will be exempt from the prospectus requirements of applicable Canadian Securities Laws and no documents will be required to be filed, proceedings taken or approvals, permits, consents or authorizations obtained under the applicable Canadian Securities Laws to permit such issuance;
(e) that the issuance and sale of the Resulting Issuer Compensation Units upon the due exercise of the Resulting Issuer Compensation Options and the Resulting Issuer Compensation Warrant Shares on the due exercise of the Resulting Issuer Compensation Warrants will be exempt from the prospectus requirements of applicable Canadian Securities Laws and no documents will be required to be filed, proceedings taken or approvals, permits, consents or authorizations obtained under the applicable Canadian Securities Laws to permit such issuance;
(f) that no other documents will be required to be filed, proceedings taken or approvals, permits, consents or authorizations obtained under the applicable Canadian Securities Laws in connection with the first trade of the Resulting Issuer Shares, Resulting Issuer Warrants or any Resulting Issuer Warrant Shares in the Selling Jurisdictions, provided that the Resulting Issuer (including its predecessor, RMR) is and has been a reporting issuer in any province or territory of Canada for the four months immediately preceding the trade, subject to the usual qualifications;
(g) that no other documents will be required to be filed, proceedings taken or approvals, permits, consents or authorizations obtained under the applicable Canadian Securities Laws in connection with the first trade of the Resulting Issuer Compensation Options, Resulting Issuer Compensation Shares, Resulting Issuer Compensation Warrants or Resulting Issuer Compensation Warrant Shares, as applicable, provided that the Compensation Options, as applicable, have been held for a period of four months following the later of (a) the Closing Date, and (b) the date the Resulting Issuer (including its predecessor, RMR) became a reporting issuer in any province or territory of Canada, subject to the usual qualifications;
(h) that the Resulting Issuer Shares, Resulting Issuer Warrants and Resulting Issuer Warrant Shares will, as of the Escrow Release Date, be “qualified investments” under the Tax Act and the regulations thereunder for trusts governed by registered retirement savings plans, registered retirement income funds, registered education savings plans, registered disability savings plans, deferred profit sharing plans and tax free savings accounts; and
(i) as to such other matters as the Agents legal counsel may reasonably request prior to the Closing Time.
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9. Rights of Termination. The Agents (or any of them) will be entitled, at their option, to terminate and cancel their obligations hereunder, by giving written notice to the Company at any time prior to the Closing Time as follows:
(a) Regulatory/Litigation Out. If any inquiry, action, suit, proceeding or investigation, whether formal or informal, is commenced, announced or threatened or any order is made by any Governmental Authority including the TSX-V or any Securities Regulator, against the Company or RMR or any subsidiary or any of the Company’s or any of its subsidiaries’ or RMR’s officers or directors, where wrong-doing is alleged or involves a finding of wrong-doing which, in the reasonable opinion of the Agents (or any one of them), has Material Adverse Effect or could reasonably be expected to have a Material Adverse Effect, the Agents (or any one of them) shall be entitled, at their sole option, and in accordance with Section 9(h) hereof, to terminate their obligations under this Agreement (and the obligations of the Purchasers arranged by them to purchase the Subscription Receipts) by written notice to that effect given to the Company any time prior to the Closing Time.
(b) Disaster Out. In the event that prior to the Closing Time, there should develop, occur or come into effect or existence any event, action, state, condition (including catastrophe, war, act of terrorism or the COVID-19 Outbreak only to the extent that there are material adverse developments related thereto after the date hereof) or major financial occurrence of national or international consequence, or a new or change in any governmental law or regulation, which, in the reasonable opinion of the Agents (or any one of them), could reasonably be expected to have a Material Adverse Effect or involves, or will materially adversely affect or involve, the financial markets or the business, affairs or operations of the Company or its subsidiary, the Agents (or any one of them) shall be entitled at their sole option, in accordance with Section 9(h) hereof, to terminate their obligations under this Agreement (and the obligations of the Purchasers arranged by them to purchase the Subscription Receipts) by written notice to that effect given to the Company prior to the Closing Time.
(c) Material Adverse Change. In the event that prior to the Closing Time, there shall have occurred any material change or a change in any material fact or a new material fact shall arise or the Agents shall discover any previously undisclosed material information or fact that, in the reasonable opinion of the Agents (or any one of them), has or could be expected to have a Material Adverse Effect, or on the market price or value of the securities of the Company or RMR, the Agents (or any one of them) shall be entitled, at their sole option, in accordance with Section 9(h) hereof, to terminate their obligations under this Agreement (and the obligations of the Purchasers arranged by them to purchase the Subscription Receipts) by written notice to that effect given to the Company prior to the Closing Time.
(d) Market Out. If the state of the financial markets, whether national or international, is such that, in the reasonable opinion of the Agents (or any one of them), it would be impractical or unprofitable to offer or continue to offer the Subscription Receipts for sale;
(e) Non-Compliance with Conditions. If the Company is in breach of any material term, condition or covenant of this Agreement, or the Company or RMR is in breach of any material representation or warranty given by the Company or RMR in this Agreement is or becomes false in any material respect and cannot be corrected prior to Closing, the Agents (or any
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one of them) shall be entitled at their sole option, in accordance with Section 9(h) hereof, to terminate their obligations under this Agreement (and the obligations of the Purchasers arranged by them to purchase the Subscription Receipts) by notice to that effect given to the Company at or prior to the Closing Time. Each of the Agents may waive, in whole or in part, or extend the time for compliance with, any terms and conditions without prejudice to their respective rights in respect of any other of such terms and conditions or any other or subsequent breach or noncompliance, provided that any such waiver or extension shall be binding upon such Agent only if the same is in writing and signed by it.
(f) Due Diligence. If the Agents (or any of them) are not satisfied, in their sole discretion, with their due diligence review and investigation of the business, properties and affairs of the Company, RMR or the Resulting Issuer, as applicable, as well as any of their subsidiaries, directors, officers and employees;
(g) Cease Trade Order. In the event that any law or regulation is enacted or changed or any order, action or proceeding is made or threatened by a Securities Regulator or other competent authority, that prevents or restricts trading in or distribution of the securities of the Company, RMR or the Resulting Issuer in the reasonable opinion of the Agents (or any one of them) materially adversely affects or might reasonably be expected to materially adversely affect the market price or value of the securities of the Company, RMR or the Resulting Issuer, the Agents (or any one of them) shall be entitled, at their option, in accordance with Section 9(h) hereof, to terminate their obligations under this Agreement (and the obligations of the Purchasers arranged by them to purchase the Subscription Receipts) by written notice to that effect given to the Company prior to the Closing Time.
(h) Exercise of Termination Rights. The rights of termination contained in this Section 9 may be exercised by the Agents and are in addition to any other rights or remedies the Agents may have in respect of any default, act or failure to act or non-compliance by the Company in respect of any of the matters contemplated by this Agreement or otherwise. In the event of any such termination by the Agents, subject to Sections 10, 11 and 12, there shall be no further liability on the part of the Agents to the Company or on the part of the Company to the Agents except in respect of any liability which may have arisen or may arise after such termination in respect of acts or omissions prior to such termination.
10. Expenses. Notwithstanding any other provision of this Agreement, whether or not the Offering is completed, the Company will be solely responsible for all costs and expenses incurred in relation to the Offering (including all applicable taxes) including, but not limited to, all third party fees and disbursements, all expenses of or incidental to the creation, issue, sale or distribution of the Subscription Receipts, the Compensation Options, the Turnium Shares, the Turnium Warrants, the Turnium Warrant Shares, the Resulting Issuer Shares, the Resulting Issuer Warrants and the Resulting Issuer Warrant Shares, all fees and expenses of counsel (including local counsel) to the Company, all fees and expenses of the Agents’ legal counsel subject to a maximum amount of $125,000, excluding taxes and disbursements, all fees and expenses of the Company’s auditors, all reasonable expenses related to the road shows (including reasonable travel expenses, hotel accommodations and meals to a maximum of $10,000), expenses with respect to preparation, printing, delivery and filing of any of the marketing materials, roadshow materials or other documents, any translation costs, and all reasonable expenses incurred by the Agents in
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connection with the engagement herein. Promptly upon request, the Company shall reimburse the Co-Lead Agents for all costs and expenses reasonably incurred by the Agents in connection with the Offering.
11. Survival of Representations and Warranties. All representations, warranties, covenants and agreements of the Company and RMR herein contained or contained in any documents submitted pursuant to this Agreement and in connection with the transactions herein contemplated shall survive the Closing and, notwithstanding such Closing or any investigation made by or on behalf of the Agents or the Purchasers with respect thereto, shall continue in full force and effect for the benefit of the Agents and the Purchasers. The representations, warranties, covenants and agreements of the Agents herein contained and in connection with the transactions herein contemplated shall survive the Closing and, notwithstanding such Closing or any investigation made by or on behalf of the Company with respect thereto, shall continue in full force and effect for the benefit of the Company and RMR for a period of three years following the Escrow Release Date. Notwithstanding the foregoing, the indemnity provided in Sections 12 and 13 hereof, shall not be limited to otherwise affected by any other indemnity obtained from any other person and shall continue in full force and effect, indefinitely, with all possible liability arising directly or indirectly from the transaction and acts contemplated by this Agreement, subject only to applicable limitation period prescribed by law.
12. Indemnity. The Company and its affiliated companies, as the case may be (collectively, the “ Indemnitor ”), jointly and severally, hereby, indemnifies, defends and agrees to hold harmless the Agents and their respective affiliates and their respective shareholders, partners, directors, officers, employees and agents (collectively, the “ Indemnified Parties ” and individually, an “ Indemnified Party ”) to the fullest extent permitted by law, against all losses, claims, damages, expenses or liabilities of any nature (other than loss of profit), including the reasonable fees and expenses of their counsel and other reasonable out-of-pocket expenses incurred in investigating, defending and/or settling any pending or threatened action, suit, proceeding, investigation or claim that may be made or threatened against any Indemnified Party or in enforcing this indemnity (collectively, the “ Claims ”), to which an Indemnified Party may become subject or otherwise involved in any capacity insofar as the Claims arise out of or are based upon, directly or indirectly, the Agents’ engagement under this Agreement, including, but not limited to: (a) any information or statement contained in any disclosure document prepared in connection with the Offering (except any information or statement relating solely to the Agents, or provided by the Agents in writing for inclusion in such document), which at the time and in light of the circumstances in which it was made contains or is alleged to contain a misrepresentation (as such term is defined in the Securities Act (Ontario)); (b) any omission to state in any disclosure document prepared in connection with the Offering any fact required to be stated to make any statement in such document not misleading in light of the circumstances in which it was made; (c) any omission or alleged omission to state, in any certificate of the Company delivered under or pursuant this Agreement, any fact (except facts relating solely to the Agents) required to be stated in such document or necessary to make any statement in such document not misleading in light of the circumstances under which it was made; (d) the non-compliance or alleged non-compliance by the Indemnitor with the requirements of applicable securities laws, regulations or rules; (e) any order made or investigation or proceeding commenced or threatened by any securities commission or other competent authority based upon any untrue statement, omission or misrepresentation (alleged or otherwise) in disclosure document prepared in
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connection with the Offering or based on any failure to comply with securities legislation, in either case preventing or restricting the trading in or sale of the Subscription Receipts or the Common Shares), and including any matter arising prior to the date hereof; and (f) any Claims made by Non-Brokered Purchasers in connection with offers and/or sales made by the Company to NonBrokered Purchasers pursuant to the Non-Brokered Offering.
This indemnity shall cease to be available to an Indemnified Party if and to the extent that any losses, Claims, damages, expenses or liabilities are determined (a “ Disqualification Event ”) by a court of competent jurisdiction in a final judicial determination from which no appeal can be made to have resulted solely from the gross negligence, any fraudulent act or wilful misconduct of such Indemnified Party.
