Form 8-K/A Newgioco Group, Inc. For: Jan 15
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
Amendment #1
CURRENT REPORT Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 18, 2018
(Date of earliest reported event): (January 15, 2018)
NEWGIOCO GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000 - 50045 33-0823179
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
130 Adelaide Street West, Suite 701
Toronto, Ontario M5H 2K4, Canada
(Address of principal executive offices)
+39 391 306 4134
(Registrant's telephone number)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registration under any of
the following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Explanatory Note
This 8-K/A amends the 8K previously filed on January 18, 2018 to add disclosure
regarding forward looking statements.
ITEM 1.01 OTHER EVENTS
On January 15, 2018, Newgioco Group, Inc. ("we," "us," "our" or the "Company")
entered into an Engagement Letter (the "Agreement") with Echelon Wealth Partners
Inc. ("Echelon") to act as our financial advisor and to provide capital markets
and strategic advice related to the proposed listing common shares for trading
on the Canadian Securities Exchange ("CSE") via an initial public offering from
treasury ("IPO") or alternative method, including a reverse takeover transaction
or other going public transaction (an "RTO") (the RTO and/or IPO are
individually or collectively, the "Going Public Transaction"), and completing a
concurrent or associated financing of between C$3,000,000 and C$5,000,000 or
such other amount, as may be determined by the Company and Echelon (the "Capital
Raising Transaction").
The Company has appointed Echelon to act as the lead agent and sole bookrunner
in respect of the Capital Raising Transaction on a reasonable best efforts
basis, subject to the right of Echelon, in consultation with the Company, to
form a syndicate, which may consist of other licensed dealers, brokers and
investment dealers (Echelon and such other selling agents, collectively,
"Agents"). In connection with the Agreement, we have agreed to pay Echelon an
advisory fee of C$30,000 and a fee equal to 8% of in cash plus broker warrants
equal to 8% the gross proceeds of the offering, subject to certain exceptions,
and to reimburse Echelon for certain expenses incurred by it.
In addition, the Company has agreed to pay Echelon a Sponsorship Agreement fee
of C$110,000 if during the term of the Agreement it is determined that a
Sponsorship Report is required.
Echelon is a leading independent, Canadian-owned and operated wealth management
and capital markets firm with more than $4 billion in assets under
administration and management. The firm has clients across Canada through
offices in Toronto, Oakville, Ottawa, Montreal, Calgary, Vancouver, Victoria,
Saskatoon as well as London and Tokyo.
The securities may be offered only by means of a long-form offering prospectus
and as of the date of this report the pricing for the public offering of our
common stock from treasury has not been determined. A preliminary prospectus
related to the offering shall be filed with the Ontario Securities Commission
("OSC") and, once filled, shall be available on the SEDAR website at
http://sedar.com.
The foregoing description of the Engagement Letter are not complete and is
qualified in its entirety by reference to the full text of the Engagement
Letter, a copy of which is filed as Exhibit 10.2 to this Current Report and is
incorporated by reference herein.
The Agreement contains representations and warranties that the parties made to,
and solely for the benefit of, the other in the context of all of the terms and
conditions of that Agreement and in the context of the specific relationship
between the parties. The provisions of the Engagement Letter, including the
representations and warranties contained therein, are not for the benefit of any
party other than the parties to such agreements and letter and are not intended
as documents for investors and the public from which to obtain factual
information about us or the other parties to such agreements and letter.
Investors and the public should look to other disclosures contained in our
filings with the SEC and the OSC.
Item 9.01 Financial Statements and Exhibits
Number Exhibit Description
10.2 Engagement Letter between Newgioco Group, Inc. and Echelon Wealth
Partners Inc. dated January 15, 2018.
Forward Looking Statements
This Current Report on Form 8-K contains forward looking statements and are
indicated by words such as "shall", "will" and other similar words or phrases.
