Attached files
EXHIBIT 10.10
SUBSCRIPTION AGREEMENT
(Canadian Dollar)
TO: NEWGIOCO GROUP, INC.
RE: PURCHASE OF UNITS OF NEWGIOCO GROUP, INC.
Subject to the terms and conditions contained in this subscription agreement,
including the terms and conditions set forth in Schedule "A" hereto, the
undersigned (the "Purchaser"), hereby irrevocably subscribes for and agrees to
purchase the number of units (the "Units" or the "Purchased Securities") of
NEWGIOCO GROUP, INC. (the "Corporation") as set forth below at a purchase price
of CDN$5,000 per Unit (the "Purchase Price").
_____________________________________
(Name of Purchaser - please print)
By: __________________________________
(Authorized Signature)
_____________________________________
(Please print name of individual whose
signature appears above if different than
the name of the Purchaser printed above.)
______________________________________
(Subscriber's Address)
______________________________________
(Telephone Number)
______________________________________
(Fax Number)
______________________________________
(Email Address)
Number of Units: __________________________
Aggregate Purchase Price: CDN$__________________________
If the Purchaser is signing as finder for a
principal and the Purchaser is not a trust
company or a portfolio manager, in either
case, purchasing as trustee or finder for
accounts fully managed by it, complete the following:
___________________________________
(Name of Principal)
___________________________________
(Principal's Address)
Register the Purchased Securities as set forth below:
____________________________________
(Name)
____________________________________
(Account reference, if applicable)
____________________________________
(Address)
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Deliver the Purchased Securities as set forth below:
____________________________________
(Name)
____________________________________
(Account reference, if applicable)
____________________________________
(Contact Name)
____________________________________
(Address)
____________________________________
(Telephone Number)
The Purchased Securities form part of a larger offering of 150 Units by the
Corporation (the "Offering") to close on or about January 24, 2017 or such other
date mutually agreed between the Purchaser and the Corporation (the "Closing
Date"). The maximum Offering will result in gross proceeds to the Corporation of
CDN$750,000. The Corporation may, at its discretion, elect to complete the
Offering for proceeds of less than CDN$750,000 or less than 150 Units and in one
or more tranches.
Each Unit is comprised of a debenture of the Corporation in a principal amount
of CDN$5,000 with a term of two (2) years and bearing interest at the value of
ten (10%) percent (the "Debenture") and 500 common share purchase warrants of
the Corporation (the "Warrants"). Each Warrant will entitle the holder to
acquire one (1) common share of the Corporation within twenty-four (24) months
from the Closing Date and each Warrant will have an exercise price of US$1.00
(one United States Dollar). The form of the Debenture is attached hereto as
Schedule "B" and the form of Warrant is attached hereto as Schedule "C".
All dollar amounts referred to in this agreement are in Canadian dollars unless
otherwise noted.
ACCEPTANCE: The Corporation hereby (i) accepts the above subscription subject
to the terms and conditions contained in this subscription agreement; and (ii)
agrees that the Purchaser shall be entitled to rely on such representations and
warranties of the Corporation contained in the subscription agreement.
NEWGIOCO GROUP, INC.
Date: January ____, 2017 Per:____________________________________
Michele Ciavarella, Chief Executive Officer
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SCHEDULE "A"
TERMS AND CONDITIONS OF
SUBSCRIPTION FOR UNITS
NEWGIOCO GROUP, INC.
1. Description of Debentures
The debenture forming part of the Purchased Securities (the "Debenture") shall
be governed by provisions of the Debenture of the Corporation, the form of which
is appended hereto as Schedule "B". The Debentures yield interest at the rate of
10% per annum payable on maturity of the Debentures. The Debentures mature two
(2) years from the date of issue provided that the Corporation may prepay all or
any part of the Debenture prior to maturity without notice or penalty, except
that the Purchaser shall receive a minimum of five (5) months of interest. The
Debentures are unsecured obligations of the Company and shall rank pari passu
with each other.
2. Description of Warrants
The warrants forming part of the Purchased Securities (the "Warrants") shall be
governed by the provisions of warrant certificates (the "Warrant Certificates")
of the Corporation, the form of which is appended hereto as Schedule "C".
Subject to the anti-dilution and other adjustment provisions contained in the
Warrant Certificates, each Warrant shall entitle the holder thereof to acquire
one common share of the Corporation at any time on or before 5:00 (Toronto time)
on the date that is 24 months from the Closing Date (the "Warrant Shares"). Each
Warrant will have an exercise price of US$1.00 (one United States dollar) as
more specifically set out in the Warrant Certificate.
3. Acknowledgments re: Hold Periods and Resale Restrictions
The Purchaser on its own behalf and (if applicable) on behalf of others for whom
it is contracting hereunder, understands and acknowledges the following:
(a) The Purchased Securities are subject to statutory hold periods or resale
restrictions and the Warrants forming part of the Purchased Securities
and the Warrant Shares (Warrants and Warrant Shares being collectively
referred to herein as the "Underlying Securities") will be subject to
statutory hold periods or resale restrictions;
(b) The Purchaser, and (if applicable) others on whose behalf the Purchaser
is contracting hereunder, have been advised to consult their own legal
advisers in connection with any applicable statutory hold periods and
resale restrictions relating to the Purchased Securities and the
Underlying Securities and no representation has been made respecting
applicable statutory hold periods or resale restrictions relating to
such securities;
(c) The Certificates representing the Purchased Securities and the
Underlying Securities may be endorsed with a legend setting out resale
restrictions under applicable securities legislation;
(d) The Purchaser, and (if applicable) others on whose behalf the Purchaser
is contracting hereunder, are solely responsible (and the Corporation
is not in any way responsible) for compliance with applicable hold
periods and resale restrictions, including without limitation the
filing of any documentation and, if applicable, the payment of any fees
with any applicable securities regulatory authority, and the Purchaser,
and (if applicable) others on whose behalf the Purchaser is contracting
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hereunder, are aware that the Purchaser, and (if applicable) such
others, may not be able to resell the Purchased Securities or the
Underlying Securities, except in accordance with limited exceptions
under applicable securities legislation and regulatory policies and the
Purchaser and, if applicable, others on whose behalf the Purchaser is
contracting hereunder, will not sell, resell or otherwise transfer the
Purchased Securities or the Underlying Securities, except in compliance
with applicable laws; and
(e) No market currently exists for the Warrants and no liquid market may
exist for the Underlying Securities.
4. Delivery and Payment
Unless other arrangements are agreed by the Corporation, the following must be
delivered to Beard Winter LLP at 130 Adelaide Street West, Suite 701, Toronto,
Ontario, M5H 2K4, not later than 5:00 p.m. (Toronto time) on the day immediately
preceding the Closing Date:
(a) One signed copy of this subscription agreement with the relevant
"accredited investor" certification completed in Schedule "D", as
applicable;
(b) The aggregate Purchase Price payable for the Purchased Securities by
way of a certified cheque or bank draft payable to "Beard Winter LLP,
in trust" or wire transfer of immediately available funds and delivered
or transmitted in accordance with the instructions set forth in
Schedule "E" attached hereto or such other method of payment as is
acceptable to the Corporation; and
(c) Such other documents as may be required pursuant to terms of this
subscription agreement.
5. Closing
This subscription is subject to acceptance by the Corporation, as described
below. A Debenture and a Warrant Certificate endorsed by the Corporation
representing the Purchased Securities will be available for delivery to the
Purchaser in Toronto, Ontario, on the Closing Date against payment of the
aggregate Purchase Price for the Purchased Securities.
6. Acceptance Subscription
This subscription may be accepted in whole only and the right is reserved to the
Corporation to refuse to accept any subscription. Confirmation of acceptance or
rejection of this subscription will be forwarded to the Purchaser promptly after
the acceptance or rejection of this subscription by the Corporation. If this
subscription is rejected, the Purchaser understands that any certified cheque,
bank draft, wire transfer or other method of payment delivered by the Purchaser
to Beard Winter LLP in accordance with Schedule "E" hereto representing the
Purchase Price will be promptly returned to the Purchaser without interest or
deduction.
7. Acknowledgments re: Prospectus Exemptions, etc.
The Purchaser acknowledges and agrees, on its own behalf and (if applicable) on
behalf of others for whom the Purchaser is contracting hereunder, that the sale
of the Purchased Securities to the Purchaser, or (if applicable) to such others,
is conditional upon, among other things, such sale being exempt from the
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requirement to file a prospectus or deliver an offering memorandum in respect of
such sale or upon the issuance of such rulings, orders, consents or approvals as
may be required to permit such sale without complying with the requirement to
file a prospectus or deliver an offering memorandum.
The Purchaser also acknowledges and agrees, on its own behalf and (if
applicable) on behalf of others for whom it is contracting hereunder, that: (i)
the Purchaser, and (if applicable) such others have not received, requested or
been provided with, nor have any need to receive, a prospectus, offering
memorandum, sales or advertising literature or similar disclosure document
relating to the Offering and/or the business and affairs of the Corporation and
that the decision to enter into this subscription agreement and purchase the
Purchased Securities has not been based upon any verbal or written
representation as to fact or otherwise made by or on behalf of the Corporation
or any officer, director, employee or agent of the Corporation and that such
decision is based entirely upon the form of Debenture attached as Schedule "B"
and the form of Warrant Certificate attached as Schedule "C" to this
subscription agreement and information set out in this subscription agreement,
(ii) there has not been any advertisement of the Purchased Securities in printed
public media, radio, television or telecommunications, including electronic
display such as the Internet; and (iii) Beard Winter LLP is acting as counsel to
the Corporation and is not acting as counsel to the Purchasers of Purchased
Securities.
The Purchaser acknowledges that the Corporation may be required by law to
provide applicable securities regulatory authorities with a list setting forth
the identities of the beneficial purchasers of the Purchased Securities and the
Purchaser agrees to use its best efforts to comply with such laws, if required.
The Purchaser, on its own behalf and (if applicable on behalf of others for whom
the Purchaser is contracting hereunder, understands and acknowledges that: (i)
the Purchased Securities have not been nor will be registered under the United
States Securities Act of 1933, as amended (the "US Securities Act") nor any
applicable state securities laws and may not be offered or sold or re-offered or
resold, directly or indirectly, in the United States or to any United States
person (as defined in Regulation S under the U.S. Securities Act, a "U.S.
