7,000,000 Shares NOUVEAU MONDE GRAPHITE INC. Common Shares UNDERWRITING AGREEMENT

 

 Exhibit 99.1

 

EXECUTION VERSION

 

7,000,000 Shares


NOUVEAU MONDE GRAPHITE INC.

Common Shares

 

UNDERWRITING AGREEMENT

 

June 18, 2021

 

 

June 18, 2021

 

Evercore Group L.L.C.

BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.

 

c/o Evercore Group L.L.C.

▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇

▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

 

c/o BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.

First Canadian Place, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.

▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇

 

Ladies and Gentlemen:

 

Nouveau Monde Graphite Inc., a corporation incorporated under the Canada Business Corporations Act (the “Company”), proposes to issue and sell to the several Underwriters named in Schedule I hereto (the “Underwriters”), for whom Evercore Group L.L.C. and BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. are acting as representatives (the “Representatives” or “you”), an aggregate of 7,000,000 Common Shares (as hereinafter defined) (the “Firm Shares”). To the extent there are no additional Underwriters listed on Schedule I other than you, the term Representatives as used herein shall mean you, as Underwriters, and the terms Representatives and Underwriters shall mean either the singular or plural as the context requires. The Company also proposes to issue and sell to the several Underwriters not more than an additional 1,050,000 Common Shares (the “Additional Shares”) if and to the extent that you, as Representatives of the offering, shall have determined to exercise, on behalf of the Underwriters, the right to purchase such Additional Shares granted to the Underwriters in Section 2 hereof. The Firm Shares and the Additional Shares are hereinafter collectively referred to as the “Shares.”

 

The Company meets the requirements under the Securities Act (Québec) and the securities legislation applicable in each of the provinces of Canada (collectively, the “Canadian Qualifying Jurisdictions”), and the rules, regulations and national, multi-jurisdictional or local instruments, policy statements, notices, blanket rulings and orders of the Canadian Securities Commissions (as defined below), including the rules and policies of the TSX Venture Exchange (“TSXV”) and all discretionary rulings and orders applicable to the Company, if any, of the Canadian Securities Commissions, including the rules and procedures established pursuant to National Instrument 44-101 – Short Form Prospectus Distributions and National Instrument 44-102 – Shelf Distributions (together, the “Canadian Shelf Procedures”), for the distribution of securities in the Canadian Qualifying Jurisdictions pursuant to a final short form base shelf prospectus (collectively, the “Canadian Securities Laws”). The Company has filed a preliminary short form base shelf prospectus, dated March 26, 2021, an amended preliminary short form base shelf prospectus, dated May 13, 2021 and a final short form base shelf prospectus, dated May 19, 2021, in respect of up to $500,000,000 aggregate principal amount of common shares, debt securities, subscription receipts, warrants and units of the Company (collectively, the “Shelf Securities”) with the Autorité des marchés financiers (Québec) (the “Reviewing Authority”) and the other Canadian securities regulators in the Canadian Qualifying Jurisdictions (together with the Reviewing Authority, the “Canadian Securities Commissions”); the Reviewing Authority has issued a receipt under Multilateral Instrument 11-102 – Passport System (collectively, the “Receipt”) in respect of each of such preliminary short form base shelf prospectus, amended preliminary short form base shelf prospectus and final short form base shelf prospectus (the final short form base shelf prospectus filed with the Canadian Securities Commissions on or before the date of this Agreement, and including all documents incorporated therein by reference, is hereinafter referred to as the “Canadian Base Prospectus”). The Canadian preliminary prospectus supplement relating to the offering of the Shares, which excludes certain pricing information and other final terms of the Shares and which has been filed with the Canadian Securities Commissions on June 15, 2021, in both the English and French languages unless the context indicates otherwise, together with the Canadian Base Prospectus, including all documents incorporated therein by reference, is hereinafter referred to as the “Canadian Preliminary Prospectus”; and the Canadian final prospectus supplement relating to the offering of the Shares, which includes the pricing and other information omitted from the Canadian Preliminary Prospectus, to be dated the date hereof and filed with the Canadian Securities Commissions in accordance with the Canadian Shelf Procedures, in both the English and French languages unless the context indicates otherwise, together with the Canadian Base Prospectus, including all documents incorporated therein by reference, is hereinafter referred to as the “Canadian Final Prospectus”.

 

 

The Company meets the general eligibility requirements for use of Form F-10 under the U.S. Securities Act of 1933, as amended, and the rules and regulations of the U.S. Securities and Exchange Commission (the “Commission”) thereunder (collectively, the “Securities Act”). The Company has filed a registration statement on Form F-10 (File No. 333-256340) in respect of the Shelf Securities with the Commission on May 20, 2021 and has filed an appointment of agent for service of process upon the Company on Form F-X (the “Form F-X”) with the Commission on May 20, 2021 in conjunction with the filing of such registration statement (such registration statement, including the Canadian Base Prospectus with such deletions therefrom and additions thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the Commission and including the exhibits to such registration statement and all documents incorporated by reference in the prospectus contained therein are hereinafter referred to collectively as the “Registration Statement”); the base prospectus relating to the Shelf Securities contained in the Registration Statement at the time the registration statement became effective, including all documents incorporated therein by reference, is hereinafter referred to as the “U.S. Base Prospectus”; the U.S. preliminary prospectus supplement relating to the offering of the Shares filed with the Commission pursuant to General Instruction II.L of Form F-10 under the Securities Act on June 16, 2021 (which consists of the Canadian Preliminary Prospectus in the English language with such deletions therefrom and additions thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the Commission), including all documents incorporated therein by reference, together with the U.S. Base Prospectus, is hereinafter referred to as the “U.S. Preliminary Prospectus”; the U.S. final prospectus supplement relating to the offering of the Shares to be filed with the Commission pursuant to General Instruction II.L of Form F-10 (which consists of the Canadian Final Prospectus in the English language with such deletions therefrom and additions thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the Commission), including all documents incorporated therein by reference, together with the U.S. Base Prospectus, is hereinafter referred to as the “U.S. Final Prospectus”.

 

As used herein, “Base Prospectuses” shall mean, collectively, the Canadian Base Prospectus and the U.S. Base Prospectus; “Preliminary Prospectuses” shall mean, collectively, the Canadian Preliminary Prospectus and the U.S. Preliminary Prospectus; and “Prospectuses” shall mean, collectively, the Canadian Final Prospectus and the U.S. Final Prospectus. The terms “supplement,” “amendment,” and “amend” as used herein with respect to the Registration Statement, the Base Prospectuses, the Time of Sale Prospectus (as defined below), the Preliminary Prospectuses or the Prospectuses or any free writing prospectus shall include all documents subsequently filed or furnished by the Company with or to the Canadian Securities Commissions and the Commission pursuant to Canadian Securities Laws or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as the case may be, that are deemed to be incorporated by reference therein.

 

For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act, “Time of Sale Prospectus” means the U.S. Preliminary Prospectus together with the free writing prospectuses, if any, and the term sheet, each identified in Schedule II hereto, and “broadly available road show” means a “bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities Act that has been made available without restriction to any person (the investor meetings on June 10-11 and June 14-17, 2021 and materials used in connection therewith being a broadly available road show for purposes of this Agreement).

 

As used herein, the terms “Registration Statement,” “U.S. Preliminary Prospectus,” “Canadian Preliminary Prospectus,” “Time of Sale Prospectus”, “Canadian Final Prospectus” and “U.S. Final Prospectus” shall include the documents, if any, incorporated by reference therein, from time to time.

 

1.                  Representations and Warranties of the Company. The Company represents and warrants to and agrees with each of the Underwriters that:

 

(a)               Effectiveness of the Registration Statement. The Registration Statement has become effective pursuant to Rule 467(a) under the Securities Act; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or, to the Company’s knowledge, threatened by the Commission; the Receipt has been obtained from the Reviewing Authority in respect of the Canadian Base Prospectus and no order or action that would have the effect of ceasing or suspending the distribution of the Shares has been issued by any Canadian Securities Commission and no proceeding for that purpose has been initiated or, to the Company’s knowledge, threatened by any Canadian Securities Commission; and any request made to the Company on the part of any Canadian Securities Commission for additional information has been complied with.

 

 

(b)               No Material Misstatements or Omissions. (i) The Registration Statement, when it became effective, did not contain and, as amended or supplemented, if applicable, will not contain, as of the date of such amendment or supplement, 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 not misleading, (ii) the Canadian Final Prospectus, as of the date of the Canadian Final Prospectus and any amendment or supplement thereto and at the Closing Date (as defined below), will not contain any untrue statement of a material fact or omit to state a material fact that is required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, (iii) the Registration Statement and the U.S. Final Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder, (iv) the Canadian Final Prospectus and any amendment or supplement thereto, at the time of filing thereof, will comply, in all material respects with the applicable requirements of Canadian Securities Laws, (v) the Time of Sale Prospectus does not, and at the time of each sale of the Shares in connection with the offering when the U.S. Final Prospectus is not yet available to prospective purchasers and at the Closing Date (as defined in Section 4), the Time of Sale Prospectus, as then amended or supplemented by the Company, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (vi) each broadly available road show, if any, when considered together with the Time of Sale Prospectus, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (vii) as of its date and as of the Closing Date, the U.S. Final Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and the Canadian Final Prospectus and any amendment or supplement thereto, at the time of filing thereof and at the Closing Date, will constitute, full, true and plain disclosure of all material facts relating to the Shares, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Registration Statement, the Time of Sale Prospectus or the Prospectuses based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through you expressly for use therein. The Form F-X conforms in all material respects with the requirements of the Securities Act and the rules and regulations of the Commission under the Securities Act.

 

(c)               Free Writing Prospectuses. The Company is not an “ineligible issuer” in connection with the offering pursuant to Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Except for the free writing prospectuses, if any, identified in Schedule II hereto, and electronic road shows or broadly available road shows, if any, each furnished to you before first use, the Company has not prepared, used or referred to, and will not, without your prior consent, prepare, use or refer to, any free writing prospectus.

 

(d)               Filed Documents. Each document filed or to be filed with the Canadian Securities Commissions and incorporated by reference in the Canadian Final Prospectus, as amended or supplemented, if applicable, when such documents were or are filed with the Canadian Securities Commissions, conformed or will conform when so filed in all material respects with applicable Canadian Securities Laws; each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Time of Sale Prospectus or U.S. Final Prospectus complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder.

 

(e)               Good Standing of the Company. The Company (i) is a valid and subsisting corporation duly incorporated and existing under the Canada Business Corporations Act, is current and up-to-date with all material corporate filings and in good standing under the laws of its jurisdiction of incorporation, (ii) has all requisite corporate power and capacity to carry on its business as now conducted or proposed to be conducted and to own, lease and operate its properties and assets as described in the Time of Sale Prospectus and the Prospectuses and (iii) has all requisite corporate power and authority to create, issue and sell the Shares, to grant the Over-Allotment Option (as defined below), to execute, deliver and file, as applicable, the Time of Sale Prospectus and the Prospectuses, to execute and deliver this Agreement, and to do all acts and things and execute and deliver all documents as are required hereunder and thereunder to be done, observed, performed or executed and delivered by it in accordance with the terms hereof and thereof.

 

 

(f)                Good Standing of Subsidiaries. The Company’s only subsidiaries are listed in the table below, which table is true, complete and accurate in all respects. Nouveau Monde District Inc. is a valid and subsisting corporation duly incorporated and existing under the Canada Business Corporations Act and Nouveau Monde Europe Limited is a valid and subsisting company duly incorporated under the Companies ▇▇▇ ▇▇▇▇ (England and Wales). Each subsidiary is (i) current and up-to-date with all material corporate filings and in good standing under the laws of its jurisdiction of incorporation, (ii) has all requisite corporate power and capacity to carry on its business as now conducted or proposed to be conducted and to own, lease and operate its properties and assets as described in the Time of Sale Prospectus and the Prospectuses and (iii) is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required, except where the failure to so qualify or to be in good standing would not reasonably be expected to result in a Material Adverse Effect. All of the issued and outstanding shares in the capital of the subsidiaries held by the Company have been duly authorized and validly issued, are fully paid and are directly or indirectly beneficially owned by the Company, and, except for Debt Instruments, is free and clear of any Liens, and none of the outstanding securities of the subsidiaries were issued in violation of the pre-emptive or similar rights of any person. There exist no options, warrants, purchase rights, or other contracts or commitments that could require the Company to sell, transfer or otherwise dispose of any securities of the subsidiaries or require the subsidiaries to issue any securities to any person other than the Company.

 

Name		Jurisdiction of Incorporation		Ownership
Nouveau Monde District Inc.		Canada			100	%
Nouveau Monde Europe Limited		England and Wales			100	%

 

 

(g)               No Other Interests. Other than the ownership of 49% of all the issued and outstanding shares of Shinzoom Nouveau United Corp., the Company has no equity or joint venture interest nor any investment or proposed investment in any person which accounted for, or which is expected to account for, more than 5% of the assets or revenues of the Company or would otherwise be material to the business or affairs of the Company.

 

(h)               No Proceedings for Dissolution. No steps or proceedings have been taken or instituted or are pending or, to the knowledge of the Company, are threatened for the dissolution or liquidation of the Company or its subsidiaries and neither the Company nor any of its subsidiaries is an “insolvent person” within the meaning of the Bankruptcy and Insolvency Act (Canada).

 

(i)                 Carrying on Business. Each of the Company and its subsidiaries has conducted and is conducting its business in compliance in all material respects with the Applicable Laws of each jurisdiction in which it carries on business or that is material to the operations thereof. Each of the Company and its subsidiaries possesses all Authorizations necessary to carry on the business currently carried on by it and is in compliance in all material respects with the terms and conditions of all such Authorizations. The Company and its subsidiaries have not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any Applicable Laws or Authorizations, and which individually or in the aggregate could result in a Material Adverse Effect. All such Authorizations are valid, subsisting and in good standing and the Company and its subsidiaries have not received any notice of and the Company does not otherwise have knowledge of the modification, revocation or cancellation of, or any intention to modify, revoke or cancel or any proceeding relating to, any of the foregoing which, individually or in the aggregate, if the subject of an unfavorable decision, order, ruling or finding, could result in a Material Adverse Effect. There is no agreement or order, ruling, judgment or decision of any Governmental Authority which has or could reasonably be expected to have the effect of prohibiting or materially impairing the conduct of business of the Company and its subsidiaries as currently conducted or as currently proposed to be conducted.

 

(j)                 Filings and Fees. All filings and fees required to be made and paid by the Company and its subsidiaries pursuant to Canadian Securities Laws and general corporate law, as applicable, have been made and paid.

 

(k)               Authorized Share Capital. The authorized capital of the Company consists of an unlimited number of Common Shares, of which, as at the close of business on June 16, 2021, 37,115,145 Common Shares were issued and outstanding as fully paid and non-assessable shares in the capital of the Company.

 

(l)                 Convertible Securities. Other than as set out in Schedule IV, no person has any agreement, option, right or privilege (whether at law, pre-emptive, contractual or otherwise) capable of becoming an agreement for the purchase, acquisition, subscription for, issue of, or conversion into any of the unissued shares or other securities or convertible obligations of any nature of the Company or any of its subsidiaries, or any contracts, commitments, understandings or arrangements by which the Company or any subsidiary is or may become bound to issue additional securities.

 

 

(m)             Voting Control. There is no agreement or document, including any Material Agreement or Debt Instrument, to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or any of the properties or assets thereof are bound in force or effect which in any manner affects or will affect the voting or control of any of the securities of the Company.

 

(n)               Dividends. The Company has not, directly or indirectly, declared or paid any dividend or declared or made any other distribution on any of its shares or securities of any class, or, directly or indirectly, redeemed, purchased or otherwise acquired any of its Common Shares or securities or agreed to do any of the foregoing. There is not, in the articles or by-laws of the Company or in any Material Agreement or Debt Instrument, any restriction upon or impediment to the declaration of dividends by the directors of the Company or the payment of dividends by the Company to its shareholders.

 

(o)               No Pre-Emptive Rights or Anti-Dilution Rights. Other than the Pallinghurst Rights and Obligations, the issuance of the Common Shares pursuant to the offering of the Shares is not subject to any pre-emptive right, participation right or other contractual right of a third party to purchase securities or to approve the Company’s issuance of securities, granted by the Company or to which the Company is subject. Other than the Pallinghurst Rights and Obligations as mentioned above, neither the Company nor its subsidiaries have granted any other anti-dilution rights to any person.

