Terms of Engagement

These terms of engagement (the “Terms of Engagement”) govern the supply of financial and strategic advisory services (the “Services”) by ScalePoynt Solutions LLC. (“ScalePoynt”, “us”, “we”, “ours” and words of like import) to our clients (in these Terms of Engagement “Client”, “you” and “yours” and words of like import mean the person to which we are providing Services under these Terms of Engagement) under order forms (each, an “Order Form”) that you and we may agree to from time to time. An Order Form may also reference one or more appendices (each, a “Work Appendix”) setting out additional details of the Services to which it relates. Supplier and Client are referred to together in these Terms of Engagement as the “Parties”.

These Terms of Service, together with the applicable Order Form and one or more applicable Service Delivery Terms and Work Appendices, constitute a legally binding agreement (when used in reference to a particular Order Form and Service Delivery Terms or particular Services, the agreement resulting from these Terms of Service and the Order Form, Service Delivery Terms and Work Appendices is referred to as the “Agreement”) between the Parties, and govern our delivery and your receipt and use of the Services described in the Agreement.

Under an Agreement you appoint us and we agree to act as your financial advisor in connection with (i) one or more potential financings, and/or (ii) a potential change of control transaction, whether effected in one transaction or a series of transactions, involving the Client or its subsidiaries, including a merger, amalgamation, arrangement, take-over bid, insider bid, reorganization, joint venture, sale of assets, exchange of assets or similar transaction (any of such financings or change of control transaction, as the case may be, a “Transaction”), as more particularly described in Order Forms.

An Agreement is effective from and after the effective date stated in the applicable Order Form.

1. Responsibilities

Under each Agreement we will provide you with such financial and market related advice and assistance as may be appropriate and agreed to by you and us, including:

1. familiarize ourselves with the financial position and operations of the Client;
2. be available to meet with senior personnel and the Board of the Client from time to time to discuss the Transaction;
3. advise and assist the Client as to Transactions;
4. introduce the Client to, and participate in discussions and negotiations with, representatives of third parties (including potential investors or acquirors, as the case may be), and their financial advisors, who may be interested in participating in the Transaction;
5. assist in drafting documentation required to effect Transactions; and
6. such other ancillary financial advisory services as the Client and agree in the Order Form or otherwise are appropriate in the circumstances.

2. Fees

1. In connection with our financial advisory services, the Client shall pay to ScalePoynt the work fees (“Work Fees”), if any, the transaction fees (“Transaction Fees”) and any other consideration set out in the Order Form.
2. In the case of Work Fees charged per month or other period of time, we shall prorate any partial periods based on the number of weekdays engaged in that period out of the total number of weekdays in that period. For clarity, if an engagement starts 5 weekdays into a 23 weekday month, the month shall be prorated at 18/23 days = 78% of Work Fees for that period.
3. Unless otherwise specified in the Order Form, if the consideration paid or received in respect of an acquisition Transaction is, in whole or in part, in the form of publicly-traded securities, they shall be valued with reference to the volume weighted average price on the 20 trading days immediately preceding the date of public announcement of the Transaction for purposes of calculating the Transaction Fee. Any consideration that is not in the form of cash or publicly-traded securities will be assessed at its estimated fair market value at the time of public announcement of the Transaction, such estimate to be determined by ScalePoynt, acting reasonably.
4. If a Transaction involves the payment of funds in multiple tranches, the entire amount of the Transaction Fee shall be due upon the payment of the initial tranche. If the Client agrees to pay a commission or fee on a Transaction to anyone else (including without limitation any other financial advisor), such commission or fee shall be for the Client’s account and shall not reduce the amount payable to ScalePoynt.
5. In the case of lending Transactions, in the event of Lending Success (as defined in the Order Form), unless the Order Form provides otherwise, the Client shall, in addition to any other Transaction Fee it is required to pay in relation to that lender, thereafter also pay a Transaction Fee of five percent (5%) of the aggregate value of any funds received by the Client from such lender during the period from the date of the Lending Success to the date that is 48 months after the later of the date of the Lending Success and the date of any restructuring or refinancing of that Transaction.

3. Expenses

Whether or not a Transaction is completed, the Client shall be responsible for all expenses incurred by ScalePoynt in connection with an Agreement that are set out in the Order Form or otherwise pre-approved by the Client. All expenses shall be payable by you within 5 days of the date of our invoice for them.