Actual events or results may differ materially from those described herein. Such
forward-looking statements are subject to a number of risks and uncertainties
that could cause the actual results or performance of the Company to differ
materially from those described herein, include but not limited to the impact of
the global economic environment on the Company's customer base (particularly in
gaming and betting) and the resulting uncertainties; changes in technology and
market requirements; decline in demand for the Company's products; inability to
timely develop and introduce new software, services and applications;
difficulties or delays in absorbing and integrating acquired operations,
technologies and personnel; loss of market share; pressure on pricing resulting
from competition; and inability to maintain certain marketing and distribution
arrangements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATED: January 18, 2018. NEWGIOCO GROUP, INC.
By: /s/ MICHELE CIAVARELLA, B.Sc.
------------------------------
MICHELE CIAVARELLA
Chairman of the Board
Chief Executive Officer
EXHIBIT 10.2
Echelon Wealth Partners Inc.
130 King Street West, Suite 2500
Toronto ON M5X 2A2
PRIVATE & CONFIDENTIAL
January 15, 2018
Newgioco Group, Inc.
130 Adelaide Street West, Suite 701
Toronto, ON M5H 2K4
Attention: Michele Ciavarella, CEO
Dear Mr. Ciavarella,
Re: Proposed Financing and Advisory Mandate
Echelon Wealth Partners Inc. ("Echelon") understand that Newgioco Group, Inc.
(the "Corporation") is seeking capital markets and strategic advice related to
listing common shares for trading on the Canadian Securities Exchange ("CSE")
via an initial public offering from treasury ("IPO") or alternative method,
including a reverse takeover transaction or other going public transaction (an
"RTO") (the RTO and/or IPO are individually or collectively, the "Going Public
Transaction"), and completing a concurrent or associated financing of between
C$3,000,000 and C$5,000,000 or such other amount, as may be determined by the
Corporation and Echelon (the "Capital Raising Transaction"), as contemplated in
Schedule "A" attached hereto.
Echelon would be pleased to act as the Corporation's financial advisor and agent
in respect of the foregoing on the following terms and conditions set out in
this letter agreement (the "Agreement").
1. Services to be Performed. Echelon will perform the following capital markets
and strategic advisory services (collectively, the "Services") in connection
with, and subject to the terms of, this Agreement:
* provide advice to the Corporation with respect to a potential listing of
the Corporation's shares on the CSE;
* assist in making introductions, structuring potential transactions and
analyzing the merit and fit of potential public company vehicles for the
Corporation in connection with the Going Public Transaction;
* assist in the general preparation and messaging of shareholder or
investor communication materials such as investor presentations, fact
sheets or other such typical investor relations or communications
materials;
* assist in reviewing the Corporation's material contracts, disclosure
documents, due diligence and business materials, and providing advice to
the Corporation with respect to the completion of a data room suitable
for use by potential investors in the Corporation;
* provide advice to the Corporation on its strategic and potential future
capital markets transactions, including financings, mergers,
acquisitions, joint ventures and divestitures;
(1)
* introduce the Corporation to capital market participants and/or
institutional investors that may include investment funds, mutual funds,
private capital sources or other potential strategic investors;
* act as lead manager and sole bookrunner in any Canadian Capital Raising
Transaction, whether or not part of the Going Public Transaction;
* provide general advisory assistance and capital markets intelligence as
required by the Corporation;
* provide the Corporation access to and feedback from experienced analysts
and capital markets staff with specialized industry knowledge and
understanding;
* provide the Corporation with industry and specific trading reports;
* provide the Corporation with ongoing financial and strategic advice in
positioning the company within the Canadian capital markets;
* assist in reviewing and providing ongoing guidance in executing the
Corporation's business plan; and
* such other services as may be agreed to between the Agents and the
Corporation.
2. Capital Raising Transaction. The Corporation hereby appoints and Echelon
agrees to act as the lead agent and sole bookrunner in respect of the
Capital Raising Transaction, subject to the right of Echelon, in
consultation with the Corporation, to form a syndicate, which may consist of
other licensed dealers, brokers and investment dealers (Echelon and such
other selling agents, collectively, "Agents").
