META MATERIALS INC. - and - 1315115 BCINC. - and- NANOTECH SECURITY CORP. ARRANGEMENT AGREEMENT August 4, 2021

 

Exhibit 2.2

EXECUTION VERSION

META MATERIALS INC.

- and -

1315115 BCINC.

- and-

NANOTECH SECURITY CORP.

 

 

ARRANGEMENT AGREEMENT

 

 

August 4, 2021

 

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TABLE OF CONTENTS

 

ARTICLE 1 INTERPRETATION		2
1.1	Definitions	2
1.2	Interpretation	15
1.3	Number, Gender and Persons	16
1.4	Date for Any Action	16
1.5	Time References	16
1.6	Currency	16
1.7	Accounting Matters	16
1.8	Knowledge	17
1.9	Schedules	17
ARTICLE 2 THE ARRANGEMENT		17
2.1	Arrangement	17
2.2	Obligations of Nanotech	17
2.3	Interim Order	18
2.4	Nanotech Meeting	19
2.5	Nanotech Circular	20
2.6	Final Order	22
2.7	Court Proceedings	22
2.8	Arrangement and Effective Date	23
2.9	Payment of Consideration	23
2.10	META SEC Filings	24
2.11	Announcements and Consultations	24
2.12	Withholding Taxes	24
2.13	Holders of Convertible Securities	25
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF NANOTECH		26
3.1	Representations and Warranties of Nanotech	26
3.2	Survival of Representations and Warranties	26
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF META AND THE PURCHASER		27
4.1	Representations and Warranties of META and the Purchaser	27
4.2	Survival of Representations and Warranties	27
ARTICLE 5 COVENANTS		27
5.1	Covenants of Nanotech Relating to the Arrangement	27
5.2	Covenants of META and the Purchaser to the Arrangement	29

 

 

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5.3	Covenants of Nanotech Relating to the Conduct of Nanotech Business	31
5.4	Insurance and Indemnification	35
ARTICLE 6 CONDITIONS		37
6.1	Mutual Conditions Precedent	37
6.2	Additional Conditions Precedent in Favour of META and the Purchaser	37
6.3	Additional Conditions Precedent in Favour of META and the Purchaser	38
6.4	Notice and Cure Provisions	39
6.5	Satisfaction of Conditions	40
ARTICLE 7 ADDITIONAL COVENANTS		40
7.1	Covenant Regarding Non-Solicitation	40
7.2	Covenant Regarding Acquisition Proposals	41
7.3	Responding to an Acquisition Proposal	42
7.4	Superior Proposals; Right to Match	43
7.5	Access to Information; Confidentiality; Transition	45
7.6	Other Deliveries	46
ARTICLE 8 TERM, TERMINATION, AMENDMENT AND WAIVER		46
8.1	Term	46
8.2	Termination	46
8.3	Expenses and Termination Payment	48
8.4	Amendment	50
8.5	Waiver	50
ARTICLE 9 GENERAL PROVISIONS AND MISCELLANEOUS		51
9.1	Privacy	51
9.2	Notices	51
9.3	Governing Law	52
9.4	Injunctive Relief	53
9.5	Time of Essence	53
9.6	Entire Agreement, Binding Effect and Assignment	53
9.7	Third Party Beneficiaries	53
9.8	No Liability	54
9.9	Severability	54
9.10	Counterparts, Execution	54
SCHEDULE A PLAN OF ARRANGEMENT		A-1
SCHEDULE B NANOTECH ARRANGEMENT RESOLUTION		B-1
SCHEDULE C REPRESENTATIONS AND WARRANTIES OF NANOTECH		C-1

 

 

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SCHEDULE D REPRESENTATIONS AND WARRANTIES OF META AND THE PURCHASER	D-1
SCHEDULE E SIGNATORIES OF NANOTECH VOTING AGREEMENTS	E-1
SCHEDULE F KEY REGULATORY APPROVALS	F-1

 

 

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1

 

ARRANGEMENT AGREEMENT

ARRANGEMENT AGREEMENT dated August 4, 2021 among META MATERIALS INC., a corporation existing under the laws of Nevada (“META”), 1315115 BC INC., a corporation existing under the laws of the Province of British Columbia (“Purchaser”) and NANOTECH SECURITY CORP., a corporation existing under the laws of the Province of British Columbia (“Nanotech”).

WHEREAS:

A. META, Purchaser and Nanotech wish to complete a transaction pursuant to which, among other things, META will, indirectly through Purchaser, acquire all of the Nanotech Shares in exchange for the Consideration, by way of a statutory plan of arrangement, which is to be completed under the provisions of the BCBCA on and subject to the terms and conditions contained herein;

B. the Nanotech Financial Advisor has advised the Nanotech Board that, as of August 4, 2021, the applicable Consideration to be received by the Nanotech Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Nanotech Shareholders, subject to the assumptions, limitations, qualifications and other matters set forth in the Nanotech Fairness Opinion;

C. the Nanotech Board has determined, upon the recommendation of the Nanotech Special Committee and after having considered financial and legal advice, that the Arrangement is in the best interests of Nanotech and is fair to Nanotech Shareholders and the Nanotech Board has unanimously resolved to recommend that Nanotech Securityholders vote in favour of the Nanotech Arrangement Resolution at the Nanotech Meeting;

D. META has entered into the Nanotech Voting Agreements with the Nanotech Supporting Shareholders, pursuant to which, among other things, such Nanotech Supporting Shareholders agree, subject to the terms and conditions thereof, to vote the Nanotech Shares and any securities convertible, exercisable or exchangeable into Nanotech Shares held by them in favour of the Nanotech Arrangement Resolution;

E. the Parties have entered into this Agreement to provide for the matters referred to in the foregoing recitals and for other matters relating to the Arrangement; and

F. capitalized terms used but not otherwise defined in these recitals have the meanings ascribed to such terms in Section 1.1.

NOW THEREFORE in consideration of the covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties hereto covenant and agree as follows:

 

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ARTICLE 1

INTERPRETATION

1.1 Definitions

In this Agreement, unless the context otherwise requires:

“Acceptable Confidentiality Agreement” has the meaning ascribed thereto in Subsection 7.3(a)(iv);

“affiliate” has the meaning ascribed thereto in the Securities Act;

“Agreement” means this arrangement agreement, including all schedules annexed hereto, together with the Nanotech Disclosure Letter, as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms hereof;

“Alternative Acquisition Agreement” has the meaning ascribed thereto in Subsection 7.2(a)(iv);

“Anti-Money Laundering Laws” means all financial recordkeeping and reporting requirements, the applicable anti-money laundering statutes of all jurisdictions where a Person and/or 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 Entity;

“Arrangement” means the arrangement under Division 5 of Part 9 of the BCBCA on the terms and subject to the conditions set out in the Plan of Arrangement, subject to any amendments or variations thereto made in accordance with this Agreement, Article 6 of the Plan of Arrangement or made at the direction of the Court in the Final Order, with the prior written consent of Nanotech and META, each acting reasonably;

“Authorization” means, with respect to any Person, any order, permit, approval, licence, registration, consent, privilege, award, determination, direction, decision, decree, waiver or similar authorization of any Governmental Entity having jurisdiction over the Person;

“BCBCA” means the Business Corporations Act (British Columbia);

“BC Registrar” means the Registrar of Companies appointed under Section 400 of the BCBCA;

“Business Day” means a day other than a Saturday, a Sunday or any other day on which commercial banking institutions in Toronto, Ontario, Vancouver, British Columbia or New York, New York are authorized or required by applicable Law to be closed;

 

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“Claim” means: (i) any suit, action, proceeding, dispute, investigation, claim, arbitration, order, summons, citation, directive, ticket, charge, demand or prosecution, whether legal or administrative; or (ii) any appeal or application for review; whether at law or in equity or by any Governmental Entity;

“Confidentiality Agreement” means the confidentiality agreement between Nanotech and META dated February 9, 2021;

“Consideration”, for a Nanotech Share, Nanotech Option or Nanotech RSU, means the cash consideration to be received pursuant to the Plan of Arrangement in respect of such security in accordance with Sections 2.2(e), 2.2(b) and 2.2(d), respectively, of the Plan of Arrangement;

“Contract” means any contract, agreement, license, franchise, lease, arrangement, commitment, joint venture, partnership or other right or obligation (written or, to the extent enforceable, oral) to which a Party or any of its subsidiaries is a party or by which it or any of its subsidiaries is bound or to which any of their respective properties or assets is subject;

“Court” means the Supreme Court of British Columbia;

“COVID-19” means the novel coronavirus, SARS-CoV-2 or COVID-19 (and all related strains and sequences), including any intensification, resurgence or any evolutions or mutations thereof, and/or related or associated epidemics, pandemics, disease outbreaks or public health emergencies;

“COVID-19 Measures” means measures undertaken by a Party or its subsidiaries to comply with any quarantine, “shelter in place”, “stay at home”, workforce reduction, social distancing, curfew, shut down, closure, sequester, travel restrictions or any other applicable Law, or any other similar directives, guidelines or recommendations issued by any Governmental Entity in connection with or in response to COVID-19;

“D&O Insurance” has the meaning ascribed thereto in Subsection 5.4(b);

“Debt Instrument” means any bond, debenture, mortgage, promissory note or other instrument evidencing indebtedness for borrowed money;

“Depositary” means AST Trust Company (Canada) or such other person appointed by Nanotech and META (each acting reasonably), for the purpose of, among other things, exchanging certificates representing Nanotech Shares for the applicable Consideration;

“Dissent Rights” means the rights of dissent exercisable by the Nanotech Shareholders under Section 237 to 247 of the BCBCA, as modified by Article 3.1 of the Plan of

 

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Arrangement, the Interim Order and the Final Order, in respect of the Nanotech Arrangement Resolution;

“Dissenting Shareholder” has the meaning ascribed thereto in the Plan of Arrangement;

“DP Laws” means all Laws relating to data protection and privacy which is from time to time applicable to Nanotech in any jurisdiction together with all applicable codes of conduct and practice, guidance and opinions relating to data protection and privacy issued in any relevant jurisdiction by, or with the approval of, any Governmental Entity.

