0001047469-16-014551.txt : 20160729 0001047469-16-014551.hdr.sgml : 20160729 20160729165454 ACCESSION NUMBER: 0001047469-16-014551 CONFORMED SUBMISSION TYPE: F-1/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20160729 DATE AS OF CHANGE: 20160729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DRAGONWAVE INC CENTRAL INDEX KEY: 0001178946 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 000000000 STATE OF INCORPORATION: A6 FILING VALUES: FORM TYPE: F-1/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-212428 FILM NUMBER: 161794703 BUSINESS ADDRESS: STREET 1: 411 LEGGET DRIVE STREET 2: SUITE 600 CITY: OTTAWA STATE: A6 ZIP: K2K 3C9 BUSINESS PHONE: 613-599-9991 MAIL ADDRESS: STREET 1: 411 LEGGET DRIVE, SUITE 600 CITY: OTTAWA STATE: A6 ZIP: K2K 3C9 F-1/A 1 a2229241zf-1a.htm F-1/A
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As filed with the Securities and Exchange Commission on July 29, 2016.

Registration No. 333-212428

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1 TO
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

DRAGONWAVE INC.
(Exact name of Registrant as specified in its charter)

N/A
(Translation of Registrant's name into English)


Canada (State or other jurisdiction of incorporation or organization)		4812 (Primary Standard Industrial Classification Code Number)		Not Applicable (I.R.S. Employer Identification No.)

DragonWave Inc.
411 Legget Drive, Suite 600
Ottawa, Ontario, Canada K2K 3C9
(613) 599-9991
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)

Peter Allen
President and Chief Executive Officer
411 Legget Drive, Suite 600
Ottawa, Ontario, Canada, K2K 3C9
(613) 599-9991
(Name, address, including zip code, and telephone number, including
area code, of agent for service)


Andrea Johnson Dentons Canada LLP 99 Bank Street, Suite 1420 Ottawa, Ontario, K1P 1H4 (613) 783-9600		Matthew Leivo DLA Piper LLP (US) 4365 Executive Drive, Suite 1100 San Diego, CA 92121 (858) 677-1400		Robert Charron Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, NY 10105 (212) 370-1300

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ý

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered(1)		Proposed maximum aggregate offering price per share		Proposed maximum aggregate offering price(2)		Amount of registration fee(3)




Class A Units consisting of:
(i) Common shares, no par value
(ii) Long-Term Warrants to purchase common shares(4)
(iii) Short-Term Warrants to purchase common shares(4)	1,435,406	$	4.18	$	5,999,997	$	604.20

Class B Units consisting of:
(i) Pre-Funded Warrants to purchase common shares(4)
(ii) Long-Term Warrants to purchase common shares(4)
(iii) Short-Term Warrants to purchase common shares(4)	1,435,406	$	4.17	$	5,985,643	$	602.76

Common shares issuable upon exercise of outstanding
(i) Long-Term Warrants to purchase common shares	2,870,812	$	5.23	$	15,014,347	$	1,511.95
(ii) Short-Term Warrants to purchase common shares	5,741,624	$	4.60	$	26,411,470	$	2,659.64
(iii) Pre-Funded Warrants to purchase common shares	1,435,406	$	0.01	$	14,354	$	1.45

Total	12,918,654			$	53,425,811	$	5,380.00

(1): Pursuant to Rule 416 under the Securities Act of 1933, as amended, this registration statement also covers such indeterminate number of additional common shares as may be issuable with respect to the shares being registered hereunder as a result of stock splits, stock dividends, recapitalizations or similar transactions.
(2): Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as amended.
(3): $1,574 previously paid.
(4): The warrants will be issued for no additional consideration. No registration fee is required pursuant to Rule 457(g) under the Securities Act of 1933, as amended.

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED JULY 29, 2016

DRAGONWAVE INC.

$6.0 million in any combination of:

Up to 1,435,406 Class A Units
Consisting of One Common Share,
One Warrant to Purchase One Common Share
and Two Short-Term Warrants Each to Purchase One Common Share

and

Up to 1,435,406 Class B Units
Consisting of One Pre-Funded Warrant to Purchase One Common Share,
One Warrant to Purchase One Common Share
and Two Short-Term Warrants Each to Purchase One Common Share

Pursuant to this prospectus, we are offering up to $6.0 million in the aggregate of Class A Units and Class B Units, in any combination. We may sell up to 1,435,406 Class A Units, each consisting of one of our common shares, one five-year warrant to purchase one of our common shares (the "Long-Term Warrants"), and two six-month warrants each to purchase one of our common shares (the "Short-Term Warrants"). Each Class A Unit will be sold to investors in this offering at an assumed offering price of $4.18 per unit, which is the closing price of our common shares on the NASDAQ Capital Market on July 26, 2016. We may also sell, to investors whose purchase of Class A Units would result in their exceeding the 4.99% beneficial ownership limitation described in this prospectus, up to 1,435,406 Class B Units, each consisting of one pre-funded warrant with no expiration date to purchase one common share (the "Pre-Funded Warrants"), one Long-Term Warrant and two Short-Term Warrants. Each Class B Unit will be sold to investors in this offering at a price of $4.17 per unit.

We refer to the Class A Units and the Class B Units collectively as the "units." We refer to the Short-Term Warrants, the Long-Term Warrants and the Pre-Funded Warrants collectively as the "warrants." The units will not be issued or certificated. The common shares or the Pre-Funded Warrants and the Short-Term Warrants and the Long-Term Warrants are immediately separable and will be issued separately, but will be purchased together in this offering. This prospectus also relates to the common shares issuable on exercise of the warrants.

The Short-Term Warrants will be exercisable during the period commencing on the date of original issuance and ending on the date six-months thereafter, at an assumed initial exercise price of $4.60 per common share. The Long-Term Warrants will be exercisable during the period commencing on the date of original issuance and ending on the date that is five years from the date of issuance, at an assumed initial exercise price of $5.23 per common share. The Pre-Funded Warrants will be exercisable on the date of original issuance, with no expiration date, are deemed purchased for a price of $4.17 per underlying common share by virtue of purchasing the Class B Unit and have an exercise price of $0.01 per share. See "Description of Securities Being Distributed" for more information on the securities offered hereby.

Our common shares are listed on the Toronto Stock Exchange ("TSX") under the symbol DWI and on the NASDAQ Capital Market under the symbol "DRWI." On July 28, 2016, the last reported sale price of our common shares on the TSX was CAD$5.72 per share and on the NASDAQ Capital Market was $4.38 per share.

Investing in our securities involves a high degree of risk. We refer you to the section entitled "Risk Factors" on page 9 of this prospectus and under similar sections in the documents we incorporate by reference into this prospectus.

	Per Class A Unit	Total




Public offering price	$	$

Underwriting discount(1)	$	$

Proceeds to DRWI (before expenses)	$	$

(1): We have also agreed to pay to the underwriter a non-accountable expense allowance of $100,000 for its legal fees. See the heading entitled "Underwriting" for additional disclosure regarding compensation to the underwriter payable by us.

The underwriter expects to deliver the securities on or about , 2016.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.

Sole Book Running Manager

Rodman & Renshaw
a unit of H.C. Wainwright & Co.

Prospectus dated , 2016

TABLE OF CONTENTS

		Page

PROSPECTUS SUMMARY			3
COMPANY OVERVIEW			3
THE OFFERING			6
SELECTED FINANCIAL DATA			8
RISK FACTORS			9
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			12
USE OF PROCEEDS			15
DIVIDEND POLICY			15
CAPITALIZATION			16
DILUTION			17
MARKET PRICES			18
DESCRIPTION OF SECURITIES BEING DISTRIBUTED			19
MATERIAL UNITED STATES FEDERAL INCOME TAXATION			22
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS FOR UNITED STATES RESIDENTS			32
UNDERWRITING			34
LEGAL MATTERS			36
EXPERTS			36
ENFORCEMENT OF CIVIL LIABILITIES			36
WHERE YOU CAN FIND MORE INFORMATION			37
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE			37

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus or incorporated by reference into this prospectus from our Annual Report on Form 20-F for the year ended February 29, 2016 (our "2016 Annual Report"), our Form 6-K filed with the Securities and Exchange Commission (the "SEC") on July 13, 2016 (the "Q1 2016 Report") and our other filings with the SEC listed in the section of this prospectus entitled "Incorporation of Certain Documents by Reference" and does not contain all of the information you should consider before investing in our common shares or the units offered under this prospectus. You should also consider, among other things, the matters described under "Risk Factors" and "Operating and Financial Review and Prospects," in each case appearing elsewhere in this prospectus or in our 2016 Annual Report, incorporated by reference herein. You should also read and consider the information contained in the documents identified under the headings "Incorporation of Certain Documents by Reference" and "Where You Can Find More Information."

You should rely only on the information provided in this prospectus, including the information incorporated by reference. We have not authorized anyone to provide you with different information. You should not assume that the information contained or incorporated by reference in this prospectus is accurate as of any date other than as of the date of this prospectus or in the case of the documents incorporated by reference, the date of such documents regardless of the time of delivery of this prospectus or any sale of our securities. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.

In this prospectus, unless otherwise specified or the context otherwise requires, all dollar amounts are expressed in United States dollars.

Unless the context otherwise requires, all references in this prospectus to the "Company", "DRWI", "we", "us" and "our" refer to DragonWave Inc., DragonWave Corp., incorporated in the state of Delaware, USA, DragonWave Pte. Ltd., incorporated in Singapore, DragonWave S.à r.l., incorporated in Luxembourg, DragonWave Telecommunication Technology (Shanghai) Co., Ltd., incorporated in China, DragonWave Mexico S.A. de C.V., incorporated in Mexico, Axerra Networks Asia Pacific Limited, incorporated in Hong Kong, DragonWave India Private Limited, incorporated in India and DragonWave Inc.'s majority owned subsidiary, DragonWave HFCL India Private Limited, incorporated in India.

References in this prospectus to "Nokia" or "NSN" refer to both Nokia Solutions and Networks and its predecessor business as carried on under the name Nokia Siemens Networks. Nokia is a trademark of Nokia Corporation or its affiliates.

COMPANY OVERVIEW

Our Business

Founded in 2000, we are a leading provider of high-capacity wireless Ethernet equipment used in emerging internet protocol ("IP") networks. We design, develop, market and sell proprietary, carrier-grade microwave radio frequency networking equipment (often referred to as "links"), that wirelessly transmit broadband voice, video and other data between two points. Our wireless carrier-Ethernet links, which are based on a native Ethernet platform, function as a wireless extension to an existing fiber and global optic core telecommunications network. The principal application for our products is the backhaul function in a wireless communications network. Backhaul links connect the large amounts of network traffic aggregated by base stations and other collection points on the edge of the network to the high-capacity fiber optic infrastructure at the core of the network. Additional applications for our products include point-to-point transport applications in private networks, including municipal and enterprise applications.

Our Products

Our products principally perform the backhaul function in a communication service provider's network, connecting high-traffic points of aggregation such as high-capacity wireless base stations (3G+ cellular, WiFi, LTE), small cells and large "out of territory" enterprises to nodes on the fiber optic core network.

Our line of wireless carrier-Ethernet links is marketed under the Horizon trade names. Our products are carrier-grade and operate primarily in licensed spectrum bands to minimize interference.

In 2011, we introduced our Avenue solution, which was designed to provide high levels of spectral efficiency and reliability for carrier-grade delivery of advanced applications and services. The Avenue solution is a small device, utilizing a small antenna, to integrate microcellular backhaul, third-party base stations, power supply, battery backup, switching, and management in an all-in-one, environmentally shielded enclosure. This is a hardened, all-outdoor, zoning-friendly and fully integrated solution that was designed specifically for service providers to deploy microcellular coverage with high-performance backhaul.

On June 1, 2012, we acquired our Harmony product line from Nokia. For a description of the transaction pursuant to which we acquired this product line from Nokia, see "Part I—Item 4. "Information on our Business—Mergers & Acquisitions and Joint Ventures—Acquisition of Microwave Transport Business of NSN and Relationship with Nokia" in our 2016 Annual Report. The Harmony product line is a multi-service wireless platform enabling time-division multiplexing (TDM) and packet-based services across wireless or wireline infrastructure. Harmony is rebranded by Nokia as FlexiPacket.

In 2013, we introduced our Harmony Lite and Avenue Link Lite products lines. These product lines are DragonWave's first products in the sub-6GHz bands. The Lite products operate in licensed and unlicensed bands, and provide Line of Sight, and non-line of sight connectivity. The Lite product line is an important part of our small cell backhaul offering in the Avenue family.

In 2014, we introduced our Harmony Eband product. Harmony Eband operates in the 70/80 GHz bands. It provides capacities of up to 2.5 Gbps, and operates in low cost bands, providing mobile operators with a much lower total cost of ownership and scalability strategy.

In 2014, we introduced Harmony Enhanced, a high capacity, long reach, multi-service radio operating in the 6-42 GHz spectrum bands. Harmony Enhanced merges the performance and reliability of DragonWave's flagship Harmony Radio and Horizon Compact+ into a next-generation, ultra high-capacity microwave system.

In 2016, we introduced Harmony Enhanced^MC, an ultra-high capacity, multi-service microwave system operating in the 6-42 GHz spectrum bands that provides dual channel support and extended reach. Harmony Enhanced^MC delivers the next level of capacity by introducing integrated dual carrier and fully integrated XPIC capabilities into a single Outdoor Unit (ODU) antenna configuration. Harmony Enhanced^MC delivers over 4 Gbps in a single radio, with scalability to deliver 8Gbps on a single antenna.