 

(p)               No Registration Rights. There are no outstanding rights which permit any person to cause the Company to file a prospectus, registration statement or other offering document under Securities Laws.

 

(q)               Shareholders’ Rights Plan. There are no agreements or arrangements relating to shareholders’ rights plan.

 

(r)                Common Shares are Listed. The Common Shares are listed and posted for trading on the TSXV under the symbol “NOU”. The Common Shares are also listed and posted for trading on the New York Stock Exchange (“NYSE”) under the symbol “NMG”. The Company is in material compliance with the rules and policies of the TSXV and the NYSE. The Company has not taken any action which would reasonably be expected to result in the delisting or suspension of the Common Shares on or from the TSXV or the NYSE. The Company has applied to list the Shares on the TSXV and the NYSE, and upon issuance on the Closing Date, the Shares will be listed and posted for trading on the TSXV and the NYSE, subject only to the satisfaction of customary listing conditions.

 

(s)                Eligible Issuer and Reporting Issuer Status. The Company is an Eligible Issuer, is eligible to use the Canadian Shelf Procedures and has an active Canadian Base Prospectus. The Company is a “reporting issuer” (as that term is defined under Canadian Securities Laws) or the equivalent in each of the Canadian Qualifying Jurisdictions, not in default of any requirement under Canadian Securities Laws, and not on the lists of defaulting reporting issuers maintained by the Canadian Securities Commissions.

 

(t)                 No Cease Trade. No Securities Regulator or any similar regulatory authority in any jurisdiction has issued any order, ruling or determination which is currently outstanding preventing, ceasing or suspending trading in any securities of the Company or its subsidiaries or prohibiting the issuance or sale of securities by the Company, including the Shares, or its subsidiaries and no proceedings for either of such purposes have been instituted or are pending or, to the knowledge of the Company, are contemplated or threatened.

 

(u)               Continuous Disclosure. The Company is in compliance in all material respects with its timely and continuous disclosure obligations under Canadian Securities Laws, including insider reporting obligations, and, without limiting the generality of the foregoing, there has been no material fact or material change relating to the Company which has not been publicly disclosed and the information and statements in the Public Disclosure Record were true and correct as of the respective dates of such information and statements and at the time such documents were filed on SEDAR, do not contain any misrepresentations and no material facts have been omitted therefrom which would make such information and statements materially misleading, and the Company has not filed any confidential material change reports which remain confidential. There are no circumstances presently existing under which liability has been or would reasonably be expected to be incurred under Division II – Secondary Market of Chapter II of Title VIII of the Securities Act (Québec) and analogous provisions under Canadian Securities Laws in the other Canadian Qualifying Jurisdictions.

 

 

(v)               Forward-Looking Information. With respect to forward-looking information contained in the Public Disclosure Record, including for certainty the Documents Incorporated by Reference, and the Time of Sale Prospectus and the Prospectuses:

 

(i)          the Company had a reasonable basis for the forward-looking information at the time the disclosure was made;

 

(ii)       all forward-looking information is identified as such, and all such documents caution users of forward-looking information that actual results may vary from the forward-looking information, identify material risk factors that could cause actual results to differ materially from the forward-looking information, and state the material factors or assumptions used to develop forward-looking information; and

 

(iii)       is limited to a period for which the information in the future-oriented financial information or financial outlook can be reasonably estimated.

 

(w)             Corporate Actions. All necessary corporate action has been taken or will have been taken prior to the Closing Date by the Company so as to: (i) authorize the execution, delivery and performance of this Agreement; (ii) authorize the execution, delivery and filing, as applicable, of the Time of Sale Prospectus and the Prospectuses; (iii) validly issue and sell the Shares as fully paid and non-assessable Common Shares; (iv) grant the Over-Allotment Option; and (v) validly issue and sell the Additional Shares upon exercise of the Over-Allotment Option.

 

(x)               Valid and Binding Agreements. Upon execution and delivery thereof, this Agreement will constitute a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally, except as limited by the application of equitable principles when equitable remedies are sought and except as rights to indemnity, contribution and waiver of contribution may be limited by Applicable Laws.

 

(y)               No Breach or Violation. The Company and its subsidiaries are not currently in conflict with or in breach, violation or default of, and the execution and delivery of this Agreement and the performance of the Company’s obligations hereunder will not conflict with, result in any breach or violation of any of the provisions of, constitute a default under, or create a state of facts which, after notice or lapse of time, or both, would conflict with, result in any breach or violation of, or constitute a default under (i) the articles or by-laws or any other constating document of the Company or its subsidiaries, (ii) any resolutions passed by the directors (or any committee thereof) or shareholders of the Company or its subsidiaries, (iii) any Applicable Laws, including applicable Securities Laws, (iv) any Material Agreement or Debt Instrument (each of which are in good standing), or (v) any judgment, decree, order, rule, policy or regulation of any court, Governmental Authority, arbitrator, stock exchange or securities regulatory authority applicable to the Company or its subsidiaries or any of the properties or assets thereof, and in the case of (ii), (iii), (iv) and (v), in any material respect.

 

(z)               No Consents, Approvals, etc. The execution and delivery of this Agreement, the compliance by the Company with the provisions hereof and the consummation of the transactions contemplated herein, including the offering, sale and delivery of the Shares and the grant of the Over-Allotment Option, do not and will not require the consent, approval, or authorization, order or agreement of, or registration or qualification with, any Governmental Authority, stock exchange or other person, except (A) such as have been obtained, or (B) such as may be required under Securities Laws, including any state “blue sky laws,” in connection with the purchase and distribution of the Shares by the Underwriters as contemplated herein and in the Time of Sale Prospectus and the Prospectuses which shall have been obtained on or before the Closing Date.

 

 

(aa)            Shares. The Shares to be issued and sold have been, or prior to the Closing Date will be, duly and validly authorized and allotted for issuance by the Company and, upon payment of the Purchase Price, the Shares will be validly issued as fully paid and non-assessable Common Shares.

 

(bb)           Form of Certificate. The form of the certificate representing the Common Shares has been duly approved by the Company and complies with applicable corporate laws and Canadian Securities Laws, including the rules and policies of the TSXV and the NYSE.

 

(cc)            Transfer Agents. AST Trust Company (Canada), at its principal transfer office in the City of Montreal, has been duly appointed as registrar and transfer agent in respect of the Common Shares in Canada and American Stock Transfer & Trust Co LLC, at its office in Brooklyn, New York, has been duly appointed as co-transfer agent and registrar for the Common Shares in the United States.

 

(dd)           Minute Books. The minute books of the Company and its subsidiaries made available to counsel for the Underwriters for the last three years in connection with its due diligence investigation of the Company and its subsidiaries are all of the minute books of the Company and the subsidiaries, are complete and accurate in any material respect, and contain copies of all by-laws and resolutions passed by and any other proceedings of their shareholders, directors and committees of the board of directors since their respective dates of incorporation, all of which by-laws and resolutions have been duly passed. No meeting, resolution or proceeding of any such shareholders, directors or committees of the board of directors of the Company or its subsidiaries has been held or passed that has not been reflected in such minute books.

 

(ee)            Financial Statements. The Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the Internal Accounting Standards Board on a basis consistent with prior periods (except as disclosed in such financial statements), present fairly and correctly the financial position of the Company (on a consolidated basis) as at the dates thereof and the results of the operations and cash flows of the Company (on a consolidated basis) for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Company (on a consolidated basis) and there has been no change in the accounting policies or practices of the Company since December 31, 2020, except as required by IFRS and as disclosed in the Financial Statements.

 

(ff)              Internal Financial Controls. The Company maintains a system for disclosure controls and procedures and internal control over financial reporting (as such terms are defined in Regulation 52-109) which controls are effective and sufficient to provide reasonable assurance that: (i) transactions are completed in accordance with the general or a specific authorization of management of the Company; (ii) transactions are recorded as necessary to permit the preparation of financial statements for the Company (on a consolidated basis) in conformity with IFRS and to maintain asset accountability; (iii) access to assets of the Company and its subsidiaries is permitted only in accordance with the general or a specific authorization of management of the Company; and (iv) the recorded accountability for assets of the Company and its subsidiaries is compared with the existing assets of the Company and its subsidiaries at reasonable intervals and appropriate action is taken with respect to any differences therein. There is no material weakness (as such term is defined in Regulation 52-109) relating to the design, implementation or maintenance of its internal control over financial reporting, or fraud, whether or not material, that involves management or other employees who have a significant role in the internal control over financial reporting of the Company. As of the date hereof, neither the Company nor, to the knowledge of the Company, any representative of the Company has received or otherwise obtained knowledge of any complaint, allegation, assertion, or claim, whether written or oral, regarding accounting, internal accounting controls or auditing matters, including any reasonable complaint, allegation, assertion, claim or expression of concern that the Company has engaged in questionable accounting or auditing practices.

 

(gg)           No Off-Balance Sheet Arrangements. There are no off-balance sheet transactions, arrangements, obligations or liabilities of the Company or its subsidiaries whether direct, indirect, absolute, contingent or otherwise which are required to be disclosed or reflected and are not disclosed or reflected in the Financial Statements.

 

(hh)           Independent Auditors. The Company’s Auditors who audited the Annual Financial Statements and who provided their audit report thereon are independent chartered professional accountants in accordance with the auditors’ rules of professional conduct of the Ordre des comptables professionnels agréés du Québec and within the meaning of the Securities Act and the applicable rules and regulations thereunder adopted by the Commission and the Public Company Accounting Oversight Board (United States) and are, to the knowledge of the Company, a participating audit firm that satisfied the requirements to provide such audit report under Canadian Securities Laws. There has never been a “reportable event” (within the meaning of Regulation 51-102 respecting Continuous Disclosure Obligations) with the present or former auditors of the Company.

 

 

(ii)              No Material Changes. Since December 31, 2020, other than as disclosed in the Time of Sale Prospectus and the Prospectuses:

 

(i)          each of the Company and its subsidiaries has carried on its business in the ordinary course and there has not been any material change in the assets, liabilities, obligations (absolute, accrued, contingent or otherwise), business, affairs, condition (financial or otherwise), results of operations, prospects, capital or control of the Company and its subsidiaries on a consolidated basis; and

 

(ii)          neither the Company nor its subsidiaries has entered into, or is in discussions to enter into, or has completed any transaction or proposed transaction which, as the case may be, materially affects, is material to or will materially affect the Company and its subsidiaries on a consolidated basis.

 

(jj)              COVID-19. Except as mandated by an applicable regulatory or governmental authority, which mandates have not materially affected the Company, as at the date hereof, and except as disclosed in the Time of Sale Prospectus and the Prospectuses, there has been no material effect on the operations of the Company or its subsidiaries as a result of the novel coronavirus disease (COVID-19) outbreak (the “COVID-19 Outbreak”). The Company has been monitoring the COVID-19 Outbreak and the potential impact at all of its operations and management believes it has implemented appropriate measures to support the wellness of its employees where the Company and its subsidiaries operate while continuing to operate.

 

(kk)           Purchases and Sales. Except as disclosed in the Time of Sale Prospectus and the Prospectuses, neither the Company nor any subsidiary of the Company has approved, is contemplating, has entered into any agreement in respect of, or has any knowledge of (i) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned by the Company or any subsidiary of the Company, whether by asset sale, transfer of shares or otherwise, (ii) any transaction which would result in the change of control (by sale or transfer of the shares or sale of all or substantially all of the property and assets including, without limitation, the Material Property) of the Company or any subsidiary of the Company, or (iii) a proposed or planned disposition of Common Shares or common shares of any subsidiary of the Company by any shareholder who owns, directly or indirectly, 10% or more of the outstanding Common Shares or of the outstanding common shares of any subsidiary of the Company.

 

(ll)              No Significant Acquisitions. The Company has not completed any “significant acquisition” that required, nor is it proposing any “significant acquisitions” that would require, the filing of a business acquisition report under Canadian Securities Laws or the inclusion of any additional financial statements or pro forma financial statements in the Time of Sale Prospectus and the Prospectuses pursuant to applicable Canadian Securities Laws.

 

(mm)      Taxes. The Company and its subsidiaries have filed all federal, provincial, state and local income tax returns, reports, elections and remittances required to be filed under applicable tax laws and has paid all taxes and other payments due thereunder (except as any extension may have been requested or granted and in any case in which the failure to make such filings or pay such taxes would not result in a Material Adverse Effect), and no material tax deficiency has been determined adversely to the Company or its subsidiaries. There are no material actions, suits, proceedings, investigations or claims now pending, instituted or, to the knowledge of the Company, threatened, against the Company or its subsidiaries which could result in a material liability in respect of taxes, charges, penalties, interest, fines, assessments, re-assessments or levies of any Governmental Authority.

 

(nn)           Compliance with Laws. There are no Applicable Laws presently in force or, to the Company’s knowledge, proposed to be brought into force (including any threatened or pending change in existing legislation), that the Company anticipates it or its subsidiaries will be unable to comply with, to the extent that compliance is necessary, and which non-compliance could result in a Material Adverse Effect.

 

(oo)           Anti-Money Laundering Laws. The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with the anti-money laundering and anti-terrorist laws of all jurisdictions where the Company and its subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), Part II.1 of the Criminal Code (Canada) and, in each case, the rules and regulations promulgated thereunder (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court, arbitrator or Governmental Authority involving the Company or its subsidiaries with respect to the Anti-Money Laundering Laws is pending, instituted or, to the knowledge of the Company, threatened.

 

 

(pp)           Anti-Bribery Laws. None of the Company or any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or any other person acting on behalf of the Company or any of its subsidiaries has (i) violated or is in violation of any provision of the Corruption of Foreign Public Officials Act (Canada), as amended (the “CFPOA”), or the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”); (ii) taken any unlawful action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any “foreign public official” (as such term is defined in the CFPOA) or any “foreign official” (as such term is defined in the FCPA); (iii) violated or is in violation of any provision of the ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ of the United Kingdom; (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment; or (v) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; and the Company and its subsidiaries have instituted and maintain and will continue to maintain policies and procedures reasonably designed to promote and achieve compliance with applicable anti-corruption laws and with the representation and warranty contained herein.

 

(qq)           Material Contracts and Debt Instruments. Each of the Material Contracts and Debt Instruments is legal, valid, binding and in full force and effect and, to the knowledge of the Company, is enforceable by the Company and its subsidiaries in accordance with their respective terms and are the product of arm’s length negotiations between the parties thereto. The Company and its subsidiaries have performed in all material respects all respective obligations required to be performed by them to date under the Material Contracts and Debt Instruments and are not alleged to be (with or without the lapse of time or the giving of notice, or both), in breach or default in any material respect thereunder. To the knowledge of the Company, no party (other than the Company or its subsidiaries) to any Material Agreement or Debt Instrument is in breach or violation of any term or provision thereof which would, or could, result in any Material Adverse Effect.

 

(rr)              No Actions or Proceedings. There are no material actions, suits, proceedings, inquiries or investigations existing, pending, instituted or, to the knowledge of the Company, threatened, against or which affect the Company or its subsidiaries, or their respective directors or officers, or to which any of the properties or assets thereof are subject, at law or equity, or before or by any Governmental Authority which, either separately or in the aggregate, could result in a Material Adverse Effect.

 

(ss)             No Bankruptcy or Winding Up. Neither the Company nor any of its subsidiaries has committed an act of bankruptcy or sought protection from the creditors thereof before any court or pursuant to any legislation, proposed a compromise or arrangement to the creditors thereof generally, taken any proceeding with respect to a compromise or arrangement, taken any proceeding to be declared bankrupt or wound up, taken any proceeding to have a receiver appointed of any of the assets thereof, had any person holding any Lien or receiver take possession of any of the property thereof, had an execution or distress become enforceable or levied upon any portion of the property thereof or had any petition for a receiving order in bankruptcy filed against it and no steps or proceedings with respect to any of the foregoing have been taken, instituted or, to the knowledge of the Company, threatened.

 

(tt)              Material Property.