“Effective Date” means the date upon which the Arrangement becomes effective pursuant to Subsection 2.8(a);

“Effective Time” has the meaning ascribed thereto in the Plan of Arrangement;

“Employee Plans” means all benefit or compensation plans, programs, policies, practices, contracts, agreements or other arrangements, covering current or former employees, directors or consultants of Nanotech, including without limitation employment, consulting, deferred compensation, equity, benefit, bonus, incentive, pension, retirement, savings, stock purchase, profit sharing, stock option, stock appreciation, phantom stock, termination, change of control, life insurance, medical, health, welfare, hospital, dental, vision care, drug, sick leave, disability, and similar plans, programmes, arrangements or practices, whether or not in writing and whether or not funded, in each case, which is sponsored, maintained or contributed to by Nanotech, or to which Nanotech is obligated to contribute, or with respect to which Nanotech has any liability, direct or indirect, contingent or otherwise, other than benefit plans established pursuant to statute;

“Encumbrance” means any encumbrance, lien, charge, hypothec, pledge, mortgage, title retention agreement, security interest of any nature, adverse claim, exception, reservation, easement, right of occupation, option, right of pre-emption, privilege or any similar matter capable of registration against title or any Contract to create any of the foregoing;

“Environmental Laws” means all Laws aimed at, or relating to, the reclamation or restoration of properties, occupational health and safety, protection of the environment, abatement of pollution, protection of wildlife, ensuring public safety from environmental hazards and all other Laws relating to (i) the management processing, use, treatment, storage, disposal, discharge, transport or handling of any Hazardous Substances; (ii) plant and animal life, (iii) lands; or (iv) other natural resources;

“Final Order” means the final order of the Court contemplated by Section 2.6 of this Agreement and made pursuant to Section 291 of the BCBCA, in a form acceptable to each of the Parties, acting reasonably, approving the Arrangement, as such order may be affirmed, amended, modified, supplemented or varied by the Court (with the consent of the Parties, each acting reasonably) at any time prior to the Effective Date or, if appealed, then,

 

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unless such appeal is withdrawn or denied, as affirmed, amended, modified, supplemented or varied (provided, however, that any such amendment, modification, supplement or variation is acceptable to the Parties, each acting reasonably) on appeal, unless such appeal is withdrawn, abandoned or denied;

“Former Nanotech Securityholder” means a holder of Nanotech Shares, In-the-Money Options or Nanotech RSUs immediately prior to the Effective Time;

“Governmental Entity” means (i) any multinational, supranational, national, federal, state, provincial, county, territorial, municipal, local or other government, administrative, judicial or regulatory authority, agency, board, body, bureau, commission, instrumentality, court or tribunal or any political subdivision thereof, or any central bank (or similar monetary or regulatory authority) thereof, any taxing authority, any ministry or department or agency of any of the foregoing, (ii) any self-regulatory organization or securities exchange or over-the-counter market, including the TSXV and NASDAQ, (iii) any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government; and (iv) any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of such entities or other bodies pursuant to the foregoing;

“Hazardous Substance” means any waste or other substance that is prohibited, listed, defined, designated or classified as hazardous, radioactive, corrosive, explosive, infectious, carcinogenic, or toxic or a pollutant or a contaminant under or pursuant to, or for which any liability or standard of care is imposed under, any applicable Environmental Laws, including petroleum and all derivatives thereof or synthetic substitutes therefor, hydrogen sulphide, arsenic, cadmium, lead, mercury, polychlorinated biphenyls (“PCBs”), PCB- containing equipment and material, mould, asbestos, asbestos-containing material, urea- formaldehyde, urea-formaldehyde-containing material and any other material or substance that may impair the environment;

“IFRS” means International Financial Reporting Standards;

“In-The-Money Option” means each Nanotech Option that, immediately prior to the Effective Time, has an exercise price per Nanotech Share less than the Nanotech Share Price per Nanotech Share;

“including” means including without limitation, and “include” and “includes” have a corresponding meaning;

“Incentive Plan” means Nanotech’s Employee and Management Share Incentive Plan adopted January 28, 2015, made affective April 8, 2015 and as amended February 20, 2019;

“Indemnified Person” has the meaning ascribed thereto in Subsection 5.4(a);

 

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“Intellectual Property” means domestic and foreign intellectual property rights, whether or not registrable, patentable or otherwise formally protectable, including: (i) inventions (whether patentable or unpatentable and whether or not reduced to practice), patents, applications for patents and reissues, divisions, continuations, renewals, extensions and continuations-in-part of patents or patent applications; (ii) works, copyrights, copyright registrations and applications for copyright registration, including all moral rights or similar rights of authorship or attribution; (iii) mask works, integrated circuit topographies and registrations and applications for registration of same; (iv) designs, design registrations, design registration applications and; (v) trade names, business names, corporate names, domain names, website names and world wide web addresses, common law trade-marks, trade-▇▇▇▇ registrations, trade-▇▇▇▇ applications, trade dress and logos and the goodwill associated with any of the foregoing; (vi) know-how, trade secrets, proprietary information, algorithms, formulae, recipes, systems, compositions, manufacturing and production processes, methods and techniques and related documentation, clinical and testing data, customer and supplier information, and market and survey information; and (vii) social media identities (including accounts, user names and handles);

“Interim Order” means an interim order of the Court contemplated by Section 2.3 of this Agreement and made pursuant to Section 291 of the BCBCA, in a form acceptable to each of the Parties, acting reasonably, providing for, among other things, the calling and holding of the Nanotech Meeting, as the same may be affirmed, amended, modified, supplemented or varied by the Court with the consent of the Parties, each acting reasonably;

“ITA” means the Income Tax Act (Canada), as amended from time to time;

“Key Regulatory Approvals” means those rulings, consents, orders, exemptions, Permits, Authorizations and other approvals of Governmental Entities, necessary to proceed with the transactions contemplated by this Agreement and the Plan of Arrangement, as listed in Schedule F;

“Law” means, with respect to any Person, any and all applicable law (statutory, common, civil or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement, whether domestic or foreign, enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such Person or its business, property or securities, and to the extent that they have the force of law, policies, guidelines, notices and protocols of any Governmental Entity, as amended;

“material change”, “material fact” and “misrepresentation” have the meanings ascribed thereto in the Securities Act;

 

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“Material Contract” means any of the following for Nanotech:

 

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“META” has the meaning ascribed thereto in the recitals above;

“META SEC Filings” means META’s filings with the SEC required under the U.S. Securities Act or the U.S. Exchange Act in connection with the transactions contemplated herein;

“MI 61-101” means Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions;

“Nanotech” has the meaning ascribed thereto in the recitals above;

“Nanotech Acquisition Proposal” means, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry from any Person or group of Persons, acting jointly or in concert, whether or not in writing and whether or not delivered to Nanotech, after the date hereof relating to: (i) any acquisition or purchase, direct or indirect, of: (A) the assets of Nanotech that, individually or in the aggregate, constitute twenty percent (20%) or more of the consolidated assets of Nanotech or which contribute twenty percent (20%) or more of the consolidated revenue of Nanotech (or any lease, long-term supply, hedging arrangement, joint venture, strategic alliance, partnership or other transaction having the same economic effect as an acquisition or purchase of such assets), or (B) beneficial ownership of twenty percent (20%) or more of the issued and outstanding voting or equity securities of Nanotech; (ii) any take-over bid, tender offer or exchange offer that,

 

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if consummated, would result in such Person or group of Persons beneficially owning twenty percent (20%) or more of the issued and outstanding voting or equity securities of any class of voting or equity securities of Nanotech; (iii) any plan of arrangement, merger, amalgamation, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving Nanotech; in all cases, whether in a single transaction or in a series of related transactions; (iv) any direct or indirect sale of assets (or any alliance, joint venture, earn-in right, option to acquire, lease, licence or other arrangement having a similar economic effect as a sale) by Nanotech, which assets represent twenty percent (20%) or more of the consolidated assets of Nanotech, or contribute twenty percent (20%) or more of the consolidated revenue or operating income of Nanotech; or (v) any other similar transaction, the consummation of which prevents, delays, impedes or interferes with, the transactions contemplated by this Agreement;

“Nanotech Annual Financial Statements” means the audited consolidated financial statements of Nanotech as at, and for the years ended September 30, 2019 and September 30, 2020 including the auditor’s report thereon and the notes thereto;

“Nanotech Arrangement Resolution” means the special resolution of the Nanotech Securityholders approving the Plan of Arrangement, which is to be considered at the Nanotech Meeting in the form of Schedule B hereto (unless META agrees in writing to any changes to such form);

“Nanotech Board” means the board of directors of Nanotech as the same is constituted from time to time;

“Nanotech Board Recommendation” has the meaning ascribed thereto in Subsection 2.5(b)(iii);

“Nanotech Business” means the business and affairs of Nanotech as described in the Nanotech Disclosure Documents;

“Nanotech Change in Recommendation” occurs or is made when: (i) the Nanotech Board and/or any committee of the Nanotech Board fails to unanimously make or withdraws, amends, modifies or qualifies, publicly proposes or states its intention, to withdraw, amend, modify or qualify, in a manner adverse to META, the Arrangement or the Nanotech Arrangement Resolution, or fails to publicly reaffirm (without qualification) within five (5) Business Days (and in any case prior to the Nanotech Meeting) after having been requested in writing by META to do so, the Nanotech Board Recommendation; (ii) the Nanotech Board or any committee of the Nanotech Board takes no position or a neutral position with respect to a Nanotech Acquisition Proposal for more than five (5) Business Days after a Nanotech Acquisition Proposal is made or publicly announced; or (iii) the Nanotech Board or any committee of the Nanotech Board resolves or publicly proposes to take any of the foregoing actions;

 

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“Nanotech Circular” means the notice of the Nanotech Meeting and accompanying management information circular, including all schedules, appendices and exhibits thereto and enclosures therewith, to be sent to the Nanotech Securityholders, as required by the Court in the Interim Order, in connection with the Nanotech Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement;

“Nanotech Disclosure Documents” means all information, disclosure, forms, reports, schedules, statements, certifications and other documents, including without limitation all press releases, forms, reports, schedules, financial statements and notes and schedules to such financial statements, management’s discussion and analysis of financial condition and results of operations, certifications, annual information forms, management information circulars, material change reports, business acquisition reports and other documents publicly disclosed or filed by Nanotech with the Securities Authorities since October 1, 2019 and prior to the date hereof and publicly available at ▇▇▇.▇▇▇▇▇.▇▇▇;

“Nanotech Disclosure Letter” means the disclosure letter executed by Nanotech and delivered to META prior to or concurrently with the execution of this Agreement;

“Nanotech Employees” means employees employed by Nanotech;

