EXHIBIT 10.20
Employment Agreement
This employment agreement (the "Agreement") is made and entered into as of the
5th day of June 2017 (the "Effective Date"), by and between Newgioco Group,
Inc., an Ontario corporation having an address at Suite 701 - 130 Adelaide St.
W., Toronto, ON M5H 2K4 (the "Corporation") and Donal Carroll (the "Employee"),
having an address at ***********, Toronto, ON ****** (the Employee and the
Corporation are collectively referred to as the "Parties").
WITNESSETH:
WHEREAS, the Corporation is engaged in the business of owning and operating
online and offline leisure betting stores and agencies; and
WHEREAS, the Employee has represented that he has the experience, background and
expertise necessary to enable him to perform the duties and services hereinafter
set forth for the Corporation; and
WHEREAS, the Employee is considered by the Corporation to be a key employee
providing valuable services to the Corporation; and
WHEREAS, based on such representation, and the Corporation's reasonable due
diligence, the Corporation wishes to employ the Employee as its Chief Financial
Officer and in such other capacities as mutually agreed to by the Corporation
and the Employee, and the Employee wishes to be so employed, in each case, upon
the terms hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements herein contained, and other good and valuable
consideration, the Parties agree as follows:
1. DEFINITIONS. As used herein, the following terms shall have the
following meanings:
1.1 "Affiliate" means any Person controlling, controlled by or under
common control with the Corporation.
1.2 "Board" means the Board of Directors of the Corporation.
1.3 "Change of Control" means:
(i) any change in the holding or possession, direct or indirect, of
the power to direct or cause the direction of the management
and policies of a person, whether through the ownership of
voting securities, by contract, or otherwise of the Corporation
as a result of which a person, or group of persons acting
jointly or in concert within the meaning of the Securities and
Exchange Act of 1934; or
(ii) the sale or lease to a person, or group of persons acting
jointly or in concert within the meaning of the Securities and
Exchange Act of 1934, of (a) assets which aggregate more than
50% of the assets (measured by fair market value) of the
Corporation or (b) assets which generated during the
Corporation's last completed fiscal year or are expected to
generate during the Corporation's current fiscal year more than
50% of the operating income or cash flow of the Corporation.
- 1 -
1.4 "Person(s)" means any individual or entity of any kind or nature,
including any other person as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, and as used in Sections 13(d) and
14(d) thereof.
2. Employment
2.1 Agreement to Employ. Effective as of the Effective Date, the
Corporation hereby agrees to employ the Employee in the position of
Chief Financial Officer subject to the terms and conditions set out in
this Agreement, and the Employee hereby confirms his acceptance of the
same.
2.2 Duties. As detailed in Section 3, the Employee will perform the
duties of his position and those which, from time to time, may be
assigned to him by the Corporation, acting reasonably and consistent
with the role of Chief Financial Officer.
The Employee will report to the Chief Executive Officer. The
Employee's compensation and performance will be reviewed annually.
2.3 Commencement and Term. The employment of the Employee shall commence
on June 5, 2017 (the "Commencement Date") and shall continue
indefinitely, subject to termination pursuant to the provisions of
this Agreement.
3. Duties and Conditions of Employment
3.1 Responsibilities. The Employee's position with the Corporation, the
job description and duties and responsibilities of the role are
detailed in Schedule "A" attached to this Agreement. During the term
of this Agreement the Employee shall, subject to the overall direction
and control of the Chief Executive Officer:
(i) diligently and faithfully serve the Corporation and carry out
those responsibilities as are necessary to perform the
functions and responsibilities associated with the position of
Chief Financial Officer of the Corporation and detailed in
Schedule A of this employment agreement,
(ii) comply with the standards, procedures, directions and
regulations set out by the Corporation; and
(iii) take the utmost care to promote the Corporation's interests and
goodwill.
3.2 Acknowledgements. The Employee acknowledges that he is a fiduciary of
the Corporation and agrees to be found by his fiduciary obligations
during his employment and following the termination of his employment
for any reason. The Employee's fiduciary duties shall be supplemental
to any other obligations he has under this Agreement.
3.3 Place of Employment. The Employee shall serve his duties in Ontario,
Canada and expressly agrees that the Corporation does not currently
participate in statutory employer programs, including, but not limited
to Canadian federal and provincial employee deductions, health
programs and pension plans.
- 2 -
3.4 Representations. The Employee represents and warrants to the
Corporation that:
(i) there exists no written agreement or contract which restricts
him from (i) being employed by the Corporation; or (ii) from
performing the duties assigned to him pursuant to this
Agreement,
(ii) in the performance of his duties for the Corporation, he shall
not improperly bring to the Corporation or use any trade
secrets, confidential information or other proprietary
information of any third party; and
(iii) he will not infringe the intellectual property rights of any
third party.
