EXHIBIT 10.2

 

THIS INVESTMENT AGREEMENT made as of the 31st day of January, 2019.

 

AMONG:

 

AUSTRALIS CAPITAL INC., a corporation formed under the laws of Alberta, Canada
(“Australis”)

 

– and –

 

BODY AND MIND INC., a corporation formed under the laws of Nevada, USA (“BaM”)

 

WHEREAS

 

A. Australis wishes to subscribe for and purchase from BaM, and BaM has agreed
to issue and sell to Australis, 1,768,545 Common Shares (as defined herein) of
BaM at a price of $0.585 per Common Share.

 

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the respective
promises, covenants, representations, warranties, indemnities and agreements
herein contained and for other good and valuable consideration (the receipt and
sufficiency of which are expressly acknowledged), the Parties (as defined
herein) covenant and agree as follows:

 

ARTICLE 1

INTERPRETATION

 

Definitions

 

1.1 In this Agreement, including the recitals hereto, unless the context
otherwise requires, the following words and phrases will have the meanings
specified below:

 

 

(a) “Applicable Laws” means, in relation to any person, property, transaction or
event, all applicable provisions of (i) any federal, provincial, state or local
laws, statutes, rules and regulations, and (ii) orders, judgments, decisions and
official directives of Governmental Authorities to which the person is a party
or by which it is bound or having application to the property, transaction or
event, as the case may be;

 

 

 

 

(b) “Applicable Securities Laws” means, collectively, and as the context may
require, the securities legislation having application and the rules, policies,
notices and orders issued by securities regulatory authorities having
application in the circumstances;

 

 

 

 

(c) “Australis” means Australis Capital Inc.;

 

 

 

 

(d) “BaM” means Body and Mind Inc.;

 

 

 

 

(e) “Board” means the board of directors of BaM;

 

 

 

 

(f) “Business Day” means any day, other than a Saturday, Sunday or statutory
holiday in Vancouver, British Columbia;

 

   

   

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(g) “Closing” means the completion of the issue and sale of the Purchased
Securities as provided herein;

 

 

 

 

(h) “Closing Date” means the date of the Closing, to be on or about January 31,
2019, or such other date as may be agreed to between BaM and Australis;

 

 

 

 

(i) “Commissions” has the meaning given to it in Section 4.2;

 

 

 

 

(j) “Common Share” means one common share in the share capital of BaM;

 

 

 

 

(k) “CSE” means the Canadian Securities Exchange;

 

 

 

 

(l) “Financing” means the non-brokered private placement of the Purchased
Securities under the terms of this Agreement;

 

 

 

 

(m) “Governmental Authority” means: (i) any federal, provincial, state, county,
municipal or local government or governmental body, including any department,
agency, commission, board or other authority thereof, exercising any statutory,
regulatory, expropriation or taxing authority; (ii) any quasi-governmental body
acting under the valid authority of any of the foregoing; and (iii) any
domestic, foreign or international judicial, quasi-judicial or administrative
court, tribunal, commission, board, panel or arbitrator having competent
jurisdiction over BaM;

 

 

 

 

(n) “Hazardous Substances” has the meaning given to it in Section 3.1(r);

 

 

 

 

(o) “Material Adverse Effect” means a fact, circumstance, change or event that
(individually or in the aggregate with all such other facts, circumstances,
changes or events) is materially adverse to the business, operations, results of
operations, cash flow, revenue, assets, liabilities, obligations (whether
absolute, accrued, conditional or otherwise) or condition (financial or
otherwise) of BaM and its subsidiaries on a consolidated basis, other than a
change, event, violation, inaccuracy or circumstance:

 

 

(i) relating to the global economy or securities markets in general;

 

 

 

 

(ii) resulting from conditions affecting the cannabis industry as a whole;

 

 

 

 

(iii) resulting from general economic, financial, currency exchange, securities
or commodity market conditions in Canada; or

 

 

 

 

(iv) resulting from the rate at which Canadian dollars or United States dollars
can be exchanged for any foreign currency;

 

 

(p) “Parties” means BaM and Australis, collectively;

 

 

 

 

(q) “PCMLTFA” has the meaning given to it in Section 4.1(t);

 

 

 

 

(r) “Permits” has the meaning given to it in Section 3.1(t);

 

 

 

 

(s) “Public Record” means information which has been publicly filed at
www.sedar.com by BaM under Applicable Securities Laws;

 

 

 

 

(t) “Purchase Price” has the meaning given to it in Section 2.1;

 

   

   

- 3 -

 

 

(u) “Purchased Securities” means the Common Shares purchased by Australis
pursuant to this Agreement;

 

 

 

 

(v) “Subscriptions Funds” means the funds representing the Purchase Price;

 

 

 

 

(w) “Transfer Agent” means New Horizon Transfer Agency, the transfer agent for
BaM;

 

 

 

 

(x) “U.S. Person” has the meaning ascribed to such term in Rule 902(k) of
Regulation S under the U.S. Securities Act; and

 

 

 

 

(y) “U.S. Securities Act” means the United States Securities Act of 1933, as
amended.