“Nanotech Fairness Opinion” means the opinion of the Nanotech Financial Advisor to the effect that, as of the date of such opinion, the Consideration to be received by the Nanotech Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Nanotech Shareholders;

“Nanotech Financial Advisor” means Echelon Wealth Partners Inc.;

“Nanotech Financial Statements” means collectively the Nanotech Interim Financial Statements and the Nanotech Annual Financial Statements;

“Nanotech Interim Financial Statements” means the unaudited interim condensed consolidated financial statements of Nanotech as at, and for the three-month and six-month period ended March 31, 2021 and 2020 including the notes thereto, or any subsequent interim financial statement of Nanotech filed on SEDAR prior to the Effective Time;

“Nanotech Material Adverse Effect” means any effect, fact, change, event, occurrence or circumstance that individually or in the aggregate with other such effects, facts, changes, events, occurrences or circumstances is, or would reasonably be expected to be, material and adverse to the business, condition (financial or otherwise), properties, assets (tangible or intangible), liabilities (whether absolute, accrued, conditional or otherwise), capital, operations or results of operations of Nanotech other than any effect, fact, change, event, occurrence or circumstance arising from, relating to or resulting from, as applicable: (i) the global economy, political conditions (including the outbreak of war or any acts of

 

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terrorism), international trade or securities, financial or credit markets in general, natural disasters or other acts of God; (ii) the nanotechnology film and nano-optics industry in general, (iii) any generally applicable change in applicable Law (other than orders, judgments, claims or decrees against Nanotech), including the COVID-19 Measures, or accounting standards or the enforcement or interpretation thereof; (iv) a change in the market trading price or trading volume of Nanotech Shares (it being understood that the underlying cause of any such change may be taken into consideration when determining whether a Nanotech Material Adverse Effect has occurred, unless otherwise excepted under this definition); (v) the announcement of this Agreement, including the impact thereof on the relationships, contractual or otherwise, on Nanotech with customers, suppliers, business partners, regulators, vendors, Governmental Entities or other third Persons; (vi) any action required to be taken or omitted from being taken by Nanotech pursuant to this Agreement or that META has expressly consented to, approved or requested in writing following the date of this Agreement and (vii) any disease outbreaks, pandemics or epidemics or other related condition including COVID-19; provided, however, that (x) in the event that Nanotech is materially and disproportionately affected by an effect described in clause (i), (ii), (iii) or (vii) above relative to other participants in the industries in which Nanotech operates, the extent (and only the extent) of such effect, relative to such other participants, on Nanotech may be taken into account in determining whether there has been a Nanotech Material Adverse Effect; and (y) references in certain sections of this Agreement to dollar amounts are not intended to be, and shall not be deemed to be, illustrative or interpretive for the purposes of determining whether a Nanotech Material Adverse Effect has occurred;

“Nanotech Meeting” means the special meeting of Nanotech Securityholders, including any adjournment or postponement thereof, to be called and held in accordance with the Interim Order to consider the Nanotech Arrangement Resolution, and for any other purpose as may be set out in the Nanotech Circular with the prior consent of META, acting reasonably;

“Nanotech Optionholders” means the holders at the relevant time of Nanotech Options;

“Nanotech Options” means, at any time, options exercisable to acquire Nanotech Shares granted under the Incentive Plan which are, at such time, outstanding, whether or not vested;

“Nanotech Owned Real Property” has the meaning ascribed thereto in Schedule C(jj);

“Nanotech RSU” means an issued and outstanding restricted share unit of Nanotech granted under the Incentive Plan, whether or not vested;

“Nanotech Securityholder Approval” has the meaning ascribed thereto in Subsection 2.3(c);

 

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“Nanotech Securityholders” means Nanotech Shareholders, Nanotech Optionholders and holders of Nanotech RSUs;

“Nanotech Shareholders” means the holders of Nanotech Shares;

“Nanotech Shares” means issued and outstanding common shares in the capital of Nanotech;

“Nanotech Share Price” means $1.25 per Nanotech Share;

“Nanotech Special Committee” means the special committee of independent members of the Nanotech Board formed inter alia to make a recommendation to the Nanotech Board with respect to the transactions contemplated by this Agreement;

“Nanotech Superior Proposal” means any bona fide written Nanotech Acquisition Proposal to acquire not less than all of the outstanding Nanotech Shares or all or substantially all of the assets of Nanotech on a consolidated basis that: (i) complies with Securities Laws and did not result from or involve a breach of Article 7; (ii) in the good faith opinion of the Nanotech Board is reasonably capable of being completed without undue delay, taking into account, all financial, legal, regulatory and other aspects of such proposal and the Person making such proposal; (iii) is not subject, either by the terms of such Nanotech Acquisition Proposal or by virtue of any applicable Law, or rule or requirement of any stock exchange, to any requirement that the approval of the shareholders of the Person making the Nanotech Acquisition Proposal be obtained; (iv) if any consideration is cash, is not subject to any financing contingency or condition; (v) is not subject to any due diligence or access condition (other than an access provision substantially similar to Section 7.5); (vi) does not provide for the payment of any break, termination or other similar fees or expenses to the Person making such proposal in the event that Nanotech completes the Arrangement or any similar other transaction with META or any of its affiliates agreed to prior to any termination of this Agreement; and (vii) that the Nanotech Board determines, in its good faith judgment, after receiving the advice of its outside legal and financial advisors and after taking into account all the terms and conditions of the Nanotech Acquisition Proposal, including all legal, financial, regulatory and other aspects of such Nanotech Acquisition Proposal and the Person making such Nanotech Acquisition Proposal, would, if consummated in accordance with its terms, but without assuming away the risk of non-completion, result in a transaction which is more favourable, from a financial point of view, to the Nanotech Shareholders than the Arrangement (including any amendments to the terms and conditions of the Arrangement proposed by META pursuant to Subsection 7.4(b));

“Nanotech Supporting Shareholders” means the individuals listed in Schedule E hereto;

 

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“Nanotech Voting Agreements” means the voting agreements of even date herewith (including all amendments thereto after the date hereof) between META and the Nanotech Supporting Shareholders setting forth the terms and conditions upon which the Nanotech Supporting Shareholders have agreed, among other things, to vote their Nanotech Shares in favour of the Nanotech Arrangement Resolution;

“NASDAQ” means the NASDAQ Capital Market;

“ordinary course of business”, “ordinary course of business consistent with past practice”, or any similar reference, means, with respect to an action taken by a Person, that such action is consistent with the past practices (in terms of nature, scope and magnitude) of such Person and is taken in the ordinary course of the normal day-to-day business and operations of such Person;

“OTC” means the OTCQX tier of the OTC Markets Group platform;

“Out-of-The-Money Option” means a Nanotech Option that is not an In-The-Money Option;

“Outside Date” means October 31, 2021 or such later date as may be agreed to in writing by the Parties;

“Parties” means, collectively, Nanotech, META and the Purchaser and a “Party” means any one of them;

“Permit” means any license, permit, certificate, consent, order, grant, approval, agreement, classification, restriction, registration or other authorization of, from or required by any Governmental Entity;

“Permitted Encumbrance” means, with respect to Nanotech:

 

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“Person” includes any individual, firm, partnership, limited partnership, limited liability partnership, joint venture, venture capital fund, limited liability company, unlimited liability company, association, trust, trustee, executor, administrator, legal personal representative, estate, body corporate, corporation, company, unincorporated association or organization, Governmental Entity, syndicate or other entity, whether or not having legal status;

“Personal Information” means any information (regardless of form) that relates to an identified or identifiable individual; an identifiable individual is one who can be identified, directly or indirectly, in particular by reference to an identifier, such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person; or any other information about an individual that is defined as “personal data” or “personal information” by applicable Law. Personal Information may include information such as name, street address, telephone number, email address, photograph, date of birth, social security number, driver’s license number or data collected through an automated license plate recognition system, passport number, financial account information, username and password combinations or customer or account number, geolocation information of an individual or device, biometric data, medical or health information, cookie identifiers associated with registration information, or any other

 

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browser- or device-specific number or identifier, and web or mobile browsing or usage information that is linked to the foregoing;

“Plan of Arrangement” means the plan of arrangement of Nanotech, substantially in the form of Schedule A hereto, and any amendments or variations thereto made from time to time in accordance with this Agreement, the Plan of Arrangement or upon the direction of the Court in the Final Order with the consent of the Parties, each acting reasonably;

“Privacy Requirements” means (i) DP Laws; and (ii) to the extent not inconsistent with the foregoing, all of the obligations, restrictions and prohibitions related to protection of privacy and personal data imposed by Nanotech’s policies and contracts;

“Purchaser” has the meaning ascribed thereto in the recitals above;

“Quebec Nanotech Owned Real Property” means the property bearing civic address ▇▇▇ ▇▇▇ ▇▇▇▇, in the City of Thurso, Province of Quebec, and further described in Schedule C(jj);

“Representative” means, collectively, in respect of a Person, its subsidiaries and its affiliates and its and their officers, directors, employees, consultants, advisors, agents or other representatives (including financial, legal or other advisors);

“SEC” means the U.S. Securities and Exchange Commission; “Securities Act” means the Securities Act (British Columbia);

“Securities Authorities” means all securities regulatory authorities, including the applicable securities commission or similar regulatory authorities in each of the provinces and territories of Canada, having jurisdiction over Nanotech, or the TSXV;

“Securities Laws” means the Securities Act, together with all other applicable Canadian provincial securities laws, and the rules and regulations and published policies of the securities authorities thereunder, as now in effect and as they may be promulgated or amended from time to time, and includes the rules and policies of the TSXV that are applicable to Nanotech;

“SEDAR” means the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval;

“subsidiary” has the meaning ascribed thereto in the National Instrument 45-106 –Prospectus Exemptions;

“Superior Proposal Matching Period” has the meaning ascribed thereto in Subsection 7.4(a)(iv);

 

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“Superior Proposal Notice” has the meaning ascribed thereto in Subsection 7.4(a)(iii);

“Tax Returns” means all domestic and foreign federal, state, provincial, territorial, municipal and local returns, reports, declarations, disclosures, elections, notices, filings, forms, statements, information statements and other documents (whether in tangible, electronic or other form) and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto, made, prepared, filed or required to be made, prepared or filed by Law in respect of Taxes;

“Taxes” means any and all domestic and foreign federal, state, provincial, municipal, territorial and local taxes, assessments and other governmental charges, duties, fees, levies, impositions and liabilities imposed by any Governmental Entity (whether payable directly or by withholding and whether or not requiring the filing of a Tax Return), including without limitation pension plan contributions, tax instalment payments, unemployment insurance contributions and employment insurance contributions, disability, severance, social security, workers’ compensation and deductions at source, including taxes based on or measured by gross receipts, income, profits, sales, capital, use, and occupation, and including goods and services, value added, ad valorem, sales, capital gains, capital stock, windfall profits, premium, transfer, franchise, stamp, license, non-resident withholding, customs, payroll, recapture, employment, excise and property duties and taxes, together with all estimated taxes, deficiency assessments, interest, penalties, fines and additions to tax imposed with respect to such amounts, and shall include any liability for such amounts as a result of (i) being a transferee or successor or member of a combined, consolidated, unitary or affiliated group, or (ii) a contractual obligation to indemnify any Person or other entity;

“Termination Payment” means an amount equal to $2,800,000;

“Transaction Personal Information” has the meaning ascribed thereto in Section 9.1; “TSXV” means the TSX Venture Exchange Inc.;

“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder;

“U.S. Securities Act” means the United States Securities Act of 1933, as amended and the rules and regulations promulgated thereunder; and

“United States” means the United States of America.