Person"), unless such securities have been registered under the U.S. Securities
Act, and any applicable state securities laws, or are otherwise exempt from such
registration; and (ii) certificates representing the Purchased Securities may
bear a legend to such effect.
8. Conditions to Closing
The Purchaser acknowledges and agrees that as the Offering will not be qualified
by a prospectus, the Offering is subject to the condition that the Purchaser, or
(if applicable) others for whom the Purchaser is contracting hereunder, execute
and return to the Corporation, as applicable, all relevant documentation
required by applicable securities legislation, regulations, rules and policies.
9. Representations, Warranties and Covenants of the Purchaser
The Purchaser, on its own behalf and (if applicable) on behalf of others for
whom the Purchaser is contracting hereunder, represent, warrant and covenant to
and with the Corporation (and acknowledges that the Corporation, and its counsel
are relying thereon) as follows:
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(a) Jurisdiction of Residence - the Purchaser, or (if applicable) any
beneficial purchaser for whom the Purchaser is contracting hereunder,
is resident in the jurisdiction set forth on the first page of this
agreement and the purchase by and sale to the Purchaser, or any such
beneficial purchaser, of the Purchased Securities is being made in
accordance with the applicable securities legislation of such
jurisdiction;
(b) Prospectus Exempt Purchase - Canadian Purchaser - if the Purchaser or
(if applicable) any beneficial purchaser for whom the Purchaser is
contracting hereunder, is resident in a province of Canada or is
otherwise subject to the securities laws of a province of Canada, the
Purchaser, on its own behalf and (if applicable) on behalf of any such
beneficial purchaser makes the representations, warranties and
covenants set out in Schedule "D", to this subscription agreement, as
applicable, with the Corporation and the Purchaser, and (if applicable)
any such beneficial purchaser, may avail itself of one or more of the
categories of prospectus exempt purchasers listed in Schedule "D";
(c) Agent Purchasing for Principal(s) - if the Purchaser is acting as agent
for one or more beneficial purchasers: (i) each such beneficial
purchaser is purchasing as principal for its own account and not for
the benefit of any other person; and (ii) each such principal can, and
does, make the representations, warranties and covenants set out herein
and in Schedule "D" to this subscription agreement as are applicable to
such principal by virtue of its jurisdiction of residence or by virtue
of it being subject to the applicable securities legislation of such
jurisdiction, and (if applicable) any beneficial purchaser for whom the
Purchaser is contracting hereunder, acknowledges that such schedule
forms part of and is incorporated into this subscription agreement;
(d) Capacity - (i) if the Purchaser, or (if applicable) any beneficial
purchaser for whom the Purchaser is contracting hereunder, is an
individual, the Purchaser, or such beneficial purchaser, as the case
may be, has attained the age of majority and is legally competent to
execute this subscription agreement and to perform all actions required
pursuant hereto; (ii) if the Purchaser, or any beneficial purchaser for
whom the Purchaser is acting, is a corporation, partnership,
unincorporated association or other entity, the Purchaser, or such
beneficial purchaser, as the case may be, has the legal capacity and
competence to enter into and be bound by this subscription agreement
and to take all actions required pursuant thereto and the Purchaser
further certifies that all necessary approvals of directors,
shareholders or otherwise have been given and obtained;
(e) Authority - (i) if the Purchaser is acting as agent for one or more
beneficial purchasers, the Purchaser is duly authorized to execute and
deliver this subscription agreement and all other necessary
documentation in connection with such subscription on behalf each such
principal and this subscription agreement has been duly authorized,
executed and delivered by the Purchaser on behalf of each such
principal; and (ii) the entering into of this subscription agreement
and the completion of the transactions contemplated herein will not
result in the violation of any of the terms and provisions of any law
applicable to, or the constating documents of, the Purchaser or of any
beneficial purchaser for whom the Purchaser is acting or of any
agreement, written or oral, to which the Purchaser or any beneficial
purchaser for whom the Purchaser is acting is a party or by which the
Purchaser or such beneficial purchaser is bound;
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(f) Enforceability - this subscription agreement has been duly and validly
authorized, executed and delivered by the Purchaser (on its own behalf
and, if applicable, on behalf of any beneficial purchaser) and, upon
acceptance by the Corporation this subscription agreement will
constitute a legal, valid and binding contract of the Purchaser, or (if
applicable) any beneficial purchaser for whom the Purchaser is acting,
enforceable against the Purchaser, or (if applicable) any such
beneficial purchasers, in accordance with its terms;
(g) Purpose - If the purchaser is not an individual, the Purchaser has not
been created solely or primarily to use exemptions from the
registration and prospectus exemptions under applicable securities
legislation and has a pre-existing purpose other than to use such
exemptions;
(h) No Representation re: Resale, Refund, Future Price or Listing - no
person has made any written or oral representation to us:
(i) That any person will resell or repurchase the Purchased
Securities;
(ii) That any person will refund the Purchaser Price other than as
may be provided in this subscription agreement; or
(iii) Relating to the future price or value of the Purchased
Securities;
(i) Investment Experience - the Purchaser, or (if applicable) any
beneficial purchaser for whom the Purchaser is contracting hereunder,
has knowledge and experience with respect to investments of this type
and the Purchaser, or (if applicable) any such beneficial purchaser, is
capable of evaluating the merits and risks thereof and obtaining
competent independent business, legal and tax advice regarding this
investment;
(j) Proceeds of Crime - The funds representing the subscription amount which
will be advanced by the Purchaser, or (if applicable) any beneficial
purchaser for whom the Purchaser is contracting hereunder, to the
Corporation hereunder will not represent proceeds of crime for the
purposes of the Proceeds of Crime (Money Laundering) Act (Canada) (the
"PCMLA") and the Purchaser, or (if applicable) any beneficial purchaser
for whom the Purchaser is contracting hereunder, acknowledges that the
Corporation may in the future be required by law to disclose the
Purchaser's, or (if applicable) any beneficial purchaser for whom the
Purchaser is contracting hereunder, name and other information relating
to this Subscription Agreement and the Purchaser's, or (if applicable)
any beneficial purchaser for whom the Purchaser is contracting
hereunder, subscription hereunder, on a confidential basis, pursuant to
the PCMLA. To the best of its knowledge (a) no portion of the
subscription amount to be provided by the Purchaser, or (if applicable)
any beneficial purchaser for whom the Purchaser is contracting
hereunder, (i) has been or will be derived from or related to any
activity that is deemed criminal under the law of Canada, the United
States, or any other jurisdiction, or (ii) is tendered on behalf of a
person or entity who has not been identified to the Purchaser, or (if
applicable) any beneficial purchaser for whom the Purchaser is
contracting hereunder. The Purchaser, or (if applicable) any beneficial
purchaser for whom the Purchaser is contracting hereunder, shall
promptly notify the Corporation if the Purchaser, or (if applicable)
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any beneficial purchaser for whom the Purchaser is contracting
hereunder, discovers that any of such representations ceases to be
true, and to provide the Corporation with appropriate information in
connection therewith; and
(k) Additional Filings - The Purchaser, or (if applicable) any beneficial
purchaser for whom the Purchaser is contracting hereunder, shall
execute, deliver, file and otherwise assist the Corporation with filing
all documentation required by the applicable securities laws and any
other applicable securities legislation to which the Purchaser, or (if
applicable) any beneficial purchaser for whom the Purchaser is
contracting hereunder, may be subject, within the time limits
prescribed to permit the subscription for and issuance of, the Units
and thereafter for any subsequent exchange thereof.
The Purchaser acknowledges that the representations, warranties and covenants
made by the Purchaser in this Subscription Agreement are made by the Purchaser
with the intent that they may be relied upon by the Corporation and its counsel
to, among other things, determine the eligibility of the Purchaser, or (if
applicable) the eligibility of others on whose behalf the Purchaser is
contracting hereunder, to purchase the Purchased Securities under relevant
securities legislation including, without limitation, the availability of
exemptions from the registration and prospectus requirements of applicable
securities legislation in connection with the issuance of the Purchased
Securities to the Purchaser. The Purchaser further agrees that by accepting the
Purchased Securities on the Closing Date the Purchaser shall be representing and
warranting that such representations, warranties and covenants are true as at
the Closing Date, with the same force and effect as if they had been made by the
Purchaser on such date. The Purchaser undertakes to immediately notify the
Corporation of any change in any statement or other information relating to the
Purchaser or others on whose behalf the Purchaser is contracting set forth
herein that takes place prior to Closing.
10. Representations, Warranties and Covenants of the Corporation
The Corporation hereby represents, warrants and covenants to the Purchaser
(and/or to any others on whose behalf the Purchaser is contracting hereunder),
that as of the date of this Subscription Agreement and as of the Closing Date:
(a) The Corporation is a valid and subsisting corporation duly incorporated
and in good standing under the laws of its jurisdiction of
incorporation;
(b) The Corporation will reserve and set aside a sufficient number of
authorized and unissued Common Shares of the Corporation to issue to
the Purchaser the Common Shares issuable in connection with the
exercise of the Warrants and such Common Shares will, when issued and
delivered upon such exercise, be duly and validly issued as fully paid
and non-assessable shares of the Corporation;
(c) This Subscription Agreement and the Offering have been duly authorized
by all necessary corporate action on the part of the Corporation and
constitute valid obligations of the Corporation legally binding upon it
and enforceable in accordance with its terms;
(d) The Corporation has all requisite corporate power and authority to carry
on its business as now and proposed to be carried on and to own, lease
and operate its material properties, business and assets, or the
interests therein;
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(e) The Corporation is not a party to any actions, suits or proceedings
which could have a material adverse effect on the assets, liabilities,
financial condition, business, capital or prospects of the Corporation
and, to the best of the Corporation's knowledge, no such actions, suits
or proceedings are pending or threatened.
11. Acknowledgment and Waiver
The Purchaser, on its own behalf and/or on behalf of others for whom the
Purchaser is contracting hereunder, has acknowledged that the decision to
purchase the Purchased Securities was made solely on the basis of publicly
available information. Accordingly, the decision to acquire the Purchased
Securities has also been made on the basis of currently available public
information.