 

Interpretation

 

1.2 Unless the context otherwise requires, the following provisions will govern
the interpretation of this Agreement:

 

 

(a) the terms “in writing” or “written” include printed or typewritten
communications or any electronic means of communication by which words are
capable of being visually reproduced at a distant point of reception, including
by facsimile;

 

 

 

 

(b) “this Agreement”, “hereto”, “herein”, “hereby”, “hereunder”, “hereof” and
similar expressions refer to this Agreement as a whole, and not to any
particular Article, Section or other subdivision hereof, and includes each and
every instrument varying, amending, modifying or supplementing this Agreement;

 

 

 

 

(c) the division of this Agreement into Articles, Sections and other
subdivisions and the insertion of headings are for convenience of reference only
and will not affect the construction or interpretation of this Agreement; and

 

 

 

 

(d) unless otherwise specified all dollar amounts referred to in this Agreement
are in lawful money of Canada.

 

ARTICLE 2

PURCHASE PRICE

 

Purchase Price

 

2.1 Subject to the terms and conditions set forth herein, Australis hereby
subscribes for and agrees to purchase from BaM, and BaM hereby accepts the
subscription and agrees to issue and sell to Australis, 1,768,545 Common Shares
at a price of $0.585 per Common Share for an aggregate purchase price of
$1,034,598.82 (the “Purchase Price”).

 

   

   

- 4 -

 
ARTICLE 3
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF BAM

 

Representations and Warranties of BaM

 

3.1 BaM represents and warrants to Australis, as at the Closing Date, and
acknowledges that Australis is relying upon such representations and warranties
in entering into this Agreement, as follows:

 

 

(a) BaM is a valid and subsisting corporation under the laws of the state of
Nevada and is qualified or registered to transact business in each jurisdiction
in which failure to be so qualified or registered would reasonably be expected
to constitute a Material Adverse Effect;

 

 

 

 

(b) BaM has the corporate power and capacity to enter into this Agreement and to
perform all of its obligations hereunder. The execution and delivery of this
Agreement, and the consummation by BaM of the transactions hereunder, has been
duly authorized by all necessary corporate action on the part of BaM (including
the approval of the Board) and no other proceedings on the part of BaM are or
will be necessary to authorize this Agreement or the transactions contemplated
hereunder;

 

 

 

 

(c) this Agreement has been duly executed and delivered by BaM and is a legal,
valid and binding obligation of BaM, enforceable against BaM in accordance with
its terms, subject to applicable bankruptcy or similar laws affecting
enforcement of creditors’ rights generally and to the extent that equitable
remedies such as specific performance and injunction are in the discretion of
the court from which they are sought;

 

 

 

 

(d) BaM has the power and authority to issue and deliver the Common Shares;

 

 

 

 

(e) each of the execution and delivery of this Agreement and all documents
contemplated hereunder, the performance by BaM of its obligations hereunder or
thereunder, the issue and sale of the Purchased Securities hereunder and the
consummation of the transactions contemplated hereby do not and will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under (whether after notice or lapse of
time or both), (i) any statute, rule or regulation applicable to BaM, including
Applicable Securities Laws; (ii) the constating documents or resolutions of BaM
which are in effect at the date hereof; (iii) any debt instrument, material
agreement, mortgage, indenture, contract, agreement, instrument, lease or other
document to which BaM is a party or by which it is bound; or (iv) any judgment,
decree or order binding BaM or the property or assets of BaM;

 

 

 

 

(f) the Purchased Securities issued at Closing, when paid for in accordance with
the provisions of this Agreement will be duly and validly issued as fully paid
and non-assessable Common Shares in the capital of BaM;

 

 

 

 

(g) to BaM’s knowledge, (i) there is no civil, administrative, regulatory,
criminal or investigative action or proceeding, or arbitration or other dispute
settlement procedure, pending or threatened against BaM by or before any
Governmental Authority; and (ii) no event has occurred that would reasonably be
expected to give rise to any such action, proceeding or procedure where the same
would in each case reasonably be expected to constitute a Material Adverse
Effect;

 

   

   

- 5 -

 

 

(h) there is no judgment, decree, award or order of any Governmental Authority
outstanding against (and binding upon) BaM that has or is reasonably expected to
constitute a Material Adverse Effect or which prohibits or materially impairs
the conduct of BaM’s business as currently conducted;

 

 

 

 

(i) to the best of the knowledge of BaM, no person, firm or corporation acting
or purporting to act at the request of BaM is entitled to any brokerage, agency
or finder’s fee in connection with the transactions described herein;

 

 

 

 

(j) BaM is a “reporting issuer” in the provinces of British Columbia and Ontario
and the Common Shares are listed on the CSE under the symbol “BAMM”;

 

 

 

 