 

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1.2 Interpretation

For the purposes of this Agreement, except as otherwise expressly provided:

1.3 Number, Gender and Persons

In this Agreement, unless the context otherwise requires, words importing the singular shall include the plural and vice versa, words importing the use of either gender shall include both genders and neuters.

1.4 Date for Any Action

If the date on which any action is required to be taken hereunder by a Party is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day.

 

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1.5 Time References.

Unless otherwise stated, references to time are to local time, Vancouver, British Columbia.

1.6 Currency

Unless otherwise stated, all references in this Agreement to sums of money are expressed in lawful money of Canada and “$” refers to Canadian dollars.

1.7 Accounting Matters

Unless otherwise stated, all accounting terms used in this Agreement in respect of Nanotech shall have the meanings attributable thereto under IFRS and all determinations of an accounting nature in respect of Nanotech required to be made shall be made in a manner consistent with IFRS consistently applied.

1.8 Knowledge

Where any representation or warranty in this Agreement is expressly qualified by reference to the knowledge of Nanotech, it shall be deemed to refer to the actual knowledge, after making reasonable inquiries regarding the relevant subject matter, of any of the Chief Executive Officer and the Chief Financial Officer.

Where any representation or warranty in this Agreement is expressly qualified by reference to the knowledge of META or the Purchaser, it shall be deemed to refer to the actual knowledge, after making reasonable inquiries regarding the relevant subject matter, of any of the Chief Executive Officer and the Chief Financial Officer.

1.9 Schedules

The following Schedules are annexed to this Agreement and are incorporated by reference into this Agreement and form a part hereof:

 

Schedule A	–	Plan of Arrangement
Schedule B	–	Nanotech Arrangement Resolution
Schedule C	–	Representations and Warranties of Nanotech
Schedule D	–	Representations and Warranties of META
Schedule E	–	Signatories of Nanotech Voting Agreements
Schedule F	–	Key Regulatory Approvals

 

 

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ARTICLE 2

THE ARRANGEMENT

2.1 Arrangement

The Parties agree that the Arrangement will be implemented in accordance with and subject to the terms and conditions contained in this Agreement and the Plan of Arrangement, pursuant to which (among other things) each Nanotech Shareholder (other than Nanotech Shareholders who have validly exercised Dissent Rights) shall receive the Consideration provided for in Section 2.2(e) of the Plan of Arrangement for each Nanotech Share held.

2.2 Obligations of Nanotech

Subject to the terms and conditions of this Agreement, Nanotech will take all actions reasonably needed to:

 

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2.3 Interim Order

As soon as reasonably practicable after the date of this Agreement, and in any event no later than August 25, 2021, Nanotech shall apply to the Court in a manner and on terms acceptable to META, acting reasonably, pursuant to Section 291 of the BCBCA and, in cooperation with META, prepare, file and diligently pursue a notice of application for the Interim Order, which shall provide, among other things:

 

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2.4 Nanotech Meeting

Subject to the terms of this Agreement:

 

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2.5 Nanotech Circular

 

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2.6 Final Order

If the Interim Order is obtained and the Nanotech Arrangement Resolution is passed at the Nanotech Meeting in accordance with applicable Law and the Interim Order, then Nanotech shall take all steps necessary or desirable to submit the Arrangement to the Court as soon as practicable (and, in any event, within five (5) Business Days following the Nanotech Meeting) and diligently pursue an application to the Court for the Final Order

 

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pursuant to Section 291 of the BCBCA approving the Arrangement on terms reasonably satisfactory to each of Nanotech and META.

2.7 Court Proceedings

Subject to the terms of this Agreement, Nanotech shall diligently pursue, and Nanotech and META shall cooperate with each other in pursuing, the Interim Order and the Final Order. Nanotech will provide META and its legal counsel with a reasonable opportunity to review and comment upon drafts of all material to be filed with the Court in connection with the Interim Order and the Final Order and shall give reasonable and good faith consideration to any comments of META and its counsel. Nanotech will ensure that all materials filed with the Court in connection with the Arrangement are consistent with this Agreement and the Plan of Arrangement. Subject to applicable Law, Nanotech will not file any material with the Court in connection with the Arrangement or serve any such material, and will not agree to modify or amend materials so filed or served, except in compliance with this Agreement and with META’s prior written consent, such consent not to be unreasonably withheld, conditioned or delayed; provided, however, that nothing herein shall require META to agree or consent to any increase or change in the applicable Consideration or any modification or amendment to such filed or served materials that expands or increases META’s obligations set forth in any such filed or served materials or under this Agreement or the Arrangement. Nanotech shall also provide to META and to META’s legal counsel on a timely basis copies of any response to petition or other Court documents served on Nanotech in respect of the application for the Interim Order or the Final Order or any appeal therefrom and of any notice, whether written or oral, received by Nanotech indicating any intention to oppose the granting of the Interim Order or the Final Order or to appeal the Interim Order or the Final Order. In addition, Nanotech will not object to legal counsel to META making such submissions on the hearing of the motion for the Interim Order and the application for the Final Order as such counsel considers appropriate; provided, however, that Nanotech and its legal counsel are advised of the nature of any submissions a reasonable time prior to the hearing and such submissions are consistent with this Agreement and the Plan of Arrangement. Nanotech will also oppose any proposal from any party other than a Party that the Interim Order or the Final Order contain any provision inconsistent with this Agreement, and, if at any time after the issuance of the Final Order and prior to the Effective Time, Nanotech is required by the terms of the Final Order or by Law to return to Court with respect to the Final Order, it shall do so only after reasonable advance notice to, and in consultation and cooperation with, META. If the Courts in British Columbia are closed due to COVID-19, COVID-19 Measures or other related conditions, then the time to make application to the Court or convene and conduct the Nanotech Meeting in Sections 2.2(d), 2.4 and 2.6, shall be tolled for such period as the Courts are closed plus three (3) Business Days; provided that in no event shall such tolling and three (3) Business Day period extend beyond the Outside Date.

 

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2.8 Arrangement and Effective Date

2.9 Payment of Consideration

As soon as reasonably practicable following receipt by Nanotech of the Final Order and in any event not later than the Business Day prior to the Effective Date, Purchaser shall deposit or cause to be deposited in escrow with the Depositary,

2.10 META SEC Filings

Nanotech shall promptly provide to META all information regarding Nanotech, as required by applicable Law for inclusion in the META SEC Filings, or in any amendments or supplements to such META SEC Filings. Nanotech shall ensure that no such information provided by Nanotech specifically for inclusion in the META SEC Filings will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

 

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2.11 Announcements and Consultations

META and Nanotech shall consult with each other in respect to issuing any press release, preparing any presentations or otherwise making any public statement or in making any filing with any Governmental Entity with respect to this Agreement or the Arrangement, except as otherwise set forth in this Agreement. Each of META and Nanotech shall use all commercially reasonable efforts to enable the other Party to review and comment on all such press releases, presentations, public statements and, except as otherwise set forth in this Agreement, filings prior to the release or filing, respectively, thereof, and neither META nor Nanotech shall release, make or file any press release, presentation or public statements or, except as otherwise set forth in this Agreement, filing without the prior written consent of the other Party (which consent shall not be unreasonably withheld or delayed), provided, however, that the obligations herein shall not prevent a Party from making such disclosure as is required by applicable Law or the rules and policies of any applicable securities exchange, and the Party making such disclosure shall use all commercially reasonable efforts to enable the other Party to review or comment on the disclosure or filing, and if such prior notice is not possible, to give such notice immediately following the making of such disclosure or filing. Reasonable consideration shall be given to any comments made by the other Party and its counsel. For the avoidance of doubt, none of the foregoing shall prevent Nanotech or META from making: (i) internal announcements to employees and having discussions in the ordinary course of business with Nanotech Shareholders or shareholders of META, respectively, financial analysts and other stakeholders so long as such announcements and discussions are consistent in all material respects with the most recent press releases, public disclosures or public statements made by such Party and, in the case of Nanotech, comply with its obligations under Article 7; or (ii) public announcements in the ordinary course of business that do not relate to this Agreement or the Arrangement so long as such announcements and discussions are consistent in all material respects with the most recent press releases, public disclosures or public statements made by such Party.

2.12 Withholding Taxes

The Parties, the Depositary and any Person making any payment on their behalf in connection with the Arrangement shall be entitled to deduct and withhold from any consideration or amount payable or otherwise deliverable to any Person hereunder and from all dividends, interest or other amounts payable to any Person (including, for greater certainty, any Nanotech Shareholder, any holder of Nanotech Options or Nanotech RSUs and any Dissenting Shareholder), such amounts as Nanotech, META, the Purchaser, the Depositary or such Person making any payment on their behalf, as applicable, is required or permitted to deduct and withhold with respect to such payment under the ITA, United States Tax Laws or any other applicable Law or the administrative practice of any Governmental Entity; except when such Person has paid such amount in cash to Nanotech, META, Purchaser, or the Depository, as applicable, to enable such Person to comply with such deduction or withholding requirement. To the extent that such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid;

 

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provided that such withheld amounts are actually remitted to the appropriate Governmental Entity.