Promptly after receiving notice of a Claim which is based, directly or indirectly, upon any matter in respect of which indemnification may be sought from the Indemnitor, the applicable Indemnified Party will notify the Indemnitor in writing of the particulars thereof, provided that the omission to so notify the Indemnitor shall not relieve the Indemnitor of any liability which they may have to any Indemnified Party except and only to the extent that any such delay in or failure to give notice as herein required materially prejudices the defence of such action, suit, proceeding, claim or investigation or results in any material increase in the liability which the Indemnitor have under this indemnity. Upon receipt of such notice, the Indemnitor shall promptly retain counsel (who shall be acceptable to the Indemnified Party acting reasonably) to represent the Indemnified Party in such matter, and the Indemnitor shall pay the fees and disbursements of such counsel relating to such matter. The Indemnified Parties will provide all reasonably necessary assistance to the Indemnitor at the cost of the Indemnitor in connection with such investigation, defence or contestation.
In any such matter, the Indemnified Party shall have the right to retain other counsel to act on his, her or its behalf, and the Indemnitor shall pay the reasonable fees and disbursements of such other counsel if: (A) the Indemnified Party is advised by counsel that there is an actual or potential conflict in the Indemnitor’s and their respective interests or additional defences are available to the Indemnified Party such that representation by the same counsel would be inappropriate; (B) the Indemnitor has not assumed the defence of the claim, action, suit or proceeding within 10 Business Days after receiving notice thereof; or (C) employment of such other counsel has been authorized by the Indemnitor; provided, however, that the Indemnitor shall not, in connection with any one such action or proceeding or separate but substantially similar actions or proceedings arising out of the same general allegations, be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties, except to the extent that local counsel, in addition to its regular counsel, is required in order to effectively defend against such action or proceeding.
The Indemnitor agrees that the Indemnified Parties shall not have any liability to the Indemnitor or any person asserting claims on behalf of or in right of the Indemnitor in connection with or as a result of either the Indemnified Parties’ engagement hereunder or any matter referred to in this Agreement, including, without limitation, related services and activities prior to the date of this Agreement, except, in respect of an Indemnified Person, to the extent that it shall be determined by a court of competent jurisdiction in a judgment that has become final in that it is no longer subject to appeal or other review that any losses, claims, damages, liabilities or
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expenses incurred by the Indemnitor were directly caused by or resulted from the gross negligence, any fraudulent act or wilful misconduct of such Indemnified Person in performing the services that are the subject of this Agreement or arose from information provided by the Agents in writing to the Indemnitor that was expressly designated by the Agents for any disclosure document prepared in connection with the Offering.
No admission of liability, fault, culpability or failure to act and no settlement of any claim, action, suit or proceeding shall be made without the consent of each Indemnified Party affected, such consent not to be unreasonably withheld, unless such admission or settlement includes an unconditional and full release of the Indemnified Person from all liability arising out of such claim, action, suit or proceeding.
If the foregoing indemnification is not for any reason available (other than the final determination of the occurrence of a Disqualification Event), the Company agrees to contribute to the amount paid or payable by the Indemnified Party as a result of any losses, claims, damages, liabilities and expenses involved (A) in the proportion appropriate to reflect the relative benefits received or sought to be received by the Company and its affiliates, on the one hand, and any Indemnified Party on the other hand, in connection with the matters contemplated by the this Agreement or (B) if (but only if and to the extent) the allocation provided for in clause (A) is for any reason held unenforceable, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (A) but also the relative fault of the Indemnitor and its affiliates, on the one hand, and the party entitled to contribution, on the other hand, as well as any other relevant equitable considerations. The Company agrees that for the purposes of this paragraph the relative benefits received, or sought to be received, by the Indemnitor and its affiliates, on the one hand, and the party entitled to contribution, on the other hand, in connection with the matters contemplated by the this Agreement shall be deemed to be in the same proportion that the total value received or paid or contemplated to be received or paid by the Indemnitor or its affiliates, as the case may be, as a result of or in connection with the matters (whether or not consummated) for which any Indemnified Party has been retained to perform services bears to the fees actually received by any Indemnified Party under the this Agreement; provided that, in no event shall the Company contribute less than the amount necessary to assure that any Indemnified Party is not liable for losses, claims, damages, liabilities and expenses in excess of the amount of fees actually received by any Indemnified Party pursuant to the this Agreement. Relative fault shall be determined by reference to, among other things, whether any alleged untrue statement or omission or any other alleged conduct relates to information provided by the Company or other conduct by the Company (or its employees, agents, or representatives), on the one hand, or by any Indemnified Party on the other hand. The contribution provisions contained in this paragraph shall cease to be available to an Indemnified Party and shall not apply if and to the extent that any losses, Claims, damages, expenses or liabilities are determined by a court of competent jurisdiction in a final judicial determination from which no appeal can be made to have resulted directly from the gross negligence, any fraudulent act or wilful misconduct of such Indemnified Party.
For purposes of this Agreement, reference to an Indemnified Party that is an Agent (as defined in this Agreement) shall include each of its affiliates, each other person, if any, controlling the Agent or any of its affiliates, their respective officers, current and former directors, employees and agents, and the successors and assigns of all of the foregoing persons.
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The Company and Eight agree that Eight shall act as trustee on behalf of all Indemnified Parties hereunder who are not a direct signatory to this this Agreement and that Stifel GMP hold the entitlements and benefits of this Indemnity in trust for each such Indemnified Party.
The foregoing rights of indemnity and contribution shall be in addition to any rights that any Indemnified Party may have at common law or otherwise.
13. Indemnities of RMR.
(a) RMR shall fully indemnify and hold the Indemnified Parties harmless to the full extent from and against any and all Claims that may be incurred in investigating, settling, advising with respect to and/or defending any actual or threatened Claim to which the Indemnified Parties may become subject or otherwise involved in any capacity under any statute or common law, or otherwise insofar as such Claims result from, arise out of or are based, directly or indirectly, upon any inaccuracy of, or any breach of or default under, any representation, warranty, covenant or agreement made by RMR in this Agreement, or any agreement, certificate or other document to be delivered pursuant hereto, or the failure of RMR to comply with any of its obligations under this Agreement.
(b) For the purposes of Section 13(a), the provisions of Section 12 shall apply
mutatis mutandis .
14. Advertisements. The Company acknowledges that the Agents shall have the right, subject always to Sections 2(a) and (c), 3(b) and 5(c)(ii), (iii) and (iv) of this Agreement, at their own expense, to place such advertisement or advertisements relating to the sale of the Subscription Receipts contemplated herein as the Agents may consider desirable or appropriate and as may be permitted by applicable law, including Securities Laws. Each of the Company and the Agents agrees that it will not make or publish any advertisement in any media whatsoever relating to, or otherwise publicize, the transaction provided for herein so as to result in any exemption from the prospectus requirements of applicable securities legislation in any of the provinces of Canada or other jurisdictions in which the Subscription Receipts shall be offered or sold not being available (it being understood and agreed that no such advertisement or other publication or announcement shall be made in any newspaper, magazine, printed public media, printed media or similar medium, or radio, television or other telecommunication in the United States).
15. Agents’ Compensation.
(a) In consideration of the services to be rendered by the Agents in connection with the Offering, the Company shall pay the Agents a cash commission equal to 7.0% of the gross proceeds of the Offering other than in respect of the gross proceeds received from the sales of Subscription Receipts to identified investors agreed upon by the Company and Co-Lead Agents on their own behalf and for and on behalf of the Agents (the “ President’s List Purchasers ”), for which the Company shall pay the Agents a cash commission equal to 3.5% of the gross proceeds from the issuance and sale of Subscription Receipts to such President’s List Purchasers (collectively, the “ Cash Commission ”). An amount equal to 50% of the Cash Commission and 50% of any other cash compensation payable to Eight and/or the Agents in connection with the Offering and the Non-Brokered Offering will be paid by the Company to Eight, on behalf of the
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Agents, at the Closing Time and the remainder, plus any interest earned thereon, shall be payable in cash upon the satisfaction of the Escrow Release Conditions on or prior to the Escrow Release Deadline and shall be payable out of the Offered Receipts Escrowed Funds.
(b) As additional compensation for the services to be rendered by the Agents in connection with the Offering, the Company shall issue to the Agents on Closing the Compensation Options, exercisable in whole or in part to acquire that number of Subscription Receipts as is equal to 7.0% of the total number of Subscription Receipts issued and sold pursuant to the Offering (other than in respect of the number of Subscription Receipts issued and sold to President’s List Purchasers, for which the number of Compensation Option Shares shall be equal to 3.5% of the total number of Subscription Receipts issued and sold to members of such list). The Compensation Options shall have the terms and conditions set forth in the form of Compensation Option Certificate attached hereto as Schedule “D”.
16. President’s List Purchasers. The Agents shall not be required to conduct a suitability review in respect of sales to President’s List Purchasers and the Company shall indemnify and save harmless the Agents from any and all losses or expenses relating to sales to President’s List Purchasers. Provided that the Company has been notified in writing not less than 24 hours prior to the Closing Date, the Agents may in their discretion, acting reasonably, refuse to process any subscription by a President’s List Purchaser. A list containing the identity of the President’s List Purchasers was provided to the Agents, which includes (i) the name of each President’s List Purchaser, (ii) the number of Subscription Receipts to be purchased and (iii) such information as the Agents may require in order to effect the delivery of the Subscription Receipts and the settlement of the purchase, including the name of the investment dealer being used for settlement purposes, the account number of the purchaser and the name of the investment advisor responsible for the account.
17. Authority of Co-Lead Agents. All actions which must or may be taken by the CoLead Agents in connection with this Agreement, including any agreement, waiver, order, notice (other than a notice pursuant to Section 9 or Section 12 hereof), direction, receipt or other action to be made, given or taken by the Agents hereunder may be made, given or taken by Co-Lead Agents on their own behalf and for and on behalf of the Agents and the Company shall accept notification of any such actions from, and deliver the Subscription Receipts to be issued pursuant to the Offering to, or to the order of, the Co-Lead Agents. The Co-Lead Agents acknowledge that where practicable to do so they will discuss any action to be taken by it hereunder with the other Agents prior to taking such action, provided that the failure of the Co-Lead Agents to so discuss will not detract from the right of the Company to rely on the action of the Co-Lead Agents in accordance with the provisions of this Section 17. The rights and obligations of the Agents under this Agreement shall be severally not joint and several.
18. Confidentiality. The Agents shall keep confidential all information obtained by them from the Company and RMR in connection with the Offering for a period of two years. This confidentiality obligation shall not apply or extend to information now in the public domain, information which may subsequently become public, including in connection with the Business Combination, other than through breach by the Agents of their obligations hereunder, information disclosed to the Agents by third parties in respect of which such third parties are not under an obligation of confidentiality to the Company or RMR, as applicable, or information which is
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required by law, rule or regulation to be disclosed. The Agents and their respective representatives, including professional consultants, shall be made aware of and be bound by this provision. Notwithstanding anything to the contrary contained in this Agreement, in connection with the Offering, nothing in this Section 18 shall (i) prevent the Agents or any of their respective affiliates from complying with all applicable disclosure laws, rules, regulations and principles in connection with the Offering, (ii) restrict the ability of the Agents to consider information for due diligence purposes or share information with other agents, dealers or other parties participating in, or providing professional advice with respect to, such Offering, (iii) prevent the Agents from retaining documents or other information in connection with their due diligence, or (iv) prevent the Agents from using any documents in investigating or defending themselves against Claims made, or threatened or which the Agents believe may be threatened by purchasers, regulatory authorities or others in connection with the Offering.
19. Alternative Transaction
In the event that the Company withdraws from the Offering after the date of this Agreement (unrelated to Agents’ inability to complete the Offering) in order to complete an Alternative Transaction (as defined below) (which transaction is completed within six months of the withdrawal from the Offering), the Company shall pay Eight promptly upon closing the Alternative Transaction a break-up fee equal to $250,000.
