Document:

Salona Global Medical Device Corp.: Exhibit 4.2 - Filed by newsfilecorp.com

    

    REGISTRATION RIGHTS AGREEMENT

    THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of February 15, 2022, is by and among Salona Global Medical Device Corporation, a corporation organized under the laws of British Columbia (the "Company"), the persons listed as subscribers on Exhibit A hereto (each, a "Purchaser," and collectively, the "Purchasers").

    RECITALS

    WHEREAS, the Company proposes to issue to the Purchasers units comprised of common shares in the capital of the Company ("Common Shares") and warrants entitling the Purchasers to subscribe for common shares in the capital of the Company ("Warrant Shares") pursuant to subscription agreements dated as of the date hereof (the "Subscription Agreements"); and

    WHEREAS, pursuant to the Subscription Agreements, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "1933 Act"), and applicable state securities laws.

    AGREEMENT

    NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Purchasers hereby agree as follows:

    1. Definitions.  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Subscription Agreements.  As used in this Agreement, the following terms shall have the following meanings:

    (a) "1934 Act" has the meaning set forth in Section 3(b).

    (b) "Business Day" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee"  or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.

    (c) "Claims" has the meaning set forth in Section 6(a).

    (d) "Closing Date" shall have the meaning set forth in the Subscription Agreements.

    (e) "Common Shares" have the meaning set forth in the Recitals.

    (f) "Current Public Information Failure" has the meaning set forth in Section 2(d)(iii).

    (g) "Effective Date" means the date that the applicable Registration Statement has been declared effective by the SEC.

    (h) "Effective Purchase Price" means, with respect to any Investor as of any given date, the sum of (x) such Investor's original Subscription Price (as defined in the Subscription Agreements) and (y) the sum of each aggregate exercise price of each exercise of the Warrants of such Investor on or prior to such given date.

    
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    (i) "Effectiveness Deadline" means (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the earlier of the (A) the 180th calendar day after the Closing Date and (B) 2nd Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed or will not be subject to further review; and (ii) with respect to any additional Registration Statements that may be required to be filed by the Company pursuant to this Agreement, the earlier of the (A) the 180th calendar day following the date on which the Company was required to file such additional Registration Statement and (B) 2nd Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed or will not be subject to further review.

    (j) "Effectiveness Failure" has the meaning set forth in Section 2(d)(i).

    (k) "Filing Deadline" means (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the 45th calendar day after the Closing Date; and (ii) with respect to any additional Registration Statements that may be required to be filed by the Company pursuant to this Agreement, the date on which the Company was required to file such additional Registration Statement pursuant to the terms of this Agreement.

    (l) "Filing Failure" has the meaning set forth in Section 2(d)(i).

    (m) "Indemnified Damages" has the meaning set forth in Section 6(a).

    (n) "Indemnified Party" has the meaning set forth in Section 6(b).

    (o) "Indemnified Person" has the meaning set forth in Section 6(a).

    (p) "Inspector" has the meaning set forth in Section 3(h).

    (q) "Investor" means a Purchaser or any transferee or assignee of any Registrable Securities or Warrants, as applicable, to whom a Purchaser assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee of any Registrable Securities or Warrants, as applicable, assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9.

    (r) "Liquidated Damages" has the meaning set forth in Section 2(d).

    (s) "Maintenance Failure" has the meaning set forth in Section 2(d)(i).

    (t) "Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or a government or any department or agency thereof.

    (u) "Principal Market" has the meaning set forth in Section 2(d)(ii).

    (v) "Records" has the meaning set forth in Section 3(h).

    
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    (w) "register," "registered," and "registration" refer to a registration effected by preparing and filing one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 and the declaration of effectiveness of such Registration Statement(s) by the SEC.

    (x) "Registrable Securities" means the (i) Common Shares; (ii) Warrant Shares; (iii) Compensation Shares (as defined in the Underwriting Agreement); (iv) any common shares of the Company issued as a dividend or other distribution; and (v) any common shares of the Company with respect to or in exchange for or in replacement of the shares referenced in (i), (ii), (iii) and (iv) above; provided, however, that Registrable Securities shall not include (a) any common shares of the Company which have previously been registered or which have been sold to the public either pursuant to a registered public offering or Rule 144; or (b) common shares of the Company held by a Holder that may immediately be sold under Rule 144.

    (y) "Registration Delay Payments" has the meaning set forth in Section 2(d).

    (z) "Registration Statement" means a registration statement or registration statements of the Company filed under the 1933 Act registering Registrable Securities.

    (aa) "Required Holders" means, as of any given time, the holders of a majority of the Registrable Securities as of such time (excluding any Registrable Securities held by the Company or any of its Subsidiaries as of such time).

    (bb) "Required Registration Amount" means 200% of the maximum number of Warrant Shares issuable upon exercise of the Warrants (assuming for purposes hereof that any such exercise shall not take into account any limitations on the exercise of the Warrants set forth in the Warrants), all subject to adjustment as provided in Section 2(c) and/or Section 2(e).

    (cc) "Rule 144" means Rule 144 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any other similar or successor rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration.

    (dd) "Rule 415" means Rule 415 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any other similar or successor rule or regulation of the SEC providing for offering securities on a continuous or delayed basis.

    (ee) "SEC" means the United States Securities and Exchange Commission.

    (ff) "Staff" has the meaning set forth in Section 2(e).

    (gg) "Subscription Agreements" have the meaning set forth in the Recitals.

    (hh) "Trading Day" has the meaning set forth in the Subscription Agreements.

    (ii) "Transaction Documents" means collectively, this Agreement, the Subscription Agreements, the Underwriting Agreement, the Ancillary Documents (as defined in the Underwriting Agreement), and all the schedules and exhibits attached to the foregoing.

    (jj) "United States" means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia.

    (kk) "Violations" has the meaning set forth in Section 6(a).

    
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    (ll) "Warrant Shares" have the meaning set forth in the Recitals.

    2. Registration.

    (a) Mandatory Registration. The Company shall prepare and, as soon as practicable, but in no event later than the Filing Deadline, file with the SEC an initial Registration Statement on Form S-3 registering the resale of all of the Registrable Securities, provided that such initial Registration Statement shall register for resale at least the number of Common Shares equal to the Required Registration Amount as of the date such Registration Statement is initially filed with the SEC; provided further that if Form S-3 is unavailable for such a registration, the Company shall use such other form as is required by Section 2(b). The Company shall use commercially reasonable efforts to have such initial Registration Statement, and each other Registration Statement required to be filed pursuant to the terms of this Agreement, declared effective by the SEC as soon as practicable, but in no event later than the applicable Effectiveness Deadline for such Registration Statement.

    (b) Ineligibility to Use Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on Form S-1 or another appropriate form reasonably acceptable to the Required Holders; and (ii) undertake to register the resale of the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of all Registration Statements then in effect until such time as a Registration Statement on Form S-3 registering the resale of all the Registrable Securities has been declared effective by the SEC and the prospectus contained therein is available for use.

    (c) Sufficient Number of Shares Registered. In the event the number of shares available under any Registration Statement is insufficient to register all of the Registrable Securities required to be registered by such Registration Statement or an Investor's allocated portion of the Registrable Securities pursuant to Section 2(g), the Company shall amend such Registration Statement (if permissible), or file with the SEC a new Registration Statement (on the short form available therefor, if applicable), or both, so as to register at least the Required Registration Amount as of the Trading Day (as defined in the Subscription Agreements) immediately preceding the date of the filing of such amendment or new Registration Statement, in each case, as soon as practicable, but in any event not later than fifteen (15) days after the necessity therefor arises (but taking account of any Staff position with respect to the date on which the Staff will permit such amendment to the Registration Statement and/or such new Registration Statement (as the case may be) to be filed with the SEC).  The Company shall use commercially reasonable efforts to cause such amendment to such Registration Statement and/or such new Registration Statement (as the case may be) to become effective as soon as practicable following the filing thereof with the SEC, but in no event later than the applicable Effectiveness Deadline for such Registration Statement.  For purposes of the foregoing provision, the number of shares available under a Registration Statement shall be deemed "insufficient to register all of the Registrable Securities" if at any time the number of Common Shares available for resale under the applicable Registration Statement is less than the product determined by multiplying (i) the Required Registration Amount as of such time by (ii) 0.90.  The calculation set forth in the foregoing sentence shall be made without regard to any limitations on exercise of the Warrants.