4. Compensation, Benefits and Expenses
4.1 Salary. The compensation payable to the Employee for his services
hereunder is set forth in Schedule "B" attached to this Agreement.
4.2 Review. The Employee's base salary will be reviewed by the
Corporation on an annual basis at the end of the calendar year, and
the Corporation or the Board of Directors of the Corporation will, in
its sole discretion, make, and confirm in writing, any increases in
the Employee's salary.
4.3 Equipment. The Corporation will provide the Employee with certain
equipment, such as a laptop or printer, for the Employee's use. Such
equipment shall be the property of the Corporation.
4.4 Employee Benefits. The Employee shall be entitled to participate in
any and all employee benefits plans offered or that may be in effect
from time to time by the Corporation to its employees, subject to the
terms and conditions of such employee benefit plans, as may be amended
by the Corporation at its sole discretion from time to time. The
Employee's entitlement to participate in the benefit plans will
commence immediately following his Commencement Date subject to any
probationary period required under such plan.
4.5 Vacation. The Employee shall be entitled to five (5) weeks' vacation
in each calendar year (pro-rated for part years of employment). The
timing of any vacation shall be mutually agreed upon by the Employee
and the Corporation.
The Corporation expects the employee to monitor his paid time away
from work and ensure that it is within the approved allotments and in
accordance with the Corporation's policy. If you exceed your
allotments for paid time away from work, the Corporation reserves the
right to periodically reclaim any amounts to cover such time from the
Employee's pay.
4.6 Holidays. The Employee shall be entitled to all statutory holidays
and any statutory holiday pay calculated in accordance with the
Employment Standards Act, 2000 (Ontario), in effect in the Province of
Ontario or the minimum requirements of such other legislation as may
then be applicable.
4.7 Shares of Common Stock Issued for Compensation. Any Shares of Common
Stock that may be issued pursuant to this Agreement are intended to be
exempt from the registration requirements of the Securities Act of
- 3 -
1933, as amended (the "Securities Act"), pursuant to Regulation D and
shall bear a "restricted legend." In connection with the Employee's
acquisition of Shares, the Employee represents and warrants to the
Corporation that (i) the Employee will not sell or otherwise transfer
the Shares during the period in which they are subject to forfeiture
and without registration under the Securities Act or an exemption
therefrom; (ii) the Employee has such knowledge and experience in
financial and business matters that the Employee is capable of
evaluating the merits and risks of the Employee's investment in the
Shares and is able to bear such risks; (iii) the Employee is acquiring
the Shares for the Employee's own account, for investment purposes
only and not with a view to distribute or resell such securities in
whole or in part. The Employee shall also complete and execute the
investor questionnaire attached hereto as Schedule C simultaneously
with the execution of this Agreement. The Corporation hereby warrants
and represents that the Shares when issued will be duly authorized and
validly issued, fully paid and nonassessable.
5. Termination
5.1 For cause. The Corporation may terminate the Employee's employment,
without notice or pay in lieu thereof, at any time for just cause.
Just cause includes, but is not limited to:
(i) any wilful breach, habitual neglect or demonstrated failure by
the Employee in his performance of the duties required under
this Agreement in a competent and professional manner;
(ii) commission, by the Employee, of any act of gross negligence or
misconduct;
(iii) dishonesty, fraud, or any act of moral turpitude;
(iv) being in a conflict of interest, failing to honour his
fiduciary or loyalty duties to the Corporation (including the
duty to act in the best interests of the Corporation), and
refusal to obey reasonable and appropriate directions and
instructions of the Corporation or the Chief Executive Officer;
(v) the Employee's conviction of, guilty or no contest plea to, or
confession of guilt to a criminal, provincial or regulatory
offence directly or indirectly relevant to the duties of his
employment or that would, in the Corporation's sole judgment
acting reasonably, impact negatively upon the Business or
public image of the Corporation;
(vi) the Employee's breach of Subsection 3.4 of this Agreement; and
(vii) any act or omission amounting to just cause as defined by the
common law.
5.2 Effect of Termination for just cause. In the event that the
Employee's employment is terminated for just cause, the Corporation
shall pay the Employee's base salary earned by the employee up to the
date of termination of employment.