(k) as of the date hereof, the authorized capital of BaM consists of 900,000,000
Common Shares with a par value of $0.0001, of which 68,479,141 Common Shares are
issued and outstanding as fully paid and non-assessable. Additionally, the
Company has a commitment to issue an aggregate of 282,000 Common Shares and an
aggregate of 2,909,091 convertible debentures, 22,900,660 share purchase
warrants and 6,075,000 stock options outstanding, as previously disclosed to
Australis and, except as disclosed in the Public Record, no person has any
right, agreement or option, present or future, contingent or absolute, or any
right capable of becoming such a right, agreement or option, pre-emptive,
contractual or otherwise, for the issue or allotment of any unissued shares in
the capital of BaM or any other security convertible into or exchangeable for
any such shares, or to require BaM to purchase, redeem or otherwise acquire any
of the issued and outstanding shares in its capital other;

 

 

 

 

(l) the Public Record complies in all material respects with the requirements of
Applicable Securities Laws;

 

 

 

 

(m) the Public Record and all financial, marketing, sales and operational
information provided to Australis are true and correct in all material respects
and do not contain any misrepresentations (as such term is defined in the
Applicable Securities Laws);

 

 

 

 

(n) the financial statements filed with the Commissions or supplied by BaM have
been prepared in accordance with Canadian generally accepted accounting
principles, international financial reporting standards or in conformity with
accounting principles generally accepted in the United States of America, as
applicable; contain no misrepresentations; present fairly, fully and correctly,
in all material respects, the financial position and all material liabilities
(accrued, absolute, contingent or otherwise) of BaM, as of the date thereof; and
there have been no adverse material changes (as defined in Applicable Securities
Laws) in the financial position of BaM since the date thereof and the business
of BaM has been carried on in the usual and ordinary course consistent with past
practice since the date thereof;

 

 

 

 

(o) the auditors of BaM who audited the financial statements of BaM for the most
recent financial year-end and who provided their audit report thereon are
independent public accountants as required under Applicable Securities Laws and
there has never been a reportable event (within the meaning of National
Instrument 51-102) with the present auditors of BaM;

 

 

 

 

(p) BaM has complied and will comply fully with the requirements of all
applicable corporate and securities laws and administrative policies and
directions, including, without limitation, the Applicable Securities Laws in
relation to the issue and trading of its securities and in all matters relating
to the Financing;

 

   

   

- 6 -

 

 

(q) other than in respect of certain United States federal laws relating to the
cultivation, distribution or possession of marijuana in the United States as
disclosed in the continuous disclosure documents of BaM, BaM is in compliance in
all material respects with all applicable laws in the jurisdictions in which it
carries on business and which may materially affect BaM, has not received a
notice of non-compliance, nor knows of, nor has reasonable grounds to know of,
any facts that could give rise to a notice of non-compliance with any such laws,
regulations and statutes, and is not aware of any pending change or contemplated
change to any applicable law or regulation or governmental position that would
materially affect the business of BaM or the business or legal environment under
which BaM operates;

 

 

 

 

(r) BaM has not caused or permitted the release, in any manner whatsoever, of
any pollutants, contaminants, chemicals or industrial toxic or hazardous waste
or substances (collectively, the “Hazardous Substances”) on or from any of its
properties or assets nor has it received any notice that it is potentially
responsible for a clean-up site or corrective action under any applicable laws,
statutes, ordinances, by-laws, regulations, or any orders, directions or
decisions rendered by any government, ministry, department or administrative
regulatory agency relating to the protection of the environment, occupational
health and safety or otherwise relating to dealing with Hazardous Substances;

 

 

 

 

(s) all operations conducted by BaM on the properties of BaM have been conducted
and are currently conducted in all material respects in accordance with good
engineering practices and any applicable material workers’ compensation, and
health, safety and workplace laws, regulations and policies;

 

 

 

 

(t) BaM has all licences, permits, approvals, consents, certificates,
registrations and other authorizations (collectively the “Permits”) under all
applicable laws and regulations, other than in respect of certain United States
federal laws relating to the cultivation, distribution or possession of
marijuana in the United States as disclosed in the continuous disclosure
documents of BaM, necessary for the operation of the businesses carried on or
proposed to be commenced by BaM and each Permit is valid, subsisting and in good
standing and BaM is not in default or breach in any material respect of any
Permit, and to the best of the knowledge of BaM, no proceeding is pending or
threatened to revoke or limit any Permit;

 

 

 

 

(u) to BaM’s knowledge, information and belief, none of the directors or
officers of BaM is or has been ever been subject to prior regulatory, criminal
or bankruptcy proceedings in Canada or elsewhere;

 

 

 

 

(v) there is not presently, and will not be until the Closing, any material
change or change in any material fact relating to BaM which has not been
disclosed to the public;

 

 

 

 

(w) to the best of BaM’s knowledge, BaM is not in default in the observance of
performance of any terms, covenant, obligation to be performed by BaM, under any
material instrument, document, agreement, or arrangement (including memorandums
of understanding or joint venture agreements) to which BaM or its subsidiaries
is a party or otherwise bound and all such material instruments, contracts,
agreements, or arrangements (including memorandums of understanding or joint
venture agreements) are in good standing and no event has occurred which with
notice or lapse of time or both would constitute such a default by BaM or, to
the best of BaM’s knowledge, any other party;