    (d) Effect of Failure to File and Obtain and Maintain Effectiveness of any Registration Statement.  If

    (i) a Registration Statement registering the resale of all of the Registrable Securities required to be registered thereby (disregarding any reduction pursuant to Section 2(e)) and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the Filing Deadline for such Registration Statement (a "Filing Failure") or (B) not declared effective by the SEC on or before the Effectiveness Deadline for such Registration Statement (an "Effectiveness Failure") (it being understood that if on the Business Day immediately following the Effective Date for such Registration Statement the Company shall not have filed a "final" prospectus for such Registration Statement with the SEC under Rule 424(b) in accordance with Section 3(b) (whether or not such a prospectus is technically required by such rule), the Company shall be deemed to not have satisfied this clause (i)(B) and such event shall be deemed to be an Effectiveness Failure);

    
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    (ii) on any day after the Effective Date of a Registration Statement sales of all of the Registrable Securities required to be included on such Registration Statement (disregarding any reduction pursuant to Section 2(e)) cannot be made pursuant to such Registration Statement (including, without limitation, because of a failure to keep such Registration Statement effective, a failure to disclose such information as is necessary for sales to be made pursuant to such Registration Statement, a suspension or delisting of the Common Shares on the TSX Venture Exchange (the "Principal Market") or any other limitations imposed by the Principal Market, or a failure to register a sufficient number of Common Shares or by reason of a stop order) or the prospectus contained therein is not available for use for any reason other than as a result of any applicable Canadian securities or Principal Market resale restrictions (a "Maintenance Failure"); or

    (iii) if a Registration Statement is not effective for any reason or the prospectus contained therein is not available for use for any reason, and either (x) the Company fails for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the failure to satisfy the current public information requirement under Rule 144(c) or (y) the Company has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a "Current Public Information Failure") as a result of which any of the Investors are unable to sell Registrable Securities without restriction under Rule 144 (including, without limitation, volume restrictions),

    then, as  relief for the damages to any holder by reason of any such delay in, or reduction of, its ability to sell the underlying Warrant Shares (which remedy shall not be exclusive of any other remedies available at law or in equity, including, without limitation, specific performance), the Company shall pay as liquidated damages ("Liquidated Damages") to each holder of Registrable Securities relating to such Registration Statement, at the Company's option, either an amount in cash or Common Shares equal to one percent (1%) of such Investor's original Effective Purchase Price on the date of such Filing Failure, Effectiveness Failure, Maintenance Failure or Current Public Information Failure, as applicable; for each 90-day period (or pro rata for any portion thereof) following the occurrence of any Filing Failure, Effectiveness Failure, Maintenance Failure or Current Public Information Failure, as applicable, and such failure remains unremedied, the amount the Company shall pay as Liquidated Damages shall be increased by half of one percent (0.5% ) during each subsequent 90-day period (or pro rata for any portion thereof), provided that in no event shall the additional amount per 90-day period exceed two and one half percent (2.5%) and in no event shall the aggregate additional amount due pursuant to this Section 2(d) exceed five percent (5.0%) of the aggregate amount of such Investor's original Effective Purchase Price. If paid in the form of Common Shares, the number of Common Shares to be issued will be calculated based on the closing price of the Common Shares on the date the Liquidated Damages payment is demanded, subject to a cap of 984,504 Common Shares, and shall be subject to prior approval of the Principal Market. The payments to which a holder of Registrable Securities shall be entitled pursuant to this Section 2(d) are referred to herein as "Registration Delay Payments".

    
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    Notwithstanding the foregoing, no Registration Delay Payment shall be owed to an Investor with respect to any period during which all of such Investor's Registrable Securities may be sold by such Investor without restriction under Rule 144 (including, without limitation, volume restrictions). 

    (e) Offering. Notwithstanding anything to the contrary contained in this Agreement, but subject to the payment of the Registration Delay Payment pursuant to Section 2(d), in the event the staff of the SEC (the "Staff") or the SEC seeks to characterize any offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting an offering of securities by, or on behalf of, the Company, or in any other manner, such that the Staff or the SEC do not permit such Registration Statement to become effective and used for resales in a manner that does not constitute such an offering and that permits the continuous resale at the market by the Investors participating therein (or as otherwise may be acceptable to each Investor) without being named therein as an "underwriter," then the Company shall reduce the number of shares to be included in such Registration Statement by all Investors until such time as the Staff and the SEC shall so permit such Registration Statement to become effective as aforesaid.  In making such reduction, the Company shall reduce the number of shares to be included by all Investors on a pro rata basis (based upon the number of Registrable Securities otherwise required to be included for each Investor) unless the inclusion of shares by a particular Investor or a particular set of Investors are resulting in the Staff or the SEC's "by or on behalf of the Company" offering position, in which event the shares held by such Investor or set of Investors shall be the only shares subject to reduction (and if by a set of Investors on a pro rata basis by such Investors or on such other basis as would result in the exclusion of the least number of shares by all such Investors); provided that, with respect to such pro rata portion allocated to any Investor, such Investor may elect the allocation of such pro rata portion among the Registrable Securities of such Investor.  In addition, in the event that the Staff or the SEC requires any Investor seeking to sell securities under a Registration Statement filed pursuant to this Agreement to be specifically identified as an "underwriter" in order to permit such Registration Statement to become effective, and such Investor does not consent to being so named as an underwriter in such Registration Statement, then, in each such case, the Company shall reduce the total number of Registrable Securities to be registered on behalf of such Investor, until such time as the Staff or the SEC does not require such identification or until such Investor accepts such identification and the manner thereof.  Any reduction pursuant to this paragraph will first reduce all Registrable Securities other than those issued pursuant to the Subscription Agreements.  In the event of any reduction in Registrable Securities pursuant to this paragraph, an affected Investor shall have the right to require, upon delivery of a written request to the Company signed by such Investor, the Company to file a registration statement within twenty (20) days of such request (subject to any restrictions imposed by Rule 415 or required by the Staff or the SEC) for resale by such Investor in a manner acceptable to such Investor, and the Company shall, following such request, cause to be and keep effective such registration statement in the same manner as otherwise contemplated in this Agreement for registration statements hereunder, in each case until such time as: (i) all Registrable Securities held by such Investor have been registered and sold pursuant to an effective Registration Statement in a manner acceptable to such Investor; or (ii) all Registrable Securities may be resold by such Investor without restriction (including, without limitation, volume limitations) pursuant to Rule 144 (taking account of any Staff position with respect to "affiliate" status) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable); or (iii) such Investor agrees to be named as an underwriter in any such Registration Statement in a manner acceptable to such Investor as to all Registrable Securities held by such Investor and that have not theretofore been included in a Registration Statement under this Agreement (it being understood that the special demand right under this sentence may be exercised by an Investor multiple times and with respect to limited amounts of Registrable Securities in order to permit the resale thereof by such Investor as contemplated above).

    (f) Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement and any increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities held by each Investor at the time such Registration Statement registering such initial number of Registrable Securities or increase thereof is declared effective by the SEC.  In the event that an Investor sells or otherwise transfers any of such Investor's Registrable Securities, each transferee or assignee (as the case may be) that becomes an Investor shall be allocated a pro rata portion of the then-remaining number of Registrable Securities included in such Registration Statement for such transferor or assignee (as the case may be).  Any Common Shares included in a Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities registered by such Registration Statement shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities then held by such Investors which are registered by such Registration Statement.

    
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    (g) No Inclusion of Other Securities. The Company shall in no event include any securities other than Registrable Securities on any Registration Statement filed in accordance herewith without the prior written consent of the Required Holders.