5.3 Without Cause. The Corporation may terminate the Employee's
employment at any time without just cause by providing the Employee
with Six (6) months' Compensation in lieu of notice of termination of
employment if termination occurs within Twelve (12) months of the
Commencement Date or, Six (6) months' Compensation plus One (1)
additional months' Compensation each complete year of service in lieu
of notice of termination of employment if termination occurs after
- 4 -
Twelve (12) months from the Commencement Date to a combined maximum of
Eighteen (18) months' Compensation. "Compensation" for the purposes
of this Section means base salary plus bonus actually earned for the
bonus year last completed prior to termination. Any money paid as
part of a separation package will be subject to the deductions and
withholdings required by law. The right to receive bonus payments
will not extend beyond the date of termination of employment
regardless of whether or not the Employee is entitled to notice of
termination of employment pursuant to statue, an employment contract
the common law or an order of a court or tribunal. No further Common
Stock or Options shall be granted subsequent to the date of
termination of the Employee's employment. The Employee may exercise
Options to the extent such Options are exercisable in accordance with
the Corporation's Equity Incentive Plan. In no event shall the
separation package be less than the minimum pay in lieu of notice of
termination and severance pay (if applicable) required by the
Employment Standards Act, 2000 (Ontario).
5.4 Termination by Employee. The Employee may terminate the Employee's
employment with the Corporation upon giving the Corporation three (3)
weeks written notice. The Corporation may, at its option, elect to
terminate the employment of the Employee prior to the expiry of the
three-week notice period. If the Corporation does make such an
election, the Corporation shall pay to the Employee the Base Salary
that the Employee would have earned if the Employee had worked the
Employee's regular hours of work for the balance of the three-week
notice period.
5.5 Return of property. Upon any termination of the Employee's employment
under this Agreement, the Employee shall immediately deliver and
return to the Corporation any and all property of the Corporation in
the possession or control of the Employee.
5.6 Surviving Conditions. Notwithstanding any termination of the
Employee's employment with the Corporation for any reason, the
provisions of Article 6 of this Agreement shall continue in full force
and effect following such termination of employment.
6. Trade Secrets, Confidentiality, Non-Solicitation and Non-Competition
6.1 Trade Secrets. The Employee acknowledges and agrees that:
(i) in the course of performing his duties and responsibilities, he
will have access to and will be entrusted with Confidential
Information (as defined below), the disclosure of which to
competitors of the Corporation or to the general public, or the
use of same by the Employee or any competitor thereof, would be
highly detrimental to the interests of the Corporation;
(ii) the Employee shall not, either during the term of this
Agreement and following the termination of the Agreement,
directly or indirectly, disclose to any person or in any way
make use of (other than for the benefit of the Corporation), in
any manner, any Confidential Information, provided that such
Confidential Information shall be deemed not to include
information that is or becomes generally available to the
public other than as a result of disclosure by the Employee.
- 5 -
6.2 Inventions and Patents. The Corporation shall be entitled to the
benefit and exclusive ownership of any inventions or improvements in
products, processes, or other things that may be made or discovered by
the Employee while he is in the service of the Corporation, and all
patents, copyrights, trade marks and other intellectual property for
the same.
6.3 Confidentiality. Confidential Information means information, whether
or not originated by the Employee, that relates to the business or
affairs of the Corporation and its affiliates, their clients or
suppliers and is confidential or proprietary to the Corporation, their
affiliates or their clients or suppliers. Confidential information
includes, but is not limited to, the following types of information
and other information of a similar nature (whether or not reduced to
writing or designated or marked as confidential):
(i) work product resulting from or related to work or projects
performed or to be performed by the Corporation;
(ii) information relating to any discoveries, know how, inventions,
designs, works of authorship, ideas, contributions,
developments, processes, compositions, techniques or any
improvements thereof and legally recognized proprietary rights
prior to any public disclosure thereof, including by not
limited to information regarding acquiring, protecting,
enforcing and licensing proprietary rights (including patents,
copyrights and trade secrets);
(iii) internal Corporation personnel and financial information,
vendor names and other vendor information, purchasing and
internal cost information, internal services and operational
manuals;
(iv) marketing and development plans, price and cost data, price and
fee amounts, pricing and billing policies, quoting procedures,
marketing techniques and methods of obtaining business,
forecasts and forecast assumptions and volumes, and future
plans and potential strategies of the Corporation which have
been or are being discussed, customer names and customer
information;
(v) contracts and their contents, client services, data provided by
clients and the type, quantity and specifications of products
and services purchased, leased, licensed or received by clients
of the Corporation; and
(vi) all confidential information of the Corporation which becomes
known to the Employee as a result of employment with the
Corporation, which the Employee, acting reasonably, believes is
confidential information of the Corporation or which the
Corporation takes measures to protect, provided that the
Employee is aware or aught to be aware of such measures.
6.4 Confidential information does not include:
(i) the general skills, general knowledge and experience gained
during the Employee's employment;
(ii) information publicly known without breach of this Agreement; or
(iii) information, the public disclosure of which is required to be
made by any law, regulation, government authority or court (to
the extent of the requirement), provided that before disclosure
is made, notice of the requirement is provided to the
Corporation where it is within the Employee's control to
provide such notice, and to the extent possible in the
circumstances, the Corporation is afforded an opportunity to
dispute the requirement.