2.13 Holders of Convertible Securities

 

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ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF NANOTECH

3.1 Representations and Warranties of Nanotech

Except as disclosed in the Nanotech Disclosure Letter, Nanotech represents and warrants to META and the Purchaser as set forth in Schedule C and acknowledges and agrees that META and the Purchaser are relying upon such representations and warranties in connection with the entering into of this Agreement. Any investigation by META or its Representatives shall not mitigate, diminish or affect the representations and warranties of Nanotech pursuant to this Agreement.

3.2 Survival of Representations and Warranties

The representations and warranties of Nanotech contained in this Agreement shall not survive the completion of the Arrangement and shall expire and be terminated on the earlier of the Effective Time and the date on which this Agreement is terminated in accordance with its terms.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF META AND THE PURCHASER

4.1 Representations and Warranties of META and the Purchaser

META and the Purchaser jointly and severally represent and warrant to Nanotech as set forth in Schedule D and acknowledge and agree that Nanotech is relying upon such representations and warranties in connection with the entering into of this Agreement. Any investigation by Nanotech or its Representatives shall not mitigate, diminish or affect the representations and warranties of META and the Purchaser pursuant to this Agreement.

 

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4.2 Survival of Representations and Warranties

The representations and warranties of META and the Purchaser contained in this Agreement shall not survive the completion of the Arrangement and shall expire and be terminated on the earlier of the Effective Time and the date on which this Agreement is terminated in accordance with its terms.

ARTICLE 5

COVENANTS

5.1 Covenants of Nanotech Relating to the Arrangement

Except such actions as are expressly permitted pursuant to any other term of this Agreement, Nanotech shall perform all obligations required to be performed by Nanotech under this Agreement, co-operate with META in connection therewith, and use its commercially reasonable efforts to do all such other acts and things as may be necessary or desirable in order to consummate and make effective, as soon as reasonably practicable, the Arrangement and the other transactions contemplated in this Agreement and, without limiting the generality of the foregoing, Nanotech shall:

 

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5.2 Covenants of META and the Purchaser to the Arrangement

Except such actions as are expressly permitted pursuant to any other term of this Agreement, META and the Purchaser shall, on a joint and several basis, perform all obligations required to be performed by META and the Purchaser under this Agreement, co-operate with Nanotech in connection therewith, and use their commercially reasonable efforts to do all such other acts and things as may be necessary or desirable in order to consummate and make effective, as soon as reasonably practicable, the Arrangement and the other transactions contemplated in this Agreement and, without limiting the generality of the foregoing, META and the Purchaser shall:

 

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5.3 Covenants of Nanotech Relating to the Conduct of Nanotech Business

 

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5.4 Insurance and Indemnification

 

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ARTICLE 6

CONDITIONS

6.1 Mutual Conditions Precedent

The obligations of the Parties to complete the Arrangement are subject to the fulfillment of each of the following conditions precedent on or before the Effective Time or the waiver thereof by each of Nanotech and META to the extent permitted by applicable Law and without prejudice to their right to rely on the fulfilment of any other of such conditions:

6.2 Additional Conditions Precedent in Favour of META and the Purchaser

The obligation of META and the Purchaser to complete the Arrangement is subject to the fulfillment of each of the following additional conditions precedent on or before the

 

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Effective Time (each of which is for the exclusive benefit of META and the Purchaser and may be waived by META):

The foregoing conditions will be for the sole benefit of META and the Purchaser and may be waived by META in whole or in part at any time in its sole discretion.

 

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6.3 Additional Conditions Precedent in Favour of Nanotech

The obligation of Nanotech to complete the Arrangement is subject to the fulfillment of each of the following additional conditions precedent on or before the Effective Time (each of which is for the exclusive benefit of Nanotech and may be waived by Nanotech):

The foregoing conditions will be for the sole benefit of Nanotech and may be waived by Nanotech in whole or in part at any time in its sole discretion.

6.4 Notice and Cure Provisions

 

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6.5 Satisfaction of Conditions

The conditions precedent set out in Section 6.1, Section 6.2 and Section 6.3 shall be conclusively deemed to have been satisfied, waived or released upon delivery by the Parties of written confirmation of the Effective Date.

 

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ARTICLE 7

ADDITIONALCOVENANS

7.1 Covenant Regarding Non-Solicitation

Nanotech shall, and shall direct and cause its Representatives to immediately, cease and cause to be terminated any solicitation, encouragement, activity, discussion or negotiation with any parties that may be ongoing with respect to a Nanotech Acquisition Proposal whether or not initiated by Nanotech, discontinue access to any parties (other than a Part to this Agreement and its Representatives) to any dataroom that contains information regarding Nanotech, and to the extent Nanotech entered into a confidentiality agreement with any such parties, Nanotech shall request the return of information regarding Nanotech previously provided to such parties or shall request the destruction of all materials including or incorporating any confidential information regarding Nanotech pursuant to any such confidentiality agreement. Nanotech represents and warrants that it has not, and agrees not to, release or permit the release of any Person from, or waive or forbear in the enforcement of, any confidentiality agreement or other similar agreement relating to a potential Nanotech Acquisition Proposal to which such third party is a party. Nanotech further represents and warrants that it has not, and agrees not to, release or permit the release of any Person from, or waive or forbear in the enforcement of, any standstill or similar agreement or obligation to which such third party is a party or by which such third party is bound (it being acknowledged by META and the Purchaser that the automatic termination or release of any standstill restrictions of any such agreements as a result of the entering into and announcement of this Agreement shall not be a violation of this Section 7.1).

7.2 Covenant Regarding Acquisition Proposals

 

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7.3 Responding to an Acquisition Proposal

7.4 Superior Proposals; Right to Match

 

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7.5 Access to Information; Confidentiality; Transition

From the date hereof until the earlier of the Effective Time and the termination of this Agreement pursuant to its terms, subject to compliance with applicable Law and

 

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COVID-19 Measures and the terms of any existing Contracts, solely for the purpose of furthering the consummation of the transactions contemplated by this Agreement (and integration activities related thereto), Nanotech shall, and shall cause its Representatives to, afford to the other Parties and their Representatives reasonable access during normal business hours upon reasonable notice, to the properties, information and records relating to, and the personnel of, Nanotech, including but not limited to, the related facilities, books, contracts, financial statements, forecasts, financial projections (to the extent permitted by confidentiality agreements in force on the date hereof), studies, records, operating Permits, and any other documentation (whether in writing or stored in computerized, electronic, disk, tape, microfilm or any other form); provided, however, that such access does not unduly interfere with the ordinary course of business of Nanotech. Nanotech shall, and shall cause its Representatives to work cooperatively and in good faith to ensure an orderly transition following the Effective Time, including with respect to transitional planning, transitional services, and the retention of personnel (and any related arrangements thereto). From the date hereof until the earlier of the Effective Time and the termination of this Agreement pursuant to its terms, Nanotech will maintain the access of the other Parties and its Representatives to the information contained as at the date of this Agreement in any dataroom that contains information regarding Nanotech to which the other Parties and its Representatives have access as at the date of this Agreement.

7.6 Other Deliveries

Concurrent with the execution and delivery of this Agreement, Nanotech shall deliver to META all of the Nanotech Voting Agreements.

ARTICLE 8

TERM, TERMINATION, AMENDMENT AND WAIVER

8.1 Term

This Agreement shall be effective from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with its terms.

8.2 Termination

(A) the Effective Time shall not have occurred on or before the Outside Date; provided that the right to terminate this Agreement under this Subsection

 

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8.2(a)(ii)(A) shall not be available to any Party whose failure to fulfill any of its obligations or whose breach of any of its covenants, representations and warranties under this Agreement has been the cause of, or resulted in, the failure of the Effective Time to occur on or before the Outside Date; and provided further, that if completion of the Arrangement is delayed by (i) an injunction or order made by a Governmental Entity of competent jurisdiction, or (ii) META or Nanotech not having obtained any Key Regulatory Approval or the Interim Order or the Final Order which is necessary to permit the completion of the Arrangement such that the conditions set forth in Subsection 6.1(a), 6.1(c) or 6.1(f) shall not have been satisfied or waived then; provided that such injunction or order is being contested or appealed by the Parties or such regulatory waiver, consent or approval or the Interim Order or the Final Order is being actively sought by the Parties, as applicable, the Outside Date shall automatically be extended for a one-time, additional period of thirty (30) days;

(B) any Governmental Entity of competent jurisdiction shall have issued an order, decree or ruling or there shall be enacted or made any applicable Law that makes consummation of the Arrangement illegal or otherwise prohibited or otherwise restrains, enjoins or prohibits Nanotech or META or the Purchaser from consummating the Arrangement (unless such order, decree, ruling or applicable Law has been withdrawn, reversed or otherwise made inapplicable) and such order, decree, ruling or applicable Law or enjoinment shall have become final and non-appealable; provided the Party seeking to terminate this Agreement pursuant to this Subsection 8.2(a)(ii)(B) has used its commercially reasonable efforts to, as applicable, prevent, withdraw, reverse, appeal, overturn or otherwise have rendered non-applicable in respect of the Arrangement, such order, decree, ruling or applicable Law and provided further that the issuance of such order, decree or ruling or the enactment or making of such Law was not primarily due to such Party’s breach of any of its covenants or obligations under this Agreement, such order, decree ruling or applicable Law; and

(C) the Nanotech Securityholder Approval shall not have been obtained at the Nanotech Meeting in accordance with applicable Law and the Interim Order.

(A) there shall have occurred a Nanotech Change in Recommendation;

(B) subject to Section 6.4, Nanotech is in default of a covenant or obligation hereunder (other than the covenants and obligations set forth in Section 7.1 and Section 7.2, as to which Subsection 8.2(a)(iii)(C) shall apply) such that the condition contained in Subsection 6.2(a) is not satisfied or is incapable of satisfaction, or any representation or warranty of Nanotech under this

 

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Agreement is untrue or incorrect or shall have become untrue or incorrect such that the condition contained in Subsection 6.2(b) would be incapable of satisfaction; provided that META and the Purchaser are not then in breach of this Agreement so as to cause any of the conditions set forth in Section 6.1 or Section 6.3 not to be satisfied; or

(C) Nanotech shall have breached or failed to perform any of its obligations set forth in Section 7.1 through Section 7.4;

(A) prior to obtaining the Nanotech Securityholder Approval, the Nanotech Board authorizes Nanotech to accept a Nanotech Superior Proposal and Nanotech shall simultaneously with such termination enter into a definitive Alternative Acquisition Agreement associated therewith; provided that Nanotech has (1) otherwise complied with its obligations set forth in Section 7.1 through Section 7.4 and (2) paid, or caused to be paid, any amounts due pursuant to Subsection 8.3(b); or

(B) subject to Section 6.4, META or the Purchaser is in default of a covenant or obligation hereunder such that the condition contained in Subsection 6.3(a) is not satisfied or is incapable of satisfaction, or any representation or warranty of META or the Purchaser under this Agreement is untrue or incorrect or shall have become untrue or incorrect such that the condition contained in Subsection 6.3(b) would be incapable of satisfaction; provided that Nanotech is not then in breach of this Agreement so as to cause any of the conditions set forth in Section 6.1 or Section 6.2 not to be satisfied.