4. Access to Information and Management

The Client will arrange for ScalePoynt to have such timely access to the Client’s directors, officers, employees, auditors, counsel and other consultants as ScalePoynt may reasonably request in carrying out an engagement. In addition, the Client will keep ScalePoynt fully informed with respect to all negotiations regarding each Transaction and will promptly provide ScalePoynt with copies of all material documents, draft or final, relating to a Transaction. The Client agrees to provide, or arrange to have provided to, ScalePoynt such information, including any financial forecasts, as ScalePoynt believes to be appropriate to permit ScalePoynt to perform the services hereunder and the Client will update such information as appropriate.

5. Accuracy of Information

In carrying out our responsibilities under this Agreement, we will necessarily rely on information prepared or supplied by you and other sources believed by us to be reliable and will apply reasonable standards of diligence to any work which we perform under this Agreement in the nature of an assessment or review of data or other information. However, we will be entitled to rely on, and are under no obligation to verify, the accuracy or completeness of such information and under no circumstances will we be liable to you for any damages arising out of the inaccuracy or incompleteness of any such information, except as required by law. The Client hereby represents and warrants to us that all information and documentation concerning the Client and each Transaction that is provided by the Client in connection with our engagements will be accurate, complete and not misleading and will not omit to state any fact or information which would be material to a financial advisor performing the services contemplated in an Agreement. You will bear sole responsibility for the accuracy and completeness of all such information and documentation, except any portions thereof that are provided by us and publicly disclosed by us or with our prior written consent.

6. Advertising

The Client shall provide ScalePoynt and its counsel with the opportunity to review any press release or other public communication issued by the Client in connection with a Transaction and, at our request, include a reference to ScalePoynt and its role in any release or communication, and shall ensure that any press release concerning a Transaction complies with applicable law. After public announcement of a Transaction, we may, at our option and expense, include the name and logo of the Client and/or its subsidiaries and a description of our role in connection with the Transaction in such online publications, newspapers, periodicals, annual reports and other public marketing materials as it may choose, in each case in a customary manner.

7. Other Services

The Client acknowledges that neither our engagement under an Agreement nor the receipt by us of confidential information nor any other matter shall restrict or prevent us from undertaking any business activity, acting on our own account, or acting on behalf of, or providing any Services to, other customers and we may undertake any business activity or provide any Services without further notification to the Client, subject only to our obligations of confidentiality in these Terms of Engagement or other confidentiality agreements that we enter into in writing with you.

8. Use of Advice

The Client acknowledges and agrees that all written and oral opinions, advice, analysis and materials provided by us in connection with our engagement under an Agreement are intended solely for the Client’s benefit (including the benefit of your board of directors and officers) and for the Client’s internal use only and for your directors’ and officers’ use only when acting on behalf of the Client in considering a Transaction (and not in any other capacity). No such opinion, advice or material will be used for any other purpose whatsoever or reproduced, disseminated, quoted from or referred to in whole or in part at any time, in any manner or for any purpose, without our prior written consent in each specific circumstance. Any advice or opinions given by us under an Agreement will be made subject to, and will be based upon, such assumptions, limitations, qualifications and reservations as we deem in the exercise of our professional judgement to be necessary or prudent in the circumstances. We expressly disclaim any liability or responsibility by reason of any unauthorized use, publication, distribution of or reference to any oral or written opinions or advice or materials provided by us or any unauthorized reference to us or our engagement. Each Agreement and its terms are confidential and may not be publicly disclosed, referred to or provided to any third party by you or any of your officers, directors, employees, consultants or affiliates, without our prior written consent in each specific instance.

9. Additional Services

If we are requested to provide any other services to the Client in addition to those to be provided under an Agreement (“Additional Services”), the terms relating to such Additional Services will be outlined in a separate Order Form and the fees for such services will be negotiated separately. However, for greater certainty, we will not provide any legal, tax or accounting advice, either pursuant to an Agreement or otherwise. The Client and its directors will be solely responsible for engaging and instructing such legal, tax and accounting professionals as deemed necessary for purposes of the subject matter of this Agreement.

