EXHIBIT 10.2

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR APPLICABLE
STATE SECURITIES LAWS, AND ARE PROPOSED TO BE ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT. SUCH
SECURITIES MAY NOT BE REOFFERED FOR SALE, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
U.S. SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS,
OR PURSUANT TO AN EXEMPTION OR EXCLUSION FROM REGISTRATION UNDER THE U.S.
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE U.S.
SECURITIES ACT.

 

BODY AND MIND INC.

 

SUBSCRIPTION AGREEMENT

(for Canadian, United States and International Subscribers)

 

INSTRUCTIONS FOR SUBSCRIBERS

 

A completed and originally executed copy of this Subscription Agreement together
with funds must be delivered or transmitted to M Partners Inc. by no later than
5:00 p.m. (Vancouver time) on May 6, 2019.

 

After reviewing the terms and conditions of this Subscription Agreement
carefully, please sign Page 3, and complete all portions, including:

 

 

 

 

(a)

applicable boxes set out in Page 3 (below);

 

 

 

 

(b)

if you are a Canadian resident, complete and sign Schedule “B” including, if
applicable, Appendix A to Schedule “B”;

 

 

 

 

(c)

if you are a U.S. Person (as defined below), as a U.S. Accredited Investor,
complete and sign Schedule “C” in accordance with the instructions set out
therein; and

 

 

 

 

(d)

if a resident of a jurisdiction other than Canada or the United States, complete
and sign:

 

 

 

 

 

 

(i)

Schedule “B” including, if applicable, Appendix A to Schedule “B”; and

 

 

 

 

 

 

(ii)

Schedule “D”.

 

 

 

 

  

  

  

- 2 -

 

UNIT SUBSCRIPTION AGREEMENT

 

TO:

BODY AND MIND INC. (the “Company”)

 

 

AND TO:

M PARTNERS INC. (the “Lead Agent”) and PI FINANCIAL CORP. (together with the
Lead Agent, the “Agents”)

 

The undersigned (the “Purchaser”), on its own behalf, and, if applicable, on
behalf of those for whom the undersigned is contracting hereunder, subject to
the terms and conditions set forth in this Subscription Agreement (including all
schedules hereto, this “Subscription Agreement”), agrees to purchase from the
Company that number of units (the “Units”) of the Company set out on page 3 of
this Subscription Agreement, upon and subject to the terms and conditions set
out in this Subscription Agreement, at a price of CAD$1.25 per Unit (the
“Subscription Price”), each Unit consisting of one common share in the capital
of the Company (a “Unit Share”) and one common share purchase warrant of the
Company (a “Warrant”). The Purchaser understands that its investment in the
Company is part of a larger offering by the Company of up to CAD$10 million of
Units. The Company has also granted the Agents the right to purchase up to an
additional CAD$10 million of Units for total gross proceeds of up to CAD$20
million. The offer and sale by the Company of up to CAD$20 million of Units is
referred to herein as the “Offering”. Net proceeds of the Offering will be used
for working capital purposes and general corporate purposes.

 

Each Warrant entitles the holder thereof to acquire one common share in the
capital of the Company (a “Warrant Share”) for an exercise price of CAD$1.50
(the “Exercise Price”) per Warrant Share for a period of 48 months following the
Closing Date (subject to adjustment in certain customary events). The Warrants
will be governed by a warrant indenture (the “Warrant Indenture”) to be in form
and substance satisfactory to the Company and the Agents.

 

The Unit Shares and the Warrants being issued and sold by the Company pursuant
to the Offering are collectively referred to as the “Offered Securities”.
Subject to fulfilling the requirements of the Exchange (as defined below), the
Unit Shares and Warrant Shares will be listed on the Exchange. The Unit Shares,
the Warrants and the Warrant Shares be referred to herein individually as a
“Security” and collectively as the “Securities”.

 

The Purchaser agrees to be bound by the terms and conditions set forth in the
attached Schedule “A”, and makes the acknowledgements, representations,
warranties and set out in the applicable Schedules attached hereto, upon which
the Purchaser acknowledges the Company and the Agents are relying in respect of
this subscription. This subscription is subject to acceptance by the Company and
may be accepted as to the number of the Units set out below or such lesser
number as may be determined by the Company in its discretion.

 

In this Subscription Agreement, certain representations and warranties are to be
made by the Purchaser so that the Company can ensure compliance with Applicable
Securities Laws (as hereinafter defined). These representations and warranties
are set out in Section 10 and 11 of Schedule “A”, and, if applicable, all of
Schedule “B”, all of Schedule “C” and Schedule “D”, and all Schedules hereto are
part of and are hereby incorporated as part of this Subscription Agreement. The
Purchaser acknowledges its consent and request that this Subscription Agreement
(including all Schedules hereto) and all other documents evidencing or relating
in any way to its purchase of the Units be drawn up in the English language
only. Nous reconnaissons par les présentes avoir consenti et demandé à ce que la
présente convention de souscription (et les annexes s’y rapportant) et tous les
autres documents faisant foi ou se rapportant de quelque manière à notre
souscription soient rédigés en anglais seulement.

 

  

  

- 3 -

 

Please print all information (other than signatures), as applicable, in the
spaces provided below.

 

                                                                                                    

(Name of Purchaser)

 

By: ________________________________________

Authorized Signature

________________________________________

(Official Capacity or Title – please print)

 

________________________________________

Please print name of individual whose signature appears above if different than
the name of the subscriber printed above.

 

________________________________________

(Purchaser’s Address, including Municipality and Province)

 

________________________________________

 

________________________________________

(Telephone Number)

 

________________________________________

(E-mail Address)

Number of Units:

 

_______________________________

Subscription Price of Units:

$_______________________________

 

If the person signing this Subscription Agreement is signing as agent for one or
more beneficial purchasers and is not a trust company or a trust corporation
acting on behalf of a fully managed account managed by it or a person acting on
behalf of a fully managed account managed by it, you must complete the following
and ensure that the attached schedules are completed on behalf of each
beneficial purchaser.

 

________________________________________

(Name of Principal)

________________________________________

(Principal’s address)

________________________________________

 

________________________________________

(Telephone Number)

________________________________________

(E-mail Address)

 

Account Registration Information:

 

________________________________________

(Name)

________________________________________

 

________________________________________

(Address)

________________________________________

Delivery Instructions as set forth below:

 

________________________________________

(Name)

________________________________________

(Address)

________________________________________

 

________________________________________

(Telephone Number)

 

  

  

 

ACCEPTANCE

 

The foregoing is acknowledged, accepted and agreed to this ___ day of
______________, 2019.

 

 

BODY AND MIND INC.

    

Per:

 

 

 

Authorized Signatory

 

 

  

  

- A-1 -

 

SCHEDULE “A”

TERMS AND CONDITIONS OF SUBSCRIPTION

 

1.Offering and Subscription

 

The Purchaser hereby tenders to the Company this Subscription Agreement which,
upon acceptance by the Company, will constitute an irrevocable agreement of the
Purchaser to purchase from the Company, and of the Company to sell to the
Purchaser, the Units as set out on the subscription page above at the
Subscription Price, all on the terms and subject to the conditions set out in
this Subscription Agreement.

 

These Units are being sold by the Company pursuant to the terms of an agency
agreement (the “Agency Agreement”) to be entered into on the Closing Date
between the Company and the Agents. The Offering is being made by the Agents on
a commercially reasonable best efforts private placement basis without
underwriter liability.

 

Each Warrant entitles the holder thereof to acquire one Warrant Share for an
exercise price of CAD$1.50 per Warrant Share for a period of 48 months following
the Closing Date (subject to adjustment in certain customary events). The
Warrants comprising the Units shall be created and issued pursuant to a Warrant
indenture to be entered into between the Company and the warrant agent and be
dated the Closing Date.

 

The Closing of the Offering is subject to the Company’s satisfaction, or the
Lead Agent’s waiver, of the following conditions precedent:

 

 

(a)the Company and the Agents entering into the Agency Agreement in a form
mutually satisfactory to the Company and the Agents, which Agency Agreement will
include the terms and conditions provided herein, and industry standard
covenants, representations and warranties to be given by the Company to the
Agents, and provisions regarding legal opinions, indemnification, contribution,
termination clauses and other relevant matters as the Agents may reasonably
determine, and which Agency Agreement will also contain customary
“disaster-out”, “market-out”, “material adverse change-out”, “due
diligence-out”; and

 

 

 

 

(b)the Agents not having terminated the Offering pursuant to the terms and
conditions of the engagement agreement made between the Company and the Lead
Agent dated April 10, 2019.

 

2.Definitions

 

In this Subscription Agreement and the schedules to this Subscription Agreement,
unless the context otherwise requires:

 

“Agency Agreement” has the meaning set forth in Section 1 hereof;

 

 

“Agents” means the M Partners Inc. and PI Financial Corp.;

 

 

“Agents’ Commission” has the meaning set forth in Section 3 hereof;

 

 

“Applicable Securities Laws” means, collectively, the applicable securities laws
of each of the Offering Jurisdictions and the respective regulations and rules
made and forms prescribed thereunder together with all applicable and legally
enforceable published policy statements, multilateral or national instruments,
blanket orders, rulings and notices of the Securities Commissions;

 

  

  

- A-2 -

 

“Change of Control” has the meaning set forth in the Term Sheet;

 

 

“Closing Date” means on or about May 10, 2019, or such other date or dates upon
which the Company and the Agents may agree;

 

 

“Closing Time” means 9:00 a.m. (Toronto time) on the Closing Date, or such other
time on the Closing Date as the Company and the Agents may agree;

 

 

“Company” has the meaning given thereto on page 2 of this Subscription
Agreement;

 

 

“Compensation Warrants” has the meaning set forth in Section 3 hereof;

 

 

“Exchange” means the Canadian Securities Exchange;

 

 

“Exercise Price” has the meaning given thereto on page 2 of this Subscription
Agreement;

 

 

“herein”, “hereof” and similar expressions mean and refer to this Subscription
Agreement and not to a particular Article or Section, and the expression
“Article” or “Section” followed by a number means and refers to the specified
Article or Section of this Schedule “A” to the Subscription Agreement;

 

 

“including” means including without limitation;

 

 

“International Jurisdiction” has the meaning set forth in Section 11(b)(iii)
hereof;

 

 

“Lead Agent” means M Partners Inc.;

 

 

“Offered Securities” has the meaning given thereto on page 2 of this
Subscription Agreement;

 

 

“Offering” has the meaning given thereto on page 2 of this Subscription
Agreement;

 

 

“Offering Jurisdictions” means all of the provinces and territories of Canada,
to the extent that any Purchasers of Units are resident therein and otherwise in
those jurisdictions where the Offering can lawfully be made;