 

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8.3 Expenses and Termination Payment

The Termination Payment shall be made, or caused to be made, by Nanotech by wire transfer of same-day funds, to an account designated by META, (x) in the event that this Agreement is terminated pursuant to Subsection 8.2(a)(iv)(A), simultaneously with, and as a condition to the effectiveness of, such termination, (y) in the event that this Agreement is terminated pursuant to Subsection 8.2(a)(iii)(A) or Subsection 8.2(a)(iii)(C), as soon as practicable, and in any event within two (2) Business Days of the date on which this Agreement is terminated, and (z) in the event that the Termination Payment is payable pursuant to Subsection 8.3(b)(ii), on the earliest to occur of the events referred to in clause (B) of that Subsection 8.3(b)(ii).

META and the Purchaser hereby acknowledge that the Termination Payment to which META may become entitled to is a payment of liquidated damages which is a genuine pre-estimate of the damages which META and the Purchaser will suffer or incur as a result of the event giving rise to such damages and the resultant non- completion of the Arrangement and the transactions contemplated by this Agreement and is not a penalty. Nanotech hereby irrevocably waives any right it may have to raise as a defence that any such liquidated damages are excessive or punitive. META and the Purchaser hereby acknowledge that the

 

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Termination Payment in the manner provided in this Section 8.3 is the sole and exclusive monetary remedy of META and the Purchaser in respect of the events giving rise to such payment and the termination of this Agreement. Upon receipt by META of the Termination Payment, neither META nor the Purchaser shall have any further Claim against Nanotech at law or in equity or otherwise (including injunctive relief to restrain any breach or threatened breach by Nanotech of any of its obligations hereunder or otherwise to obtain specific performance).

8.4 Amendment

Subject to the provisions of the Interim Order, the Final Order and applicable Law, this Agreement and the Plan of Arrangement may, at any time and from time to time prior to the Effective Time, be amended only by mutual written agreement of META and Nanotech, and any such amendment may without limitation:

Notwithstanding the foregoing, after the Nanotech Securityholder Approval has been obtained, no amendment shall be made that pursuant to applicable Law requires approval or adoption by the Nanotech Shareholders or the Nanotech Securityholders without such further approval or adoption.

8.5 Waiver

Any Party may (a) extend the time for the performance of any of the obligations or acts of another Party, (b) waive compliance, except as provided herein, with any of another Party’s agreements or the fulfilment of any conditions to its own obligations contained herein, or (c) waive inaccuracies in any of an other Party’s representations or warranties contained herein or in any document delivered by the other Party, in each case only to the extent such obligations, agreements and conditions are intended for its benefit. Notwithstanding the foregoing, after the Nanotech Securityholder Approval has been obtained, no waiver shall be made that pursuant to applicable Law requires approval or adoption by the Nanotech Shareholders or Nanotech Securityholders without such approval or adoption. No extension or waiver shall be valid unless set forth in an instrument in writing signed on

 

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behalf of the waiving Party and, unless otherwise provided in the written waiver, will be limited to the specific breach or condition waived and shall not extend to any other matter or occurrence. No failure or delay in exercising any right, power or privilege under this Agreement will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege under this Agreement.

ARTICLE 9

GENERAL PROVISIONS AND MISCELLANEOUS

9.1 Privacy

Each Party shall comply with applicable privacy Laws in the course of collecting, using and disclosing Personal Information in connection with the transactions contemplated hereby (the “Transaction Personal Information”). No Party shall disclose Transaction Personal Information originally collected by any other Party to any Person other than to its advisors who are evaluating and advising on the transactions contemplated by this Agreement.

The Parties shall protect and safeguard the Transaction Personal Information against unauthorized collection, use or disclosure. META and Nanotech shall cause their respective advisors to observe the terms of this Section 9.1 and to protect and safeguard all Transaction Personal Information in their possession. If this Agreement shall be terminated, each Party shall promptly deliver to the other Party all Transaction Personal Information originally collected by such other Party in its possession or in the possession of any of its advisors, including all copies, reproductions, summaries or extracts thereof, except, unless prohibited by applicable Law, for electronic backup copies made automatically in accordance with the usual backup procedures of the Party returning such Transaction Personal Information.

9.2 Notices

All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed to have been duly given and received on the day it is delivered; provided, however, that it is delivered on a Business Day prior to 4:30 p.m. local time in the place of delivery or receipt. However, if notice is delivered after 4:30 p.m. local time or if such day is not a Business Day then the notice shall be deemed to have been given and received on the next Business Day. Notice shall be sufficiently given if delivered (either in person, by courier service or other personal method of delivery), or if transmitted

 

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by email to the Parties at the following addresses (or at such other addresses as shall be specified by any Party by notice to the other given in accordance with these provisions):

c/o Meta Materials Inc.

▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇

▇▇▇ ▇▇▇

Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇

Email: ▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

with a copy (that shall not constitute notice) to:

Fasken ▇▇▇▇▇▇▇▇▇ DuMoulin LLP

▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇

Attention: ▇▇▇▇ ▇▇▇▇▇▇▇

Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇

and

▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PC ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇ ▇▇▇▇▇

▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇

Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

Email: ▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇

▇▇▇ - ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇

▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇

Attention: ▇▇▇▇ ▇▇▇▇▇▇▇

Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇

 

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55

 

with a copy (that shall not constitute notice) to:

▇▇▇▇▇▇ ▇▇▇▇▇▇ Gervais LLP

1200 Waterfront Centre

▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇

Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇

Email: ▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇

9.3 Governing Law

This Agreement shall be governed, including as to validity, interpretation and effect, by the Laws of the Province of British Columbia and the Laws of Canada applicable therein, without giving effect to any principles of conflict of Laws thereof which would result in the application of the Laws of any other jurisdiction. Each of the Parties hereby irrevocably attorns to the exclusive jurisdiction of the courts of the Province of British Columbia in respect of all matters arising under and in relation to this Agreement and the Arrangement. Notwithstanding the foregoing, any provisions of this Agreement with respect to US Securities Laws shall be governed by applicable US Laws, and any provisions with respect to the corporate governance, existence, good standing and authority of META shall be governed by NRS.

9.4 Injunctive Relief

Subject to Subsection 8.3(b), the Parties acknowledge and agree that irreparable harm would occur for which money damages would not be an adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the Parties agree that, in the event of any breach or threatened breach of this Agreement by a Party, the non-breaching Party will be entitled, without the requirement of posting a bond or other security, to seek equitable relief, including injunctive relief and specific performance, and the Parties shall not object to the granting of injunctive or other equitable relief on the basis that there exists an adequate remedy at law. Subject to Subsection 8.3(b), such remedies will not be the exclusive remedies for any breach of this Agreement but will be in addition to all other remedies available at law or equity to each of the Parties.

9.5 Time of Essence

Time shall be of the essence in this Agreement.

 

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56

 

9.6 Entire Agreement, Binding Effect and Assignment

This Agreement (including the exhibits and schedules hereto and the Nanotech Disclosure Letter and the other agreements, documents and certificates delivered pursuant to this Agreement), the Nanotech Voting Agreements, and the Confidentiality Agreement constitute the entire agreement, and supersede all other prior agreements and understandings, both written and oral, among the Parties, or any of them, with respect to the subject matter hereof and thereof and, except as expressly provided herein, this Agreement is not intended to and shall not confer upon any Person other than the Parties any rights or remedies hereunder. This Agreement shall enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any of the Parties without the prior written consent of the other Parties.

9.7 Third Party Beneficiaries

9.8 No Liability

No director or officer of META or the Purchaser shall have any personal liability whatsoever to Nanotech under this Agreement, or any other document delivered in connection with the transactions contemplated hereby on behalf of META or the Purchaser. No director or officer of Nanotech shall have any personal liability whatsoever to META or the Purchaser under this Agreement, or any other document delivered in connection with the transactions contemplated hereby on behalf of Nanotech.

 

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57

 

9.9 Severability

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

9.10 Counterparts, Execution

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. The Parties shall be entitled to rely upon delivery of an executed facsimile or similar executed electronic copy of this Agreement, and such facsimile or similar executed electronic copy shall be legally effective to create a valid and binding agreement among the Parties.

 

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58

 

IN WITNESS WHEREOF the Parties have executed this Arrangement Agreement as of the date first written above by their respective officers thereunto duly authorized.

 

META MATERIALS INC.
By:
	Name:	▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
	Title:	President & CEO

 

1315115 BC INC.
By:
	Name:	▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
	Title:	President & CEO

 

NANOTECH SECURITY CORP.
By:
	Name:
	Title:

 

Arrangement Agreement Signature Page - Project Beyond

 

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59

 

IN WITNESS WHEREOF the Parties have executed this Arrangement Agreement as of the date first written above by their respective officers thereunto duly authorized.

 

META MATERIALS INC.
By:
	Name:
	Title:

 

1315115 BC INC.
By:
	Name:
	Title:

 

NANOTECH SECURITYCORP.
By:
	Name:	▇▇▇▇ ▇▇▇▇▇▇▇
	Title:	President & CEO

 

123000939:v10

 

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SCHEDULE A

PLAN OF ARRANGEMENT

A-1

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PLAN OF ARRANGEMENT

ARTICLE 1

INTERPRETATION

1.1 Definitions

In this Plan of Arrangement:

“affiliate” has the meaning ascribed thereto in the Securities Act (British Columbia), as amended.

“Arrangement” means the arrangement under Division 5 of Part 9 of the BCBCA on the terms and subject to the conditions set out in this Plan of Arrangement, subject to any amendments or variations hereto made in accordance with the Arrangement Agreement, Article 5 of the Plan of Arrangement or made at the direction of the Court in the Final Order, with the prior written consent of Nanotech, META and Purchaser, each acting reasonably.