Any amounts payable to Eight in connection with an Alternative Transaction will constitute liquidated damages of Eight resulting from the failure to complete the Offering and will not constitute a penalty.
20. Notices. Unless otherwise expressly provided in this Agreement, any notice or other communication to be given under this Agreement shall be in writing addressed as follows:
If to the Company, to it at:
Turnium Technology Group Inc. 1127-15th Street West North Vancouver, British Columbia V7P 1M7
Attention: Johan Arnet, Chief Executive Officer Email: [email protected]
with a copy to (which shall not constitute delivery):
Harper Grey LLP 3200-650 West Georgia Street Vancouver, British Columbia V6B 4P7
Attention: Michael Kennedy Email: [email protected]
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If to RMR, to it at: RMR Science Technologies Inc. 3500-157A Street, Suite 4 Surrey, British Columbia V3Z 2P2 Attention: Robin Hutchison, Chief Executive Officer Email: [email protected]
with a copy to (which shall not constitute delivery):
Borden Ladner Gervais LLP Centennial Place, East Tower, Suite 1900 530 3[rd] Avenue SW Calgary, Alberta T2P 0R3
Attention: Melinda Park Email: [email protected]
or if to the Agents, to Eight and Canaccord (on their own behalf and for and on behalf of the Agents):
Eight Capital 100 Adelaide Street West, Suite 2900 Toronto, Ontario M5H 1S3
Attention: Michelle Goh, Principal, Managing Director Email: [email protected] and to:
Canaccord Genuity Corp. 609 Granville Street, Suite 2100 Vancouver, British Columbia V7Y 1H2
Attention: Jamie Brown, Managing Director, Head of Investment Banking – Western Canada Email: [email protected]
with a copy to (which shall not constitute delivery):
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Minden Gross LLP 145 King Street West Suite 2200 Toronto, Ontario M5H 4G2
Attention: Andrew Elbaz Email: [email protected]
or to such other address as any of the parties may designate by notice given to the others in accordance with the above.
Each notice shall be personally delivered to the addressee or sent by email transmission to the addressee and (i) a notice which is personally delivered shall, if delivered on a Business Day, be deemed to be given and received on that day and, in any other case, be deemed to be given and received on the first Business Day following the day on which it is delivered; and (ii) a notice which is sent by email transmission shall be deemed to be given and received, if sent at or prior to 5:00 p.m. (Toronto time) of a Business Day, on that day, and if sent after 5:00 p.m. (Toronto time) on a Business Day, on the first Business Day following the day on which it is sent.
21. Time of the Essence. Time shall, in all respects, be of the essence hereof.
22. Canadian Dollars. All references herein to dollar amounts are to lawful money of Canada.
23. Headings. The headings contained herein are for convenience only and shall not affect the meaning or interpretation hereof.
24. Singular and Plural, etc. Where the context so requires, words importing the singular number include the plural and vice versa, and words importing gender shall include the masculine, feminine and neuter genders.
25. Entire Agreement. This Agreement and the Advisory Agreement constitute the only agreement between the parties with respect to the subject matter hereof and shall supersede any and all prior negotiations and understandings, including the Engagement Letter. This Agreement may be amended or modified in any respect by written instrument only.
26. Severability. The invalidity or unenforceability of any particular provision of this Agreement shall not affect or limit the validity or enforceability of the remaining provisions of this Agreement.
27. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein and the parties hereto irrevocably attorn to the jurisdictions of the courts of the Province of British Columbia.
28. Language. The parties hereto have expressly requested that this Agreement and any notice or other document in connection therewith be prepared in the English language. Les
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parties ont demandé spécifiquement que cette convention ainsi que tous les avis et autres documents y afférents soient rédigés en anglais.
29. Successors and Assigns. The terms and provisions of this Agreement shall be binding upon and enure to the benefit of the Company, the Agents and the Purchasers and their respective executors, heirs, successors and permitted assigns; provided that, except as provided herein or in the Subscription Agreements, this Agreement shall not be assignable by any party without the written consent of the others.
30. Further Assurances. Each of the parties hereto shall do or cause to be done all such acts and things and shall execute or cause to be executed all such documents, agreements and other instruments as may reasonably be necessary or desirable for the purpose of carrying out the provisions and intent of this Agreement.
31. Effective Date. This Agreement is intended to and shall take effect as of the date first set forth above, notwithstanding its actual date of execution or delivery.
32. Conflict. The Company acknowledges that the Agents and their affiliates carry on a range of businesses which may include providing brokerage services, investment advisory, research, investment management and custodial services to clients and trading in financial products as agent or principal. It is possible that the Agents and other entities in their respective groups that carry on those businesses may hold long or short positions in securities of companies or other entities, which are or may be involved in the transactions contemplated in this Agreement and effect transactions in those securities for their own account or for the account of their respective clients. The Company agrees and acknowledges that these divisions and entities may hold such positions and effect such transactions in the Company’s securities without regard to the Company’s interests under this Agreement.
33. Fiduciary. The Company hereby acknowledges that the Agents are acting solely as agents in connection with the Offering and are not retained hereunder to advise the Company as to its business, whether to consummate the Offering or as to any use of the proceeds of the Offering. The Company further acknowledges that the Agents are acting pursuant to a contractual relationship created solely by this Agreement entered into on an arm’s length basis, and in no event do the parties intend that the Agents act or be responsible as a fiduciary to the Company, its management, shareholders or creditors or any other person in connection with any activity that the Agents may undertake or have undertaken in furtherance of the Offering, either before or after the date hereof. The Agents hereby expressly disclaim any fiduciary or similar obligations to the Company, either in connection with the transactions contemplated by this Agreement, by the Amalgamation Agreement or any matters leading up to such transactions, and the Company hereby confirm its understanding and agreement to that effect. The Company and the Agents agree that they are each responsible for making their own independent judgments with respect to any such transactions and that any opinions or views expressed by the Agents to the Company regarding such transactions, including any opinions or views with respect to the price or market for the Company’s securities, do not constitute advice or recommendations to the Company. The Company and the Agents agree that the Agents are acting as principal and not the fiduciary of the Company and no Agent has assumed, and no Agent will assume, any advisory responsibility in favour of the Company with respect to the transactions contemplated hereby or the process leading
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thereto (irrespective of whether any Agent has advised or is currently advising the Company on other matters).
34. Counterparts and Facsimile and Electronic Copies. This Agreement may be executed in any number of counterparts and by facsimile or other electronic transmission, each of which so executed shall constitute an original and all of which taken together shall form one and the same agreement.
If the Company and RMR are in agreement with the foregoing terms and conditions, please so indicate by executing a copy of this Agreement where indicated below and delivering the same to the Agents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Yours very truly,
EIGHT CAPITAL
Per: ______ "Michelle Goh"_ Name: Michelle Goh Title: Principal, Managing Director
CANACCORD GENUITY CORP.
Per: ______ "Jamie Brown"_ Name: Jamie Brown Title: Managing Director, Head of Investment Banking – Western Canada
iA PRIVATE WEALTH INC.
Per: ______ "John Rak"_ Name: John Rak Title: Managing Director
ECHELON WEALTH PARTNERS INC.
Per: ______ "Beng Lai"_ Name: Beng Lai Title: Managing Director
Signature Page to Agency Agreement
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The foregoing is hereby accepted on the terms and conditions therein set forth. DATED this 8th day of April, 2022.
TURNIUM TECHNOLOGY GROUP INC.
Per: ______ "Johan Arnet"_ Name: Johan Arnet Title: Chief Executive Officer
RMR SCIENCE TECHNOLOGIES INC.
Per: ______ "Robin Hutchison"_ Name: Robin Hutchison Title: Chief Executive Officer
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SCHEDULE “A”
COMPLIANCE WITH U.S. SECURITIES LAWS
This is Schedule “A” to the agency agreement (the “ Agency Agreement ”) dated April 8, 2022, among Eight Capital, Canaccord Genuity Corp., iA Private Wealth Inc. and Echelon Wealth Partners Inc. (collectively, the “ Agents ” and each, an “ Agent ”), Turnium Technology Group Inc. (the “ Company ”) and RMR Science Technologies Inc.
Capitalized terms used herein and not defined herein shall have the meaning ascribed thereto in the Agency Agreement to which this schedule is annexed and the following terms shall have the meanings indicated:
“ affiliate ” means an “affiliate” within the meaning of Rule 405 under the U.S. Securities Act;
“ Directed Selling Efforts ” means “directed selling efforts” as that term is defined in Rule 902(c) of Regulation S;
“ Rule 506 Disqualification Event ” means any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) of Regulation D;
“ FINRA ” means the Financial Industry Regulatory Authority, Inc.;
“ Foreign Private Issuer ” means a “foreign private issuer” as that term is defined in Rule 405 under the U.S. Securities Act;
“ Offshore Transaction ” means “offshore transaction” as that term is defined in Rule 902 of Regulation S;
“ Qualified Institutional Buyer ” means a “qualified institutional buyer” as that term is defined in Rule 144A under the U.S. Securities Act that is also a U.S. Accredited Investor;
“ Regulation D ” means Regulation D adopted by the SEC under the U.S. Securities Act;
“ Regulation M ” means Regulation M adopted by the SEC under the U.S. Exchange Act;
“ Regulation S ” means Regulation S adopted by the SEC under the U.S. Securities Act;
“ SEC ” means United States Securities and Exchange Commission;
“ Substantial U.S. Market Interest ” means “substantial U.S. market interest” as that term is defined in Rule 902(j) of Regulation S;
“ U.S. Accredited Investor ” means an “accredited investor” that satisfies one or more of the criteria set forth in Rule 501(a) of Regulation D;
“ U.S. Affiliates ” means United States registered broker-dealer affiliates of the Agents;
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“ U.S. Exchange Act ” means the United States Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder; and
“ U.S. Purchaser ” means an original purchaser of the Subscription Receipts in the Offering that is (a) a U.S. Person, (b) any person purchasing such Subscription Receipts on behalf of, or for the account or benefit of, any U.S. Person or any person in the United States, (c) any person who receives or received an offer to acquire such Subscription Receipts while in the United States, and (d) any person who was in the United States at the time such person’s buy order was.