12. Survival
This Subscription Agreement, including without limitation the representations,
warranties and covenants contained herein, shall survive and continue in full
force and effect and be binding upon the Corporation and the undersigned for a
period of two (2) years from the Closing Date notwithstanding the completion of
the purchase of the Purchased Securities.
13. Governing Law
This Subscription Agreement shall be governed by and construed in accordance
with the laws of the Province of Ontario and the laws of Canada applicable
therein. The Purchaser, on its own behalf and (if applicable) on behalf of
others for whom the Purchaser is contracting hereunder, hereby irrevocably
attorn to the jurisdiction of the courts of the Province of Ontario with respect
to any matters arising out of this agreement.
14. Costs
All costs and expenses incurred by the Purchaser (including any fees and
disbursements of any counsel retained by the Purchaser) relating to its purchase
of the Purchased Securities shall be borne by the Purchaser.
15. Assignment
This Subscription Agreement is not transferable or assignable, in whole or in
part, by the Purchaser or (if applicable) by others on whose behalf the
Purchaser is contracting hereunder.
16. Entire Agreement and Headings
This Subscription Agreement (including the schedules hereto) contains the entire
agreement of the parties hereto relating to the subject matter hereof and there
are no representations, covenants or other agreements relating to the subject
matter hereof except as stated or referred to herein. This agreement may only be
amended or modified in any respect by written instrument only. The headings
contained herein are for convenience only and shall not effect the meanings or
interpretation hereof.
17. Language
The parties hereto confirm their express wish that this agreement and all
documents and agreements directly or indirectly relating thereto be drawn up in
the English language. Les parties reconnaissent leur volonte expresse que la
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presente convention, ainsi que tous les documents et contrats qui s'y rettachent
directement ou indirectment, soient rediges en anglais.
18. Time of Essence
Time shall be of the essence of this Subscription Agreement.
19. Currency
All dollar amounts referred to in this Subscription Agreement are in Canadian
dollars.
20. Counterparts and Facsimile Deliveries
This Subscription Agreement may be executed in one or more counterparts, each of
which counterparts when executed shall constitute an original and all of which
counterparts so executed shall constitute one and the same instrument. The
Corporation shall be entitled to rely on delivery of a facsimile copy of this
Subscription Agreement, including the completed schedules attached hereto, and
acceptance by the Corporation of any such facsimile copy shall be legally
effective to create a valid and binding agreement between the parties hereto in
accordance with the terms hereof.
21. Consent to Collection and Use of Personal Information
The Purchaser acknowledges that this subscription agreement requires the
Purchaser to provide certain personal information to the Corporation ("Personal
Information"). Such information is being collected by the Corporation for the
purposes of completing the proposed issuance of the Units, which includes,
without limitation, determining the Purchaser's eligibility to purchase the
Units under applicable securities laws, preparing and registering certificates
representing the Underlying Securities and completing filings required by the
securities commissions, the TSX Venture Exchange and/or other securities
regulatory authorities. The Purchaser agrees that the Purchaser's Personal
Information may be disclosed by the Corporation to: (a) securities commissions,
the TSX Venture Exchange and/or other securities regulatory authorities, (b) the
Corporation's registrar and transfer agent, and (c) any of the other parties
involved in this subscription, including legal counsel, and may be included in
record books in connection with this subscription. In the case of such
information is being collected indirectly by them for the purpose of the
administration and enforcement of the applicable securities laws and the
Purchaser authorizes the indirect collection of such information by them. In the
case of the TSX Venture Exchange, the Personal Information is being collected by
them for the purposes of identified by them from time to time. The Purchaser
consents to the foregoing collection, use and disclosure of the Purchaser's
Personal Information by the securities commissions, the TSX Venture Exchange
and/or other securities regulatory authorities. The title, business address and
business telephone number of the public official in Ontario who can answer
questions about the Ontario Securities Commission's indirect collection of the
information is the Administrative Assistant to the Director of Corporate
Finance, Telephone (416) 593-8086, Ontario Securities Commission, Suite 1903,
Box 5520 Queen Street West, Toronto, Ontario M5H 3S8.
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SCHEDULE "B"
DEBENTURE
No. D-_______
NEWGIOCO GROUP, INC.
Debenture due January 24, 2019
Holder: ______________________________
Amount: ______________________________
Commencement Date: January 24, 2017
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TABLE OF CONTENTS
ARTICLE 1 - INTERPRETATION 13
Section 1.1 Definitions 13
Section 1.2 Interpretation not Affected by Headings, etc 14
Section 1.3 Deemed Notice of Debenture 14
Section 1.4 Applicable Law. 14
Section 1.5 Accounting Terms 14
Section 1.6 Day not a Business Day. 15
Section 1.7 Currency. 15
ARTICLE 2 - THE DEBENTURE 15
Section 2.1 Terms, Form and Denomination of Debenture 15
Section 2.2 Certification by Company 15
Section 2.3 Replacement of Debenture 15
Section 2.4 Payment of Principal and Interest 15
Section 2.5 Ownership of Debenture 16
ARTICLE 3 - NO SECURITY 16
Section 3.1 No Security. 16
ARTICLE 4 - DEFAULT AND ENFORCEMENT 16
Section 4.1 Events of Default: 16
Section 4.2 Acceleration of Default 17
Section 4.3 Enforcement of Security 17
Section 4.4 Holder not Obliged to Institute Proceedings 18
Section 4.5 Application of Proceeds of Realization 18
Section 4.6 Rights and Remedies Cumulative 19
ARTICLE 5 - SUCCESSOR COMPANIES 19
Section 5.1 Certain Requirements 19
Section 5.2 Vesting of Powers in Successor 19
ARTICLE 6 - MISCELLANEOUS 19
Section 6.1 Notice to the Holder and to the Company. 19
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This Debenture has not been and will not be qualified for under the Securities
Act (Ontario) or under applicable securities laws in any other province or
territory of Canada, and may not be offered or sold in Canada or to, or for the
account or benefit of, a resident of Canada except in certain transactions
exempt from the prospectus and registration requirements of applicable
securities laws therein. This Debenture has not been registered under the U.S.
Securities Act of 1933 or the securities laws of any state of the United States
and cannot be offered, sold, pledged or otherwise transferred or assigned in the
United States or to a resident of the United States unless an exemption from
such registration requirements is available. This Debenture has not been and
will not be qualified for sale or registered under the laws of any other
jurisdiction and any transferee should refer to the securities laws of any
jurisdiction applicable to them.
NEWGIOCO GROUP, INC.
(incorporated under the laws of the State of Delaware)
No. D-__________ $__________________
Debenture due January 24, 2019
NEWGIOCO GROUP, INC. (hereinafter referred to as the "Company"), FOR VALUE
RECEIVED, hereby promises to pay to ________________________ (the "Holder"),
subject to the provisions hereof (the provisions hereof are hereinafter
collectively referred to as the "Debenture"), on January 24, 2019, or on such
other date as the principal amount hereof may become due in accordance with the
provisions of the Debenture, on presentation and surrender of this Debenture,
the sum of _________________________ (CDN$____________) Canadian Dollars and,
subject to the provisions of this Debenture, to pay interest monthly on the
principal amount hereof at the rate of ten (10%) per cent per annum payable on
the Maturity Date (as hereinafter defined), which interest shall be payable
before as well as after maturity and both before and after default and judgment,
with interest on amounts in default at the same rate, all in accordance with the
terms and conditions hereof.
ARTICLE 1 - INTERPRETATION
Section 1.1 Definitions. In this Debenture, unless there is something in
the subject matter or context inconsistent therewith:
"Applicable Laws" means the laws applicable to the Company at any relevant time;
"Business Day" means a day on which banks are open for business in Toronto,
Ontario other than a Saturday, Sunday or civic or statutory holiday in Toronto,
Ontario;
"Commencement Date" means the effective date of original issue of this
Debenture, being January 24, 2017;
"Company" means NEWGIOCO GROUP, INC. and every Successor Corporation which shall
have complied with the provisions of Article 7;
"Company Articles" means the Certificate of Incorporation of the Company and any
amendments thereof;
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"Corporate Reorganization" means, in respect of a corporation, any transaction
whereby all or substantially all of its undertaking, property and assets would
become the property of any other Person whether by way of arrangement,
reorganization, consolidation, amalgamation, merger, transfer, sale, continuance
into any other jurisdiction of incorporation or otherwise;
"Debenture" means this Debenture due January 24, 2019 of the Company;
"Director" means a director of the Company for the time being and "Directors"
means the board of directors of the Company or, if duly constituted and whenever
duly empowered, the executive committee of the board of directors of the Company
for the time being, and reference to action by the directors means action by the
directors of the Company as a board or action by the said executive committee as
such committee;
"Event of Default" has the meaning attributed thereto in Section 5.01;
"Maturity Date" means January 24, 2019;
"Offering" means the offering of 150 Units by the Company to close on or about
January 24, 2017 which may result in gross proceeds to the Company of
CDN$750,000 with each such Unit being comprised of (i) a debenture in a
principal amount of CDN$5,000 in the form of this Debenture and (ii) 500 common
share purchase warrants with each warrant entitling the holder to acquire one
(1) common share of the company within twenty-four (24) months with an exercise
price of US$1.00;
"Person" means any individual, partnership, limited partnership, joint venture,
syndicate, sole proprietorship, company or corporation with or without share
capital, unincorporated association, trust, trustee, estate trustee, or other
legal personal representative or other entity howsoever designated or construed;
"Successor Corporation" means any corporation continuing from and which acquires
all or substantially all of the undertaking, property and assets of the Company
pursuant to any Corporate Reorganization;
"Transfer Agent" means the law firm of Beard Winter LLP with its office situate
at 130 Adelaide Street West, Suite 701, Toronto, Ontario, or such other transfer
agent as the Company may, from time to time, appoint with respect to the
Debenture by giving written notice to the Holder, as herein provided.
Section 1.2 Interpretation not Affected by Headings, etc. The division
of this Debenture into Articles, sections, subsections and clauses, and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation hereof.
Section 1.3 Deemed Notice of Debenture. The Holder of this Debenture,
and all Persons claiming through or under such Holder, shall be deemed to have
notice of, and shall be bound by, the provisions of this Debenture.