10. Indemnity

The Client agrees to indemnify us and every other “Indemnified Person” as provided for in Schedule “A” to these Terms of Engagement (the “Indemnity”), which forms part of each Agreement and the consideration for which is the entering into of an Agreement. The Indemnity will apply to all services contemplated in these Terms of Engagement, including, without limitation, any “Additional Services” contemplated by paragraph 9 of these Terms of Engagement.

11. Term and Termination

An Agreement is effective as of the date set out in the applicable Order Form and terminates on the date of termination specified by either the Client upon 30 days written notice or by us without notice (collectively, the “Term” of the Agreement); provided that the obligations of the Client set out in paragraphs 2, 3, 4, 5, 6, 7, 8, 9, 12, 15 and in Schedule “A” to these Terms of Engagement shall survive any termination of an Agreement indefinitely.

12. Confidentiality

We will keep strictly confidential and will use only for the purpose of performing our obligations hereunder all confidential information, whether written or oral, provided by the Client, its agents and advisors in connection with our work hereunder, except information that: (a) is or becomes generally available to the public (other than as a result of disclosure by us), (b) was in our possession on a non-confidential basis prior to its disclosure by the Client, (c) becomes available to us on a non-confidential basis from a person other than the Client who, to our knowledge, is not prohibited from transferring such information to us, (d) the Client agrees may be disclosed or (e) we are requested pursuant to, or required by, law, regulation, legal process or regulatory or self-regulatory authority to disclose (in which case they will provide the Client with prompt notice of such request or requirement where legally permissible so that the Client may seek an appropriate protective order or waive compliance with this requirement). Nothing in these Terms of Engagement precludes us or our affiliates from using or disclosing any confidential information in connection with any suit, action or proceeding for the purpose of defending itself, reducing its liability or protecting or exercising any of its rights, remedies or interests. The obligations imposed on us by this section will with respect to an Agreement expire eighteen months from the effective date of the Order Form under that Agreement.

13. Representations and Warranties

The Client represents and warrants to us, acknowledging that we are relying upon such representation and warranty, with respect to each Agreement that:

1. You (i) will comply with all applicable laws, regulations and policies, whether domestic, foreign, national, federal, provincial, state or otherwise, including the rules of any stock exchange, applicable to it and the applicable Transactions, (ii) will obtain or use best efforts to obtain all necessary regulatory and other consents and approvals required in connection with effecting such Transactions, and (iii) will retain, if required by us and subject to our reasonable approval, legal, accounting, tax and other applicable advisors or experts to work with us in effecting such Transactions; and
2. You have the requisite corporate power, authority and capacity to enter into and perform your obligations under the Agreement, and that you are not party to or otherwise bound by any instrument or agreement which restricts or otherwise conflicts with the performance by you of your obligations under the Agreement.

14. Notices

Notices sent to either Party as required by, or pursuant to, an Agreement must be in writing and will be effective when delivered in person, by mail or, in the case of routine operational notices, by email, one (1) day after being sent by overnight courier or email, or two (2) days after being sent by first class mail postage prepaid, to the addresses set forth in the Order Form. Claims under the Agreement and any other legal notices must be delivered by hand or mail, and also by email.

15. Audit Rights

In order to ensure that ScalePoynt has a reasonable opportunity to assess the applicability of its rights under any Agreement to any particular Transaction:

1. The Client shall promptly provide notice and reasonable details of any Transaction with a third party that it completes, enters into or announces and with respect to which fees could be due to ScalePoynt under an Agreement. This right of notice shall be interpreted broadly, and the Client shall perform its obligations under this section 15 reasonably and in good faith, to ensure ScalePoynt’s transparent access to information concerning Transactions to which fees could be due to ScalePoynt.
2. ScalePoynt may on reasonable notice inspect (and the Client shall promptly provide) and conduct an audit of any of Client’s information that could be relevant to the determination of any such fees. Such information shall be treated by ScalePoynt as the Confidential Information of the Client. The information that will be made available to ScalePoynt for inspection and audit under this section will be the least intrusive information reasonably necessary for that purpose. The Client will give ScalePoynt any assistance it may reasonably need during any such audit at no charge.