- 6 -
6.5 Non-compete. During the Term of the Agreement and, for a period of
twenty-four (24) months immediately following the termination of the
Employee's employment with the Corporation, Employee shall not:
compete, or participate as a shareholder, director, officer, partner
(limited or general), trustee, holder of a beneficial interest,
employee, agent of or representative in any business competing
directly with the Companies without the prior written consent of the
Corporation or its affiliates, which may be withheld in the
Corporation's sole discretion; provided, however, that nothing
contained herein shall be construed to limit or prevent the purchase
or beneficial ownership by Employee of less than five percent of any
security registered under Section 12 or 15 of the Securities Exchange
Act of 1934;
6.6 Non-solicitation. The Employee shall not, either during the term of
this Agreement and for a period of Twenty-four (24) months after the
date of termination, for whatever reason and with or without just
cause: either individually or in conjunction with any person,
Corporation or other legal entity, in any manner whatsoever, solicit,
directly or indirectly, for his own account or on behalf of anyone
competing or endeavouring to compete with the Corporation, any
customer or client of the Corporation or who was a customer or client
of the Corporation or that was pursued as a prospective client by the
Employee on behalf of the Corporation. The Employee further agrees
that he shall not, during the same time, directly or indirectly
solicit or induce any person employed by the Corporation to leave such
employment. The Employee acknowledges and agrees that the agreements
and covenants contained is this Section are essential to protect the
Business of the Corporation;
6.7 Assurances. Employee expressly acknowledges that all of the
provisions of this Section 6 of this Agreement have been bargained for
and Employee's agreement hereto is an integral part of the
consideration to be rendered by the Employee which justifies the rate
and extent of the compensation provided for hereunder, further, the
employee acknowledges and agrees that the agreements and covenants
contained in this Section are essential to protect the business of the
Corporation and:
(i) that if it is determined that the Employee has breached a term
of this Section, the Employee shall indemnify the Corporation
against all losses, damages, liabilities and expenses
(including legal fees and any recruitment fees for any
replacement employee or individual working on contract),
related to or arising out of or in connection with such breach;
and
(ii) notwithstanding the provision of (a) above, a breach by the
Employee of the covenants in this Section could result in
irreparable loss to the Corporation and consequently, if the
Employee breaches any of such provisions, the Corporation shall
have, in addition to and not in lieu of, any other rights and
remedies available to them under law or in equity (including
pursuant to (a) above), the right to obtain injunctive relief
to restrain any such breach or threatened breach and to have
the provisions of this Section specifically enforced by any
court of competent jurisdiction.
7. General
7.1 Further Assurances. Each Party from time to time at the request of
- 7 -
the other Parties and without further consideration shall execute any
other documents and take any further actions as the requesting Party
may reasonably require to more effectively complete any matter
provided for in this Agreement.
7.2 Indemnification. The Corporation and each of its subsidiaries shall,
to the maximum extent provided under applicable law, indemnify and
hold the Employee harmless from and against any expenses, including
reasonable attorney's fees, judgments, fines, settlements and other
legally permissible amounts ("Losses"), incurred in connection with
any proceeding arising out of, or related to, Employee's employment by
the Corporation, other than any such Losses incurred as a result of
the Employee's negligence or willful misconduct. The Corporation
shall, or shall cause a subsidiary thereof to, advance to the Employee
any expenses, including attorney's fees and costs of settlement,
incurred in defending any such proceeding to the maximum extent
permitted by applicable law. Such costs and expenses incurred by the
Employee in defense of any such proceeding shall be paid by the
Corporation or applicable subsidiary in advance of the final
disposition of such proceeding promptly upon receipt by the
Corporation of (a) written request for payment; (b) appropriate
documentation evidencing the incurrence, amount and nature of the
costs and expenses for which payment is being sought; and (c) an
undertaking adequate under applicable law made by or on behalf of the
Employee to repay the amounts so advanced if it shall ultimately be
determined pursuant to any non-appealable judgment or settlement that
the Employee is not entitled to be indemnified by the Corporation or
any subsidiary thereof.
7.3 Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand-delivery to the other Party or by
registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Employee:
Donal Carroll
Address: ***********
Toronto, Ontario, Canada ******
If to the Corporation:
Newgioco Group, Inc.
Address: 130 Adelaide Street West, Suite 701
Toronto, Ontario, Canada M5H 2K4
or to such other address as either Party shall have furnished to the
other in writing in accordance herewith. Notices and communications
shall be effective when actually received by the addressee.
7.4 Withholding. The Corporation may withhold from any amounts payable
under the Agreement, such federal, state and local income,
unemployment, social security and similar employment related taxes and
similar employment related withholdings as shall be required to be
withheld pursuant to any applicable law or regulation.
7.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior representations,
understandings, warranties, covenants and agreements with respect to
the subject matter of this Agreement. There are no oral
representations or warranties among the parties of any kind respecting
the subject matter of this Agreement on which the Employee, and the
Corporation rely in entering into this Agreement.