Section 1.4 Applicable Law. This Debenture shall be governed by and
construed in accordance with the laws of the Province of Ontario and the laws of
Canada applicable therein without reference to any conflicts of law provisions
and shall be treated in all respects as an Ontario contract.
Section 1.5 Accounting Terms. All accounting terms which are not
specifically defined herein shall be construed in accordance with Canadian
generally accepted accounting principles consistently applied.
14
Section 1.6 Day not a Business Day. If any day on or before which any
action is required or permitted to be taken hereunder is not a Business Day,
then such action shall be required or permitted to be taken on or before the
requisite time on the next succeeding day that is a Business Day.
Section 1.7 Currency. All references to currency herein are expressed
in Canadian Dollars.
ARTICLE 2 - THE DEBENTURE
Section 2.1 Terms, Form and Denomination of Debenture.
(a) This Debenture shall be designated as a "Debenture due
January 24, 2019".
(b) The outstanding principal amount of this Debenture shall bear interest
from and including the Commencement Date to but excluding the Maturity
Date, as applicable, at the rate of ten (10%) per cent per annum
payable on the Maturity Date, provided that the Company may prepay at
anytime the whole or any part of this Debenture in accordance with
section 2.4(c).
Section 2.2 Certification by Company. This Debenture shall not be
obligatory or entitle the Holder to the benefit hereof until it has been
executed by or on behalf of the Company and certified by the Transfer Agent, and
certification by the Transfer Agent of any Debenture shall be conclusive
evidence as against the Company that this Debenture so certified has been duly
issued and is a valid obligation of the Company and that the Holder is entitled
to the benefit hereof.
Section 2.3 Replacement of Debenture.
(a) In case this Debenture shall be mutilated, defaced, lost, destroyed or
stolen, the Company, subject to Applicable Laws, shall issue and the
Transfer Agent shall certify and deliver a new Debenture of like date
and tenor as the one mutilated, defaced, lost, destroyed or stolen in
exchange for and in place of and upon cancellation of such Debenture
and in lieu of and in substitution for such mutilated, defaced, lost,
destroyed or stolen Debenture, and the new Debenture shall be entitled
to the benefit hereof and rank equally in accordance with its terms
with all other Debenture.
(b) Upon the application for the issue of a new Debenture pursuant to this
Section 2.3, the Holder shall bear the costs of the issue thereof and
in case of loss, destruction or theft shall, as a condition precedent
to the issue thereof, provide to the Transfer Agent such evidence of
ownership and of the loss, destruction or theft of the Debenture so
lost, destroyed or stolen as shall be satisfactory to the Transfer
Agent and the Company in their discretion and the Holder may also be
required to provide an indemnity in amount and form satisfactory to the
Transfer Agent and the Company in their discretion.
Section 2.4 Payment of Principal and Interest.
(a) The principal and interest of this Debenture will be payable when due
in Canadian Dollars by cheque to the Holder or, at the Holder's option,
will be payable by wire transfer to such account and at such location
as may be specified by written notice from the Holder to the Company
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given not less than ten (10) Business Days prior to the date of
payment. For greater certainty, any such payment by wire transfer in
accordance with the Holder's specifications shall satisfy and fully
discharge the Company's obligations in respect thereof.
(b) Subject to the other provisions herein, the outstanding principal
amount of this Debenture and all accrued interest shall be repaid by
cheque or wire transfer on the Maturity Date against presentation and
surrender hereof at the offices of the Transfer Agent in the City of
Toronto, Ontario, or as otherwise agreed in writing between the Company
and the Holder.
(c) The outstanding principal and accrued interest under this Debenture may
be prepaid in whole or in part at any time or times by the Corporation
without notice, bonus or penalty, provided that the Holder shall
receive a minimum payment on account of interest that is equal to five
(5) months interest.
Section 2.5 Ownership of Debenture. The Person in whose name this
Debenture is registered shall for all the purposes of this Debenture be and be
deemed to be the owner thereof and payment of or on account of the principal or
the interest thereon shall be made, subject to any express provisions hereof to
the contrary, only to or upon the order in writing of such Person.
ARTICLE 3 - NO SECURITY
Section 3.1 No Security. This Debenture is an unsecured obligation of the
Company and shall rank pari passu with each of the other debentures issued by
the Company as part of the Offering irrespective of the date of issue of such
debentures.
ARTICLE 4 - DEFAULT AND ENFORCEMENT
Section 4.1 Events of Default. Each of the following events is herein
sometimes referred to as an "Event of Default":
(i) default in the payment of any principal or interest on this
Debenture as and when the same shall become due and payable,
and continuance of such default for a period of five (5)
Business Days after the date on which written notice of such
failure, requiring the Company to remedy the same, shall have
been given by the Holder;
(ii) the institution of bankruptcy or insolvency proceedings against
the Company, or the institution of proceedings seeking
reorganization or winding-up of the Company under the
Bankruptcy and Insolvency Act (Canada) or any other bankruptcy,
insolvency or analogous laws, or the issuing of sequestration
or process of execution against the Company or any substantial
part of its property, or the appointment of a receiver or
manager of the Company or of any substantial part of its
property, and, in each case, the continuance of any such
proceedings unstayed, undischarged and in effect for a period
of fifteen (15) days from the date thereof; or
(iii) the institution by the Company of proceedings to be adjudicated
bankrupt or insolvent, or the consent by it to the institution
of bankruptcy or insolvency proceedings against it, or the
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filing by it, or the passing of a resolution authorizing the
filing by it, of a petition or answer or consent seeking
reorganization or relief under the Bankruptcy and Insolvency
Act (Canada) or any other bankruptcy, insolvency or analogous
laws, or the consent by it to the filing of any such petition
or to the appointment of a receiver of the Company or of any
substantial part of its property, or the making by it of a
general assignment for the benefit of creditors, or the
Company's admitting in writing its inability to pay its debts
generally as they become due or taking corporate action in
furtherance of any of the aforesaid purposes.
Section 4.2 Acceleration of Default. In case any Event of Default has
occurred and is continuing, the Holder may in his, her or its discretion,
declare the principal of and interest on this Debenture and other moneys payable
hereunder to be due and payable and, the same shall forthwith become immediately
due and payable to the Holder and the Company shall forthwith pay to the Holder
the principal of and accrued and unpaid interest on this Debenture with such
interest to be paid in cash not Common Shares and all other moneys payable
hereunder together with subsequent interest thereon, at the rate borne by this
Debenture, from the date of the said declaration until payment is received by
the Holder, such subsequent interest to be payable in cash not Common Shares at
the times and places in and according to the tenor of the Debenture.
Section 4.3 Enforcement of Security. In case any Event of Default has
occurred and the Holder has declared the principal of and interest on this
Debenture and other moneys payable hereunder to be due and payable pursuant to
Section 5.2, the Holder may (to the extent permitted by law):
(i) Appoint a Receiver - by instrument in writing appoint any person
qualified under applicable legislation, whether an officer or
employee of the Holder or not, to be a receiver (which term shall
include a receiver and manager) of the Company; and, subject to the
provisions of the instrument appointing such receiver, any such
receiver so appointed shall have power (to the extent permitted by
law):
(A) to carry on (or to concur in the carrying on of) all or any part of
the business of the Company,
(B) to make any arrangement or compromise which the receiver shall
consider expedient,
(C) to borrow money on the security of the assets of the Company for the
purpose of the maintenance, preservation or protection of the
business of the Company or for carrying on all or any part of the
business of the Company,
(D) to sell, lease or otherwise dispose of the whole or any part of the
assets of the Company (or to concur therein) at public auction, by
public tender or by private sale, with or without advertisement,
for cash or upon credit or partly for cash and partly for credit,
at such time and upon such terms and conditions as the receiver
shall determine with or without notice and with or without
advertising and without any formality all of which are hereby
waived by the Company, with power to vary or rescind any contract
or sale or other contract, buy at any such auction, resell with or
under any of the powers conferred hereunder without being
answerable for any loss and adjourn any sale from time to time; and
17
the receiver may execute and deliver to any purchaser of the assets
of the Company or any part thereof good and sufficient deeds and
documents for the same, the receiver being irrevocably constituted
the attorney of the Company for the purpose of making any such sale
and executing such deeds and documents, provided that such receiver
shall be deemed the agent of the Company and not that of the Holder
and the Holder shall not be in any way responsible for any
misconduct, negligence or non-feasance of any such receiver, his
servants, agents or employees. To facilitate the foregoing powers,
any such receiver may, to the exclusion of all others, including
the Company, enter upon, use and occupy all premises owned or
occupied by the Company wherein the assets of the Company may be
situate, maintain the assets of the Company upon such premises,
borrow money and use assets of the Company directly in carrying on
the Company's business or as security for loans or advances to
enable him to carry on the Company's business or otherwise, as such
receiver shall, in his discretion, determine;
(ii) Further Rights - exercise any of the other rights to which the
Holder is entitled as holder of this Debenture, including the right
to take proceedings in any court of competent jurisdiction for the
appointment of a receiver or manager, for the sale of the assets of
the Company or any part thereof or for foreclosure;
(iii) Power of Attorney - act as attorney for the Company (and the Company
grants to the Holder its irrevocable power of attorney, which power
shall be binding upon the Company and all third parties) to execute
and deliver on behalf of the Company all documents and instruments
as may be necessary to effect the transfers, assignments and
enforcement procedures contemplated in this Section 5.03; and
(iv) Holder May Purchase Company's Assets - the Holder may become (and
any subsidiary, agent or representative of the Holder may become) a
purchaser at any sale of the assets of the Company, whether made
under the powers of sale contained in this Debenture or pursuant to
judicial proceedings.
Section 4.4 Holder not Obliged to Institute Proceedings. The Holder shall
not be liable or accountable for any failure to enforce the rights and remedies
of the Holder herein and shall not be bound to institute proceedings for the
purpose of collecting, enforcing or realizing the same for the purpose of
preserving any right of the Holder, the other Holders, the Company or any other
Person in respect of the same.
