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The subscription by an insider of Empire, for 833,333 units or $50,000, comprising 16.7% of the total amount raised, constitutes a related party transaction within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Empire is relying on the exemptions contained in sections 5.5(a) and section 5.7(1)(a) as the fair market value of the participation in the private placement by the insider does not exceed 25 per cent of the market capitalization of Empire, as determined in accordance with MI 61-101. Empire’s board of directors and specifically the independent members of the board carefully reviewed and approved the private placement subscription by the insider. Empire did not file a material change report in respect of the related party transaction at least 21 days before closing of the private placement as the date of closing was not previously known.