Completion of the Capital Raising Transaction will be subject to the
entering into by the Corporation, the Agents and other syndicate members, if
any, of an agency agreement in respect of the Capital Raising Transaction
(the "Capital Raising Agency Agreement"). The Capital Raising Agency
Agreement will include the terms and conditions provided herein, and
industry standard covenants, representations and warranties and provisions
regarding legal opinions, indemnification, contribution, termination clauses
and other relevant matters as the Corporation and the Agents may agree. The
Capital Raising Agency Agreement will also contain customary "due diligence
out", "disaster out", "market out", "material adverse change out" and
"regulatory change out" provisions. The Capital Raising Agency Agreement, if
entered into, will supersede this Agreement in respect of the Capital
Raising Transaction.
In respect of the Capital Raising Transaction, it is understood that the
Agents will be acting as agents on a commercially reasonable efforts basis
only, with no obligation or commitment to purchase any of the securities
offered thereunder, but the Agents shall have the right, in their sole
discretion, to acquire securities for their own accounts. It is further
understood that this Agreement does not represent a firm commitment by the
Agents to underwrite the Capital Raising Transaction at this time and that
such a commitment, if any, will not be established until satisfactory
completion of due diligence and the Capital Raising Agency Agreement is
signed and will be governed by the terms of the Capital Raising Agency
Agreement. The pricing of, and the ability of, the Agents to complete the
Capital Raising Transaction will be contingent upon numerous factors
including the market conditions at the time of such transaction, results of
due diligence, and current and future forecasts of financial results and
budgets for the Corporation. Notwithstanding anything in this Agreement to
the contrary, the parties hereto may each determine, acting jointly or
solely, not to enter into the Capital Raising Agency Agreement or to
complete the Capital Raising Transaction. The Capital Raising Transaction
will close immediately prior to or concurrently with completion of the Going
Public Transaction.
(2)
In consideration for the Agent's services with respect to the Capital
Raising Transaction, the Corporation shall (i) pay the Agents a cash fee of
8% of the aggregate gross proceeds of the Capital Raising Transaction
(including the Over-Allotment Option), payable on the closing of the Capital
Raising Transaction, and (ii) broker warrants (the "Broker Warrants") to
purchase up to an additional 8% of the Units sold in the Capital Raising
Transaction (including the Over-Allotment Option), on the same terms of the
Capital Raising Transaction (collectively, the "Capital Raising
Commission").
3. Advisory Fees. In consideration for the provision of the Services outlined
in paragraph 1, the Corporation will pay to Echelon an advisory fee of
C$30,000 (plus applicable taxes) (the "Advisory Fee") due upon execution of
the Agreement. The Advisory Fee will be applied in full to the Capital
Raising Commission due to the Agents.
The Advisory Fee shall be non-refundable regardless of whether the Capital
Raising Transaction is completed, and which shall be the only compensation
payable to Echelon (subject only to the expense reimbursement provisions of
paragraph 6 and the Alternative Transaction provisions of paragraph 14) in
the event no Capital Raising Transaction occurs.
4. Sponsorship Agreement. If during the term of this Agreement, the Corporation
requires sponsorship by a recognized Participating Organization or Member
of the CSE, the Corporation and Echelon will, unless the CSE objects in
writing to Echelon acting as sponsor, enter into a separate agreement where
Echelon will act as a Sponsor and provide for filing with the CSE a Sponsor
Report (the "Sponsorship Agreement"). The fees payable to Echelon in
relation to the Sponsorship Agreement will be C$110,000 and will be payable
upon delivery of the sponsorship report. The Sponsorship Agreement will
contain provisions related to other expenses, including legal fees,
consistent with fees paid to Canadian investment banks and legal counsel
for similar services.
5. Additional Services. If Echelon is requested to provide any other services
in addition to those described in paragraphs 1, 2 and 4 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 will be consistent with fees paid to Canadian
investment bankers for similar services. For additional certainty, Echelon
will not provide any legal, tax or accounting advice, either pursuant to
this Agreement or otherwise.