Section 4.5 Application of Proceeds of Realization. Upon enforcement of the
rights and remedies of the Holder herein, any net profits of carrying on the
business of the Company and the net proceeds of realization of any assets of the
Company shall be applied by the Holder or the receiver, interim receiver or
receiver-manager, if any, subject to claims ranking in priority to this
Debenture:
(i) firstly, in payment of all costs, charges and expenses of and
incidental to the appointment of the receiver, interim receiver or
receiver-manager, and the exercise by such person of all or any of
the powers aforesaid, including his reasonable remuneration and all
outgoings properly paid by him;
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(ii) secondly, in payment of all costs, charges and expenses of the
Holder incidental to the enforcement of this Debenture and the
exercise by the Holder of all or any of the powers aforesaid,
including all outgoings properly paid by such Holder;
(iii) thirdly, in payment of all outstanding indebtedness then due and
payable pursuant to this Debenture; and
(iv) fourthly, in payment of all claims ranking subordinate to this
Debenture, by remitting any surplus to the Company.
Section 4.6 Rights and Remedies Cumulative. All rights and remedies of the
Holder set out in this Debenture shall be cumulative and no right or remedy
contained herein is intended to be exclusive but each shall be in addition to
every other right and remedy contained herein or in any existing or future
security document or now or hereafter existing at law or in equity or by
statute. The taking of a judgment or judgments with respect to any of the
obligations hereby secured shall not operate as a merger of any of the covenants
contained in this Debenture.
ARTICLE 5 - SUCCESSOR COMPANIES
Section 5.1 Certain Requirements. The Company shall not enter into any
Corporate Reorganization, unless:
(i) the Successor Company shall execute, prior to or contemporaneously
with the consummation of such Corporate Reorganization, such
instruments as are necessary or advisable to evidence the
assumption by the Successor Company of all of the obligations of
the Company, as the case may be, under this Debenture;
(ii) such Corporate Reorganization shall be upon such terms as to
preserve and not to impair any of the rights and powers of the
Holder hereunder; and
(iii) no condition or event shall exist as to the Company or the Successor
Company either at the time of or immediately after such Corporate
Reorganization and after giving full effect thereto or immediately
after the Successor Company complying with the provisions of
subsection 5.1(i) above which constitutes or would constitute an
Event of Default hereunder.
Section 5.2 Vesting of Powers in Successor. Whenever the conditions of
Section 5.1 have been duly observed and performed, the Successor Company shall
possess and from time to time may exercise each and every right and power of the
Company, under this Debenture in the name of the Company or otherwise and any
act or proceeding by any provision of this Debenture required to be done or
performed by the directors or any officers of the Company may be done and
performed with like force and effect by the directors or the like officer or
officers of such Successor Company.
ARTICLE 6 - MISCELLANEOUS
Section 6.1 Notice to the Holder and to the Company.
Any notice in writing required or permitted to be given hereunder shall be
sufficiently given if delivered personally or mailed by registered mail, postage
prepaid, addressed as follows:
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To the Company at: 671 Westburne Dr.
Concord, Ontario
L4K 4Z1
Attention:
Michele Ciavarella, C.E.O.
To the Holder at: ___________________________
___________________________
___________________________
In all cases with a copy to: Beard Winter LLP
Barristers and Solicitors
Suite 701, 130 Adelaide Street W.
Toronto, ON
M5H 2K4
Attention: Julian L. Doyle
Any such notice given by personal delivery shall conclusively be deemed to be
received on the date of the actual delivery thereof and when given by registered
mail, shall conclusively be deemed to be received on the seventh (7th) Business
Day following the date of mailing. When any party giving ay notice knows, or
ought to know, of any disruption in the operation of the postal system which may
affect the delivery of mail in the ordinary course, any such notice shall not be
mailed but shall be given by personal delivery.
Any party may at any time give notice in writing to the other party of any
change of address of the party giving such notice, and from and after the giving
of such notice, the address therein specified shall be deemed to be the address
of such party for the giving of notices hereunder.
IN WITNESS WHEREOF, the Company has caused its corporate seal to be hereunto
affixed and this Debenture to be signed by its proper officer in that behalf as
of the _____ day of January, 2017.
NEWGIOCO GROUP, INC.
by: _____________________
Name: Michele Ciavarella
Title: C.E.O.
Certified countersigned and
registered by the Transfer Agent:
BEARD WINTER LLP
by: ______________________________
Name: Julian L. Doyle
Title: Partner
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SCHEDULE "C"
COMMON SHARE PURCHASE WARRANT CERTIFICATE
No. ____________
Certificate for ____________ Warrants
NOT EXERCISABLE AFTER 5:00 P.M.,
EASTERN STANDARD TIME, ON JANUARY 24, 2019
NEWGIOCO GROUP, INC.
COMMON SHARE PURCHASE WARRANT CERTIFICATE
THIS CERTIFICATE CERTIFIES THAT ___________________________ or its registered
assigns is the registered holder (the "Holder") of the number of Warrants set
forth above, each of which represents the right to purchase one (1) fully paid
and non-assessable common share (the "Common Share") of NEWGIOCO GROUP, INC., a
corporation organized under the laws of the State of Delaware (the "Company"),
at the Exercise Price (as hereinafter defined), by surrendering this Warrant
Certificate, with the form of Election to Purchase attached hereto duly executed
and by paying in full the Exercise Price (the Common Shares issuable upon
exercise of the Warrants being referred to herein as the "Warrant Shares") at
the principal office of the Company as set forth below. No Warrant may be
exercised after 5:00 P.M., Eastern Standard Time, on January 24, 2019 (the
"Expiration Date"). All Warrants evidenced hereby shall thereafter become void.
Prior to the Expiration Date, subject to any applicable laws, rules or
regulations restricting transferability and to any restriction on
transferability that may appear on this Warrant Certificate, the Holder shall be
entitled to transfer this Warrant Certificate, in whole or in part, upon
surrender of this Warrant Certificate at the principal office of the Company
with the form of assignment set forth hereon duly executed. Upon any such
transfer, a new Warrant Certificate or Warrant Certificates representing the
same aggregate number of Warrant Shares will be issued in accordance with
instructions in the form of assignment.
1. Exercise of the Warrants
At any time prior to the Expiration Date, the Holder shall be entitled to
exercise some or all of the Warrants represented by this Warrant Certificate and
purchase an equal number of Common Shares upon surrender of this Certificate at
the principal office of the Company, together with:
(i) the form of Election to Purchase annexed hereto duly executed; and
(ii) a certified cheque of bank draft, payable at par, in Canadian
currency, to or to the order of the Company, in the amount of the
Exercise Price per Warrant (as hereinafter determined) multiplied
by the number of Warrants being so converted.
The exercise price per Warrant to be exercised shall be one (US$1.00) United
States dollar (the "Exercise Price"). Upon the exercise of less than all of the
Warrants to purchase the Common Shares evidenced by this Warrant Certificate,
there shall be issued to the Holder a new Warrant Certificate in respect of the
Warrants not exercised.
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2. Fractional Shares
The Company shall not be required to issue fractional shares upon the exercise
of some or all of the Warrants represented by this Warrant Certificate.
3. Limitation
This Warrant Certificate shall not entitle the Holder to any of the rights of a
shareholder of the Company, including, without limitation, the tight to vote, to
receive dividends and other distributions, or to attend or receive any notice of
meetings of stockholders or any other proceedings of the Company.
4. Registration of Warrant Certificates
The Company shall number and register the Warrant Certificates in a warrant
register maintained by the Company as they are needed. The Company may deem and
treat the registered holder(s) of the Warrant Certificates as the absolute
owner(s) thereof for all purposes. Upon request by a Holder requesting such
information for the purpose of obtaining a consent, waiver or other action of
Holders, the Company will notify that Holder as to the identity and address of
record of the other Holders.
5. Transfer of Warrant Certificate and Warrant Shares
(1) The Company shall from time to time register the transfer of any
outstanding Warrant Certificates in the warrant register upon surrender
thereof accompanied by a written instrument or instruments of transfer
in form reasonably satisfactory to the Company duly executed by the
Holder or Holders thereof or by the duly appointed legal representative
thereof or by a duly authorized attorney. Upon any such registration of
transfer, the Company shall issue as promptly as practicable in any
event within three (3) Business Days (as hereinafter defined) after
receipt of such notice of transfer of a new Warrant Certificate to the
transferee(s). As used in the Warrant Certificate, the term "Business
Day" means any day which is not a Saturday, Sunday or statutory holiday
in the City of Toronto.
(2) Warrant Certificates may be exchanged at the option of the Holder(s)
thereof when surrendered to the Company at the address set forth herein
for another Warrant Certificate or Warrant Certificates of like tenor
and representing the right to purchase in the aggregate a like number
of Warrant Shares; provided that the Company shall not be required to
issue any Warrant Certificates representing any fractional Warrant
Shares.
(3) The Company shall pay all expenses, taxes and other charges payable in
connection with the preparation, issuance and delivery of new Warrant
Certificates, including, without limitation, any transfer or stamp
taxes.
6. Lost, Stolen, Mutilated or Destroyed Warrant Certificates
If any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the
Company shall issue, execute and deliver, in exchange and substitution for and
upon cancellation of such mutilated Warrant Certificate, or in lieu of or in
substitution for such lost, stolen or destroyed Warrant Certificate, a new
Warrant Certificate representing an equivalent number of Warrants or Warrant
Shares. If required by the Company, the Holder of the mutilated, lost, stolen or
destroyed Warrant Certificate must provide an affidavit of loss and an indemnity
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reasonably sufficient to protect the Company from any loss which it may suffer
if the Warrant Certificate is replaced. Any new Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall be at
any time enforceable by any person.
7. Cancellation of Warrant Certificates
Any Warrant Certificate surrendered upon the exercise of Warrants or for
exchange or transfer, or purchased or otherwise acquired by the Company, shall
be cancelled and shall not be reissued by the Company; and, except as provided
in Section 1 with respect to the exercise of less than all of the Warrants
evidenced by a Warrant Certificate or in Section 5 with respect to an exchange
or transfer, no Warrant Certificate shall be issued hereunder in lieu of such
cancelled Warrant Certificate. Any Warrant Certificate so cancelled shall be
destroyed by the Company.
