NOTE CERTIFICATE NO. [●]
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Principal Amount: $[●]
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DATED for reference this [●]
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DEVVSTREAM CORP.
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Per:
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Authorized Signatory
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1.1 |
Definitions
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(a) |
“Applicable Securities Laws” means the securities laws, regulations, policies, notices, rulings and orders in the Provinces of British Columbia, Alberta and Ontario, as well as the federal and
state securities laws of the United States;
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(b) |
“Business Day” means a day, other than a Saturday, Sunday or a day on which major commercial banks are CLOSED in the Provinces of British Columbia or Alberta or in New York City;
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(c) |
“Capital Reorganization” has the meaning ascribed thereto in Section 5.4(a)(i)
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(d) |
“Company” means DevvStream Corp.;
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(e) |
“Conversion Date” has the meaning ascribed thereto in Section 5.2(c);
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(f) |
“Conversion Price” means the price that is a 25% discount to the 20-day VWAP of the Shares on the Exchange calculated on the date of the Conversion Date; provided, that, to the extent that the
number of Shares issuable on conversion is greater than the number of Shares equal to the Principal Amount and all accrued interest on this Note divided by the De-SPAC Floor Price (the “Maximum Shares”),
then the amount of Initial Conversion Shares shall be the Maximum Shares;
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(g) |
"Current Market Price” has the meaning ascribed thereto in Section 5.4(b);
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(h) |
“De-SPAC Floor Price” means $0.867;
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(i) |
“Exchange” means the Nasdaq Global Market;
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(j) |
“Events of Default” has the meaning ascribed thereto in Section 6.1;
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(k) |
“Issue Date” means [●];
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(l) |
“Maturity Date” means two years from the Issue Date;
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(m) |
“Note” means this 5.3% secured convertible note;
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(n) |
“Official Body” means any government or political subdivision or any agency, authority, bureau, central bank, monetary authority, commission, department or instrumentality thereof, or any court,
tribunal or arbitrator, whether foreign or domestic;
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(o) |
“Person” means an individual, partnership, corporation, limited or unlimited liability company, trust, unincorporated association, joint venture or government or any agent, instrument or
political subdivision thereof, and any stock exchange;
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(p) |
“Principal Amount” means the principal amount outstanding under this Note, as set forth on the face page to this Note;
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(q) |
“Reclassification of Shares” has the meaning ascribed thereto in Section 5.4(c);
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(r) |
“Regulation D” means Regulation D under the U.S. Securities Act;
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(s) |
“Regulation S” means Regulation S under the U.S. Securities Act;
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(t) |
“Rights Offering” has the meaning ascribed thereto in Section 5.4(a)(ii);
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(u) |
“Shares” means fully-paid and non-assessable common shares in the capital of the Company as constituted on the date hereof and which the Noteholder can elect to receive upon a conversion of this
Note as set out in Article 5;
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(v) |
“Special Distribution” has the meaning ascribed thereto in Section 5.4(a)(iii);
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(w) |
“Time of Expiry” has the meaning ascribed thereto in Section 5.4(a)(i);
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(x) |
“United States”, or “U.S.” means, as the context requires, the United States of America, its territories and possessions, any state of the United States,
and/or the District of Columbia;
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(y) |
“U.S. Person” has the meaning ascribed to it in Rule 902(k) of Regulation S (the definition of which includes, but is not limited to, (i) any natural person resident in the United States, (ii)
any partnership or corporation organized or incorporated under the laws of the United States, (iii) any partnership or corporation organized outside of the United States by a U.S. Person principally for the purpose of investing in
securities not registered under the U.S. Securities Act, unless it is organized, or incorporated, and owned, by U.S. Accredited Investors who are not natural persons, estates or trusts, and (iv) any estate or trust of which any executor
or administrator or trustee is a U.S. Person); and
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(z) |
“VWAP” on any date means the volume weighted average trading price of the Shares on the Exchange for the prior number of trading days as indicated herein.
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1.2 |
Interpretation
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(a) |
the words “herein”, “hereof”, and “hereunder” and other words of similar import refer to this Note as a whole and
not to any particular Article, clause, subclause or other subdivision or Schedule;
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(b) |
a reference to an Article or Section means an Article or Section of this Note, as applicable;
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(c) |
the headings are for convenience only, do not form a part of this Note and are not intended to interpret, define or limit the scope, extent or intent of this Note or any of its provisions;
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(d) |
the word “including”, when following a general statement, term or matter, is not to be construed as limiting such general statement, term or matter to the specific items or matters set forth or to similar items or matters (whether or
not qualified by non‑limiting language such as “without limitation” or “but not limited to” or words of similar import) but rather as permitting the general statement or term to refer to all other items or matters that could reasonably
fall within its possible scope;
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(e) |
unless otherwise indicated, all monetary amounts herein are in United States dollars; and
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(f) |
words importing the masculine gender include the feminine or neuter, words in the singular include the plural, words importing a corporate entity include individuals, and vice versa.