A. Representations, Warranties and Covenants of the Agents
Each Agent represents and warrants and covenants, and will cause its U.S. Affiliate to comply with such representations, warranties and covenants, that:
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it acknowledges, on behalf of itself and the U.S. Affiliate, that the Subscription Receipts have not been and will not be registered under the U.S. Securities Act or any U.S. state securities laws, and may be offered and sold only in transactions exempt from or not subject to the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. The Subscription Receipts may be offered and sold in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person only pursuant to the exemptions from the registration requirements of the U.S. Securities Act provided by Rule 506(b) of Regulation D and/or Section 4(a)(2) of the U.S. Securities Act and similar exemptions under applicable U.S. state securities laws, and the Subscription Receipts may be offered and sold outside the United States only in accordance with Rule 903 of Regulation S. Accordingly, neither the Agent, nor the U.S. Affiliate, nor any persons acting on its or their behalf: (i) have engaged or will engage in any Directed Selling Efforts, General Solicitation or General Advertising; or (ii) except as permitted by this Schedule “A”, have made or will make (x) any offers to sell Subscription Receipts to U.S. Purchasers or (y) any sale of Subscription Receipts unless at the time the purchaser made its buy order therefor, the Agent, the U.S. Affiliate or other person acting on any of their behalf reasonably believed that such U.S. Purchaser was outside the United States and was not a U.S. Person;
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it has not entered and will not enter into any contractual arrangement with respect to the distribution of the Subscription Receipts, except with its affiliates or otherwise with the prior written consent of the Company. The Agent shall cause its U.S. Affiliate to agree, for the benefit of the Company, to comply with, and shall ensure that the U.S. Affiliate complies with, the same provisions of this Schedule “A” as apply to the Agent;
-
all offers and sales of Subscription Receipts in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person made by the Agent have been and shall be made solely through the U.S. Affiliate, which is, and on the dates of such offers and sales was and will be, duly registered as a broker or dealer under Section 15(b) of the U.S. Exchange Act and under the securities laws of all states in which such offer or sale was made (unless exempt from such states’ broker-dealer registration requirements) and a member of, and in good standing with, FINRA, in accordance with all applicable
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United States federal and state securities laws and regulations, including those governing the registration and conduct of brokers and dealers;
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that each offeree that is a U.S. Purchaser has been or will be provided with a copy of the same information regarding the Company and the Offering as has been or will be provided by the Agents to offerees and Purchasers of Subscription Receipts in Canada;
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any offer, sale or solicitation of an offer to buy Subscription Receipts that has been made or will be made (i) to U.S. Purchasers, was or will be made only to Qualified Institutional Buyers or U.S. Accredited Investors in transactions that are exempt from the registration requirements of the U.S. Securities Act pursuant to Rule 506(b) of Regulation D and/or Section 4(a)(2) of the U.S. Securities Act and similar exemptions under applicable state securities laws, and (ii) to persons outside the United States (other than U.S. Persons) will be made in transactions that are exempt from registration pursuant to Rule 903 of Regulation S;
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neither the Agent nor its affiliates, either directly or through a person acting on its or their behalf, have engaged in or will engage in any form of General Solicitation or General Advertising in connection with the offer and sale of the Subscription Receipts in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person or have otherwise engaged or will engage in any conduct involving a public offering within the meaning of Section 4(a)(2) of the U.S. Securities Act in connection with the offer and sale of the Subscription Receipts in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person;
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immediately prior to offering the Subscription Receipts in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person, the Agent or the U.S. Affiliate had or will have reasonable grounds to believe and did or will believe that such offeree is or was a Qualified Institutional Buyer or a U.S. Accredited Investor, and at the Closing Time, the Agent and the U.S. Affiliate shall have reasonable grounds to believe and shall believe that each U.S. Purchaser is a Qualified Institutional Buyer or a U.S. Accredited Investor;
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prior to the completion of any sale of the Subscription Receipts to a U.S. Purchaser, each such U.S. Purchaser will be required by the Agents, acting through the U.S. Affiliate, to execute and deliver a Subscription Agreement in the appropriate form;
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at the Closing Time, the Agent, together with the U.S. Affiliate, will provide a certificate, substantially in the form of Exhibit I to this Schedule “A”, relating to the manner of the offer and sale of the Subscription Receipts in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person or will be deemed to have represented that they did not offer or sell Subscription Receipts to U.S. Purchasers;
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it will inform, and cause its U.S. Affiliate to inform, each U.S. Purchaser that: (i) the Subscription Receipts, the Turnium Shares and the Resulting Issuer Shares have not been and will not be registered under the U.S. Securities Act or under state securities laws; (ii) the Subscription Receipts, the Turnium Shares and the Resulting Issuer Shares are being
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sold to it without registration under the U.S. Securities Act and in reliance upon exemptions from applicable U.S. state securities laws; (iii) the Subscription Receipts, the Turnium Shares and the Resulting Issuer Shares are “restricted securities” within the meaning of Rule 144 of the U.S. Securities Act and can only be offered, sold, pledged or otherwise transferred, directly or indirectly, to the Company or outside the United States in accordance with applicable exemption under the U.S. Securities Act and in compliance with local laws and regulations; such securities are registered under the U.S. Securities Act and any applicable state securities law, or, to the extent such securities were initially sold to U.S. Accredited Investors, an exemption from such registration is available or such registration is otherwise not required;(iv)for so long as the Subscription Receipts, Turnium Shares, Turnium Warrants, Turnium Warrant Shares, Resulting Issuer Shares, Resulting Issuer Warrants and Resulting Issuer Warrant Shares constitute “restricted securities”, any U.S. Purchaser that is a Qualified Institutional Buyer must not deposit any of the Subscription Receipts, Turnium Shares, Turnium Warrants, Turnium Warrant Shares, Resulting Issuer Shares, Resulting Issuer Warrants and Resulting Issuer Warrant Shares into the facilities of the Depository Trust Company, or a successor depository within the United States, or arrange for the registration of any the Subscription Receipts, Turnium Shares, Turnium Warrants and Resulting Issuer Shares with Cede & Co. or any successor thereto; and (v) any U.S. Purchaser that is a Qualified Institutional Buyer must implement appropriate internal controls and procedures to ensure that the Subscription Receipts, Turnium Shares, Turnium Warrants, Turnium Warrant Shares, Resulting Issuer Shares, Resulting Issuer Warrants and Resulting Issuer Warrant Shares shall be properly identified in its records as “restricted securities” that are subject to the re-sale and transfer restrictions set forth above notwithstanding the absence of a U.S. restrictive legend;
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none of it, its U.S. Affiliate or any person acting on its or their behalf will: (i) take an action that would cause the exemption provided by Section 3(a)(9) of the U.S. Securities Act to be unavailable for the exchange of Subscription Receipts for Turnium Shares and Turnium Warrants; and (ii) receive any commission or remuneration, directly or indirectly, for soliciting the exchange of Subscription Receipts for Turnium Shares;
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neither the Agent, nor the U.S. Affiliate nor any person acting on its behalf has engaged or will engage in any violation of Regulation M in connection with the Offering;
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it is acquiring the Compensation Options as principal for its own account and not for the benefit of any other person. Furthermore, in connection with the issuance of the Compensation Options, it is (i) not a U.S. Person and it is not acquiring the Compensation Options in the United States, or on behalf of a U.S. Person or a person located in the United States, and (ii) the Agency Agreement was executed and delivered outside the United States. It agrees that it will not engage in any Directed Selling Efforts with respect to any Compensation Options; and
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with respect to the Subscription Receipts to be offered and sold hereunder in reliance on Rule 506(b) of Regulation D (the “ Regulation D Securities ”), none of it, its U.S. Affiliates, any of their respective general partners or managing members, any director or executive officer of any of the foregoing, any other officer of any of the foregoing participating in offer and sale of the Regulation D Securities, or any other officer or
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employee of any of the foregoing that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers of the Regulation D Securities (each, a “ Dealer Covered Person ” and, together, the “ Dealer Covered Persons ”) is subject to any Rule 506 Disqualification Event except for a Rule 506 Disqualification Event (i) covered by Rule 506(d)(2) of Regulation D and (ii) a description of which has been furnished in writing to the Corporation prior to the date hereof. Neither it nor its U.S. Affiliate has paid or will pay, nor is it aware of any other person that has paid or will pay, directly or indirectly, any remuneration to any person (other than the Dealer Covered Persons) for solicitation of purchasers of the Regulation D Securities.
B. Representations, Warranties and Covenants of the Company
The Company (and to the extent the below is applicable to it, the Resulting Issuer) represents, warrants, covenants and agrees to and with the Agents that as of the date hereof and the Closing Date:
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(a) as of the Closing Date, the Company will be a Foreign Private Issuer and, as of the date hereof, the Company reasonably believed that at the commencement of the Offering there was, and reasonably believes that there is and will be on the Closing Date and on the date of conversion of the Subscription Receipts into Turnium Shares and Turnium Warrants, no Substantial U.S. Market Interest in the Subscription Receipts or the Turnium Shares or Turnium Warrants, as applicable; (b) the Company is not, and following the application of the proceeds of the sale of the Subscription Receipts contemplated hereby will not be, registered or required to be registered as an “investment company” under the United States Investment Company Act of 1940, as amended and the rules and regulations promulgated thereunder; (c) none of the Company, its affiliates or any person acting on their respective behalf (other than the Agents, their affiliates and any person acting on their behalf, as to which the Company makes no representation, warranty, covenant or agreement) has engaged or will engage in any form of General Solicitation or General Advertising; (d) in connection with offers and sales of the Subscription Receipts outside the United States, the Company, its affiliates and any person acting on its or their behalf (other than the Agents, their affiliates and any person acting on their behalf, as to which the Company makes no representation, warranty, covenant or agreement) have complied and will comply with the requirements for an Offshore Transaction; and (e) except with respect to sales of Subscription Receipts made directly by the Company in accordance with this Schedule “A”, and except with respect to offers and sales to certain President’s List Purchasers settling directly with the Company, none of the Company, any of its affiliates, or any person acting on its or their behalf (other than the Agents, their affiliates, and any person acting on their behalf, as to which the Company makes no representation, warranty, covenant or agreement) has made or will make any offer to sell, any solicitation of an offer to buy, or any sale of Subscription Receipts in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person;
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none of the Company, its affiliates or any person acting on its or their behalf (other than the Agents, their affiliates and any person acting on their behalf, as to which the Company makes no representation, warranty, covenant or agreement) has engaged or will engage in any Directed Selling Efforts with respect to the Subscription Receipts, or has taken or will
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take any action that would cause the exemption from the registration requirements of the U.S. Securities Act afforded by Rule 506(b) of Regulation D and/or Section 4(a)(2) of the U.S. Securities Act, or the exclusion from such registration requirements afforded by Rule 903 of Regulation S, to be unavailable for offers and sales of the Subscription Receipts pursuant to the Agency Agreement to which this Schedule “A” is attached;
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the Company has not and will not, during the period beginning six months prior to the commencement of the offering of the Subscription Receipts and during the six-month period commencing on the Closing Time, offered or sold, or solicited any offer to buy, any securities of the Company in a manner that would (i) be integrated with the offer and sale of the Subscription Receipts and (ii) reasonably be expected to cause the exemption from the registration requirements of the U.S. Securities Act afforded by Rule 506(b) of Regulation D and/or Section 4(a)(2) of the U.S. Securities Act, or the exclusion from such registration requirements afforded by Rule 903 of Regulation S, to become unavailable with respect to the offer and sale of the Subscription Receipts pursuant to the Agency Agreement to which this Schedule “A” is attached;
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none of the Company, its affiliates or any person on behalf of any of them (other than the Agents, their affiliates and any person acting on their behalf, as to which the Company makes no representation, warranty, covenant or agreement) has engaged or will engage in any violation of Regulation M in connection with the Offering;
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the Company will, within prescribed time periods, prepare and file any forms or notices required under the U.S. Securities Act or applicable state securities laws, including but not limited to the filing of a notice on Form D with the SEC;
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none of the Company or any of its predecessors has had the registration of a class of securities under the U.S. Exchange Act revoked by the SEC pursuant to Section 12(j) of the U.S. Exchange Act and any rules or regulations promulgated thereunder;
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none of the Company, its affiliates or any person acting on its or their behalf (other than the Agents, their U.S. Affiliates and any persons acting on their behalf, as to which no representation, warranty, covenant or agreement is made) will (i) take an action that would cause the exemption provided by Section 3(a)(9) of the U.S. Securities Act to be unavailable for the exchange of Subscription Receipts for Turnium Shares or Turnium Warrants, and (ii) pay or give any commission or other remuneration, directly or indirectly, for soliciting the exchange of Subscription Receipts for Turnium Shares; and
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with respect to Regulation D Securities, none of the Company, any of its predecessors, any director, executive officer, or other officer of the Company participating in the offering, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the U.S. Securities Act but excluding the Agents, their U.S. Affiliates and their respective affiliates or any person acting on its or their behalf, as to whom the Company makes no representation, warranty, acknowledgement, covenant or agreement) connected with the Company in any capacity at the time of sale (each, an “ Issuer Covered Person ” and, together, “ Issuer Covered Persons ”) is subject to a Rule 506
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Disqualification Event, except for a Rule 506 Disqualification Event covered by Rule 506(d)(2) or (d)(3) of Regulation D. The Company has exercised reasonable care to determine: (i) the identity of each person that is an Issuer Covered Person; and (ii) whether any Issuer Covered Person is subject to a Rule 506 Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) of Regulation D, and has furnished to the Agents a copy of any disclosures provided thereunder. The Company has not paid and will not pay, nor is it aware of any person that has paid or will pay, directly or indirectly, any remuneration to any person (other than the Dealer Covered Persons) for solicitation of purchasers of the Subscription Receipts.