6. Expenses. The Corporation will be responsible for all reasonable expenses
related to the Going Public Transaction and/or Capital Raising Transaction,
whether or not each is completed, including, but not limited to: fees and
disbursements of the Corporation's legal counsel; fees and disbursements of
the Agents' legal counsel, such counsel to be acceptable to the Corporation
acting reasonably; fees and disbursements of accountants and auditors; fees
and disbursements of other applicable experts; expenses related to
road-shows and marketing activities; printing costs; filing fees; stock
exchange fees; out-of-pocket expenses of the Agents, including, but not
limited to, their travel expenses in connection with due diligence and
marketing activities; and taxes on all of the foregoing. Expenses payable
pursuant to this Agreement shall be payable upon receipt of a detailed
invoice with respect thereto.
The Corporation will pay to Echelon upon the signing of this Agreement a
cash sum of C$10,000 to be allocated to the Agents' legal counsel as a
(3)
retainer for legal services relating to the Going Public Transaction and/or
Capital Raising Transaction. If at any time this Agreement is terminated
and amounts held by Echelon as a retainer for legal services exceed the
cost of those legal services, such excess amounts will be refunded promptly
to the Corporation.
7. Rights of First Refusal. If within a period of 18 months after the date of
this Agreement (the "Right of First Refusal Period") and only if the
Capital Raising Transaction has been completed, the Corporation undertakes
a public or private offering of debt (excluding mortgage debt or any other
form of property level financing), equity or equity-based securities, or,
engages in any corporate transaction involving a merger or acquisition with
industry peers, potential partners, or for property acquisitions, or, if
the Corporation otherwise requires financial advisory services, Echelon
will have a right of first refusal to serve as manager and exclusive
placement agent for such financing or advisor for such financial advisory
engagement. In the event that a right of first refusal is exercised under
this section, the Corporation and Echelon, will enter into a separate
agreement or other appropriate documentation for such engagement containing
such compensation and other terms and conditions as are customary for
similar engagements, including, without limitation, appropriate
indemnification provisions. The foregoing right of first refusal must be
exercised by Echelon within five business days following written
notification from the Corporation that the Corporation requires or proposes
to obtain additional financing or financial advisory services, failing
which Echelon shall relinquish its rights with respect to that particular
engagement only and shall continue to have a right of first refusal in
relation to any other public or private offering of debt, equity,
equity-based securities, or financial advisory services of the Corporation
during the Right of First Refusal Period. If, prior to, or any time after,
providing Echelon with such written notice, the Corporation has received an
offer from a third party to serve as lead manager, exclusive placement
agent or financial advisor in connection with a financing or financial
advisory engagement, the terms upon which such third party has proposed to
act in such capacity shall be disclosed to Echelon by the Corporation in
writing, and Echelon shall be entitled to exercise its right of first
refusal by notifying the Corporation, within five business days following
written notification from the Corporation, of its intention to match the
terms proposed by such third party. The Corporation confirms that there are
no other rights of first refusal to provide debt or equity financing or
financial advisory services to the Corporation currently outstanding.
8. Indemnification. The Corporation shall indemnify and hold harmless Echelon
and its respective officers, directors, employees, partners and agents (the
"Indemnified Parties") in the manner set forth in Schedule "B" to this
Agreement. Such indemnity shall apply to all services contemplated herein,
including, without limitation, any Additional Services.
9. Role of the Agents. It is understood and agreed that the Agents will act
under this Agreement as independent contractors with duties solely to the
Corporation and nothing in this Agreement or the nature of the Agents'
services in connection with this engagement or otherwise shall be deemed to
create a fiduciary duty or fiduciary relationship between or among the
Agents, the Corporation or its security holders, employees, creditors or
any other person or entity, and the Corporation agrees that it shall not
make, and hereby waives, any claim based on an assertion of any such
fiduciary duty or other relationship.
(4)
The Agents shall keep strictly confidential and will only use for the
purpose of performing their obligations hereunder, all information whether
written or oral obtained by it from the Corporation, its affiliates and
their respective agents, advisors, directors, officers or employees in
connection with this engagement ("Confidential Information"). This
confidentiality obligation shall not apply or extend to information now in
the public domain, information which may subsequently become public other
than through breach by the Agents of their obligations hereunder,
information disclosed to the Agents by third parties in respect of which
(to the Agent's knowledge) such third parties are not under an obligation
of confidentiality to the Corporation or information which is required by
law, rule or regulation to be disclosed. The Agents shall ensure that each
of its representatives, including employees and professional consultants,
agents and the other syndicate members, if any, shall be made aware of and
be bound by this provision prior to receiving any such Confidential
Information.