 

   

   

- 7 -

 

 

(x) BaM is not a party to any actions, suits or proceedings which could
materially affect its business or financial condition, and to the best of BaM’s
knowledge no such actions, suits or proceedings are contemplated or have been
threatened;

 

 

 

 

(y) there are no judgments against BaM which are unsatisfied, nor are there any
consent decrees or injunctions to which BaM is subject;

 

 

 

 

(z) no order ceasing, halting or suspending trading in securities of BaM nor
prohibiting the sale of such securities has been issued to and is outstanding
against BaM or, to the knowledge of BaM, any of its directors, officers or
promoters or against any other companies that have common directors, officers or
promoters and to the knowledge of BaM no investigations or proceedings for such
purposes are pending or threatened;

 

 

 

 

(aa) BaM has filed, or is in the process of filing, all federal, provincial,
local and foreign tax returns which are required to be filed, or have requested
extensions thereof, and has or intends to pay all taxes required to be paid by
BaM, including its subsidiaries and any other assessment, fine or penalty levied
against BaM and/or its subsidiaries, or any amounts due and payable to any
governmental authority, to the extent that any of the foregoing is due and
payable;

 

 

 

 

(bb) BaM has established on its books and records reserves which are adequate
for the payment of all taxes not yet due and payable and there are no liens for
taxes on the assets of BaM, except for taxes not yet due, and there are no
audits of any of the tax returns of which are known by BaM’s management to be
pending, and there are no claims which have been or may be asserted relating to
any such tax returns which, if determined adversely, would result in the
assertion by any governmental agency of any deficiency which would have a
material adverse effect on the properties, business or assets of BaM;

 

 

 

 

(cc) BaM owns or possesses adequate rights to use all material patents,
trademarks, service marks, trade names, copyrights, trade secrets, information,
proprietary rights and other intellectual property necessary for the business of
BaM now conducted to the knowledge of BaM, without any conflict with or
infringement of the rights of others. BaM has received no communication alleging
that BaM has violated or, by conducting its business as proposed, would violate
any of the patents, trademarks, service marks, trade names, copyrights or trade
secrets or other proprietary rights of any other person or entity;

 

 

 

 

(dd) BaM does not have any loans or other indebtedness outstanding which has
been made to any of its shareholders, officers, directors or employees, past or
present, or any person not dealing at “arm’s length” (as such term is used in
the Income Tax Act (Canada));

 

 

 

 

(ee) BaM will not take any action which would be reasonably expected to result
in the delisting or suspension of its common shares on or from the CSE or on or
from any stock exchange, market or trading or quotation facility on which its
common shares are listed or quoted and BaM will comply, in all material
respects, with the rules and regulations thereof; and

 

 

 

 

(ff) BaM has and will have filed all documents that are required to be filed
under the continuous disclosure provisions of the Applicable Securities Laws,
including annual and interim financial information and annual reports, press
releases disclosing material changes and material change reports.

 

   

   

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ARTICLE 4
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF AUSTRALIS

 

Representations, Warranties and Covenants of Australis

 

4.1 Australis represents and warrants to BaM, as at the Closing Date, and
covenants with BaM, and acknowledges that BaM is relying upon such
representations, warranties and covenants in entering into this Agreement, as
follows.

 

 

(a) Australis is a valid and subsisting corporation under the laws of Alberta,
Canada;

 

 

 

 

(b) Australis is neither a U.S. Person nor subscribing for the Purchased
Securities for the account of a U.S. Person or for resale in the United States
and Australis confirms that the Common Shares have not been offered to Australis
and that this Agreement has not been signed in the United States;

 

 

 

 

(c) the Common Shares have not been and will not be registered under the U.S.
Securities Act and may not be offered or sold in the United States or to any
U.S. Person, except pursuant to applicable exemptions from United States federal
and state registration requirements;

 

 

 

 

(d) Australis has the corporate power and capacity to enter into this Agreement
and to perform all of its obligations hereunder. The execution and delivery of
this Agreement and the consummation by Australis of the transactions hereunder
have been duly authorized by all necessary corporate action on the part of
Australis;

 

 

 

 

(e) this Agreement has been duly executed and delivered by Australis and is a
legal, valid and binding obligation of Australis, enforceable against Australis
in accordance with its terms, subject to applicable bankruptcy or similar laws
affecting enforcement of creditors’ rights generally and to the extent that
equitable remedies such as specific performance and injunction are in the
discretion of the court from which they are sought;

 

 

 

 