 

(i)          The Material Property is accurately and fully disclosed in the Time of Sale Prospectus and the Prospectuses and no other property or assets are necessary for the conduct of the business of the Company and its subsidiaries as currently conducted. Other than the Material Property, as disclosed in the Time of Sale Prospectus and the Prospectuses, neither the Company nor any of its subsidiaries currently owns or leases any material real or immovable property, right, title or interest, or any material mining or mineral claims, mining leases, mining concessions, concessions, exploration licenses, exploitation licenses, prospecting permits, participating interests or other conventional property, proprietary or contractual interests or rights, or any other rights for the exploration, mining, development or processing activities in respect of the Material Property;

 

 

 

(ii)          the Company and/or its subsidiaries are the absolute legal and beneficial owners of either mining leases, mining claims, mining concessions or participating interests or other conventional property, proprietary or contractual interests or rights (collectively, the “Mineral Rights”) in respect of the Material Property under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit the Company and its subsidiaries to access, explore for, mine, develop and process the mineral deposits relating thereto and to conduct all operations and production and processing activities thereon, free and clear of any Liens, other than those described in the Time of Sale Prospectus and the Prospectuses. All mining claims and mining leases owned by the Company are solely registered pursuant to the provisions of the Mining Act (Québec) and in the register of real rights of State resource development of the land register. All other material Mineral Rights have been validly located, registered and recorded in accordance with all Applicable Laws and are valid, subsisting and in good standing. Except as disclosed in the Time of Sale Prospectus and the Prospectuses, no material commission, royalty, license fee or similar payment to any person with respect to the Material Property is payable. There are no options or other participation interests or rights of preference relating to the Mineral Rights and all Mineral Rights have active status and neither the Company nor any of its subsidiaries has received written notice of, nor has any knowledge of, any pending or threatened suspension or revocation proceedings in respect of the Mineral Rights or any of them from any Governmental Authority, or of any outstanding or threatened claim, action, litigation or proceedings with respect to the Mineral Rights before any Governmental Authority;

 

(iii)          the Company and its subsidiaries have or will obtain in the ordinary course, all necessary surface rights, access rights and other necessary rights and interests relating to the Material Property (collectively, the “Mining Rights”), granting the Company or its subsidiaries with the right and ability to access, explore for, mine, construct, develop and process the mineral deposits and to conduct all operations and construction, production, commissioning and processing activities thereon, as are appropriate in view of the rights and interests therein of the Company or its subsidiaries, free and clear of any Liens other than those described in the Time of Sale Prospectus and the Prospectuses and with only such exceptions as do not materially interfere with the use made or contemplated to be made by the Company or its subsidiaries of the rights or interests so held. All of the Mining Rights and each of the documents, agreements, instruments and obligations relating thereto referred to above are valid, subsisting and in good standing in the name of the Company or its subsidiaries, as applicable;

 

 

(iv)          the Company and its subsidiaries are not in default, and to the knowledge of the Company no other party is in default, of any of the material provisions of any such agreements, documents or instruments relating to the Mineral Rights or the Mining Rights, nor has any such default been alleged, and all such Mineral Rights and Mining Rights are in good standing under all Applicable Laws of the jurisdictions in which they are situated, and all taxes required to be paid thereon have been paid. The Material Property (or any interest in, or right to earn an interest in, any property) is not subject to any right of first refusal or purchase or acquisition right which is not disclosed in the Time of Sale Prospectus and the Prospectuses; and

 

(v)          all assessments or other work required to be performed and rent or renewal fees in relation to the Mineral Rights and the Mining Rights in order to maintain the Company’s or any of its subsidiary’s interest therein, if any, have been performed and paid to date and the Company and its subsidiaries have complied in all respects with all Applicable Laws and contractual, legal and other obligations to third parties in order to maintain such interest.

 

(uu)           Possession of Authorizations. The Company and its subsidiaries have, collectively, obtained all Authorizations necessary as at the date hereof to conduct their operations and activities as currently carried on and the Company expects any additional Authorizations that are required to conduct their operations and activities as proposed to be commenced and carried on by the Company and its subsidiaries to be obtained in the ordinary course and consistent with the anticipated timing as set forth in the Time of Sale Prospectus and the Prospectuses and the Public Disclosure Record, including in respect of access to and the construction, commissioning, operation, production and processing activities at the Material Property. Each Authorization is valid, subsisting and in good standing, neither the Company nor any of its subsidiaries is in material default or breach of any Authorization and no proceeding is pending or, to the knowledge of the Company, threatened to revoke or limit any Authorization which, if the subject of an unfavorable decision, order, ruling or finding, could result in a Material Adverse Effect.

 

(vv)           Description of Mineral Properties. The Material Property, the Mineral Rights and the Mining Rights, as disclosed in the Time of Sale Prospectus and the Prospectuses and in the Public Disclosure Record, constitute an accurate description of the Material Property, the Mineral Rights and the Mining Rights held by the Company and its subsidiaries and no other property or assets are necessary for the conduct of the business of the Company as currently conducted. Other than the Material Property, Mineral Rights and the Mining Rights, as disclosed in the Time of Sale Prospectus and the Prospectuses, neither the Company nor any of its subsidiaries currently owns or leases any material real or immovable property, right, title or interest, or any material mining or mineral claims, mining leases, mining concessions, concessions, exploration licenses, exploitation licenses, prospecting permits, participating interests or other conventional property, proprietary or contractual interests or rights, or any other rights for the exploration, mining, development or processing activities in respect of the Material Property.

 

 

(ww)       Conduct of Operations. To the Company’s knowledge, all exploration and development operations on the properties of the Company, including all operations and activities relating to the exploration, development, construction and commissioning of the Material Property, have been conducted in all material respects in accordance with good exploration, development and engineering practices.

 

(xx)           First Nations and Local Communities.

 

(i)          Other than as disclosed in the Time of Sale Prospectus and the Prospectuses, the Company does not know of any claim or the basis for any claim by any First Nation, local community or any other person, including a claim with respect to any First Nation’s asserted or established rights or local community rights, that might or could have a Material Adverse Effect on the right thereof to use, transfer or otherwise explore for, mine and develop the mineral deposits or to conduct operations and production, construction and commissioning activities on the Material Property or the LiB Anode Plant (as defined below);

 

(ii)          other than as disclosed in the Time of Sale Prospectus and the Prospectuses, the Company is not aware of any treaty land entitlement claim or aboriginal rights or title claim having been asserted or any legal action by or relating to any local community or First Nation having been instituted with respect to the Material Property or the LiB Anode Plant, and no dispute between the Company or any of its subsidiaries and any local community or First Nation exists or, to the knowledge of the Company, is threatened or imminent with respect to any of the Company’s or any such subsidiary’s properties or activities; and

 

(iii)          other than the Pre-Development Agreement and the Collaboration Agreement and ongoing discussions regarding a potential impacts and benefits agreement with the Council of the Atikamekw Nation and of the Manawan Atikamekw Council, the Company or its subsidiaries have not entered into any written or oral arrangements with any First Nation or local community to provide benefits, pecuniary or otherwise, with respect to the Material Property or the LiB Anode Plant at any stage of development, nor has the Company or its subsidiaries engaged in discussions, negotiations or similar communications with any First Nation or local community regarding the foregoing.

 

 

(yy)           Environmental Matters.

 

(i)          The Company and its subsidiaries are in material compliance with all applicable Environmental Laws and neither the Company nor any such subsidiary has used, except in material compliance with all Environmental Laws, any property or facility which it owns or leases, or previously owned or leased, to conduct any Environmental Activity, except where such noncompliance or use would not result in a Material Adverse Effect;

 

(ii)          neither the Company nor its subsidiaries, nor to the knowledge of the Company, any predecessor companies, have received any notice of any claim, judicial or administrative proceeding, order or direction, pending, instituted, threatened, concluded or issued against, the Company or its subsidiaries or any of their properties, assets or operations relating to, or alleging any violation of, any Environmental Laws; the Company is not aware of any facts which could give rise to any such claim, judicial or administrative proceeding, order or direction and neither the Company nor its subsidiaries, nor any of their properties, assets or operations is the subject of any investigation, evaluation, audit or review by any Governmental Authority to determine whether any violation of any Environmental Laws has occurred or is occurring or whether any remedial action is needed in connection with a release of any Contaminant into the environment or Environmental Activity, except for compliance investigations conducted in the normal course by any Governmental Authority or where such claim, proceeding, order, direction, investigation, evaluation, audit or review would not result in a Material Adverse Effect;

 

(iii)          to the knowledge of the Company, there are no liabilities (whether contingent or otherwise) in connection with any Environmental Activity relating to or affecting the Company, its subsidiaries or their properties, assets or operations, and there are no liabilities (whether contingent or otherwise) relating to the restoration or rehabilitation of land, water or any other part of the environment, in each case which would have a Material Adverse Effect;

 

(iv)          there are no environmental audits, evaluations, assessments, studies or tests, relating to the Company, its subsidiaries or their properties, assets or operations, except for ongoing assessments conducted by or on behalf of the Company or its subsidiaries in the ordinary course; and

 

(v)          all material studies and reports pertaining to any environmental assessments/audits of the Company or the Material Property obtained for, in the possession, control or carried out on behalf of, the Company have been delivered or made available to the Underwriters.

 

 

(zz)            Technical Report and Regulation 43-101.

 

(i)          The Technical Report was in compliance in all material respects with the requirements of Regulation 43-101 at the time of filing thereof, and the Company believes that the Technical Report reasonably presents the quantity of mineral resources and mineral reserves attributable to the Material Property as at the date stated therein based upon information available at the time the Technical Report was prepared;

 

(ii)          the Company made available to the authors of the Technical Report, prior to the issuance of such report, for the purpose of preparing such report, all information requested by the authors, which information did not contain any misrepresentation at the time such information was so provided, and there have been no material changes to such information since the date of delivery or preparation thereof;

 

(iii)          the Company is in compliance with the provisions of Regulation 43-101 and has filed all technical reports required thereby and, notwithstanding the Resource Estimate Update, there has been no change that would require the filing of a new technical report under Regulation 43-101;

 

(iv)          all scientific and technical information derived from the Technical Report, the Resource Estimate Update or otherwise requiring review by a “qualified person” under Regulation 43-101 set forth in the Time of Sale Prospectus and the Prospectuses has been reviewed by a “qualified person” as required under Regulation 43-101 and has been prepared in accordance with Canadian industry standards set forth in Regulation 43-101; and

 

(v)          the Company has no reason to believe that the assumptions underlying the mineral resource and mineral reserve estimates associated with the Material Property contained in the Time of Sale Prospectus and the Prospectuses are not reasonable and appropriate and has no reason to believe that the projected capital and operating costs and projected production and operating results relating to the Material Property, as summarized in the Time of Sale Prospectus and the Prospectuses, are not commercially achievable by the Company.

 

(aaa)        FEL-1 Analysis.

 

(i)          The Company believes that the front-end loading engineering analysis (“FEL-1”) for Phase 2 of its large-scale commercial lithium-ion anode material project (the “LiB Anode Plant”) reasonably presents the projected capital and operating costs and projected production and operating results of the LiB Anode Plant as at the date stated therein based upon information available at the time the FEL-1 was prepared;

 

 

(ii)          the Company made available to the authors of the FEL-1, prior to the issuance of such analysis, for the purpose of preparing such analysis, all information requested by the authors, which information did not contain any misrepresentation at the time such information was so provided, and there have been no material changes to such information since the date of delivery or preparation thereof; and

 

(iii)          the Company has no reason to believe that the assumptions underlying the projected capital and operating costs and projected production and operating results associated with the LiB Anode Plant contained in the Time of Sale Prospectus and the Prospectuses are not reasonable and appropriate and has no reason to believe that the projected capital and operating costs and projected production and operating results relating to the LiB Anode Plant, as summarized in the Time of Sale Prospectus and the Prospectuses, are not commercially achievable by the Company.

 

(bbb)       Intellectual Property.

 

(i)          Except for such matters as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the Company and its subsidiaries own or possess sufficient enforceable rights to use all intellectual and industrial property, including patents, patent applications, trademarks, trademark applications, trademark registrations, service marks, service ▇▇▇▇ applications, service ▇▇▇▇ registrations, trade names, copyrights, industrial designs, concepts, know how, inventions, know how and trade secrets, used or proposed to be used in the conduct of the business thereof, free and clear of any Liens of any kind or nature. The Company and its subsidiaries have taken reasonable measures to protect the intellectual and industrial property, including, without limitation, by securing the registration of intellectual and industrial property (as appropriate or as required by contractual obligations if applicable);

 

(ii)          to the knowledge of the Company, the Company and its subsidiaries are not infringing, misappropriating, violating and will not infringe, misappropriate or otherwise violate upon the rights of any other person with respect to the conduct of the business as currently conducted and proposed to be conducted by the Company and its subsidiaries and, to the knowledge of the Company, there are no claims or threat of claims by any other person challenging the right of the Company and its subsidiaries to use any intellectual and industrial property, and no other person has infringed, misappropriated or violated any such intellectual and industrial property owned by the Company or its subsidiaries;

 

(iii)          each of the Company and its subsidiaries has performed all of the obligations required to be performed by it and is entitled to all benefits under the contracts to which the Company or its subsidiary is a party and (i) pursuant to which the Company or its subsidiary is granted a license or any other rights to any third party intellectual and industrial property and (ii) pursuant to which any person is granted a license or any other rights to any intellectual and industrial property owned by the Company or its subsidiaries (subsections (i) and (ii) collectively “IP Licenses”), and each of the counterparties to the IP Licenses has performed all of the material obligations required to be performed by it under the IP Licenses. There exists no default or event of default, actual or alleged, under any such IP License that would be material;

 

 

(iv)          to the extent any intellectual or industrial property has been created in whole or in part by current or past employees, consultants or independent contractors of the Company or its subsidiaries, any such rights therein of such persons have been irrevocably assigned in writing to the Company or its subsidiaries, and all authors of the works have waived all moral rights that they may have in writing. No such person has any claim or asserted any claim in respect of any intellectual or industrial property or component thereof of the Company or its subsidiaries; and

 

(v)          the Company and its subsidiaries have implemented and maintained commercially reasonable measures to protect and maintain the confidentiality of all trade secrets and other confidential proprietary information forming part of the intellectual and industrial property rights owned or possessed by the Company and its subsidiaries.

 

(ccc)        Premises. With respect to each premises of the Company and its subsidiaries which is material to the Company (on a consolidated basis) and which the Company and/or its subsidiaries occupy as tenant (the “Premises”), the Company and/or such subsidiaries occupy the Premises and have the exclusive right to occupy and use the Premises and each of the leases pursuant to which the Company and/or such subsidiaries occupy the Premises is in good standing and in full force and effect.

 

(ddd)       Employment Matters. The Company and its subsidiaries are in compliance with all laws and regulations respecting employment and employment practices, terms and conditions of employment, pay equity, hours, wages, workers’ compensation and occupational health and safety except where such non-compliance would not result in a Material Adverse Effect. The Company and its subsidiaries have not and are not engaged in any unfair labor practice and there is no labor strike, dispute, slowdown, stoppage, complaint or grievance pending, instituted or, to the knowledge of the Company, threatened, against the Company or its subsidiaries. There is no collective bargaining agreement currently in place or being negotiated by the Company or its subsidiaries and the Company and its subsidiaries have not received any notice of, nor have any knowledge of, any occurrence which would reasonably be expected to lead to a dispute, complaint, grievance or any other unresolved matter. There are no outstanding orders under any employment or human rights legislation in any jurisdiction in which the Company or its subsidiaries carry on business or have employees.

 

 

(eee)        Employee Plans. Each plan for retirement, bonus, stock purchase, profit sharing, stock option, deferred compensation, severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick leave, disability, salary continuation, legal benefits, unemployment benefits, vacation, pension, incentive or otherwise contributed to, or required to be contributed to, by the Company or its subsidiaries for the benefit of any current or former officer, director, employee or consultant of the Company or its subsidiaries has been maintained and funded in material compliance with the terms thereof and with the requirements prescribed by Applicable Laws and has been publicly disclosed (including any accrued or contingent liability in respect thereof) to the extent required by applicable Securities Laws. All accruals for unpaid vacation pay, premiums for unemployment insurance, health premiums, federal or provincial pension plan premiums, accrued wages, salaries and commissions and payments for any plan for any current or former officer, director, employee or consultant of the Company or its subsidiaries have been accurately reflected in the books and records of the Company and its subsidiaries.

 

(fff)           No Loans. Neither the Company nor any subsidiary of the Company has (i) made any material loans to each other, except in respect of the intercompany loans made in the ordinary course of business, or (ii) guaranteed the material obligations of each other. Neither the Company nor any subsidiary has made any material loans to or guaranteed the material obligations of any other person.

