PRIVATE AND CONFIDENTIAL
October 15, 2014
Lomiko Metals Inc.
#439 – 7184 120th Street
Attention: A. Paul Gill, CEO
Re: Market Support Mandate
We understand that Lomiko Metals Inc. (the “Corporation”) is seeking continued strategic advice and support with regard to its ongoing capital markets activities. Integral Wealth Securities Ltd. (“Integral”) would be pleased to act as the Corporation’s advisor and to perform the Mandate on the following terms and conditions set out in this letter agreement (the “Agreement”).
1. Services to be Performed. Integral will perform the following capital markets advisory services (collectively, the “Services”) in connection with the Mandate:
General Capital Markets Support Services
– introduce the Corporation to capital market participants and institutional investors that may include investment funds, mutual funds, private capital sources and other potential strategic investors;
– assist in maintaining active and orderly trading in the market for the Corporation’s securities. Subject to applicable law and rules of the TSX Venture Exchange, Integral agrees to instruct one of its proprietary traders to act as the unofficial market maker for the Corporation’s shares on the TSX Venture Exchange following the execution of this Agreement for a period of not less than six (6) months subject to TSX Venture Exchange approval. Without becoming an investor and without attempting to influence the market price of the Corporation’s securities the trader will endeavor to: (i) call a two-sided market; (ii) contribute to market liquidity and depth; (iii) maintain activity in the market; and (iv) service odd lots.
2. Fees Payable. In conjunction with the Services rendered as outlined in paragraph 1, the Corporation will pay to Integral a cash fee equal to $5,500 per month, plus any applicable taxes. The first monthly payment will be paid on the signing by the Corporation of this Agreement and, thereafter, the fee will be payable on the 15th day of each month. The Corporation shall pay all reasonable costs and expenses incurred in connection with the performance by Integral of the Services, including without limitation, the reasonable fees, disbursements and taxes thereon, including legal counsel retained by Integral (collectively, the “Expenses”). All Expenses shall be payable by the Corporation upon the Corporation receiving an invoice from Integral.
3. Additional Services. If Integral is requested to provide any other services in addition to those described in paragraph I above (“Additional Services”), the terms and conditions relating to such Additional Services will be outlined in a separate letter of agreement and the fees for such services will be in addition to the fees payable hereunder, will be negotiated separately and in good faith and will be consistent with fees paid to Canadian investment bankers for similar services. However, for greater certainty, Integral will not provide any legal, tax or accounting advice, either pursuant to this Agreement or otherwise.
4. Indemnification. The Corporation shall indemnify and hold harmless Integral and its officers, directors, employees, partners and agents and each direct and indirect shareholder of Integral (the “Indemnified Parties”) in the manner set forth in Schedule “A” to this Agreement. Such indemnity shall apply to all services contemplated herein, including, without limitation, any Additional Services.
5. Role of Integral. The Corporation and Integral acknowledge and agree that Integral has been retained by the Corporation to provide the Services. In such capacity, Integral shall act as an independent contractor and any duties of Integral arising out of this engagement to provide the Services pursuant to this Agreement shall be owed solely to the Corporation. Integral agrees to perform such duties in accordance with its obligations hereunder and in compliance with the policies of the TSX Venture Exchange. Integral will use reasonable efforts to preserve the confidentiality of any confidential information that the Corporation discloses to Integral, subject only to applicable law and regulation and Integral’s professional and ethical obligations. The Corporation acknowledges that Integral is a full service investment dealer and that it may have other clients that have an interest that is adverse to the Corporation’s or that may provide confidential information to Integral that Integral cannot share or pass on to the Corporation. Since Integral owes a duty of confidentiality to all of its clients, Integral will not disclose to the Corporation any confidential information that Integral holds in confidence for other clients.
6. Use of Integral’s Advice. The Corporation acknowledges and agrees that all written and oral advice, analysis and materials provided by Integral in connection with its engagement hereunder are intended solely for the benefit of the Corporation and its internal use only and the Corporation covenants and agrees that, except as may be required by applicable law, no such advice, analysis 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 Integral’s prior written consent in each specific instance. Any advice given by Integral hereunder will be made subject to and will be based upon such assumptions, limitations, qualifications and reservations as Integral deems necessary or prudent in the circumstances. Integral expressly disclaims any liability or responsibility by reason of any unauthorized use, publication, distribution of or reference to any oral or written advice, analysis or materials provided by us or any unauthorized reference to Integral or this engagement.