Our Strategy

The demand for our products is driven by global trends, including IP convergence and pressure on backhaul capacity caused by increased functionality of mobile devices, the shift in demand from voice to multimedia content and services, growing demand for wireless coverage, increasing numbers of subscribers, and investment in radio access network spectrum. In our target markets, network traffic is shifting from legacy TDM traffic to IP-based traffic to improve network efficiency and enable IP-based services.

Principally, we target the global wireless communications service provider market and, in particular, those service providers offering high-capacity wireless communication services, including traditional cellular service providers and emerging broadband wireless access (BWA) service providers. These service providers offer high-speed digital communication services over wireless access networks, employing IP-based wireless network access technologies such as advanced (3G, 4G and 5G) cellular technologies, as well as WiFi. The market addressed by these wireless service providers is characterized by significant growth in number of subscribers, coverage area, and bandwidth requirements per subscriber, and a corresponding need to reduce the cost per bit of the backhaul network. (See Cisco® Visual Networking Index (VNI) Global Mobile Data Traffic Forecast Update dated February 3, 2016). We also target other markets, including wireless extension of fixed-line networks to directly connect high-bandwidth end-customers to the core network, and private networks of large multi-site organizations such as Fortune 500 enterprises, municipalities and government organizations.

The key elements of our solutions include: high performance; carrier-grade availability; cost-competitiveness; support of legacy networking standards; and the availability of advanced network management and wireless network IP planning.

Our Corporate Information

We commenced commercial deployment of our products in 2002 and, as of February 29, 2016, have shipped approximately 154,867 links (each link contains 2-4 units). In the fiscal year ended February 29, 2016, we delivered products to 184 customers, in 58 countries. Customers included: Nokia, Reliance Jio Infocomm (India), TESSCO (United States), Samsung, Alliance Communications (United States) and Xplornet (Canada).

Our head office is located at 411 Legget Drive, Suite 600, Ottawa, Ontario, Canada K2K 3C9.

THE OFFERING


Units we are offering		Up to $6.0 million in the aggregate of any combination of up to 1,442,307 Class A Units and up to 1,442,307 Class B Units. Each unit consists of one common share or one Pre-Funded Warrant (depending on whether it is a Class A Unit or Class B Unit), as well as one Long-Term Warrant and two Short-Term Warrants. The common shares or the Pre-Funded Warrants and the Long-Term Warrants and the Short-Term Warrants are immediately separable and will be issued separately, but will be purchased together in this offering. This prospectus also relates to the common shares issuable upon exercise of the warrants.
Assumed public offering price		$4.18 per Class A Unit and $4.17 per Class B Unit.
Short-Term Warrants		The Short-Term Warrants will be exercisable during the period commencing on the date of original issuance and ending on the date six months thereafter, at an assumed initial exercise price of $4.60 per common share.
Long-Term Warrants		The Long-Term Warrants will be exercisable during the period commencing on the date of original issuance and ending on the date that is five years from the date of issuance, at an assumed initial exercise price of $5.23 per common share.
Pre-Funded Warrants		Investors whose purchase of Class A Units would result in their exceeding the 4.99% beneficial ownership limitations described in this prospectus may, alternatively, purchase Class B Units, in which they would acquire a Pre-Funded Warrant in lieu of a common share (as well as the Long-Term Warrant and the Short-Term Warrant components of the unit). The Pre-Funded Warrants will be exercisable on the date of original issuance, with no expiration date, are deemed purchased for a price of $4.17 per underlying common share by virtue of purchasing the Class B Unit, and have an exercise price of $0.01 per share.
Common shares to be outstanding immediately following this offering(1)		5,055,973
Use of proceeds		We estimate that the net proceeds from the sale of the units in this offering will be approximately $5.3 million, based on an assumed public offering price of $4.18 per Class A Unit, after deducting the underwriting discount and our estimated expenses related to this offering. We intend to use the net proceeds for general corporate purposes, which may include working capital, general and administrative expenses, capital expenditures and implementation of our strategic priorities. See "Use of Proceeds".
Risk factors		This investment involves a high degree of risk. See "Risk Factors" for a discussion of factors you should consider carefully before making an investment decision.


NASDAQ Capital Market symbol		"DRWI." We do not intend to list the warrants on any trading market.

(1)

Unless otherwise indicated, all information in this prospectus, including the number of shares outstanding immediately following this offering assumes all units sold in this offering are Class A Units. The number of shares outstanding immediately following this offering is based on 3,620,567 common shares outstanding as of May 31, 2016, and excludes as of May 31, 2016 unless otherwise noted:

•: 342,260 common shares subject to outstanding options with exercise price of CAD$21.79 per share;
•: 319,806 common shares issuable upon exercise of outstanding warrants at a weighted average exercise price of CAD$56.38 per share;
•: 383,549 common shares issuable upon exercise of outstanding warrants at a weighted average exercise price of $8.12 per share; and
•: the common shares issuable upon the exercise of the warrants comprising part of the units.

SELECTED FINANCIAL DATA

The selected consolidated statements of operations data for the three months ended May 31, 2016 and 2015 and the selected consolidated balance sheet data as of May 31, 2016 have been derived from our consolidated interim financial statements set forth in Exhibit 99.2 to our Q1 2016 Report. The selected consolidated statements of operations data for the years ended February 29, 2016, February 28, 2015, and February 28, 2014, and the selected consolidated balance sheet data at February 29, 2016, February 28, 2015, and February 28, 2014, have been derived from our audited consolidated financial statements set forth in "Part III—Item 18. Financial Statements" of our 2016 Annual Report. The selected consolidated statements of operations data for the years ended February 29, 2012 and February 28, 2013 and the selected consolidated balance sheet data at February 29, 2012 and February 28, 2013, have been derived from our previously published audited consolidated financial statements, which are not included in this prospectus or our 2016 Annual Report. This selected financial data should be read in conjunction with our consolidated financial statements and are qualified entirely by reference to such consolidated financial statements. We prepare our consolidated financial statements in U.S. dollars and in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP"). You should read the selected financial data together with Management Discussion and Analysis included as Exhibit 99.3 in the Q1 2016 Report and with the section of our 2016 Annual Report entitled "Part I—Item 5. Operating and Financial Review and Prospects".

The tables are expressed in thousands of U.S. dollars except percentages, share and per share amounts.

Selected Consolidated Statements of Operations Data

	For the three months ended						For the year ended

	May 31 2016			May 31 2015			Feb 29 2016			Feb 28 2015			Feb 28 2014			Feb 28 2013			Feb 29 2012
Revenue		12,545			26,340			86,295			157,766			90,011			123,877			45,656
Gross Profit		3,892			5,549			13,971			27,994			10,663			19,501			16,401
Gross Profit %		31.0	%		21.1	%		16.2	%		17.7	%		11.8	%		15.7	%		35.9	%
Operating Expenses		7,261			10,963			37,776			47,717			50,236			76,709			54,956
Loss before other items		(3,369	)		(5,414	)		(23,805	)		(19,723	)		(39,573	)		(57,208	)		(38,555	)
Net loss applicable to shareholders		(4,100	)		(5,954	)		(42,304	)		(21,520	)		(34,242	)		(54,749	)		(33,481	)
Net loss per share
Basic & Diluted		(1.23	)		(1.98	)		(14.01	)		(7.90	)		(20.75	)		(36.50	)		(23.50	)
Weighted average number of shares outstanding
Basic & Diluted		3,346,378			3,011,941			3,019,259			2,724,467			1,657,535			1,499,832			1,420,267

Selected Consolidated Balance Sheet Data



Cash and cash equivalents	3,951	4,277	23,692	18,992	22,959	52,975
Trade receivables	15,000	18,986	48,626	17,408	35,452	9,850
Inventory	23,312	22,702	24,294	30,416	32,722	27,043
Total other current assets	2,184	2,777	5,895	5,978	19,989	5,570
Long term assets	3,971	4,325	18,546	18,326	23,872	24,683
Total assets	48,418	53,067	121,053	91,120	134,994	120,121
Total liabilities	45,173	48,840	76,285	49,677	79,384	18,056
Shareholders' equity	1,476	2,520	43,801	41,524	55,594	101,764
Shares issued and outstanding	3,620,567	3,020,069	3,011,632	2,320,349	1,521,931	1,423,448

RISK FACTORS

You should carefully consider the risk factors set forth below and under the caption "Risk Factors" in our 2016 Annual Report, which is incorporated by reference in this prospectus. See "Where You Can Find More Information" and "Incorporation of Certain Documents by Reference." Before making any investment decision, you should carefully consider these risks as well as other information we include or incorporate by reference in this prospectus. The risks and uncertainties we describe are not the only ones facing us. Additional risks and uncertainties that we are unaware of or that we believe are not material at the time could also materially adversely affect our business, financial condition or results of operations. In any case, the value of our common shares could decline, and you could lose all or part of your investment. See also the information contained under the heading "Cautionary Statement Regarding Forward-Looking Statements" below.

Risks Relating to this Offering

We will require additional capital, which may not be available at all or available on terms acceptable to us.

We expect that we may need additional capital in order to fund ongoing operations, develop new products, take advantage of opportunities, including more rapid expansion of our business or the acquisition of complementary products, technologies or businesses, or respond to competitive pressures.

In addition, we may require capital due to our long term credit facility with Comerica Bank and Export Development Canada (our "Lenders"). As at May 31, 2016, we had drawn $18.9 million on the asset based facility and $1.9 million against letters of credit. The credit facility was extended on January 6, 2014, and matured on June 1, 2016 and is secured by a first priority charge on all of our assets and the assets of our principal direct and indirect subsidiaries. We have entered into three forbearance agreements, the third of which has an August 1, 2016 expiration date and requires that we hold a minimum of $0.8 million at Comerica. In addition, the forbearance agreement reduced the facility commitment from $40.0 million to $30.0 million and implemented more frequent monitoring. Because the credit facility matured on June 1, 2016, and there is no forbearance agreement in effect as of August 1, 2016, the lenders may require repayment of all amounts outstanding thereunder at any time on or after August 1, 2016. We are currently negotiating a fourth forbearance agreement with our Lenders, although we may be unable to reach agreement. Our Lenders have advised us that they will require, as a condition of any further forbearance, that we complete this offering.

Any additional capital raised through the sale of equity will dilute each shareholder's percentage ownership of the Company and such dilution may be significant. Capital raised through debt financing would require us to make periodic interest payments and may impose restrictive covenants on the conduct of our business. Furthermore, additional capital may not be available at all or on terms acceptable to us. A failure to obtain additional capital could prevent us from making expenditures that may be required to grow or maintain our operations.

The trading price of our common shares has been, and may continue to be, subject to large fluctuations.

Our common shares are listed on the TSX and NASDAQ Capital Market. The trading price of our common shares has been, and may continue to be, subject to large fluctuations and, therefore, the value of the common shares comprising part of the offered unit may also fluctuate significantly, which may result in losses to investors.

We have not paid and do not intend to pay dividends on our common shares. Investors in this offering may never obtain a return on their investment.

We have never paid any dividends on our common shares and do not anticipate paying any cash dividends in the foreseeable future. We plan to retain earnings, if any, for the foreseeable future for

our operations. In addition, our credit facility restricts our ability to pay dividends. Accordingly, you will need to rely on sales of your common shares after price appreciation, which may never occur, in order to realize a return on your investment.

Since we have broad discretion in how we use the proceeds from this offering, we may use the proceeds in ways with which you disagree.

Our management will have significant flexibility in applying the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to influence how the proceeds are being used. It is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us. The failure of our management to use such funds effectively could have a material adverse effect on our business, financial condition, prospects, financial condition, operating results and cash flow.

There is no public market for the warrants and we do not intend to list the warrants on any stock exchange.

There is currently no public market for the warrants and we do not intend to list the warrants on any trading market. While the warrants will be freely transferable, we do not expect any active public market to develop or be sustained after completion of this offering. Even if a public market for the warrants develops it may not be possible to predict the price at which the warrants will trade in the secondary market or whether such market will be liquid or illiquid. To the extent the warrants are exercised, the number of warrants outstanding will decrease, which may diminish the liquidity for such remaining outstanding warrants. A decrease in the liquidity of the warrants may cause, in turn, an increase in the volatility associated with the price of the warrants. To the extent that the warrants are or become illiquid, an investor may have to exercise the warrants to realize value.

Due to the speculative nature of warrants, there is no guarantee that it will ever be profitable for holders of the warrants to exercise the warrants.

The warrants being offered do not confer any rights of common share ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire common shares at a fixed price. Except for the Pre-Funded Warrants, which have no expiration date, this right is also for a limited period of time. Specifically, commencing on the date of issuance, holders of the Short-Term Warrants may exercise their right to acquire common shares and pay an assumed initial exercise price of $4.60 per share (110% of the offering price per Class A Unit) until the date six months thereafter. The Long-Term Warrants will be exercisable during the period commencing on the date of original issuance and ending on the date that is five years from the date of issuance, at an assumed initial exercise price of $5.23 per common share (125% of the offering price per Class A Unit). After these expiration dates any unexercised Short-Term Warrants or Long-Term Warrants will expire and have no further value. Moreover, following this offering, the market value of the warrants, if any, is uncertain. The market price of the common shares may never equal or exceed the exercise price of the warrants and, consequently, it may never be profitable for holders of the warrants to exercise the warrants.