- 8 -
7.6 Amendments. This Agreement may not be amended or modified otherwise
except by a written agreement executed by all the Parties hereto or
their respective successors or legal representatives.
7.7 Legislative Compliance. It is the Parties' mutual intent that this
Agreement shall, and shall be interpreted so as to, comply with all
applicable legislation governing employment and labour standards.
Should any term of this Agreement fail to meet any applicable
legislated standard, then the common law shall govern.
7.8 Applicable Law and Attornment. This Agreement shall be governed by
and construed in accordance with the laws of the Province of Ontario
exclusively and shall be treated in all respects as an Ontario
contract. Each Party shall attorn to the exclusive jurisdiction of
the courts of Ontario for the settlement of any dispute arising out of
this Agreement.
7.9 Severability. Any covenant or provision in this Agreement determined
to be illegal or unenforceable, in whole or in part, shall be deemed
not to affect or impair the validity of any other covenant or
provision of this Agreement and the covenants and provisions are
declared to be separate and distinct. Any term determined to be
illegal or unenforceable shall be severed from this Agreement to the
extent of such illegality or unenforceability without affecting the
remaining terms of this Agreement
7.10 Successors and Assigns. The Employee may not assign any of his rights
or obligations under this Agreement. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators
and legal or personal representatives of the Employee upon the
successors and assigns of the Corporation.
7.11 Survival. The provisions of this Agreement, which by their nature,
extend beyond the term of this Agreement shall survive any termination
of this Agreement.
7.12 Waiver. The waiver of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach
of the same or any other provision hereof.
7.13 Legal Advice. The Employee hereby represents and warrants to the
Corporation and acknowledges and agrees that he has had the
opportunity to seek independent legal advice prior to the execution
and delivery of this Agreement.
(Signature Page Follows)
- 9 -
This Agreement constitutes the entire Employment Agreement and there are no
other verbal or written agreements or statements.
I have read, understood and accept the terms and conditions of this Agreement.
DATED at Toronto, Ontario, as of June **, 2017.
EMPLOYEE WITNESSED BY
___________________________________ ___________________________________
Name: Donal Carroll Name:
NEWGIOCO GROUP
________________________________
Name: Michele Ciavarella
Title: Chief Executive Officer
- 10 -
Schedule "A"
Title: Chief Financial Officer
Reporting to: Chief Executive Officer
Primary Duties of the Chief Financial Officer:
a. provide financial leadership to manage the Corporation and its
subsidiaries in the best interests of the Corporation;
b. serve as the Corporation's liaison to analysts and financial rating
agencies;
c. communicate in a timely fashion with the Audit Committee, and the Board
on material financial and accounting matters affecting the Corporation;
d. ensure the corporation maintains an appropriate capital structure to
support its annual budget, and strategic plans;
e. ensure the Corporation and its subsidiaries have sufficient liquidity to
implement the Corporation business plans;
f. provide general supervision and management of the day-to-day financial
and accounting affairs of the Corporation within the guidelines
established by the Board, consistent with decisions requiring prior
approval of the Board and the Board's expectations of Management;
g. provide required regulatory certifications regarding the Corporation and
its activities as required by applicable securities laws;
h. ensure appropriate financial, risk, accounting and auditing policies and
procedure of the Corporation are developed, maintained, approved and
disclosed, as appropriate;
i. with the CEO:
(i) provide leadership in setting and communicating the mission,
vision, principles, values and strategic plan, in conjunction
with the Board;
(ii) lead the growth of the Corporation's businesses in a profitable
and sustainable manner;
(iii) ensure the development of an annual budget for the Corporation
and recommend it to the Board for review and, in the Board's
discretion, approval, and ensure the implementation of the
budget;
(iv) provide the board assurance that the proper systems are in place
to identify and manage business risks and that such risks are
acceptable to the Corporation and are within the guidelines
established by the Audit Committee and the Board;
(v) ensure the accuracy, completeness, integrity and appropriate
disclosure of the Corporation's financial statements and other
financial information through appropriate policies and
procedures;
(vi) establish and maintain the Corporation's disclosure controls and
procedures through appropriate policies and procedures;
(vii) as required by applicable law, establish and maintain the
Corporation's internal controls over financial reporting through
appropriate policies and procedures;
(viii) ensure that the Corporation has complied with all regulatory
requirements for the Corporation's financial information,
reporting, disclosure requirements and, when applicable, internal
controls over financial reporting;
j. with the Board, the CEO and other members of management, as needed, to
ensure appropriate and timely disclosure of material information;
k. carry out any other appropriate duties and responsibilities assigned by the
Board or the CEO.