    3. Related Obligations.  The Company shall use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof, and, pursuant thereto, the Company shall have the following obligations:

    (a) The Company shall promptly prepare and file with the SEC a Registration Statement with respect to all the Registrable Securities (but in no event later than the applicable Filing Deadline) and use commercially reasonable efforts to cause such Registration Statement to become effective as soon as practicable after such filing (but in no event later than the Effectiveness Deadline).  The Company shall keep each Registration Statement effective (and the prospectus contained therein available for use) pursuant to Rule 415 for resales by the Investors on a delayed or continuous basis at then-prevailing market prices (and not fixed prices) at all times until  five (5) years following the expiry date of the Warrants (the "Registration Period").  Notwithstanding anything to the contrary contained in this Agreement, the Company shall ensure that, when filed and at all times while effective, each Registration Statement (including, without limitation, all amendments and supplements thereto) and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection with such Registration Statement (i) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading; and (ii) will disclose (whether directly or through incorporation by reference to other SEC filings to the extent permitted) all material information regarding the Company and its securities.  The Company shall submit to the SEC, within two (2) Business Days after the date that the Company learns that no review of a particular Registration Statement will be made by the Staff or that the Staff has no further comments on a particular Registration Statement (as the case may be), a request for acceleration of effectiveness of such Registration Statement to a time and date not later than forty-eight (48) hours after the submission of such request.  The Company shall respond in writing to comments made by the SEC in respect of a Registration Statement as soon as practicable, but in no event later than twenty (20) days after the receipt of comments by or notice from the SEC that an amendment is required in order for a Registration Statement to be declared effective. 

    (b) The Company shall prepare and file with the SEC such amendments (including, without limitation, post-effective amendments) and supplements to each Registration Statement and the prospectus used in connection with each such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep each such Registration Statement effective at all times during the Registration Period for such Registration Statement, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company required to be registered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement; provided, however, by 8:30 a.m. (New York time) on the Business Day immediately following each Effective Date, the Company shall file with the SEC in accordance with Rule 424(b) under the 1933 Act the final prospectus to be used in connection with sales pursuant to the applicable Registration Statement (whether or not such a prospectus is technically required by such rule).  In the case of amendments and supplements to any Registration Statement which are required to be filed pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason of the Company filing a report on Form 8-K, Form 10-Q or Form 10-K or any analogous report under the Securities Exchange Act of 1934, as amended (the "1934 Act"), the Company shall, if permitted under the applicable rules and regulations of the SEC, have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement.

    
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    (c) The Company shall promptly furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, (i) after the same is prepared and filed with the SEC, at least one (1) copy of each Registration Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, all exhibits and each preliminary prospectus; (ii) upon the effectiveness of each Registration Statement, as many copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such Investor may reasonably request from time to time) as may be reasonably requested; and (iii) such other documents, including, without limitation, copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.

    (d) The Company shall use commercially reasonable efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by Investors of the Registrable Securities registered by a Registration Statement under such other securities or "blue sky" laws of all applicable jurisdictions in the United States; (ii) prepare and file in those jurisdictions, such amendments (including, without limitation, post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period; (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period; and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d); (y) subject itself to general taxation in any such jurisdiction; or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify each Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or "blue sky" laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

    (e) The Company shall notify each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, may include an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, non-public information regarding the Company or any of its Subsidiaries), and, subject to this Agreement, promptly prepare a supplement or amendment to such Registration Statement and such prospectus contained therein to correct such untrue statement or omission and deliver as many copies of such supplement or amendment to each Investor (or such other number of copies as such Investor may reasonably request) as may reasonably be requested.  The Company shall also promptly notify each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to each Investor by e-mail on the same day of such effectiveness and by overnight mail), and when the Company receives written notice from the SEC that a Registration Statement or any post-effective amendment will be reviewed by the SEC' (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information; (iii) of the Company's reasonable determination that a post-effective amendment to a Registration Statement would be appropriate; and (iv) of the receipt of any request by the SEC or any other federal or state governmental authority for any additional information relating to the Registration Statement or any amendment or supplement thereto or any related prospectus.  The Company shall respond as promptly as practicable to any comments received from the SEC with respect to each Registration Statement or any amendment thereto (it being understood and agreed that the Company's response to any such comments shall be delivered to the SEC no later than later than twenty (20) days after the receipt thereof).

    
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    (f) The Company shall (i) use commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of each Registration Statement or the use of any prospectus contained therein, or the suspension of the qualification, or the loss of an exemption from qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment; and (ii) notify each Investor who holds Registrable Securities of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

    (g) If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter and such Investor consents to so being named an underwriter, at the request of any Investor, the Company shall furnish to such Investor, on the date of the effectiveness of such Registration Statement and thereafter from time to time on such dates as an Investor may reasonably request (i) a letter, dated such date, from the Company's independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors; and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Investors.

    (h) If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter and such Investor consents to so being named an underwriter, upon the written request of such Investor, the Company shall make available for inspection by (i) such Investor; (ii) legal counsel for such Investor; and (iii) one (1) firm of accountants or other agents retained by such Investor (collectively, the "Inspectors"), all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the "Records"), as shall be reasonably deemed necessary by each Inspector, and cause the Company's officers, directors and employees to supply all information which any Inspector may reasonably request; provided, however, each Inspector shall agree in writing to hold in strict confidence and not to make any disclosure (except to such Investor) or use of any Record or other information which the Company's board of directors determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (1) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act; (2) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction; or (3) the information in such Records has been made generally available to the public other than by disclosure in violation of this Agreement or any other Transaction Document (as defined in the Subscription Agreements). Such Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential.  Nothing herein (or in any other confidentiality agreement between the Company and such Investor, if any) shall be deemed to limit any Investor's ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

    
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    (i) The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure of such information is necessary to comply with applicable federal or state securities laws; (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required to be disclosed in such Registration Statement pursuant to the 1933 Act; (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction; or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other Transaction Document. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at such Investor's expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

    (j) The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts (as the case may be) as the Investors may reasonably request from time to time and registered in such names as the Investors may request.

    (k) If requested by an Investor, the Company shall as soon as practicable after receipt of notice from such Investor, (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement or prospectus contained therein if reasonably requested by an Investor holding any Registrable Securities.

    (l) The Company shall use commercially reasonable efforts to cause the Registrable Securities registered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.

    (m) The Company shall otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

    (n) Within one (1) Business Day after a Registration Statement which registers Registrable Securities is declared effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC in the form attached hereto as Exhibit B.

    
        10

    

    

    (o) The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by each Investors of its Registrable Securities pursuant to each Registration Statement.

    (p) Neither the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure or filing with the SEC, and any Purchaser being deemed an underwriter by the SEC shall not relieve the Company of any obligations it has under this Agreement or any other Transaction Document (as defined in the Subscription Agreements).

    (q) Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Purchasers in this Agreement or otherwise conflicts with the provisions hereof.

    4. Obligations of the Investors.

    (a) At least five (5) Business Days prior to the first anticipated filing date of each Registration Statement, the Company shall notify each Investor in writing of the information the Company requires from each such Investor with respect to such Registration Statement.  It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

    (b) Each Investor, by such Investor's acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor's election to exclude all of such Investor's Registrable Securities from such Registration Statement.

    (c) Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(e), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) registering such Registrable Securities until such Investor's receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(e) or receipt of notice that no supplement or amendment is required.

    5. Expenses of Registration.  All expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company shall be paid by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement.

    6. Indemnification.

    (a) To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor and each of its directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) and each Person, if any, who controls such Investor within the meaning of the 1933 Act or the 1934 Act and each of the directors, officers, shareholders, members, partners, employees, agents, affiliates, advisors, representatives (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) of such controlling Persons (each, an "Indemnified Person"), against any losses, obligations, claims, damages, liabilities, contingencies, judgments, fines, penalties, charges, costs (including, without limitation, court costs, reasonable attorneys' fees and costs of defense and investigation), amounts paid in settlement or expenses, joint or several, (collectively, "Claims") incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an Indemnified Person is or may be a party thereto ("Indemnified Damages"), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under applicable securities laws of any jurisdiction in which Registrable Securities are offered, or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, "Violations"). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person for such Indemnified Person expressly for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company; and (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of any of the Registrable Securities by any of the Investors pursuant to Section 9.

    
        11

    

    

    (b) In connection with any Registration Statement in which an Investor is participating, such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an "Indemnified Party"), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case, to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(c) and the below provisos in this Section 6(b), such Investor will reimburse an Indemnified Party any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such Claim; provided, however, the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed, provided further that such Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the applicable sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of any of the Registrable Securities by any of the Investors pursuant to Section 9.