You will experience immediate and substantial dilution in the book value per common share you acquire.

Because the public offering price per unit is expected to be substantially higher than our book value per share, you will suffer immediate and substantial dilution in the net tangible book value of the common shares you acquire in this offering. Based on the assumed public offering price of $4.18 per Class A Unit, and assuming all units sold in their offering are Class A Units, if you acquire common shares in this offering, you will suffer immediate and substantial dilution of approximately $2.60 per share in the net tangible book value of the common shares you acquire.

The exercise price of certain of our currently outstanding warrants to purchase our common shares will be reduced in connection with this offering.

Warrants to purchase 83,550 common shares, which we issued in September 2013, currently remain outstanding (the "2013 Warrants"). Prior to the completion of this offering, 25 whole 2013 Warrants entitle the holder to purchase one common share at a price of $6.76 per share, subject to adjustment as specified in the 2013 Warrant. The 2013 Warrants contain anti-dilution provisions, which provide that if we issue or sell, or are deemed to issue or sell, any common shares (or securities convertible into common shares) for a consideration per share (as defined in the 2013 Warrant) less than a price equal to the exercise price of the 2013 Warrants in effect immediately before such issue or sale (or deemed issuance or sale), then the exercise price of the remaining outstanding 2013 Warrants will be reduced to the amount of such consideration per share (as defined in the 2013 Warrant). Upon the closing of this offering, the exercise price of the remaining outstanding 2013 Warrants will be reduced in accordance with these provisions. This reduced price will apply to both standard exercises in which the exercise price is payable in cash, and the calculation of the "cashless exercise" feature of the 2013 Warrants. The exercise price and number of common shares issuable under the 2013 Warrants may be subject to further adjustment in the future. Any such adjustments may result in dilution to purchasers of the units.

We may sell or issue additional common shares in the future, causing dilution of your equity interest.

If we require additional funds in the future and raise such funds by issuing additional equity securities, especially at prices lower than the price of the units offered under this prospectus, such financing may dilute the equity interests of our current shareholders, including purchasers who acquire units pursuant to this prospectus.

Significant beneficial owners of our common shares may not be permitted to exercise warrants they hold.

Investors in this offering whose purchase of Class A Units would result in their exceeding the 4.99% beneficial ownership limitations described in this prospectus may purchase Class B Units, which contain Pre-Funded Warrants rather than common shares. In addition, the warrants being offered hereby will prohibit a holder from exercising any portion of its warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of our common shares outstanding immediately after giving effect to such exercise, which we refer to as the beneficial ownership limitation; provided, however, that upon notice to us, the holder may increase or decrease the beneficial ownership limitation, provided that in no event shall the beneficial ownership limitation exceed 9.99% and any increase in the beneficial ownership limitation will not be effective until 61 days following notice of such increase from the holder to us. As a result, you may not be able to exercise your warrants for common shares at a time when it would be financially beneficial for you to do so. In such circumstance, you could seek to sell your warrants to realize value but you may be unable to do so.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian and United States securities laws. All statements other than statements that are reporting results or statements of historical fact are forward-looking. All forward-looking information and forward-looking statements are necessarily based on a number of estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words "may", "will", "should", "continue", "expect", "anticipate", "estimate", "believe", "intend", "plan" or "project" or the negative of these words or other variations on or synonyms of these words or comparable terminology. Forward-looking statements include, without limitation, statements regarding strategic plans, future production, sales and revenue estimates, cost estimates and anticipated financial results, capital expenditures, results attributable to mergers and acquisitions activities and other objectives.

There can be no assurance that forward-looking statements will prove to be accurate and actual results and outcomes could differ materially from those expressed or implied in such statements. The following are some of the important factors related to our business and industry that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements:

•: limited cash resources and our dependence on our credit facilities and accommodations by our lenders and certain suppliers;
•: our reliance on a small number of customers for a large percentage of revenue;
•: our need for working capital will intensify if we are successful in winning new business;
•: intense competition from several competitors;
•: competition from indirect competitors;
•: our history of losses;
•: our ability to implement our ongoing program of operating cost reductions;
•: our dependence on our ability to develop new products, enhance existing products and execute product roll-outs on a basis that meets customer requirements;
•: our exposure to product warranty claims, and inventory and account receivables exposure in relation to recent product quality issues;
•: our ability to successfully manage our resources;
•: our dependence on our ability to manage our workforce and recruit and retain management and other qualified personnel;
•: quarterly revenue and operating results that are difficult to predict and can fluctuate substantially;
•: a lengthy and variable sales cycle;
•: our reliance on suppliers, including outsourced manufacturing, third party component suppliers and suppliers of outsourced services;
•: our ability to manage the risks related to increasingly complex engagements with channel partners and end-customers;
•: pressure on our pricing models from existing and potential customers and as a result of competition;

•: our exposure to credit risk for accounts receivable;
•: our dependence on the development and growth of the market for high-capacity wireless communications services;
•: the allocation of radio spectrum and regulatory approvals for our products;
•: the ability of our customers to secure a license for applicable radio spectrum;
•: changes in government regulation or industry standards that may limit the potential market for our products;
•: currency fluctuations;
•: our ability to protect our own intellectual property and potential harm to our business if we infringe the intellectual property rights of others;
•: risks associated with software licensed by us;
•: a change in our tax status or assessment by domestic or foreign tax authorities;
•: exposure to risks resulting from our international sales and operations, including the requirement to comply with export control and economic sanctions laws;
•: our exposure to potential product defects and product liability claims and health and safety risk relating to wireless products;
•: the impact that general economic weakness and volatility may be having on our customers; and
•: disruption resulting from economic and geopolitical uncertainty.

In particular, in our most recent fiscal year ended on February 29, 2016 and quarter ended May 31, 2016, approximately 44% and 38%, respectively, of our sales were through the Nokia channel. Recent developments within Nokia, including Nokia's combination with Alcatel-Lucent, have resulted in our conclusion that new product sales through this channel are unlikely. See "Part I—Item 4. "Information on our Business—Mergers & Acquisitions and Joint Ventures—Acquisition of Microwave Transport Business of NSN and Relationship with Nokia" of our 2016 Annual Report.

Additional risks related specifically to our securities include:

•: risks associated with our outstanding warrants and the impact that the terms of such warrants have on our ability to raise capital and to undertake certain business transactions;
•: risks associated with our ability to raise additional capital;
•: large fluctuations in the trading price of our common shares;
•: our actual financial results may vary from our publicly disclosed forecasts;
•: expense and risks associated with being a U.S. public company and possible loss of our foreign private issuer status;
•: expense and risks associated with the loss of our ability to use the multi-jurisdictional disclosure system ("MJDS") adopted by the United States and Canada;
•: an investor may not be able to bring actions or enforce judgment against us and certain of our directors and officers;
•: we do not currently intend to pay dividends on our common shares;
•: tax consequences associated with an investment in our securities;

•: future sales of common shares by our existing shareholders could cause our share price to fall;
•: our management's broad discretion over the use of proceeds of financings; and
•: certain Canadian laws could prevent or deter a change of control.

Also see the discussion under "Risk Factors" in this prospectus and "Part I—Item 3. Key Information—D. Risk Factors" of our 2016 Annual Report. Although we have attempted to identify important factors that could cause our actual results to differ materially from expectations, intentions, estimates or forecasts, there may be other factors that could cause our results to differ from what we currently anticipate, estimate or intend. Ongoing global economic uncertainty could impact forward-looking statements in an unpredictable and possibly detrimental manner. In light of these risks, uncertainties and assumptions, the forward-looking events might not occur or might not occur when stated. Forward-looking statements are provided to assist external stakeholders in understanding management's expectations and plan relating to the future as of the date of our 2016 Annual Report and may not be appropriate for other purposes. Readers are cautioned not to place undue reliance on forward looking statements. Except as required under applicable securities legislation, we undertake no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

USE OF PROCEEDS

We estimate that the net proceeds from the sale of the units in this offering will be approximately $5.3 million, based on an assumed public offering price of $4.18 per Class A Unit, after deducting the underwriting discount and our estimated expenses related to this offering. We intend to use the net proceeds for general corporate purposes, which may include working capital, general and administrative expenses, capital expenditures and implementation of our strategic priorities. Additionally, we may also use a portion of the net proceeds to acquire or invest in businesses, products and technologies that are complementary to our current business, although we have no present commitments or agreements for any such transactions. Pending the application of the net proceeds, we may invest the proceeds in short-term, interest bearing, investment-grade marketable securities or money market obligations. If we are unable to secure a further forbearance from our Lenders, we may be required to use substantially all of the proceeds to repay our Lenders.

Each $1.00 increase (decrease) in the assumed public offering price of $4.18 per Class A Unit would increase (decrease) the net proceeds to us from this offering by approximately $1.3 million, assuming that the number of units we offer, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discount. Similarly, each increase (decrease) of 100,000 in the number of units we are offering would increase (decrease) the net proceeds to us from this offering by approximately $0.4 million, assuming the public offering price remains the same and after deducting the underwriting discount.

As of the date of this prospectus, we cannot specify with certainty all of the particular uses of the proceeds from this offering. Accordingly, we will retain broad discretion over the use of such proceeds.

DIVIDEND POLICY

We plan to retain any earnings, if any, for the foreseeable future for our operations. We have never paid any dividends on our common shares and do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements and such other factors as our board of directors deems relevant. In addition, our credit facility restricts our ability to pay dividends.

CAPITALIZATION

The following table sets out our consolidated capitalization as at May 31, 2016 and after giving effect to this offering, in each case assuming all units sold in this offering are Class A Units and excluding the exercise of the options and warrants described under footnote 1 to the table under the heading "The Offering". There has been no material change in our share and loan capital on a consolidated basis since May 31, 2016.

For purposes of the following table, the entire net proceeds from this offering are assumed to be classified as equity and to increase shareholder's equity. The fair value of the Long-Term Warrants will be classified as liability. The fair value of the Long-Term Warrants will be determined on the date they are sold. Accordingly, shareholder's equity will be less than the amount reflected and liabilities will be greater than the amount reflected.

This table should be read in conjunction with Management's Discussion and Analysis included as Exhibit 99.3 in the Q1 2016 Report and the financial statements contained therein, as well as "Part I—Item 5. Operating and Financial Review and Prospects" and our consolidated financial statements and the notes thereto set forth in "Part III—Item 18. Financial Statements" of our 2016 Annual Report.

	As at May 31, 2016 (Before this offering)

	(amounts in US$ thousands, except share amounts)
Total debt (line of credit)		18,867		18,867
Total current liabilities less total debt (line of credit)		24,913		24,913
Shareholder's equity		1,476		6,766
Total issued and outstanding common shares		3,620,567		5,055,973
Contributed surplus		9,450		9,450
Deficit		(222,325	)	(222,325	)
Total capitalization(2)		18,284		25,533

(1): After deducting the underwriting discount and the estimated expenses of this offering payable by us. Each $1.00 increase (decrease) in the assumed public offering price of $4.18 per Class A Unit would increase (decrease) shareholder's equity on an as-adjusted basis by approximately $1.3 million, assuming that the number of units we offer, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discount. Similarly, each increase (decrease) of 100,000 in the number of units we are offering would increase (decrease) shareholder's equity on an as-adjusted basis by approximately $0.4 million, assuming that the public offering price remains the same and after deducting the underwriting discount.
(2): Based on the closing price of $5.05 on Nasdaq Capital Markets for the common shares on May 31, 2016.

DILUTION

If you invest in our common shares and warrants through the purchase of our units, your ownership interest will be diluted to the extent of the difference between the public offering price per unit that you pay and our as-adjusted net tangible book value per share immediately after this offering. Net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the number of common shares outstanding. Dilution in the as-adjusted net tangible book value per share represents the difference between the amount per share paid by purchasers in this offering and the as-adjusted net tangible book value per share immediately after the consummation of this offering.

As of May 31, 2016, our historical net tangible book value was approximately $2.7 million, or $0.74 per share. After giving effect to the sale of 1,435,406 common shares in this offering and the receipt of $5.3 million of estimated net proceeds from this offering, our as-adjusted net tangible book value as of May 31, 2016, would have been approximately $8.0 million, or approximately $1.58 per share. This represents an immediate increase in net tangible book value of $0.84 per share to existing shareholders and an immediate and substantial dilution in net tangible book value of $2.60 per share to new investors participating in this offering. The following table illustrates this per share dilution:


Public offering price per unit	$	4.18
Historical net tangible book value per share as of May 31, 2016	$	0.74
Increase in net tangible book value per share attributable to this offering	$	0.84
Adjusted net tangible book value per share after giving effect to this offering	$	1.58
Dilution per share to new investors	$	2.60

For purposes of the above presentation, the entire net proceeds from this offering are assumed to be classified as equity and to increase net tangible book value. The fair value of the Long-Term Warrants and the Short-Term Warrants will be classified as liability, which values will be determined on the date of the closing of this offering. Accordingly, the adjusted net tangible book value per share will be less than the amount reflected and the dilution per share will be greater than the amount reflected.

Each $1.00 increase (decrease) in the assumed public offering price of $4.18 per Class A Unit would increase (decrease) our adjusted net tangible book value by approximately $1.3 million, or approximately $0.27 per common share, and would increase (decrease) dilution per share to new investors by approximately $0.73 per common share, assuming that the assumed public offering price remains the same and after deducting the underwriting discount.