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2.1 |
Principal Amount and Repayment
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2.2 |
Interest on Note
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2.3 |
Outstanding Balance
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2.4 |
Security
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3.1 |
Right of Prepayment
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4.1 |
Covenants of the Company
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(a) |
Observe Obligations. The Company will duly pay or cause to be paid to the Noteholder the Principal Amount and interest of this Note and any other amounts owed to the Noteholder in the manner set
forth herein;
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(b) |
Reservation of Shares. The Company shall at all times have reserved for issuance out of its authorized capital a sufficient number of Shares to satisfy its obligations to issue and deliver Shares
upon the due conversion of the Note;
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(c) |
Approvals and Filings. The Company shall, in connection with the execution and delivery of this Note and the possible conversion of the Note into Shares, obtain any and all requisite approvals of
the shareholders of the Company and statutory and regulatory approvals required to effect and complete the same and shall file all notices, reports and other documents required to be filed by or on behalf of the Company pursuant to
Applicable Securities Laws in respect thereof, including the rules and regulations of the Exchange;
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(d) |
Listing. The Company shall at all times while this Note is outstanding, use its commercially reasonable efforts to maintain the listing of the Shares on the Exchange;
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(e) |
Securities Laws. All Shares issued to the Noteholder upon conversion of the Note or any part thereof shall be made pursuant to an exemption from prospectus and registration requirements available
to the Noteholder or the Company in respect of the transactions contemplated herein under Applicable Securities Laws; and
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(f) |
No Additional Debt. The Company shall not incur any debt, other than indebtedness incurred in the ordinary course of business, without the written consent of the Noteholder, provided that the
Noteholder shall not unreasonably withhold consent to further debt by the Company if such additional indebtedness is determined by the board of directors of the Company to be in the best interests of the Company.
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5.1 |
Conversion
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5.2 |
Manner of Conversion
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(a) |
The Noteholder may convert this Note, in whole but not in part, into Shares at the Conversion Price by delivering to the Company at the address provided for herein, a notice in writing of the Noteholder’s election to convert the Note.
Thereupon, the Noteholder shall be entitled to be entered in the books of the Company as at the Conversion Date as the holder of the number of Shares into which this Note is convertible in accordance with the provisions of this Note.
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(b) |
This Note shall be deemed to be surrendered for conversion on the date (the “Conversion Date”) on which notice is delivered pursuant to Section 5.2(b). If this Note is surrendered for conversion
on a day on which the register of Shares is closed, the person or persons entitled to receive the Shares shall become the holder or holders of record of such Shares as at the date on which such register is next re-opened.
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(c) |
The Noteholder or, subject to payment of all applicable stamp or security transfer taxes or other governmental charges by such Noteholder, the Noteholder's nominee(s) or assignee(s), shall be entitled to be entered in the books of the
Company as of the Conversion Date as the holder of the number of Shares into which the Note is convertible.