    
        12

    

    

    (c) Promptly after receipt by an Indemnified Person or Indemnified Party (as the case may be) under this Section 6 of notice of the commencement of any action or proceeding (including, without limitation, any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party (as the case may be) shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party (as the case may be); provided, however, an Indemnified Person or Indemnified Party (as the case may be) shall have the right to retain its own counsel with the fees and expenses of such counsel to be paid by the indemnifying party if: (i) the indemnifying party has agreed in writing to pay such fees and expenses; (ii) the indemnifying party shall have failed promptly to assume the defense of such Claim and to employ counsel reasonably satisfactory to such Indemnified Person or Indemnified Party (as the case may be) in any such Claim; or (iii) the named parties to any such Claim (including, without limitation, any impleaded parties) include both such Indemnified Person or Indemnified Party (as the case may be) and the indemnifying party, and such Indemnified Person or such Indemnified Party (as the case may be) shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Person or such Indemnified Party and the indemnifying party (in which case, if such Indemnified Person or such Indemnified Party (as the case may be) notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, then the indemnifying party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the indemnifying party), provided further that in the case of clause (iii) above the indemnifying party shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnified Person or Indemnified Party (as the case may be). The Indemnified Party or Indemnified Person (as the case may be) shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person (as the case may be) which relates to such action or Claim.  The indemnifying party shall keep the Indemnified Party or Indemnified Person (as the case may be) apprised at all times as to the status of the defense or any settlement negotiations with respect thereto.  No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, which consent shall not be unreasonably withheld or delayed; provided, however, the indemnifying party shall not unreasonably withhold, delay or condition its consent.  No indemnifying party shall, without the prior written consent, which consent shall not be unreasonably withheld or delayed, of the Indemnified Party or Indemnified Person (as the case may be), consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person (as the case may be) of a release from all liability in respect to such Claim or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnified Party.  Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person (as the case may be) with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party (as the case may be) under this Section 6, except to the extent that the indemnifying party is materially and adversely prejudiced in its ability to defend such action.

    
        13

    

    

    (d) The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received, or Indemnified Damages are incurred.

    (e) The indemnity and contribution agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others; and (ii) any liabilities the indemnifying party may be subject to pursuant to applicable law.

    7. Contribution.  To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however: (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6 of this Agreement; (ii) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received by such seller from the applicable sale of such Registrable Securities pursuant to such Registration Statement.  Notwithstanding the provisions of this Section 7, no Investor shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Investor from the applicable sale of the Registrable Securities subject to the Claim exceeds the amount of any damages that such Investor has otherwise been required to pay, or would otherwise be required to pay under Section 6(b), by reason of such untrue or alleged untrue statement or omission or alleged omission.

    8. Reports Under the 1934 Act.  With a view to making available to the Investors the benefits of Rule 144, the Company agrees to:

    (a) make and keep public information available, as those terms are understood and defined in Rule 144;

    (b) file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements (it being understood and agreed that nothing herein shall limit any obligations of the Company under the Subscription Agreements) and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

    (c) furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting, submission and posting requirements of Rule 144, the 1933 Act and the 1934 Act; (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company with the SEC if such reports are not publicly available via EDGAR; and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

    
        14

    

    

    9. Assignment of Registration Rights.  All or any portion of the rights under this Agreement shall be automatically assignable by each Investor to any transferee or assignee (as the case may be) of all or any portion of such Investor's Registrable Securities or Warrants if: (i) such Investor agrees in writing with such transferee or assignee (as the case may be) to assign all or any portion of such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such transfer or assignment (as the case may be); (ii) the Company is, within a reasonable time after such transfer or assignment (as the case may be), furnished with written notice of (a) the name and address of such transferee or assignee (as the case may be), and (b) the securities with respect to which such registration rights are being transferred or assigned (as the case may be); (iii) immediately following such transfer or assignment (as the case may be) the further disposition of such securities by such transferee or assignee (as the case may be) is restricted under the 1933 Act or applicable state securities laws if so required; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence such transferee or assignee (as the case may be) agrees in writing with the Company to be bound by all of the provisions contained herein; (v) such transfer or assignment (as the case may be) shall have been made in accordance with the applicable requirements of the Subscription Agreements and the Warrants (as the case may be); and (vi) such transfer or assignment (as the case may be) shall have been conducted in accordance with all applicable federal and state securities laws.

    10. Amendment of Registration Rights.  Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Required Holders; provided that any such amendment or waiver that complies with the foregoing, but that disproportionately, materially and adversely affects the rights and obligations of any Investor relative to the comparable rights and obligations of the other Investors shall require the prior written consent of such adversely affected Investor.  Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company, provided that no such amendment shall be effective to the extent that it (i) applies to less than all of the holders of Registrable Securities; or (ii) imposes any obligation or liability on any Investor without such Investor's prior written consent (which may be granted or withheld in such Investor's sole discretion).  No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.  No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to this Agreement.

    11. Miscellaneous.

    (a) Solely for purposes of this Agreement, a Person is deemed to be a holder of Registrable Securities whenever such Person owns, or is deemed to own, of record such Registrable Securities.  If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable Securities.

    (b) Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient's email server that such e-mail could not be delivered to such recipient); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service with next day delivery specified, in each case, properly addressed to the party to receive the same.  The addresses and email addresses for such communications shall be:

    
        15

    

    

    If to the Company:

    Salona Global Medical Device Corporation
3330 Caminito Daniella 

    Del Mar CA 92014
Telephone: (858) 395-1013
Attention: Les Cross
Email: les.cross@salonaglobal.com

    If to the Transfer Agent:

    Computershare

    510 Burrard Street

    3rd Floor

    Vancouver, BC V6C 3B9
Telephone: 604-661-9407
Attention: Mariano Banting
Email: Mariano.Banting@computershare.com

    If to a Purchaser, to its address and/or email address set forth in the applicable Subscription Agreement, with copies to such Purchaser's representatives as set forth in the applicable Subscription Agreement, or to such other address, and/or email address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's email containing the time, date, recipient email address or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by e-mail or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

    (c) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.  The Company and each Investor acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that each party hereto shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement by any other party hereto and to enforce specifically the terms and provisions hereof (without the necessity of showing economic loss and without any bond or other security being required), this being in addition to any other remedy to which any party may be entitled by law or equity.

    (d) This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of Florida. Any and all disputes arising under this Agreement, whether as to interpretation, performance or otherwise, shall be subject to the non-exclusive jurisdiction of the courts of the of the State of Florida and each of the parties hereto hereby irrevocably attorns to the jurisdiction of the courts of such state.

    (e) If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, such provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.  The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

    
        16

    

    

    (f) This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto, and the instruments referenced herein and therein constitute the entire agreement among the parties hereto and thereto solely with respect to the subject matter hereof and thereof.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto solely with respect to the subject matter hereof and thereof; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any agreements any Investor has entered into with the Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by such Investor in the Company; (ii) waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries or any rights of or benefits to any Investor or any other Person in any agreement entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries and any Investor and all such agreements shall continue in full force and effect; or (iii) limit any obligations of the Company under any of the other Transaction Documents.

    (g) Subject to compliance with Section 9 (if applicable), this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.  This Agreement is not for the benefit of, nor may any provision hereof be enforced by, any Person, other than the parties hereto, their respective permitted successors and assigns and the Persons referred to in Sections 6 and 7 hereof.

    (h) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.  Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof.  The terms "including", "includes", "include" and words of like import shall be construed broadly as if followed by the words "without limitation".  The terms "herein", "hereunder", "hereof" and words of like import refer to this entire Agreement instead of just the provision in which they are found.

    (i) This Agreement may be executed in two or more identical counterparts, each of which shall be deemed an original, but all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.  In the event that any signature is delivered by facsimile transmission or by an email which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

    (j) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

    (k) The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party. Notwithstanding anything to the contrary set forth in Section 10, terms used in this Agreement but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in writing by each Investor.

    
        17

    

    

    (l) All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Required Holders, determined as if all of the outstanding Warrants then held by the Investors have been exercised for Registrable Securities without regard to any limitations on exercise of the Warrants then held by Investors.

    (m) This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

    (n) The obligations of each Investor under this Agreement and the other Transaction Documents are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under this Agreement or any other Transaction Document.  Nothing contained herein or in any other Transaction Document, and no action taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as, and the Company acknowledges that the Investors do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Investors are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the Investors are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by this Agreement or any of the other the Transaction Documents.  Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose.  The use of a single agreement with respect to the obligations of the Company contained herein was solely in the control of the Company, not the action or decision of any Investor, and was done solely for the convenience of the Company and not because it was required or requested to do so by any Investor.  It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and an Investor, solely, and not between the Company and the Investors collectively and not between and among Investors.