The discussion and table above assume all units sold in this offering are Class A Units and exclude, as of May 31, 2016, unless otherwise noted:

•: 342,260 common shares subject to outstanding options with a weighted average exercise price of CAD$21.79 per share;
•: 319,806 common shares issuable upon exercise of outstanding warrants at a weighted average exercise price of CAD$56.38 per share;
•: 383,549 common shares issuable upon exercise of outstanding warrants at a weighted average exercise price of $8.12 per share; and
•: the common shares issuable upon the exercise of the warrants comprising part of the units.

MARKET PRICES

Our common shares are publicly traded on the TSX under the symbol "DWI". Trading of the common shares on the TSX commenced with the closing of our initial public offering on April 19, 2007. Our common shares are also traded on the NASDAQ Capital Market under the symbol "DRWI". Trading of our common shares on NASDAQ commenced on October 15, 2009.

Our warrants issued on August 1, 2014 are traded on the TSX under the symbol DWI.WT and on the NASDAQ Capital Market under the symbol DRWIW. These warrants are set to expire on August 1, 2016. The ranges of our common shares on the TSX and NASDAQ for the annual high and low market prices during the five most recent full financial years ended February 28/29 are as follows:

	DWI.TO Common Shares—TSX (in Canadian dollars)				DRWI.NSDQ Common Shares— NASDAQ

Annual	High		Low		High		Low
2012		211.75		71.50		218.75		67.50
2013		112.50		42.50		114.25		43.75
2014		92.00		28.25		89.50		27.00
2015		68.75		24.75		63.75		19.50
2016		28.00		2.00		22.50		1.50

The ranges of our common shares on the TSX and NASDAQ for the quarterly high and low market prices during the two most recent full financial years ended February 28/29 are as follows:

	DWI.TO Common Shares—TSX (in Canadian dollars)				DRWI.NSDQ Common Shares— NASDAQ

	High		Low		High		Low
Quarterly 2015
First Quarter		46.75		30.00		42.25		27.50
Second Quarter		68.75		32.50		63.75		30.00
Third Quarter		41.50		25.00		38.25		22.00
Fourth Quarter		34.25		24.75		29.50		19.50
Quarterly 2016
First Quarter		28.00		16.25		22.50		12.50
Second Quarter		20.00		6.50		16.00		4.75
Third Quarter		8.25		2.50		6.50		1.75
Fourth Quarter		5.75		2.00		4.25		1.50
Quarterly 2017
First Quarter		13.96		2.70		10.66		1.85
Second Quarter (through July 28, 2016)		8.82		4.75		6.83		3.68

DESCRIPTION OF SECURITIES BEING DISTRIBUTED

We are offering up to $6.0 million in the aggregate of any combination of Class A Units and Class B Units. Each unit consists of one common share or one Pre-Funded Warrant (depending on whether it is a Class A Unit or Class B Unit), as well as of one Long-Term Warrant and two Short-Term Warrants. The common shares or the Pre-Funded Warrants and the Short-Term Warrants and the Long-Term Warrants are immediately separable and will be issued separately, but will be purchased together in this offering. This prospectus also relates to the common shares issuable on exercise of the warrants.

COMMON SHARES

Each common share comprising part of the units and each common share issuable upon exercise of the warrants will entitle its holder to notice of, and to one vote at, all meetings of our shareholders. Each of our common shares carries an entitlement to receive dividends if, as and when declared by our board of directors. In the event of our liquidation, dissolution or winding-up, our net assets available for distribution to our shareholders will be distributed rateably among the holders of our common shares. There are no pre-emptive, conversion or redemption rights attached to our common shares.

Our authorized share capital consists of an unlimited number of common shares, of which 3,620,567 common shares are issued and outstanding as of May 31, 2016.

WARRANTS

The Short-Term Warrants and the Long-Term Warrants comprising part of the units in this offering will be created and issued, and governed by, the terms of the warrant indenture between us and Computershare Trust Company of Canada and Computershare Trust N.A. (collectively, the "Warrant Agent"), to be entered into and dated as of the closing date of this offering. Any Pre-Funded Warrant comprising part of any Class B Units sold in this offering will be a standalone physical warrant governed by its terms and provisions. The following summary of certain provisions of the warrant indenture and the form of Pre-Funded Warrant does not purport to be complete and is subject in its entirety to the detailed provisions of the warrant indenture and the form of Pre-Funded Warrant, which are incorporated by reference in their entirety into this prospectus. We have appointed the principal transfer offices of the Warrant Agent in Toronto, Ontario and Denver, Colorado as the locations at which the Short-Term Warrants and the Long-Term Warrants may be surrendered for exercise or transfer. Any Pre-Funded Warrant may be surrendered for exercise or transferred directly to us.

Duration and Exercise

Each whole warrant is exercisable to purchase one common share. The Short-Term Warrants will be exercisable during the period commencing on the date of original issuance and ending on the date six months thereafter, at an assumed initial exercise price of $4.60 per common share. The Long-Term Warrants will be exercisable during the period commencing on the date of original issuance and ending on the date that is five years from the date of issuance, at an assumed initial exercise price of $5.23 per common share. The Pre-Funded Warrants will be exercisable on the date of original issuance, with no expiration date, are deemed purchased for a price of $4.17 per underlying common share by virtue of purchasing the Class B Unit, and have an exercise price of $0.01 per share.

The purpose of the Pre-Funded Warrants is to enable investors to participate in this offering even if they have restrictions on their ability to beneficially own more than the 4.99% beneficial ownership limitation. Investors whose purchase of Class A Units would result in their exceeding the 4.99% beneficial ownership limitation may, alternatively, purchase Class B Units, in which they would acquire a Pre-Funded Warrant in lieu of a common share (as well as the Long-Term Warrant and the Short-Term Warrant components of the unit).

A holder of warrants will not have the right to exercise any portion of its warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of our common shares outstanding immediately after giving effect to such exercise; provided, however, that upon notice to us, the holder may increase or decrease the beneficial ownership limitation, provided that in no event shall the beneficial ownership limitation exceed 9.99% and any increase in the beneficial ownership limitation will not be effective until 61 days following notice of such increase from the holder to us.

The exercise price and number of common shares issuable upon the exercise of the warrants will be subject to adjustment in the event of any dividends, share split, reverse share split, share dividend, recapitalization, reorganization or similar transaction, as described in the warrant indenture and the form of Pre-Funded Warrant. In addition, the Short-Term Warrants provide that, subject to receipt of any required regulatory approvals, we may reduce the exercise price of the then outstanding Short-Term Warrants to any amount and for any period of time deemed appropriate by our Board of Directors, in its sole discretion.

The warrants will be exercisable on a "net" basis in certain circumstances including if exercised at a time when we do not have an effective registration statement on file with the SEC registering the issuance of the underlying common shares.

Transferability

Subject to applicable laws and any restrictions on transfer set forth in the warrant indenture and the form of Pre-Funded Warrant, warrants may be transferred at the option of the holder without our consent.

Pro Rata Distributions

If, at any time while the warrants are outstanding, we distribute to our common shareholders for no consideration (1) evidences of our indebtedness, (2) any security (other than payment of a common share dividend or other distribution on any class of capital that is payable in common shares), (3) rights or warrants to subscribe for or purchase any security, or (4) any other asset (including cash) (in each case, "Distributed Property"), then each holder of a warrant shall receive, with respect to the common shares issuable upon exercise of such warrant, the Distributed Property that such holder would have been entitled to receive had the holder been the record holder of such number of common shares issuable upon exercise of the warrant immediately prior to the record date for such Distributed Property.

Fundamental Transactions

If, at any time while the warrants are outstanding, we consummate (1) any merger, consolidation, arrangement or amalgamation in which we are not the surviving entity; (2) our liquidation or dissolution; (3) any sale of all or substantially all of our assets in one or a series of related transactions; or (4) any transaction, by our issuance of securities or tender offer or otherwise, whereby any person or entity acquires more than 50% of our outstanding common shares (each, a "Fundamental Transaction"), then, upon any subsequent exercise of a warrant, the holder thereof will have the right to receive the same amount and kind of securities, cash or other property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of shares then issuable upon exercise of the warrants (the "Alternate Consideration"). We may not effect any Fundamental Transaction unless any successor to us, surviving entity or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume the obligation to deliver to the holders of the warrants such Alternate Consideration as the holders of the warrants may be entitled to purchase.

Notwithstanding the foregoing, at any time concurrently with, or within 30 days after the consummation of the Fundamental Transaction, we or any successor entity will purchase a holder's Long-Term Warrant or Short-Term Warrant by paying an amount of cash equal to the Black-Scholes Option Pricing Model obtained from the "OV" function on Bloomberg as of the day immediately preceding the public announcement of the applicable Fundamental Transaction.

Right as a Shareholder

The holder of a warrant does not generally have the rights or privileges of a holder of our common shares, including any voting rights, until the holder exercises his, her or its warrant.

Waivers and Amendments

Except as otherwise provided in the warrant indenture and the form of Pre-Funded Warrant, we may not may amend or fail to observe the terms of the warrant without the consent of the applicable holder of each such warrant.

MATERIAL UNITED STATES FEDERAL INCOME TAXATION

The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership, and disposition of common shares and warrants acquired pursuant to this prospectus.

This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of common shares and warrants. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including, without limitation, specific tax consequences to a U.S. Holder under an applicable income tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. This summary does not address the U.S. federal alternative minimum tax, U.S. federal estate and gift tax, U.S. state and local tax, and non-U.S. tax consequences to U.S. Holders of the acquisition, ownership, and disposition of common shares and warrants. In addition, except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each prospective U.S. Holder should consult its own tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of common shares and warrants.

No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service ("IRS") has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares and warrants. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the conclusions described in this summary.

Scope of this Summary

Authorities

This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the "Canada-U.S. Tax Convention"), and U.S. court decisions that are applicable, and, in each case, as in effect and available, as of the date of this prospectus. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied retroactively. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation.

U.S. Holders

For purposes of this summary, the term "U.S. Holder" means a beneficial owner of common shares and warrants acquired pursuant to this offering that is for U.S. federal income tax purposes:

•: an individual who is a citizen or resident of the United States;
•: a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia;
•: an estate whose income is subject to U.S. federal income taxation regardless of its source; or

•: a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed

This summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders that: (a) are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) have a "functional currency" other than the U.S. dollar; (e) own common shares or warrants as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) acquire common shares or warrants in connection with the exercise of employee stock options or otherwise as compensation for services; (g) hold common shares or warrants other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); or (h) own, have owned or will own (directly, indirectly, or by attribution) 10% or more of the total combined voting power of our outstanding shares. This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders who are: (a) U.S. expatriates or former long-term residents of the U.S.; (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Income Tax Act (Canada) (the "Tax Act"); (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold common shares or warrants in connection with carrying on a business in Canada; (d) persons whose common shares or warrants constitute "taxable Canadian property" under the Tax Act; or (e) persons that have a permanent establishment in Canada for the purposes of the Canada-U.S. Tax Convention. U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders described immediately above, should consult their own tax advisors regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of common shares and warrants.

If an entity or arrangement that is classified as a partnership (or other "pass-through" entity) for U.S. federal income tax purposes holds common shares or warrants, the U.S. federal income tax consequences to such entity or arrangement and the partners (or other owners or participants) of such entity or arrangement generally will depend on the activities of the entity or arrangement and the status of such partners (or owners or participants). This summary does not address the tax consequences to any such partner (or owner or participants). Partners (or other owners or participants) of entities or arrangements that are classified as partnerships or as "pass-through" entities for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership, and disposition of common shares and warrants.

The United States federal income tax consequences of the acquisition, ownership and disposition of the common shares and warrants can be very complex and, in certain cases, uncertain or potentially unfavorable to a U.S. Holder. Accordingly, each prospective investor considering an acquisition of, or who acquires units pursuant to this offering is strongly urged to consult its own tax advisor with respect to the United States federal, state or local income and alternative minimum tax, United States federal estate or gift, or foreign tax consequences of such acquisition, ownership and disposition of common shares and warrants in light of its own particular facts and circumstances.

Allocation of Offering Price

Because the components of a unit are immediately separable, the purchaser of a unit generally will be treated, for U.S. federal income tax purposes, as the owner of the underlying common share and warrant components of the unit. For U.S. federal income tax purposes, each purchaser of a unit generally must allocate the purchase price of a unit between the common share and the warrant that comprise the unit based on the relative fair market value of each at the time of issuance. The price allocated to each common share and the warrant generally will be the holder's tax basis in such common share or warrant, as the case may be. Each U.S. Holder is advised to consult its own tax advisor regarding the risks associated with an investment in a unit (including alternative characterizations of a unit) and regarding an allocation of the purchase price between the common share and the warrant that comprise a unit. The balance of this discussion assumes that the characterization of the units described above is respected for U.S. federal income tax purposes.