7. Term of Mandate. The period of this Agreement shall be for a period of no less than six (6) months, commencing upon the date of this Agreement, and continue indefinitely until otherwise terminated by either party on 30 days’ notice in writing. The provisions of paragraphs 2,3,4,6, and 8 and Schedule “A” shall survive any such termination of this Agreement.
8. Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. The Corporation and Integral hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the courts of the Province of Ontario for any lawsuits, action or other proceeding arising out of this Agreement.
9. Interpretation. If one or more provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision or provisions had never been contained herein.
10. Notices. Any notice or other communication required or permitted to be given under this Agreement will be in writing and will be delivered to:
(a) in the case of the Corporation:
To the address on page one
Attention: A. Paul Gill
Email: [email protected]
(b) in the case of Integral:
To the address on page one
Attention: John Gibson
Email: [email protected]
The parties may change their respective addresses for notices by notice given in the manner set out above. Any notice or other communication will be in writing, and unless delivered personally to the addressee or to a responsible officer of the addressee, as applicable, will be given by telecopy or email and will be deemed to have been given when (i) in the case of a notice delivered personally to a responsible officer of the addressee, when so delivered; (ii) in the case of a notice delivered or given by telecopy, on the first business day following the day on which it is sent; and (iii) in the case of a notice delivered or given by email, on the first business day following the day on which it is acknowledged as having been received by the intended recipient.
11. Successors and Assigns. This Agreement shall be binding upon Integral and the Corporation and their respective successors and permitted assigns.
12. Entire Agreement; Amendment. This Agreement, including the schedules attached hereto, reflects the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements or arrangements or negotiations pertaining thereto, whether written or oral. No amendment to the provisions of this Agreement shall be effective unless such amendment is provided in writing and executed on behalf of each of the parties hereto.
13. Counterparts. This Agreement may be signed in one or more counterparts, in original or facsimile form.
If the foregoing is acceptable to you, please indicate your acceptance by signing and returning to us the enclosed duplicate copy of this Agreement, whereupon this Agreement shall become binding between us.
Yours very truly,
INTEGRAL WEALTH SECURITIES LIMITED
Signed: “Authorized Signatory”
Lomiko Metals Inc. hereby confirms that, effective October ___ ,2014, it agrees to the terms and conditions set forth above and as set forth in the attached schedules and which collectively constitute the Agreement.
LOMIKO METALS INC.
Signed: “Authorized Signatory”
Lomiko Metals Inc. (the “Indemnitor”) hereby agrees to indemnify and hold Integral Wealth Securities Limited and its affiliates (hereinafter collectively referred to as “Integral”) and officers, directors, employees, partners and agents and each shareholder of Integral (hereinafter referred to as the “Indemnified Parties”) harmless from and against any and all expenses, losses (other than loss of profits), claims, actions, damages or liabilities, whether joint or several (including the aggregate amount paid in reasonable settlement of any actions, suits, proceedings or claims), and the reasonable fees and expenses of its counsel that may be incurred in advising with respect to and/or defending any claim that may be made against Integral, to which Integral and/or its Indemnified Parties may become subject or otherwise involved in any capacity under any statute or common law or otherwise, in each case as and when incurred, insofar as such expenses, losses, claims, damages, liabilities or actions arise out of or are based, directly or indirectly, upon the performance of professional services rendered to the Indemnitor by Integral and its Indemnified Parties hereunder or otherwise in connection with the matters referred to in the Agreement to which this is attached, provided, however, that this indemnity shall not apply to the extent that a court of competent jurisdiction in a final judgment that has become non-appealable shall determine that:
i. Integral or its Indemnified Parties have been negligent or have committed any fraudulent act or wilful misconduct in the course of such performance, or have otherwise breached the terms of the Agreement; and
ii. the expenses, losses, claims, damages or liabilities, as to which indemnification is claimed, were directly caused by the negligence, fraudulent act, wilful misconduct or breach referred to in (i).
If for any reason (other than the occurrence of any of the events itemized in (i) and (ii) above), the foregoing indemnification is unavailable to Integral or insufficient to hold it harmless, then the Indemnitor shall contribute to the amount paid or payable by Integral as a result of such expense, loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the Indemnitor on the one hand and Integral on the other hand but also the relative fault of the Indemnitor and Integral, as well as any relevant equitable considerations; provided that the Indemnitor shall, in any event, contribute to the amount paid or payable by Integral as a result of such expense, loss, claim, damage or liability, any excess of such amount over the amount of the fees received by Integral hereunder pursuant to the Agreement to which this indemnity is attached.