 

 

“PCMLTFA” has the meaning set forth in Section 11(k) hereof;

 

 

“Purchaser” has the meaning given thereto on page 2 of this Subscription
Agreement;

 

 

“Regulation D” means Regulation D promulgated under the U.S. Securities Act;

 

 

“Regulation S” means Regulation S promulgated under the U.S. Securities Act;

 

 

“Securities Commissions” means, collectively, the applicable securities
commission or other securities regulatory authority in each of the Offering
Jurisdictions;

 

 

“Security” or “Securities” has the meaning given thereto on page 2 of this
Subscription Agreement;

 

 

 

  

  

- A-3 - 

 

“Subscription Agreement” means this Subscription Agreement (including any
Schedules hereto) and any instrument amending this Subscription Agreement;

 

 

“Subscription Price” has the meaning given thereto on page 2 of this
Subscription Agreement;

 

 

“Unit Shares” has the meaning given thereto on page 2 of this Subscription
Agreement;

 

 

“United States” means the United States of America, its territories and
possessions, any State of the United States and the District of Columbia;

 

 

“Units” has the meaning given thereto on page 2 of this Subscription Agreement;

 

 

 

“U.S. Accredited Investor” means an “accredited investor” as defined by Rule
501(a) of Regulation D adopted pursuant to the U.S. Securities Act;

 

“U.S. Person” has the meaning set forth in Rule 902(k) of Regulation S under the
U.S. Securities Act. Without limiting the foregoing, but for greater clarity in
this Subscription Agreement, a U.S. Person includes, subject to the exclusions
set forth in Regulation S: (a) any natural person resident in the United States;
(b) any partnership, limited liability company or corporation organized or
incorporated under the laws of the United States; (c) any estate or trust of
which any executor, administrator or trustee is a U.S. Person; (d) any
discretionary account or similar account (other than an estate or trust) held by
a dealer or other fiduciary organized, incorporated, or (if an individual)
resident in the United States; and (e) any partnership or corporation organized
or incorporated under the laws of any non‑U.S. jurisdiction which is formed by a
U.S. Person principally for the purpose of investing in securities not
registered under the U.S. Securities Act, unless it is organized or
incorporated, and owned, by U.S. Accredited Investors who are not natural
persons, estates or trusts;

 

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

 

“Warrant” has the meaning given thereto on page 2 of this Subscription
Agreement;

 

“Warrant Certificate” mean the certificate representing the Warrants;

 

“Warrant Indenture” has the meaning given thereto on page 2 of this Subscription
Agreement; and

 

“Warrant Share” has the meaning given thereto on page 2 of this Subscription
Agreement.

 

 

3.

Agents’ Compensation

  

The Company will pay the Agents at the Closing Time a cash commission equal to
7.50% of the gross proceeds raised in the Offering (the “Agents’ Commission”).

 

As additional consideration, the Company will issue the Agents such number of
non-transferable compensation warrants (the “Compensation Warrants”) as is equal
to 7.50% of the number of Units issued pursuant to the Offering.

 

Upon the execution of the Engagement Letter, the Company paid the Lead Agent a
work fee of CAD$60,000 plus HST.

 

  

  

- A-4 - 

 

Notwithstanding the above, the Company will retain the right to create a
President’s list of purchasers (the “President’s List”) for up to $4 million of
Units. At the Closing Time, the Company will pay to the Agents a cash commission
equal to 1.0% of the gross proceeds raised from the President’s List purchasers
and will issue to the Agents that number of Compensation Warrants equal to 1.0%
of the number of Units sold to purchasers on the President’s List.

 

Each Compensation Warrant entitles the holder thereof to acquire one Unit for an
exercise price of CAD$1.25 per Unit for a period of four years following the
Closing Date (subject to adjustment in certain customary events).

 

4.Expenses

 

The Company is also responsible for all reasonable expenses of the Offering,
including but not limited to: (a) fees and disbursements of accountants and
auditors, technical consultants, translators and other applicable experts; (b)
all costs and expenses related to roadshows and marketing activities, printing,
filing, issue, sale and distribution, stock exchange approval and other
regulatory compliance; (c) other reasonable out-of-pocket expenses of the Agents
(including, but not limited to, travel expenses in connection with due diligence
and marketing activities, and fees and disbursements of the Agents’ legal
counsel (in Canada and in foreign jurisdictions, including the United States)
and all taxes payable in respect of any of the foregoing); and (d) including any
expenses incurred prior to the date first written above and all taxes payable in
respect of any of the foregoing. All such fees, disbursements and expenses shall
be payable by you immediately upon receiving an invoice therefor from the Lead
Agent, or at the option thereof, may be deducted from the gross proceeds of the
Offering otherwise payable by the Agents to the Company at the closing of the
Offering. Notwithstanding the foregoing, the Agents’ counsel’s fees shall be
capped at a maximum of CAD$25,000 plus applicable disbursements and taxes.

 

The Purchaser will purchase and pay for the Purchaser’s Units at the closing of
the Offering, upon acceptance of this offer by the Company and the satisfaction
by the Company, or waiver on behalf of the Purchaser by the Lead Agent, of the
conditions set out in the Agency Agreement. The Purchaser acknowledges that the
Agents retain the right to exercise or not to exercise, as it determines, in its
sole discretion, the rights of termination as contained in the Agency Agreement,
and the Agents will have no liability to the Purchaser whatsoever in connection
with any such decision.

 

5.Delivery and Payment

 

The Purchaser agrees that the following must be delivered to the Agents in the
manner specified by the Agents no later than 5:00 p.m. (Vancouver time) on May
6, 2019, or such other date or dates as the Company and the Agents may
determine:

 

 

(a)a duly-executed copy of this Subscription Agreement;

 

 

 

 

(b)a certified cheque, bank draft or payment by wire transfer for the aggregate
Subscription Price of the Units made payable to the Agents or to such other
party as the Agents may direct;

 

 

 

 

(c)if the Purchaser is a Canadian resident, the Accredited Investor Exemption
Certificate, completed and duly signed in the form of Schedule “B” hereto (by
completing the relevant certificate and initialing the category that applies to
the Purchaser (or others on whose behalf the Purchaser is contracting
hereunder));

 

  

  

- A-5 - 

 

 

(d)if the Purchaser is a U.S. Person, or is not a U.S. Person but was offered
the Units, or executed or delivered this Subscription Agreement, in the United
States, or is purchasing the Units for the account or benefit of a U.S. Person
or a person in the United States, or is otherwise subject to the securities laws
of the United States, and both the Subscriber and the person for whose account
or benefit the Subscriber is acting, if any, is a U.S. Accredited Investor, the
Purchaser has duly completed, executed and delivered to the Agents the U.S.
Accredited Investor Certificate, completed and duly signed in the form of
Schedule “C” hereto (by completing the relevant certificate and initialing the
category that applies to the Purchaser (or others on whose behalf the Purchaser
is contracting hereunder));

 

 

 

 

(e)if the Purchaser is a resident of an International Jurisdiction (as
hereinafter defined), the Accredited Investor Exemption Certificate, completed
and duly signed in the form of Schedule “B” hereto (by completing the relevant
certificate and initialing the category that applies to the Purchaser (or others
on whose behalf the Purchaser is contracting hereunder)), and the Offshore
Purchaser Certificate, completed and duly signed in the form of Schedule “D”
hereto; and

 

 

 

 

(f)such other documents as may be required pursuant to terms of this
Subscription Agreement.

   

6.

Closing

 

 

 

 

(a)Subject to the determination of the Company and the Agents, the transactions
contemplated herein may close in one or more subsequent tranches after the
initial Closing Date;

 

 

 

 

(b)This subscription is subject to acceptance by the Company. Unless other
arrangements have been made with the Company, at the Closing Time, the Unit
Share Certificate and the Warrant Certificate will be delivered to the address
set out for delivery on the face pages of this Subscription Agreement promptly
thereafter; and

 

 

 

 

(c)The Company’s obligation to complete the purchase and sale of the Units is
subject to the following conditions:

 

 

(i)the Purchaser will have complied with the requirements of Section 5 hereof
and the applicable documents and payment will have been received as
contemplated;

 

 

 

 

(ii)the representations and warranties made by the Purchaser in this
Subscription Agreement are true and correct as of the date when made, as of the
Closing Time, as though made at that time (except for representations and
warranties that speak as of a specific date) and all undertakings of the
Purchaser have been performed, satisfied and complied with on or before the
Closing Time; and

 

 

 

 

(iii)receipt of such other documents relating to the transactions contemplated
by this Subscription Agreement as the Company or its counsel may reasonably
request.

 

  

  

- A-6 - 

 

7.Power of Attorney

 

The Agents are hereby appointed as the Purchaser’s agents and attorneys to
represent the Purchaser, and any beneficial purchaser for whom the Purchaser is
contracting hereunder, at the closing of the Offering for the purpose of all
closing matters, deliveries of documents, receipt of the Unit Share Certificate,
the Warrant Certificate or other evidence of ownership of the Purchaser’s Unit
Shares and Warrants and is hereby irrevocably authorized by the Purchaser for
and on behalf of the Purchaser, and any beneficial purchaser for whom the
Purchaser is acting as agent or trustee, to extend such time periods and modify
or waive such conditions as may be contemplated herein or in the Agency
Agreement or, in their absolute discretion, as they deem appropriate. Without
limiting the generality of the foregoing, the Agents are specifically and
irrevocably authorized to:

 

 

(a)waive any representations and warranties, covenants or conditions contained
in the Agency Agreement;

 

 

 

 

(b)correct minor errors or omissions in the information provided by the
Purchaser in this Subscription Agreement, including any Schedules hereto, and
any other documents or forms delivered by the Purchaser in connection with the
transactions contemplated hereby, if any;

 

 

 

 

(c)negotiate and settle the form of the Warrant Indenture and Warrant
Certificate and any other certificates to be delivered and any agreement to be
entered into in connection with the Offering and to vary, amend, alter or waive,
on its own behalf and on behalf of the Purchaser, in whole or in part, or extend
the time for compliance with, any of the conditions, representations, warranties
or covenants in the Warrant Indenture and the Warrant Certificate in such manner
and on such terms and conditions as the Agents may determine, acting reasonably,
without in any way affecting the Purchaser’s obligations or the obligations of
such others hereunder; provided, however, that the Agents will not vary, amend,
alter or waive any such condition, representation, warranty or covenant where to
do so would result in a material change to any of the material attributes of the
Unit Shares or the Warrants or contents thereof;

 

 

 

 

(d)allocate the Unit Shares and Warrants being offered pursuant to the Offering
and in accordance with the terms of the Agency Agreement; and

 

 

 

 

(e)act as its representative at the closing of the Offering with full power of
substitution, as its true and lawful attorney and agent with the full power and
authority in its place and stead to swear, execute, file and record any document
necessary, to approve any opinions, certificates or other documents addressed to
the Purchaser, to accept delivery of the Unit Share Certificate and the Warrant
Certificate on the closing of the Offering, to terminate this subscription on
its behalf in the event that any condition precedent to the Offering has not
been satisfied, to execute a receipt for such certificates and all other
documentation, and to deliver such certificates to the Purchaser as set out in
this Subscription Agreement promptly after the Closing Time.