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EXHIBIT I to SCHEDULE “A”
AGENT’S CERTIFICATE
In connection with the offer and sale of subscription receipts (the “ Subscription Receipts ”) of Turnium Technology Group Inc. (the “ Company ”) to one or more U.S. investors, pursuant to the agency agreement dated April 8, 2022 among Eight Capital, Canaccord Genuity Corp., iA Private Wealth Inc. and Echelon Wealth Partners Inc. (collectively, the “ Agents ” and each, an “ Agent ”), the Company and RMR Science Technologies Inc. (the “ Agency Agreement ”), the undersigned (the “ U.S. Affiliate ”), does hereby certify that:
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the U.S. Affiliate is on the date hereof, and was at the time of each offer and sale of Subscription Receipts made by it, a duly registered broker or dealer under Section 15(b) of the U.S. Exchange Act and under the laws of all applicable states of the United States (unless exempt from such states’ broker-dealer registration requirements) and was at such times and is on the date hereof a member of, and in good standing with, FINRA, and all offers and sales (other than sales of Subscription Receipts directly by the Corporation) of the Subscription Receipts in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person have been effected by the U.S. Affiliate in accordance with all applicable United States federal and state securities laws and regulations, including those governing the registration and conduct of brokers and dealers;
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we provided each offeree and each U.S. Purchaser with the same information about the Company and the Offering as has been provided by us to offerees and Purchasers of Subscription Receipts in Canada;
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immediately prior to our making any offer to an offeree in the United States or who are, or are acting for the account or benefit of, a person in the United States or a U.S. Person, we had a pre-existing relationship with and reasonable grounds to believe and did believe that each such offeree was a Qualified Institutional Buyer or a U.S. Accredited Investor, and we continue to believe on the date hereof that each U.S. Purchaser is a Qualified Institutional Buyer or a U.S. Accredited Investor;
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no form of Directed Selling Efforts, General Solicitation or General Advertising was used by us in connection with the offer or sale of the Subscription Receipts in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person;
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prior to any sale of Subscription Receipts to a U.S. Purchaser, we caused each such U.S. Purchaser to sign a Subscription Agreement in the appropriate form;
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all U.S. Purchasers to whom we offered the Subscription Receipts we informed that the Subscription Receipts, the Turnium Shares and the Resulting Issuer Shares have not been and will not be registered under the U.S. Securities Act and are being offered and sold to such U.S. Purchasers without registration in reliance on available exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws;
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neither we, nor any of our affiliates, nor any person acting on our or their behalf (other than the Company, its affiliates and any person acting on their behalf, as to which no
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certification is made) have taken or will take, directly or indirectly, any action in relation of Regulation M in connection with the offer and sale of the Subscription Receipts in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person; and
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none of (i) the undersigned, (ii) the undersigned’s general partners or managing members, (iii) any of the undersigned’s directors, executive officers or other officers participating in the offering of the Regulation D Securities, (iv) any of the undersigned’s general partners’ or managing members’ directors, executive officers or other officers participating in the offering of the Regulation D Securities or (v) any other person associated with any of the above persons that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with sale of Regulation D Securities (each, a “ Dealer Covered Person ”), is subject to disqualification under Rule 506(d) of Regulation D;
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we represent that we not aware of any person (other than any Dealer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Regulation D Securities;
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neither us nor any of our affiliates will solicit the exchange of the Subscription Receipts for the Turnium Shares and will not pay, give or receive any commission or other remuneration, directly or indirectly, for soliciting the exchange of the Subscription Receipts for the Turnium Shares and Turnium Warrants in reliance upon Section 3(a)(9) of the U.S. Securities Act; and
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the offering of the Subscription Receipts in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person by us has been conducted in accordance with the terms of the Agency Agreement, including Schedule “A” thereto.
Terms used in this certificate have the meanings given to them in the Agency Agreement, including Schedule “A” thereto, unless otherwise defined herein.
Dated: this __ day of _, 2020.
[NAME OF AGENT] [NAME OF U.S. AFFILIATE]
By: Name: Title:
By: Name: Title:
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SCHEDULE “B”
LIST OF INTELLECTUAL PROPERTY RIGHTS
Turnium List of IP and Processes as of March 31, 2022
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OEM software package: Partner host/manage
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API for external OSS/BSS integration
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Multi-tenant core node application
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Private, secure multi-tenant spaces
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Packet-based link aggregation (better than FEC)
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90% Link aggregation efficiency
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<300ms failover, same IP across multiple links for session continuity
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Dynamic, automatic bandwidth adaptation
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Jitter, latency, packet loss, flap detection
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Bi-directional, elastic QoS & traffic shaping
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Use your IP addresses (own the customer)
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TCP proxy
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Hybrid networks: integrate other managed networks (MPLS, competitor SD-WAN)
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• Dual stack IPv4 and IPv6 support
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Layer 4-7 protocol detection and export
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AES128, AES256
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Security through packet-based link aggregation
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WAN Optimization integration
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Simplified, Service-Provider GUI (delegated admin)
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In-GUI configuration for Edge devices, link aggregation, QoS, dynamic routing
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Cloud-hosted Management Server for centralized management of edge devices and configuration
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Containerized software
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Managed and Unmanaged Core Node Mesh
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Turnium Operator certification – Red Hat OpenShift
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CNF Certification – Red Hat OpenShift
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SCHEDULE “C”
LIST OF OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES
A. Options
| Name (if securityholder is not an individual, identify the controlling securityholders) |
Issuance/grant date | Number of Options | Maturity and Exercise price |
|---|---|---|---|
| Bell,Roger | 24-Nov-17 | 46,638 | 24-Nov-22/$0.2308 |
| Cambpell,Logan | 24-Nov-17 | 22,530 | 24-Nov-22/$0.2308 |
| Oakley, James | 24-Nov-17 | 46,638 | 24-Nov-22/$0.2308 |
| SandeepPanesar | 24-Oct-19 | 112,500 | 24-Oct-26/ $0.10 |
| DerekSpratt | 05-Aug-21 | 1,467,391 | 04-Aug-26/$0.10 |
| Jim Lovie | 05-Aug-21 | 300,000 | 04-Aug-26/$0.15 |
| PeterSmyrniotis | 11-Nov-21 | 300,000 | 04-Aug-26/$0.15 |
| JulietJones | 17-Nov-21 | 2,000,000 | 16-Nov-26/ $0.48 |
| Aaron Patton | 17-Nov-21 | 600,000 | 16-Nov-26/ $0.48 |
| Sameh Zavandi | 17-Nov-21 | 300,000 | 16-Nov-26/ $0.48 |
| LaurenVeliz | 17-Nov-21 | 300,000 | 16-Nov-26/ $0.48 |
| Haresh Kheskani | 17-Nov-21 | 600,000 | 16-Nov-26/ $0.48 |
| Geoff Hultin | 17-Nov-21 | 200,325 | 16-Nov-26/ $0.48 |
| DavidLoganCampbell | 17-Nov-21 | 600,520 | 16-Nov-26/ $0.48 |
| Colin Atkinson | 17-Nov-21 | 600,000 | 16-Nov-26/ $0.48 |
| SandeepPanesar | 17-Nov-21 | 487,500 | 16-Nov-26/ $0.48 |
| AndreaPearmain | 17-Nov-21 | 800,000 | 16-Nov-26/ $0.48 |
| James Oakley | 17-Nov-21 | 143,362 | 16-Nov-26/ $0.48 |
| Roger Bell | 17-Nov-21 | 129,362 | 16-Nov-26/ $0.48 |
| Alan Bailward | 17-Nov-21 | 165,000 | 16-Nov-26/ $0.48 |
| AlanCheung | 17-Nov-21 | 132,000 | 16-Nov-26/ $0.48 |
| Goran Ilic | 17-Nov-21 | 110,000 | 16-Nov-26/ $0.48 |
| ArturoFermill | 17-Nov-21 | 106,000 | 16-Nov-26/ $0.48 |
| NicholasKearns | 17-Nov-21 | 106,000 | 16-Nov-26/ $0.48 |
| Graeme Stewart | 17-Nov-21 | 97,000 | 16-Nov-26/ $0.48 |
| Manthan Rami | 17-Nov-21 | 97,000 | 16-Nov-26/ $0.48 |
| Travis CMacDonald | 17-Nov-21 | 97,000 | 16-Nov-26/ $0.48 |
| Bijan Khajavi | 17-Nov-21 | 84,000 | 16-Nov-26/ $0.48 |
- 78 -
| Alan Murrell | 17-Nov-21 | 132,000 | 16-Nov-26/ $0.48 |
|---|---|---|---|
| Keith Eng | 17-Nov-21 | 132,000 | 16-Nov-26/ $0.48 |
| Vyachteslav (Steve)Tevlin | 17-Nov-21 | 132,000 | 16-Nov-26/ $0.48 |
| Johan Arnet | 17-Nov-21 | 300,000 | 16-Nov-26/ $0.48 |
| ErinCampbell | 17-Nov-21 | 150,000 | 16-Nov-26/ $0.48 |
| Total: | 10,896,766 |
B. Warrants
| Name (if Warrant holder is not an individual, identify the controlling securityholders) |
Issuance/grant date | Number of Warrants |
Maturity and Exercise Price |
|---|---|---|---|
| 1882320 Alberta Ltd.(1) | 07-Sep-21 | 145,833 | 13-Dec-2022/0.72 |
| 789445 Alberta Ltd.(2) | 30-Jul-21 | 89,715 | 13-Dec-2022/0.72 |
| A.C. Shaw | 30-Jul-21 | 179,431 | 13-Dec-2022/0.72 |
| Aldo G. Gallone | 07-Sep-21 | 15,000 | 13-Dec-2022/0.72 |
| Bruce and Shannon Shaw | 30-Jul-21 | 89,715 | 13-Dec-2022/0.72 |
| Canaccord Genuity Corp. IN TRUST FOR HARRISON KEENAN |
10-Aug-21 | 25,000 | 13-Dec-2022/0.72 |
| Canaccord Genuity Corp. IN TRUST FOR HOWARD KERBEL |
10-Aug-21 | 100,000 | 13-Dec-2022/0.72 |
| Canaccord Genuity Corp. IN TRUST FOR PRINCEVILLE CAPITAL |
10-Aug-21 | 25,000 | 13-Dec-2022/0.72 |
| Chris Thompson | 07-Sep-21 | 10,000 | 13-Dec-2022/0.72 |
| CMR Corporation(3) | 30-Jul-21 | 134,573 | 13-Dec-2022/0.72 |
| David Golinsky | 07-Sep-21 | 10,500 | 13-Dec-2022/0.72 |
| Dr. Robert Gully | 07-Sep-21 | 52,500 | 13-Dec-2022/0.72 |
| Dr. Tobias Ihde | 07-Sep-21 | 105,000 | 13-Dec-2022/0.72 |
| ECMB Capital Partners Inc.(4) | 07-Sep-21 | 7,812 | 13-Dec-2022/0.72 |
| Evelyn Shaw | 30-Jul-21 | 123,359 | 13-Dec-2022/0.72 |
| Evergreen GapDebt LP | 30-Jul-21 | 467,834 | 30-Jul-2027/0.48 |
| Fidelity Clearing Canada ITF Eight Capital(5) |
07-Sep-21 | 52,500 | 13-Dec-2022/0.72 |
| GapDebt III LP | 30-Jul-21 | 1,262,963 | 30-Jul-2027/0.48 |
| Gundyco in trust for Neil Pope | 07-Sep-21 | 52,083 | 13-Dec-2022/0.72 |
| James & Catherine Fletcher JWROS | 07-Sep-21 | 52,500 | 13-Dec-2022/0.72 |
| John Alexander Costigan | 07-Sep-21 | 50,000 | 13-Dec-2022/0.72 |
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| John Carter | 07-Sep-21 | 10,500 | 13-Dec-2022/0.72 |
|---|---|---|---|
| JudyVosburgh | 30-Jul-21 | 44,857 | 13-Dec-2022/0.72 |
| K. Allan Brown | 30-Jul-21 | 67,286 | 13-Dec-2022/0.72 |
| Laura Eva Shaw | 30-Jul-21 | 89,715 | 13-Dec-2022/0.72 |
| Longthorn Holdings Ltd.(6) | 30-Jul-21 | 44,857 | 13-Dec-2022/0.72 |
| Michael David Shaw | 30-Jul-21 | 44,857 | 13-Dec-2022/0.72 |
| Nepean SF(7) | 07-Sep-21 | 50,000 | 13-Dec-2022/0.72 |
| Nicholas F. Watters | 07-Sep-21 | 12,500 | 13-Dec-2022/0.72 |
| Owen King | 07-Sep-21 | 6,250 | 13-Dec-2022/0.72 |
| R.A. Sandover-Sly | 30-Jul-21 | 56,072 | 13-Dec-2022/0.72 |
| Soon SiangYeo | 07-Sep-21 | 10,500 | 13-Dec-2022/0.72 |
| Stephen Gordon Schenck | 30-Jul-21 | 89,715 | 13-Dec-2022/0.72 |
| Thomas & ShirleyErskine Jt. | 30-Jul-21 | 44,857 | 13-Dec-2022/0.72 |
| Tom Cuell | 30-Jul-21 | 22,428 | 13-Dec-2022/0.72 |
| Valeo Investments Inc.(8) | 15-Sep-18 | 3,500,000 | 14-Sep-2028/0.25 |
| Wilson D. Patchell | 07-Sep-21 | 15,625 | 13-Dec-2022/0.72 |
| Dr. Tobias Ihde | 01-Dec-21 | 500,000 | 30-Nov-2024/0.48 |
| Total: | 7,661,337 |
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SCHEDULE “D”
FORM OF COMPENSATION OPTION CERTIFICATE
(see attached)
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE LATER OF (I) , 2022; AND (II) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY.