“Arrangement Agreement” means the arrangement agreement made as of August 4, 2021 among META, Purchaser and Nanotech, as amended, supplemented and/or restated in accordance with its terms.

“BCBCA” means the Business Corporations Act (British Columbia) and the regulations made thereunder, as now in effect and as they may be promulgated or amended from time to time.

“Business Day” means a day other than a Saturday, a Sunday or any other day on which commercial banking institutions in Toronto, Ontario, Vancouver, British Columbia or New York, New York are authorized or required by applicable Law to be closed.

“Consideration”, for a Nanotech Share, Nanotech Option or Nanotech RSU, means the cash consideration to be received pursuant to the Plan of Arrangement in respect of such security in accordance with Sections 2.2(b), 2.2(d) and 2.2(e), respectively.

“Court” means the Supreme Court of British Columbia.

“Depositary” means AST Trust Company (Canada) or such other person appointed by Nanotech and META, each acting reasonably, for the purpose of, among other things, exchanging certificates representing Nanotech Shares for the Consideration.

“Dissent Rights” has the meaning set out in Section 3.1.

“Dissenting Shareholder” means a registered holder of Nanotech Shares that has duly and

 

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-3-

 

validly exercised Dissent Rights in strict compliance with the dissent procedures set out under Division 2 of Part 8 of the BCBCA, as modified by Section 3.1 of this Plan of Arrangement, the Interim Order and the Final Order and who has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights and who is ultimately entitled to be paid the fair value of such holder’s Nanotech Shares as determined in accordance with Section 3.1.

“Effective Date” means the date upon which the Arrangement becomes effective pursuant to the Arrangement Agreement.

“Effective Time” means 12:01 a.m. (Vancouver time) on the Effective Date or such other time as META, Purchaser and Nanotech may agree upon in writing.

“Encumbrance” has the meaning set out in the Arrangement Agreement.

“Final Order” means the final order of the Court pursuant to Section 291 of the BCBCA, in a form acceptable to META, Purchaser and Nanotech, each acting reasonably, approving the Arrangement after a hearing upon the procedural and substantive fairness of the terms and conditions of the Arrangement, as such order may be affirmed, amended, modified, supplemented or varied by the Court (with the consent of META, Purchaser and Nanotech, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed, amended, modified, supplemented or varied (provided, however, that any such amendment, modification, supplement or variation is acceptable to META, Purchaser and Nanotech, each acting reasonably) on appeal, unless such appeal is withdrawn, abandoned or denied.

“Former Nanotech Securityholder” means a holder of Nanotech Shares, In-the-Money Options or Nanotech RSUs immediately prior to the Effective Time.

“Governmental Entity” means (i) any multinational, supranational, national, federal, state, provincial, county, territorial, municipal, local or other government, administrative, judicial or regulatory authority, agency, board, body, bureau, commission, instrumentality, court or tribunal or any political subdivision thereof, or any central bank (or similar monetary or regulatory authority) thereof, any taxing authority, any ministry or department or agency of any of the foregoing, (ii) any self-regulatory organization or stock exchange, including the TSXV and NASDAQ, (iii) any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government; and (iv) any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of such entities or other bodies pursuant to the foregoing.

“holder” means the holder of Nanotech Shares, Nanotech Options or Nanotech RSUs shown from time to time in the central securities register maintained by or on behalf of Nanotech in respect of such securities, as the context requires.

 

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-4-

 

“Incentive Plan” means Nanotech’s Employee and Management Share Incentive Plan adopted January 28, 2015, made effective April 8, 2015 and as amended February 20, 2019.

“including” means “including without limitation” and “includes” means “includes without limitation”.

“Interim Order” means an interim order of the Court made pursuant to Section 291 of the BCBCA, in a form acceptable to each of Nanotech, META and Purchaser, acting reasonably, providing for, among other things, the calling and holding of the Nanotech Meeting, as the same may be affirmed, amended, modified, supplemented or varied by the Court with the consent of Nanotech, META and Purchaser, each acting reasonably.

“In-The-Money Option” means each Nanotech Option that, immediately prior to the Effective Time, has an exercise price per Nanotech Share less than the Nanotech Share Price per Nanotech Share.

“ITA” means the Income Tax Act (Canada), as amended.

“Law” means, with respect to any person, any and all applicable law (statutory, common, civil or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement, whether domestic or foreign, enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such person or its business, undertaking, property or securities, and to the extent that they have the force of law, policies, guidelines, notices and protocols of any Governmental Entity, as amended.

“Letter of Transmittal” means the letter of transmittal for use by holders of Nanotech Shares or other securities of Nanotech, in the form accompanying the Nanotech Circular.

“META” means Meta Materials Inc., a corporation governed under the laws of Nevada. “Nanotech” means Nanotech Security Corp., a corporation governed under the BCBCA.

“Nanotech Arrangement Resolution” means the special resolution of Nanotech Shareholders, Nanotech Optionholders and holders of Nanotech RSUs approving the Arrangement and this Plan of Arrangement to be considered at the Nanotech Meeting.

“Nanotech Circular” means the notice of the Nanotech Meeting and accompanying management proxy circular, including all schedules, appendices and exhibits thereto and enclosures therewith, sent to the Nanotech Securityholders, as required by the Court in the Interim Order, in connection with the Nanotech Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of the Arrangement Agreement.

 

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-5-

 

“Nanotech Meeting” means the special meeting of Nanotech Securityholders, including any adjournment or postponement thereof, to be called and held in accordance with the Interim Order to consider the Nanotech Arrangement Resolution, and for any other purpose as may be set out in the Nanotech Circular with the prior consent of META, acting reasonably.

“Nanotech Optionholders” means the holders at the relevant time of Nanotech Options.

“Nanotech Options” means, at any time, options exercisable to acquire Nanotech Shares granted under the Incentive Plan which are, at such time, outstanding, whether or not vested.

“Nanotech RSU” means a restricted share unit of Nanotech granted under the Incentive Plan which are, at the relevant time, outstanding, whether or not vested.

“Nanotech Securityholders” means Nanotech Shareholders, Nanotech Optionholders and holders of Nanotech RSUs.

“Nanotech Shareholders” means the holders of Nanotech Shares.

“Nanotech Shares” means, at any particular time, the issued and outstanding common shares in the capital of Nanotech at that time.

“Nanotech Share Price” means $1.25 per Nanotech Share. “NASDAQ” means the NASDAQ Capital Market.

“Out-of-The-Money Option” means a Nanotech Option that is not an In-The-Money Option.

“person” includes any individual, firm, partnership, limited partnership, limited liability partnership, joint venture, venture capital fund, limited liability company, unlimited liability company, association, trust, trustee, executor, administrator, legal personal representative, estate, body corporate, corporation, company, unincorporated association or organization, Governmental Entity, syndicate or other entity, whether or not having legal status.

“Plan of Arrangement” means this plan of arrangement, and any amendments or variations thereto made from time to time in accordance with the Arrangement Agreement, the plan of arrangement or upon the direction of the Court in the Final Order with the consent of META, Purchaser and Nanotech, each acting reasonably.

“Purchaser” means 1315115 BC Inc., a corporation existing under the laws of British Columbia.

 

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-6-

 

“TSXV” means the TSX Venture Exchange Inc.

1.2 Headings and References

The division of this Plan of Arrangement into Articles and Sections and the insertion of headings are for convenience of reference only and do not affect the construction or interpretation of this Plan of Arrangement. Unless otherwise specified, references to Articles or Sections are to Articles and Sections, respectively, of this Plan of Arrangement.

1.3 Currency

Except as expressly indicated otherwise, all sums of money referred to in this Plan of Arrangement are expressed and shall be payable in lawful money of Canada and “$” refers to Canadian dollars.

1.4 Time

Time shall be of the essence in each and every matter or thing herein provided. Unless otherwise indicated, all times expressed herein are local time at Vancouver, British Columbia.

ARTICLE 2

THE ARRANGEMENT

2.1 Binding Effect

Subject to the terms of the Arrangement Agreement, the Arrangement will become effective at the Effective Time and shall be binding at and after the Effective Time on Nanotech, META, Purchaser, the Depositary and all holders and beneficial holders of Nanotech Shares, Nanotech Options and Nanotech RSUs including Dissenting Shareholders, without any further act or formality required on the part of any person.

2.2 The Arrangement

Commencing at the Effective Time on the Effective Date, subject to the terms and conditions of the Arrangement Agreement, the following shall occur as part of the Arrangement and shall be deemed to occur in the following order without any further act or formality:

 

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-7-

 

 

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-8-

 

The events provided for in this Section 2.2 will be deemed to occur on the Effective Date notwithstanding that certain of the procedures related thereto may not be completed until after the Effective Date.

2.3 Share Registers

Every registered Nanotech Shareholder (other than a Dissenting Shareholder or META or an affiliate thereof) from whom a Nanotech Share is transferred and acquired pursuant to the Arrangement shall cease to be a registered holder thereof and every Nanotech Shareholder shall be removed from the register of holders of Nanotech Shares at the Effective Time and shall cease to have any rights in respect of such Nanotech Shares, and Purchaser shall become the holder of such Nanotech Shares and shall be added to that register at the Effective Time and shall be entitled as of that time to all of the rights and privileges attached to the Nanotech Shares.

2.4 Adjustments to Consideration

Notwithstanding any restriction or any other matter in this Plan of Arrangement to the contrary, if, between the date of the Arrangement Agreement and the Effective Time, the issued and outstanding Nanotech Shares shall have been changed into a different number of shares or a different class by reason of any split, consolidation, reclassification, redenomination, reorganization, recapitalization or stock dividend of the issued and outstanding Nanotech Shares or similar event, provided such action is permitted by the Arrangement Agreement, then the Consideration shall be appropriately adjusted to provide to Nanotech Securityholders the same economic benefit as contemplated by this Plan of Arrangement prior to such action.