10. Use of Agents' Advice. The Corporation acknowledges and agrees that all
written and oral advice, analysis and materials provided by the Agents 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 the
Agents' prior written consent in each specific instance. Any advice given
by the Agents hereunder will be made subject to and will be based upon such
assumptions, limitations, qualifications and reservations as the Agents
deem necessary or prudent in the circumstances. The Agents expressly
disclaim 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 the
Agents or this engagement.
Neither this Agreement nor the delivery of any advice in connection with
this Agreement confers upon any person or entity not a party hereto
(including, without limitation, security holders, employees, creditors or
any other person or entity) any rights or remedies hereunder or by reason
hereof as against the Agents or the other Indemnified Parties.
11. Term of Mandate. The period of this Agreement shall be for the period
commencing upon the date of execution of this Agreement by the Corporation
and ending on June 30, 2018, unless otherwise extended by the mutual
written agreement of Echelon and the Corporation in writing.
Notwithstanding the previous sentence, this Agreement may be terminated by
either party upon 10 days' prior written notice to the other. The
provisions of this paragraph and paragraphs 3, 6, 8, 9, 10, 12, 14 to 21
inclusive and Schedule "B" shall survive any such termination or expiration
of this Agreement.
12. Other Business. The Corporation acknowledges that the Agents and certain of
their affiliates: (i) act as an investment fund manager and a trader of,
and dealer in, securities both as principal and on behalf of its clients
(including managed accounts and investment funds) and, as such, may have
had, and may in the future have, long or short positions in the securities
of the Corporation or related entities and, from time to time, may have
executed or may execute transactions on behalf of such persons; (ii) may
provide research or investment advice or portfolio management services to
(5)
clients on investment matters, including the Corporation; (iii) may
participate in securities transactions on a proprietary basis, including
transactions in the Offering or other securities of the Corporation or
related entities; and (iv) nothing herein shall restrict their ability to
conduct business in the ordinary course and in compliance with applicable
laws.
13. Due Diligence. The Agents and their legal counsel will be provided with
timely access to all information required to permit them to conduct a full
due diligence investigation of the Corporation in connection with the
Capital Raising Transaction and/or Going Public Transaction, as applicable.
In particular, the Agents shall be permitted to conduct all due diligence
that they may require in order to fulfill their obligations under
applicable securities legislation, and in that regard the Corporation will
make available to the Agents and their legal counsel, on a timely basis,
all corporate and operating records, material contracts, financial
information, budgets, and other relevant information necessary in order to
complete the due diligence investigation of the business, properties and
affairs of the Corporation and all affiliated entities, as well as of its
respective directors, officers and employees. The Corporation agrees that
during the term of the engagement, the Agents will be kept informed of all
material business and financial developments affecting the Corporation,
whether or not requested by the Agents or their legal counsel.
14. Alternative Transaction. If, during the term of this Agreement, a
preliminary prospectus is filed in connection with the IPO or a filing
statement/information circular is filed in connection with an RTO and
subsequent thereto the Corporation terminates this Agreement then, where
the Corporation and/or any of its respective affiliates complete an
Alternative Transaction (as defined below) within six months of the date of
such termination (the "Alternative Transaction Period") which results in
the sale, amalgamation, or merger of the Corporation or results in an
initial public offering by the Corporation, a Toronto Stock Exchange
("TSX"), Toronto Venture Stock Exchange ("TSXV") or CSE listing, a
reverse-take over involving a TSX, TSXV or CSE entity or a private
placement or Capital Raising Transaction, RTO and/or IPO contemplated
hereunder, the Corporation will, upon completing the Alternative
Transaction, pay Echelon, in addition to any amounts required to be paid
under this Agreement, an amount equal to 50% of the cash commission payable
pursuant to paragraph two of this Agreement based on an offering size equal
to the gross proceeds or deemed consideration paid under or in association
with such Alternative Transaction (the "Alternative Transaction Fee"). The
Alternative Transaction Fee shall be payable only with respect to the first
Alternative Transaction completed during the Alternative Transaction Period
and upon such payment being made this paragraph 14 shall be of no further
force or effect.