The Indemnitor agrees that in case any legal proceeding shall be brought against the Indemnitor and/or Integral by any governmental commission or regulatory authority or any stock exchange or other entity having regulatory authority, either domestic or foreign, or any such entity shall investigate the Indemnitor and/or Integral and any Indemnified Parties of Integral shall be required to testify in connection therewith or shall be required to respond to procedures designed to discover information regarding, in connection with, or by reason of the performance ofprofessional services rendered to the Indemnitor by Integral, Integral shall have the right to employ its own counsel in connection therewith, and the reasonable fees and expenses of such counsel as well as the reasonable costs (including an amount to reimburse Integral for time spent by its Indemnified Parties in connection therewith) and out-of-pocket expenses incurred by its Indemnified Parties in connection therewith shall be paid by the Indemnitor as they occur.
Promptly after receipt of notice of the commencement of any legal proceeding against Integral or any of its Indemnified Parties or after 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, Integral will notify the Indemnitor in writing of the commencement thereof and, throughout the course thereof, will provide copies of all relevant documentation to the Indemnitor, will keep the Indemnitor advised of the progress thereof and will discuss with the Indemnitor all significant actions proposed. The omission so to notify the Indemnitor shall not relieve the Indemnitor of any liability which the Indemnitor may have to Integral except only to the extent that any such delay in giving or failure to give notice as herein required materially prejudices the defence of such action, suit, proceeding, claim or investigation or results in any material increase in the liability which the Indemnitor would otherwise have under this indemnity had Integral not so delayed in giving or failed to give the notice required hereunder.
The Indemnitor shall be entitled, at its own expense, to participate in and, to the extent it may wish to do so, assume the defence thereof, provided such defence is conducted by experienced and competent counsel. Upon the Indemnitor notifying Integral in writing of its election to assume the defence and retaining counsel, the Indemnitor shall not be liable to Integral for any legal expenses subsequently incurred by them in connection with such defence. If such defence is assumed by the Indemnitor, the Indemnitor throughout the course thereof will provide copies of all relevant documentation to Integral, will keep Integral advised of the progress thereof and will discuss with Integral all significant actions proposed.
Notwithstanding the foregoing paragraph, Integral shall have the right, at the Indemnitor’s expense, to employ counsel of Integral’s choice, in respect of the defence of any action, suit, proceeding, claim or investigation if: (i) the employment of such counsel has been authorized by the Indemnitor; or (ii) the Indemnitor has not assumed the defence and employed counsel therefor within a reasonable time after receiving notice of such action, suit, proceeding, claim or investigation; or (iii) counsel retained by the Indemnitor or Integral has advised Integral that representation of both parties by the same counsel would be inappropriate for any reason, including without limitation because there may be legal defences available to Integral which are different from or in addition to those available to the Indemnitor (in which event and to that extent, the Indemnitor shall not have the right to assume or direct the defence on Integral’s behalf) or that there is an actual or potential conflict of interest between the Indemnitor and Integral or the subject matter of the action, suit, proceeding, claim or investigation may not fall within the indemnity set forth herein (in either of which events the Indemnitor shall not have the right to assume or direct the defence on Integral’s behalf).
No admission of liability and no settlement of any action, suit, proceeding, claim or investigation shall be made without the consent of Integral. No admission of liability shall be made and the Indemnitor shall not be liable for any settlement of any action, suit, proceeding, claim or investigation made without its consent.
The indemnity and contribution obligations of the Indemnitor shall be in addition to any liability which the Indemnitor may otherwise have, shall extend upon the same terms and conditions to the Indemnified Parties of Integral and shall be binding upon and enure to the benefit of any successors, assigns, heirs and personal representatives of the Indemnitor, Integral and any of the Indemnified Parties of Integral. The foregoing provisions shall survive the completion of professional services rendered under the letter to which this is attached or any termination of the authorization given by the letter to which this is attached.
The Indemnitor hereby constitutes Integral as trustee for each of the other Indemnified Parties of the Indemnitor’s covenants under this indemnity with respect to such persons and Integral agrees to accept such trust and to hold and enforce such covenants on behalf of such persons.
This indemnity: (i) shall not be assignable by any party hereto without the prior written consent of each other party hereto; and (ii) shall be governed by and construed in accordance with the law of the Province of Ontario and the federal law of Canada applicable therein and the parties hereto hereby irrevocably attorn to the jurisdiction of the court of the Province of Ontario. No waiver, amendment or other modification of this indemnity shall be effective unless in writing and signed by each of the parties hereto. Any notice or other communication required or permitted to be given under this indemnity shall be so given in accordance with the attached Agreement.