16. Miscellaneous Terms

1. Each Party is entering into Agreements as an independent contractor. Nothing in these Terms of Engagement is intended to: (a) create any partnership, joint venture or fiduciary relationship of any kind whatsoever; or (b) benefit any third parties or create any obligations to any third parties, except for the Indemnity, which is intended to benefit all Indemnified Parties.
2. These Terms of Engagement, together with an Order Form and any agreements and documents to be delivered pursuant to their terms, constitutes the entire agreement between the Parties pertaining to the subject matter of that Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of any of the Parties in respect of the subject matter thereof.
3. A Party may not assign an Agreement or any right or obligation hereunder to any person, without the other Party’s prior written consent.
4. No waiver of any provision of an Agreement will constitute a waiver of any other provision (whether or not similar). No waiver will be binding unless executed in writing by the Party to be bound by the waiver. A Party’s failure or delay in exercising any right under an Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a Party from any other or further exercise of that right or the exercise of any other right it may have.
5. If any provision of an Agreement is determined to be illegal, invalid or unenforceable by an arbitrator or any court of competent jurisdiction from which no appeal exists or is taken, that provision will be severed from the Agreement and the remaining provisions will remain in full force and effect.
6. To the extent any fees, expenses or other amounts payable under an Agreement are subject to harmonized sales tax, goods and services tax and/or provincial sales tax, the Client will pay an additional amount equal to the amount of any applicable tax, which will be payable by the Client to us at the same times as such fees, expenses or other amounts are payable.
7. We may delegate or subcontract all or any part of our services under an Agreement to any third party. The delegating or subcontracting of all or any part of our obligations set out in an Agreement to any third party will not relieve us from any obligation or liability under the Agreement, and we will remain responsible for the performance its obligations subcontracted to and performed by all such third parties to the same extent as if such obligations were performed by us.
8. Each Agreement has been negotiated and approved by the Parties. Notwithstanding any rule or maxim of law or construction to the contrary, any ambiguity or uncertainty will not be construed against either of the Parties by reason of the authorship of any of the provisions of an Agreement.
9. Unless otherwise specified in the Order Form, all references to currency in an Agreement shall mean Canadian dollars if your address set forth in the Agreement at the time of signing is in Canada; and otherwise means US dollars.
10. In the event of any conflict or inconsistency between any provisions of an Agreement, the conflict or inconsistency shall be resolved in accordance with the following priority: (i) the Order Form, and (ii) these Terms of Engagement.
11. Time shall be of the essence with respect to each Agreement.

17. Governing Law

Each Agreement is made pursuant to and will be construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein and the parties submit to the exclusive jurisdiction of the courts of the Province of Ontario.

18. Language

The Parties acknowledge that they have agreed that these Terms of Engagement Agreement and all documents under or in connection with an Agreement are to be prepared and executed in the English language only. Les parties aux présents ont consenti à ce que la présente convention et tous les documents s’y rattachant soient rédigés et souscrits en anglais seulement et s’en declarant satisfaites.

19. Independent Legal Advice

The Client confirms that (i) its authorized representatives and signatory have read each Agreement in its entirety, understand it and the Client agrees to be bound by its terms and conditions; and (ii) it has been advised by ScalePoynt to seek independent legal advice with respect to the execution and delivery of Agreements, and has received such advice or has, without undue influence, elected to waive the benefit of any such advice.

20. Execution in Counterparts

Order Forms may be executed in any number of counterparts, each of which is deemed to be an original, and such counterparts together constitute one and the same instrument. Transmission of an executed signature page by facsimile, email or other electronic means is as effective as a manually executed counterpart of an Order Form.