Schedule "B"
Compensation
Base Salary: Your monthly base salary shall be US$9,000 (gross) based on
full-time active employment, and reviewable annually at the
Corporation's discretion ("Base Salary"). Base Salary and
other compensation paid to you will be subject to applicable
statutory withholdings and payable in accordance with the
Corporation's usual payroll practices.
Stock Warrants: The Company shall grant to the Chief Financial Officer Warrants
to purchase five hundred thousand (500,000) shares of the
common stock of Newgioco Group, Inc (a Delaware corporation) at
an exercise price of $1.00 per share (the "Warrant Award").
This Warrant Award is granted outside the 2016 Equity Incentive
Plan of the Company adopted August 8, 2016 and shall vest on
date of the employment commencement. The Warrant Award shall
be further documented by a Warrant agreement in the form
customarily used by the Company for Warrant awards, with all
terms consistent with this Agreement. Further grants of shares
or options will be decided on the basis of merit and
Corporation performance.
Annual Bonus: Shall be determined on an annual basis by the Compensation
Committee of the Board of Directors of Newgioco Group, Inc.
You will be eligible to receive an annual bonus as determined
by the Compensation Committee based on merit, Corporation
performance and other factors that may be determined from time
to time and mutually agreed to between yourself and the Chief
Executive Officer. This bonus is not guaranteed, is paid only
at the discretion of the Corporation, and the Corporation
reserves the right to modify, suspend or discontinue such bonus
at any time without any obligation to replace the bonus or to
otherwise compensate you in respect thereof.
Expenses: The Corporation shall reimburse you for all reasonable
business-related expenses incurred by you during your
employment in the course of performing your duties, which are
consistent with the Corporations' policies in effect from time
to time, with respect to travel, entertainment and other
business expenses.
Schedule "C"
Accredited Investor Questionnaire
TO BE COMPLETED BY SUBSCRIBERS UNDER ACCREDITED INVESTOR EXEMPTION
ACCREDITED INVESTOR CERTIFICATE
In connection with the purchase of Debentures of the Corporation by the
undersigned subscriber or, if applicable, the principal on whose behalf the
undersigned is purchasing as agent (the "Subscriber" for the purposes of this
Schedule D), the Subscriber hereby represents, warrants, covenants and certifies
to the Corporation that:
1. The Subscriber is resident in the jurisdiction as set forth on the face
page of this Subscription Agreement or is subject to the securities
laws of such jurisdiction;
2. The Subscriber is purchasing the Debentures as principal for its own
account or a fully managed account;
3. The Subscriber is an "accredited investor" within the meaning of
National Instrument 45 106 entitled "Prospectus Exemptions", section
73.3(2) of the Securities Act (Ontario) and the regulations promulgated
thereunder, by virtue of satisfying the indicated criterion as set out
in Appendix A to this Accredited Investor Certificate;
4. The Subscriber was not created or used solely to purchase or hold
securities as an "accredited investor" as described in paragraph (m) of
the attached Appendix A of this Schedule A;
5. Upon execution of this Schedule A by the Subscriber, this Schedule A
shall be incorporated into and form a part of the Subscription
Agreement; and
6. The Subscriber acknowledges that he has requested and is satisfied that
this Subscription Agreement and all documentation related thereto be
drawn up in the English language. Le soussigne reconnait qu'il a exige
que cette contrat d'abonnement ainsi que toutes les autres documents
qui s'y rattachent soit redige et execute en anglais et s'en declare
satisfait.
The foregoing representations and warranties are true an accurate as of the date
of this certificate and will be true and accurate as of Closing Date. If any
such representations and warranties shall not be true and accurate prior to
Closing Date, the Subscriber shall give immediate written notice of such fact to
the Corporation.
Dated: _________________________________________, 2017.
______________________________
Print name of Subscriber
By: __________________________
Signature
______________________________
Print name of Signatory (if different from Subscriber)
______________________________
Title
IMPORTANT: PLEASE MARK THE CATEGORY OR CATEGORIES
IN APPENDIX A ON THE NEXT PAGE THAT DESCRIBES YOU.
CONFIRMATION OF APPLICABLE PORTION OF ACCREDITED INVESTOR DEFINITION
NOTE: THE INVESTOR MUST INITIAL BESIDE THE APPLICABLE PORTION OF THE DEFINITION
BELOW.