Passive Foreign Investment Company Rules

Our PFIC Status

If we were to constitute a "passive foreign investment company" under the meaning of Section 1297 of the Code (a "PFIC", as defined below) for any year during a U.S. Holder's holding period, then certain potentially adverse rules may affect the U.S. federal income tax consequences to a U.S. Holder as a result of the acquisition, ownership and disposition of common shares and warrants. No opinion of legal counsel or ruling from the IRS concerning our status as a PFIC has been obtained or is currently planned to be requested. The determination of whether any corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this prospectus. Accordingly, there can be no assurance that we have never been and will not become a PFIC for any taxable year during which a U.S. Holder holds common shares or warrants. Also, there can be no assurance that the IRS will not challenge any determination made by us (or any of our subsidiaries) concerning its PFIC status. Each U.S. Holder should consult its own tax advisors regarding our PFIC status and the PFIC status of each of our subsidiaries.

In any year in which we are classified as a PFIC, a U.S. Holder will be required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require. In addition to penalties, a failure to satisfy such reporting requirements may result in an extension of the time period during which the IRS can assess a tax. U.S. Holders should consult their own tax advisors regarding the requirements of filing such information returns under these rules, including the requirement to file an IRS Form 8621.

We will generally be a PFIC if, for a tax year, (a) 75% or more of our gross income is passive income (the "PFIC income test") or (b) 50% or more of the value of our assets either produce passive income or are held for the production of passive income, based on the quarterly average of the fair market value of such assets (the "PFIC asset test"). "Gross income" generally includes all sales revenues less the cost of goods sold, plus income from investments and from incidental or outside operations or sources, and "passive income" generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.

For purposes of the PFIC income test and PFIC asset test described above, if we own, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, we will be treated as if we (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC income test and PFIC asset test described above, and assuming certain other requirements are

met, "passive income" does not include certain interest, dividends, rents, or royalties that are received or accrued by us from certain "related persons" (as defined in Section 954(d)(3) of the Code) also organized in Canada, to the extent such items are properly allocable to the income of such related person that is not passive income.

Under certain attribution rules, if we are a PFIC, U.S. Holders will generally be deemed to own their proportionate share of our direct or indirect equity interest in any company that is also a PFIC (a "Subsidiary PFIC"), and will generally be subject to U.S. federal income tax on their proportionate share of (a) any "excess distributions," as described below, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by us or another Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC. In addition, U.S. Holders may be subject to U.S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition of common shares and warrants. Accordingly, U.S. Holders should be aware that they could be subject to tax under the PFIC rules even if no distributions are received and no redemptions or other dispositions of common shares and warrants are made.

Default PFIC Rules Under Section 1291 of the Code

If we are a PFIC for any tax year during which a U.S. Holder owns common shares and warrants, the U.S. federal income tax consequences to such U.S. Holder of the acquisition, ownership, and disposition of common shares and warrants will depend on whether and when such U.S. Holder makes an election to treat us and each Subsidiary PFIC, if any, as a "qualified electing fund" or "QEF" under Section 1295 of the Code (a "QEF Election") or makes a mark-to-market election under Section 1296 of the Code (a "Mark-to-Market Election"). A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a "Non-Electing U.S. Holder."

A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code (described below) with respect to (a) any gain recognized on the sale or other taxable disposition of common shares and warrants and (b) any "excess distribution" received on the common shares and warrants. A distribution generally will be an "excess distribution" to the extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S. Holder's holding period for the common shares and warrants, if shorter).

Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of common shares and warrants (including an indirect disposition of the stock of any Subsidiary PFIC), and any "excess distribution" received on common shares and warrants or with respect to the stock of a Subsidiary PFIC, must be ratably allocated to each day in a Non-Electing U.S. Holder's holding period for the respective common shares and warrants. The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution and to years before the entity became a PFIC, if any, would be taxed as ordinary income (and not eligible for certain preferred rates). The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest tax rate applicable to ordinary income in each such year, and an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such year. A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as "personal interest," which is not deductible.

If we are a PFIC for any tax year during which a Non-Electing U.S. Holder holds common shares and warrants, we will continue to be treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether we cease to be a PFIC in one or more subsequent tax years. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above), but not loss, as if such common shares or warrants were sold on the last day of the last tax year for which we were a PFIC.

QEF Election

A U.S. Holder that makes a timely and effective QEF Election for the first tax year in which the holding period of its common shares and warrants begins generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to its common shares and warrants. A U.S. Holder that makes a timely and effective QEF Election will be subject to U.S. federal income tax on such U.S. Holder's pro rata share of (a) our net capital gain, which will be taxed as long-term capital gain to such U.S. Holder, and (b) our ordinary earnings, which will be taxed as ordinary income to such U.S. Holder. Generally, "net capital gain" is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and "ordinary earnings" are the excess of (a) "earnings and profits" over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which we are a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by us. However, for any tax year in which we are a PFIC and have no net income or gain, U.S. Holders that have made a QEF Election would not have any income inclusions as a result of the QEF Election. If a U.S. Holder that made a QEF Election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will be treated as "personal interest," which is not deductible.

A U.S. Holder that makes a timely and effective QEF Election with respect to us generally (a) may receive a tax-free distribution from us to the extent that such distribution represents our "earnings and profits" that were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holder's tax basis in the common shares and warrants to reflect the amount included in income or allowed as a tax-free distribution because of such QEF Election. In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of common shares and warrants.

The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely. A QEF Election will be treated as "timely" if such QEF Election is made for the first year in the U.S. Holder's holding period for the common shares and warrants in which we are a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year. If a U.S. Holder does not make a timely and effective QEF Election for the first year in the U.S. Holder's holding period for the common shares and warrants, the U.S. Holder may still be able to make a timely and effective QEF Election in a subsequent year if such U.S. Holder meets certain requirements and makes a "purging" election to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such common shares or warrants were sold for their fair market value on the day the QEF Election is effective. If a U.S. Holder makes a QEF Election but does not make a "purging" election to recognize gain as discussed in the preceding sentence, then such U.S. Holder shall be subject to the QEF Election rules and shall continue to be subject to tax under the rules of Section 1291 discussed above with respect to its common shares and warrants. If a U.S. Holder owns PFIC stock indirectly through another PFIC, separate QEF Elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary PFIC for the QEF rules to apply to both PFICs.

A QEF Election will apply to the tax year for which such QEF Election is timely made and to all subsequent tax years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax year, we cease to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which we are not a PFIC. Accordingly, if we become a PFIC in another subsequent tax year, the QEF Election will be effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which we qualify as a PFIC.

U.S. Holders should be aware that we do not intend to provide U.S. Holders with the information required to permit them to make a QEF Election, and, accordingly, prospective investors should assume that a QEF Election will not be available. Thus, U.S. Holders may not be able to make a QEF Election with respect to their common shares and warrants. Each U.S. Holder should consult its own tax advisors regarding the availability of, and procedure for making, a QEF Election.

A U.S. Holder makes a QEF Election by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely filed United States federal income tax return. However, if we do not provide the required information with regard to us or any of our Subsidiary PFICs, U.S. Holders will not be able to make a QEF Election for such entity and will continue to be subject to the rules of Section 1291 of the Code discussed above that apply to Non-Electing U.S. Holders with respect to the taxation of gains and excess distributions, unless such U.S. Holder makes an effective Mark-to-Market Election as discussed below.

Mark-to-Market Election

A U.S. Holder may make a Mark-to-Market Election only if the common shares are marketable stock. The common shares generally will be "marketable stock" if the common shares are regularly traded on (a) a national securities exchange that is registered with the SEC, (b) the national market system established pursuant to section 11A of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or (c) a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and surveillance requirements, and meets other requirements and the laws of the country in which such foreign exchange is located that, together with the rules of such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange effectively promote active trading of listed stocks. If such stock is traded on such a qualified exchange or other market, such stock generally will be "regularly traded" for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Provided that the common shares are "regularly traded" as described in the preceding sentence, the common shares are expected to be marketable stock. However, each U.S. Holder should consult its own tax advisor regarding the "regularly traded" requirement.

A U.S. Holder that makes a Mark-to-Market Election with respect to its common shares generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such common shares. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of such U.S. Holder's holding period for the common shares for which we are a PFIC and such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, the common shares.

A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which we are a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the common shares, as of the close of such tax year over (b) such U.S. Holder's adjusted tax basis in such common shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (a) such U.S. Holder's adjusted tax basis in the common shares, over (b) the fair market value of such common shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years).

A U.S. Holder that makes a Mark-to-Market Election generally also will adjust such U.S. Holder's tax basis in the common shares to reflect the amount included in gross income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition of common shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years). Losses that

exceed this limitation are subject to the rules generally applicable to losses provided in the Code and Treasury Regulations.

A U.S. Holder makes a Mark-to-Market Election by attaching a completed IRS Form 8621 to a timely filed United States federal income tax return. A Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the common shares cease to be "marketable stock" or the IRS consents to revocation of such election. Each U.S. Holder should consult its own tax advisors regarding the availability of, and procedure for making, a Mark-to-Market Election.

Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to the common shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election will not be effective to avoid the application of the default rules of Section 1291 of the Code described above with respect to deemed dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC to its shareholder.

Other PFIC Rules

Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of common shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which common shares are transferred.

Certain additional adverse rules may apply with respect to a U.S. Holder if we are a PFIC, regardless of whether such U.S. Holder makes a QEF Election. For example, under Section 1298(b)(6) of the Code, a U.S. Holder that uses common shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such common shares.

Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should consult with its own tax advisors regarding the availability of the foreign tax credit with respect to distributions by a PFIC.

The PFIC rules are complex, and each U.S. Holder should consult its own tax advisors regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares.

Taxation of Exercise, Sale, Redemption or Expiration of Warrant

Generally, no U.S. federal income tax will be imposed upon the U.S. Holder of a warrant upon exercise of such warrant to acquire common shares. A U.S. Holder's tax basis in a warrant will generally be the amount of the purchase price that is allocated to the warrant as described above under the heading "Allocation of Offering Price." Upon exercise of a warrant, the tax basis of the common shares acquired thereby would be equal to the sum of the tax basis of the warrant in the hands of the U.S. Holder plus the exercise price paid, and the holding period of the new common shares would begin on the date that the warrant is exercised.

The Long-Term Warrants and Short-Term Warrants contain a cashless exercise feature, and it is also possible that the IRS will consider the nominal exercise price of $0.01 per share for the Pre-Funded Warrants as a deemed exercise of such warrants into common shares at issuance. The

U.S. federal income tax treatment of a cashless or deemed exercise of warrants into common shares is unclear, and the tax consequences of such a cashless or deemed exercise could differ from the consequences upon the exercise of a warrant described above.

In general, if you are a U.S. Holder of a warrant, you will recognize gain or loss upon the sale or other taxable disposition of the warrant (provided that the common share to be issued on the exercise of such warrant would have been a capital asset within the meaning of Section 1221 of the Code if acquired by the U.S. Holder) in an amount equal to the difference between the amount realized on the sale and your adjusted tax basis in the warrant. If a warrant lapses without exercise, the U.S. Holder will generally realize a capital loss equal to its tax basis in the warrant. Prospective U.S. Holders should consult their tax advisors regarding the tax consequences of acquiring, holding, exercising and disposing of warrants.

General Rules Applicable to the Ownership and Disposition of Common Shares

The following discussion describes the general rules applicable to the ownership and disposition of the common shares but is subject in its entirety to the special rules described above under the heading "Passive Foreign Investment Company Rules."

Distributions on Common Shares

A U.S. Holder that receives a distribution, including a constructive distribution, with respect to a common share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of our current and accumulated "earnings and profits," as computed for U.S. federal income tax purposes. A dividend generally will be taxed to a U.S. Holder at ordinary income tax rates if we are a PFIC for the tax year of such distribution or for the preceding tax year. To the extent that a distribution exceeds our current and accumulated "earnings and profits," such distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holder's tax basis in the common shares and thereafter as gain from the sale or exchange of such common shares. (See "Sale or Other Taxable Disposition of common shares" below). However, we may not maintain the calculations of our earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder may have to assume that any distribution by us with respect to the common shares will constitute ordinary dividend income. Dividends received on common shares by corporate U.S. Holders generally will not be eligible for the "dividends received deduction." Subject to applicable limitations and provided we are eligible for the benefits of the Canada-U.S. Tax Convention, dividends paid by us to non-corporate U.S. Holders, including individuals, generally will be eligible for the preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period and other conditions are satisfied, including that we not be classified as a PFIC in the tax year of distribution or in the preceding tax year. The dividend rules are complex, and each U.S. Holder should consult its own tax advisors regarding the application of such rules.

Sale or Other Taxable Disposition of Common Shares

Upon the sale or other taxable disposition of common shares, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the U.S. dollar value of cash received plus the fair market value of any property received and such U.S. Holder's tax basis in such common shares sold or otherwise disposed of. A U.S. Holder's tax basis in common shares generally will be such holder's U.S. dollar cost for such common shares. Gain or loss recognized on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the common shares have been held for more than one year.

Preferential tax rates currently apply to long-term capital gain of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gain of a

U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.

Additional Considerations

Additional Tax on Passive Income

Certain U.S. Holders that are individuals, estates or trusts (other than trusts that are exempt from tax) will be subject to a 3.8% tax on all or a portion of their "net investment income," which includes dividends on the common shares and net gains from the disposition of the common shares. Further, excess distributions treated as dividends, gains treated as excess distributions under the PFIC rules discussed above, and mark-to-market inclusions and deductions are all included in the calculation of net investment income.