(f) each of the execution and delivery of this Agreement and all documents
contemplated hereunder, the performance by Australis of its obligations
hereunder or thereunder and the consummation of the transactions contemplated
hereby, do not and will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under (whether after
notice or lapse of time or both), (i) any statute, rule or regulation applicable
to Australis; (ii) the constating documents or resolutions of Australis which
are in effect at the date hereof; (iii) any debt instrument, material agreement,
mortgage, indenture, contract, agreement, instrument, lease or other document to
which Australis is a party or by which it is bound; or (iv) any judgment, decree
or order binding Australis or the property or assets thereof;

 

 

 

 

(g) Australis is purchasing the Purchased Securities as principal within the
meaning of Applicable Securities Laws, for its own account and not for the
benefit of any other person, for investment only and not with a view to the
resale or distribution of all or any of the Purchased Securities;

 

 

 

 

(h) Australis is resident in the Province of British Columbia and the Purchased
Securities have an acquisition cost to Australis of not less than C$150,000,
payable in cash at Closing, and Australis was not created and is not being used
solely to purchase or hold securities in reliance on the prospectus exemptions
provided under Section 2.10 of NI 45-106, it pre-existed the Financing and has a
bona fide purpose other than investment in the Purchased Securities;

 

   

   

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(i) Australis acknowledges that no securities commission, agency, Governmental
Authority, stock exchange or other regulatory body has reviewed or passed on the
merits of the Purchased Securities and there are risks associated with the
purchase of the Purchased Securities;

 

 

 

 

(j) Australis acknowledges that the certificates representing the Purchased
Securities will bear the following legends:

 

 

 

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR ANY
APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE U.S. SECURITIES ACT AND SUCH LAWS COVERING SUCH SECURITIES,
OR THE COMPANY RECEIVES AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY STATING
THAT SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF THE U.S. SECURITIES ACT AND SUCH LAWS.
THE SECURITIES REPRESENTED BY THE CERTIFICATEHEREBY CANNOT BE THE SUBJECT OF
HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH
THE U.S. SECURITIES ACT.

 

 

 

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE [FOUR MONTHS PLUS ONE DAY FROM THE CLOSING DATE]”

 

 

 

 

(k) Other than 20,311,243 Common Shares, Australis does not currently hold,
directly or indirectly, any other securities of BaM;

 

 

 

 

(l) Australis is able to bear economic risk of loss of its investments in the
Financing;

 

 

 

 

(m) Australis is not in possession of any material information concerning BaM
that has not generally been disclosed;

 

 

 

 

(n) Australis understands the political, economic and other business risks of
its investment, including the fact that cannabis is currently registered as a
Schedule 1 drug under the Controlled Substances Act in the United States of
America;

 

 

 

 

(o) Australis is not acting jointly or in concert with any other person in
connection with its purchase of securities of BaM, and is not a party to any
agreement, commitment or understanding with any other person for the acquisition
or holding of securities of BaM, whether by BaM, such other person, or other
third party;

 

 

 

 

(p) Australis acknowledges that there are restrictions under Applicable
Securities Laws on Australis’s ability to resell the Common Shares and that it
has been advised to consult its own legal advisors with respect to the
particulars of such resale restrictions, and that it is Australis’s sole
responsibility to find out what those restrictions are and to comply with them;

 

   

   

- 10 -

 

 

(q) Australis has not taken any action which will or may result in BaM, or any
its directors, officers, employees or agents breaching any regulatory or legal
requirements of any jurisdiction in connection with the purchase and sale of the
Purchased Securities hereunder;

 

 

 

 

(r) Australis acknowledges that there may be material tax consequences to
Australis from the purchase of the Purchased Securities under Canadian federal,
provincial or local laws or foreign laws, and BaM makes no representations
regarding the tax consequences to Australis;

 

 

 

 

(s) to the best of the knowledge of Australis, this subscription for Purchased
Securities has not been made through or as a result of, and the distribution of
Purchased Securities is not being accompanied by, any form of advertisement,
including, without limitation, in printed public media, radio, television,
internet or telecommunications, including electronic display, or as part of a
general solicitation;

 

 

 

 

(t) none of the funds Australis is using to purchase the Purchased Securities
are, to the knowledge of Australis, proceeds obtained or derived, directly or
indirectly, as a result of illegal activities. The funds being used to purchase
the Purchased Securities which will be advanced by Australis to BaM hereunder
will not represent proceeds of crime for the purposes of the Proceeds of Crime
(Money Laundering) and Terrorist Financing Act (Canada) (the “PCMLTFA”) and
Australis acknowledges that BaM may in the future be required by law to disclose
Australis’s name and other information relating to this Agreement and
Australis’s subscription hereunder, on a confidential basis, pursuant to the
PCMLTFA. To the best of Australis’s knowledge (i) none of the funds to be
provided by Australis are being tendered on behalf of a person who has not been
identified to Australis, and (ii) Australis will promptly notify BaM if
Australis discovers that any of such representations cease to be true, and to
provide BaM with appropriate information in connection therewith;

 

 

 

 

(u) to the best of the knowledge of Australis, no person, firm or corporation is
entitled to any brokerage, agency or finder’s fee in connection with the
transactions described herein, except as disclosed to BaM; and

 

 

 

 

(v) Australis acknowledges that no prospectus has been filed by BaM with any
securities commission or similar authority, in connection with the issuance of
the Purchased Securities, and the issuance and the sale of the Purchased
Securities is subject to such sale being exempt from the prospectus requirements
under Applicable Securities Laws and accordingly:

 

 

(i) Australis is restricted from using certain civil remedies available under
such legislation;

 

 

 

 

(ii) Australis may not receive information that might otherwise be required to
be provided to it under such legislation; and

 

 

 

 

(iii) BaM is relieved from certain obligations that would otherwise apply under
such legislation.