  

8.Acceptance of Subscription

 

This subscription may be accepted in whole or in part and the right is reserved
to the Company to allot to any subscriber less than the aggregate Subscription
Price subscribed for by the Purchaser. 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 Company. If this
subscription is rejected in whole, the Purchaser understands that any certified
cheques or bank drafts delivered by the Purchaser to the Company representing
the purchase price for the Units will be promptly returned to the Purchaser
without interest. If this subscription is accepted only in part, the Purchaser
understands that a cheque representing the portion of the purchase price for
that portion of the Purchaser’s subscription for Units which is not accepted
will be promptly delivered to the Purchaser, without interest.

 

  

  

- A-7 - 

 

9.Acknowledgements of ALL Purchasers

 

The Purchaser acknowledges and agrees, on his, her or its own behalf and (if
applicable) on behalf of others for whom the Purchaser is contracting hereunder,
that:

 

 

(a)the sale of the Units to the Purchaser, or (if applicable) to such others for
whom the Purchaser is contracting hereunder is conditional upon:

 

 

(i)such sale being exempt from the prospectus filing requirements of all
applicable securities legislation relating to such sale or upon the issuance of
such rulings, orders, consents or approvals as may be required to permit such
sale without the requirement of filing a prospectus;

 

 

 

 

(ii)no agency, governmental authority, regulatory body, stock exchange or other
entity having made any finding or determination as to the merit for investment
of, nor have any such agencies or governmental authorities made any
recommendation or endorsement with respect to the Offered Securities or the
underlying Warrant Shares;

 

 

 

 

(iii)other than the investor presentation of the Company dated April 2019, the
Purchaser having not received, nor requested, any prospectus, sales or
advertising literature, offering memorandum or any other document describing the
business and affairs of the Company, which has been prepared for delivery to,
and review by, prospective purchasers in order to assist them in making an
investment decision in respect of the Units, and the Purchaser not having become
aware of any advertisement in printed public media, radio, television or
telecommunications, including electronic display such as the internet, with
respect to the distribution of the Securities;

 

 

 

 

(iv)no prospectus or registration statement having been filed by the Company
with a Securities Commission or other securities regulatory authority in any
province of Canada or any other jurisdiction in connection with the issuance of
the Units and such issuances are exempt from the prospectus or registration
requirements otherwise applicable under the provisions of Canadian and United
States securities laws and, as a result, in connection with the purchase of
Units hereunder:

 

 

(1)the Purchaser, and (if applicable) others for whom the Purchaser is
contracting hereunder, are restricted from using most of the civil remedies
available under Applicable Securities Laws;

 

 

 

 

(2)the Purchaser, and (if applicable) others for whom the Purchaser is
contracting hereunder, will not receive information that would otherwise be
required to be provided to the Purchaser under Applicable Securities Laws or
contained in a prospectus prepared in accordance with Applicable Securities
Laws; and

 

 

 

 

(3)the Company is relieved from certain obligations that would otherwise apply
under such Applicable Securities Laws;

 

  

  

- A-8 - 

 

 

(v)the Securities will be issued pursuant to prospectus exemptions under
National Instrument 45-106 - Prospectus Exemptions in all provinces and
territories of Canada, and similar exemptions under other Applicable Securities
Laws, as mutually agreed upon between the Company and the Agents, on a private
placement or equivalent basis in accordance with applicable laws; provided,
however, that such laws permit offers and sales of the Securities on a private
placement basis and without any obligation on the part of the Company to prepare
or file any registration statement, prospectus or other disclosure document and
without triggering any disclosure obligations or submission to the jurisdiction
on the part of the Company;

 

 

 

 

(vi)(1) the certificates representing the Offered Securities, and the
certificates representing the Warrant Shares if issued prior to four months
after the Closing Date, will bear a legend in substantially the following form:

 

 

 

 

 

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE [INSERT THE DATE THAT IS 4 MONTHS AND A DAY AFTER
THE DISTRIBUTION DATE].”

 

(2) if the Purchaser is a U.S. Person or purchasing the Units for the account or
benefit of a U.S. Person or a person in the United States, then the Purchaser
also acknowledges and understands that the certificates representing the
Securities will be required to be stamped with the following legend (or
substantially equivalent language) restricting transfer in the following manner
in the United States:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE [for warrants add: AND THE
SECURITIES ISSUABLE HEREUNDER] HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR APPLICABLE
STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE U.S. SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION OR EXCLUSION FROM REGISTRATION
UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.”

 

(3) if the Purchaser is outside of the United States and is not (A) a U.S.
Person, or (B) purchasing the Units for the account or benefit of a U.S. Person
or a person in the United States, then the Purchaser also acknowledges and
understands that the certificates representing the Securities will be required
to be stamped with the following legend (or substantially equivalent language)
restricting transfer in the following manner:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE [for warrants add: AND THE
SECURITIES ISSUABLE HEREUNDER] HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR APPLICABLE
STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE U.S. SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION OR EXCLUSION FROM REGISTRATION
UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES REPRESENTED BY THE CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING
TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE U.S.
SECURITIES ACT.”

 

  

  

- A-9 - 

 

 

 

provided, however, in either (2) or (3) above, if any Securities are being sold,
the legend may be removed by delivery to the registrar and transfer agent and
the Company of an opinion of counsel, of recognized standing reasonably
satisfactory to the Company, that such legend is no longer required under
applicable requirements of the U.S. Securities Act or state securities laws.

 

(4) the Purchaser understands and acknowledges that in addition to the legends
set forth above, the certificates representing the Warrants will also bear a
legend in substantially the following form:

 

“THIS WARRANT MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF,
OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON OR A PERSON IN THE UNITED STATES
UNLESS THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES
LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS IS AVAILABLE. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY
REGULATION S UNDER THE U.S. SECURITIES ACT.”;

 

 

(b)The Securities have not been and will not be registered under the U.S.
Securities Act, or any state securities laws and accordingly, the Offered
Securities are “restricted securities” within the meaning of Rule 144(a)(3) of
the U.S. Securities Act;

 

 

 

 

(c)the Purchaser’s ability to transfer the Securities is limited by, among other
things, the Applicable Securities Laws. The Securities will be subject to
statutory resale restrictions under the Applicable Securities Laws, and the
Purchaser covenants that it will not resell the Securities except in compliance
with such laws and the Purchaser acknowledges that it is solely responsible (and
the Company is not in any way responsible) for such compliance.

 

 

 

 

The Purchaser acknowledges that the Securities have not been registered under
the U.S. Securities Act and the Company has no obligation or present intention
of filing a registration statement under the U.S. Securities Act in respect of
the Securities. The Purchaser agrees to resell the Securities only in accordance
with the provisions of Applicable Securities Laws pursuant to a registration
under the U.S. Securities Act, or pursuant to an available exemption from such
registration (in particular the provisions of Regulation S or Rule 144, as
applicable), and that hedging transactions involving the Securities may not be
conducted unless in compliance with the U.S. Securities Act. The Purchaser
understands that any certificate representing the Securities will bear a legend
setting forth the foregoing restrictions in (a)(vi) above. The Purchaser
understands that the Securities are “restricted securities” within the meaning
of Rule 144 promulgated under the U.S. Securities Act, that the exemption from
registration under Rule 144 will not be available in any event for at least six
months from the Closing Date for the Offered Securities and other terms and
conditions of Rule 144 are complied with.

 

  

  

- A-10 - 

 

 

The Purchaser further acknowledges and understands that the Purchaser agrees
that the Purchaser shall in no event make any disposition of all or any portion
of the Securities which the Purchaser is acquiring hereunder unless and until:

 

 

 

 

(i)there is then in effect a “Registration Statement” under the U.S. Securities
Act covering such proposed disposition and such disposition is made in
accordance with said Registration Statement; or

 

 

 

 

(ii)(A) the Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, (B) the Purchaser shall
have furnished the Company with an opinion of the Purchaser’s own counsel to the
effect that such disposition will not require registration of any such
Securities under the U.S. Securities Act and (C) such opinion of the Purchaser’s
counsel shall have been concurred in by counsel for the Company and the Company
shall have advised the Purchaser of such concurrence.

 

 

(d)that the Purchaser consents to the Company making a notation on its records
and/or giving instruction to the registrar and transfer agent of the Company in
order to implement the restrictions on transfer set forth and described herein;

 

 

 

 

(e)all costs and expenses incurred by the Purchaser and each beneficial
purchaser, if any, for whom the Purchaser is contracting hereunder, (including
any fees and disbursements of legal counsel retained by the Purchaser or any
beneficial purchaser) relating to the purchase of the Purchaser’s Units will be
borne solely by the Purchaser or the beneficial purchaser;

 

 

 

 

(f)the Purchaser, on his or her own behalf and (if applicable) on behalf of
others for whom the Purchaser is contracting hereunder, agree to provide the
Company with such information and documents, including certificates, statutory
declarations and undertakings, as they may reasonably require from time to time
to comply with any filing or other requirements under Applicable Securities
Laws;

 

 

 

 

(g)the Agents will be paid the Agents’ Commission as described herein;

 

 

 

 

(h)the Purchaser is solely responsible for obtaining such tax, investment, legal
and other professional advice as it considers appropriate in connection with the
offer, sale and issuance of the Purchaser’s Securities, the execution, delivery
and performance by it of this Subscription Agreement, applicable tax
considerations and the applicable hold periods and resale restrictions imposed
in respect of the Purchaser’s Securities by applicable securities legislation
and regulatory policies, and confirms that it (and any disclosed principal, if
applicable) is not relying on the Company, the Agents and their affiliates or
counsel to any of them in this regard. The Purchaser is solely responsible for
compliance with applicable resale restrictions and applicable tax legislation;

 

 

 

 

(i)the Agents are acting solely as placement agent for the Company in connection
with the Offering and not as financial advisor or investment advisor to the
Purchaser or as an agent of the Purchaser;

  

  

  

- A-11 - 

 

 

(j)the Purchaser, and each beneficial purchaser, if any, for whom the Purchaser
is contracting hereunder, has had the opportunity to review this Subscription
Agreement and the Schedules attached hereto and the transactions contemplated by
this Subscription Agreement and fully understands the same;

 

 

 

 

(k)the Purchaser, and each beneficial purchaser, if any, for whom the Purchaser
is contracting hereunder, has had the opportunity to ask questions and receive
answers concerning the terms and conditions of the Offering and it has had
access to such information concerning the Company as it has considered necessary
or appropriate in connection with its investment decision to acquire the Units;
and

 

 

 

 

(l)the Purchaser understands and agrees that there may be material tax
consequences to the Purchaser of an acquisition or disposition of the
Securities. The Company gives no opinion and makes no representation with
respect to the tax consequences to the Purchaser under United States, state,
local or foreign tax law of the undersigned’s acquisition or disposition of such
securities. In particular, no determination has been made whether the Company
will be a “passive foreign investment company” (“PFIC”) within the meaning of
Section 1291 of the United States Internal Revenue Code.