THIS COMPENSATION OPTION CERTIFICATE, AND THE COMPENSATION OPTIONS EVIDENCED HEREBY, WILL BE VOID AND OF NO VALUE UNLESS EXERCISED ON OR BEFORE 5:00 P.M. ( TIME) ON THE EXPIRY DATE (AS HEREINAFTER DEFINED).
TURNIUM TECHNOLOGY GROUP INC.
1127-15[th] Street West, North Vancouver, British Columbia V7P 1M7 a corporation incorporated under the laws of British Columbia
NO. CO 2022-03-
COMPENSATIONS OPTIONS Each entitling the Holder (as hereinafter defined) to acquire, one (1) common share in the capital of Turnium Technology Group Inc. (a “ Share ”) and one half of one (1/2) common share purchase warrant of Turnium Technology Group Inc. (a “ Warrant ”), as further defined herein, subject to adjustment as set forth herein, in accordance with the terms and conditions set forth herein.
COMPENSATION OPTIONS
THIS IS TO CERTIFY THAT for value received (the “ Holder ”) is the registered Holder of the number of compensation options (the “ Compensation Options ”) stated above and is entitled, for each whole Compensation Option represented hereby, to purchase one unit of the Corporation (each, a “ Compensation Unit ”), each consisting of one Common Share (a “ Compensation Share ”) in the capital of Turnium Technology Group Inc. or its successors and assigns (the “ Corporation ”) and one-half of one (1/2) common share purchase warrant of the Corporation (a “ Compensation Warrant ”) for each Compensation Option represented hereby at a price of $0.56 per Compensation Unit (the “ Exercise Price ”) at any time and from time to time from the date of issue hereof up to and including 5:00 p.m. (Eastern Time) on that date which is 24 months from the Closing Date (as such term is defined in the agency agreement entered into among the Corporation, RMR Science Technologies Inc., Eight Capital, Canaccord Genuity Corp., iA Private Wealth Inc. and Echelon Wealth Partners Inc. dated April 8, 2022 (the “ Agency Agreement ”)), upon and subject to the terms and conditions contained herein (the “ Expiry Time ”).
Each whole Compensation Warrant entitles the holder to acquire one common share of the Corporation (a “ Compensation Warrant Share ”) at a price of $0.75, subject to adjustment, for a period of 24 months following the Closing Date.
The number of Compensation Shares and Compensation Warrants that the Holder is entitled to acquire upon exercise of the Compensation Options and the Exercise Price are subject to adjustment as hereinafter provided.
For purposes of this Compensation Option:
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(i) “ $ ” means Canadian dollars; and
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(ii) “ Shares ” means the common shares of the Corporation.
The Compensation Options are issued under and pursuant to the Agency Agreement.
TERMS AND CONDITIONS
- Manner of Exercise. At any time and from time to time at or prior to the Expiry Time (the “ Exercise Period ”),
the Holder may exercise all or any number of whole Compensation Options represented hereby, upon delivering to the Corporation at its corporate office noted on the face page of this Compensation Option certificate (the “ Compensation Option Certificate ”), a duly completed and executed subscription notice in the form attached hereto as Schedule “A” (the “ Subscription Notice ”) evidencing the election of the Holder to exercise the number of Compensation Options set forth in the Subscription Notice (which shall not be greater than the number of Compensation Options represented by this Compensation Option Certificate as adjusted from time to time pursuant to Sections 6 and 7 of this Compensation Option Certificate) and a certified cheque, money order or bank draft payable to the Corporation for the aggregate Exercise Price of all Compensation Options being exercised. If the Holder is not exercising all Compensation Options represented by this Compensation Option Certificate, the Holder shall be entitled to receive, without charge, an updated grid attached hereto as Schedule “B” that is initialed by the Corporation (an electronic copy of which shall be deemed to be an original), which, in each instance that Compensation Options are exercised, sets out the number of Compensation Options that remain following the number of Compensation Options being exercised.
- Issuance of Compensation Units. The Holder shall be deemed to have become the Holder of record of the Compensation Units on the date (the “ Exercise Date ”) on which the Corporation has received a duly completed Subscription Notice, delivery of the Compensation Option Certificate and payment of the full aggregate Exercise Price in respect of the Compensation Options being exercised pursuant to such Subscription Notice; provided, however, that if such date is not a business day (being any day other than a Saturday, Sunday or Statutory Holiday in the Province of British Columbia (a “ Business Day ”) then the Compensation Units shall be deemed to have been issued and the Holder shall be deemed to have become the Holder of record of the Compensation Units on the next following Business Day. Within five (5) Business Days of the Exercise Date, the Corporation shall issue and deliver (or cause to be delivered) to the Holder, by registered mail or pre-paid courier to the Holder’s address as specified in the register of the Corporation, one or more certificates for the appropriate number of issued and outstanding Compensation Shares and Compensation Warrants underlying the Compensation Units. All costs, expenses, transfer taxes and other charges payable in connection with the issue and delivery of the Compensation Units shall be at the sole expense of the Corporation (other than withholding tax, if any). If required under applicable securities laws, any certificates representing Compensation Shares and Compensation Warrants underlying the Compensation Units and any Compensation Warrant Shares issued upon the exercise of Compensation Options and Compensation Warrants, as applicable, will bear the following legends:
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF (I) , 2022 AND (II), THE DATE THE CORPORATION BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA.”
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Compensation Shares to be Reserved. The Corporation will reserve and there shall remain unissued a sufficient number of Compensation Shares to satisfy the right of purchase provided for in this Compensation Option Certificate. All Compensation Shares and Compensation Warrant Shares forming part of the Compensation Units which are issued upon exercise of the right of purchase provided in this Compensation Option Certificate, upon payment therefor of the amount at which such Compensation Units may be purchased pursuant to the provisions of this Compensation Option Certificate, shall be and be deemed to be fully paid and non-assessable shares and free from all taxes, liens and charges with respect to the issue thereof. The Corporation represents and warrants that this Compensation Option Certificate is a legal, valid and binding obligation of the Corporation, enforceable against the Corporation in accordance with its terms. The Corporation covenants that it will make all requisite filings under applicable laws in connection with the exercise of the Compensation Options and issue of Compensation Units.
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No Fractional Units. No fractional Compensation Units will be issued upon exercise of this Compensation Option and the Holder will not be entitled to any cash payment or other compensation in lieu of a fractional Compensation Unit. To the extent that the Holder would otherwise be entitled to purchase a fraction of a Compensation Unit, such right may be exercised in combination with other rights which, in the aggregate, entitle the Holder to purchase a whole number of Compensation Units.
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No Right as Shareholder. The holding of a Compensation Option evidenced by this Compensation Option Certificate shall not constitute the Holder a shareholder of the Corporation or entitle the Holder to any right
or interest in respect thereof.
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Adjustment. The Exercise Price (and the number of Compensation Units issuable upon exercise) shall be subject to adjustment from time to time in the manner provided as follows:
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(a) If during the Exercise Period the Corporation shall:
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(i) issue Shares or securities exchangeable for or convertible into Shares to Holders of all or substantially all of its then outstanding Shares by way of stock dividend or other distribution; or
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(ii) subdivide, redivide or change its outstanding Shares into a greater number of Shares; or
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(iii) consolidate, reduce or combine its outstanding Shares into a lesser number of Shares;
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(any of such events in these subparagraphs (i), (ii) and (iii) being a “ Share Reorganization ”), then the Exercise Price shall be adjusted as of the effective date or record date, as the case may be, at which the Holders of Shares are determined for the purpose of the Share Reorganization by multiplying the Exercise Price in effect immediately prior to such effective date or record date by a fraction, the numerator of which shall be the number of Shares outstanding on such effective date or record date before giving effect to such Share Reorganization and the denominator of which shall be the number of Shares outstanding as of the effective date or record date after giving effect to such Share Reorganization (including, in the case where securities exchangeable for or convertible into Shares are distributed, the number of Shares that would have been outstanding had such securities been fully exchanged for or converted into Shares on such record date or effective date). From and after any adjustment of the Exercise Price pursuant to this Section 6(a), the number of Compensation Units purchasable pursuant to this Compensation Option Certificate shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of Compensation Units 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.
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(b) If and whenever during the Exercise Period the Corporation shall fix a record date for the issue or distribution of rights, options or warrants to all or substantially all of the Holders of Shares under which such Holders are entitled, during a period expiring not more than 45 days after the record date for such issue to subscribe for or purchase Shares or securities exchangeable for or convertible into Shares at a price per Share to the Holder (or having a conversion price or exchange price per Share) of less than 95% of the Current Market Price (as defined in Section 7(g) hereof) for the Shares on such record date (any of such events being called a “ Rights Offering ”), then the Exercise Price shall be adjusted effective immediately after the record date for the Rights Offering to a price determined by multiplying the Exercise Price in effect on such record date by a fraction:
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(i) the numerator of which shall be the aggregate of:
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(A) the number of Shares outstanding as of the record date for the Rights Offering; and
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(B) a number determined by dividing:
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I. either (a) the product of the number of Shares offered under the Rights Offering and the price at which such Shares are offered, or (b) the product of the exchange or conversion price per Share of such securities offered and the maximum number of Shares for or into which the securities so offered pursuant to the Rights Offering may be exchanged or converted, as the case may be, by;
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II. the Current Market Price of the Shares as of the record date for the Rights
-
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Offering; and
III. if which shall be the aggregate of the number of Shares outstanding on such record date after giving effect to the Rights Offering and including the number of Shares offered pursuant to the Rights Offering (including Shares issuable upon exercise of the rights, warrants or options under the Rights Offering or upon the exercise of the exchange or conversion rights contained in such exchangeable or convertible securities under the Rights Offering).
If by the terms of the rights, options, or warrants referred to in this Section 6(b), there is more than one purchase, conversion or exchange price per Share, the aggregate price of the total number of additional 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 Share, as the case may be. Any 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 6(b) 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 6(b), 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 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.