Treasury Regulations provide, subject to the election described in the following paragraph, that solely for purposes of this additional tax distributions of previously taxed income will be treated as dividends and included in net investment income subject to the additional 3.8% tax. Additionally, to determine the amount of any capital gain from the sale or other taxable disposition of common shares that will be subject to the additional tax on net investment income, a U.S. Holder that has made a QEF Election will be required to recalculate its basis in the common shares excluding QEF basis adjustments.

Alternatively, a U.S. Holder may make an election which will be effective with respect to all interests in a PFIC for which a QEF Election has been made and which is held in that year or acquired in future years. Under this election, a U.S. Holder pays the additional 3.8% tax on QEF income inclusions and on gains calculated after giving effect to related tax basis adjustments. U.S. Holders that are individuals, estates or trusts should consult their own tax advisors regarding the applicability of this tax to any of their income or gains in respect of the common shares.

Receipt of Foreign Currency

The amount of any distribution paid to a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of common shares, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). A U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who converts or otherwise disposes of the foreign currency after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the accrual method. Each U.S. Holder should consult its own U.S. tax advisors regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

Foreign Tax Credit

Subject to the PFIC rules discussed above, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on the common shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax. Generally, a credit will reduce a U.S. Holder's U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder's income that is subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.

Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder's U.S. federal income tax liability that such U.S. Holder's "foreign source" taxable income bears to such U.S. Holder's worldwide taxable income.

In applying this limitation, a U.S. Holder's various items of income and deduction must be classified, under complex rules, as either "foreign source" or "U.S. source." Generally, dividends paid by a foreign corporation should be treated as foreign source for this purpose, and gains recognized on the sale of stock of a foreign corporation by a U.S. Holder should be treated as U.S. source for this purpose, except as otherwise provided in an applicable income tax treaty, and if an election is properly made under the Code. However, the amount of a distribution with respect to the common shares that is treated as a "dividend" may be lower for U.S. federal income tax purposes than it is for Canadian federal income tax purposes, resulting in a reduced foreign tax credit allowance to a U.S. Holder. In addition, this limitation is calculated separately with respect to specific categories of income. The foreign tax credit rules are complex, and each U.S. Holder should consult its own U.S. tax advisors regarding the foreign tax credit rules.

Backup Withholding and Information Reporting

Under U.S. federal income tax law, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who are U.S. Holders that hold certain specified foreign financial assets in excess of certain thresholds. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. U.S. Holders may be subject to these reporting requirements unless their common shares are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns, including the requirement to file an IRS Form 8938.

Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, common shares will generally be subject to information reporting and backup withholding tax, at the rate of 28%, if a U.S. Holder (a) fails to furnish such U.S. Holder's correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder's U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner.

The discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisors regarding the information reporting and backup withholding rules.

THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON SHARES AND WARRANTS. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.

CANADIAN FEDERAL INCOME TAX CONSIDERATIONS FOR UNITED STATES RESIDENTS

The following is a summary of the principal Canadian federal income tax considerations generally applicable to the holding and disposition of our common shares and warrants acquired pursuant to this prospectus by a holder who, at all relevant times, (a) for the purposes of the Tax Act, (i) is not resident, or deemed to be resident, in Canada, (ii) deals at arm's length with us, and is not affiliated with us, (iii) holds our common shares as capital property, (iv) does not use or hold the common shares in the course of carrying on, or otherwise in connection with, a business carried on or deemed to be carried on in Canada and (v) is not a "registered non-resident insurer" or "authorized foreign bank" (each as defined in the Tax Act), and (b) for the purposes of the Canada-U.S. Tax Convention, is a resident of the United States, has never been a resident of Canada, does not have and has not had, at any time, a permanent establishment or fixed base in Canada, and who otherwise qualifies for the full benefits of the Canada-U.S. Tax Convention. Our common shares and warrants will generally be considered to be capital property to a holder unless such common shares or warrants are held in the course of carrying on a business of buying or selling securities, or as part of an adventure or concern in the nature of trade. Holders who meet all the criteria in clauses (a) and (b) are referred to herein as "Non-Canadian Holders". This summary does not deal with special situations, such as the particular circumstances of traders or dealers, tax exempt entities, insurers or financial institutions. Such holders and other holders who do not meet the criteria in clauses (a) and (b) should consult their own tax advisers.

This summary is based upon the current provisions of the Tax Act, the regulations thereunder in force at the date hereof ("Regulations"), the current provisions of the Canada-U.S. Tax Convention and our understanding of the administrative and assessing practices of the Canada Revenue Agency published in writing prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act and Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the "Proposed Amendments") and assumes that such Proposed Amendments will be enacted in the form proposed. However, no assurance can be given that such Proposed Amendments will be enacted in the form proposed, or at all. This summary does not otherwise take into account or anticipate any changes in law or administrative or assessing practices, whether by legislative, governmental or judicial decision or action, nor does it take into account tax laws of any province or territory of Canada or of any other jurisdiction outside Canada, which may differ from those discussed in this summary.

For the purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of our common shares and warrants must generally be expressed in Canadian dollars. Amounts denominated in United States currency generally must be converted into Canadian dollars using the rate of exchange quoted by the Bank of Canada at noon on the relevant day, or such other rate of exchange as is acceptable to the Canada Revenue Agency.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Non-Canadian Holder and no representation with respect to the Canadian federal income tax consequences to any particular Non-Canadian Holder or prospective Non-Canadian Holder is made. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, prospective purchasers should consult with their own tax advisors for advice with respect to their own particular circumstances.

Withholding Tax on Dividends

Amounts paid or credited or deemed to be paid or credited as, on account or in lieu of payment, or in satisfaction of, dividends on our common shares to a Non-Canadian Holder will be subject to Canadian withholding tax. Under the Canada-U.S. Tax Convention, the rate of Canadian withholding tax on dividends paid or credited by us to a Non-Canadian Holder that beneficially owns such

dividends is generally 15% unless the beneficial owner is a company, which owns at least 10% of our voting stock at that time, in which case the rate of Canadian withholding tax is reduced to 5%.

Dispositions

A Non-Canadian Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition of our common shares or warrants, unless the common shares or warrants are, or are deemed to be, "taxable Canadian property" (as defined in the Tax Act) of the Non-Canadian Holder at the time of disposition and the Non-Canadian Holder is not entitled to relief under the Canada-U.S. Tax Convention. Generally, our common shares and warrants will not constitute taxable Canadian property to a Non-Canadian Holder provided our common shares are listed on a "designated stock exchange" as defined in the Tax Act (which currently includes the TSX and the NASDAQ Capital Market) at the time of the disposition unless: (a) (i) at any time during the 60-month period immediately preceding the disposition one or any combination of: (A) the Non-Canadian Holder, (B) persons with whom the Non-Canadian Holder does not deal at arm's length (within the meaning of the Tax Act), and (C) partnerships in which the Non-Canadian Holder or a person described in (B) holds a membership interest directly or indirectly through one or more partnerships owned 25% or more of the issued shares of any series or class of our capital stock and (ii) more than 50% of the fair market value of our common shares was derived directly or indirectly from one or any combination of real or immovable property situated in Canada, "Canadian resource property" (as defined in the Tax Act), "timber resource property" (as defined in the Tax Act) or options in respect of, or interests in, or for civil law, rights in such property, whether or not such property exists; or (b) our common shares are deemed under the Tax Act to be taxable Canadian property of the Non-Canadian Holder. If our common shares or warrants constitute taxable Canadian property of a particular Non-Canadian Holder, any capital gain arising on their disposition may be exempt from Canadian tax under the Canada-U.S. Tax Convention if, at the time of disposition, our common shares do not derive their value principally from real property situated in Canada. The exercise of a warrant for Common Shares will generally be deemed not to constitute a disposition and, accordingly, a Non-Resident Holder will not recognize a gain or a loss on such an exercise. Non-Canadian Holders whose common shares or warrants may constitute taxable Canadian property should consult their own tax advisors.

UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting agreement we intend to enter into with the underwriter, at the time of pricing of the units we will agree to sell to the underwriter named below the number of units set forth opposite its name:

Underwriter		Number of units

H.C. Wainwright & Co., LLC			1,435,406

The underwriting agreement will provide that the underwriter is obligated to purchase all the units in this offering if any are purchased. The underwriter is offering the units subject to receipt and acceptance of the units from us and subject to the underwriter's right to reject any order in whole or in part.

The underwriter is offering the units, subject to prior sale, when, as and if issued to and accepted by the underwriter, subject to approval of legal matters by its counsel, including the validity of the units and their component shares and warrants, and other conditions contained in the underwriting agreement, such as the receipt by the underwriter of officers' certificates and legal opinions. The underwriter reserves the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Any units sold by the underwriter to securities dealers will be sold at the applicable public offering price less a selling concession not in excess of $ per unit. The underwriter proposes to offer the units to the public at the public offering price set forth on the cover of this prospectus. If all of the units are not sold at the public offering price, the underwriter may change the offering price and other selling terms, and we will file a supplement to this prospectus reflecting such revised terms.

The following table shows the per unit and total underwriting discount to be paid to the underwriter by us.

		Per Class A Unit			Per Class B Unit			Total

Underwriting discount paid by us		$			$			$

We estimate that our out of pocket expenses for this offering will be approximately $350,000 (excluding the underwriting discount), including a nonaccountable expense allowance of $100,000 for legal fees and expenses of the underwriter. In the event this offering is not completed, we have also agreed to pay to the underwriter a tail fee equal to the proposed underwriting discount in this offering, if any investor with which we have had substantive discussions with respect to this offering provides us with further capital during the seven-month period following July 7, 2016.

We and our officers and directors have agreed with the underwriter, subject to certain exceptions, not to offer, sell, contract to sell, announce the intention to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any common shares, or any options or warrants to purchase any common shares, or any securities convertible into, exchangeable for or that represent the right to receive common shares during the period from the date of this prospectus continuing through the date 90 days after the date of this prospectus, except with the prior written consent of the underwriter.

We have agreed to indemnify the underwriter against liabilities under the Securities Act of 1933, as amended (the "Securities Act"), or contribute to payments that the underwriter may be required to make in that respect.

The underwriter and its affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment

management, investment research, principal investment, hedging, financing and brokerage activities. The underwriter and its affiliates have in the past performed commercial banking, investment banking and advisory services for us and our affiliates from time to time for which they have received customary fees and reimbursement of expenses and may, from time to time, engage in transactions with and perform services for us and our affiliates in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses. We have given the underwriter a right of first refusal for a period of 12 months following completion of this offering to act as our lead underwriter or lead placement agent if we decide to undertake a public or private capital raise.

In connection with this offering, the underwriter does not have any over-allotment option to purchase additional units, common shares or warrants from us. Accordingly, the underwriter will not engage in any market stabilization activities.

A prospectus in electronic format may be made available on the website maintained by the underwriter, or selling group members, if any, participating in this offering and the underwriter may distribute prospectuses electronically. Other than the prospectus in electronic format, the information on the websites of any such underwriter or selling group member is not part of this prospectus. The underwriter may agree to allocate a number of shares to selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriter and selling group members that will make internet distributions on the same basis as other allocations.

LEGAL MATTERS

The validity of the units, the common shares contained in the units and the warrants contained in the units offered by this prospectus will be passed upon for us by Dentons Canada LLP, Ottawa, Ontario. Certain legal matters will also be passed upon for us by DLA Piper LLP (US), San Diego, CA. Certain legal matters will be passed upon for the underwriters by Ellenoff Grossman & Schole LLP, New York, NY.

As of the date hereof, the partners and associates of each of Dentons Canada LLP and DLA Piper LLP (US), in each case as a group, beneficially own, directly or indirectly, less than 1%, respectively, of the outstanding securities of the Company.

EXPERTS

Our auditors are Ernst & Young LLP, Ottawa, Ontario, Canada.

Our Annual Consolidated Financial Statements have been audited by Ernst & Young LLP, independent registered public accounting firm, as stated in their report dated May 18, 2016 which is incorporated by reference in this prospectus and the registration statement of which this prospectus forms a part, and has been so incorporated in reliance upon the reports of such firm given their authority as experts in accounting and auditing.

Ernst & Young LLP has advised us that they are independent within the meaning of Rule 3520 of the Public Company Accounting Oversight Board, Auditor Independence and the Rules of Professional Conduct of the Chartered Professional Accountants of Ontario.

ENFORCEMENT OF CIVIL LIABILITIES

Enforcement of civil liabilities under United States federal securities laws may be affected adversely by the fact that we are incorporated in Canada, our principal executive offices are located in Canada, all of our directors and executive officers and most of the experts named in this prospectus, including our independent public accounting firm, reside principally outside of the United States and all or a substantial portion of our assets and the assets of these persons are located outside the United States.

We have appointed an agent for service of process in the United States, but it may not be possible to effect service in the United States on our directors, executive officers, public accounting firm and other experts who reside outside of the United States. Furthermore, it may not be possible for an investor to enforce judgments obtained in United States courts based upon the civil liability provisions of United States federal securities laws or other laws of the United States against us or those persons.

Purchasers are also advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

WHERE YOU CAN FIND MORE INFORMATION

You may read and copy this prospectus, including the related exhibits and schedules, and any document we file with the SEC without charge at the SEC's public reference room at 100 F Street, N.E., Room 1580, Washington, DC 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Room 1580, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC also maintains an Internet website that contains reports and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are also available to the public through the SEC's website at www.sec.gov.