 

   

   

- 11 -

 

Privacy

 

4.2 Australis provides its consent to the disclosure of personal information by
BaM to the CSE, to the British Columbia Securities Commission and to any other
applicable securities regulatory authorities (the “Commissions”), BaM’s
registrar and transfer agent, legal counsel and any other party involved in the
purchase and sale of the Purchased Securities for the following purposes;

 

 

(a) internal use with respect to managing the relationships between and
contractual obligations of BaM and Australis;

 

 

 

 

(b) indirect collection of personal information and queries by the Commissions;

 

 

 

 

(c) use and disclosure to BaM’s transfer agent and registrar;

 

 

 

 

(d) use and disclosure for income tax related purposes, including without
limitation, where required by law, disclosure to Canada Revenue Agency or United
States Internal Revenue Services;

 

 

 

 

(e) disclosure to securities regulatory authorities and other regulatory bodies
with jurisdiction with respect to reports of trade and similar regulatory
filings;

 

 

 

 

(f) disclosure to a governmental or other authority to which the disclosure is
required by court order or subpoena compelling such disclosure and where there
is no reasonable alternative to such disclosure;

 

 

 

 

(g) disclosure to professional advisers of BaM in connection with the
performance of their professional services;

 

 

 

 

(h) disclosure to any person where such disclosure is necessary for legitimate
business reasons and is made with the Australis’ prior written consent;

 

 

 

 

(i) disclosure to a court determining the rights of the parties under this
Agreement; or

 

 

 

 

(j) for use and disclosure as otherwise required or permitted by law.

 

4.3 In addition, Australis acknowledges that BaM will file with the Commissions
Forms 45-106F1 and 45-106F6, which will be publicly available, and which will
include Australis’ name and the amount of their subscription.

 

ARTICLE 5

CONDITIONS PRECEDENT

 

Mutual Conditions

 

5.1 The respective obligations of BaM and Australis under this Agreement are
subject to the fulfillment of the following conditions being satisfied at or
before the Closing:

 

 

(a) receipt of all required regulatory, shareholder and third party approvals,
and compliance with all applicable regulatory requirements and conditions
necessary to complete the Financing;

 

 

 

 

(b) this Agreement will not have been terminated pursuant to Article 7;

 

   

   

- 12 -

 

 

(c) there being no prohibition at law against the completion of the subscription
and issuance of the Purchased Securities; and

 

 

 

 

(d) the Purchased Securities issued in connection with the Financing being
issued in a manner that is exempt from applicable prospectus requirements of
Applicable Securities Law.

 

Conditions of Closing in Favour of BaM

 

5.2 The completion of the sale of the Purchased Securities by BaM is conditional
upon the following conditions in favour of BaM being satisfied at or before the
Closing:

 

 

(a) Australis complying with all the terms, covenants and conditions of this
Agreement on its part to be complied with up to the Closing;

 

 

 

 

(b) the representations and warranties of Australis contained in this Agreement
being true and correct in all material respects as of the Closing; and

 

 

 

 

(c) Australis having delivered the requisite deliverables contemplated by
Section 6.1 of this Agreement.

 

Conditions of Closing in Favour of Australis

 

5.3 The completion of the purchase of the Purchased Securities by Australis is
conditional upon the following conditions in favour of Australis being satisfied
at or before the Closing:

 

 

(a) BaM complying with all the terms, covenants and conditions of this Agreement
on its part to be complied with up to the Closing;

 

 

 

 

(b) there being no material change or change in a material fact or a new
material fact or an undisclosed material fact or change in respect of BaM which
might be reasonably be expected to have a Material Adverse Effect and Australis
will be satisfied that BaM will not have taken any act, entered into or become a
party to or subject to any agreement or transaction or incurred or become liable
for any obligation except in the ordinary course of business.

 

 

 

 

(c) the representations and warranties of BaM contained in this Agreement being
true and correct in all material respects as of the Closing;

 

 

 

 

(d) BaM having made all requisite filings with the CSE in connection with the
Financing in accordance with the policies of the CSE; and

 

 

 

 

(e) BaM having delivered the requisite certificate contemplated by Section 6.2
of this Agreement.