(c) If and whenever during the Exercise Period the Corporation shall issue or distribute to all or to substantially all of the Holders of the Shares:
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(i) shares of the Corporation of any class other than Shares;
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(ii) rights, options or warrants to acquire Shares or securities convertible or exchangeable into Shares entitling them, for a period expiring not more than 45 days after such record date, to subscribe for or purchase Shares (or securities convertible into or exchangeable for Shares) at a price per Share (or having a conversion or exchange price per Share) less than 95% of the Current Market Price of the Shares on such record date;
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(iii) evidences of indebtedness of the Corporation; or
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(iv) any cash, property or other assets,
and if such issuance or distribution does not constitute a dividend paid in the ordinary course, a Share Reorganization or a Rights Offering (any of such non-excluded events being herein called a “ Special Distribution ”), the Exercise Price shall be adjusted immediately after the record date for the Special Distribution so that it shall equal the price determined by multiplying the Exercise Price in effect on such record date by a fraction:
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(i) the numerator of which shall be the difference between:
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(A) the amount obtained by multiplying the number of Shares outstanding on such record date by the Current Market Price of the Shares on such record date, and
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(B) the fair value (as determined by the directors of the Corporation) to the Holders of such Shares of such Special Distribution; and
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(ii) the denominator of which shall be the total number of Shares outstanding on such record date multiplied by such Current Market Price of the Shares on such record date.
Any Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed. To the extent that such Special Distribution is not so made or any such rights, options or warrants are not exercised prior to the expiration thereof, the Exercise Price shall be readjusted to the Exercise Price which would then be in effect if such record date had not been fixed or if such expired rights, options or warrants had not been issued. From and after any adjustment of the Exercise Price pursuant to this Section 6(c), the number of Compensation Shares purchasable pursuant to this Compensation Option Certificate shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of Compensation 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. To the extent that any adjustment in the Exercise Price occurs pursuant to this Section 6(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 6(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 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 and whenever during the Exercise Period there shall be a reclassification or redesignation of Shares at any time outstanding or a change of the Shares into other shares or into other securities or any other capital reorganization (other than a Share Reorganization), or a consolidation, amalgamation, arrangement or merger of the Corporation with or into any other corporation or other entity (other than a consolidation, amalgamation, arrangement or merger which does not result in any reclassification or redesignation of the outstanding Shares or a change of the Shares into other securities), or a transfer of all or substantially all of the undertaking or assets of the Corporation to another corporation or other entity (any of such events being herein called a “ Capital Reorganization ”), the Holder, where he has not exercised the right of subscription and purchase under this Compensation Option Certificate prior to the effective date or record date, as the case may be, of such Capital Reorganization, shall, unless subject to any court order in respect of any plan of arrangement or other similar transaction to the contrary, be entitled to receive, and shall accept upon the exercise of such right for the same aggregate consideration, in lieu of the number of Compensation Units to which such Holder was theretofore entitled upon such exercise, the kind and aggregate number of shares, other securities or other property which such Holder would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, he had been the registered Holder of the number of Compensation Units to which such Holder was theretofore entitled to subscribe for and purchase; provided however, that no such Capital Reorganization shall be carried into effect unless all necessary steps shall have been taken to so entitle the Holder. If determined appropriate by the board of directors of the Corporation (the “ Board ”), acting reasonably and in good faith, and subject to the prior written approval of the principal Canadian stock exchange or over-the-counter market on which the Shares are then listed or quoted for trading, appropriate adjustments shall be made as a result of any such Capital Reorganization in the application of the provisions set forth in this Section 6 with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth in this Section 6 shall thereafter correspondingly be made applicable as nearly as may reasonably be possible in relation to any shares, other securities or other property thereafter deliverable upon the exercise of any Compensation Option. Any such adjustments shall be made by and set forth in terms and conditions supplemental hereto approved by the Board, acting reasonably and in good faith.
- (e) If and whenever at any time after the date hereof and prior to the Expiry Time, the Corporation takes any action affecting its Shares to which the foregoing provisions of this Section 6 , in the opinion of the Board, acting reasonably and 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 thereof, or would otherwise materially affect the rights of the Holder hereunder, then the Corporation shall 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 a manner as the Board may determine to be equitable in the circumstances, acting reasonably and in good faith. The failure of the taking of action by the Board 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 has determined that it is equitable to make no adjustment in the
circumstances.
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Rules Relating to Adjustment. The following rules and procedures shall be applicable to the adjustments made pursuant to Section 6:
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(a) The adjustments provided for in Section 6 are cumulative and shall be made successively whenever an event referred to therein shall occur, and shall, in the case of adjustments to the Exercise Price be computed to the nearest one-tenth of one cent subject to the following paragraphs of this Section 7.
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(b) No adjustment in the Exercise Price shall be required unless such adjustment would result in a change of at least 1% in the prevailing Exercise Price and no adjustment shall be made in the number of Compensation Units purchasable upon exercise of this Compensation Option unless it would result in a change of at least one one-hundredth of a Compensation Unit; provided, however, that any adjustments which, except for the provisions of this Section 7(b) would otherwise have been required to be made, shall be carried forward and taken into account in any subsequent adjustment. Notwithstanding Section 6 or Section 7 hereof, no adjustment shall be made which would result in an increase in the Exercise Price or a decrease in the number of Compensation Units purchasable upon the exercise of this Compensation Option (except in respect of a consolidation of the outstanding Shares).
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(c) No adjustment in the Exercise Price or in the number of Compensation Units purchasable upon exercise of the Compensation Options shall be made in respect of any event described in Section 6, other than the events referred to in Sections 6(a)(ii) and (iii), if the Holder is entitled to participate in such event on the same terms, mutatis mutandis, as if it had exercised its Compensation Options prior to or on the effective date or record date, as the case may be, of such event. The terms of the participation of the Holder in such event shall be subject to the prior written approval, if applicable, of the principal Canadian stock exchange or over-the-counter market on which the Shares are then listed or quoted for trading.
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(d) No adjustment in the Exercise Price shall be made pursuant to Section 6 in respect of the issue from time to time:
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(i) of Compensation Units purchasable on exercise of the Compensation Options represented by this Compensation Option Certificate;
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(ii) of dividends paid in the ordinary course to Holders of Shares who exercise an option or election to receive substantially equivalent dividends in Shares in lieu of receiving a cash dividend pursuant to a dividend reinvestment plan or similar plan adopted by the Corporation in accordance with the requirements of the principal Canadian stock exchange or over-the-counter market on which the Shares are then listed or quoted for trading and applicable securities laws; or
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(iii) of Shares pursuant to any stock option, stock option plan, stock purchase plan or benefit plan in force at the date hereof for directors, officers, employees, advisers or consultants of the Corporation, as such option or plan is amended or superseded from time to time in accordance with the requirements of the principal Canadian stock exchange or over-thecounter market on which the Shares are then listed or quoted for trading and applicable securities laws, and such other stock option, stock option plan, stock purchase plan or benefit plan as may be adopted by the Corporation in accordance with the requirements of the principal Canadian stock exchange or over-the-counter market on which the Shares are then listed or quoted for trading and applicable securities laws;
-
and any such issue shall be deemed not to be a Share Reorganization or Capital Reorganization.
- (e) If the Corporation shall set a record date to determine the Holders of the Shares for the purpose of entitling them to receive any dividend or distribution or any subscription or purchase rights and shall, thereafter and before the distribution to such shareholders of any such dividend, distribution
or subscription or purchase rights, legally abandon its plan to pay or deliver such dividend, distribution or subscription or purchase rights, then no adjustment in the Exercise Price or the number of Compensation Units purchasable upon exercise of any Compensation Option shall be required by reason of the setting of such record date.
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(f) As a condition precedent to the taking of any action which would require any adjustment in any of the subscription rights pursuant to this Compensation Option Certificate, including the Exercise Price and the number or class of shares or other securities which are to be received upon the exercise thereof, the Corporation shall take any corporate action which may, in the opinion of counsel, be necessary in order that the Corporation have unissued and reserved shares in its authorized capital and may validly and legally issue as fully paid and non-assessable all the shares or other securities which the Holder of such Compensation Option Certificate is entitled to receive on the full exercise thereof in accordance with the provisions hereof.
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(g) For the purposes of this Compensation Option Certificate, the “ Current Market Price ” of a Share at any date shall be calculated as the price per Share equal to the weighted average price at which the Shares have traded in the principal Canadian stock exchange or, if the Shares are not listed, the over-the-counter market, on which the Shares are then listed or posted for trading during the 20 consecutive trading days (on each of which at least 500 Shares are traded in board lots) ending not more than five (5) trading days immediately prior to such date as reported by such market or exchange in which the Shares are then trading or quoted. If the Shares are not then traded in the over-the-counter market or on a recognized Canadian stock exchange, the Current Market Price of the Shares shall be the fair market value of the Shares as determined in good faith by the Board after consultation with a nationally or internationally recognized and independent investment dealer, investment banker or firm of chartered accountants.
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(h) In the absence of a resolution of the Board fixing a record date for any dividend or distribution referred to in Section 6(a)(i) or any Rights Offering or Special Distribution, the Corporation shall be deemed to have fixed as the record date therefor the date on which such dividend, distribution, Rights Offering or Special Distribution is effected.
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(i) 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 adjustments pursuant to Section 6 shall be conclusively determined by the Corporation’s auditors, or if they are unable or unwilling to act, by such other firm of independent chartered accountants, and such determination shall be binding upon the Corporation and the Holder, absent manifest error. Notwithstanding the foregoing, such determination shall be subject to the prior written approval of the principal Canadian stock exchange or over-the-counter market on which the Shares are then listed or quoted for trading. In the event that any such determination is made, the Corporation shall notify the Holder in the manner contemplated in Section 16 describing such determination.
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Deemed Amendment. On the happening of each and every such event set out in Section 6, the applicable provisions of this 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.
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Postponement of Subscription. In any case in which Section 6 shall require that an adjustment be effective immediately after a record date for an event referred to herein, the Corporation may defer, until the occurrence of such an event:
-
(a) issuing to the Holder of any Compensation Option exercised after such record date and before the occurrence of such event, the additional Compensation Units purchasable upon such exercise by reason of the adjustment required by such event; and
-
(b) delivering to such Holder any distributions declared with respect to such additional Compensation Units after such Exercise Date and before such event;
provided, however, that the Corporation shall deliver or cause to be delivered to such Holder, an appropriate
instrument evidencing such Holder’s right, upon the occurrence of the event requiring the adjustment, to an adjustment in the Exercise Price and/or the number of Compensation Units purchasable on the exercise of any Compensation Option and to such distributions declared with respect to any additional Compensation Units purchasable on the exercise of any Compensation Option.
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Notice of Adjustment. At least ten (10) Business Days prior to the effective date or record date, as the case may be, of any event which requires or might require adjustment in any of the subscription rights pursuant to this Compensation Option Certificate, including the Exercise Price and the number of Compensation Units which are purchasable upon the exercise hereof, or such longer period of notice as the Corporation shall be required to provide Holders of Compensation Units in respect of any such event, the Corporation shall notify the Holder of the particulars of such event and, if determinable, the required adjustment and the computation of such adjustment. In case any adjustment for which such notice has been given is not then determinable, the Corporation shall promptly after such adjustment is determinable notify the Holder of the adjustment and the computation of such adjustment.
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Register of Compensation Option Holders. The Corporation shall maintain a register of Holders in which shall be entered the names and addresses of the Holders of the Compensation Options and of the number of Compensation Options held by them. Such register shall be open at all reasonable times for inspection by the Holder. The Corporation shall notify the Holder forthwith of any change of address of the corporate office of the Corporation.
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Exchange of Certificate. The registered Holder of this Compensation Option Certificate may at any time up to and including the Expiry Time, upon the surrender hereof to the Corporation at its principal office, exchange this Compensation Option Certificate for one or more Compensation Option Certificates entitling the Holder to subscribe in the aggregate for the same number of Compensation Shares as is expressed in this Compensation Option Certificate. Any Compensation Option Certificate tendered for exchange shall be surrendered to the Corporation and cancelled.