8. Issuance of Common Shares
As promptly as practicable after the date on which part or all of the Warrants
represented by this Warrant Certificate are exercised (the "Date of Exercise")
of any Warrants and in any event within three (3) Business Days after receipt of
the Election to Purchase, the Company shall issue, or cause its transfer agent
to issue, a certificate or certificates for the number of non-fractional Warrant
Shares (the "Common Share Certificate"), registered in accordance with the
instructions set forth in the Election to Purchase. All Warrant Shares issued
upon the exercise of any Warrants shall be legally and validly authorized and
issued and outstanding, fully paid, non-assessable, free of pre-emptive rights
and free from all taxes, liens, charges and security interests in respect of the
issuance thereof. Each person in whose name any such Common Share Certificate is
issued shall be deemed for all purposes to have become the holder of record of
the Common Shares represented thereby on the Date of the Exercise of the
Warrants resulting in the issuance of such shares, irrespective of the date of
issuance or delivery of such Common Share Certificate.
The Company shall pay all expenses, taxes and other charges payable in
connection with the preparation, issuance and delivery of new Common Share
Certificates, including, without limitation, any transfer or stamp taxes.
9. Reservation of Common Shares; Listing
The Company shall reserve and keep available, free from pre-emptive rights, for
issuance upon the exercise of Warrants, the maximum number of its authorized but
unissued Common Shares which may then be issuable upon the exercise in full of
all outstanding Warrants.
10. No Impairment
The Company shall not by any action, including, without limitation, amending its
articles of incorporation or through any reorganization, transfer of assets,
consolidation, amalgamation, combination, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid, or seek to avoid the
observation or performance of any of the terms of the Warrants, the Warrant
Certificates or this Certificate, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such actions as may
be necessary or appropriate to protect the rights of the Holders against
impairment. Without limiting the generality of the foregoing, the Company shall
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
23
Company to perform its obligations under the Warrants. In case any securities
other than the Common Shares ("Other Securities") shall be issued or sold, or
shall become subject to issue upon the conversion or exchange of any stock (or
Other Securities) of the Company (or any other issuer of Other Securities) or to
subscription, purchase or other acquisition pursuant to any rights or options
granted by the Company (or such other issuer or Person), for a consideration per
share of Other Security such as to dilute the purchase rights evidenced by the
Warrants, the computations, adjustments and readjustments provided for in
Section 11 with respect to the Exercise Price and the number of Warrant Shares
shall be made as nearly as possible in the manner so provided and applied so as
to protect the Holders against the effect of such dilution.
11. Adjustment of Exercise Price
Subject to the provisions of this Section 11, the Exercise Price in effect from
time to time shall be subject to adjustment, as follows:
(1) In the event that the Company shall (i) declare a dividend or make a
distribution on the outstanding Common Shares in additional Common
Shares, (ii) subdivide or reclassify the outstanding Common Shares into
a greater number of shares, or (iii) consolidate, combine or reclassify
the outstanding Common Shares into a fewer number of shares, the
Exercise Price in effect immediately after the record date for such
dividend or distribution or the effective date of such subdivision,
consolidation, combination or reclassification, as the case may be,
shall be adjusted so that it shall equal the price determined by
multiplying the Exercise Price in effect immediately prior thereto by a
fraction, of which the numerator shall be the number of Common Shares
outstanding immediately before such dividend, distribution,
subdivision, consolidation, combination or reclassification, and of
which the denominator shall be the number of Common Shares outstanding
immediately after such dividend, distribution, subdivision,
consolidation, combination or reclassification. Any Common Shares
issuable in payment of a dividend shall be deemed to have been issued
immediately prior to the record date or other applicable date cited in
Sections 11(2) or 11(3) for the purpose of calculating the number of
outstanding Common Shares under Sections 11(2) or 11(3). Such
adjustment shall be made successively whenever any event specified
above shall occur.
(2) In the event that the Company shall fix a record date for the issuance
of rights, options, warrants or convertible or exchangeable securities
to all or substantially all holders of its Common Shares entitling them
(for a period which, by its express terms, expires within forty-five
(45) days after such record date) to subscribe for or purchase Common
Shares at a price per share less than the Fair Market Value of a Common
Share on such record date, the Exercise Price shall be adjusted
immediately thereafter so that it shall equal the price determined by
multiplying the Exercise Price in effect immediately prior thereto by a
fraction, of which the numerator shall be the number of Common Shares
outstanding on such record date plus the maximum number of Common
Shares which the aggregate offering price of the total number of Common
Shares so offered would purchase at the Fair Market Value per share,
and of which the denominator shall be the number of Common Shares
outstanding on such record date plus the number of additional Common
Shares offered for subscription or purchase. Such adjustment shall be
made successively whenever such a record date is fixed. To the extent
that any such rights, options, warrants or convertible or exchangeable
securities are not so issued or expire unexercised, the Exercise Price
23
then in effect shall be readjusted to the Exercise Price which would
then be in effect if such unissued or unexercised rights, options,
warrants or convertible or exchangeable securities had not been
issuable. As used in this Warrant Certificate, the term "Fair Market
Value" means the price at which a buyer and seller would transfer a
Common Share both being fully informed of all relevant information and
neither being under any compulsion to buy or sell, as the case may be
and, for the purposes of this Section 11(2), shall, at the request of a
Holder, be determined by the Company's Board of Directors in good faith
and on a reasonable basis.
(3) In the event that the Company shall fix a record date for the making of
a distribution to all or substantially all holders of Common Shares (i)
of shares of any class other than its Common Shares or (ii) of the
evidence of its indebtedness or (iii) of assets or (iv) of rights,
options, warrants or convertible or exchangeable securities, then in
each such case the Exercise Price in effect immediately thereafter
shall be determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, of which the numerator shall
be the total number of Common Shares outstanding on such record date
multiplied by the Fair Market Value per share on such record date, less
the aggregate fair market value as determined in good faith by the
Company's Board of Directors of said shares or evidences of
indebtedness or assets or rights, options, warrants or convertible or
exchangeable securities as distributed, and of which the denominator
shall be the total number of Common Shares outstanding on such record
date multiplied by such Fair Market Value per share. Such adjustment
shall be made successively whenever such a record date is fixed;
provided, however, that in no event shall the Exercise Price be less
than zero. In the event that such distribution is not so made, or that
such distribution, by its express terms, is intended to be made, and is
in fact made, to all holders of Warrant Shares upon exercise of their
respective Warrants, the Exercise Price then in effect shall be
readjusted to the Exercise Price which would then be in effect if such
record date had not been fixed.
12. No Adjustment to Exercise Price
No adjustment in the Exercise Price in accordance with the provisions of
Section 11 need be made unless such adjustment would amount to a change of at
least one (1.0%) per cent in such Exercise Price, provided, however, that the
amount by which any adjustment is not made by reason of the provisions of this
Section 12 shall be carried forward and taken into account at the time of any
subsequent adjustment in the Exercise Price.
13. Adjustment of Number of Shares
Upon each adjustment of the Exercise Price pursuant to Section 11, each Warrant
shall thereupon evidence the right to purchase that number of Warrant Shares
(calculated to the nearest hundredth of a share) obtained by multiplying the
number of Warrant Shares purchasable immediately prior to such adjustment upon
exercise of the Warrant by the Exercise Price in effect immediately prior to
such adjustment and dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment.
14. Reorganizations
In the event of any capital reorganization, other than in the cases referred to
in Section 11(1), or the consolidation, amalgamation, merger or other
combination of the Company with or into another corporation (other than a
25
consolidation, amalgamation, merger or other combination in which the Company is
the continuing corporation and which does not result in any reclassification of
the outstanding Common Shares or the conversion of such outstanding Common
Shares into shares of other stock or other securities or property), or the sale,
transfer or conveyance of the property of the Company as an entirety or
substantially as an entirety (collectively such actions being hereinafter
referred to as "Reorganizations"), there shall thereafter be deliverable upon
exercise of any Warrant (in lieu of the number of Warrant Shares theretofore
deliverable) the number of shares of stock or other securities of property to
which a holder of the number of Warrant Shares which would otherwise have been
deliverable upon the exercise of such Warrant would have been entitled upon such
Reorganization if such Warrant had been exercised in full immediately prior to
such Reorganization. In the event of any Reorganization, appropriate adjustment,
as determined in good faith by the Company's Board of Directors, shall be made
in the application of the provisions herein set forth with respect to the rights
and interests of Holders so that the provisions set forth herein shall
thereafter be applicable, as nearly as possible, in relation to any shares or
other property thereafter deliverable upon exercise of Warrants. Any such
adjustment shall be made by and set forth in a supplemental agreement prepared
by the Company or any successor thereto, between the Company and any successor
thereto, and shall for all purposes hereof conclusively be deemed to be an
appropriate adjustment. The Company shall not effect any such Reorganization,
unless upon or prior to the consummation thereof the successor corporation, or
if the Company shall be the surviving corporation in any such Reorganization and
is not the issuer of the shares of stock or other securities or property to be
delivered to holders of Common Shares outstanding at the effective time thereof,
then such issuer, shall assume by written instrument the obligation to deliver
to the Holder of any Warrant Certificate such shares of stock, securities, cash
or other property as such holder shall be entitled to purchase in accordance
with the foregoing provisions.
15. Notice of Certain Actions
In the event the Company shall (a) declare any dividend payable in stock to the
holders of its Common Shares or make any other distribution in property other
than cash to the holders of its Common Shares, (b) offer to the holders of its
Common Shares rights to subscribe for or purchase any shares of any class of
stock or any other rights or options, or (c) effect any reclassification of its
Common Shares (other than a reclassification involving merely the subdivision or
combination of outstanding Common Shares) or any capital reorganization or any
consolidation, amalgamation, merger or other combination (other than a
consolidation, amalgamation, merger or other combination in which no
distribution of securities or other property is made to holders of Common
Shares) or any sale, transfer or other disposition of its property, assets and
business substantially as an entirety, or the liquidation, dissolution or
winding up of in the Company; then, in each such case, the Company shall cause
notice of such proposed action to be mailed to each Holder at least thirty (30)
days prior to such action. Such notice shall specify the date on which the books
of the Company shall close, or a record be taken, for determining holders of
Common Shares entitled to receive such stock dividend or other distribution or
such rights or options, or the date on which such reclassification,
reorganization, consolidation, amalgamation, combination, merger, sale,
transfer, other disposition, liquidation, dissolution, winding up or exchange
shall take place or commence , as the case may be, and the date as of which it
is expected that holders of record of Common Shares shall be entitled to receive
securities or other property deliverable upon such action, if any such date has
been fixed. Such notice shall be mailed in the case of any action covered by
paragraph (a) and (b) of this Section 16, at least ten (10) days prior to the
record date for determining holders of the Common Shares for purposes of
26
receiving such payment or offer, and in the case of any action covered by this
paragraph (c), at least ten (10) days prior to the record date to determine
holders of Common Shares entitled to receive such securities or other property.