 

(ggg)       Non-Arm’s Length Transactions. The Company and its subsidiaries do not owe any amount to, have not borrowed any amount from and are not otherwise indebted to, and the Company and its subsidiaries do not have any present loans or other indebtedness made to, any officer, director, employee or security holder of the Company or its subsidiaries, past or present, or any person not dealing at “arm’s length” (as such term is defined in the Tax Act) with any of them, except as described or disclosed in the Time of Sale Prospectus and the Prospectuses and for usual employee reimbursements and compensation paid in the ordinary and normal course of the business of the Company and its subsidiaries. The Company and its subsidiaries are not a party to any material contract or agreement or understanding with any officer, director, employee or security holder of the Company or any of its subsidiaries or any other person not dealing at arm’s length with the Company or any of its subsidiaries.

 

(hhh)       Related Parties. Except as described or disclosed in the Time of Sale Prospectus and the Prospectuses, none of the directors, officers or employees of the Company or its subsidiaries, any known holder of more than 10% of any class of securities of the Company or securities of any person exchangeable for more than 10% of any class of securities of the Company, or any known associate or affiliate of any of the foregoing persons or companies, has had any material interest, direct or indirect, in any transaction within the previous two years or any proposed material transaction which, as the case may be, materially affected or is reasonably expected to materially affect the Company and its subsidiaries, on a consolidated basis.

 

 

(iii)            Insurance. The Company and the subsidiaries maintain insurance by insurers of recognized financial responsibility, against such losses, risks and damages to their business operations and assets in such amounts that are: (i) customary for the business in which they are engaged, (ii) on a basis consistent with reasonably prudent persons in comparable businesses, and (iii) in compliance with the requirements contained in any Material Agreement or Debt Instrument; and all of the policies in respect of such insurance coverage, fidelity or surety bonds insuring the Company, the subsidiaries, and their respective directors, officers and employees, and the business operations and assets, are in good standing and in full force and effect in all respects, and there are no default thereunder. The Company and its subsidiaries are in compliance with the terms of such policies and instruments in all material respects and there are no material claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; the Company and its subsidiaries have no reason to believe that they will not be able to renew such existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue business operations at a cost that would not have a Material Adverse Effect, and neither the Company nor its subsidiaries has failed to promptly give any notice of any material claim thereunder.

 

(jjj)            Fees, Commissions and Proceeds. Other than as provided by this Agreement or as disclosed in the Time of Sale Prospectus and the Prospectuses, no brokerage, agency or other financial advisory or similar fee is payable by the Company in connection with the offering of the Shares, and other than the Company, there is no person that is or will be entitled to demand any of the net proceeds of the offering of the Shares.

 

(kkk)        Not an Investment Company. The Company is not, and after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in U.S. Final Prospectus will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

 

(lll)            No Stamp Taxes. No stamp duty, registration or documentary taxes, duties or similar charges are payable under the federal laws of Canada or the laws of any province in connection with the issuance, sale and delivery to the Underwriters of the Shares or the authorization, execution, delivery and performance of this Agreement or the resale of Shares by an underwriter to U.S. residents.

 

(mmm)      Sanctions. (i) Neither the Company nor any of its subsidiaries, nor any director, officer, or employee thereof, nor, to the Company’s knowledge, any agent, affiliate or representative of the Company or any of its subsidiaries, is a person that is, or is controlled or 50% or more owned by a person that is:

 

(A) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor

 

 

(B)  located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Crimea, Cuba, Iran, North Korea and Syria).

 

(ii)          the Company will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person:

 

(A) to fund or facilitate any activities or business of or with any person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or

 

(B)  in any other manner that will result in a violation of Sanctions by any person (including any person participating in the offering, whether as underwriter, advisor, investor or otherwise).

 

(iii)          the Company and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and will not knowingly engage in, any dealings or transactions with any person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.

 

(nnn)       IT Systems and Company Data. The Company’s and its subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the Company and its subsidiaries as currently conducted and, to the best of the Company’s and its subsidiaries’ knowledge, are free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. The Company and its subsidiaries have implemented and maintained commercially reasonable controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Company Data”)) used in connection with their businesses, and, to the best of the Company’s and its subsidiaries’ knowledge there have been (i) no breaches, violations, outages or unauthorized uses of or accesses to the same, except for those that have been remedied without material cost or liability or the duty to notify any other person, and (ii) no incidents under internal review or investigations relating to the same, except where such breach, violation, outage, unauthorized use or access, or incidents under internal review or investigation relating to the same, would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The Company and its subsidiaries are presently in material compliance with all applicable laws or statutes and all applicable judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company and its subsidiaries, and all internal policies and contractual obligations relating to the privacy and security of IT Systems and Company Data and to the protection of such IT Systems and Company Data from unauthorized use, access, misappropriation or modification.

 

 

(ooo)       Marketing Materials. Any marketing material that the Company is required to file with or deliver to the Canadian Securities Commissions has been, or will be, filed with or delivered to the Canadian Securities Commissions in accordance with the requirements of Canadian Securities Laws. Each marketing material that the Company has filed or delivered, or is required to file or deliver, in connection with the Public Offering pursuant to Canadian Securities Laws or that was prepared by or on behalf of or used or referred to by the Company (i) does not and will not, at the time of any filing, delivery or use thereof in accordance with this Agreement, contain any misrepresentation of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made not misleading, and (ii) complies or will comply in all material respects with the applicable requirements of Canadian Securities Laws. Except for the marketing materials, if any, identified in Schedule V hereto that have been, or will be, filed with or delivered to the Canadian Securities Commission in accordance with the requirements of Canadian Securities Laws, each furnished to you before first use, the Company has not prepared, used or referred to, and will not, without your prior consent, prepare, use or refer to, any marketing materials.

 

(ppp)       PFIC Status. The Company may be a passive foreign investment company (a “PFIC”) within the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), for previous taxable years and may be a PFIC for its current taxable year ending December 31, 2021 and future taxable years. For any year in which the Company is a PFIC, the Company will provide purchasers of the Shares that are subject to United States federal income taxation, upon written request, with the information necessary to make a “qualified electing fund” election pursuant to Section 1295 of the Code with respect to the Company and any of its direct or indirect subsidiaries which are also PFICs.

 

2.                  Agreements to Sell and Purchase. The Company hereby agrees to sell to the several Underwriters, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase the number of Firm Shares set forth opposite such Underwriter’s name in Schedule I hereto at a price of US$6.975 a common share (the “Purchase Price”).

 

 

On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company agrees to sell to the Underwriters the Additional Shares, and the Underwriters shall have the right to purchase, severally and not jointly, up to 1,050,000 Additional Shares at the Purchase Price (the “Over-Allotment Option”). You may exercise this right on behalf of the Underwriters in whole or from time to time in part by giving written notice to the Company not later than 30 days after the Closing Date. Any exercise notice shall specify the number of Additional Shares to be purchased by the Underwriters and the date on which such Additional Shares are to be purchased. Each purchase date must be at least one business day after the written notice is given and may not be earlier than the Closing Date nor later than eight business days after the date of such notice (except to the extent the Company agrees to a shorter or longer period). Additional Shares may be purchased as provided in Section 4 solely for the purpose of covering sales of securities in excess of the number of the Firm Shares. On each day, if any, that Additional Shares are to be purchased (an “Option Closing Date”), each Underwriter agrees, severally and not jointly, to purchase the number of Additional Shares (subject to such adjustments to eliminate fractional Shares as you may determine) that bears the same proportion to the total number of Additional Shares to be purchased on such Option Closing Date as the number of Firm Shares set forth in Schedule I opposite the name of such Underwriter bears to the total number of Firm Shares.

 

3.                  Terms of Public Offering. The Company is hereby advised by you that the Underwriters propose to make a public offering of their respective portions of the Shares as soon after this Agreement has become effective as in your judgment is advisable. The Company is further advised by you that the Shares are to be offered to the public initially at US$7.50 a common share (the “Public Offering Price”). The Company is also advised that after the Underwriters have made a reasonable effort to sell all of the Shares at the Public Offering Price, the Public Offering Price may be decreased from time to time to an amount less than the Public Offering Price, and the compensation realized by the Underwriters will be decreased by the amount that the aggregate price paid by purchasers for the Shares is less than the gross price paid by the Underwriters to the Company. Such decrease in the Public Offering Price will not affect the net proceeds of the offering of the Shares to be paid by the Underwriters to the Company. The Company is further advised by you that, prior to the commencement of any Road Show undertaken in connection with the marketing of the offering of the Shares, you reasonably expected that the Shares would be sold primarily in the United States. The Company and the Representatives hereby approve the term sheet, substantially in the form of Schedule II-A, for use as marketing materials, and both acknowledge that such marketing materials have not been provided to any prospective purchaser of Securities before the date hereof.

 

4.                  Payment and Delivery. Payment for the Firm Shares shall be made in Federal or other funds immediately available in New York City against delivery of such Firm Shares for the respective accounts of the several Underwriters at 8:00 a.m., New York City time, on June 23, 2021, or at such other time on the same or such other date, not later than June 30, 2021, as shall be designated in writing by you. The time and date of such payments are hereinafter referred to as the “Closing Date.”

 

Payment for any Additional Shares shall be made to the Company in Federal or other funds immediately available in New York City against delivery of such Additional Shares for the respective accounts of the several Underwriters at 8:00 a.m., New York City time, on the date specified in the corresponding notice described in Section 2 or at such other time on the same or on such other date, in any event not later than July 30, 2021, as shall be designated in writing by you.

 

 

The Firm Shares and Additional Shares shall be registered in such names and in such denominations as you shall request in writing not later than one full business day prior to the Closing Date or the applicable Option Closing Date, as the case may be. The Firm Shares and Additional Shares shall be delivered to you on the Closing Date or an Option Closing Date, as the case may be, for the respective accounts of the several Underwriters, with any transfer taxes payable in connection with the transfer of the Shares to the Underwriters duly paid, against payment of the Purchase Price therefor.

 

All payments to be made by the Company hereunder shall be made without withholding or deduction for or on account of any present or future taxes, duties or governmental charges whatsoever unless the Company is compelled by law to deduct or withhold such taxes, duties or charges. In that event, the Company shall pay such additional amounts as may be necessary in order that the net amounts received after such withholding or deduction shall equal the amounts that would have been received if no withholding or deduction had been made.

 

5.                  Conditions to the Underwriters’ Obligations. The several obligations of the Underwriters to purchase and pay for the Firm Shares on the Closing Date are subject to the condition that the Registration Statement shall have become effective not later than 4:30 p.m., New York City time, on the date hereof, and to the following further conditions, which conditions may be waived in writing in whole or in part by the Representatives on behalf of the Underwriters:

 

(a)               Subsequent to the execution and delivery of this Agreement and prior to the Closing Date:

 

(i)          there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded to any of the securities of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization,” as such term is defined in Section 3(a)(62) of the Exchange Act; and

 

(ii)          there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in each of the Time of Sale Prospectus and the Prospectuses that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Shares on the terms and in the manner contemplated in the Time of Sale Prospectus.

 

(b)               The Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an officer of the Company, but without personal liability, to the effect set forth in Section 5(a)(i) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date.

 

 

The officer signing and delivering such certificate may rely upon his or her knowledge as to proceedings threatened.

 

(c)               The Underwriters shall have received on the Closing Date an opinion of ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, outside Canadian counsel for the Company (and such counsel may arrange for separate deliveries of opinions of local counsel, where such counsel deems such delivery proper, as to the laws of any Canadian Qualifying Jurisdiction other than the province of Québec and the laws of Canada applicable therein or alternatively, make arrangements to have such opinions directly addressed to the Underwriters and counsel to the Underwriters) and may rely upon, as to matters of fact, certificates of public officials and officers of the Company, as applicable, and letters from stock exchange representatives and transfer agents) dated the Closing Date, with respect to the following matters, subject to customary limitations, assumptions and qualifications:

 

(i)          the Company has been incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and capacity to own its property and to conduct its business as described in each of the Time of Sale Prospectus and the Prospectuses;

 

(ii)          each Canadian subsidiary of the Company has been incorporated, is validly existing in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and capacity to own its property and to conduct its business as described in each of the Time of Sale Prospectus and the Prospectuses;

 

(iii)          the Company is duly registered in the Province of Quebec under the Act respecting the legal publicity of enterprises (Quebec);

 

(iv)          the authorized share capital of the Company conforms as to legal matters to the description thereof contained in each of the Time of Sale Prospectus and the Prospectuses;

 

(v)          all of the issued shares of each Canadian subsidiary of the Company have been duly authorized and validly issued, are fully paid and non-assessable and the Company is the registered owner of all such shares;

 

(vi)          the Shares have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of such Shares will not be subject to any preemptive or similar rights under the Canada Business Corporations Act or, to such counsel’s knowledge, any agreements of the Company that are material to the Company;

 

 

(vii)          this Agreement has been duly authorized and, in so far as execution and delivery are applicable and governed by the laws of the Province of Québec and the federal laws of Canada applicable therein, executed and delivered by the Company;

 

(viii)          the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement will not result in a material breach of or a material default of any provision of the laws of the Province of Québec or federal laws of Canada applicable therein that are applicable to the Company, or the articles of incorporation or by laws of the Company or, to such counsel’s knowledge, such agreements of the Company that are material to the Company as to be mutually agreed, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency having jurisdiction under the laws of the Province of Québec or federal laws of Canada applicable therein is required for the performance by the Company of its obligations under this Agreement except as have been obtained or will be obtained prior to the Closing Date;

 

(ix)          subject to the qualifications and limitations set out therein, the summary of matters included in the Canadian Final Prospectus under the caption “Statutory Rights of Withdrawal and Rescission” and in the Registration Statement under the caption “Part II – Information Not Required To Be Delivered To Offerees or Purchasers – Indemnification of Directors and Officers” is in each case an accurate summary in all material respects of such matters;

 

(x)          the description of the Shares in the Time of Sale Prospectus and in the Prospectuses under the caption “Description of Common Shares” is in each case, in all material respects, an accurate description of the rights, privileges, restrictions and conditions attaching to such securities;

 

(xi)          subject to the qualifications, assumptions and limitations referred to therein, the statements set out in the Time of Sale Prospectus and in the Prospectuses under the caption “Certain Canadian Federal Income Tax Considerations” accurately describe a general summary, in all material respects, of the principal Canadian federal income tax considerations under the Tax Act generally applicable to a holder who acquires Shares pursuant to the offering of the Shares;

 

(xii)          subject to the qualifications, assumptions and limitations referred to therein, the statements set out in the Canadian Final Prospectus under the caption “Eligibility for Investment” is in each case accurate as of the date hereof;

 

 

 

(xiii)          except as set out in a schedule to such counsel’s opinion, such counsel does not represent the Company or any of its subsidiaries in respect of any legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is a party that are not described in the Registration Statement, the Time of Sale Prospectus or the Prospectuses;

 

(xiv)          subject to the qualifications, assumptions and limitations referred to therein, in the opinion of such counsel, the Canadian Final Prospectus (except for the financial statements and financial schedules and other financial and statistical data included therein, as to which such counsel does not express any opinion) when it was filed with the Canadian Securities Commissions, appears on its face to have been appropriately responsive in all material respects to the requirements of applicable Canadian Securities Laws (it being understood that counsel expresses no opinions as to the accuracy of the disclosure made in response to such requirements or whether such disclosure constitutes all material information required to be disclosed in response thereto);

 

(xv)          all necessary corporate action has been taken by the Company to authorize the filing of the Canadian Preliminary Prospectus and the Canadian Final Prospectus with the Reviewing Authority and the other Canadian Securities Commissions;

 

(xvi)          all necessary corporate action has been taken by the Company to authorize the filing of the Registration Statement, the U.S. Preliminary Prospectus and the U.S. Final Prospectus with the Commission;

 

(xvii)          all necessary documents have been filed, all requisite proceedings have been taken and all other necessary approvals, permits, consents and authorizations have been obtained by the Company under Canadian Securities Laws to qualify the distribution of the Shares to the public in the Canadian Qualifying Jurisdictions through persons who are registered under the Canadian Securities Laws of the Canadian Qualifying Jurisdictions who have complied with the relevant provisions of such Canadian Securities Laws;

 

(xviii)          the TSXV and the NYSE have each granted conditional approval for the listing of the Shares, subject only to the satisfaction by the Company of customary conditions imposed by each of the TSXV and NYSE in similar circumstances;

 

(xix)          the choice of the laws of the State of New York as the law governing this Agreement would, to the extent specifically pleaded, be recognized and applied in an action brought before a court of competent jurisdiction in the Province of Québec (a “Québec Court”), provided such choice is bona fide (i.e. not made with a view to avoiding the consequences of the law of any other jurisdiction), subject to proof of such laws as a question of fact, except that:

 

 

(A) the laws of the State of New York would not be applied if such laws or the result of their application would be manifestly inconsistent with public order as understood in international relations or if it governs conflict of laws, revenue, expropriatory or penal matters;

 

(B)  a Québec Court may give effect to a mandatory provision of the laws of another jurisdiction with which the situation is closely connected where it determines that legitimate and manifestly preponderant interests so require;

 

(C)  a Québec Court would apply the internal law of the State of New York, but not its rules governing conflict of laws;

 

(D) a Québec Court would apply those laws of the Province of Québec which such Québec Court characterized as procedural in nature and would not apply those laws of the State of New York which such Québec Court characterized as procedural in nature; and

 

(E)  a Québec Court may apply the rules of evidence of the Province of Québec which are more favorable than those of the laws of the State of New York to the establishment of evidence;

 

(xx)          the submission by the Company to the non-exclusive jurisdiction of any federal or state court sitting in the Borough of Manhattan, The City of New York, New York (a “New York Court”) would be recognized by a Québec Court as a valid submission to the jurisdiction of the New York Court; and

 

(xxi)          a Québec Court will recognize and, where applicable, declare enforceable a final and enforceable judgment in personam validly and properly rendered against the Company for a sum certain in money due under this Agreement by a New York Court respecting the enforcement of this Agreement that is not impeachable as void or voidable under the internal laws of the State of New York, except if:

 

(A) the court rendering such judgment had no jurisdiction as determined under the relevant provisions of the Civil Code of Québec;

 

(B)  the judgment, at the place where it was rendered, is subject to ordinary remedy or is not final or enforceable;

 

 

(C)  such judgment was rendered in contravention of the fundamental principles of procedure or contrary to any order made by the Attorney General of Canada under the Foreign Extraterritorial Measures Act (Canada) or by the Competition Tribunal under the Competition Act (Canada);

 

(D) a dispute between the same parties, based on the same facts and having the same object has given rise to a decision rendered in the Province of Québec, whether or not it has acquired the authority of a final judgment, or is pending before a Québec authority, first seized of the dispute, or has been decided in a third country and the decision meets the necessary conditions for recognition in the Province of Québec;

 

(E)  the outcome of a foreign decision is manifestly inconsistent with public order as understood in international relations as may be determined by the courts of Québec;

 

(F)  the decision enforces obligations arising from the taxation laws of a foreign State other than the Province of Québec or Canada, unless in such jurisdiction the obligations resulting from the taxation laws of the Province of Québec are recognized and enforced;

 

(G) the motion to recognize such judgment is not commenced in the Province of Québec within the applicable limitation period after the date of such judgment; and

 

(H) in the event the judgment of the New York Court was rendered by default, the plaintiff does not prove that the act of procedure initiating the proceedings was duly served on the defaulting party in accordance with the laws of the place where the decision was rendered; however, a Québec Court may in any event refuse recognition or enforcement of the judgment if the defaulting party proves that, owing to the circumstances, the defaulting party was unable to learn of the act of procedure initiating the action or was not given sufficient time to offer its defense.

 

(d)               The Underwriters shall have received on the Closing Date an opinion of White & Case LLP, outside U.S. counsel for the Company, dated the Closing Date, to the effect set forth in Schedule III hereto. Such opinion shall be rendered to the Underwriters at the request of the Company and shall so state therein.

 

(e)               The Underwriters shall have received on the Closing Date an opinion of each of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Canadian counsel for the Underwriters, and ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, U.S. counsel for the Underwriters, dated the Closing Date, in form and substance reasonably satisfactory to you.

 

 

(f)                The Underwriters shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to the Underwriters, from PricewaterhouseCoopers LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the Time of Sale Prospectus and the Prospectuses; provided that the letter delivered the date hereof shall use a “cut-off date” not more than two business days prior to the date hereof and the letter delivered on the Closing Date shall use a “cut-off date” not earlier than two business days prior to the Closing Date.

 

(g)               The Underwriters shall have received an opinion of counsel to the Company in Québec, dated the Closing Date in respect of the Canadian Final Prospectus, in form and substance satisfactory to the Underwriters, acting reasonably, addressed to the Underwriters, to the effect that the French language version of the Canadian Final Prospectus except for the management discussion and analysis of the Company for the year ended December 31, 2020, the audited consolidated annual financial statements of the Company as at and for the years ended December 31, 2020 and December 31, 2019, together with the notes thereto and the independent auditors’ report thereon, the management discussion and analysis of the Company for the three-month period ended March 31, 2021 and the unaudited consolidated condensed interim financial statements of the Company as at March 31, 2021 and for the three-month periods ended March 31, 2021 and March 31, 2020 (collectively, the “Financial Information”) included therein, as to which no opinion need be expressed by such counsel, is, in all material respects, a complete and proper translation of the English language version thereof.

 

(h)               The Underwriters shall have received an opinion of PricewaterhouseCoopers LLP, independent public accountants, dated the Closing Date in respect of the Canadian Final Prospectus, in form and substance satisfactory to the Underwriters, acting reasonably, addressed to the Underwriters, to the effect that the French language version of the Financial Information translated by it and included in the Canadian Final Prospectus is, in all material respects, a complete and proper translation of the English language version thereof.

 

(i)                 The Shares to be sold at Closing shall have been approved for listing on the NYSE, subject only to official notice of issuance, and conditionally approved for listing and posting for trading on the TSXV, subject only to the satisfaction by the Company of customary conditions imposed by the TSXV in similar circumstances.

 

(j)                 The several obligations of the Underwriters to purchase Additional Shares hereunder are subject to the delivery to you on the applicable Option Closing Date of the following:

 

 

(i)          a certificate, dated the Option Closing Date and signed by an executive officer of the Company, confirming that the certificate delivered on the Closing Date pursuant to Section 5(b) hereof remains true and correct as of such Option Closing Date;

 

(ii)          an opinion of ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, outside Canadian counsel for the Company (and such counsel may arrange for separate deliveries of opinions of local counsel as described above in Section 5(c)), dated the Option Closing Date, relating to the Additional Shares to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Sections 5(c) and 5(g) hereof;

 

(iii)          an opinion of White & Case LLP, outside U.S. counsel for the Company, dated the Option Closing Date, relating to the Additional Shares to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(d) hereof;

 

(iv)          an opinion of each of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Canadian counsel for the Underwriters, and ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, U.S. counsel for the Underwriters, dated the Option Closing Date, relating to the Additional Shares to be purchased on such Option Closing Date and otherwise to the same effect as the opinion required by Section 5(e) hereof;

 

(v)          a letter dated the Option Closing Date, in form and substance satisfactory to the Underwriters, from PricewaterhouseCoopers LLP, independent public accountants, substantially in the same form and substance as the letter furnished to the Underwriters pursuant to Section 5(f) hereof; provided that the letter delivered on the Option Closing Date shall use a “cut-off date” not earlier than two business days prior to such Option Closing Date;

 

(vi)          an opinion dated the Option Closing Date, in form and substance satisfactory to the Underwriters, from PricewaterhouseCoopers LLP, independent public accountants, substantially in the same form and substance as the letter furnished to the Underwriters pursuant to Section 5(h) hereof; and

 

(vii)          such other documents as you may reasonably request with respect to the good standing of the Company, the due authorization and issuance of the Additional Shares to be sold on such Option Closing Date and other matters related to the issuance of such Additional Shares.

 

(k)               The “lock-up” agreements, each substantially in the form of Exhibit A hereto, between you, the officers and directors of the Company and Pallinghurst relating to sales and certain other dispositions of Common Shares and or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date.

 

 

6.                  Covenants of the Company. The Company covenants with each Underwriter as follows:

 

(a)               To furnish to you upon request, without charge, and for delivery to each other Underwriter a conformed copy of the Registration Statement (without exhibits thereto and documents incorporated by reference therein) and to furnish to you in New York City and Montréal, without charge, prior to 10:00 a.m., New York City time, on the business day next succeeding the date of this Agreement and during the period mentioned in Section 6(f) or 6(g) below, as many copies of the Time of Sale Prospectus, the Prospectuses and any supplements and amendments thereto or to the Registration Statement as you may reasonably request.

 

(b)               Before amending or supplementing the Registration Statement, the Time of Sale Prospectus or the Prospectuses or the Canadian Base Prospectus, to furnish to you a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which you reasonably object in a timely manner, and to file (i) the Canadian Final Prospectus with the Reviewing Authority and each of the other Canadian Securities Commissions in accordance with the Canadian Shelf Procedures not later than the Reviewing Authority’s close of business on the business day following the execution and delivery of this Agreement and (ii) the U.S. Final Prospectus with the Commission within the applicable period specified in General Instruction II.L. of Form F-10 under the Securities Act.

 

(c)               To furnish to you a copy of each proposed free writing prospectus to be prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed free writing prospectus to which you reasonably object in a timely manner, provided that, if in the reasonable opinion of counsel for the Company, any such amendment or supplement shall be required by law or regulation to be used, the Company shall be permitted to file such amendment of supplement after taking into account such comments as you may reasonably make on the content, form or other aspects of such amendment or supplement.

 

(d)               Not to take any action that would result in an Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would not have been required to file thereunder.

 

(e)               If the Time of Sale Prospectus is being used to solicit offers to buy the Shares at a time when U.S. Final Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in the light of the circumstances, not misleading, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration Statement then on file, or if, in the reasonable opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and the Canadian Securities Commissions and furnish, at its own expense, to the Underwriters and to any dealer upon request, either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in the light of the circumstances when the Time of Sale Prospectus is delivered to a prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law.

 

 

(f)                If, during such period after the first date of the public offering of the Shares as in the reasonable opinion of counsel for the Underwriters either of the Prospectuses (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectuses (or one of them) in order to make the statements therein, in the light of the circumstances when the Prospectuses (or one of them) (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, not misleading, or if, in the reasonable opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectuses (or one of them) to comply with applicable law, forthwith to prepare, file with the Commission and the Canadian Securities Commissions and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Shares may have been sold by you on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectuses (or one of them) so that the statements in the Prospectuses as so amended or supplemented will not, in the light of the circumstances when the Prospectuses (or one of them) (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectuses, as amended or supplemented, will comply with applicable law.

 

(g)               To use its commercially reasonable efforts to qualify the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as you reasonably request, provided, however, that the Company shall not be obligated to file any general consent to service of process in any such jurisdiction where it is not presently qualified or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in any jurisdiction in which it is not otherwise so subject.

 

(h)               To make generally available to the Company’s security holders and to you as soon as practicable an earnings statement covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder.

 

 

(i)                 To use its best efforts to have the Shares accepted for listing on the NYSE and the TSXV and to file with such exchanges all documents and notices required by such exchanges of issuers that have securities that are listed on such exchanges.

 

The Company also covenants with each Underwriter that, without the prior written consent of the Representatives on behalf of the Underwriters, which consent shall (i) be at the sole discretion of the Representatives on behalf of the Underwriters and (ii) not be unreasonably withheld, conditioned or delayed, it will not (and will not announce any intention to do so), during the period commencing on the date hereof and ending 90 days after the Closing Date (the “Restricted Period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Shares or such other securities, in cash or otherwise or (3) file any registration statement with the Commission or any prospectus with any Canadian Securities Commission relating to the offering of any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares.

 

The restrictions contained in the preceding paragraph shall not apply to (a) the Shares to be sold hereunder, (b) the Private Placement (as defined herein), (c) the issuance of Common Shares upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof, (d) Common Shares issued or options to purchase Common Shares or other securities granted pursuant to incentive plans of the Company referred to in the Time of Sale Prospectus and the Prospectus, (e) the filing by the Company of one or more registration statements with the Commission on Form S-8 in respect of any shares issued under or the grant of any award pursuant to an incentive plan in effect on the date hereof and described in the Time of Sale Prospectus and the Prospectus, (f) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Common Shares, provided that (i) such plan does not provide for the transfer of Common Shares during the Restricted Period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by the Company regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of Common Shares may be made under such plan during the Restricted Period, (g) the entry into an agreement providing for the issuance by the Company of Common Shares or any security convertible into or exercisable for Common Shares in connection with the acquisition by the Company or any of its subsidiaries of the securities, technology, business, property or other assets of another person or entity or pursuant to an employee benefit plan assumed by the Company in connection with such acquisition, and the issuance of any such securities pursuant to any such agreement, or (h) the entry into an agreement providing for the issuance of Common Shares or any security convertible into or exercisable for Common Shares in connection with joint ventures, commercial relationships, debt financings, charitable contributions or other strategic corporate transactions, and the issuance of any such securities pursuant to any such agreement; provided that in the case of clauses (g) and (h), the aggregate number of Common Shares that the Company may sell or issue or agree to sell or issue pursuant to clauses (g) and (h) shall not exceed 10% of the total number of Common Shares issued and outstanding immediately following the completion of the transactions contemplated by this Agreement; provided further that each recipient of Common Shares or securities convertible into or exercisable or exchangeable for Common Shares pursuant to clauses (g) and (h) shall execute a lock-up agreement substantially in the form of Exhibit A hereto.

 

 

7.                  Expenses. Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company agrees to pay or cause to be paid all expenses incident to the performance of the Company’s obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s counsel, the Company’s accountants in connection with the registration, qualification and delivery of the Shares under the Securities Act and Canadian Securities Laws and all other fees or expenses of the Company in connection with the preparation and filing of the Registration Statement, any preliminary prospectus (including the Canadian Preliminary Prospectus), the Time of Sale Prospectus, the Prospectuses, any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company, any marketing materials and amendments and supplements to any of the foregoing, including all printing costs associated therewith, and the mailing and delivering of copies thereof to the Underwriters and dealers, in the quantities hereinabove specified and the fees, disbursements and expenses of the Company’s accountants, (ii) all costs and expenses related to the transfer and delivery of the Shares to the Underwriters, including any transfer or other taxes payable thereon, (iii) all expenses in connection with the qualification of the Shares for offer and sale under state securities laws as provided in Section 6(g) hereof, including filing fees and the reasonably incurred and documented fees and disbursements of counsel for the Underwriters in connection with such qualification, (iv) all costs and expenses incident to listing the Shares on the NYSE and the TSXV, (v) the cost of printing certificates representing the Shares, (vi) the costs and charges of any transfer agent, registrar or depositary, (vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Shares, including, without limitation, expenses associated with the preparation or dissemination of any electronic road show, expenses associated with the production of road show slides and graphics, the reasonable fees and expenses of any consultants engaged in connection with any road show presentations with the prior written approval of the Company, travel and lodging expenses of the representatives and officers of the Company (excluding the Underwriters and representatives of the Underwriters) and any such consultants, and 50% of the cost of any aircraft chartered in connection with any road show, used on or prior to the date of this Agreement, provided that the Company will only be liable for any cost of any chartered aircraft if it provided express prior consent to the use and charter and cost of such aircraft, (viii) the document production charges and expenses associated with printing this Agreement, and (ix) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. It is understood, however, that except as provided in this Section, Section 9 entitled “Indemnity and Contribution” and the last paragraph of Section 11 below, the Underwriters will pay all of their costs and expenses, including fees and disbursements of their counsel (which for greater certainty shall include the fees and disbursements of the Underwriters’ counsel in connection with this Agreement and the consummation of the transactions contemplated herein), stock transfer taxes payable on resale of any of the Shares by them and any advertising expenses connected with any offers they may make, as well as 50% of the cost of any aircraft chartered in connection with any road show.

 

 

8.                  Covenants of the Underwriters. Each Underwriter severally covenants with the Company not to take any action that would result in the Company being required to file with the Commission under Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of such Underwriter that otherwise would not be required to be filed by the Company thereunder, but for the action of the Underwriter. Each Underwriter, severally and not jointly, agrees that (i) it has not made and will not make use of any materials that would constitute marketing materials relating to the Offering except marketing materials identified in Schedule V or marketing materials prepared in accordance with the terms and conditions hereof, and (ii) it will comply with Canadian securities laws in connection with the distribution of the Shares and the provision of any marketing materials or standard term sheets (as defined in National Instrument 41-101 – General Prospectus Requirements) relating to the distribution of the Shares.

 

9.                  Indemnity and Contribution. (a) The Company agrees to indemnify and hold harmless each Underwriter, each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus (including the Canadian Preliminary Prospectus), the Time of Sale Prospectus or any amendment or supplement thereto, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any marketing materials, any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act, any road show as defined in Rule 433(h) under the Securities Act or broadly available road show (together, a “road show”), or the Prospectuses or any amendment or supplement thereto, caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement of a material fact or omission based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter or on such Underwriter’s behalf through you expressly for use therein.