 

 

 

10.

Representations, Warranties, Covenants and Acknowledgements of Purchasers who
are U.S. Persons or who are in the United States

  

The Purchaser, which is a U.S. Person, or is not a U.S. Person but was offered
the Units, or executed or delivered this Subscription Agreement, in the United
States, or is purchasing the Units for the account or benefit of a U.S. Person
or a person in the United States, or is otherwise subject to the securities laws
of the United States, on its own behalf and, if applicable, on behalf of others
for whom it is acting hereunder, hereby represents and warrants to, and
covenants with, the Company and the Agents as follows and acknowledges that the
Company and the Agents are relying on such representations and warranties and
covenants in connection with the transactions contemplated herein:

 

 

(a)that the Purchaser is a U.S. Accredited Investor and is acquiring the Units
for its own account or for the account of another U.S. Accredited Investor over
which the Purchaser exercises sole investment direction and not with a view to
resale for distribution of the Offered Securities or the Warrant Shares in
violation of United States securities laws; and the Purchaser certifies that it
is a resident in the jurisdiction set out on page 3 of this Subscription
Agreement and that the investment decision with respect to the Units was made in
such jurisdiction, and that such address was not created and is not used solely
for the purpose of acquiring the Units and the Purchaser was solicited to
purchase in such jurisdiction;

 

 

 

 

(b)that, in the event that the Purchaser requests that the certificates
representing the Unit Shares or the Warrants be registered and/or delivered in
the name of someone with an address in a state other than the state of its
residence as set out on page 3 of this Subscription Agreement, it has done so
only for safekeeping or as a bare trusteeship with respect to such certificate
in accordance with its normal business practice;

 

 

 

 

(c)that the subscription for the Offered Securities has not been made through or
as a result of any form of “directed selling efforts” (as such term is used in
Regulation S under the U.S. Securities Act) or general solicitation or general
advertising (as such terms are used in Rule 502(c) of Regulation D under the
U.S. Securities Act), including by any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over radio, television or telecommunications, including electronic display and
the Internet, or any seminar or meeting whose attendees have been invited by
general solicitation or general advertising;

 

  

  

- A-12 - 

 

 

(d)the Warrants may not be exercised by or on behalf of a U.S. Person or a
person in the United States unless an exemption is available from the
registration requirements of the U.S. Securities Act and the securities laws of
all applicable states, and the holder has furnished an opinion of counsel
satisfactory to the Company to such effect; provided, however, that, a holder
that is an original Purchaser hereunder will not be required to deliver an
opinion of counsel in connection with its due exercise of the Warrants, for its
own account or for the account of the original beneficial purchaser, if any, at
a time when such holder and such original beneficial purchaser thereof, if any,
are U.S. Accredited Investors;

 

 

 

 

(e)that the Purchaser agrees to indemnify and hold harmless the Company and the
Agents and each of their respective officers, directors, employees and agents
from and against any and all costs, liabilities and expenses, including
attorneys’ fees, arising out of or related in any way to any breach of any
confirmation, representation, warranty or undertaking of the Purchaser contained
in this Subscription Agreement;

 

 

 

 

(f)that neither the Offered Securities nor the Warrant Shares have been or will
be registered under the U.S. Securities Act or any applicable state securities
laws, the offer and sale are being made in reliance on a private placement
exemption provided by Rule 506(b) of Regulation D under the U.S. Securities Act
to investors who are U.S. Accredited Investors, and the Offered Securities and
the Warrant Shares may be offered, sold, or otherwise transferred only: (A) to
the Company; (B) pursuant to an effective registration statement under the U.S.
Securities Act; (C) in accordance with Rule 144 under the U.S. Securities Act,
if available, and in compliance with applicable state securities laws; (D) in
accordance with the provisions of Regulation S, if available; or (E) in a
transaction that does not otherwise require registration under the U.S.
Securities Act or any applicable state securities laws if an opinion of counsel,
of recognized standing reasonably satisfactory to the Company, has been provided
to the Company to that effect. The Purchaser understands that the Company has no
present intention to register the Offered Securities or the Warrant Shares
pursuant to the U.S. Securities Act. The Purchaser further understands that
there is no assurance that any exemption from registration under the U.S.
Securities Act will be available and that, even if available, such exemption may
not allow the Purchaser to transfer all or any portion of the Offered Securities
or the Warrant Shares under the circumstances, in the amounts or at the times
that the Purchaser may propose;

 

 

 

 

(g)that the Purchaser understands that the Company may instruct its registrar
and transfer agent not to record any transfer of the Offered Securities or the
Warrant Shares without first being notified by the Company that it is satisfied
that such transfer is exempt from, or not subject to, the registration
requirements of, the U.S. Securities Act and applicable state securities laws;

 

 

 

 

(h)that the Purchaser understands and acknowledges that the Company has no
obligation to file, or present intention of filing, with the United States
Securities and Exchange Commission or with any state securities administrator,
any registration statement in respect of resales of the Securities in the United
States; and

 

  

  

- A-13 - 

 

 

(i)that the Purchaser understands and agrees that there may be material tax
consequences to the Purchaser of an acquisition, disposition, exercise or
conversion of any of the Offered Securities and the Warrant Shares, and that the
Company gives no opinion and makes no representation with respect to the tax
consequences to the Purchaser under United States, state, local or foreign tax
law of the Purchaser’s acquisition, holding or disposition of such securities,
and the Subscriber acknowledges that it is solely responsible for determining
the tax consequences of its investment.

 

 

 

11.

Representations, Warranties, Covenants and Acknowledgement of ALL Purchasers

 

The Purchaser, on his, her or its own behalf and (if applicable) on behalf of
others for whom the Purchaser is contracting hereunder, acknowledges,
represents, warrants and covenants to and with the Company and the Agents (and
acknowledges that the Company and the Agents are relying thereon) as follows:

 

 

(a)Jurisdiction of Residence – the Purchaser, on his or her own behalf and (if
applicable) on behalf of others for whom the Purchaser is contracting hereunder,
is resident or otherwise subject to the applicable securities legislation in the
jurisdiction set out as the Purchaser’s address on page 3 of this Subscription
Agreement, and the purchase by and sale to the Purchaser, and any such others,
of the Units has occurred only in such jurisdiction;

 

 

 

 

(b)Prospectus Exempt Purchaser –

 

 

(i)Canadian Purchaser - Unless exempted by an order of the Securities Commission
or similar regulatory authority of the province in which it resides, the
Purchaser is an “accredited investor”, as such term is defined in National
Instrument 45-106 - Prospectus Exemptions and has concurrently executed and
completed the Accredited Investor Exemption Certificate at Schedule “B” to this
Subscription Agreement, along with Appendix A to Schedule “B” if the Purchaser
is an individual;

 

 

 

 

(ii)United States Purchaser - If the Purchaser is a U.S. Person, or is not a
U.S. Person but was offered the Units, or executed or delivered this
Subscription Agreement, in the United States, or is purchasing the Units for the
account or benefit of a U.S. Person or a person in the United States, or is
otherwise subject to the securities laws of the United States, and both the
Subscriber and the person for whose account or benefit the Subscriber is acting,
if any, the Purchaser is a U.S. Accredited Investor and has concurrently
executed and completed the U.S. Accredited Investor Certificate in the form of
Schedule “C” hereto (by completing the relevant certificate and initialing the
category that applies to the Purchaser (or others on whose behalf the Purchaser
is contracting hereunder)); or

 

 

 

 

(iii)International Jurisdiction Purchaser - If the Purchaser is a resident of a
jurisdiction outside of Canada and the United States (an “International
Jurisdiction”), the Purchaser is an “accredited investor”, as such term is
defined in National Instrument 45-106 - Prospectus Exemptions and has
concurrently executed and completed the Accredited Investor Exemption
Certificate at Schedule “B” to this Subscription Agreement, along with Appendix
A to Schedule “B” if the Purchaser is an individual, and the Purchaser has
concurrently executed and completed the Offshore Purchaser Certificate at
Schedule “D” and, in addition to the other representations and warranties
contained herein, the Purchaser represents and warrants that the subscription
for the Units by the Purchaser is being made pursuant to exemptions under, and
does not contravene any of the applicable securities legislation in that
International Jurisdiction and does not give rise to any obligation of the
Company to prepare and file a prospectus or similar document or to register the
Units or Warrant Shares, or to be registered with or to file any report or
notice with any governmental or regulatory authority of any kind whatsoever in
that International Jurisdiction;

 

  

  

- A-14 - 

 

 

(c)Due Execution and Delivery – the Purchaser, on his, her or its own behalf and
(if applicable) on behalf of others for whom the Purchaser is contracting
hereunder, is responsible for obtaining such legal advice as the Purchaser
considers necessary in connection with the execution, delivery and performance
by the Purchaser of this Subscription Agreement and the transactions
contemplated herein and the Purchaser represents and warrants that such
execution, delivery and performance will not contravene any applicable laws of
the jurisdiction in which the Purchaser is resident;

 

 

 

 

(d)Independent Tax Advice – the Purchaser, on his, her or its own behalf and (if
applicable) on behalf of others for whom the Purchaser is contracting hereunder,
is solely responsible for obtaining such advice concerning the tax consequences
of the Purchaser’s investment in the Units and the Purchaser is not relying on
the Company for advice concerning such tax consequences;

 

 

 

 

(e)Agents Purchasing for Principal(s) – if the Purchaser is contracting
hereunder as agent for one or more other purchasers: (i) each such other
purchaser is purchasing as principal for its own account and not for the benefit
of any other person; and (ii) each of such principals can, and does, make the
representations, warranties and covenants set out in Schedule “B”, Schedule “C”,
and/or Schedule “D”, as applicable, to this Subscription Agreement as are
applicable to such principal by virtue of its jurisdiction of residence or by
virtue of being subject to the applicable securities legislation of such
jurisdiction;