    [Signature Pages Follow]

    
        18

    

    

    IN WITNESS WHEREOF, each Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.

    	
                 

            	
                COMPANY:

                SALONA GLOBAL MEDICAL DEVICE CORPORATION

                By: /s/ Les Cross                                                         

                Name: Les Cross

                Title:  Interim Chief Executive Officer

            

    

    PURCHASERS:

Hugh McCauley

By:   /s/ Hugh McCauley                                                         

    
Richard Donohue

By:   /s/ Richard Donohue                                                       

    
Michael Curran

By:   /s/ Michael Curran                                                           

Anthony Barresi 

By:   Anthony Barresi                                                              

    
Clinton Keefer Pitfield

By:   /s/ Clinton Keefer Pitfield                                              

    
Justin Gilman

By:   /s/ Justin Gilman                                                             

    
Douglas Cooper

By:   /s/ Douglas Cooper                                                          
 

     

    
        [Signature Page to Registration Rights Agreement]

    

    

    Spencer Shier

By:   /s/ Spencer Shier                                                             

    
MMCAP International Inc. 

    
By:                                                                                               
Name:  
Title: 

    
Palos Management Inc
 

    
By:                                                                                               
Name:  
Title: 

    
HedgeOne Capital Fund Inc

By:                                                                                               
Name:  
Title: 

    
Stonecastle Investment Management Inc

By:                                                                                               
Name:  
Title: 

    
BT Global Growth Fund LP

By:                                                                                               
Name:  
Title: 

    
        [Signature Page to Registration Rights Agreement]

    

    

    
Scott Chan

By:   /s/ Scott Chan                                                                  

    Fountain Asset Corp.

By:                                                                                               
Name:  
Title: 

    
Delaney Capital Management Ltd 

By:                                                                                               
Name:  
Title: 

    
Robert McLay

By:   /s/ Robert McLay                                                            

    
Howard Brass

By:   /s/ Howard Brass                                                             

    
Beacon Securities Limited

By:                                                                                               
Name:  
Title: 

    Canaccord Genuity Corp.

    

By:                                                                                        
Name:  
Title: 

    
        [Signature Page to Registration Rights Agreement]

    

    

    Leede Jones Gable Inc.

    

By:                                                                          
Name:  
Title: 

    
        [Signature Page to Registration Rights Agreement]

    

    

    EXHIBIT A

    LIST OF SUBSCRIBERS

    	Hugh McCauley
	Richard Donohue
	Michael Curran
	Anthony Barresi 
	Clinton Keefer Pitfield
	Justin Gilman
	Douglas Cooper
	Spencer Shier
	MMCAP International Inc.
	Palos Management Inc
	HedgeOne Capital Fund Inc
	Stonecastle Investment Management Inc
	BT Global Growth Fund LP
	Scott Chan
	Fountain Asset Corp
	Delaney Capital Management Ltd
	Robert McLay
	Howard Brass
	Beacon Securities Limited
	Canaccord Genuity Corp.
	Leede Jones Gable Inc.

    
        A-1

    

    

    EXHIBIT B

    FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT

    ______________________
______________________
______________________
Attention: _____________

    Re: Salona Global Medical Device Corporation

    Ladies and Gentlemen:

    [We are][I am] counsel to Salona Global Medical Device Corporation, a corporation organized under the laws of British Columbia (the "Company"), and have represented the Company in connection with those certain Subscription Agreements (the "Subscription Agreements") entered into by and between the Company and each subscriber named in such Subscription Agreements (collectively, the "Holders") pursuant to which the Company issued to the Holders Warrants (the "Warrants") exercisable into the Company's common shares (the "Common Shares"). Pursuant to the Subscription Agreements, the Company also has entered into a Registration Rights Agreement with the Holders (the "Registration Rights Agreement") pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement), including the Common Shares issuable upon exercise of the Warrants under the Securities Act of 1933, as amended (the "1933 Act"). In connection with the Company's obligations under the Registration Rights Agreement, on ____________ ___, 2022, the Company filed a Registration Statement on Form S-3 (File No. 333-_____________) (the "Registration Statement") with the United States Securities and Exchange Commission (the "SEC") relating to the Registrable Securities which names each of the Holders as a selling shareholder thereunder.

    In connection with the foregoing, [we][I] advise you that [a member of the SEC's staff has advised [us][me] by telephone that [the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]] [an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]] has been posted on the web site of the SEC at www.sec.gov] and [we][I] have no knowledge, after a review of information posted on the website of the SEC at http://www.sec.gov/litigation/stoporders.shtml, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement.

    This letter shall serve as our standing opinion to you that the Registrable Securities are freely transferable by the Holders pursuant to the Registration Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance of such Registrable Securities to the Holders as contemplated by the Company's Irrevocable Transfer Agent Instructions dated _________ __, 2022.

    
        B-1Salona Global Medical Device Corp.: Exhibit 4.3 - Filed by newsfilecorp.com

    

    

    THE COMPENSATION OPTIONS REPRESENTED HEREBY ARE EXERCISABLE ON OR BEFORE 5:00 P.M., LOCAL TIME IN TORONTO, ONTARIO ON [FEBRUARY 15, 2025] AFTER WHICH TIME THEY WILL BE VOID AND OF NO VALUE UNLESS THE COMPENSATION OPTIONS REPRESENTED HEREBY ARE ALREADY VOID AND OF NO VALUE IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS CERTIFICATE.

    UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY (NOR ANY SECURITIES ISSUABLE ON THE EXERCISE OF THIS SECURITY) BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER [FEBRUARY 15, 2022].

    NEITHER THIS COMPENSATION OPTION NOR THE SECURITIES DELIVERABLE UPON ‎EXERCISE HEREOF (COLLECTIVELY, THE "SECURITIES") HAVE BEEN REGISTERED  ‎UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. ‎SECURITIES ACT") OR ANY STATE LAWS AND REGULATIONS GOVERNING THE ‎OFFER AND SALE OF SECURITIES  (THE 'BLUE SKY LAWS"). THESE SECURITIES MAY ‎BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE ‎CORPORATION, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE ‎WITH THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT AND IN ‎ACCORDANCE WITH THE APPLICABLE BLUE SKY LAWS , (C)  IN A TRANSACTION ‎THAT IS EXEMPT FROM AND DOES NOT REQUIRE REGISTRATION UNDER THE U.S. ‎SECURITIES ACT OR ANY APPLICABLE BLUE SKY LAWS , AND THE HOLDER HAS, ‎PRIOR TO SUCH SALE, FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL ‎OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY ‎SATISFACTORY TO THE CORPORATION. HEDGING TRANSACTIONS INVOLVING THE ‎SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN ‎COMPLIANCE WITH U.S. SECURITIES LAWS.‎

    THIS COMPENSATION OPTION AND THE SECURITIES DELIVERABLE UPON EXERCISE ‎HEREOF HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT, OR THE ‎SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS COMPENSATION ‎OPTION MAY NOT BE EXERCISED UNLESS THE COMPENSATION OPTION AND THE ‎UNDERLYING SECURITIES HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ‎ACT AND ALL APPLICABLE STATE SECURITIES LAWS 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.

    COMPENSATION OPTION

    TO PURCHASE UP TO [●] COMMON SHARES OF

    SALONA GLOBAL MEDICAL DEVICE CORPORATION

    	
                Compensation Option Certificate Number: CO-2022-[●]

            	
                [●] Compensation Options

            

    
NON-TRANSFERABLE COMPENSATION OPTIONS 

    THIS IS TO CERTIFY THAT for valuable consideration [Holder], at [Address of Holder] (the "Holder"), is entitled, at any time prior to 5:00 p.m., Toronto time, on [February 15], 2025 (the "Expiry Time"), upon and subject to the terms and conditions set forth herein and in Schedule A attached hereto, which schedule forms an integral part hereof and shall be deemed to be incorporated herein (the whole being referred to herein as this "Compensation Option Certificate" and the rights of the Holder represented by this Compensation Option Certificate being referred to herein as the "Compensation Option"), to subscribe in whole or in part for up to [●] common shares ("Common Shares"), subject to adjustment in accordance with this Compensation Option Certificate, of Salona Global Medical Device Corporation (the "Corporation"), a corporation existing under the laws of British Columbia on the date hereof at a purchase price (the purchase price in effect from time to time being called the "Exercise Price") of $0.55 per Common Share, subject to adjustment in the events and in the manner set forth herein. This Compensation Option shall become wholly void and the unexercised portion of the subscription rights represented hereby will expire and terminate at the Expiry Time. No fractional Common Shares will be issuable upon any exercise of this Compensation Option and the Holder will not be entitled to any cash payment or compensation in lieu of a fractional Common Share.