16. Certificate of Adjustment
The Company shall perform any computations and determine any adjustments
required to be made under this Certificate (the "Adjustment") and shall cause an
independent nationally recognized firm of chartered accountants selected by the
Company to verify each Adjustment. As promptly as practicable after determining
any Adjustment, and upon receipt of the aforementioned verification, the Company
shall prepare a certificate executed by the President of the Company setting
forth such Adjustment and mail such certificate to each Holder (an "Adjustment
Notice"). The Adjustment Notice shall include in reasonable detail (a) the
events precipitating the Adjustment, (b) the computations relating to such
Adjustment, and (c) the Exercise Price and the number of shares or the
securities or other property purchasable upon exercise of each Warrant after
giving effect to such Adjustment. In the event that the Holders of Warrants
entitling such Holders to purchase a majority of the Warrant Shares subject to
purchase upon exercise of Warrants at the time outstanding (the "Required
Interest") shall disagree with any Adjustment, the Required Interest shall give
notice thereof (the "Dispute Notice") to the Company within fifteen (15) days
after the Adjustment Notice. Upon receipt of the Dispute Notice, the Company
shall promptly engage an independent nationally recognized firm of chartered
accountants acceptable to the Required Interest to make an independent
determination of such disputed Adjustment (the "Independent Adjustment"). The
Independent Adjustment shall be final and binding on the Company and all
Holders. If the disputed Adjustment and the Independent Adjustment differ by an
amount of three (3%) per cent or less of the value of the disputed Adjustment,
then the costs of conducting the independent determination shall be borne by the
Required Interest (pro rata, in accordance with the number of Warrants held by
each, with each subject Holder jointly and severally liable); if the disputed
Adjustment and the Independent Adjustment differ by more than three (3%) per
cent of the disputed Adjustment, then the costs of conducting the independent
determination shall be borne entirely by the Company; provided that in each case
costs separately incurred by the Company and any Holders shall be separately
borne by them.
17. Warrant Certificate Amendments
Irrespective of any adjustments pursuant to this Section 17, Warrant
Certificates theretofore or thereafter issued need not be amended or replaced,
but certificates thereafter issued shall bear an appropriate legend or other
notice of any adjustments; provided the Company may, at its option, issue new
Warrant Certificates evidencing Warrants in such form as may be approved by its
Board of Directors to reflect any adjustment in the Exercise Price and number of
Warrant shares purchasable under the Warrants.
18. Fractional Shares
The Company shall not be required upon the exercise of any Warrant to issue
fractional Warrant Shares which may result from adjustments in accordance with
this Section 18 to the Exercise Price or number of Warrant Shares purchasable
under each Warrant. If more than one Warrant is exercised at one time by the
same Holder, the number of Warrant Shares which shall be issuable upon the
exercise thereof shall be computed based on the aggregate number of Warrant
Shares purchasable upon exercise of such Warrants.
27
19. Payment of Taxes and Charges
The Company will pay all taxes (other than income taxes or other similar taxes
personal to the Holders, including without limitation, non resident withholding
taxes) and other government charges payable in connection with the issuance or
delivery or transfer of the Warrants and the initial issuance or delivery of
Warrant Shares upon the exercise of any Warrants and payment of the Exercise
Price.
20. Changes to Agreement
The Company, when authorized by its Board of Directors, with the written consent
of Holders of Warrants entitling such Holders to purchase a majority of the
Warrant Shares subject to purchase upon exercise of the Warrants outstanding at
such time, may amend or supplement this Certificate, except that no amendment
which (i) increases the Exercise Price or reduces the number of Warrant Shares
or otherwise economically impairs the value of the Warrants or (ii) amends the
provisions of Sections 11, 12, 13, 14, 15, 16, 17 and 18 shall be enforceable
against a Holder who has not consented in writing to such amendment.
21. Assignment
All the covenants and provisions of this Certificate by or for the benefit of
the Company or the Holders shall bind and inure to the benefit of their
respective successors and assigns.
22. Successor to Company
In the event that the Company consolidates, amalgamates, merges or otherwise
combines with or into any other corporation or sells, transfers or otherwise
conveys its property, assets and business substantially as an entirety to a
successor corporation or entity, the Company shall prior to such events becoming
effective, have such successor corporation or other entity assume by a written
instrument each and every undertaking covenant and condition of this Certificate
to be performed and observed by the Company, and such successor corporation or
other entity shall be deemed, upon the closing of such merger, amalgamation,
combination, consolidation, conveyance or sale, to have so assumed such
liabilities.
23. Notices
Any notice or demand required by this Certificate to be given or made by any
Holder to or on the Company shall be sufficiently given or made if such notice
is in writing and sent by first-class or registered mail, postage prepaid,
addressed as follows:
NEWGIOCO GROUP, INC.
671 Westburne Dr.
Concord, Ontario
L4K 4Z1
Attention: C.E.O.
With a copy to:
Beard Winter LLP
130 Adelaide St. W.
Suite 701
Toronto, Ontario
M5H 2K4
Attention: Julian L. Doyle
28
Any notice or demand required by this Certificate to be given or made by the
Company to or on any Holder shall be sufficiently given or made if such notice
is in writing and sent by first-class or registered mail, postage prepaid,
addressed to such Holder and sent to the address set below such Holder's name on
the attached signature pages or, if a subsequent Holder, the address of such
Holder on the Company's warrant register.
Any notice or demand required by this Certificate to be given or made by the
Company to or on any Holder shall be sufficiently given or made, whether or not
such Holder receives the notice, five (5) days after mailing, if sent by
first-class or registered mail, postage prepaid, addressed to such Holder at its
last address as shown on the books of the Company. Otherwise, such notice or
demand shall be deemed given when received by the party entitled thereto.
24. Defects in Notice
Failure to file any certificate or notice or to mail any notice, or any defect
in any certificate or notice pursuant to this Certificate shall not affect in
any way the right of any Holder or the legality or validity of any adjustment
made pursuant to Section 11 hereof.
25. Governing Law
This Certificate and each Warrant Certificate issued hereunder shall be governed
by the laws of the State of Delaware applicable therein without regard to
principles of conflicts of laws thereof
26. Standing
Nothing in this Certificate expressed and nothing that may be implied from any
of the provisions hereof is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the Company and the Holders any
right, remedy or claim under or by reason of this Certificate or of any
covenant, condition, stipulation, promise or agreement contained herein; and all
covenants, conditions, stipulations, promises and agreements contained in this
Certificate shall be for the sole and exclusive benefit of the Company and its
successors and the Holders.
27. Headings
The descriptive headings of the sections of this Certificate are inserted for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
28. Counterparts
This Certificate may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
29. Availability of the Agreement
The Company shall keep copies of this Certificate available for inspection by
Holders during normal business hours. Copies of this Certificate may be obtained
upon written request addressed to the Company at the address set forth in
Section 23.
29
30. Entire Agreement
This Certificate, including Exhibits referred to herein and the other agreements
and writings specifically identified herein or contemplated hereby, is complete,
reflects the entire agreement of the parties with respect to its subject matter,
and supersedes all previous written or oral negotiations, commitments and
writings.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed.
DATED as of the _____ day of January, 2017. NEWGIOCO GROUP, INC.
By:_________________________________
Name: Michele Ciavarella
Title: C.E.O.
30
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby irrevocably sells, assigns and
transfers unto the assignee named below all of the rights of the undersigned
represented by the within Warrant Certificate, with respect to the number of
Warrants to purchase Common Shares set for below:
Name of Assignee _____________________ No. of Warrants________________
Address: _____________________________
_____________________________
_____________________________
and does hereby irrevocably constitute and appoint ____________ true and lawful
attorney, to make such transfer on the books of NEWGIOCO GROUP, INC. maintained
for that purpose, with full power of substitution in the premises.
DATED:____________________________ ____________________________________
Signature
____________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
31
FORM OF ELECTION OF PURCHASE
The undersigned hereby irrevocably elects to exercise ____________ of the
Warrants represented by the Warrant Certificate and to purchase the Common
Shares issuable upon the exercise of said Warrants, and requests that
certificates for such shares be issued and delivered as follows:
ISSUE TO: _________________________________________________________________
(NAME)
_____________________________________________________________________________
(ADDRESS, INCLUDING POSTAL CODE)
_____________________________________________________________________________
(S.I.N. OR OTHER IDENTIFICATION NUMBER)
DELIVER TO: _________________________________________________________________
(NAME)
at___________________________________________________________________________
(ADDRESS, INCLUDING POSTAL CODE)
In full payment of the purchase price with respect to the exercise of Warrants
to purchase Common Shares, the undersigned hereby tenders payment of
CDN$_________ by certified cheque, cashier's cheque or money order payable to
the order of the Company.
If the number of Warrants to purchase the Common Shares hereby exercised is less
than all the Warrants represented by this Warrant Certificate, the undersigned
requests that a new Warrant Certificate representing the number of such full
Warrants not exercised be issued and delivered as follows:
ISSUE TO: _________________________________________________________________
(NAME)
_____________________________________________________________________________
(ADDRESS, INCLUDING POSTAL CODE)
_____________________________________________________________________________
(S.I.N. OR OTHER IDENTIFICATION NUMBER)
DELIVER TO: _________________________________________________________________
(NAME)
_____________________________________________________________________________
(ADDRESS, INCLUDING POSTAL CODE)
Date: __________________ _____________________________________
Signature
(Signature must conform in all respects to name of holder as specified on the
face of the Warrant Certificate.)