As a "foreign private issuer," we are subject to the information reporting requirements of the Exchange Act that are applicable to foreign private issuers, and under those requirements file reports with the SEC. Those other reports or other information may be inspected without charge at the locations described above. As a "foreign private issuer," we are exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and "short-swing" profit recovery provisions contained in Section 16 of the Exchange Act with respect to their purchases and sales of common shares. Furthermore, as a "foreign private issuer," we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act.

We maintain a corporate website at www.dragonwaveinc.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into and does not constitute a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The SEC allows us to incorporate by reference information into this document. This means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be a part of this document, except for any information superseded by information that is included directly in this prospectus or incorporated by reference subsequent to the date of this prospectus.

We incorporate by reference the following documents or information that we have filed with the SEC in each case with File No. 001-34491:

•: our Annual Report on Form 20-F for the fiscal year ended February 29, 2016;
•: our Current Reports on Form 6-K filed on April 18, 2016, May 18, 2016, May 26, 2016, June 17, 2016, June 22, 2016 and July 13, 2016; and
•: the description of our common shares which is contained in our registration statement on Form 8-A, filed with the SEC on October 14, 2009, including any amendment or report filed for the purpose of updating such description.

Documents incorporated by reference in this prospectus are available from us without charge upon written or oral request, excluding any exhibits to those documents that are not specifically incorporated by reference into those documents. You can obtain documents incorporated by reference in this document by requesting them from us in writing or at DragonWave Inc., 411 Legget Drive, Suite 600, Ottawa, Ontario, Canada, K2K 3C9 or via telephone at (613) 599-9991.

PROSPECTUS

DRAGONWAVE INC.

$6.0 million in any combination of:

Up to 1,435,406 Class A Units
Consisting of One Common Share,
One Warrant to Purchase One Common Share
and Two Short-Term Warrants Each to Purchase One Common Share

and

Up to 1,435,406 Class B Units
Consisting of One Pre-Funded Warrant to Purchase One Common Share,
One Warrant to Purchase One Common Share
and Two Short-Term Warrants Each to Purchase One Common Share

Rodman & Renshaw
a unit of H.C. Wainwright & Co.

, 2016

PART II—INFORMATION NOT REQUIRED IN PROSPECTUS

Item 6. Indemnification of Directors and Officers

Under the Canada Business Corporations Act (the "CBCA"), DragonWave Inc. (the "Registrant") may indemnify a director or officer of the Registrant, a former director or officer of the Registrant or another individual who acts or acted at the Registrant's request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association with the Registrant or other entity and provided that (a) the director, officer or other individual acted honestly and in good faith with a view to the best interest of the Registrant, or, as the case may be, to the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the Registrant's request and, (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his conduct was lawful. The indemnification may be made in connection with an action by or on behalf of the Registrant or other entity to procure a judgment in its favor, to which the individual is made a party because of the individual's association with the Registrant or other entity as described above, only with court approval and provided the individual fulfills the conditions set out in clauses (a) and (b), above. A director, officer or other individual referred to above is entitled to indemnification from the Registrant in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the Registrant or other entity as described above, if the individual seeking indemnity was not judged by the court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done, and fulfils the conditions set out in (a) and (b), above. A Registrant may advance monies to an individual described above for the costs, charges and expenses of a proceeding described above; however, the individual shall repay the monies if the individual does not fulfill the conditions set out in clauses (a) and (b), above.

The Registrant's By-Law No. 1A (the "By-Law") provides that, subject to the provisions of the CBCA, the Registrant shall indemnify a director or officer, a former director or officer, or another individual who acts or acted at the Registrant's request as a director or officer, or an individual acting in a similar capacity of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal or administrative action or proceeding to which the individual is involved because of that association with the Registrant or other entity, if (a) the individual acted honestly and in good faith with a view to the best interests of the Registrant or, as the case may be, to the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the Registrant's request; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual's conduct was lawful. The Registrant shall also indemnify any such person in such other circumstances as the CBCA or other law permits or requires. Nothing in the By-Law shall limit the right of any person entitled to indemnity to claim indemnity apart from the provisions of the By-Law to the extent permitted by the CBCA or other law.

The Registrant has also entered into contractual indemnification agreements in favor of each of the directors that provide, to the full extent allowed by law, that the Registrant shall indemnify and save harmless each director, his estate, executors, administrators, legal representatives and lawful heirs, from and against any and all costs, charges of expenses (including, but not limited to, an amount paid to settle any action or to satisfy any judgment, legal fees on a solicitor and client basis, other professional fees, out-of-pocket expenses for attending proceedings including discoveries, trials, hearings and meetings, and any amount for which he is liable by reason of any statutory provision whether civil, criminal or otherwise ("indemnifiable costs")), suffered or incurred by the director or such other indemnified parties, directly or indirectly, as a result of or by reason of the director: (i) being or having

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been a director or officer of the Registrant or an affiliate of the Registrant or by reason of any action taken by the director in his capacity as a director or officer of the Registrant or an affiliate of the Registrant; (ii) being or having been a member of a committee of the board of directors of the Registrant or an affiliate of the Registrant; or (iii) acting as a member of the plan administrator pursuant to the Registrant's Stock Option Plan, subject to certain conditions being satisfied including that the director: (a) acted honestly and in good faith with a view to the best interests of the Registrant, or the best interests of the Registrant's affiliate, as the case may be; and (b) in the case of a criminal or administrative action, proceeding, investigation, inquiry or hearing that is enforced by monetary penalty, he had reasonable grounds for believing that his conduct was lawful. The indemnities also provide that indemnifiable costs will be paid by the Registrant immediately, with the agreement that, in the event it is ultimately determined that the indemnified party was not entitled to be so indemnified, such amounts shall be refunded to the Registrant.

A policy of directors' and officers' liability insurance is maintained by the Registrant which insures directors and officers for losses as a result of claims against the directors and officers of the Registrant in their capacity as directors and officers and also reimburses the Registrant for payments made pursuant to the indemnity provisions under the By-Law and the CBCA.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act"), may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the U.S. Securities and Exchange Commission (the "SEC") such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 7. Recent Sales of Unregistered Securities

On April 11, 2016, the Registrant completed an equity offering previously announced on April 7, 2016. In connection therewith, the Registrant entered into securities purchase agreements (each a "Purchase Agreement") with certain institutional investors providing for the issuance and sale by the Registrant of 599,998 common shares and a price per share equal to U$7.25. The common shares were offered (the "Registered Offering") by the Registrant pursuant to an effective shelf registration statement on Form F-3 (File No. 333-209969), which was declared effective by the SEC on March 14, 2016 (the "Registration Statement"). In a concurrent private placement (the "Private Placement" and, together with the Registered Offering, the "2016 Offering"), the Registrant issued warrants to purchase 299,999 common shares at an exercise price of $8.50 per share (the "2016 Warrants") pursuant to an exemption from registration under Rule 506(b) of the Securities Act. The 2016 Warrants expire on March 12, 2020 and have an exercise price of $8.50 (the "2016 Warrants"). The net proceeds of the 2016 Offering were $4.09 million, after the underwriting discount and estimated offering expenses payable by the Registrant, and excluding any proceeds the Registrant may receive upon exercise of the warrants. The Registrant expects that any exercise of the warrants will result in cash proceeds being paid to the Registrant. The 2016 Warrants cannot be exercised until October 12, 2016 and if, any time after October 13, 2016, there is no effective registration statement registering the common shares issuable upon exercise of the 2016 Warrants, the 2016 Warrants can be cashlessly exercised. As of the date of the prospectus contained in this Registration Statement, there are 299,999 of the 2016 Warrants outstanding.

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Item 8. Exhibits and Financial Statement Schedules

(a) Exhibit Index

		Description

1.1		Form of Underwriting Agreement by and between DragonWave Inc. and H.C. Wainwright & Co.

3.1	*	Restated Articles of Incorporation of DragonWave Inc. (filed as Exhibit 1.0 on Form 20-F with the SEC on May 27, 2015).

3.2	*	Amendment to Restated Articles of Incorporation (filed as Exhibit 99.3 on Form 6-K with the SEC on February 2, 2016).

3.3	*	Composite Form of By-Laws (as amended) of the Company (filed as Exhibit 1.1 on Form 20-F with the SEC on May 27, 2015).

4.1		Form of Warrant Indenture.

4.2		Form of Pre-Funded Warrant.

4.3	*	Form of Warrant Indenture between DragonWave Inc. and Computershare Trust Company of Canada as the Warrant Agent (filed as Exhibit 99.1 on Form 6-K with the SEC on September 12, 2013).

4.4	*	Form of Common Share Warrant Certificate (filed as Exhibit 99.1 on Form 6-K with the SEC on September 17, 2013).

4.5	*	Warrant Indenture between DragonWave Inc. and Computershare Trust Company of Canada as the Warrant Agent (filed as Exhibit 99.2 on Form 6-K with the SEC on August 1, 2014).

4.6	*	First Supplemental Warrant Indenture, dated as of September 4, 2014, to the Warrant Indenture dated as of August 1, 2014 (filed as Exhibit 99.1 on Form 6-K with the SEC on September 4, 2014).

4.7	*	Second Supplemental Warrant Indenture, dated as of February 2, 2016, to the Warrant Indenture Dated as of August 1, 2014 (filed as Exhibit 99.1 on Form 6-K with the SEC on September 4, 2014).

4.8	*	Form of Warrant (filed as Exhibit 99.1 on Form 6-K with the SEC on April 7, 2016).

4.9	*	Warrant for the Purchase of Common Shares dated May 30, 2007.

5.1		Opinion of Dentons Canada LLP

10.1	*	DragonWave Inc. Employee Share Purchase Plan (filed as Exhibit 4.1 on Form S-8 with the SEC on February 24, 2010).

10.2	*	DragonWave Inc. Sixth Amended and Restated Key Employee Stock Option Plan (filed as Appendix C to Exhibit 99.1 on Form 6-K with the SEC on May 17, 2013).

10.3	*	DragonWave Inc. Share Based Compensation Plan (filed as Exhibit 4.2 on Form S-8 with the SEC on July 8, 2014).

10.4	*	Amended and Restated Master Acquisition Agreement, dated as of May 3, 2012, by and between Nokia Siemens Networks B.V., DragonWave Inc. and DragonWave S.A.R.L. (filed as Exhibit 99.1 on Form 6-K with the SEC on May 11, 2012).

10.5	*	Employment Agreement, dated January 21, 2004, as amended, by and between DragonWave Inc. and Peter Allen.

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		Description


10.6	*	Employment Agreement, dated August 27, 2015, as amended, by and between DragonWave Inc. and Patrick Houston.

10.7	*	Employment Agreement, dated November 13, 2003, as amended, by and between DragonWave Inc. and Erik Boch.

10.8	*	Employment Agreement, dated June 28, 2012, as amended, by and between DragonWave Inc. and Barry Dahan.

10.9	*	Employment Agreement, dated November 13, 2003, as amended, by and between DragonWave Inc. and Dave Farrar.

10.10	*	Revolving Credit Agreement, dated June 1, 2012, as amended, by and between DragonWave Inc. and Comerica Bank.

10.11	*	Securities Purchase Agreement dated April 6, 2016 by and among DragonWave Inc. and the Purchasers identified therein (filed as Exhibit 99.2 on Form 6-K with the SEC on April 7, 2016).

21	*	Subsidiaries of the Registrant

23.1		Consent of Ernst & Young LLP

23.2		Consent of Dentons Canada LLP (included in Exhibit 5.1)

24	*	Powers of Attorney (included on signature page)

*: Previously filed.
(b): Financial Statement Schedules

All financial statement schedules have been omitted because either they are not required, are not applicable or the information required therein is otherwise set forth in the Registrant's financial statements and related notes thereto.

Item 9. Undertakings

The undersigned hereby undertakes:

(a) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Ottawa, Province of Ontario, Country of Canada, on July 29, 2016.


		DRAGONWAVE INC.
		By:		/s/ PETER ALLEN Peter Allen President and Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.


Date: July 29, 2016	By:	/s/ PETER ALLEN Peter Allen President and Chief Executive Officer (Principal Executive Officer)
Date: July 29, 2016	By:	/s/ PATRICK HOUSTON Patrick Houston Chief Financial Officer (Principal Financial Officer)
Date: July 29, 2016	By:	/s/ RUTH BENGOUGH Ruth Bengough Controller (Principal Accounting Officer)
Date: July 29, 2016	By:	* Claude Haw, Chairman of the Board of Directors
Date: July 29, 2016	By:	* Lori O'Neill, Director
Date: July 29, 2016	By:	* Cesar Cesarato, Director


*Pursuant to Power of Attorney
By:		/s/ PETER ALLEN Peter Allen Attorney-in-fact

II-6

QuickLinks

TABLE OF CONTENTS
PROSPECTUS SUMMARY
COMPANY OVERVIEW
THE OFFERING
SELECTED FINANCIAL DATA
Selected Consolidated Statements of Operations Data
Selected Consolidated Balance Sheet Data
RISK FACTORS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
USE OF PROCEEDS
DIVIDEND POLICY
CAPITALIZATION
DILUTION
MARKET PRICES
DESCRIPTION OF SECURITIES BEING DISTRIBUTED
MATERIAL UNITED STATES FEDERAL INCOME TAXATION
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS FOR UNITED STATES RESIDENTS
UNDERWRITING
LEGAL MATTERS
EXPERTS
ENFORCEMENT OF CIVIL LIABILITIES
WHERE YOU CAN FIND MORE INFORMATION
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
PART II—INFORMATION NOT REQUIRED IN PROSPECTUS

Item 6. Indemnification of Directors and Officers

Item 7. Recent Sales of Unregistered Securities

Item 8. Exhibits and Financial Statement Schedules

Item 9. Undertakings

SIGNATURES
EX-1.1 2 a2229241zex-1_1.htm EX-1.1

Exhibit 1.1

DRAGONWAVE INC.