    All Common Shares which are to be issued upon the exercise of this Compensation Option shall be issued to the Holder upon full payment therefor and the Holder shall be deemed to have become the holder of record of such Common Shares on the date of delivery of this Compensation Option Certificate, the Subscription form in substantially the form attached hereto as Schedule B (properly completed and executed), together with full payment for the Common Shares so subscribed for, unless the transfer books of the Corporation shall be closed on such date, in which event the Common Shares so subscribed for shall be deemed to be issued, and the Holder shall be deemed to have become the holder of record of such Common Shares on the date on which such transfer books are reopened, and such Common Shares shall be issued at the purchase price in effect on the date of exercise of this Compensation Option together with full payment for the Common Shares subscribed for by the Holder.

    

    
        2

    

    The Holder may purchase less than the number of Common Shares which the Holder is entitled to purchase hereunder on exercise of this Compensation Option, in which event a new certificate, in form identical hereto but with appropriate changes, representing the right to purchase Common Shares not previously purchased, shall be issued to the Holder.

    This Compensation Option does not entitle the Holder to any rights or interest whatsoever as a shareholder of the Corporation or any other rights or interests except as expressly provided in this Compensation Option Certificate.

    This Compensation Option is non-assignable and non-transferable except with the prior consent of the Corporation and subject to compliance with all applicable laws and the rules and policies of the TSX Venture Exchange or such other stock exchange on which the Common Shares may then be listed.

    If this Compensation Option Certificate or any replacement hereof becomes stolen, lost, mutilated or destroyed, the Corporation shall, on such terms as it may in its discretion impose, acting reasonably, issue and deliver a new certificate, in form identical hereto but with appropriate changes, representing any unexercised portion of the subscription rights represented hereby to replace the certificate so stolen, lost, mutilated or destroyed.

    By acceptance hereof, the Holder hereby represents and warrants to the Corporation that the Holder is acquiring this Compensation Option as principal for its own account and not for the benefit of any other person.

    All amounts of money referred to in this Compensation Option Certificate are expressed in lawful money of Canada.

    This Compensation Option shall enure to the benefit of, and shall be binding upon, the Holder and the Corporation and their respective successors.

    [Signature on following page.]

    

    IN WITNESS WHEREOF the Corporation has caused this Compensation Option Certificate to be issued under the signature of a properly authorized officer of the Corporation.

     DATED as of the [●]th day of February 2022.

    	 	
                SALONA GLOBAL MEDICAL DEVICE CORPORATION

            
	 	 	 
	 	
                By:

            	
                 

            
	 	
                 

            	
                Name: Les Cross
Title:  Chief Executive Officer

            

    

    

    
        A-1

    

    SCHEDULE A

    Additional Terms and Conditions of this Compensation Option

    1. Exercise: In the event that the Holder desires to exercise the right to purchase Common Shares conferred hereby, the Holder shall (a) complete the subscription form in the form attached as Schedule B to this Compensation Option Certificate, (b) surrender this Compensation Option Certificate to the Corporation in accordance with section 8 hereof, and (c) pay in full the amount payable on the exercise of this Compensation Option in respect of the Common Shares subscribed for by certified cheque, bank draft or money order in lawful money of Canada payable to the Corporation or by transmitting same day funds in lawful money of Canada by wire to such account as the Corporation shall direct the Holder. Upon such surrender and full payment as aforesaid, the Holder shall be deemed for all purposes to be the holder of record of the number of the Common Shares to be so issued and the Holder shall be entitled to delivery of a certificate or certificates representing such Common Shares and the Corporation shall cause such certificate or certificates to be delivered to the Holder at the address specified in the subscription form within five (5) Business Days after such surrender and full payment as aforesaid. No fractional Common Shares will be issuable upon any exercise of this Compensation Option and the Holder will not be entitled to any cash payment or compensation in lieu of a fractional Common Share.

    2. Covenants, Representations and Warranties: The Corporation hereby covenants and agrees that it is authorized to issue and that it will cause the Common Shares from time to time subscribed for and purchased in the manner provided in this Compensation Option Certificate and the certificate or certificates representing the Common Shares to be issued as fully paid and non-assessable Common Shares and that, at all times prior to the Expiry Time, it will reserve and there will remain unissued a sufficient number of Common Shares to satisfy the right of purchase provided in this Compensation Option Certificate. The Corporation hereby further covenants and agrees that it will at its expense expeditiously use its best efforts to obtain the listing of the Common Shares (subject to issue or notice of issue) resulting from the exercise of this Compensation Option on each stock exchange or over-the-counter market on which the Common Shares may be listed from time to time. All Common Shares which are issued upon the exercise of the right of purchase provided in this Compensation Option Certificate, upon full payment therefor of the amount at which such Common Shares may be purchased pursuant to the provisions of this Compensation Option Certificate, shall be and be deemed to be fully paid and non-assessable shares and free from all liens and charges with respect to the issue thereof. The Corporation hereby represents and warrants that this Compensation Option Certificate is a valid and enforceable obligation of the Corporation, enforceable in accordance with the provisions of this Compensation Option Certificate.

    3. Anti-Dilution Protection:

    (1) Definitions: For the purposes of this section 3, unless there is something in the subject matter or context inconsistent therewith, the words and terms defined below shall have the respective meanings specified therefor in this subsection 3(1):

    (a) "Adjustment Period" means the period commencing on the date of issue of this Compensation Option and ending at the Expiry Time;

    

    
        A-2

    

    (b) "Business Day" means any day, other than a Saturday or Sunday, on which the chartered banks in Toronto, Ontario, are open for commercial banking business during normal banking hours;

    (c) "Current Market Price" of the Common Shares at any date means the volume weighted average price at which the Common Shares have traded on the principal stock exchange on which the Common Shares are listed as at such date or, if the Common Shares are not then listed on any stock exchange, in the over-the-counter market, during the period of any 20 consecutive trading days ending not more than five (5) Business Days before such date; provided that the volume weighted average price shall be determined by dividing the aggregate sale price of all Common Shares sold on the said exchange or market, as the case may be, during such 20 consecutive trading days by the total number of Common Shares so sold; and provided further that if the Common Shares are not then listed on any stock exchange or traded in the over-the-counter market, then the Current Market Price shall be determined by such firm of independent chartered accountants as may be selected by the directors of the Corporation;

    (d) "director" means a director of the Corporation at the relevant time and, unless otherwise specified herein, a reference to action "by the directors" means action by the directors of the Corporation as a board or, whenever empowered, action by any committee of the directors of the Corporation; and

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

    (2) Adjustments: The Exercise Price and the number of Common Shares issuable to the Holder pursuant to this Compensation Option Certificate shall be subject to adjustment from time to time in the events and in the manner provided as follows:

    (a) If at any time during the Adjustment Period the Corporation shall:

    (i) fix a record date for the issue of, or issue Common Shares to the holders of all or substantially all of the outstanding Common Shares by way of a stock dividend or other distribution;

    (ii) fix a record date for the distribution to, or make a distribution to, the holders of all or substantially all of the outstanding Common Shares payable in Common Shares or securities exchangeable for or convertible into Common Shares;

    (iii) subdivide the outstanding Common Shares into a greater number of Common Shares; or

    (iv) consolidate the outstanding Common Shares into a lesser number of Common Shares,

    

    
        A-3

    

    (any of such events in subclauses 3(2)(a)(i), 3(2)(a)(ii), 3(2)(a)(iii) and 3(2)(a)(iv) above being herein called a "Common Share Reorganization"), the Exercise Price shall be adjusted on the earlier of the record date on which holders of Common Shares are determined for the purposes of the Common Share Reorganization and the effective date of the Common Share Reorganization to the amount determined by multiplying the Exercise Price in effect immediately prior to such record date or effective date, as the case may be, by a fraction:

    (A) the numerator of which shall be the number of Common Shares outstanding on such record date or effective date, as the case may be, before giving effect to such Common Share Reorganization; and

    (B) the denominator of which shall be the number of Common Shares which will be outstanding immediately after giving effect to such Common Share Reorganization (including in the case of a distribution of securities exchangeable for or convertible into Common Shares the number of Common Shares that would have been outstanding had such securities been exchanged for or converted into Common Shares on such date).