In consideration for ScalePoynt Solutions LLC. (“ScalePoynt”) accepting the engagement (the “Engagement”) pursuant to the Terms of Engagement to which this Schedule “A” is attached, the Client (in this Schedule, the “Indemnitor”) agrees to indemnify and hold harmless ScalePoynt, each of its subsidiaries and affiliates and each of their respective directors, officers, employees, partners, agents, shareholders, each other person, if any, controlling ScalePoynt or any of its respective subsidiaries and affiliates (collectively, the “Indemnified Parties” and individually, an “Indemnified Party”), from and against any and all losses, expenses, claims (including shareholder actions, derivative or otherwise), actions, damages and liabilities, joint or several, including without limitation the aggregate amount paid in reasonable settlement of any actions, suits, proceedings, investigations or claims, and the reasonable fees and expenses of their counsel (collectively, the “Losses”) that may be suffered by, incurred by, imposed upon or asserted against an Indemnified Party as a result of, in respect of, connected with or arising out of any action, suit, proceeding, investigation or claim that may be made or threatened by any person or in enforcing this indemnity (collectively the “Claims”) insofar as the Claims relate to, are caused by, result from, arise out of or are based upon, directly or indirectly, the Engagement, whether performed before or after the Indemnitor’s execution of the applicable Order Form (as defined in the Terms of Engagement). The Indemnitor agrees to waive any right the Indemnitor may have of first requiring an Indemnified Party to proceed against or enforce any other right, power, remedy or security or claim payment from any other person before claiming under this indemnity. The Indemnitor also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Indemnitor or any person asserting Claims on behalf of or in right of the Indemnitor for or in connection with the Engagement (whether performed before or after the Indemnitor’s execution of the applicable Order Form). The Indemnitor will not, without the prior written consent of ScalePoynt settle, compromise, consent to the entry of any judgment in or otherwise seek to terminate any Claim in respect of which indemnification may be sought under this indemnity (whether or not any Indemnified Party is a party to such Claim) unless the Indemnitor has acknowledged in writing that the Indemnified Parties are entitled to be indemnified in respect of such Claim and such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Party from any liabilities arising out of such Claim without any admission of negligence, misconduct, liability or responsibility by or on behalf of any Indemnified Party.

Promptly after receiving notice of a Claim against ScalePoynt or any other Indemnified Party or receipt of notice of the commencement of any investigation which is based, directly or indirectly, upon any matter in respect of which indemnification may be sought from the Indemnitor, ScalePoynt or any such other Indemnified Party will notify the Indemnitor in writing of the particulars thereof, provided that the omission to so notify the Indemnitor shall not relieve the Indemnitor of any liability which the Indemnitor may have to any Indemnified Party, except and only to the extent that any such delay in or failure to give notice as required prejudices the defense of such Claim or results in any material increase in the liability which the Indemnitor has under this indemnity.

The Indemnitor shall have 14 days after receipt of the notice to undertake, conduct and control, through counsel of their own choosing and at their own expense, the settlement or defense of the Claim. If an Indemnitor undertakes, conducts or controls the settlement or defense of the Claim, the relevant Indemnified Parties shall have the right to participate in the settlement or defense of the Claim.

The Indemnitor also agrees to reimburse each Indemnified Party and for the time spent them and their personnel in connection with any Claim at their normal per diem rates. An Indemnified Party may retain counsel to separately represent it in the defense of a Claim, which shall be at the Indemnitor’s expense if (i) the Indemnitor does not promptly assume the defense of the Claim no later than 14 days after receiving actual notice of the Claim (as set forth above), (ii) the Indemnitor agrees to separate representation, or (iii) the Indemnified Party is advised by counsel that there is an actual or potential conflict in the Indemnitor’s and the Indemnified Party’s respective interests or additional defenses are available to the Indemnified Party which makes representation by the same counsel inappropriate.

The foregoing indemnity shall not apply to the extent that a court of competent jurisdiction in a final judgment that has become non-appealable has determined that such Losses to which the Indemnified Party may be subject were caused solely by the gross negligence, intentional fault or willful misconduct of the Indemnified Party.

If for any reason the foregoing indemnity is unavailable (other than in accordance with the terms hereof) to ScalePoynt or any other Indemnified Party or insufficient to hold ScalePoynt or any other Indemnified Party harmless in respect of a Claim, the Indemnitor shall contribute to the amount paid or payable by ScalePoynt or the other Indemnified Party as a result of such Claim in such proportion as is appropriate to reflect not only the relative benefits received by the Indemnitor on the one hand and ScalePoynt or any other Indemnified Party on the other hand but also the relative fault of the Indemnitor, ScalePoynt or any other Indemnified Party as well as any relevant equitable considerations; provided that the Indemnitor shall in any event contribute to the amount paid or payable by ScalePoynt or any other Indemnified Party as a result of such Claim any excess of such amount over the amount of the fees received by ScalePoynt under the Agreement.

The Indemnitor hereby constitutes ScalePoynt as trustee for each of the other Indemnified Parties of the Indemnitor’s covenants under this indemnity with respect to those persons and ScalePoynt agrees to accept that trust and to hold and enforce those covenants on behalf of those persons.

The obligations of the Indemnitor hereunder are in addition to any liabilities which the Indemnitor may otherwise have to ScalePoynt or any other Indemnified Party.