 

(b)               Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, the directors of the Company, the officers of the Company who sign the Registration Statement and the Canadian Prospectus and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus or any amendment or supplement thereto, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act, any road show or the Prospectuses or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information relating to such Underwriter furnished to the Company in writing by or on behalf of such Underwriter through you expressly for use in the Registration Statement, any preliminary prospectus (including the Canadian Preliminary Prospectus), the Time of Sale Prospectus, any issuer free writing prospectus, marketing materials, road show or the Prospectuses or any amendment or supplement thereto.

 

 

(c)               In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 9(a) or 9(b), such person (the “indemnified party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel chosen by the indemnifying party and reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the reasonably incurred and documented fees and disbursements of such counsel related to such proceeding; provided that the failure to notify the indemnifying party shall not relieve such indemnifying party from any liability that it may have under the preceding paragraphs of this Section 9 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve such indemnifying party from any liability that it may have to an indemnified party otherwise than under the preceding paragraphs of this Section 9. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (i) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Underwriters and all persons, if any, who control any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act or who are affiliates of any Underwriter within the meaning of Rule 405 under the Securities Act and (ii) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Underwriters and such control persons and affiliates of any Underwriters, such firm shall be designated in writing by the Representatives. In the case of any such separate firm for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for reasonably incurred and documented fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (i) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

 

(d)               To the extent the indemnification provided for in Section 9(a) or 9(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand from the offering of the Shares or (ii) if the allocation provided by clause 9(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 9(d)(i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Shares shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Shares (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate Public Offering Price of the Shares. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters’ respective obligations to contribute pursuant to this Section 9 are several in proportion to the respective number of Shares they have purchased hereunder, and not joint.

 

(e)               The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 9(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in Section 9(d) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 9, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 9 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

 

(f)                The indemnity and contribution provisions contained in this Section 9 and the representations, warranties and other statements of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter, any person controlling any Underwriter or any affiliate of any Underwriter, or the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Shares.

 

10.              Termination. The Underwriters may terminate this Agreement by notice given by you to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, the NYSE, the Nasdaq Global Market, the Toronto Stock Exchange or the TSXV, (ii) trading of any securities of the Company shall have been suspended on the NYSE or the TSXV, (iii) a material disruption in securities settlement, payment or clearance services in the United States or Canada shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by U.S. Federal, New York State or Canadian authorities or (v) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets, currency exchange rates or controls or any calamity or crisis that, in your judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in your judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the Shares on the terms and in the manner contemplated in the Time of Sale Prospectus or the Prospectuses.

 

 

11.              Effectiveness; Defaulting Underwriters. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.

 

If, on the Closing Date, or an Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Shares that it has or they have agreed to purchase hereunder on such date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of the Shares to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Shares set forth opposite their respective names in Schedule I bears to the aggregate number of Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as you may specify, to purchase the Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Shares that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 11 by an amount in excess of one-ninth of such number of Shares without the written consent of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Shares and the aggregate number of Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Shares to be purchased on such date, and arrangements satisfactory to you and the Company for the purchase of such Shares are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement, in the Time of Sale Prospectus, in the Prospectuses or in any other documents or arrangements may be effected. If, on an Option Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Additional Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Additional Shares to be purchased on such Option Closing Date, the non-defaulting Underwriters shall have the option to (i) terminate their obligation hereunder to purchase the Additional Shares to be sold on such Option Closing Date or (ii) purchase not less than the number of Additional Shares that such non-defaulting Underwriters would have been obligated to purchase in the absence of such default. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

 

If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, (which, for the purposes of this paragraph, shall not include termination pursuant to Section 10(i), (iii), (iv) or (v)), the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the reasonably incurred fees and disbursements of their counsel) reasonably incurred and documented by such Underwriters in connection with this Agreement or the offering contemplated hereunder.

 

 

12.              Submission to Jurisdiction; Appointment of Agent for Service. (a) The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or United States Federal court sitting in The City of New York over any suit, action or proceeding arising out of or relating to this Agreement, the Prospectus, the Time of Sale Prospectus, the Registration Statement or the offering of the Shares. The Company irrevocably waives, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. To the extent that the Company has or hereafter may acquire any immunity (on the grounds of sovereignty or otherwise) from the jurisdiction of any court or from any legal process with respect to itself or its property, the Company irrevocably waives, to the fullest extent permitted by law, such immunity in respect of any such suit, action or proceeding.

 

(b)               The Company hereby irrevocably appoints C T Corporation System, located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its agent for service of process in any suit, action or proceeding described in the preceding paragraph and agrees that service of process in any such suit, action or proceeding may be made upon it at the office of such agent. The Company waives, to the fullest extent permitted by law, any other requirements of or objections to personal jurisdiction with respect thereto. The Company represents and warrants that such agent has agreed to act as the agent for service of process for the Company, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect for a period of 6 years from the date of this Agreement.

 

13.              Entire Agreement. (a) This Agreement, together with any contemporaneous written agreements and any prior written agreements (to the extent not superseded by this Agreement) that relate to the offering of the Shares, represents the entire agreement between the Company, on the one hand, and the Underwriters, on the other, with respect to the preparation of any preliminary prospectus (including the Canadian Preliminary Prospectus), the Time of Sale Prospectus, the Prospectuses, the conduct of the offering, and the purchase and sale of the Shares.

 

(b)               The Company acknowledges that in connection with the offering of the Shares: (i) the Underwriters have acted at arm’s length, are not agents of, and owe no fiduciary duties to, the Company or any other person, (ii) the Underwriters owe the Company only those duties and obligations set forth in this Agreement and prior written agreements (to the extent not superseded by this Agreement), if any, and (iii) the Underwriters may have interests that differ from those of the Company. The Company waives to the full extent permitted by applicable law any claims it may have against the Underwriters arising from an alleged breach of fiduciary duty in connection with the offering of the Shares.

 

 

 

14.              Recognition of the U.S. Special Resolution Regimes.

 

(a)               In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

 

(b)               In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

 

For purposes of this Section 14, a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. §1841(k). “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

 

15.              Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g. ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

16.              Applicable Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.

 

17.              Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement.

 

 

18.              Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Underwriters could purchase United States dollars with such other currency in The City of New York on the business day preceding that on which final judgment is given. The obligation of the Company with respect to any sum due from it to any Underwriter or any person controlling any Underwriter shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by such Underwriter or controlling person of any sum in such other currency, and only to the extent that such Underwriter or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to such Underwriter or controlling person hereunder, the Company agrees as a separate obligation and notwithstanding any such judgment, to indemnify such Underwriter or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to the Underwriters hereunder, the Underwriters agree to pay to the Company an amount equal to the excess of the dollars purchased over the sum originally due to the Underwriters

 

19.              Notices. All communications hereunder shall be in writing and effective only upon receipt and if to the Underwriters shall be delivered, mailed or sent to you in care of Evercore Group L.L.C., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: General Counsel, Investment Banking; or BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. First Canadian Place, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇; and if to the Company shall be delivered, mailed or sent to ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇▇▇-▇▇▇-▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Legal Officer and Corporate Secretary.

 

20.              Definitions. The terms which follow, when used in this Agreement, shall have the meanings indicated.

 

“Annual Financial Statements” means the Company’s audited annual financial statements as at and for the years ended December 31, 2020 and December 31, 2019, together with the related notes thereto and the independent auditors’ report thereon.

 

“Applicable Laws” means all applicable laws, rules, regulations, policies, statutes, ordinances, codes, orders, consents, decrees, judgments, decisions, rulings, awards, guidelines, or the terms and conditions of any Authorizations, including any judicial or administrative interpretation thereof, of any Governmental Authority, including for certainty with respect to all Environmental Laws.

 

“Authorizations” means any regulatory licenses, approvals, permits, consents, certificates, registrations, filings or other authorizations of or issued by any Governmental Authority under Applicable Laws.

 

“Collaboration Agreement” means the Entente de collaboration et de partage des bénéfices relative au projet ▇▇▇▇▇▇ Matawinie executed on January 23, 2020, between the Company and the Municipalité de Saint-Michel-des-Saints.

 

“Common Shares” means common shares of the Company.

 

 

“Company’s Auditors” means PricewaterhouseCoopers LLP, or such firm of chartered accountants as the Company may have appointed or may from time to time appoint as auditors of the Company.

 

“Contaminant” means and includes, without limitation, any pollutants, contaminants, chemicals, industrial, toxic or hazardous wastes, materials or substances, including an odor, a sound or a vibration, as defined or described as or otherwise determined to be hazardous, radioactive explosive, gaseous, flammable, toxic, corrosive, oxidizing or leachable or a pollutant or a contaminant pursuant to any Environmental Laws, including a mixture thereof.

 

“Debt Instrument” means the Pallinghurst Convertible Bond, the Deed of Hypothec, and any and all other loans, bonds, notes, debentures, indentures, promissory notes, mortgages, guarantees, security agreements or other instruments evidencing indebtedness (demand or otherwise) for borrowed money or other liability to which the Company or its subsidiaries are a party or to which their property or assets are otherwise bound.

 

“Deed of Hypothec” means the deed of hypothec granted by the Company in favor of Pallinghurst, registered at the RDPRM on August 27, 2020, under registration number ▇▇-▇▇▇▇▇▇▇-▇▇▇▇, and at Québec’s Land Registry Office for the registration divisions of Berthier, on August 28, 2020, under registration number 25 639 607, and on September 15, 2020, under registration number 25 681 886, pursuant to which the universality of all movable and immovable property, corporeal and incorporeal, present and future of the Company, are hypothecated, as assigned to Pallinghurst Graphite International Limited pursuant to a deed of assignment dated December 18, 2020, and registered at Québec’s Land Registry Office for the registration divisions of Berthier, on December 21, 2020, under registration number 25 955 924.

 

“Distribution Period” means the period commencing on the date of this Agreement and ending on the date on which all of the Shares have been sold by the Underwriters to the public or the date on which the Underwriters have ceased distributing the Shares.

 

“Documents Incorporated by Reference” means all financial statements, management’s discussion and analysis, management information circulars, annual information forms, material change reports, business acquisition reports, marketing materials or other documents issued by the Company, whether before or after the date of this Agreement, that are required or deemed by applicable Canadian Securities Laws to be incorporated by reference into the Time of Sale Prospectus, the Prospectuses or any Supplementary Material.

 

“Eligible Issuer” means an issuer which meets the criteria and has complied with the requirements of Regulation 44-101 so as to allow it to offer securities using a short form prospectus in the Canadian Qualifying Jurisdictions under Regulation 44-101.

 

“Environmental Activity” means and includes, without limitation, any past, present or contemplated activity, event or circumstance in respect of a Contaminant, including, without limitation, the storage, use, holding, collection, purchase, accumulation, generation, manufacture, processing, treatment, stabilization, disposition, handling or transportation thereof, or the release, escape, leaching, dispersal or migration thereof into the natural environment, including the movement through or in the air, soil, surface water or groundwater.

 

“Environmental Laws” means any and all applicable international, federal, provincial, state or municipal laws, statutes, regulations, treaties, orders, judgments, decrees, ordinances or official directives that apply in whole or in part to the Company or its subsidiaries or its prior or existing operations or properties or assets and all Authorizations relating to the environment, occupational health and safety, or any Environmental Activity.

 

“Financial Statements” means the Annual Financial Statements.

 

“First Nation” means the Indian, Inuit and Métis peoples of Canada; a band as defined pursuant to the Indian Act (RSC 1985, c I-5); any government or council including customary government or council established for the benefit of Indian, Inuit and Métis peoples of Canada; a corporation, trust, partnership or other unincorporated organization belonging to or established for the benefit of the Indian, Inuit or Métis peoples of Canada or in which one or more Indian, Inuit or Métis hold an interest; and also includes a third party acting on its behalf.

 

 

“Governmental Authority” means, without limitation, any national or federal government, any provincial, state, municipal or other political subdivision of any of the foregoing, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation or other entity owned or controlled (through stock or capital ownership or otherwise) by any of the foregoing.

 

“Liens” means any encumbrance or title defect of whatever kind or nature, regardless of form, whether or not registered or registrable and whether or not consensual or arising by law (statutory or otherwise), including any mortgage, lien, charge, pledge or security interest, whether fixed or floating, or any assignment, lease, option, right of pre-emption, privilege, encumbrance, easement, servitude, right of way, restrictive covenant, right of use or any other right or claim of any kind or nature whatever which affects ownership or possession of, or title to, any interest in, or right to use or occupy, property or assets.

 

“Material Adverse Effect” means any change (including a decision to implement a change made by the board of directors or by senior management who believe that confirmation of the decision by the board of directors is probable), event, violation, inaccuracy, circumstance or effect that (i) is materially adverse to the business, assets (including intangible assets), liabilities (contingent or otherwise), capitalization, condition (financial or otherwise), results of operations or prospects of the Company or its subsidiaries, as the case may be, or (ii) would result in any of the Time of Sale Prospectus or Prospectuses containing a misrepresentation.

 

“Material Agreements” means collectively, the Collaboration Agreement, the Pre-Development Agreement, the Offtake and Joint Marketing Agreement, the Pallinghurst Investment Agreement, the Pallinghurst Convertible Bond and any and all other contracts, commitments, agreements (written or oral), instruments, leases or other documents or arrangements to which the Company or its subsidiaries are a party or to which their properties or assets are otherwise bound, and which are material to the Company and its subsidiaries, on a consolidated basis “material change”, “material fact” and “misrepresentation” have the respective meanings ascribed thereto in the Securities Act (Québec).

 

“Material Property” means the property constituting the sole material mineral project owned by the Company, being the Matawinie Graphite Property located in the Saint-Michel-des-Saints area of Québec, approximately 150 kilometers North of Montreal, Québec and includes 319 map-designated cells forming seven (7) mining claims blocks covering 17,585 hectares.

 

“Offtake and Joint Marketing Agreement” means the offtake and joint marketing agreement with Traxys Group for flake graphite concentrate to be produced by the Company at its Saint-Michel-des-Saints demonstration plant.

 

“Option” means an option to acquire one Common Share subject to the conditions established under the Company’s Stock Option Plan adopted by the board of directors of the Company on April 18, 2018.

 

“Outstanding Warrants” means those Common Share purchase warrants of the Company that are issued and outstanding which entitle the holders thereof to acquire Common Shares in accordance with the terms and conditions of the governing certificates or indentures evidencing such warrants.

 

“Pallinghurst” means Pallinghurst Graphite International Limited and its affiliates, including without limitation Pallinghurst Graphite Limited.

 

“Pallinghurst Convertible Bond” means the $15,000,000 convertible bond issued by the Company to Pallinghurst Graphite Limited on August 28, 2020, with a maturity date of August 28, 2023, as assigned to Pallinghurst Graphite International Limited on December 17, 2020.

 

“Pallinghurst Investment Agreement” means amended and restated investment agreement dated August 28, 2020, amending and restating the investment agreement between Pallinghurst and the Company dated April 2, 2019, as assigned to Pallinghurst Graphite International Limited on December 17, 2020.

 

 

“Pallinghurst Rights and Obligations” means the rights granted to Pallinghurst pursuant to the Pallinghurst Investment Agreement, which include: (i) the right to nominate up to three (3) nominees to the board of director, subject to the terms and conditions of the Pallinghurst Investment Agreement; (ii) information and access rights, provided that Pallinghurst retains a minimum ownership of at least 10% of the issued and outstanding Common Shares; (iii) anti-dilution rights over future equity financing in order to maintain its 19.99% ownership of the Common Shares, which continues, subject to certain exceptions, until August 28, 2021; and (iv) a lock-up right, subject to certain exceptions, on the Common Shares held by Pallinghurst until August 28, 2021.

 

“person” shall be broadly interpreted and shall include any individual, corporation, partnership, joint venture, association, trust or other legal entity or any Governmental Authority.

 

“Pre-Development Agreement” means the pre-development agreement dated March 26, 2019 with the Conseil des Atikamekw de Manawan and the Conseil de la Nation Atikamekw outlining the respective rights and interests of all parties thereto with respect to pre-development activities.

 

“Private Placement” means the non-brokered private placement the Company intends to complete with institutional investors shortly following the closing of the offering of the Shares, subject to certain conditions, for up to 25% of the Shares at the Public Offering Price.

 

“Prospectus Amendment” means any amendment to the Time of Sale Prospectus and the Prospectuses (in both the English and French language) required to be prepared and filed by the Company pursuant to Canadian Securities Laws.