    To the extent that any adjustment in the Exercise Price occurs pursuant to this clause 3(2)(a) as a result of the fixing by the Corporation of a record date for the distribution of securities exchangeable for or convertible into Common Shares, the Exercise Price shall be readjusted immediately after the expiry of any relevant exchange or conversion right to the Exercise Price which would then be in effect based upon the number of Common Shares actually issued and remaining issuable after such expiry and shall be further readjusted in such manner upon the expiry of any further such right. If the Holder has not exercised its right to subscribe for and purchase Common Shares on or prior to the record date of such stock dividend or distribution or the effective date of such subdivision or consolidation, as the case may be, upon the exercise of such right thereafter shall be entitled to receive and shall accept in lieu of the number of Common Shares then subscribed for and purchased by the Holder, at the Exercise Price determined in accordance with this clause 3(2)(a), the aggregate number of Common Shares that the Holder would have been entitled to receive as a result of such Common Share Reorganization, if, on such record date or effective date, as the case may be, the Holder had been the holder of record of the number of Common Shares so subscribed for and purchased.

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

    

    
        A-4

    

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

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

    (B) the quotient determined by dividing

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

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

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

    If by the terms of the rights, options, or warrants referred to in this clause 3(2)(b), there is more than one purchase, conversion or exchange price per Common Share, the aggregate price of the total number of additional Common Shares offered for subscription or purchase, or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered, shall be calculated for purposes of the adjustment on the basis of the lowest purchase, conversion or exchange price per Common Share, as the case may be. Any Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any such calculation. To the extent that any adjustment in the Exercise Price occurs pursuant to this clause 3(2)(b) as a result of the fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants referred to in this clause 3(2)(b), the Exercise Price shall be readjusted immediately after the expiry of any relevant exchange, conversion or exercise right to the Exercise Price which would then be in effect based upon the number of Common Shares actually issued and remaining issuable after such expiry and shall be further readjusted in such manner upon the expiry of any further such right.

    

    
        A-5

    

    (c) If at any time during the Adjustment Period the Corporation shall fix a record date for the issue or distribution to the holders of all or substantially all of the Common Shares of:

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

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

    (iii) evidences of indebtedness of the Corporation; or

    (iv) any property or assets of the Corporation;

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

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

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

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

    

    
        A-6

    

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

    Any Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of such calculation. To the extent that any adjustment in the Exercise Price occurs pursuant to this clause 3(2)(c) as a result of the fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants to acquire Common Shares or securities exchangeable or exercisable for or convertible into Common Shares referred to in this clause 3(2)(c), the Exercise Price shall be readjusted immediately after the expiry of any relevant exchange, exercise or conversion right to the amount which would then be in effect if the fair market value had been determined on the basis of the number of Common Shares issued and remaining issuable immediately after such expiry, and shall be further readjusted in such manner upon the expiry of any further such right.

    (d) If at any time during the Adjustment Period there shall occur:

    (i) a reclassification or redesignation of the Common Shares, any change or exchange of the Common Shares into other shares or securities or any other capital reorganization involving the Common Shares other than a Common Share Reorganization;

    (ii) a consolidation, amalgamation, arrangement or merger of the Corporation with or into any other body corporate which results in a reclassification or redesignation of the Common Shares or a change or exchange of the Common Shares into or for other shares or securities; or

    (iii) the transfer of the undertaking or assets of the Corporation as an entirety or substantially as an entirety to another corporation or entity;

    (any of such events being herein called a "Capital Reorganization"), after the effective date of the Capital Reorganization the Holder shall be entitled to receive, and shall accept, for the same aggregate consideration, upon exercise of this Compensation Option, in lieu of the number of Common Shares which the Holder was theretofore entitled to purchase or receive upon the exercise of this Compensation Option, the kind and aggregate number of shares and other securities or property resulting from the Capital Reorganization which the Holder would have been entitled to receive as a result of the Capital Reorganization if, on the effective date thereof, the Holder had been the registered holder of the number of Common Shares to which the Holder was theretofore entitled to purchase or receive upon the exercise of this Compensation Option. If necessary, as a result of any Capital Reorganization, appropriate adjustments shall be made in the application of the provisions of this Compensation Option Certificate with respect to the rights and interest thereafter of the Holder to the end that the provisions of this Compensation Option Certificate shall thereafter correspondingly be made applicable as nearly as may reasonably be possible in relation to any shares or other securities or property thereafter deliverable upon the exercise of this Compensation Option.

    

    
        A-7

    

    (e) If at any time during the Adjustment Period any adjustment or readjustment in the Exercise Price shall occur pursuant to the provisions of clauses 3(2)(a), 3(2)(b) or 3(2)(c) hereof, then the number of Common Shares purchasable upon the subsequent exercise of this Compensation Option shall be simultaneously adjusted or readjusted, as the case may be, by multiplying the number of Common Shares purchasable upon the exercise of this Compensation Option immediately prior to such adjustment or readjustment by a fraction which shall be the reciprocal of the fraction used in the adjustment or readjustment of the Exercise Price.

    (3) Rules: The following rules and procedures shall be applicable to adjustments made pursuant to subsection 3(2) hereof.

    (a) Subject to the following provisions of this subsection 3(3), any adjustment made pursuant to subsection 3(2) hereof shall be made successively whenever an event referred to therein shall occur.

    (b) No adjustment in the Exercise Price shall be required unless such adjustment would result in a change of at least one per cent in the then Exercise Price and no adjustment shall be made in the number of Common Shares purchasable or issuable on the exercise of this Compensation Option unless it would result in a change of at least one one-hundredth of a Common Shares; provided, however, that any adjustments which except for the provision of this clause 3(3)(b) would otherwise have been required to be made shall be carried forward and taken into account in any subsequent adjustment. Notwithstanding any other provision of subsection 3(2) hereof, no adjustment of the Exercise Price shall be made which would result in an increase in the Exercise Price or a decrease in the number of Common Shares issuable upon the exercise of this Compensation Option (except in respect of the Common Share Reorganization described in subclause 3(2)(a)(iv) hereof or a Capital Reorganization described in subclause 3(2)(d)(ii) hereof).

    (c) No adjustment in the Exercise Price or in the number or kind of securities purchasable upon the exercise of this Compensation Option shall be made in respect of any event described in section 3 hereof if the Holder is entitled to participate in such event on the same terms mutatis mutandis as if the Holder had exercised this Compensation Option prior to or on the record date or effective date, as the case may be, of such event.

    (d) No adjustment in the Exercise Price or in the number of Common Shares purchasable upon the exercise of this Compensation Option shall be made pursuant to subsection 3(2) hereof in respect of the issue from time to time of Common Shares pursuant to this Compensation Option Certificate or pursuant to any stock option, stock purchase or stock bonus plan in effect from time to time for directors, officers or employees of the Corporation and/or any subsidiary of the Corporation and any such issue, and any grant of options in connection therewith, shall be deemed not to be a Common Share Reorganization, a Rights Offering nor any other event described in subsection 3(2) hereof.

    

    
        A-8

    

    (e) If at any time during the Adjustment Period the Corporation shall take any action affecting the Common Shares, other than an action described in subsection 3(2) hereof, which in the opinion of the directors would have a material adverse effect upon the rights of the Holder, either or both the Exercise Price and the number of Common Shares purchasable upon exercise of this Compensation Option shall, subject to subsection 3(3)(b), be adjusted in such manner and at such time by action by the directors, in their sole discretion, but subject to the prior written consent of the TSX Venture Exchange or any stock exchange or market on which the Common Shares may be listed or traded (if such consent is required by such exchange or market), as may be equitable in the circumstances, and any other required regulatory approval. Failure of the taking of action by the directors so as to provide for an adjustment prior to the effective date of any action by the Corporation affecting the Common Shares shall be deemed to be conclusive evidence that the directors have determined that it is equitable to make no adjustment in the circumstances.

    (f) If the Corporation shall set a record date to determine holders of Common Shares for the purpose of entitling such holders to receive any dividend or distribution or any subscription or purchase rights and shall, thereafter and before the distribution to such holders of any such dividend, distribution or subscription or purchase rights, legally abandon its plan to pay or deliver such dividend, distribution or subscription or purchase rights, then no adjustment in the Exercise Price or the number of Common Shares purchasable upon exercise of this Compensation Option shall be required by reason of the setting of such record date.