 

 

 

 

(f)Capacity – if the Purchaser, or any other purchaser for whom the Purchaser is
contracting hereunder: (i) is an individual, the Purchaser, or such other
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; or (ii) is a corporation, partnership, unincorporated
association or other entity, the Purchaser, or such other purchaser, as the case
may be, has the legal capacity and competence to enter into and be bound by this
Subscription Agreement and the Purchaser further certifies that all necessary
approvals of directors, shareholders or otherwise have been given and obtained;

 

 

 

 

(g)Authority – (i) if the Purchaser is contracting hereunder as agent for one or
more other 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 of 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 other purchaser for
whom the Purchaser is contracting hereunder or of any agreement, written or
oral, to which the Purchaser or any other purchaser for whom the Purchaser is
contracting hereunder is a party or by which the Purchaser or such other
purchasers are bound;

 

  

  

- A-15 - 

 

 

(h)Enforceability – this Subscription Agreement has been duly and validly
authorized, executed and delivered by the Purchaser and, upon acceptance by the
Company this Subscription Agreement will constitute a legal, valid and binding
contract of the Purchaser, and (if applicable) the other purchasers for whom the
Purchaser is contracting hereunder, enforceable against the Purchaser, and (if
applicable) such other purchasers, in accordance with its terms;

 

 

 

 

(i)No Representation Re Resale, Refund, Future Price or Listing – no person has
made any written or oral representation to the Purchaser:

 

 

(i)that any person will resell or repurchase the Offered Securities or the
Warrant Shares;

 

 

 

 

(ii)that any person will refund the purchase price of the Units or the Warrant
Shares; or

 

 

 

 

(iii)relating to the future price or value of the Offered Securities or the
Warrant Shares;

 

 

(j)Investment Experience – the Purchaser, or (if applicable) all other
purchasers for whom the Purchaser is contracting hereunder, have knowledge and
experience with respect to investments of this type enabling the Purchaser, or
(if applicable) such other purchasers, to evaluate the merits and risks thereof
and the capacity to obtain competent independent business, legal and tax advice
regarding this investment;

 

 

 

 

(k)Subscription Funds – none of the funds the Purchaser is using to purchase the
Units are, to the knowledge of the Purchaser, proceeds obtained or derived,
directly or indirectly, as a result of illegal activities. The funds the
Purchaser is using to purchase the Units which will be advanced by the Purchaser
to the Company hereunder will not represent proceeds of crime for the purposes
of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada)
(for the purposes of this paragraph the “PCMLTFA”) or the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act (United States) (commonly referred to as the “USA PATRIOT
Act”) or similar legislation and the Purchaser acknowledges that the Company may
in the future be required by law to disclose the name of the Purchaser and other
information relating to this Subscription Agreement and the subscription
hereunder, on a confidential basis, pursuant to the PCMLTFA, USA Patriot Act or
similar legislation. To the best of the Purchaser’s knowledge: (i) none of the
subscription funds provided by the Purchaser: (1) have been or will be derived
directly or indirectly from or related to any activity that is deemed criminal
under the laws of Canada, the United States of America, or any other
jurisdiction; or (2) are being tendered on behalf of a person or entity who has
not been identified to the Company; and (ii) the Purchaser will promptly notify
the Company if the Purchaser discovers that any of such representations cease to
be true, and to provide the Company with appropriate information in connection
therewith;

 

  

  

- A-16 - 

 

 

(l)Resale Restrictions - the Purchaser, and each beneficial purchaser, if any,
for whom it is contracting hereunder, has been advised to consult their own
legal advisors with respect to trading in the Offered Securities and the Warrant
Shares and with respect to the resale restrictions imposed by the Applicable
Securities Laws of the jurisdiction in which the Purchaser, or beneficial
purchaser, if any, for whom it is contracting hereunder, resides and all other
Applicable Securities Laws, and acknowledges that no representation has been
made respecting the applicable hold periods imposed by the Applicable Securities
Laws or other resale restrictions applicable to such securities which restrict
the ability of the Purchaser, or beneficial purchaser, if any, for whom it is
acting as trustee or agent, to resell such securities, that the Purchaser, or
beneficial purchaser, if any, for whom it is contracting hereunder, is solely
responsible to find out what these restrictions are and the Purchaser, or
beneficial purchaser, if any, for whom it is contracting hereunder, is solely
responsible (and the Company and the Agents are not in any way responsible) for
compliance with applicable resale restrictions and the Purchaser is aware that
it (or any beneficial purchaser for whom it is contracting hereunder) may not be
able to resell such securities except in accordance with limited exemptions
under the Applicable Securities Laws. The certificates evidencing the Securities
may bear legends denoting such restrictions;

 

 

 

 

(m)Not an Insider - the purchase of the Purchaser’s Units hereunder is not a
transaction in which any shareholder of the Company, or any beneficial owner of
securities carrying more than 10% of the voting rights attaching to all
outstanding voting securities of the Company, has a direct or indirect
beneficial interest, unless the Purchaser has otherwise notified the Company and
the Agents;

 

 

 

 

(n)No Finder’s Fees - other than the Agents, there is no person acting or
purporting to act in connection with the transactions contemplated herein who is
entitled to any brokerage or finder’s fee. If any person establishes a claim
that any fee or other compensation is payable in connection with this
subscription for the Purchaser’s Units, the Purchaser covenants to indemnify and
hold harmless the Company and the Agents with respect thereto and with respect
to all costs reasonably incurred in the defence thereof;

 

 

 

 

(o)Investment Purposes - the Purchaser, and each beneficial purchaser, if any,
for whom the Purchaser is contracting hereunder, is purchasing the Units for
investment purposes only and not with a view to resale or distribution that
would or may contravene the prospectus or other requirements of Applicable
Securities Laws;

 

 

 

 

(p)Knowledge of Material Fact or Change – the Purchaser, and each beneficial
purchaser, if any, for whom it is contracting hereunder, has no knowledge of a
material fact or material change in respect of the affairs of the Company that
has not been generally disclosed to the public;

 

 

 

 

(q)Purchaser is a Non-U.S. Person - If the Purchaser is a non-U.S. Person:

  

 

(i)it understands that the Company is the seller of the Offered Securities and
that, for purposes of Regulation S, a “distributor” is any underwriter, dealer
or other person who participates, pursuant to a contractual arrangement, in the
distribution of securities offered or sold in reliance on Regulation S and that
an “affiliate” is any partner, officer, director or any person directly or
indirectly controlling, controlled by or under common control with any person in
question; except as otherwise permitted by Regulation S, the Purchaser agrees
that it will not, during a six-month distribution compliance period, act as a
distributor, either directly or through any affiliate, or sell, transfer,
hypothecate or otherwise convey the Offered Securities or the Warrant Shares
other than to or for the account or benefit of a non-U.S. Person;

 

  

  

- A-17 - 

 

 

(ii)in the event the Offered Securities or the Warrant Shares are offered, sold
or otherwise transferred by the Purchaser to or for the account or benefit of a
non-U.S. person, unless pursuant to an effective registration statement under
the U.S. Securities Act, prior to the expiration of a six-month distribution
compliance period prescribed in Regulation S, the purchaser or transferee must
agree not to resell such securities except in accordance with the provisions of
Regulation S, pursuant to registration under the U.S. Securities Act, or
pursuant to an available exemption from registration; and must further agree not
to engage in hedging transactions with regard to such securities unless in
compliance with the U.S. Securities Act;

 

 

 

 

(iii)it will not acquire the Offered Securities as a result of, and neither the
Purchaser nor its affiliates will engage in, any “directed selling efforts” (as
defined in Regulation S) in the United States in respect of the Offered
Securities or the Warrant Shares which would include any activities undertaken
for the purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the resale of the Offered
Securities or the Warrant Shares; and

 

 

 

 

(iv)at the time the buy order for the Offered Securities was originated, the
Subscriber was outside the United States and this Subscription Agreement was not
executed or delivered in the United States;

 

 

(r)Insurance – There is no government or other insurance covering the Offered
Securities.

 

 

 

 

(s)Personal Information - Federal - the Purchaser, on his, her or its own behalf
and, if applicable, on behalf of each beneficial purchaser for whom the
Purchaser is contracting hereunder, acknowledges and consents to the fact that
the Company is collecting the Purchaser’s personal information (as that term is
defined under applicable privacy legislation, including, without limitation, the
Personal Information Protection and Electronic Documents Act (Canada) and any
other applicable similar, replacement or supplemental provincial or federal
legislation or laws in effect from time to time), and, if applicable, that of
each beneficial purchaser for whom the Purchaser is contracting hereunder, for
the purpose of completing this Subscription Agreement. The Purchaser, on his,
her or its own behalf and, if applicable, on behalf of each beneficial purchaser
for whom the Purchaser is contracting hereunder, acknowledges and consents to
the Company retaining such personal information for as long as permitted or
required by law or business practices. The Purchaser, on his, her or its own
behalf and, if applicable, on behalf of each beneficial purchaser for whom the
Purchaser is contracting hereunder, further acknowledges and consents to the
fact that the Company may be required by the Applicable Securities Laws or the
rules and policies of any stock exchange to provide regulatory authorities with
any personal information provided under this Subscription Agreement. The
Purchaser represents and warrants, as applicable, that he, she or it has the
authority to provide the consents and acknowledgements set out in this paragraph
on behalf of each beneficial purchaser for whom the Purchaser is contracting
hereunder. In addition to the foregoing, the Purchaser agrees and acknowledges
that the Company may use and disclose the Purchaser’s personal information, or
that of each beneficial purchaser for whom the Purchaser is contracting
hereunder, as follows:

  

 

(i)for internal use with respect to managing the relationships between and
contractual obligations of the Company and the Purchaser or any beneficial
purchaser for whom the Purchaser is contracting hereunder;

  

  

  

- A-18 - 

 

 

(ii)for use and disclosure for income tax related purposes, including without
limitation, where required by law, disclosure to Canada Revenue Agency;

 

 

 

 

(iii)for disclosure to securities regulatory authorities and other regulatory
bodies with jurisdiction with respect to reports of trades and similar
regulatory filings;

 

 

 

 

(iv)for 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;

 

 

 

 

(v)for disclosure to professional advisers of the Company in connection with the
performance of their professional services;

 

 

 

 

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

 

 

 

 

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

 

 

 

 

(viii)for use and disclosure as otherwise required or permitted by law; and

 

 