PLEASE INSERT S.I.N. OR TAX I.D. NUMBER OF HOLDER ___________________________
32
SCHEDULE "D"
ACCREDITED INVESTOR STATUS CERTIFICATE
The categories listed herein contain certain specifically defined terms. If you
are unsure as to the meanings of those terms, or are unsure as to the
applicability of any category below, please contact your broker and/or legal
advisor before completing this certificate.
To: NEWGIOCO GROUP, INC. (the "Issuer")
Re: Purchase of Units.
In connection with the purchase by the undersigned purchaser of the Units (the
"Purchaser"), the Purchaser, on its own behalf and on behalf of each of the
beneficial purchasers for whom the Purchaser is acting, hereby represents and
warrants to the Issuer that:
1. the Purchaser, or each of the beneficial purchasers for whom the
Purchaser is acting, is resident in the Canadian province set out at
the end of this certificate;
2. the Purchaser, or each of the beneficial purchasers for whom the
Purchaser is acting, is purchasing the Units as principal for its own
account and not for the benefit of any other person; and
3. the Purchaser, or each of the beneficial purchasers for whom the
Purchaser is acting, is an "accredited investor" within the meaning of
National Instrument 45-106 ("N145-106") because the Purchaser, or that
beneficial purchaser, is correctly described by the category of
"accredited investor" marked below.
(PLEASE CHECK THE BOX OF THE APPLICABLE CATEGORY OF ACCREDITED INVESTOR)
___ (a) a Canadian financial institution, or a Schedule III bank,
___ (b) the Business Development Bank of Canada incorporated under the Business
Development Bank of Canada Act (Canada),
___ (c) a subsidiary of any person referred to in paragraphs (a) or (b), if the
person owns all of the voting securities of the subsidiary, except the
voting securities required by law to be owned by directors of that
subsidiary,
___ (d) a person registered under the securities legislation of a jurisdiction
of Canada as an adviser or dealer, other than a person registered
solely as a limited market dealer under one or both of the Securities
Act (Ontario) or the Securities Act (Newfoundland and Labrador),
___ (e) an individual registered or formerly registered under the securities
legislation of a jurisdiction of Canada as a representative of a person
referred to in paragraph (d),
___ (f) the Government of Canada or a jurisdiction of Canada, or any crown
corporation, agency or wholly owned entity of the Government of Canada
or a jurisdiction of Canada,
___ (g) a municipality, public board or commission in Canada and a metropolitan
community, school board, the Comite de gestion de la taxe scolaire de
l'ile de Montreal or an intermunicipal management board in Quebec,
33
___ (h) any national, federal, state, provincial, territorial or municipal
government of or in any foreign jurisdiction, or any agency of that
government,
___ (i) a pension fund that is regulated by the Office of the Superintendent of
Financial Institutions (Canada), a pension commission or similar
regulatory authority of a jurisdiction of Canada,
___ (j) an individual who, either alone or with a spouse, beneficially owns
financial assets having an aggregate realizable value that before
taxes, but net of any related liabilities, exceeds $1,000,000,
___ (k) an individual whose net income before taxes exceeded $200,000 in each of
the 2 most recent calendar years or whose net income before taxes
combined with that of a spouse exceeded $300,000 in each of the 2 most
recent calendar years and who, in either case, reasonably expects to
exceed that net income level in the current calendar year,
___ (l) an individual who, either alone or with a spouse, has net assets of at
least $5,000,000,
___ (m) a person, other than an individual or investment fund, that has net
assets of at least $5,000,000 as shown on its most recently prepared
financial statements,
___ (n) an investment fund that distributes or has distributed its securities
only to
(i) a person that is or was an accredited investor at the time of
the distribution,
(ii) a person that acquires or acquired securities in the
circumstances referred to in sections 2.10 [Minimum amount
investment], or 2.19 [Additional investment in investment
funds], or
(iii) a person described in paragraph (i) or (ii) that acquires or
acquired securities under section 2.18 [Investment fund
reinvestment],
___ (o) an investment fund that distributes or has distributed securities under
a prospectus in a jurisdiction of Canada for which the regulator or, in
Quebec, the securities regulatory authority, has issued a receipt,
___ (p) a trust company or trust corporation registered or authorized to carry
on business under the Trust and Loan Companies Act (Canada) or under
comparable legislation in a jurisdiction of Canada or a foreign
jurisdiction, acting on behalf of a fully managed account managed by
the trust company or trust corporation, as the case may be,
___ (q) a person acting on behalf of a fully managed account managed by that
person, if that person
(i) is registered or authorized to carry on business as an adviser
or the equivalent under the securities legislation of a
jurisdiction of Canada or a foreign jurisdiction, and
(ii) in Ontario, is purchasing a security that is not a security of
an investment fund,
34
___ (r) a registered charity under the Income Tax Act (Canada) that, in regard
to the trade, has obtained advice from an eligibility adviser or an
adviser registered under the securities legislation of the jurisdiction
of the registered charity to give advice on the securities being
traded,
___ (s) an entity organized in a foreign jurisdiction that is analogous to any
of the entities referred to in paragraphs (a) to (d) or paragraph (i)
in form and function,
___ (t) a person in respect of which all of the owners of interests, direct,
indirect or beneficial, except the voting securities required by law to
be owned by directors, are persons that are accredited investors,
___ (u) an investment fund that is advised by a person registered as an adviser
or a person that is exempt from registration as an adviser, or
___ (v) a person that is recognized or designated by the securities regulatory
authority or, except in Ontario and Quebec, the regulator as (i) an
accredited investor, or (ii) an exempt purchaser in Alberta or British
Columbia after this instrument comes into force.
For the purposes hereof, the following definitions are included for convenience:
"Canadian financial institution" means (i) an association governed by the
Cooperative Credit Associations Act (Canada) or a central cooperative credit
society for which an order has been made under Section 473(1) of that Act, or
(ii) a bank, loan corporation, trust company, trust corporation, insurance
company, treasury branch, credit union, caisse populaire, financial services
cooperative, or league that, in each case, is authorized by an enactment of
Canada or a jurisdiction of Canada to carry on business in Canada or a
jurisdiction of Canada;
"control person" has the same meaning as in securities legislation except in
Manitoba, Newfoundland and Labrador, Northwest Territories, Nova Scotia,
Nunavut, Ontario, Prince Edward Island and Quebec where control person means any
person that holds or is one of a combination of persons that holds (i) a
sufficient number of any of the securities of an issuer so as to affect
materially the control of the issuer, or (ii) more than 20% of the outstanding
voting securities of an issuer except where there is evidence showing that the
holding of those securities does not affect materially the control of the
issuer;
"entity" means a company, syndicate, partnership, trust or unincorporated
organization;
"financial assets" means cash, securities, or a contract of insurance, a deposit
or an evidence of a deposit that is not a security for the purposes of
securities legislation;
"founder" means, in respect of an issuer, a person who, (i) acting alone, in
conjunction, or in concert with one or more persons, directly or indirectly,
takes the initiative in founding, organizing or substantially reorganizing the
business of the issuer, and (ii) at the time of the trade is actively involved
in the business of the issuer;
"fully managed account" means an account of a client for which a person makes
the investment decisions if that person has full discretion to trade in
securities for the account without requiring the client's express consent to a
transaction;
35
"investment fund" means a mutual fund or a non-redeemable investment fund, and,
for greater certainty in British Columbia, includes an employee venture capital
corporation that does not have a restricted constitution, and is registered
under Part 2 of the Employee Investment Act (British Columbia), R.S.B.C. 1996 c.
112, and whose business objective is making multiple investments and a venture
capital corporation registered under Part 1 of the Small Business Venture
Capital Act (British Columbia), R.S.B.C. 1996 c. 429 whose business objective is
making multiple investments;
"related liabilities" means liabilities incurred or assumed for the purpose of
financing the acquisition or ownership of financial assets and liabilities that
are secured by financial assets;
"Schedule Ill bank" means an authorized foreign bank named in Schedule Ill of
the Bank Act (Canada);
"spouse" means an individual who (i) is married to another individual and is not
living separate and apart within the meaning of the Divorce Act (Canada), from
the other individual, (ii) is living with another individual in a marriage-like
relationship, including a marriage-like relationship between individuals of the
same gender, or (iii) in Alberta, is an individual referred to in paragraph (i)
or (ii), or is an adult interdependent partner within the meaning of the Adult
Interdependent Relationships Act (Alberta); and
"subsidiary" means an issuer that is controlled directly or indirectly by
another issuer and includes a subsidiary of that subsidiary.
36
In N145-106 a person or company is considered to be an affiliated entity of
another person or company if one is a subsidiary entity of the other, or if both
are subsidiary entities of the same person or company, or if each of them is
controlled by the same person or company.
In N145-106 a person (first person) is considered to control another person
(second person) if (a) the first person, directly or indirectly, beneficially
owns or exercises control or direction over securities of the second person
carrying votes which, if exercised, would entitle the first person to elect a
majority of the directors of the second person, unless that first person holds
the voting securities only to secure an obligation, (b) the second person is a
partnership, other than a limited partnership, and the first person holds more
than 50% of the interests of the partnership, or (c) the second person is a
limited partnership and the general partner of the limited partnership is the
first person.
The foregoing representations are true and accurate as of the date of this
certificate and will be true and accurate as of the date on which the Securities
are purchased. If any such representations shall not be true and accurate prior
to the date on which the Securities are purchased, the undersigned shall give
immediate written notice of such fact to the Issuer.
Dated: January _____, 2017. Signed:________________________________
________________________________
Print Name of Purchaser
________________________________
If Purchaser is a Corporation,
print name and title of
Authorized Signing officer
________________________________
Province in which the Purchaser
is resident
37
SCHEDULE "E"
PAYMENT INSTRUCTIONS
The subscription price may be paid in Canadian currency by certified cheque or
bank draft.
Please make the certified cheque or bank draft payable to "Beard Winter LLP, in
trust" and deliver it to:
Beard Winter LLP
130 Adelaide Street West
Suite 701
Toronto, Ontario
M5H 2K4
Attention: Julian L. Doyle
Alternatively, please wire transfer immediately available funds to Beard Winter
LLP as follows:
Transit #: [WITHELD]
Account #: [WITHELD]
ABA # [WITHELD]
Swift Code: ROYCCAT2
Name of
Account: Beard Winter LLP