    (g) In any case in which this Compensation Option shall require that an adjustment shall become effective immediately after a record date for an event referred to in subsection 3(2) hereof, the Corporation may defer, until the occurrence of such event:

    (i) issuing to the Holder, to the extent that this Compensation Option is exercised after such record date and before the occurrence of such event, the additional Common Shares issuable upon such exercise by reason of the adjustment required by such event; and

    (ii) delivering to the Holder any distribution declared with respect to such additional Common Shares after such record date and before such event;

    provided, however, that the Corporation shall deliver to the Holder an appropriate instrument evidencing the right of the Holder, upon the occurrence of the event requiring the adjustment, to an adjustment in the Exercise Price and the number of Common Shares purchasable upon the exercise of this Compensation Option and to such distribution declared with respect to any such additional Common Shares issuable on this exercise of this Compensation Option.

    

    
        A-9

    

    (h) In the absence of a resolution of the directors fixing a record date for a Rights Offering, the Corporation shall be deemed to have fixed as the record date therefor the date of the issue of the rights, options or warrants issued pursuant to the Rights Offering.

    (i) If a dispute shall at any time arise with respect to adjustments of the Exercise Price or the number of Common Shares purchasable upon the exercise of this Compensation Option, such disputes shall be conclusively determined by the auditors of the Corporation or, if they are unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by the directors and any such determination shall be conclusive evidence of the correctness of any adjustment made pursuant to subsection 3(2) hereof and shall be binding upon the Corporation and the Holder.

    (j) As a condition precedent to the taking of any action which would require an adjustment pursuant to subsection 3(2) hereof, including the Exercise Price and the number of Common Shares or other securities which are to be received upon the exercise hereof, the Corporation shall take any action which may, in the opinion of counsel to the Corporation, be necessary in order that the Corporation may validly and legally issue as fully paid and non-assessable shares all of the Common Shares or other securities which the Holder is entitled to receive in accordance with the provisions of this Compensation Option Certificate.

    (4) Notice: At least 10 business days prior to any record date or effective date, as the case may be, for any event which requires or might require an adjustment in any of the rights of the Holder under this Compensation Option, including the Exercise Price and the number of Common Shares which are purchasable under this Compensation Option, the Corporation shall deliver to the Holder a certificate of the Corporation specifying the particulars of such event and, if determinable, the required adjustment and the calculation of such adjustment. In case any adjustment for which a notice in this subsection 3(4) has been given is not then determinable, the Corporation shall promptly after such adjustment is determinable deliver to the Holder a certificate providing the calculation of such adjustment. The Corporation hereby covenants and agrees that the register of transfers and transfer books for the Common Shares will be open, and that the Corporation will not take any action which might deprive the Holder of the opportunity of exercising the rights of subscription contained in this Compensation Option Certificate, during such 10 business days period.

    4. Transfer of Compensation Options: Subject to applicable law and the rules and policies of the TSX Venture Exchange, the holder of this Compensation Option Certificate may not transfer this Compensation Option Certificate except to a subsidiary or to an entity of which such holder is a subsidiary, upon prior written notice to the Corporation. No transfer of this Compensation Option Certificate shall be made if in the opinion of counsel to the Corporation such transfer would result in the violation of any applicable securities laws or the rules and policies of the TSX Venture Exchange or such other stock exchange on which the Common Shares may then be listed. Subject to the foregoing, the Corporation shall issue and mail as soon as practicable, and in any event within ten (10) Business Days of such delivery, a new Compensation Option Certificate (with or without legends as may be appropriate) registered in the name of the transferee or as the transferee may direct and shall take all other necessary actions to effect the transfer as directed.

    

    
        A-10

    

    5. Further Assurances: The Corporation hereby covenants and agrees that it will do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, all and every such other act, deed and assurance as the Holder shall reasonably require for the better accomplishing and effectuating of the intentions and provisions of this Compensation Option Certificate.

    6. Time of Essence: Time shall be of the essence of this Compensation Option Certificate.

    7. Governing Laws: This Compensation Option Certificate shall be construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

    8. Notices: All notices or other communications to be given under this Compensation Option Certificate shall be delivered by hand or by electronic transmission and, if delivered by hand, shall be deemed to have been given on the delivery date and, if sent by electronic transmission on the date of transmission if sent before 4:00 p.m. on a Business Day or, if such day is not a Business Day, on the first Business Day following the date of transmission.

    Notices to the Corporation shall be addressed to:

    Salona Global Medical Device Corporation

    3330 Caminito Daniella

    Del Mar, California, 92014

    United States

    Attention: Les Cross, Interim Chief Executive Officer

    E-mail: les@salonaglobal.com

    Notices to the Holder shall be addressed to:

     [●]

    [●]

    [●]

    [●]

    Attention: [●]
Email: [●]

    The Corporation or the Holder may change its address for service by notice in writing to the other of them specifying its new address for service under this Compensation Option Certificate.

    9. Language: The parties hereto acknowledge and confirm that they have requested that this Compensation Option Certificate as well as all notices and other documents contemplated hereby be drawn up in the English language. Les parties aux présentes reconnaissent et confirment qu'elles ont exigé que le présent certificat ainsi que tous les avis et documents qui s'y rattachent soient rédigés en langue anglaise.

    

    
        A-11

    

    10. Electronic Signature: This Compensation Option Certificate may be delivered by electronic transmission in PDF, or other legally permissible electronic signature, and in such ‎cases will be deemed to be an original, and all of which together will be deemed to be one and the same document, provided that if this Compensation Option Certificate bears an electronic signature as contemplated by the foregoing and the Company is delivering this Compensation Option Certificate by electronic transmission pursuant to this Section 10, then the Company represents to the Holder that the electronically transmitted Compensation Option Certificate shall be the only executed copy to be issued by the Company.

     

    

    
        B-1

    

    SCHEDULE B

    TO: SALONA GLOBAL MEDICAL DEVICE CORPORATION

    SUBSCRIPTION FORM

    The undersigned hereby:

    1. subscribes for ____________ common shares ("Common Shares") of Salona Global Medical Device Corporation (the "Corporation") (or such other number of Common Shares or other securities to which such subscription entitles the undersigned in lieu thereof or in addition thereto) pursuant to the provisions of the Compensation Option Certificate dated as of February [15], 2022 (the "Compensation Option Certificate") issued by the Corporation to the Holder (as defined in the Compensation Option Certificate) at the purchase price of $_________ per Common Share and on and subject to the other terms and conditions specified in the Compensation Option Certificate and encloses herewith a certified cheque, bank draft or money order in lawful money of Canada in the aggregate amount of $____________________ payable to the Corporation or has transmitted such amount in same day funds in lawful money of Canada by wire to such account as the Corporation directed the undersigned in full payment of the subscription price.

    By executing this subscription form the undersigned represents and warrants that the undersigned is not a U.S. Person or a Person within the United States and that the Common Shares are not being subscribed for on behalf of a U.S. person or a person in the United States (as such terms are defined for purposes of the United States Securities Act of 1933, as amended).

    The undersigned hereby directs that the Common Shares subscribed for be registered and delivered as follows:

    	
                Name in Full

            	
                Address
(include Postal Code)

            	
                Number of

                Common Shares

            	
                Number of

                Compensation Options

            
	
                 

            	
                 

            	
                 

            	
                 

            

     

     

    DATED this _______ day of ______________, 20___.

    	
                [HOLDER]

            
	 
	 
	
                By:

                 

                 

                 

            	
                 

            

    

    

    
        B-2

    

    INSTRUCTIONS:

    1. If this Subscription Form indicates that the Common Shares are to be issued to a person or persons other than the registered holder of the Compensation Options to be exercised: (i) the signature of the registered holder on this Subscription Form must be medallion guaranteed by an authorized officer of a chartered bank, trust corporation or an investment dealer who is a member of a recognized stock exchange, and (ii) the registered holder must pay to the Corporation all applicable taxes and other duties.

    2. If this Subscription Form is signed by a trustee, executor, administrator, custodian, guardian, attorney, officer of a corporation or any other person acting in a fiduciary or representative capacity, this Subscription Form must be accompanied by evidence of authority to sign satisfactory to the Corporation.

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