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Replacement of Certificate. Upon receipt of satisfactory evidence by the Corporation of the loss, theft, mutilation or destruction of this Compensation Option Certificate, the Corporation shall, on such terms as it may in its discretion acting reasonably impose, issue and deliver to the Holder a new Compensation Option Certificate of like denomination, tenor and date as the Compensation Option Certificate so lost, stolen, mutilated or destroyed.
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Transfer. The Compensation Options are transferable in accordance with the restrictions contained herein, including any restrictive legends on this Compensation Option Certificate, and the term “Holder” shall mean and include any successor, transferee or assignee of the current or any future Holder. The Compensation Options may be transferred by the Holder by completing and delivering to the Corporation the transfer form attached hereto as Schedule C.
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Not Exercisable in the United States. The Compensation Options and Compensation Units and Compensation Warrant Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “ U.S. Securities Act ”), or any state securities laws. The Compensation Options may not be exercised in the United States or by, or for the account or benefit of, any U.S. person or persons in the United States, except pursuant to an exemption from the registration requirements of the U.S. Securities Act and all applicable state securities laws. The Compensation Shares may not be offered or sold in the United States unless an exemption or an exclusion from the registration requirements of the U.S. Securities Act and any applicable state securities laws is available and the prior consent of the Corporation is obtained (which will be delivered promptly and will not be unreasonably withheld but which may be conditioned on delivery of a legal opinion in form and substance satisfactory to the Corporation). Terms used in this paragraph have the meanings given to them in Regulation s under the U.S. Securities Act.
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Notice. Unless herein otherwise expressly provided, any notice to be given hereunder to the Holder shall be deemed to be validly given if such notice is given by personal delivery or registered mail to the attention of the Holder at its registered address recorded in the registers maintained by the Corporation. Any notice so given shall be deemed to be validly given, if delivered personally, on the day of delivery and if sent by post or other means, on the fifth Business Day following the sending thereof. In determining under any provision hereof the date when notice of any event must be given, the date of giving notice shall be included and the date of the event shall be excluded.
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Modification of Terms and Conditions for Certain Purposes. From time to time the Corporation may, subject to the provisions hereof, modify the Terms and Conditions hereof, for the purpose of correction or rectification of any ambiguities, defective provisions, errors or omissions herein of a non-substantive nature.
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Successors. This Compensation Option Certificate shall enure to the benefit of and shall be binding upon the Holder and the Corporation and their respective successors. For greater certainty, in connection with the Amalgamation, the Corporation shall ensure that certificates representing an equivalent number of compensation options to acquire Class A common shares and Class A common share purchase warrants in the capital of the Resulting Issuer (as such term is defined in the Agency Agreement) are issued in exchange for the Compensation Options represented by this Compensation Option Certificate, such replacement compensation options to be exercisable on the terms set out herein, mutatis mutandis .
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Signature and Electronic Copies. This Compensation Option Certificate may be signed digitally or by other electronic means, which shall be deemed to be an original and shall be deemed to have the same legal effect and validity as a certificate bearing an original signature. A signed copy of this Compensation Option Certificate transmitted by facsimile, email or other electronic transmission shall be deemed to have the same legal effect and validity as delivery of an originally executed copy of this Compensation Option Certificate, provided that if this Compensation Option Certificate bears a digital or electronic signature as contemplated above and the Corporation is delivering this Compensation Option Certificate by electronic transmission pursuant to this Section 19, then the Corporation represents to the Holder that the electronically transmitted Compensation Option Certificate is the only executed copy to be issued to the Holder by the Corporation.
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Miscellaneous.
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(a) Nothing contained herein shall confer any right upon the Holder hereof or any other person to subscribe for or purchase any shares of the Corporation at any time subsequent to the Expiry Time. After the Expiry Time this Compensation Option Certificate and all rights hereunder shall be void and of no value.
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(b) Whenever used in this Compensation Option Certificate, words importing the singular number only shall include the plural and vice versa and words importing gender shall include all genders.
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(c) All Compensation Options shall rank pari passu , whatever may be the actual date of the issuance thereof.
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(d) This Compensation Option Certificate is binding upon the Corporation and its successors and assigns.
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(e) Subject as herein 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.
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(f) Time is of the essence hereof.
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(g) This Compensation Option Certificate and the Compensation Options represented hereby shall be governed by the laws of the Province of British Columbia and the federal laws of Canada applicable therein.
[Remainder of page left intentionally blank.]
IN WITNESS WHEREOF the Corporation has caused this Compensation Option Certificate to be signed by its duly authorized signing officer.
DATED as of the day of , 2022.
TURNIUM TECHNOLOGY GROUP INC.
By:
Authorized Signing Officer
EXHIBIT “1”
SUBSCRIPTION NOTICE
- TO: TURNIUM TECHNOLOGY GROUP INC. (the “ Corporation 1127-15[th] Street West North Vancouver, British Columbia V7P 1M7
The undersigned registered Holder of the attached Compensation Option Certificate, hereby:
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(a) subscribes for Compensation Units at a price of CAD$0.56 per Compensation Unit (or such adjusted price which may be in effect under the provisions of the Compensation Option Certificate) and in payment of the exercise price encloses a certified cheque, bank draft or money order in lawful money of Canada payable to the order of the Corporation or its successor corporation; and
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(b) delivers herewith the above-mentioned Compensation Option Certificate entitling the undersigned to subscribe for the above-mentioned number of Compensation Units,
in each case in accordance with the terms and conditions set out in the attached Compensation Option Certificate.
The undersigned hereby directs that the Compensation Units issuable to the undersigned upon exercise of the Compensation Options be registered as follows:
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Name(s)
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Number of Address(es) in full Compensation Units TOTAL:
(Please print full name in which certificates for Compensation Shares and Compensation Warrants are to be issued. If any of the Compensation Units are to be issued to a person or persons other than the Holder, the Holder must pay to the Corporation all requisite taxes or other governmental charges.)
As at the time of exercise hereunder, the undersigned represents, warrants and certifies as follows (one (only) of the following must be checked):
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(x) the undersigned Holder at the time of exercise of the Compensation Options (i) is not in the United States, (ii) is not a U.S. person, (iii) is not exercising the Compensation Options for the account or benefit of a U.S. person or a person in the United States, (iv) did not execute or deliver this Subscription Notice in the United States, and (v) delivery of the Compensation Units issuable upon exercise of the Compensation Options will not be to an address in the United States; OR
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(y) the undersigned Holder has delivered to the Corporation an opinion of counsel of recognized standing (which will not be sufficient unless it is in form and substance satisfactory to the Corporation) or such other evidence satisfactory to the Corporation to the effect that with respect to the Compensation Units to be delivered upon exercise of the Compensation Options, the issuance of such securities is exempt from the registration requirements of the United States Securities Act of 1933, as amended (the “ U.S. Securities Act ”) and any applicable state securities laws.
Note: Certificates representing Compensation Shares and Compensation Warrants will not be registered or delivered to an address in the United States unless box (y) immediately above is checked.
For purposes hereof, the terms “ United States ” and “ U.S. person ” shall have the meanings ascribed to them in Regulation S under the U.S. Securities Act.
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DATED this day of , 20 .
By:
Authorized Signatory
(Address of Holder)
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The certificates will be mailed by registered mail to the address appearing in this Subscription Notice.
EXHIBIT “2”
TURNIUM TECHNOLOGY GROUP INC. CO 2022-02- GRID
| Date | Compensation | Compensation | Compensation | Amount Paid | Notations |
|---|---|---|---|---|---|
| Options | Options | Options | Made By | ||
| Available | Exercised | Remaining | |||
EXHIBIT “3”
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(include name and address of the
transferee) Compensation Options exercisable for units consisting of common shares and common share purchase warrants of Turnium Technology Group Inc. (the " Corporation ") registered in the name of the undersigned on the register of the Corporation maintained therefore, and hereby irrevocably appoints _____the attorney of the undersigned to transfer the said securities on the books maintained by the Corporation with full power of substitution.
DATED this day of , 20 .
Signature of Transferor guaranteed by:
Name of Bank or Trust Company: Signature of Transferor
Address of Transferor
Notes:
The signature to this transfer must correspond with the name written upon the face of this Compensation Option Certificate in every particular without any changes whatsoever.
If the Transfer Form indicates that Compensation Options are to be issued to a person or persons other than the registered holder of the Compensation Option Certificate, the signature on this Transfer Form must be guaranteed by a Schedule I chartered bank or licensed trust company, or a member of an acceptable medallion guarantee program. The guarantor must affix a stamp bearing the actual words "Signature Guaranteed". Signature guarantees are not accepted from Treasury Branches or credit unions unless they are members of the Stamp Medallion Program.
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SCHEDULE “E”
FORM OF INSIDER LOCK-UP AGREEMENT
(see attached)
LOCK-UP AGREEMENT
April 8, 2022
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To: Eight Capital, Canaccord Genuity Corp., iA Private Wealth Inc. and Echelon Wealth Partners Inc. (collectively, the “ Agents ”)
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Re: Private placement (the “ Offering ”) of subscription receipts of Turnium Technology Group Inc. (the “ Corporation ”)
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An agency agreement dated April 8, 2022 (the “ Agency Agreement ”) was entered into among the Agents, the Corporation and RMR Science Technologies Inc. (“ RMR ”) in respect of the Offering.
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Any capitalized terms used in this lock-up agreement (this “ Lock-Up Agreement ”) but not otherwise defined shall have the meanings ascribed to them in the Agency Agreement.
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In consideration of the benefit that the Offering will confer upon the Corporation and the Resulting Issuer, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned (the “ Locked-Up Party ”) hereby agrees that from the date hereof until 120 days from the date on which the Escrow Release Conditions are satisfied, he/she/it will not, directly or indirectly, without the prior written consent of Eight Capital offer, sell, contract to sell, grant or sell any option to purchase, purchase any option or contract to sell, hypothecate, pledge, transfer, assign, lend, swap, or enter into any other agreement to transfer the economic consequences of, or otherwise dispose of or deal with (or, in either case, agree to or publicly announce any intention to do any of the foregoing) whether through the facilities of a stock exchange, by private placement or otherwise, any securities of the Corporation or the Resulting Issuer (collectively, the “ Locked-Up Securities ”).
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The Locked-Up Party represents and warrants that it has good and marketable title to the LockedUp Securities and understands that the Agents are relying upon this Lock-Up Agreement in proceeding towards the closing of the Offering and the consummation of the Business Combination. The Locked-Up Party further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the Locked-Up Party’s legal representatives, successors, and permitted assigns, and shall enure to the benefit of the Agents and their legal representatives, successors and permitted assigns.
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This Lock-Up Agreement will be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein and the parties attorn to the jurisdiction of the Courts of the Province of Ontario.
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This Lock-Up Agreement may be executed by facsimile, PDF, or other electronic format capable of producing a printed copy, which so executed agreement shall constitute an original.
[Signature page follows.]
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DATED as of the first date written above.
NAME OF SECURITYHOLDER:
(Signature of Securityholder) (Signature of Witness) OR IF CORPORATION NAME OF SECURITYHOLDER: Name: Authorized Signing Authority
Number and type of securities of Corporation subject to this Lock-Up Agreement (and to be exchanged for securities of the Resulting Issuer in connection with the Business Combination to be subject to this Lock-Up Agreement):
SCHEDULE “F”
LIST OF LOCKED-UP PERSONS
Colin Merritt Atkinson Derek Spratt Geoff Hultin Haresh Kheskani IntrinsIQ Technology Group Inc. James Lovie Logan Campbell Tenacious Services Inc. Thinsolution Inc. Johan Andreas Arnet Raffaele (Ralph) Garcea Juliet Jones Aaron Patton Evelyn Bailey Peter Green