Accredited Investor - (defined in section 1.1of the National Instrument 45 106,
in the Province of Ontario in section 73.3(1) of the Securities Act (Ontario)
and regulations promulgated thereunder, means:
____ (a) a Canadian financial institution, or an authorized foreign bank
named in Schedule III of the Bank Act (Canada) (and, in Ontario, a
Schedule I, II or III bank); or
____ (b) the Business Development Bank of Canada incorporated under the
Business Development Bank of Canada Act (Canada); or
____ (c) a subsidiary of any person referred to in paragraphs (a) or (b), if
the person owns all of the voting securities of the subsidiary,
except the voting securities required by law to be owned by
Directors of that subsidiary; or
____ (d) a person registered under the securities legislation of a
jurisdiction of Canada, as an adviser or dealer; or
____ (e) an individual registered under the securities legislation of a
jurisdiction of Canada as a representative of a person referred to
in paragraph (d); or
____ (e.1) an individual formerly registered under the securities
legislation of a province, territory or other permissible
jurisdiction of Canada, other than an individual formerly
registered solely as a representative of a limited market dealer
under one or both of the Securities Act (Ontario) or the Securities
Act (Newfoundland and Labrador); or
____ (f) the Government of Canada or a jurisdiction of Canada, or any crown
corporation, agency or wholly owned entity of the Government of
Canada or a jurisdiction of Canada; or
____ (g) a municipality, public board or commission in Canada and a
metropolitan community, school board, the Comite de gestion de la
taxe scolaire de l'ile de Montreal or an intermunicipal management
board in Quebec; or
____ (h) any national, federal, state, provincial, territorial or municipal
government of or in any foreign jurisdiction, or any agency of that
government; or
____ (i) a pension fund that is regulated by either the Office of the
Superintendent of Financial Institutions (Canada) or a pension
commission or similar regulatory authority of a jurisdiction of
Canada; or
____ (j) an individual who, either alone or with a spouse, beneficially owns,
directly or indirectly, financial assets having an aggregate
realizable value that before taxes, but net of any related
liabilities, exceeds $1,000,000; or
(Note: if an individual qualifies as an accredited investor under
this category (j), such individual must complete, sign and deliver
a Risk Acknowledgement Form set out in Appendix B.)
____ (j.1) an individual who beneficially owns financial assets having an
aggregate realizable value that, before taxes but net of any
related liabilities, exceeds $5,000,000; or
____ (k) an individual whose net income before taxes exceeded $200,000 in
each of the two most recent calendar years or whose net income
before taxes combined with that of a spouse exceeded $300,000 in
each of the two most recent calendar years and who, in either case,
reasonably expects to exceed that net income level in the current
calendar year; or
(Note: if an individual qualifies as an accredited investor under
this category (k), such individual must complete, sign and deliver
a Risk Acknowledgement Form set out in Appendix B.)
(Note: if individual accredited investors wish to purchase through
wholly-owned holding companies or similar entities, such purchasing
entities must qualify under paragraph (t) below, which must be
initialled.)
____ (l) an individual who, either alone or with a spouse, has net assets of
at least $5,000,000; or
(Note: if an individual qualifies as an accredited investor under
this category (l), such individual must complete, sign and deliver
a Risk Acknowledgement Form set out in Appendix B.)
____ (m) a person, other than an individual or investment fund, that has net
assets of at least $5,000,000 as shown on its most recently
prepared financial statements; or
____ (n) an investment fund that distributes or has distributed its
securities only to
(a) a person that is or was an accredited investor at the time of
the distribution, or
(b) a person that acquires or acquired securities in the
circumstances referred to in sections 2.10 and 2.19 of National
Instrument 45-106 or of Quebec Regulation 45-106, as
applicable, or
(c) a person described in paragraph (a) or (b) that acquires or
acquired securities under section 2.18 of National Instrument
45-106 or of Quebec Regulation 45-106, as applicable, or
____ (o) an investment fund that distributes or has distributed securities
under a prospectus in a jurisdiction of Canada for which the
regulator or, in Quebec, the securities regulatory authority, has
issued a receipt; or
____ (p) a trust company or trust corporation registered or authorized to
carry on business under the Trust and Loan Companies Act (Canada)
or under comparable legislation in a jurisdiction of Canada or a
foreign jurisdiction, acting on behalf of a fully managed account
managed by the trust company or trust corporation, as the case may
be; or
____ (q) a person acting on behalf of a fully managed account managed by that
person, if that person is registered or authorized to carry on
business as an adviser or the equivalent under the securities
legislation of a jurisdiction of Canada or a foreign jurisdiction,
or
____ (r) a registered charity under the Income Tax Act (Canada) that, in
regard to the trade, has obtained advice from an eligibility
adviser or an adviser registered under the securities legislation
of the jurisdiction of the registered charity to give advice on the
securities being traded; or
____ (s) an entity organized in a foreign jurisdiction that is analogous to
any of the entities referred to in paragraphs (a) to (d) or
paragraph (i) in form and function; or
____ (t) a person in respect of which all of the owners of interests, direct,
indirect or beneficial, except the voting securities required by
law to be owned by directors, are persons that are accredited
investors; or
(Note: if you are purchasing as an individual, accredited investors
paragraph (k) above must be initialed rather than paragraph (t))
____ (u) an investment fund that is advised by a person registered as an
adviser or a person that is exempt from registration as an adviser;
or
____ (v) a person that is recognized or designated by the securities
regulatory authority or, except in Ontario and Quebec, the regulator
as
(a) an accredited investor, or
(b) an exempt purchaser in Alberta or British Columbia after
September 14, 2005; or
____ (w) a trust established by an accredited investor for the benefit of the
accredited investor's family members of which a majority of the
trustees are accredited investors and all of the beneficiaries are
the accredited investor's spouse, a former spouse of the accredited
investor or a parent, grandparent, brother, sister, child or
grandchild of that accredited investor, of that accredited
investor's spouse or of that accredited investor's former spouse.