ARTICLE 3

DISSENT RIGHTS

3.1 Rights of Dissent

Registered holders of Nanotech Shares (other than META or an affiliate thereof) may exercise rights of dissent with respect to those Nanotech Shares held by such holder

 

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-9-

 

pursuant to, and (except as expressly indicated to the contrary in this Section 3.1), in the manner set forth in Sections 237 to 247 of the BCBCA, as modified by this Section 3.1 and the Interim Order, and the Final Order, in connection with the Arrangement (the “Dissent Rights”); provided that, notwithstanding Section 242 of the BCBCA, the written objection to Arrangement Resolution must be received by Nanotech not later than 5:00 p.m. (Vancouver time) on the second Business Day before the Nanotech Meeting (as it may be adjourned or postponed from time to time); and provided further that, notwithstanding the provisions of the BCBCA, Nanotech Shareholders who duly exercise Dissent Rights and who have not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights and who:

further act or formality and free and clear of all Encumbrances, to Nanotech and shall not be entitled to any other payment or consideration, including any payment that would be payable under the Arrangement had such holder not exercised their Dissent Rights in respect of such Nanotech Shares, and shall be deemed to not to have participated in the transactions in Article 2 (other than Section 2.2(a)); or

but in no case shall Nanotech, META, Purchaser, the Depositary or any other person be required to recognize any such holder as a holder of Nanotech Shares after the Effective Time, and the names of each such holder shall be deleted from the register of holders of Nanotech Shares at the Effective Time.

ARTICLE 4

PAYMENT AND CERTIFICATES

4.1 Payment of Consideration

As soon as reasonably practicable following receipt by Nanotech of the Final Order and in any event not later than the Business Day prior to the Effective Date, Purchaser shall deposit or cause to be deposited in escrow with the Depositary,

 

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and the aggregate amount of which shall be held by the Depositary as agent and nominee for Former Nanotech Securityholders for distribution to such Former Nanotech Securityholders in accordance with the provisions of this Plan of Arrangement.

Upon surrender to the Depositary by a holder of Nanotech Shares, Nanotech Options or Nanotech RSUs of a duly completed Letter of Transmittal or such other documents and instruments as the Depositary may reasonably require along with the certificate or certificates, if any, representing such securities transferred or disposed of under the Arrangement, such holder thereof shall be entitled to receive in exchange therefor, and promptly after the Effective Date the Depositary shall deliver, a cheque, wire transfer or other form of immediately available funds representing the Consideration which such holder is entitled to receive in accordance with Sections 2.2(b), 2.2(d) and 2.2(e) less any amounts withheld pursuant to Section 4.4, and any certificate so surrendered shall forthwith be cancelled. In the event of a transfer of ownership of Nanotech Shares which was not registered in the transfer records of Nanotech, the Consideration payable to the registered holder may be paid to the transferee if the certificate representing such Nanotech

Shares is presented to the Depositary, accompanied by a duly completed Letter of Transmittal and all documents required to evidence and effect such transfer. Without limiting the provisions of Section 2.3, until surrendered as contemplated by this Section 4.1, each certificate which immediately prior to the Effective Time represented one or more outstanding Nanotech Shares (other than Nanotech Shares held by META or any of its affiliates) that, under the Arrangement, were transferred pursuant to Section 2.2 shall be deemed at all times after the Effective Time to represent only the right to receive upon such surrender the Consideration to which the holder thereof is entitled under the Arrangement less any amounts withheld pursuant to Section 4.4.

No holder of Nanotech Shares, Nanotech Options or Nanotech RSUs shall be entitled to receive any consideration or entitlement with respect to such Nanotech Shares, Nanotech Options or Nanotech RSUs other than the applicable Consideration to which such holder is entitled to receive in accordance with Section 2.2, this Section 4.1 and the other terms of this Plan of Arrangement and, for greater certainty, no such holder will be entitled to receive any interest, dividends, premium or other payment in connection therewith.

4.2 Lost Certificates

In the event any certificate which immediately prior to the Effective Time represented one or more outstanding Nanotech Shares that were acquired by Purchaser pursuant to Section

 

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2.2 shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed, the Depositary will deliver to such person or make available for pick up at its offices in exchange for such lost, stolen or destroyed certificate, a cheque or other form of immediately available funds representing the applicable Consideration which such holder is entitled to in accordance with Section 2.2 and such holder’s Letter of Transmittal, less any amounts withheld pursuant to Section 4.4. When authorizing such payment in exchange for any lost, stolen or destroyed certificate, the person to whom the Consideration is payable shall, as a condition precedent to the payment thereof, give a bond satisfactory to Nanotech, META, Purchaser and its transfer agent (each acting reasonably) in such amount as META may direct or otherwise indemnify Nanotech, META and Purchaser in a manner satisfactory to Nanotech, META and Purchaser (each acting reasonably) against any claim that may be made against Nanotech, META or Purchaser with respect to the certificate alleged to have been lost, stolen or destroyed.

4.3 Extinction of Rights

Any certificate which immediately prior to the Effective Time represented outstanding Nanotech Shares that were acquired pursuant to Section 2.2 that is not deposited with all other instruments required by Section 4.1 on or prior to the sixth anniversary of the Effective Date shall cease to represent a claim or interest of any kind or nature in the applicable Consideration, and the Consideration that the holder of such Nanotech Shares was entitled to receive shall no longer be payable. On such date, the Consideration to which the former holder of the certificate referred to in the preceding sentence was ultimately entitled shall be deemed to have been donated and forfeited for no consideration to Purchaser or its successors and the interest of the holder of such Nanotech Shares in such Consideration shall be terminated. None of Nanotech, META, Purchaser or the Depositary shall be liable to any person in respect of any cash or property delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

4.4 Withholding Rights

Nanotech, META, Purchaser, the Depositary, and any person making any payment on their behalf, in connection with the Arrangement shall be entitled to deduct and withhold from any dividend (actual or deemed for tax purposes), consideration or other amount otherwise payable to any person (including, for greater certainty, any Nanotech Shareholder, any holder of Nanotech Options or Nanotech RSUs and any Dissenting Shareholder), such amounts as Nanotech, META, Purchaser, the Depositary, or such person making any payment on their behalf, as applicable, is required to deduct and withhold with respect to such payment under the ITA, United States tax Laws or any other applicable Law or the administrative practice of any Governmental Entity, except when such person has paid such amount in cash to Nanotech, META, Purchaser or the Depository, as applicable, to enable it to comply with such deduction or withholding requirement. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes hereof as having been paid to the holder of the securities in respect of which such deduction and

 

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withholding was made; provided that such withheld amounts are actually remitted to the appropriate Governmental Entity.

4.5 Paramountcy

From and after the Effective Time: (i) this Plan of Arrangement shall take precedence and priority over any and all Nanotech Shares, Nanotech Options and Nanotech RSUs issued prior to the Effective Time; (ii) the rights and obligations of the registered holders of Nanotech Shares, Nanotech Options and Nanotech RSUs (other than META, Purchaser or any of their respective affiliates), and of Nanotech, META, Purchaser, the Depositary and any transfer agent or other depositary in relation thereto, shall be solely as provided for in this Plan of Arrangement and the Arrangement Agreement; and (iii) all actions, causes of action, claims or proceedings (actual or contingent and whether or not previously asserted) based on or in any way relating to any Nanotech Shares, Nanotech Options or Nanotech RSUs shall be deemed to have been settled, compromised, released and determined without liability except as set forth herein.

ARTICLE 5

AMENDMENT

5.1 Plan of Arrangement Amendment

 

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ARTICLE 6

FURTHER ASSURANCES

 

Notwithstanding that the transactions and events set out in this Plan of Arrangement shall occur and shall be deemed to occur in the order set out in this Plan of Arrangement without any further act or formality, each of Nanotech, META and Purchaser shall make, do and execute, or cause to be made, done and executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by any of them to document or evidence any of the transactions or events set out in this Plan of Arrangement.

 

ARTICLE 7

NOTICE

Any notice to be given by META or Purchaser to Nanotech Shareholders, Nanotech Optionholders or holders of Nanotech RSUs pursuant to the Arrangement will be deemed to have been properly given if it is mailed by first class mail, postage prepaid, to registered Nanotech Shareholders, Nanotech Optionholders or holders of Nanotech RSUs, as the case may be, at their addresses as shown on the applicable register of such holders maintained by Nanotech and will be deemed to have been received on the first day following the date of mailing which is a Business Day.

The provisions of this Plan of Arrangement, the Arrangement Agreement and the Letter of Transmittal apply notwithstanding any accidental omission to give notice to any one or more Nanotech Shareholders, Nanotech Optionholders or holders of Nanotech RSUs and notwithstanding any interruption of mail services in Canada, the United States or elsewhere following mailing. In the event of any interruption of mail service following mailing, META intends to make reasonable efforts to disseminate any notice by other means, such as dissemination by press release.

Notwithstanding the provisions of the Arrangement Agreement, this Plan of Arrangement and the Letter of Transmittal, cheques, if any, issuable, pursuant to the Arrangement need not be mailed if Purchaser determines that delivery thereof by mail may be delayed. Persons entitled to cheques which are not mailed for the foregoing reason may take delivery thereof at the office of the Transfer Agent in respect of which the certificates being issued were deposited, upon application to the Depositary, until such time as Purchaser has determined that delivery by mail will no longer be

 

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delayed. Notwithstanding the provisions of the Arrangement Agreement, this Plan of Arrangement and the Letter of Transmittal, the deposit of cheques with the Depositary in such circumstances will constitute delivery to the persons entitled thereto and the Nanotech Shares will be deemed to have been paid for immediately upon such deposit.

 

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SCHEDULE B

NANOTECH ARRANGEMENT RESOLUTION

BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:

B-1

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such determination to be conclusively evidenced by the execution and delivery of such document, agreement or instrument or the doing of any such act or thing.

B-2

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SCHEDULE C

REPRESENTATIONS AND WARRANTIES OF NANOTECH

Nanotech represents and warrants to and in favour of META and the Purchaser as follows, and acknowledges that META and the Purchaser are relying upon such representations and warranties in connection with the completion of the transactions contemplated herein:

C-1

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C-2

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C-3

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C-4

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C-5

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C-6

---

 

C-7

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C-8

---

 

C-9

---

 

C-10

---

 

C-11

---

 

C-12

---

 

C-13

---

 

C-14

---

 

C-15

---

 

C-16

---

 

C-17

---

 

C-18

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C-19

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C-20

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C-21

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C-22

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SCHEDULE D

REPRESENTATIONS AND WARRANTIES OF META AND THE PURCHASER

 

META and the Purchaser jointly and severally represent and warrant to and in favour of Nanotech as follows, and acknowledges that Nanotech is relying upon such representations and warranties in connection with the completion of the transactions contemplated herein:

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D-2

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D-3

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SCHEDULE E

SIGNATORIES OF NANOTECH VOTING AGREEMENTS

 

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Iginatius ▇▇▇▇▇▇

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D. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇

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E-1

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SCHEDULE F

KEY REGULATORY APPROVALS

Canada

F-1

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