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5.3 |
No Requirement to Issue Fractional Securities
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5.4 |
Adjustment of Conversion Price
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(a) |
Where applicable, the Conversion Price in effect at any time will be subject to adjustment from time to time as follows:
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(i) |
If and whenever at any time up to and including the Conversion Date (referred to in this §5.4 as the “Time of Expiry”), the Company will:
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(A) |
subdivide, redivide or change its Shares into a greater number of shares;
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(B) |
consolidate, reduce or combine its Shares into a lesser number of shares; or
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(C) |
issue Shares to all or substantially all of the holders of its Shares by way of a stock dividend or other distribution on such Shares payable in Shares (other than dividends paid in the ordinary course);
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(ii) |
If and whenever at any time prior to the Time of Expiry, the Company will fix a record date for the issuance of rights, options or warrants to all or substantially all the holders of Shares entitling them, for a period expiring not
more than 45 days after such record date, to subscribe for or purchase Shares at a price per share (or having a conversion or exchange price per share) of less than 95% of the Current Market Price per Share on such record date (any such
event being hereinafter referred to as a “Rights Offering”), the Conversion Price will be adjusted immediately after such record date so that it will equal the price determined by multiplying the
Conversion Price in effect on such record date by a fraction, of which the numerator will be the total number of Shares outstanding on such record date plus a number equal to the number determined by dividing the aggregate purchase price
of the additional Shares offered for subscription or purchase by such Current Market Price per Share, and of which the denominator will be the total number of Shares outstanding on such record date plus the number of the additional Shares
offered for subscription or purchase. Any Shares owned by or held for the account of the Company will be deemed not to be outstanding for the purpose of any such computation. Such adjustment will be made successively whenever such a
record date is fixed. To the extent that such Rights Offering is not made or any such rights, options or warrants are not exercised prior to the expiration thereof, the Conversion Price will then be readjusted to the Conversion Price
which would then be in effect if such record date had not been fixed or if such expired rights, options or warrants had not been issued;
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(iii) |
If and whenever at any time prior to the Time of Expiry, the Company will fix a record date for the distribution to all or substantially all the holders of its Shares of:
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(A) |
shares of any class whether of the Company or any other corporation (excluding dividends paid in the ordinary course);
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(B) |
rights, options or warrants;
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(C) |
evidences of indebtedness; or
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(D) |
other assets or property (excluding dividends paid in the ordinary course);
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(b) |
For the purpose of any computation under §5.4(a)(ii) or §5.4(a)(iii), the “Current Market Price” per Share at any date will be the closing market price per share of such Shares on the day
immediately preceding such date on the Exchange;
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(c) |
If and whenever at any time prior to the Time of Expiry, there is a reclassification or change of Shares into other shares or there is a consolidation, merger, reorganization or amalgamation of the Company with or into another
corporation or entity that results in any reclassification of Shares or a change of Shares into other shares or there is a transfer of the undertaking or assets of the Company as an entirety or substantially as an entirety to another
person (any such event being hereinafter referred to as a “Reclassification of Shares”), the Noteholder will be entitled to receive and will accept, upon the exercise of the Noteholder’s right of
conversion at any time after the effective date thereof, in lieu of the number of Shares of the Company to which the Noteholder was theretofore entitled on conversion, the kind and amount of shares or other securities or money or other
property that the Noteholder would have been entitled to receive as a result of such Reclassification of Shares, if, on the effective date thereof, the Noteholder had been the registered holder of the number of such Shares to which the
Noteholder was theretofore entitled upon conversion, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained in this §5.4; provided, however, that the De-SPAC Transaction
shall not constitute a Reclassification of Shares under this §5.4(c);
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(d) |
In any case in which this §5.4 will require that an adjustment become effective immediately after a record date or agreement date for an event referred to herein, the Company may defer, until the occurrence of such event, issuing or
transferring to the Noteholder who converts on a Conversion Date after such record date or agreement date and before the occurrence of such event the additional Shares issuable upon conversion by reason of the adjustment of the Conversion
Price required by such event before giving effect to such adjustment; provided, however, that the Company will deliver to the Noteholder an appropriate instrument evidencing the Noteholder’s right to receive such additional Shares upon
the occurrence of the event requiring such adjustment and the right to receive any distributions made on such additional Shares on and after the Conversion Date or such later date as the Noteholder would, but for the provisions of this
§5.4(d), have become the holder of record of such additional Shares pursuant to this §5.4;
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(e) |
In case the Company after the date hereof will take any action affecting its Shares, other than any action described in this §5.4, which in the opinion of the Company, acting reasonably, would materially affect the conversion rights of
the Noteholder, the Conversion Price will be adjusted in such manner, at such time and by such action by the directors of the Company, as they may determine, acting reasonably, to be equitable to the Noteholder and the Company in the
circumstances, but subject in all cases to any necessary regulatory approval;
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(f) |
The adjustments provided for in this §5.4 are cumulative and will apply to successive subdivisions, redivisions, reductions, combinations, consolidations, distributions, issues or other events resulting in any adjustment under the
provisions of this Section, provided that, notwithstanding any other provision of this Section, no adjustment will be made which would result in any increase in the Conversion Price (except upon a consolidation, reduction or combination
of outstanding Shares) and no adjustment of the Conversion Price will be required unless such adjustment would require a decrease of at least 1% in the Conversion Price then in effect; provided, however, that any adjustments which by
reason of this subsection 5.4(f) are not required to be made will be carried forward and taken into account in any subsequent adjustment;
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(g) |
In the event of any dispute arising with respect to the adjustments provided in this §5.4, such question will be conclusively determined by a firm of chartered accountants appointed by the Company (who may be auditors of the Company)
and acceptable to the Noteholder. Such accountants will have access to all necessary records of the Company and such determination will be binding upon the Company and the Noteholder; and
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Notwithstanding any other provision herein contained, no adjustment to the Conversion Price will be made in respect of any event described in this §5.4 (other than the events referred to in paragraphs (i) and (ii) of subsection (a)),
if the Noteholder is entitled, without converting the Note, to participate in such event on the same terms mutatis mutandis as if the Noteholder had converted the Note into Shares prior to or on the effective date or record date of such
event.