 

“Public Disclosure Record” means, collectively, all of the documents which have been filed on ▇▇▇.▇▇▇▇▇.▇▇▇ on or after January 1, 2018 by or on behalf of the Company pursuant to the requirements of Canadian Securities Laws.

 

“RDPRM” means the Register of Personal and Movable Real Rights.

 

“Regulation 43-101” means Regulation 43-101 respecting Standards of Disclosure for Mineral Projects, or the equivalent in the Canadian Qualifying Jurisdictions.

 

“Regulation 44-101” means Regulation 44-101 respecting Short Form Prospectus Distributions, or the equivalent in the Canadian Qualifying Jurisdictions.

 

“Regulation 52-109” means Regulation 52-109 respecting Certification of Disclosure in Issuers’ Annual and Interim Filings, or the equivalent in the Canadian Qualifying Jurisdictions.

 

“Resource Estimate Update” means the updated pit-constrained mineral resource estimate on its Material Property, announced on March 19, 2020.

 

 

“Securities Laws” means collectively and as applicable, Canadian Securities Laws, U.S. Securities Laws and all applicable securities laws, rules, regulations, policies and other instruments promulgated by the Securities Regulators in any of the other Selling Jurisdictions.

 

“Securities Regulators” means, collectively, the securities commissions or other securities regulatory authorities in the Selling Jurisdictions.

 

“Selling Jurisdictions” means, collectively, all of the Canadian Qualifying Jurisdictions, the United States, the United Kingdom, the European Economic Area, the Asia Pacific region, and such other international jurisdictions as mutually agreed to by the Company and the Underwriters, in each case acting reasonably.

 

“Supplementary Material” means, collectively, any Prospectus Amendment, any amendment or supplemental prospectus or ancillary materials (in both the English and French language) that may be filed by or on behalf of the Company under the Canadian Securities Laws relating to the offering of the Shares.

 

“Tax Act” means the Income Tax Act (Canada), as amended, and the regulations made thereunder.

 

“Technical Report” means the technical report titled “NI 43-101 Technical Feasibility Study Report for the Matawinie Graphite Project”, effective as of July 10, 2018 and issued on December 10, 2018.

 

“U.S. Securities Laws” means all applicable securities laws in the United States, including without limitation, the Securities Act, the Exchange Act and the rules and regulations promulgated thereunder, including the rules and policies of the Commission, and any applicable state securities laws.

 

21.              Currency. Unless otherwise specified, all references in this Agreement to “$” refer to Canadian dollars and all references in this Agreement to “US$” refer to United States dollars.

 

[Signature page follows]

 

 

	Very truly yours,
	NOUVEAU MONDE GRAPHITE INC.

 

	By:	(s) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
		Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
		Title:   President and Chief Executive Officer

 

[Signature Page to Underwriting Agreement]

 

 

Accepted as of the date hereof Evercore Group L.L.C. BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.

 

Acting severally on behalf of themselves and the several Underwriters named in Schedule I hereto.

 

By:	EVERCORE GROUP L.L.C
By:	(s) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
	Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
	Title:  Managing Director
By:	BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ INC.
By:	(s) Pierre-▇▇▇▇▇▇▇ ▇▇▇▇▇▇
	Name: Pierre-▇▇▇▇▇▇▇ ▇▇▇▇▇▇
	Title:  Director, Investment & Corporate Banking

 

[Signature Page to Underwriting Agreement]

 

 

SCHEDULE I

 

Underwriter		Number of Firm Shares To Be Purchased
Evercore Group L.L.C.			3,500,000
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.			2,100,000
▇. ▇▇▇▇▇ Securities, Inc.			560,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Canada Inc.			560,000
▇▇▇▇ Capital Partners, LLC			280,000
Total:			7,000,000

 

 

SCHEDULE II

 

Time of Sale Prospectus

 

1.	U.S. Preliminary Prospectus issued June 15, 2021

 

2.	Term sheet containing the terms of the Shares, substantially in the form of Schedule II-A

 

3.	Press release dated June 15, 2021, substantially in the form of Schedule II-B

 

4.	Press release dated June 17, 2021, substantially in the form of Schedule II-C

 

 

SCHEDULE II-A

 

NOUVEAU MONDE GRAPHITE INC.

Public Offering of Common Shares

Final Term Sheet

US$52.5 Million

June 18, 2021

 

 

Issuer:	Nouveau Monde Graphite Inc. (the “Company”).
Description of the Company:	The Company is a Québec-based company incorporated pursuant to the Canada Business Corporations Act whose mission is to become a major producer of advanced graphite materials with a carbon-neutral footprint.
Offering Size:	US$52,500,000 on a firm commitment basis (US$60,375,000 if the Over-Allotment Option is exercised in full).
Offered Shares:	7,000,000 common shares in the share capital of the Company (the “Offered Shares”), plus the common shares issuable upon exercise of the Over-Allotment Option (as defined below).
Offering Price:	US$7.50 per Offered Share (the “Offering Price”).

 

 

Over-Allotment Option:	The Company has granted to the Underwriters an option (the “Over-Allotment Option”), exercisable, in whole or in part, at any time for a period of 30 days from and including the Closing Date, to purchase at the Offering Price up to an additional 1,050,000 common shares representing 15% of the number of Offered Shares purchased pursuant to the offering.
Shares Outstanding:	Upon completion of the offering, an aggregate of 44,115,145 common shares will be issued and outstanding (45,165,145 common shares if the Over-Allotment Option is exercised in full).
Use of Proceeds:	The aggregate net proceeds to the Company from the offering are estimated to be approximately US$48.8 million (US$56.1 million if the Over-Allotment Option is exercised in full) after deducting the Underwriters' fee but before the expenses relating to the offering.   The net proceeds of the Offering are expected to be used towards the development of the Matawinie Mine project and the LiB Anode Plant project, and for general working capital and corporate expense needs.
Listing:	The common shares are listed on the NYSE and the TSXV under the symbols “NMG” and “NOU”, respectively.   The TSX Venture Exchange (“TSXV”) has conditionally approved the listing of the Offered Shares and the common shares to be issued on the exercise of the Over-Allotment Option. In addition, the Company has applied to have the Offered Shares listed on the New York Stock Exchange (“NYSE”). Listing will be subject to the Company fulfilling all the listing requirements of the TSXV and the NYSE.
Eligibility for Investment:	Eligible under the usual statutes and for RRSPs, RRIFs, RESPs, RDSPs and TFSAs.
Underwriting Fee:	7.0% of the gross proceeds of the offering (including the Over-Allotment Option).
Underwriters:	Evercore Group L.L.C. and BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. are acting as joint book-running managers. ▇. ▇▇▇▇▇ Securities, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Canada Inc. are also acting as joint book-running managers. ▇▇▇▇ Capital Partners, LLC is acting as co-manager.

 

 

Closing:	June 23, 2021 (T+3).   Under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended, trades in the secondary market generally are required to settle in two business days unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Offered Shares on the date of pricing will be required, by virtue of the fact that the Offered Shares initially will settle in T+3, to specify an alternative settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers of the Offered Shares who wish to trade the Offered Shares on the date of pricing should consult their own advisors.
Shareholder Participation:	One of the Company’s current shareholders, Pallinghurst Graphite International Limited, has indicated that it and one of its investors collectively intend to purchase 706,666 Offered Shares in the Offering for aggregate gross proceeds to the Company of approximately US$5,300,000.
Private Placement:	Shortly following the closing of the Offering, the Company plans to complete a non-brokered private placement of Common Shares for aggregate proceeds of up to 25% of the aggregate gross proceeds of the Offering, at a price per share which will not be less than the Offering Price for maximum gross proceeds of approximately US$13,125,000, with one of its current shareholders (the “Private Placement”). In addition, the shareholder participating in the Private Placement will have the option to purchase, at the Offering Price, such number of additional Common Shares as is equal to 15% of the initial number of Common Shares under the Private Placement in the event of the full exercise of the Over-Allotment Option under the Offering (or such lesser number of Common Shares as is proportionate to any lesser exercise of the Over-Allotment Option). The Private Placement will be made pursuant to an exemption from Canadian prospectus requirements and the Common Shares issued pursuant thereto will be subject to restrictions on resale for a period of four months and one day from the closing of the Private Placement under applicable Canadian securities legislation. The completion of the contemplated Private Placement will be subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals including the conditional approvals of the TSXV and the NYSE. Closing of the Private Placement and of the Offering are not conditional upon each other.

 

 

SCHEDULE II-B

 

Nouveau Monde Announces Launch of Public Offering of Common Shares in the United States and Canada

 

MONTRÉAL, CANADA, June 15, 2021 – Nouveau Monde Graphite Inc. (“Nouveau Monde” or the “Company”) (NYSE: NMG; TSXV: NOU) today announced the launch of a proposed underwritten public offering (the “Offering”) of 7,000,000 of its common shares (the “Common Shares”). All of the Common Shares to be sold in the Offering will be offered by Nouveau Monde. Nouveau Monde also expects to grant the underwriters a 30-day option to purchase up to an additional 15% of the Common Shares sold pursuant to the Offering (the “Over-Allotment Option”).

 

Evercore ISI and BMO Capital Markets are acting as joint book-running managers for the proposed Offering.

 

The Company is also pleased to announce that, shortly following the closing of the Offering and after preliminary discussions with one of its current shareholders, it plans to complete a non-brokered private placement of a maximum of 1,750,000 Common Shares on the same terms as the Offering (the “Private Placement”). Moreover, the shareholder participating in the Private Placement will have the option to purchase a maximum of 262,500 additional Common Shares in the event of the full exercise of the Over-Allotment Option under the Offering (or such lesser number of Common Shares as is proportionate to any lesser exercise of the Over-Allotment Option) (the “Private Placement Option”). The Private Placement will be made pursuant to an exemption from Canadian prospectus requirements and the Common Shares issued thereto will be subject to restrictions on resale for a period of four months and one day from the closing of the Private Placement under applicable Canadian securities legislation. The Private Placement and the Private Placement Option are expected to close within 45 days following the filing of the final version of the prospectus supplement to the Base Shelf Prospectus (as defined below) prepared in connection with the Offering, and will be subject to the Company receiving all necessary regulatory approvals, including the approval of the TSX Venture Exchange (the “TSXV”) and the New York Stock Exchange (the "NYSE"). Closing of the Private Placement and of the Offering are not conditional upon each other.

 

The Company expects the net proceeds of the Offering and the Private Placement to be used towards the development of the Matawinie mine project and LiB anode plant project and for general working capital and corporate expense needs.

 

 

 

In connection with the Offering, Nouveau Monde filed a preliminary prospectus supplement (the “Preliminary Prospectus Supplement”) to the Company’s existing base shelf prospectus filed in Canada (the “Base Shelf Prospectus”) and the Company's United States registration statement on Form F-10 (the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “SEC”) under the U.S.-Canada multijurisdictional disclosure system (MJDS). The Offering is being made in the United States and in each of the provinces of Canada. The Preliminary Prospectus Supplement, the Base Shelf Prospectus and the Registration Statement contain important information about the Company and the proposed Offering. Prospective investors should read the Preliminary Prospectus Supplement, the Base Shelf Prospectus and the Registration Statement and the documents incorporated by reference therein before making an investment decision. The Preliminary Prospectus Supplement filed in Canada (together with the related Base Shelf Prospectus) is available on SEDAR at ▇▇▇.▇▇▇▇▇.▇▇▇. The Preliminary Prospectus Supplement filed in the United States (together with the Registration Statement) is available on the SEC’s website at ▇▇▇.▇▇▇.▇▇▇. Alternatively, the Preliminary Prospectus Supplement filed in Canada (together with the related Base Shelf Prospectus) and the Preliminary Prospectus Supplement filed in the United States (together with the Registration Statement) may be obtained, when available, upon request from any of the following sources: Evercore Group L.L.C., Attention: Equity Capital Markets, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, by telephone at (▇▇▇) ▇▇▇-▇▇▇▇ or by e-mail at ▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇; or in Canada by contacting BMO Capital Markets, Brampton Distribution Centre C/O The Data Group of Companies, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ by telephone at ▇▇▇-▇▇▇-▇▇▇▇ Ext 4312 or by email at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇, and in the United States by contacting BMO Capital Markets Corp., Attn: Equity Syndicate Department, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or by telephone at (▇▇▇) ▇▇▇-▇▇▇▇ or by email at ▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇.

 

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities, nor will there be any sale of the securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such province, state or jurisdiction. The securities being offered and the contents of this press release have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon by the accuracy or adequacy of the Preliminary Prospectus Supplement, the Base Shelf Prospectus or the Registration Statement.

 

About Nouveau Monde

 

Nouveau Monde is striving to become a key contributor to the sustainable energy revolution. The Company is working towards developing a fully-integrated source of green battery anode material in Québec, Canada. Targeting commercial operations by 2023, the Company is developing advanced carbon-neutral graphite-based material solutions for the growing lithium-ion and fuel cell markets. With low-cost operations and enviable ESG standards, Nouveau Monde aspires to become a strategic supplier to the world’s leading battery and automobile manufacturers, providing high performing and reliable advanced materials while promoting sustainability and supply chain traceability.

 

Media

 

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VP Communications & ESG Strategy

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▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇

 

 

Investors

 

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Director, Investor Relations

▇▇-▇▇▇-▇▇▇-▇▇▇▇

▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇

 

Cautionary Note Regarding Forward-Looking Information

 

All statements, other than statements of historical fact, contained in this press release including, but not limited to, the Offering and the Private Placement, the expected use of proceeds, the receiving of all necessary regulatory approvals, the approval for the listing of the Common Shares to be issued pursuant to the Offering and the Private Placement on the TSXV and the NYSE, as applicable, and those which are discussed under the “About Nouveau Monde” paragraph and elsewhere in this press release which essentially describe the Company’s outlook and objectives, constitute “forward-looking information” or “forward-looking statements” within the meaning of certain securities laws, and are based on expectations, estimates and projections as of the time of this press release. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company as of the time of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. These estimates and assumptions may prove to be incorrect. Moreover, these forward-looking statements are based upon various underlying factors and assumptions, including that the Offering will be completed on favourable terms and that the proceeds from the Offering, if any, will be utilized by Nouveau Monde as currently expected, and are not guarantees of future performance.

 

Forward-looking information and statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward-looking information and statements. Risk factors that could cause actual results or events to differ materially from current expectations include, among others, the conduct of the Offering and the Private Placement, the granting of the Over-Allotment Option, the anticipated use of proceeds from the Offering and the Private Placement, the ability of the Company to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the availability of financing or financing on favourable terms for the Company, the dependence on commodity prices, the impact of inflation on costs, the risks of obtaining the necessary permits, the operating performance of the Company’s assets and businesses, competitive factors in the graphite mining and production industry, changes in laws and regulations affecting the Company’s businesses, political and social acceptability risk, environmental regulation risk, currency and exchange rate risk, technological developments, the impacts of the global COVID-19 pandemic and the governments’ responses thereto, and general economic conditions, as well as earnings, capital expenditure, cash flow and capital structure risks and general business risks. Unpredictable or unknown factors not discussed in this cautionary note could also have material adverse effects on forward-looking statements.

 

Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, actual results to differ materially from those expressed or implied in any forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. The Company disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.

 

No securities regulatory authority nor the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

 

Further information regarding Company is available in the SEDAR database (▇▇▇.▇▇▇▇▇.▇▇▇) and in the SEC’s ▇▇▇▇▇ database (▇▇▇.▇▇▇.▇▇▇).

 

 

SCHEDULE II-C

 

Nouveau Monde Announces Pricing of US$52,500,000 Public Offering of Common Shares in the United States and Canada

 

MONTRÉAL, June 17, 2021 -- Nouveau Monde Graphite Inc. (“Nouveau Monde” or the “Company”) (NYSE: NMG; TSXV: NOU) today announced the pricing of its previously announced underwritten public offering (the “Offering”) of 7,000,000 of its common shares (the “Common Shares”) at a price per share of US$7.50 (the “Offering Price”) for aggregate gross proceeds of US$52,500,000. Nouveau Monde has granted the underwriters a 30-day option to purchase up to an additional 1,050,000 Common Shares at the Offering Price. The Offering is expected to close on Wednesday, June 23, 2021, subject to customary closing conditions.

 

Evercore ISI and BMO Capital Markets are acting as joint book-running managers for the Offering. ▇. ▇▇▇▇▇ Securities and Stifel GMP are also acting as joint book-running managers. ▇▇▇▇ Capital Partners is acting as co-manager for the Offering.