 

   

   

- 13 -

 

ARTICLE 6

CLOSING MATTERS

 

Closing Deliveries

 

6.1 BaM’s obligation to sell the Purchased Securities at Closing will be
conditional upon the satisfactory receipt by BaM at or before or at Closing of
the following:

 

 

(a) payment of the Subscription Funds made by certified cheque delivered by
Australis to BaM or electronic funds transfer to such account as may be directed
by BaM; and

 

 

 

 

(b) a certified copy of the resolutions of the Board of Directors of Australis
authorizing this Agreement and the transactions contemplated hereby.

 

6.2 Australis’s obligation to purchase the Purchased Securities at the Closing
will be conditional upon the satisfactory receipt by Australis at or before the
Closing of the following:

 

 

(a) a certificate dated as of the Closing Date in substantially the form as
Appendix I, signed by the appropriate officers of BaM addressed to Australis;
and

 

 

 

 

(b) a share certificate representing the Common Shares.

 

ARTICLE 7
TERM AND TERMINATION

 

Termination

 

7.1 This Agreement may be terminated at any time prior to the Closing Date:

 

 

(a) by mutual written agreement of the Parties;

 

 

 

 

(b) by Australis if a breach of any representation or warranty or failure to
perform any obligation on the part of BaM as set forth in this Agreement will
have occurred that would cause the conditions set forth in Section 5.1 and
Section 5.3 not to be satisfied or such conditions are incapable of being
satisfied by the Closing Date, as reasonably determined by BaM, provided however
that BaM is not then in breach of this Agreement so as to cause any condition in
Section 5.1 or Section 5.3 not to be satisfied; or

 

 

 

 

(c) by BaM if a breach of any representation or warranty or failure to perform
any obligation on the part of Australis as set forth in this Agreement will have
occurred that would cause the conditions set forth in Section 5.1 or Section 5.2
not to be satisfied, or such conditions are incapable of being satisfied by the
Closing Date as reasonably determined by Australis, provided however, that
Australis is not then in breach of this Agreement so as to cause any condition
in Section 5.1 or Section 5.2 not to be satisfied.

 

ARTICLE 8
MISCELLANEOUS

 

Confidentiality

 

8.1 Except as required by Applicable Laws, Applicable Securities Laws or
applicable stock exchange requirements, neither BaM nor Australis will make any
public announcement or statement with respect to the transactions contemplated
by and in this Agreement without the approval of the other party, acting
reasonably. Moreover, in any event, each party agrees to give 24 hours prior
notice to the other of any public announcement relating to the transactions
contemplated by and in this Agreement and agrees to consult with the other prior
to issuing each such public announcement.

 

   

   

- 14 -

 

Expenses

 

8.2 Each party will bear its own expenses in connection with this Agreement and
the transactions contemplated herein.

 

Further Assurances

 

8.3 Each party will from time to time hereafter, at the reasonable request of
the other party and without further consideration, do such further acts and
execute and deliver such further instruments and documents as may be reasonably
required in order to fully perform and carry out the terms of this Agreement.

 

Successor and Assigns

 

8.4 This Agreement will enure to the benefit of and will be binding upon the
parties hereto and their respective successors and permitted assigns. Neither
this Agreement nor any rights or obligations hereunder may be assigned by any of
the parties hereto without the express written consent of the other party.

 

Time of Essence

 

8.5 Time is of the essence of this Agreement.

 

Governing Law

 

8.6 This Agreement will be governed by and construed in accordance with the laws
of the Province of British Columbia and the federal laws of Canada applicable
therein, excluding reference to conflicts of laws principles that, if applied,
would require the application of the laws of another jurisdiction. Each of the
parties hereby irrevocably submits to and attorns to the exclusive jurisdiction
of the courts of the Province of British Columbia with respect to any actions,
claims, disputes or proceedings arising out of this Agreement or the transaction
contemplated hereby.

 

Survival

 

8.7 The representations, warranties, covenants and agreements made herein will
survive the Closing and the completion of the transactions hereunder for a
period of two years following the date of the Closing.

 

Notice

 

8.8 Unless otherwise expressly provided in this Agreement, any notice or other
communication to be given under this Agreement (a “notice”) shall be in writing
addressed as follows:

 

 

(a) If to BaM, to:

 

 

   

 

 

Body and Mind Inc.

750 – 1095 West Pender Street

Vancouver, BC

V6E 2M6

 

   

   

- 15 -

 

 

 

Attention: Leonard Clough

Email:         len@altuscapital.ca

 

 

 

 

 

with a copy (for informational purposes only and not constituting notice) to:

 

 

 

 

 

DLA Piper (Canada) LLP

Suite 6000, 1 First Canadian Place

PO Box 367, 100 King St W

Toronto ON

M5X 1E2

 

 

 

 

 

Attention: Derek Sigel

Email:         derek.sigel@dlapiper.com

 

 

 

 

(b)

If to Australis, to:

 

 

    

 

 

Australis Capital Inc.