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5.5 |
Resale Restrictions
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(a) |
All Shares issued to the Noteholder upon conversion of the Note will be subject to resale restrictions imposed under Applicable Securities Laws, and the rules of regulatory bodies having jurisdiction over the Company;
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(b) |
The Note and the underlying Shares have not been and will not be registered under the U.S. Securities Act or under any U.S. state securities laws, and conversion of the Note will be effected in reliance on an exclusion or an exemption
from the registration requirements of the U.S. Securities Act and any applicable U.S. state securities laws;
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(c) |
If the Note was originally issued in reliance on the exemption from registration provided by Rule 506(b) of Regulation D, the Note is, and any Shares issued upon conversion thereof will be, “restricted securities” within the meaning of
Rule 144 under the U.S. Securities Act;
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(d) |
Until such time as the same is no longer required under the U.S. Securities Act or applicable U.S. state securities laws, the certificates or other instruments representing any Shares issued as restricted securities upon conversion of
the Note pursuant to the exemption from registration provided by Rule 506(b) of Regulation D, and all certificates or other instruments issued in exchange therefor or in substitution thereof, will bear a legend in substantially the
following form:
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(e) |
The Company is not obligated to remain a “foreign issuer.”
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6.1 |
General
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(a) |
Non-Compliance: the Company fails to observe or perform one or more material covenants, agreements, conditions or obligations in favour of the Noteholder, including a failure to pay any or all of
the Principal Amount, interest and other monies due under the Note when due, and such failure continues unremedied for a period of 30 days;
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(b) |
Ceasing to Carry on Business: the Company ceases or threatens to cease to carry on business or causes any material subsidiary to cease or threaten to cease to carry on business;
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(c) |
Bankruptcy or Insolvency: the Company or any of its material subsidiaries becomes insolvent or makes a voluntary assignment or proposal in bankruptcy or otherwise acknowledges its insolvency, or
a bankruptcy petition is filed or presented against the Company or any of its material subsidiaries, or the Company or any of its material subsidiaries commits or threatens to commit an act of bankruptcy;
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(d) |
Receivership: a receiver or receiver manager of the Company or any of its material subsidiaries is appointed under any statute or pursuant to any document issued by the Company or any of its
material subsidiaries;
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(e) |
Compromise or Arrangement: any proceedings with respect to the Company or any of its material subsidiaries are commenced under the compromise or arrangement provisions of the corporations statute
pursuant to which the Company or such subsidiaries are governed, or the Company or any of its material subsidiaries enter into an arrangement or compromise with any or all of their respective creditors pursuant to such provisions or
otherwise;
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(f) |
Companies' Creditors Arrangement Act: any proceedings with respect to the Company are commenced in any jurisdiction under the Companies' Creditors Arrangement
Act (Canada) or any similar legislation; and
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(g) |
Liquidation: an order is made, a resolution is passed, or a petition is filed, for the liquidation, dissolution or winding-up of the Company or any of its material subsidiaries.
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7.1 |
Upon Default
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7.2 |
Waiver
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8.1 |
Tax Characterization and Withholding Taxes
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8.2 |
Amendment and Waiver
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8.3 |
Notices and Other Instruments
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(a) |
personally delivered to such party; or
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(b) |
except during a period of strike, lock-out or other postal disruption, sent by double registered mail, postage prepaid to the address of such party set forth below; or
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(c) |
sent by facsimile transmission or other means of electronic communication to the address of such party set forth below;
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(i) |
if to the Company, at:
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(ii) |
if to the Noteholder, at the address set forth on the face page to this Note.
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8.4 |
Maximum Rate
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8.5 |
Successors and Assigns
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8.6 |
Headings, etc.
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8.7 |
Severability
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8.8 |
Noteholder's Rights and Remedies
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8.9 |
Modification
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8.10 |
Governing Law
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