 

One of the Company’s current shareholders, Pallinghurst Graphite International Limited, has indicated that it and one of its investors collectively intend to purchase 706,666 Common Shares in the Offering for aggregate gross proceeds to the Company of approximately US$5,300,000. Further, shortly following the closing of the Offering and after preliminary discussions with one of its other current shareholders, the Company plans to complete a non-brokered private placement of Common Shares for aggregate gross proceeds of up to US$13,125,000, at a price per Common Share which will not be less than the Offering Price (the “Private Placement”). Moreover, the shareholder participating in the Private Placement will have the option to purchase such number of additional Common Shares as is equal to 15% of the initial number of Common Shares under the Private Placement in the event of the full exercise of the Over-Allotment Option under the Offering (or such lesser number of Common Shares as is proportionate to any lesser exercise of the Over-Allotment Option). The Private Placement will be made pursuant to an exemption from Canadian prospectus requirements and the Common Shares issued thereto will be subject to restrictions on resale for a period of four months and one day from the closing of the Private Placement under applicable Canadian securities legislation. Closing of the Private Placement and of the Offering are not conditional upon each other.

 

The Company expects the net proceeds of the Offering and the Private Placement to be used towards the development of the Matawinie mine project and LiB anode plant project and for general working capital and corporate expense needs.

 

 

In connection with the Offering, Nouveau Monde has filed a preliminary prospectus supplement and will file a final prospectus supplement (together, the “Prospectus Supplement”) to the Company’s existing base shelf prospectus filed in Canada (the “Base Shelf Prospectus”) and the Company's United States registration statement on Form F-10 (the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “SEC”) under the U.S.-Canada multijurisdictional disclosure system (MJDS). The Offering is being made in the United States and in each of the provinces of Canada. The Prospectus Supplement, the Base Shelf Prospectus and the Registration Statement contain important information about the Company and the Offering. Prospective investors should read the Prospectus Supplement, the Base Shelf Prospectus and the Registration Statement and the documents incorporated by reference therein before making an investment decision. The Prospectus Supplement when filed in Canada (together with the related Base Shelf Prospectus) will be available on SEDAR at ▇▇▇.▇▇▇▇▇.▇▇▇. The Prospectus Supplement when filed in the United States (together with the Registration Statement) will be available on the SEC’s website at ▇▇▇.▇▇▇.▇▇▇. Alternatively, the Prospectus Supplement filed in Canada (together with the related Base Shelf Prospectus) and the Prospectus Supplement filed in the United States (together with the Registration Statement) may be obtained, when available, upon request from any of the following sources: Evercore Group L.L.C., Attention: Equity Capital Markets, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, by telephone at (▇▇▇) ▇▇▇-▇▇▇▇ or by e-mail at ▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇; or in Canada by contacting BMO Capital Markets, Brampton Distribution Centre C/O The Data Group of Companies, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ by telephone at ▇▇▇-▇▇▇-▇▇▇▇ Ext 4312 or by email at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇, and in the United States by contacting BMO Capital Markets Corp., Attn: Equity Syndicate Department, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or by telephone at (▇▇▇) ▇▇▇-▇▇▇▇ or by email at ▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇.

 

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities, nor will there be any sale of the securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such province, state or jurisdiction. The securities being offered and the contents of this press release have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon by the accuracy or adequacy of the Prospectus Supplement, the Base Shelf Prospectus or the Registration Statement.

 

About Nouveau Monde

 

Nouveau Monde is striving to become a key contributor to the sustainable energy revolution. The Company is working towards developing a fully-integrated source of green battery anode material in Québec, Canada. Targeting commercial operations by 2023, the Company is developing advanced carbon-neutral graphite-based material solutions for the growing lithium-ion and fuel cell markets. With low-cost operations and enviable ESG standards, Nouveau Monde aspires to become a strategic supplier to the world’s leading battery and automobile manufacturers, providing high performing and reliable advanced materials while promoting sustainability and supply chain traceability.

 

Media

 

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VP Communications & ESG Strategy

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Investors

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Cautionary Note Regarding Forward-Looking Information

 

All statements, other than statements of historical fact, contained in this press release including, but not limited to, the Offering and the Private Placement, the expected use of proceeds, the receiving of all necessary regulatory approvals, the approval for the listing of the Common Shares to be issued pursuant to the Offering and the Private Placement on the TSXV and the NYSE, as applicable, and those which are discussed under the “About Nouveau Monde” paragraph and elsewhere in this press release which essentially describe the Company’s outlook and objectives, constitute “forward-looking information” or “forward-looking statements” within the meaning of certain securities laws, and are based on expectations, estimates and projections as of the time of this press release. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company as of the time of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. These estimates and assumptions may prove to be incorrect. Moreover, these forward-looking statements are based upon various underlying factors and assumptions, including that the Offering will be completed on favourable terms and that the proceeds from the Offering, will be utilized by Nouveau Monde as currently expected, and are not guarantees of future performance.

 

Forward-looking information and statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward-looking information and statements. Risk factors that could cause actual results or events to differ materially from current expectations include, among others, the satisfaction of the closing conditions relating to the Offering and the Private Placement, the granting of the Over-Allotment Option, the anticipated use of proceeds from the Offering and the Private Placement, the ability of the Company to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the availability of financing or financing on favourable terms for the Company, the dependence on commodity prices, the impact of inflation on costs, the risks of obtaining the necessary permits, the operating performance of the Company’s assets and businesses, competitive factors in the graphite mining and production industry, changes in laws and regulations affecting the Company’s businesses, political and social acceptability risk, environmental regulation risk, currency and exchange rate risk, technological developments, the impacts of the global COVID-19 pandemic and the governments’ responses thereto, and general economic conditions, as well as earnings, capital expenditure, cash flow and capital structure risks and general business risks.

 

Unpredictable or unknown factors not discussed in this cautionary note could also have material adverse effects on forward-looking statements.

 

Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, actual results to differ materially from those expressed or implied in any forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. The Company disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.

 

 

No securities regulatory authority nor the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

 

Further information regarding Company is available in the SEDAR database (▇▇▇.▇▇▇▇▇.▇▇▇) and in the SEC’s ▇▇▇▇▇ database (▇▇▇.▇▇▇.▇▇▇).

  

 

SCHEDULE IV

 

DETAILS OF OUTSTANDING CONVERTIBLE SECURITIES AND RIGHTS TO
ACQUIRE SECURITIES

 

This is Schedule IV to the Underwriting Agreement dated June 18, 2021 among Nouveau Monde Graphite Inc. and the several Underwriters named in Schedule I thereto.

 

1. Stock Options Outstanding as at June 16, 2021

 

The Company has 2,773,750 Common Shares reserved for issuance pursuant to outstanding Options. The Options are exercisable at prices between $1.85 to $16.84 per Common Share and expire between year 2021 and year 2026.

 

2. Warrants Outstanding as at June 16, 2021

 

The Company has nil Common Shares reserved for issuance pursuant to Outstanding Warrants.

 

3. Pallinghurst Rights and Obligations

 

Pallinghurst has anti-dilution rights over future equity financing in order to maintain its 19.99% ownership of the Common Shares, which continues, subject to certain exceptions, until August 28, 2021.

 

 

SCHEDULE V

 

MARKETING MATERIALS

 

1.

Investor presentation.

 

2.

Term sheet containing the terms of the Shares, substantially in the form of Schedule II-A.

 

 

EXHIBIT A

 

[FORM OF LOCK-UP LETTER]

 

_____________, 2021

 

Evercore Group L.L.C.

BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.

 

c/o Evercore Group L.L.C.

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c/o BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.

First Canadian Place, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.

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Ladies and Gentlemen:

 

The undersigned understands that Evercore Group L.L.C. and BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. (the “Representatives” or “you”) propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Nouveau Monde Graphite Inc., a Canadian corporation (the “Company”), providing for the public offering (the “Public Offering”) by the several Underwriters, including the Representatives (the “Underwriters”), of common shares of the Company (the “Subject Shares”).

 

To induce the Underwriters that may participate in the Public Offering to continue their efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of the Representatives on behalf of the Underwriters, which consent shall not be unreasonably withheld, conditioned or delayed, the undersigned will not (and will not announce any intention to do so), during the period commencing on the date hereof and ending 90 days after the Closing Date (the “Restricted Period”) relating to the Public Offering (the “Prospectus”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Subject Shares beneficially owned (as such term is used in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), by the undersigned or any other securities so owned convertible into or exercisable or exchangeable for Subject Shares, or publicly disclose the intention to do so, or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Subject Shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Subject Shares or such other securities, in cash or otherwise. The foregoing sentence shall not apply to:

 

(a)       transactions relating to Subject Shares or other securities acquired in open market transactions after the completion of the Public Offering, provided that no filing or public announcement under Section 16(a) of the Exchange Act, under any of the securities laws (including rules, regulations, policy statements or other such instruments or rulings) of each of the provinces and territories of Canada (collectively, “Canadian Securities Laws”) or otherwise shall be required or shall be voluntarily made during the Restricted Period in connection with any such subsequent sales of Subject Shares or other securities acquired in such open market transactions;

 

 

(b)       (i) the exercise of stock options or other similar awards granted pursuant to the Company’s equity incentive plans or (ii) the vesting or settlement of awards granted pursuant to the Company’s equity incentive plans (including the delivery and receipt of Subject Shares, other awards or any securities convertible into or exercisable or exchangeable for Subject Shares in connection with such vesting or settlement), provided that the foregoing restrictions shall apply to any of the undersigned’s Subject Shares or any security convertible into or exchangeable for Subject Shares issued or received upon such exercise, vesting or settlement;

 

(c)       transfers of Subject Shares or any security convertible into or exercisable or exchangeable for Subject Shares:

 

(i)       as a bona fide gift or a charitable donation, including as a result of estate or intestate succession, or pursuant to a will or other testamentary document;

 

(ii)        if the undersigned is a natural person, to a member of the immediate family of the undersigned (for purposes of this agreement, “immediate family” shall mean any relationship by blood, marriage, domestic partnership or adoption no more remote than first cousin, and shall include any former spouse);

 

(iii)       if the undersigned is a natural person, to any trust or other like entity for the direct or indirect benefit of the undersigned or the immediate family of the undersigned;

 

(iv)       if the undersigned is a natural person, to a corporation, partnership, limited liability company or other entity of which the undersigned and the immediate family of the undersigned are the direct or indirect legal and beneficial owners of all the outstanding equity securities or similar interests of such corporation, partnership, limited liability company or other entity;

 

(v)       if the undersigned is a corporation, partnership, limited liability company or other entity, to any trust or other like entity for the direct or indirect benefit of the undersigned or any affiliate as defined in Rule 405 promulgated under the Securities Act of 1933, as amended (an “Affiliate”), wholly-owned subsidiary, limited partner, member or stockholder of the undersigned; or

 

(vi)       if the undersigned is a corporation, partnership, limited liability company or other entity, to any Affiliate, wholly-owned subsidiary, limited partner, member or stockholder of the undersigned or to any investment fund or other entity controlled or managed by the undersigned;

 

provided that in each case, such transfer shall not involve a disposition for value;

 

(d)       (A) the establishment or modification of any trading plan that complies with Rule 10b5-1 under the Exchange Act or similar plan under Canadian Securities Laws for the transfer of Subject Shares, provided that (i) such plan or modification does not provide for the transfer of Subject Shares during the Restricted Period and (ii) to the extent a public announcement or filing under the Exchange Act or Canadian Securities Laws, if any, is required of or voluntarily made by or on behalf of the undersigned or the Company regarding the establishment or modification of such plan, such announcement or filing shall include a statement to the effect that no transfer of Subject Shares may be made under such plan during the Restricted Period, and (B) the termination of any trading plan established pursuant to Rule 10b5-1 under the Exchange Act or similar plan under Canadian Securities Laws for the transfer of Subject Shares;

 

 

(e)       the transfer of Subject Shares or any security convertible into or exercisable or exchangeable for Subject Shares to the Company, pursuant to agreements or rights in existence on the date hereof under which the Company has the option to repurchase such shares or a right of first refusal with respect to transfers of such shares, in each case, in connection with the termination of the undersigned’s employment or other service relationship with the Company; provided that any public filing or public announcement under Section 16(a) of the Exchange Act or Canadian Securities Laws, reporting a reduction in beneficial ownership of Subject Shares, or otherwise, required or voluntarily made during the Restricted Period shall clearly indicate in the footnotes thereto or comments section thereof that such transfer was made solely to the Company pursuant to the circumstances described in this clause (e);

 

(f)       the transfer of Subject Shares or any securities convertible into or exercisable or exchangeable for Subject Shares from the undersigned to the Company (or the purchase and cancellation of same by the Company) upon a vesting event of the Company’s securities or upon the exercise of options to purchase Subject Shares by the undersigned, in each case on a “cashless” or “net exercise” basis, or to cover tax withholding obligations of the undersigned in connection with such vesting or exercise; provided that any public filing or public announcement under Section 16(a) of the Exchange Act or Canadian Securities Laws, reporting a reduction in beneficial ownership of Subject Shares, or otherwise, required or voluntarily made during the Restricted Period shall clearly indicate in the footnotes thereto or comments section thereof that such transfer was made pursuant to the circumstances described in this clause (f);

 

(g)       the transfer of Subject Shares or any security convertible into or exercisable or exchangeable for Subject Shares pursuant to a bona fide third party tender offer, merger, amalgamation, consolidation or other similar transaction made to all holders of the Subject Shares involving a Change of Control of the Company, provided that in the event that the tender offer, merger, amalgamation, consolidation or other such transaction is not completed, the Subject Shares owned by the undersigned shall remain subject to the restrictions contained in this agreement;

 

(h)       the exercise of any right with respect to, or the taking of any other action in preparation for, a registration by the Company of Subject Shares or any securities convertible into or exercisable or exchangeable for Subject Shares, provided that no transfer of the undersigned’s Subject Shares proposed to be registered pursuant to the exercise of such rights under this clause (h) shall occur, and no registration statement shall be filed, during the Restricted Period; provided that no public announcement regarding such exercise or taking of such action shall be required or shall be voluntarily made during the Restricted Period; or

 

(i)       any transfer of Subject Shares that occurs by operation of law pursuant to a qualified domestic order in connection with a divorce settlement or other court order; provided that any public filing or public announcement under Section 16(a) of the Exchange Act or Canadian Securities Laws, reporting a reduction in beneficial ownership of Subject Shares, or otherwise, required or voluntarily made during the Restricted Period shall clearly indicate in the footnotes thereto or comments section thereof that such transfer was made pursuant to the circumstances described in this clause (i);

 

provided that in the case of any transfer or distribution pursuant to clause (c) other than a charitable donation, no public filing or public announcement under Section 16(a) of the Exchange Act or Canadian Securities Laws, reporting a reduction in beneficial ownership of Subject Shares, or otherwise, shall be required or shall be voluntarily made during the Restricted Period; and further provided that in the case of any transfer or distribution pursuant to clause (c) or (h), each donee, distributee or transferee, other than a recipient of a charitable donation, shall concurrently with such transfer or distribution sign and deliver a lock-up letter substantially in the form of this letter. For purposes of clause (g) of this paragraph, “Change of Control” shall mean the transfer (whether by tender offer, merger, consolidation or other similar transaction), after the closing of the Public Offering, to a person or group of affiliated persons, of the Company’s voting securities if, after such transfer, such person or group of affiliated persons would hold shares having more than 50% of the voting power of all outstanding voting shares of the Company (or the surviving entity).

 

 

In addition, except as set forth in this agreement, the undersigned agrees that, without the prior written consent of the Representatives on behalf of the Underwriters, it will not, during the Restricted Period, make any demand for or exercise any right with respect to, the registration or qualification for distribution of any Subject Shares or any security convertible into or exercisable or exchangeable for Subject Shares.

 

The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Subject Shares except in compliance with the foregoing restrictions.

 

The undersigned understands that the Company and the Underwriters are relying upon this agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns. This agreement shall automatically terminate, and the undersigned will, in each case, be released from its obligations under this agreement, upon the earliest to occur, if any, of (a) prior to the execution of the Underwriting Agreement, the date that the Company advises the Representatives, in writing, that it does not intend to proceed with the Public Offering or (b) the date of termination of the Underwriting Agreement (if executed) if prior to the closing of the Public Offering.

 

Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriters.

 

	Very truly yours,
	(Name)
	(Address)