(t)Personal Information – Provincial - The information provided by the Purchaser
on page 3 of this Subscription Agreement identifying the name, address and
telephone number of the Purchaser, the number of Units being purchased hereunder
and the total Subscription Price, as well as the Closing Date and the exemption
that the Purchaser is relying on in purchasing the Units will be disclosed to
the Securities Commission in the Province of residence for the Purchaser, and
such information is being indirectly collected by such Securities Commission
under the authority granted to it under Applicable Securities Laws. This
information is being collected for the purposes of the administration and
enforcement of the Applicable Securities Laws in such Provinces. Each Purchaser
hereby authorizes the indirect collection of such information by such Securities
Commission. In the event the Purchaser has any questions with respect to the
indirect collection of such information by such securities regulators, the
Purchaser should contact the relevant Securities Commission at:

   

Alberta Securities Commission

Suite 600, 250 – 5th Street SW

Calgary, Alberta T2P 0R4

Telephone: (403) 297-6454

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

Facsimile: (403) 297-2082

 

British Columbia Securities Commission

P.O. Box 10142, Pacific Centre

701 West Georgia Street

Vancouver, British Columbia V7Y 1L2

Inquiries: (604) 899-6854

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

Facsimile: (604) 899-6581

Email: inquiries@bcsc.bc.ca

 

The Manitoba Securities Commission

500 – 400 St. Mary Avenue

Winnipeg, Manitoba R3C 4K5

Telephone: (204) 945-2548

Toll free in Manitoba 1-800-655-5244

Facsimile: (204) 945-0330

Government of Nunavut

Department of Justice

Legal Registries Division

P.O. Box 1000, Station 570

1st Floor, Brown Building

Iqaluit, Nunavut X0A 0H0

Telephone: (867) 975-6590

Facsimile: (867) 975-6594

Ontario Securities Commission

20 Queen Street West, 22nd Floor

Toronto, Ontario M5H 3S8

Telephone: (416) 593- 8314

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

Facsimile: (416) 593-8122

Email: exemptmarketfilings@osc.gov.on.ca

Public official contact regarding indirect collection of information: Inquiries
Officer

 

Prince Edward Island Securities Office

95 Rochford Street, 4th Floor Shaw Building

P.O. Box 2000

Charlottetown, Prince Edward Island C1A 7N8

Telephone: (902) 368-4569

Facsimile: (902) 368-5283

 

  

  

- A-19 - 

 

Financial and Consumer Services Commission (New Brunswick)

85 Charlotte Street, Suite 300

Saint John, New Brunswick E2L 2J2

Telephone: (506) 658-3060

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

Facsimile: (506) 658-3059

Email: info@fcnb.ca

 

Government of Newfoundland and Labrador

Financial Services Regulation Division

P.O. Box 8700

Confederation Building

2nd Floor, West Block

Prince Philip Drive

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

Attention: Director of Securities

Telephone: (709) 729-4189

Facsimile: (709) 729-6187

 

Government of the Northwest Territories

Office of the Superintendent of Securities

P.O. Box 1320

Yellowknife, Northwest Territories X1A 2L9

Attention: Deputy Superintendent, Legal & Enforcement

Telephone: (867) 920-8984

Facsimile: (867) 873-0243

 

Nova Scotia Securities Commission

Suite 400, 5251 Duke Street

Duke Tower

P.O. Box 458

Halifax, Nova Scotia B3J 2P8

Telephone: (902) 424-7768

Facsimile: (902) 424-4625

Autorité des marchés financiers

800, Square Victoria, 22e étage

C.P. 246, Tour de la Bourse

Montréal, Québec H4Z 1G3

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

Facsimile: (514) 873-6155 (For filing purposes only)

Facsimile: (514) 864-6381 (For privacy requests only)

Email: financementdessocietes@lautorite.qc.ca

(For corporate finance issuers); fonds_dinvestissement@lautorite.qc.ca

(For investment fund issuers)

Financial and Consumer Affairs Authority of Saskatchewan

Suite 601 - 1919 Saskatchewan Drive

Regina, Saskatchewan S4P 4H2

Telephone: (306) 787-5879

Facsimile: (306) 787-5899

Government of Yukon

Department of Community Services

Law Centre, 3rd Floor

2130 Second Avenue

Whitehorse, Yukon Y1A 5H6

Telephone: (867) 667-5314

Facsimile: (867) 393-6251

 

The Purchaser acknowledges that the foregoing representations and warranties are
made by the Purchaser with the intent that they may be relied upon by the
Company and the Agents in determining the Purchaser’s eligibility, or (if
applicable) the eligibility of others on whose behalf the Purchaser is
contracting hereunder, to purchase the Units under relevant securities
legislation and the Purchaser hereby agrees to indemnify the Company and the
Agents against all losses, claims, costs, expenses and damages and other
liabilities which the Company or the Agents may suffer or incur as the result of
or arising from the reliance by the Company or the Agents on any such
representation or warranty. Such representations, warranties and covenants will
survive the Closing and continue in full force and effect for the benefit of the
Company and the Agents in accordance with the terms of the Agency Agreement.

 

12.Representations, Warranties and Covenants of the Company

 

By accepting this Subscription Agreement, the Company agrees that the Purchaser
will have the benefit of all the representations, warranties and covenants given
by the Company in the Agency Agreement and further agrees that all such
representations, warranties and covenants will be deemed to be incorporated
herein as if they were reproduced in their entirety, with such changes as are
necessary in order to reflect that such representations, warranties and
covenants are being made by the Company to the Purchaser, to the extent that
such representations, warranties and covenants are not amended or waived by the
Agents, and such representations, warranties and covenants will survive the
Closing and continue in full force and effect for the benefit of the Purchaser
in accordance with the terms of the Agency Agreement.

 

  

  

- A-20 - 

 

13.Governing Law

 

This Subscription Agreement will be governed by and construed in accordance with
the laws of the Province of British Columbia and the laws of Canada applicable
therein, without regard to conflict of laws rules. The Purchaser, on his or her
own behalf and (if applicable) on behalf of others for whom the Purchaser is
contracting hereunder, hereby irrevocably attorn to the non-exclusive
jurisdiction of the courts of the Province of British Columbia with respect to
any matters arising out of this Subscription Agreement.

 

14.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.

 

15.Currency

 

All dollar amounts referred to in this Subscription Agreement and the Schedules
thereto are expressed in Canadian funds unless otherwise specified.

 

16.Enurement

 

This Subscription Agreement will be binding upon and enure to the benefit of the
parties hereto and their respective successors and assigns.

 

17.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 Subscription
Agreement may be amended or modified in any respect by written instrument only.
The headings contained herein are for convenience only and will not affect the
meanings or interpretation hereof.

 

18.Time of Essence

 

Time will be of the essence of this Subscription Agreement.

 

19.Counterparts and Facsimile Deliveries

 

This Subscription Agreement may be executed in one or more counterparts, each of
which counterparts when executed will constitute an original and all of which
counterparts so executed will constitute one and the same instrument. The
Company and the Agents will be entitled to rely on delivery of an electronic or
facsimile copy of this Subscription Agreement, including the completed Schedules
attached hereto, and acceptance by the Company and the Agents of any such
electronic or facsimile copy will be legally effective to create a valid and
binding agreement between the parties hereto in accordance with the terms
hereof.

 

  

  

- B-1 -

 

SCHEDULE “B”

 

ACCREDITED INVESTOR EXEMPTION CERTIFICATE

 

This is Schedule “B” to the Subscription Agreement relating to the purchase
Units of Body and Mind Inc. (the “Company”). Capitalized terms used but not
defined in this schedule are intended to have the meanings given thereto, as
applicable, in the Subscription Agreement.

 

TO:

BODY AND MIND INC.

 

 

AND TO:

M PARTNERS INC. (the “Lead Agent”) and PI FINANCIAL CORP. (together with the
Lead Agent, the “Agents”)

 

Reference is made to the Subscription Agreement between the Company and the
undersigned (referred to herein as the “Purchaser”) dated as of the date hereof
(the “Subscription Agreement”). Upon execution of this certificate (the
“Purchaser Certificate”) by the Purchaser, this Purchaser Certificate will be
incorporated into and form a part of the Subscription Agreement.

 

Terms not otherwise defined herein or in the Subscription Agreement have the
meanings attributed to them in National Instrument 45-106 – Prospectus
Exemptions (“NI 45-106”) promulgated under Applicable Securities Laws. All
monetary references are in Canadian dollars.

 

In connection with the purchase of the Units of the Company by the Purchaser,
the Purchaser represents, warrants and covenants (on its own behalf and, if
applicable, on behalf of those for whom the Purchaser is contracting under the
Subscription Agreement) and certifies to the Company and the Agents and
acknowledges that the Company and the Agents are relying thereon that:

 

General

 

A.one of the following clauses (i), (ii) or (iii) applies:

 

 

(i)the Purchaser is resident in or otherwise subject to the laws of the
jurisdiction set out as the “Purchaser’s Residential Address” on page 3 of the
Subscription Agreement and is purchasing as principal for its own account and
not for the benefit of any other person;

 

 

 

 

(ii)the Purchaser is contracting hereunder on behalf of a Disclosed Principal
and such Disclosed Principal is resident in or otherwise subject to the laws of
the jurisdiction set out as the “Disclosed Principal’s Residential Address” on
page 3 of the Subscription Agreement and is purchasing as principal for its own
account and not for the benefit of any other person; or

 

 

 

 

(iii)the Purchaser is deemed to be purchasing as principal pursuant to NI 45-106
with respect to a purchase of the Units, by virtue of the fact that it is a
trust company or trust corporation described in clause (p) of the definition of
“accredited investor” in Section B below and is not a trust company or trust
corporation registered under the laws of Prince Edward Island that is not
registered or authorized under the Trust and Loan Companies Act (Canada) or
under comparable legislation in another jurisdiction of Canada, or by virtue of
the fact that it is a person or company described in item (q) of the definition
of “accredited investor” in Section B below; and

  

  

  

- B-2 -

 

Prospectus Exemptions

 

B.the Purchaser or the Disclosed Principal, as applicable, is, as of the date
hereof, and will be, as of the Closing Date, an “accredited investor”, as such
term is defined in NI 45-106, by virtue of the fact that the Purchaser or the
Disclosed Principal, as applicable, falls within one or more of the following
categories checked below. A Purchaser checking boxes (j), (j.1), (k) or (l) must
also complete and sign Appendix A to this Schedule “B” (Form 45-106F9 - Form for
Individual Accredited Investors).