[The remainder of this page has been left blank intentionally.]
APPENDIX B
FORM 45-106F9
FORM FOR INDIVIDUAL ACCREDITED INVESTORS
SECTION 1 TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER
1. About your investment
Type of securities: [Instruction: Include a short description, e.g., common
shares]
10% Convertible Debentures with Warrants
Issuer: NEWGIOCO GROUP, INC.
Purchased from: [Instruction: Indicate whether securities are purchased
form the issuer or a selling security holder.]
NEWGIOCO GROUP, INC.
SECTIONS 2 TO 4 TO BE COMPLETED BY THE PURCHASER
2. Risk acknowledgement
This investment is risky. Initial that you understand that: Your initials
Risk of loss - You could lose your entire investment of
$____________________. _____
[Instruction: Insert the total dollar amount of the investment.]
Liquidity risk - You may not be able to sell your investment
quickly - or at all. _____
Lack of information - You may receive little or no information about
your investment _____
Lack of advice - You will not receive advice from the salesperson
about whether this investment is suitable for you unless the sales
person is registered. The salesperson is the person who meets with,
or provides information to, you about making this investment. To
check whether the salesperson is registered, go to
www.aretheyregistgered.ca. _____
3. Accredited investor status Your initials
You must meet at least one of the following criteria to be able to
make this investment. Initial the statement that applies to you.
(You may initial more than one statement.) The person identified in
section 6 is responsible for ensuring that you meet the definition
of accredited investor. That person, or the sales person identified
in section 5, can help you if you have questions about whether you
meet these criteria.
* Your net income before taxes was more than $200,000 in each of the
2 most recent calendar years, and you expect it to be more than
$200,000 in the current calendar year. (You can find your net income
before taxes on your personal income tax return.) _____
* Your net income before taxes combined with your spouse's was more
than $300,000 in each of the 2 most recent calendar years, and you
expect your combined net income before taxes to be more than
$300,000 in the current calendar year. _____
* Either alone or with your spouse, you own more than $1 million in
cash and securities, after subtracting any debt related to the cash
and securities. _____
* Either alone or with your spouse, you have net assets worth more
than $5 million. (Your net assets are your total assets (including
real estate) minus your total debt.) _____
4. Your name and signature
By signing this form, you confirm that you have read this form and you
understand the risks of making this investment as identified in this form.
First and last name (please print): ___________________________________________
Signature: _____________________________________ Date: ______________________
SECTION 5 TO BE COMPLETED BY THE SALESPERSON
5. Salesperson information
[Instruction: The sales person is the person who meets with, or provides
information to, the purchaser with respect to making this investment. That could
include a representative of the issuer or selling security holder, a registrant
or a person who is exempt from the registration requirement.]
First and last name of salesperson (please print):
___________________________________________
Telephone: ________________________ Email: _________________________________
Name of firm (if registered): __________________________________________________
SECTION 6 TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER
6. For more information about this investment
For investment in a non-investment fund
[Insert name of issuer/selling security holder] NEWGIOCO GROUP, INC.
[Insert address of issuer/
selling security holder] Suite 701, 130 Adelaide St. W.,
Toronto, Ontario M5H 2K5
[Insert contact person name, if applicable] Mike Ciavarella
[Insert telephone number] *******
[Insert email address] ceo@newgiocogroup.com
[Insert website address, if applicable]
For investment in an investment fund
[Insert name of investment fund]
[Insert name of investment fund manager]
[Insert address of investment fund manager]
[Insert telephone number of investment fund manager]
[Insert email address of investment fund manager]
[If investment is purchased from a selling security holder, also
insert the name, address, telephone number and email address of selling security
holder here]
For more information about prospectus exemptions, contact your local securities
regulator. You can find contact information at www.securities-administrators.ca.
Form instructions:
1. This form does not mandate the use of a specific font size or style but the
font must be legible.
2. The information in sections 1, 5 and 6 must be completed before the
purchaser completes and signs the form.
3. The purchaser must sign this form. Each of the purchaser and the issuer or
selling security holder must receive a copy of this form signed by the
purchaser. The issuer or selling security holder is required to keep a copy
of this form for 8 years after the distribution.