An "Alternative Transaction" means (i) an issuance or sale by the
Corporation or any of its respective affiliates, of securities other than
those pursuant to the Capital Raising Transaction contemplated herein; (ii)
a merger, amalgamation, business combination, RTO, reorganization,
joint-venture or similar transaction involving the Corporation or its
shareholders; (iii) the acquisition of the Corporation by way of take-over
bid, exchange offer, RTO or similar transaction; or (iv) the direct sale or
indirect sale or exchange of all or substantially all of the shares,
securities or assets of the Corporation. For greater clarity, non-arm's
length transactions involving the properties of the Corporation that are
completed for the purpose of the Going Public Transaction or the Capital
Raising Transaction, do not constitute an Alternative Transaction.
(6)
15. 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 Echelon
hereby irrevocably and unconditionally 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.
16. 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.
17. 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:
Attention: Michele Ciavarella, CEO
Email: [email protected]
(b) in the case of Echelon:
Attention: Arinder Mahal, Managing Director
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 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; and (ii) in the case of a notice delivered or given by email, on
the business day sent (if sent on or prior to 4:00 p.m. local time at the
place of receipt) or the following business day (if sent after 4:00 p.m.
local time at the place of receipt).
18. Successors and Assigns. This Agreement shall be binding upon Echelon and the
Corporation and their respective successors and permitted assigns.
19. Assignment. None of the parties may assign or transfer its rights hereunder
without the prior written consent of the other party.
20. Entire Agreement; Amendment. This Agreement, including the schedule 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.
21. RTO. In the event that the obligations of the Corporation pursuant to this
Agreement are not assumed by operation of law, the Corporation hereby
agrees that, in connection with the RTO, it will use commercially
reasonable efforts to obtain from the party or parties it enters into an
agreement with for an RTO (the "RTO Party"), a covenant from the RTO Party
in favour of the Agents to assume all obligations of the Corporation under
this Agreement following the completion of the RTO.
(7)
22. Counterparts. This Agreement may be signed in one or more counterparts, in
original or electronic form.
[The remainder of this page is intentionally left blank.]
[Signature page follows.]
(8)
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,
ECHELON WEALTH PARTNERS INC.
By: /s/ David Anderson
____________________________________
David Anderson, Head of Investment Banking
* * *
Newgioco Group, Inc. hereby confirms that, effective the date first written
above, it agrees to the terms and conditions set forth above and as set forth in
the attached schedule and which collectively constitute the Agreement.
NEWGIOCO GROUP, INC.
By: /s/ Michele Ciavarella
____________________________________
Michele Ciavarella, CEO
(9)
SCHEDULE "A"
INDICATIVE TERM SHEET
NEWGIOCO GROUP, INC.
OFFERING OF UNITS
Issuer: Newgioco Group, Inc. (the "Company")
Offering: Treasury offering of units (the "Units") to be qualified by a
long form prospectus.
Amount: Up to $5 million (the "Offering").
Offering Price: $** per Unit.
Units: Each Unit will be comprised of one common share in the Company
(each, a "Common Share"), and one common share purchase warrant
(each, a "Warrant").
Warrants: Each Warrant will entitle the holder acquire one Common Share at
a price of $** for a period of ** months from the Closing Date.
Agent's Option: The Company will grant the Agent an option to increase the size
of the Offering by up to 15% in Units, exercisable in whole or
in part at any time for a period of 30 days after and including
the Closing Date (the "Agent's Option").
Use of Proceeds:The Company will use the net proceeds of the Offering in the
following order of priority: (i) extinguish high interest debt
owed to Darling Capital, LLC, (ii) to expand its current store
distribution, (iii) to initiate a customer acquisition plan for
product development, and (iv) working capital and general
corporate purposes.