  

(a) 

a Canadian financial institution, or a Schedule III bank;

o

 

 

(b)

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

o

 

 

(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;

o

 

 

(d)

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

o

 

 

(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);

o

 

 

(e.1)

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

o

 

 

(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;

o

 

 

(g)

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

o

 

 

(h)

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

o

 

  

  

- B-3 -

 

(I)

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

o

 

 

(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;

o

 

 

(j.1)

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

o

 

 

(k)

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

o

 

 

(l)

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

o

 

 

(m)

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

o

 

 

(n)

an investment fund that distributes or has distributed its securities only to:

 

(i) a person that is or was an accredited investor at the time of the
distribution;

 

(ii) a person that acquires or acquired securities in the circumstances referred
to in sections 2.10 (Minimum amount investment), or 2.19 (Additional investment
in investment funds) of NI 45-106; or

 

(iii) a person described in paragraph (i) or (ii) that acquires or acquired
securities under section 2.18 (Investment fund reinvestment) of NI 45-106;

 

o

 

 

(o)

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

o

 

  

  

- B-4 -

 

(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;

o

 

 

(q)

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

o

 

 

(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;

o

 

 

(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;

o

 

 

(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;

o

 

 

(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;

o

 

 

(v)

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

o

 

 

(w)

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

o

 

  

  

- B-5 -

 

The foregoing representations are true and accurate as of the date of this
certificate and will be true and accurate as of the Closing Date. If any such
representation will not be true and accurate prior to the Closing Date, the
undersigned will give immediate written notice of such fact to the Company.

 

Dated: ____________________, 2019

 

_________________________________________

Name of Purchaser

 

_________________________________________

Name of witness (if the Purchaser is an individual)

 

_________________________________________

Signature of Purchaser

 

_________________________________________

Signature of witness

 

 

_________________________________________

If the Purchaser is a corporation, print name and title of Authorized Signing
Officer

 

  

  

- B-6 -

 

APPENDIX A TO SCHEDULE “B”

 

Form 45-106F9

 

Form for Individual Accredited Investors

 

WARNING!

 

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

 

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

1. About your investment

Type of securities: Unit consisting of one Common Share and one Warrant

Issuer: Body and Mind Inc.

Purchased from: Issuer

[Instruction: Indicate whether securities are purchased from the issuer or a
selling security holder.]

SECTIONS 2 TO 4 TO BE COMPLETED BY THE PURCHASER

2. Risk acknowledgement

This investment is risky. Initial that you understand that:

Initials

Risk of loss – You could lose your entire investment of $ ______________.

[Instruction: Insert the total dollar amount of the investment.]

 

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

 

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

 

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

 

3. Accredited investor status

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

Initials

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

 

 

  

  

- B-7 -

 

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

 

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

 

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

 

4. Your name and signature

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

First and last name (please print):

Signature:

Date:

SECTION 5 TO BE COMPLETED BY THE SALESPERSON

5. Salesperson information

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

First and last name of salesperson (please print):

Telephone:

Email:

Name of firm (if registered):

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

6. For more information about this investment

 

Body and Mind Inc.

1095 West Pender Street

Vancouver, BC V6E 2M6

Attention: Leonard Clough, CEO

 

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

 

 

The Purchaser must complete and sign this form. The Company and the Agents must
receive a copy of this form signed by the Purchaser. The Company is required to
keep a signed copy of this form for 8 years after the distribution. 

 

  

  

- C-1 -

 

SCHEDULE “C”

U.S. ACCREDITED INVESTOR CERTIFICATE

 

This is Schedule “C” to the Subscription Agreement relating to the purchase
Units of Body and Mind Inc. (the “Company”). Capitalized terms used but not
defined in this schedule are intended to have the meanings given thereto, as
applicable, in the Subscription Agreement.

 

TO:

BODY AND MIND INC.

AND TO:

M PARTNERS INC. (the “Lead Agent”) and PI FINANCIAL CORP. (together with the
Lead Agent, the “Agents”)

 

Reference is made to the Subscription Agreement between the Company and the
undersigned (referred to herein as the “Purchaser”) dated as of the date hereof
(the “Subscription Agreement”). Upon execution of this certificate (the
“Purchaser Certificate”) by the Purchaser, this Purchaser Certificate will be
incorporated into and form a part of the Subscription Agreement.

 

All monetary references are in U.S. dollars.

 

In addition to the covenants, representations and warranties contained in the
Subscription Agreement, the undersigned Purchaser covenants, represents and
warrants to the Company and to the Agents that the Purchaser (on its own behalf
and, if applicable, on behalf of each beneficial purchaser for whom the
Purchaser is contacting hereunder):

 

(a)(i) is a “U.S. Person” as defined in Rule 902(k) of Regulation S under the
United States Securities Act of 1933, as amended (the “1933 Act”) and which,
without limiting the foregoing, includes a natural person resident in the United
States, a partnership, limited liability company, or corporation organized or
incorporated under the laws of the United States, an estate of which any
executor or administrator is a U.S. Person, a trust of which any trustee is a
U.S. Person, a non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit of a U.S.
Person, a discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated or (if an
individual) resident in the United States, and a partnership or corporation if
(A) organized or incorporated under the laws of any foreign jurisdiction, and
(B) formed by a U.S. Person principally for the purpose of investing in
securities not registered under the 1933 Act, unless it is organized or
incorporated, and owned, by “accredited investors” under Rule 501(a) of
Regulation D under the 1933 Act (“Regulation D”) who are not natural persons,
estates or trusts; or (ii) is not a U.S. Person but was offered the Units, or
executed or delivered the Subscription Agreement, in the United States (which,
for the purposes of this Schedule means the United States of America, its
territories and possessions and the District of Columbia)); or (iii) is
purchasing the Units for the account of or benefit of a U.S. Person or a person
in the United States, or is otherwise subject to the securities laws of the
United States;

 

 

(b)has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of the investment and it is able to
bear the economic risk of loss of the investment;

 

 

(c)is purchasing the Securities for its own account or for the account of one or
more beneficial purchasers for whom it is exercising sole investment discretion,
for investment only and not with a view to resale or distribution and in
particular, neither it nor any beneficial purchaser for whose account it is
purchasing the Units has any intention to distribute either directly or
indirectly any of the Securities in the United States or to U.S. Persons unless
such Securities are registered under the 1933 Act and any applicable state
securities laws, including, without limitation, any regulation under the 1933
Act, or in reliance on and pursuant to an exemption from such requirements;

 

  

  

- C-2 -

 

(d)the Purchaser acknowledges that (i) the Company has not undertaken, and will
have no obligation, to register any of Securities under the 1933 Act or any
applicable state securities laws, (ii) the Securities may not be offered or
sold, directly or indirectly, in the United States or to, or for the account or
benefit of, a U.S. Person or person in the United States except pursuant to
registration under the 1933 Act and the securities laws of all applicable states
or available exemptions therefrom, and (iii) the Company has present intention
of filing a registration statement under the 1933 Act or the securities laws of
any applicable states in respect of any of the Securities;

 

 

(d)the purchase and sale contemplated hereby is being made in reliance on an
exemption from registration under Rule 506(b) of Regulation D based in part upon
the Purchaser’s representations contained herein, including without limitation
that the Purchaser is an “accredited investor” meeting one or more of the
criteria in Rule 501(a) of Regulation D;

 

 

(e)satisfies one or more of the following categories of “accredited investor”
(please write “SUB” for the undersigned Purchaser, and “BP” for each beneficial
purchaser, if any, on each line that applies):

 

 

_______ Category 1.

A bank, as defined in Section 3(a)(2) of the 1933 Act, whether acting in its
individual or fiduciary capacity; a savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the 1933 Act, whether acting in
its individual or fiduciary capacity; a broker or dealer registered pursuant to
Section 15 of the United States Securities Exchange Act of 1934, as amended; an
insurance company as defined in Section 2(a)(13) of the 1933 Act; an investment
company registered under the United States Investment Company Act of 1940; a
business development company as defined in Section 2(a)(48) of the United States
Investment Company Act of 1940; a small business investment company licensed by
the U.S. Small Business Administration under Section 301 (c) or (d) of the
United States Small Business Investment Act of 1958; a plan established and
maintained by a state, its political subdivisions or any agency or
instrumentality of a state or its political subdivisions, for the benefit of its
employees, with total assets in excess of U.S.$5,000,000; or an employee benefit
plan within the meaning of the United States Employee Retirement Income Security
Act of 1974 in which the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such Act, which is either a bank, savings and loan
association, insurance company or registered investment adviser, or an employee
benefit plan with total assets in excess of U.S.$5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons who are
“accredited investors” (as such term is defined in Rule 501 under the 1933 Act);
or

 

 

 

 

_______ Category 2.

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

 

 

 

 

_______ Category 3.

An organization described in Section 501(c)(3) of the United States Internal
Revenue Code of 1986, as amended, a corporation, a Massachusetts or similar
business trust, a partnership or a limited liability company, not formed for the
specific purpose of acquiring the securities offered, with total assets in
excess of U.S.$5,000,000; or;

 

 

 

 

_______ Category 4.

Any director or executive officer of the Company; or

 

  

  

- C-3 -

 

 

_______ Category 5.

Any natural person whose individual net worth, or joint net worth with that
person’s spouse, at the time of his or her purchase exceeds US$1,000,000 (note:
for the purposes of calculating net worth: (i) the person’s primary residence
shall not be included as an asset; (ii) indebtedness that is secured by the
person’s primary residence, up to the estimated fair market value of the primary
residence at the time of the sale and purchase of securities contemplated
hereby, shall not be included as a liability (except that if the amount of such
indebtedness outstanding at the time of the sale and purchase of securities
contemplated hereby exceeds the amount outstanding 60 days before such time,
other than as a result of the acquisition of the primary residence, the amount
of such excess shall be included as a liability); and (iii) indebtedness that is
secured by the person’s primary residence in excess of the estimated fair market
value of the primary residence shall be included as a liability); or

 

 

 

 

_______ Category 6.

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

 

 

 

 

_______ Category 7.

A trust, with total assets in excess of U.S.$5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person as described in Rule 506(b)(2)(ii) under the 1933 Act.

 

 

 

 

_______ Category 8. 

Any entity in which each of the equity owners meets the requirements of one or
more of the above categories – if this alternative is selected you must identify
each equity owner and provide statements from each demonstrating how they
qualify as an accredited investor.