Address: Suite 900, 510 Seymour Street

Vancouver, BC

V6B 1V5

 

 

 

 

 

Attention: Scott Dowty

Email:         scott@ausacap.com

 

 

 

 

 

with a copy (for informational purposes only and not constituting notice) to:

 

 

 

 

 

McMillan LLP

1500 – 1550 West Georgia Street

Vancouver, BC V6E 4N7

 

 

 

 

 

Attention: Mark Neighbor

Email:         mark.neighbor@mcmillan.ca

 

or to such other address as any of the parties may designate by notice given to
the others.

 

Each notice shall be personally delivered to the addressee or sent by means of
electronic transmission to the addressee and: (i) a notice which is personally
delivered shall, if delivered on a Business Day, be deemed to be given and
received on that day and, in any other case, be deemed to be given and received
on the first Business Day following the day on which it is delivered; and (ii) a
notice which is sent by means of electronic transmission shall be deemed to be
given and received on the first Business Day following the day on which it is
sent.

 

Amendments and Waivers

 

8.9 Any term of this Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and is signed, in the case of an amendment, by
each party to this Agreement, or in the case of a waiver, by the party against
whom the waiver is to be effective.

 

   

   

- 16 -

 

Severability

 

8.10 The invalidity or unenforceability of any particular provision of this
Agreement will not affect or impair the validity or enforceability of the
remaining provisions of this Agreement, and the provision determined to be
invalid or unenforceable will be severable from the remaining provisions hereof.

 

Entire Agreement

 

8.11 This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and will supersede any and all prior
negotiations, understandings and agreements between the parties.

 

Counterparts

 

8.12 This Agreement may be executed and delivered (including by facsimile or
other electronic transmission) by the parties hereto in separate counterparts,
each of which will when executed be deemed an original and all of which taken
together will constitute one and the same agreement. The exchange of copies of
this Agreement and of signature pages by facsimile or electronic transmission
will constitute effective execution and delivery of this Agreement as between
the parties and may be used in lieu of the original agreement for all purposes.
Signatures of the authorized signatories of the parties transmitted by facsimile
or electronic transmission will be deemed to be their original signatures for
all purposes.

 

[Balance of Page Left Blank]

 

   

   

- 17 -

 

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and
year first above written.

 

AUSTRALIS CAPITAL INC.       Per: /s/ “Scott Dowty”

 

Authorized Signatory       BODY AND MIND INC.  

 

 

 

Per:

/s/ “Leonard Clough”

 

 

Authorized Signatory

 

 

   

   

- 18 -

 

APPENDIX I

Form of Officer’s Certificate

 

This certificate is provided pursuant to the Investment Agreement dated for
reference January 31, 2019 (the “Investment Agreement”) between Body and Mind
Inc. (the “Company”) and Australis Capital Inc. (the “Subscriber”) in relation
to an offering of common shares of the Company.

 

I, Leonard Clough, signing in my capacity as the Chief Executive Officer of the
Company, and I, Darren Tindale, signing in my capacity as the Chief Financial
Officer of the Company and not in our personal capacities, hereby certify to the
best of our knowledge, information and belief, after having made due inquiry,
that:

 

1. the representations and warranties made by the Company in the Investment
Agreement remain true and correct in all material respects as of the date hereof
and the Company has complied with all the covenants and satisfied all of the
conditions contained therein;

 

 

2. no transaction out of the ordinary course of business, which is of a nature
material to the Company, has been entered into by the Company;

 

 

3. there are no actions, suits, proceedings or inquiries pending or threatened
against or affecting the Company at law or in equity or before or by any
federal, provincial, municipal or other governmental department, commission,
board, bureau or agency, domestic or foreign, which may in any way materially
and adversely affect the Company;

 

 

4. no order ceasing or suspending trading in securities of the Company nor
prohibiting the sale of such securities has been issued to the Company or its
directors, officers or promoters or to any reporting companies that have common
directors, officers or promoters and no proceedings for such purposes are
pending or threatened;

 

 

5. the offering and the sale of its securities by the Company does not and will
not conflict with or result in a breach of or constitute a default under or
result in a violation of, whether after notice or lapse of time or both, any of
the terms, conditions or provisions of the constating documents, by‑laws or
resolutions of the Company or any indenture or other agreement or instrument to
which the Company is a party or by which it is bound or any order, decree,
statute, by‑law, regulation, covenant or restriction applicable to the Company
or any of its assets;

 

 

6. the Company is not presently in default in the performance of any covenant or
obligation contained in any indenture or other agreement which creates,
evidences or secures the indebtedness of the Company;

 

 

7. there are no persons, firms or corporations having any agreement or option or
any right or privilege capable of becoming an agreement for the purchase,
subscription or issuance of any securities of the Company;

 

 

8. the Company’s directors and officers have been duly elected or appointed; and

 

 

9. the Company is not in default with respect to any material filings it is
required to make with the Canadian Securities Exchange or the applicable
securities regulatory authorities.

 

   

   

- 19 -

 

DATED ·

 

/s/ “Leonard Clough”

 

/s/ “Darren Tindale”

Leonard Clough

 

Darren Tindale

Chief Executive Officer

 

Chief Financial Officer