Offering Basis: The Units will be offered by way of long form prospectus to be
filed in Ontario, and such other jurisdictions as the Company
and Echelon may agree pursuant to National Instrument 44-101
("NI 44-101") and in the U.S. by way of private placement to
selected "accredited investors" (as such term is defined in
Rule 501(a) of Regulation D under the U.S. Securities Act of
1933 and internationally as permitted pursuant to private
placement exemptions under local securities laws.
Eligibility: The Units will be eligible for RRSPs, RRIFs, RESPs, RDSPs, and
TFSAs, subject to the qualifications set forth in the Final
Prospectus under the heading "Eligibility for Investment".
Listing: The Common Shares issued pursuant to the Offering, including the
Common Shares underlying the Warrants and the Broker Warrants,
will be listed on the Canadian Securities Exchange.
Agent: Echelon Wealth Partners Inc.
Commission: 8% cash.
Broker Warrants:To purchase that number of Securities equal to 8% of the number
of Units sold under the Offering, exercisable for a period of
24 months from the Closing Date, under the same terms as the
Offering.
Closing Date: On or about March 30, 2018.
(10)
SCHEDULE "B"
INDEMNITY
Newgioco Group, Inc. (the "Indemnitor") hereby agrees to indemnify and hold
Echelon Wealth Partners Inc., and its respective affiliates (hereinafter
collectively referred to as the "Agents") and officers, directors, employees,
partners, agents and successors and assigns (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 the Agents, to which the Agents
and/or its Indemnified Parties may become subject or otherwise involved in any
capacity under any statute or common law or otherwise, 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 the Agents and their 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 in
respect of an Agent or its respective Indemnified Parties to the extent that a
court of competent jurisdiction in a final judgment that has become
non-appealable shall determine that:
i. An Agent or its respective Indemnified Parties have been negligent or have
committed any fraudulent act or wilful misconduct in the course of such
performance; and
ii. the expenses, losses, claims, damages or liabilities, as to which
indemnification is claimed, were directly or indirectly caused by the
negligence, fraudulent act or wilful misconduct 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 an Agent or
the Agents or insufficient to hold it or them harmless as applicable, then the
Indemnitor shall contribute to the amount paid or payable by the Agents 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 each of the Agents on the other hand but also the
relative fault of the Indemnitor and each of the Agents, as well as any relevant
equitable considerations; provided that the Indemnitor shall, in any event,
contribute to the amount paid or payable by each Agent as a result of such
expense, loss, claim, damage or liability, any excess of such amount over the
amount of the fees received by such Agent 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 one or both of the Agents 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 one or both of the Agents and any Indemnified Parties of the
Agents 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 of professional services
rendered to the Indemnitor by the Agents, each of the Agents 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 the Agents for time spent by its Indemnified Parties in
(11)
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 one or both of the Agents or any of their respective 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, the Agents 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 the Agents 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 the Agents 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 the Agents in writing of its election to assume the defence and
retaining counsel, the Indemnitor shall not be liable to the Agents 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 the Agents, will
keep the Agents advised of the progress thereof and will discuss with the Agents
all significant actions proposed.
Notwithstanding the foregoing paragraph, the Agents, or either one of them,
shall have the right, at the Indemnitor's expense, to employ counsel of the
Agent'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 the Agents have advised the Agents 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 the Agents,
or to either one of the Agents, 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 the Agent's behalf)
or that there is an actual or potential conflict of interest between the
Indemnitor and the Agents or between the Agents 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 the Agent's behalf).
No admission of liability and no settlement of any action, suit, proceeding,
claim or investigation shall be made without the consent of the Agents. 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 the Agents and
(12)
shall be binding upon and enure to the benefit of any successors, assigns, heirs
and personal representatives of the Indemnitor, the Agents and any of the
Indemnified Parties of the Agents. 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 the Agents as agent and trustee for each of
the other Indemnified Parties of the Indemnitor's covenants under this indemnity
with respect to such persons and the Agents agree to accept such trust and to
hold and enforce such covenants on behalf of such persons.
NEWGIOCO GROUP, INC.
By: /s/ Michele Ciavarella
____________________________________
Michele Ciavarella, CEO
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