  

(f)acknowledges that the Purchaser has not purchased the Units as a result of
any form of “general solicitation” or “general advertising” (as such terms are
defined in Regulation D under the 1933 Act) including advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
media (including any press release of the Corporation) or broadcast over the
Internet, radio, or television, or any seminar or meeting whose attendees have
been invited by general solicitation or general advertising;

 

 

(g)understands that the Securities will not be registered under the 1933 Act and
are “restricted securities” as that term is defined in Rule 144(a)(3) of the
1933 Act and agrees that if the Purchaser decides to offer, sell or otherwise
transfer any of the Securities, the Purchaser will not offer, sell or otherwise
transfer any of such Securities directly or indirectly, unless:

 

 

(A)the sale is to the Company;

 

 

 

 

(B)the sale is made outside the United States in a transaction meeting the
requirements of Rule 904 of Regulation S under the 1933 Act and in compliance
with applicable local laws and regulations;

 

 

 

 

(C)the sale is made pursuant to the exemption from the registration requirements
under the 1933 Act provided by Rule 144 thereunder, if available, and in
compliance with any applicable state securities laws; or

 

 

 

 

(D)the Securities are sold in a transaction that does not require registration
under the 1933 Act or any applicable state laws and regulations governing the
offer and sale of securities, and the Purchaser has prior to such sale furnished
to the Company an opinion of counsel reasonably satisfactory to the Company,
stating that such sale, transfer, assignment or hypothecation is exempt from the
registration and prospectus delivery requirements of the 1933 Act and any
applicable state securities laws;

 

  

  

- C-4 -

 

(h)acknowledges that it has not purchased the Units as a result of, and will not
itself engage in, any “directed selling efforts” (as defined in Regulation S
under the 1933 Act) in the United States in respect of the Securities which
would include any activities undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market in the
United States for the resale of the Securities;

 

 

(i)understands and acknowledges that any certificates representing any
Securities sold in the United States, and all certificates issued in exchange
for or in substitution of such certificates will bear the following legends upon
the original issuance of any such Securities and until the legend is no longer
required under applicable requirements of the 1933 Act or applicable state
securities laws:

  

 

(i)the certificates representing the Offered Securities, and the certificates
representing the Warrant Shares if issued prior to four months after the Closing
Date, will bear a legend in substantially the following form:

 

 

 

 

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE [INSERT THE DATE THAT IS 4 MONTHS AND A DAY AFTER
THE DISTRIBUTION DATE].”;

 

 

 

 

(ii)the certificates representing the Offered Securities, and the certificates
representing the Warrant Shares will be required to be stamped with the
following legend (or substantially equivalent language):

 

 

 

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE [for warrants add: AND THE
SECURITIES ISSUABLE HEREUNDER] HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR APPLICABLE
STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE U.S. SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION OR EXCLUSION FROM REGISTRATION
UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.”; and

 

 

 

 

(iii)the certificates representing the Warrants will also bear a legend in
substantially the following form:

 

 

 

 

“THIS WARRANT MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF,
OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON OR A PERSON IN THE UNITED STATES
UNLESS THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES
LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS IS AVAILABLE. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY
REGULATION S UNDER THE U.S. SECURITIES ACT.”

 

 

 

 

provided, however, in (ii) immediately above, if any Securities are being sold,
the legend may be removed by delivery to the registrar and transfer agent and
the Company of an opinion of counsel, of recognized standing reasonably
satisfactory to the Company, that such legend is no longer required under
applicable requirements of the 1933 Act or state securities laws.

 

  

  

- C-5 -

 

(j)it understands that the Warrants may not be exercised in the United States or
by, or on behalf of, a U.S. Person or a person in the United States unless
exemptions are available from the registration requirements of the 1933 Act and
the securities laws of all applicable states, and the holder has furnished an
opinion of counsel of recognized standing in form and substance reasonably
satisfactory to the Company to such effect; provided that a holder of Warrants
(a “Warrantholder”), as the case may be, will not be required to deliver an
opinion of counsel in connection with its due exercise of the Warrants, for its
own account or for the account of the original beneficial purchaser, if any, at
a time when the Warrantholder and such original beneficial purchaser thereof, if
any, are “accredited investors” meeting one or more of the criteria in Rule
501(a) of Regulation D;

 

 

(k)consents to the Company making a notation on its records or giving
instruction to the registrar and transfer agent of the Company in order to
implement the restrictions on transfer set forth and described herein;

 

 

(l)the office or residence of the Purchaser at which the Purchaser received and
accepted the offer to purchase the Units is the address set out in the
“Purchaser’s Address” on page 3 of the Subscription Agreement;

 

 

(m)has relied solely upon its own independent investigation in making a decision
to purchase the Units and acknowledges that the Units are speculative
investments which involve a substantial degree of risk with no assurance of any
income from such investments and the possibility that such may become worthless;

 

 

(n)certifies that the Purchaser has received or has had full access to all the
information the Purchaser considers necessary or appropriate to make an informed
investment decision with respect to the Units;

 

 

(o)certifies that the Purchaser has had an opportunity to ask questions and
receive answers from the Company regarding the Company’s business, management
and financial affairs and the terms and conditions of the offer, sale and
issuance of the Offered Securities and to obtain additional information (to the
extent the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished to
the Purchaser or to which the Purchaser had access;

 

 

(p)certifies that the offer, sale and issuance of the Securities is not a
transaction, or part of a chain of transactions which, although in technical
compliance with Regulation D, is part of a plan or scheme to evade the
registration requirements of the 1933 Act;

 

 

(q)certifies that, if the Purchaser is an entity or organization, the Purchaser
was not formed for the specific purpose of acquiring the Units;

 

  

  

- C-6 -

 

(r)(i) the funds representing the aggregate purchase price which will be
advanced by the Purchaser for the subscription for the Units in the Offering
will not represent proceeds of crime for the purposes of the United States
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act (the “PATRIOT Act”), and the Purchaser
acknowledges that the Company, the Agents and/or any of their respective
affiliates in the United States may in the future be required by law to disclose
the Purchaser’s name and other information relating to the Subscription
Agreement and the undersigned’s subscription hereunder, on a confidential basis,
pursuant to the PATRIOT Act, and (b) no portion of the aggregate purchase price
to be provided by the Purchaser (i) has been or will be derived from or related
to any activity that is deemed criminal under the laws of the United States of
America, or any other jurisdiction, or (ii) is being tendered on behalf of a
person or entity that has not been identified to or by the Purchaser; and the
Purchaser shall promptly notify the Agents, the Company and their respective
affiliates in the United States if the Purchaser discovers that any of such
representations ceases to be true and provide the Agents, the Company and any of
their respective affiliates in the United States with appropriate information in
connection therewith;

 

 

(s)it acknowledges and understands that no agency, governmental authority,
regulatory body, stock exchange or other entity (including, without limitation,
the United States Securities and Exchange Commission or any state securities
commission) has made any finding or determination as to the merit of investment
in, nor have any such agencies or governmental authorities made any
recommendation or endorsement with respect to, any of the Units; and

 

 

(t)understands and agrees that there may be material tax consequences to the
Purchaser of an acquisition, disposition or exercise of any of the Securities;
the Company gives no opinion and makes no representation with respect to the tax
consequences to the Purchaser under United States, state, local or foreign tax
law of the Purchaser’s acquisition or disposition of such Securities; in
particular, no determination has been made whether the Company will be a
“passive foreign investment company” within the meaning of Section 1297 of the
United States Internal Revenue Code.

 

  

  

- C-7 -

 

The foregoing representations are true and accurate as of the date of this
certificate and will be true and accurate as of the Closing Date. If any such
representation will not be true and accurate prior to the Closing Date, the
undersigned will give immediate written notice of such fact to the Company.

 

Dated: ____________________, 2019

 

_________________________________________

Name of Purchaser

 

_________________________________________

Name of witness (if the Purchaser is an individual)

 

_________________________________________

Signature of Purchaser

 

_________________________________________

Signature of witness

 

 

_________________________________________

If the Purchaser is a corporation, print name and title of Authorized Signing
Officer

 

  

  

- D-1 -

 

SCHEDULE “D”

OFFSHORE PURCHASER CERTIFICATE

 

This is Schedule “D” to the Subscription Agreement relating to the purchase of
the Units of Body and Mind Inc. (the “Company”). Capitalized terms used but not
defined in this schedule are intended to have the meanings given thereto, as
applicable, in the Subscription Agreement.

 

TO:

BODY AND MIND INC. (the “Company”)

AND TO:

M PARTNERS INC. (the “Lead Agent”) and PI FINANCIAL CORP. (together with the
Lead Agent, the “Agents”)

 

The Purchaser hereby represents, warrants and certifies (by completing and
signing this certificate below) on its own behalf or, if applicable on behalf of
those for whom the Purchaser is contracting hereunder, to the Company and the
Agents (which representations, warranties and certifications will survive the
closing of the purchase of the Units by the Purchaser pursuant to the
Subscription Agreement) and acknowledges that the Company and the Agents are
relying thereon that:

 

 

(a)The Purchaser is: (i) purchasing the securities as principal for its own
account and not for the benefit of any other person, and it is purchasing for
investment only and not with a view to resale or distribution and no other
person, corporation, firm or other organization has a beneficial interest in the
said securities being purchased; or (ii) purchasing the securities as agent or
trustee for the principal disclosed on page 3 of this Subscription Agreement and
not for the benefit of any other person, and is purchasing for investment only
and not for a view to resale or distribution;

 

 

 

 

(b)The Purchaser is located outside of Canada and the United States and is not a
“U.S. Person” as defined in Rule 902(k) of Regulation S under the United States
Securities Act of 1933, as amended;

 

 

 

 

(c)The subscription by the Purchaser does not contravene any of the applicable
securities legislation in the jurisdiction in which the Purchaser resides and
does not give rise to: (i) any obligation of the Company to prepare and file a
prospectus or similar document or to register the Offered Securities or the
Warrant Shares, or to be registered with, any obligation to file a report or
notice with any governmental or regulatory authority; or (ii) any continuous
disclosure reporting obligation of the Company in the International Jurisdiction
(as defined in the Subscription Agreement);

 

 

 

 

(d)the Purchaser is purchasing the Units pursuant to exemptions from any
prospectus, registration or similar requirements under the laws of that
International Jurisdiction or, if such is not applicable, the Purchaser is
permitted to purchase the Units without the need to comply with any substantive
or procedural requirements or any kind whatsoever in the Purchaser’s
jurisdiction of residence; and

 

 

 

 

(e)the Purchaser will, if requested by the Company, deliver to the Company a
certificate or opinion of local counsel from the Purchaser’s jurisdiction of
residence confirming the matters referred to in subparagraph (d) above to the
satisfaction of the Company, acting reasonably.

 

[The remainder of this page intentionally left blank. Signature page follows.]

 

  

  

- D-2 -

 

IN WITNESS WHEREOF, the undersigned has executed this certificate as of the
_____ day of ____________________, 2019.

 

If a Company, Partnership or Other Entity

 

If an Individual:

 

 

Name of Entity

 

Signature

 

 

Type of Entity

 

Print or Type Name

 

 

Signature of Person Signing

 

 

Print or Type Name and Title of Person Signing