UNDERWRITING AGREEMENT

August , 2016

H.C. Wainwright & Co., LLC

As the Representative of the

Several underwriters, if any, named in Schedule I hereto

430 Park Avenue

New York, New York 10022

Ladies and Gentlemen:

The undersigned, DragonWave Inc., a corporation existing under the federal laws of Canada (collectively with its subsidiaries and affiliates, including, without limitation, all entities disclosed or described in the Registration Statement as being subsidiaries or affiliates of the DragonWave Inc., the “Company”), hereby confirms its agreement (this “Agreement”) with any underwriter named in Schedule I hereto (such underwriters, including the Representative (as defined below), the “Underwriters” and each an “Underwriter”) for which H.C. Wainwright & Co., LLC is acting as representative (the “Representative” and if there are no Underwriters other than the Representative, references to multiple Underwriters shall be disregarded and the term Representative as used herein shall have the same meaning as Underwriter) on the terms and conditions set forth herein.

It is understood that the several Underwriters are to make a public offering of the Closing Securities as soon as the Representative deems it advisable to do so. The Closing Securities are to be initially offered to the public at the public offering price set forth in the Prospectus. The Representative may from time to time thereafter change the public offering price and other selling terms.

It is further understood that you will act as the Representative for the Underwriters in the offering and sale of the Closing Securities in accordance with this Agreement.

ARTICLE I.

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

“Affiliate” means with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under

common control with such Person as such terms are used in and construed under Rule 405 under the Securities Act.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York or Province of Ontario are authorized or required by law or other governmental action to close.

“Class A Units” means the units consisting of one Common Share, one Long-Term Warrant and two Short-Term Warrants, sold to the Underwriters in accordance with Section 2.1(a).

“Class B Units” means the units consisting of one Pre-Funded Warrant, one Long-Term Warrant and two Short-Term Warrants, sold to the Underwriters in accordance with Section 2.1(a).

“Closing” means the closing of the purchase and sale of the Closing Securities pursuant to Section 2.1.

“Closing Date” means the hour and the date on the Trading Day on which all conditions precedent to (i) the Underwriters’ obligations to pay the Closing Purchase Price and (ii) the Company’s obligations to deliver the Closing Securities, in each case, have been satisfied or waived, but in no event later than 10:00 a.m. (New York City time) on the third Trading Day following the date hereof or at such earlier time as shall be agreed upon by the Representative and the Company.

“Closing Pre-Funded Warrants” shall have the meaning ascribed to such term in Section 2.1(a)(i).

“Closing Purchase Price” means the aggregate Unit Purchase Prices for all Units purchased by the Underwriters in the Offering, as set forth on Schedule I.

“Closing Securities” shall have the meaning ascribed to such term in Section 2.1(a)(ii).

“Closing Shares” shall have the meaning ascribed to such term in Section 2.1(a)(i).

“Closing Warrants” shall have the meaning ascribed to such term in Section 2.1(a)(ii).

“Commission” means the United States Securities and Exchange Commission.

“Common Shares” means the common shares of the Company, no par value per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

“Common Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Shares.

“Company Auditor” means Ernst & Young LLP, with offices located at 99 Bank Street, Suite 1200, Ottawa, Ontario K1P 6B9, Canada.

“Company Counsel” means, together, DLA Piper LLP (US), with offices located at 4365 Executive Drive, Suite 1100, San Diego, California 92121 and Dentons Canada LLP, with offices located at 99 Bank Street, Suite 1420, Ottawa, Ontario.

“Effective Date” shall have the meaning ascribed to such term in Section 3.1(e).

“EGS” means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Execution Date” means the date on which the parties execute and enter into this Agreement.

“Exempt Issuance” means the issuance of (a) Common Shares or options to employees, officers or directors of the Company pursuant to any share or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into Common Shares issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, (c) securities in connection with the Company’s incurrence or restructuring of indebtedness with unrelated parties, and (d) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the

Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

“FINRA” means the Financial Industry Regulatory Authority.

“GAAP” shall have the meaning ascribed to such term in Section 3.1(i).

“Indebtedness” means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.

“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

“Lock-Up Agreements” means the lock-up agreements, in the form of Exhibit A attached hereto, delivered on the date hereof by each of the Company’s officers and directors holding Common Shares or Common Share Equivalents.

“Long-Term Warrants” means the warrants to purchase Common Shares exercisable during the period commencing from their original issuance and ending on the date that is five years from the date of issuance, at an initial exercise price of $ per Warrant Share, and having the other rights and obligations set forth in the Warrant Indenture.

“Material Adverse Effect” means (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document.

“Offering” shall have the meaning ascribed to such term in Section 2.1(c).

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Pre-Funded Warrants” means the warrants included in the Class B Units, which are exercisable on the date of original issuance and have no expiration date, at an initial

purchase price of $ per Warrant Share, of which all but the exercise price of $0.01 per share is pre-paid by virtue of purchasing the Class B Unit, and having the other rights and obligations set forth in the warrant certificate therefor.

“Preliminary Prospectus” means, if any, any preliminary prospectus relating to the Securities included in the Registration Statement or filed with the Commission pursuant to Rule 424(b).

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Prospectus” means the final prospectus filed for the Registration Statement.

“Prospectus Supplement” means, if any, any supplement to the Prospectus relating to the Securities complying with Rule 424(b) of the Securities Act that is filed with the Commission.

“Registration Statement” means, collectively, the various parts of the registration statement prepared by the Company on Form F-1, File No. 333-212428, with respect to the Securities, each as amended as of the date hereof, including the Prospectus and Prospectus Supplement, if any, the Preliminary Prospectus, if any, and all exhibits filed with or incorporated by reference into such registration statement.

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

“Securities” means the Closing Securities and the Warrant Shares.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Short-Term Warrants” means the warrants to purchase Common Shares exercisable during the period commencing from their original issuance and ending on the date that is the six-month anniversary thereafter, at an initial exercise price of $ per Warrant Share, and having the other rights and obligations set forth in the Warrant Indenture.

“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

“Trading Day” means a day on which the principal Trading Market is open for trading in the United States.

“Trading Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTCQX or OTCQB or the Toronto Stock Exchange (or any successors to any of the foregoing).

“Transaction Documents” means this Agreement, the Warrant Indenture, the Warrants, the Lock-Up Agreements, and any other documents or agreements executed in connection with the transactions contemplated hereunder.

“Transfer Agent” means Computershare Investor Services Inc., the current transfer agent of the Company, with a mailing address of 100 University Avenue, 8th Floor, Toronto, Ontario and a facsimile number of 416-263-9200, and any successor transfer agent of the Company.

“Units” means the Class A Units and the Class B Units, collectively, sold to the Underwriters in accordance with Section 2.1(a).

“Unit Purchase Price” shall have the meaning ascribed to such term in Section 2.1(b).

“Warrant Indenture” means the warrant indenture dated on or about the date hereof, among the Company and Computershare Trust Company of Canada in the form of Exhibit B attached hereto.

“Warrant Shares” means the Common Shares issuable upon exercise of the Warrants.

“Warrants” means, collectively, the Long-Term Warrants, the Short-Term Warrants and the Pre-Funded Warrants, each delivered to the Underwriters in accordance with Section 2.1(a)(ii).

ARTICLE II.

PURCHASE AND SALE

2.1 Closing.

(a) Upon the terms and subject to the conditions set forth herein, the Company agrees to sell in the aggregate Class A Units and Class B Units, and each Underwriter agrees to purchase, severally and not jointly, at the Closing, the number of Class A Units and/or Class B Units set forth opposite the name of such Underwriter on Schedule I hereof. The Units will not be certificated, and the Common Shares (in the case of the Class A Units) or the Pre-Funded Warrants (in the case of the Class B Units) and the Long-Term Warrants and the Short-Term Warrants comprising the Units will immediately separate and be issued separately, such that at the Closing the Underwriters will acquire, and the Company will deliver to the Underwriters:

(i) Common Shares (the “Closing Shares”), in the case of Class A Units purchased by the Underwriters, and Pre-Funded Warrants, in the case of Class B Units purchased by the Underwriters (the “Closing Pre-Funded Warrants”);

(ii) Long-Term Warrants and Short-Term Warrants (collectively, the “Closing Warrants” and, together with the Closing Shares and the Closing Pre-Funded Warrants, the “Closing Securities”).

(b) The aggregate purchase price for the Closing Securities shall equal the amount set forth opposite the name of such Underwriter on Schedule I hereto, which aggregate price shall be net of the underwriting discount. The combined purchase price for one Class A Unit (including one Closing Share, one Long-Term Warrant and two Short-Term Warrants) shall be $ per Unit, and the combined purchase price for one Class B Unit (including one Pre-Funded Warrant, one Long-Term Warrant and two Short-Term Warrants) shall be $ per Unit (as applicable, the “Unit Purchase Price”).

(c) On the Closing Date, the Representative shall deliver or cause to be delivered to the Company, via wire transfer, immediately available funds equal to the aggregate Closing Purchase Price and the Company shall deliver to, or as directed by, the Representative, the Closing Securities, and the Company shall deliver the other items required pursuant to Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other location as the Company and Representative shall mutually agree. The Closing Securities are to be offered initially to the public at the offering price set forth on the cover page of the Prospectus (the “Offering”).

2.2 Deliveries. The Company shall deliver or cause to be delivered to each Underwriter (if applicable) the following:

(i) At the Closing Date, the Closing Shares shall be delivered via The Depository Trust Company Deposit or Withdrawal at Custodian system in such names and in such denominations as the Representative may direct by notice in writing to the Transfer Agent given at or prior to 9:00 a.m. (New York City time) on the Trading Day preceding the Closing Date;

(ii) At the Closing Date, any Closing Pre-Funded Warrants and the Closing Warrants, shall be delivered via The Depository Trust Company Deposit of Withdrawal at Custodian system (or such alternative method of delivery, including delivery of physical Warrants, as the parties may agree) in such names and in such denominations as the Representative may direct by notice in writing to the Transfer Agent given at or prior to 9:00 a.m. (New York City time) on the Trading Day preceding the Closing Date;

(iii) At the Closing Date, legal opinions of Company Counsel addressed to the Underwriters, together with negative assurance letters, in form and substance reasonably satisfactory to the Representative;

(iv) Contemporaneously herewith, a cold comfort letter, addressed to the Underwriters and in form and substance reasonably satisfactory to the Representative from the Company Auditor dated, respectively, as of the date of this Agreement and a bring-down letter dated as of the Closing Date;

(v) At the Closing Date, the duly executed and delivered Officer’s Certificate, substantially in the form required by Exhibit C attached hereto;

(vi) At the Closing Date, the duly executed and delivered Secretary’s Certificate, substantially in the form required by Exhibit D attached hereto;

(vii) At the Closing Date, the Warrant Indenture duly executed by the Company and the warrant agent; and

(viii) Contemporaneously herewith, the duly executed and delivered Lock-Up Agreements.

2.3 Closing Conditions. The respective obligations of each Underwriter hereunder in connection with the Closing are subject to the following conditions being met:

(i) the accuracy in all material respects when made and on the date in question (other than representations and warranties of the Company already qualified by materiality, which shall be true and correct in all respects) of the representations and warranties of the Company contained herein (unless as of a specific date therein);

(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the date in question shall have been performed in all material respects;

(iii) the delivery by the Company of the items set forth in Section 2.2 of this Agreement;

(iv) the Registration Statement shall be effective on the date of this Agreement and at the Closing Date, if any, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or shall be pending or, to the Company’s knowledge, contemplated by the Commission and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representative;

(v) by the Execution Date, if required by FINRA, the Underwriters shall have received clearance from FINRA as to the amount of compensation allowable or payable to the Underwriters as described in the Registration Statement;

(vi) the Closing Shares and the Warrant Shares have been approved for listing on the Trading Market; and

(vii) prior to and on the Closing Date: (i) there shall have been no material adverse change or development involving a prospective material adverse change in the condition or prospects or the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration Statement and Prospectus; (ii) no action suit or proceeding, at law or in equity, shall have been pending or, to the Company’s knowledge, threatened against the Company or any Affiliate of the Company before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income of the Company, except as set forth in the Registration Statement and Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the rules and regulations thereunder and shall conform in all material respects to the requirements of the Securities Act and the rules and regulations thereunder, and neither the Registration Statement nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Execution Date as follows:

(a) Subsidiaries. All of the direct and indirect Subsidiaries of the Company are set forth in the SEC Reports. The Company owns, directly or indirectly, all of the capital stock or other equity ownership interest of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no Subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

(a) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or would not reasonably be expected to result in a Material Adverse Effect and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(b) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s shareholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(c) No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as would not have or would not reasonably be expected to result in a Material Adverse Effect.

(d) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filing with the Commission of the Prospectus and one or more reports on Form 6-K relating to the Offering, (ii) as may be required by the Trading Market, (iii) as may be required by FINRA, and (iv) such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

(e) Registration Statement. The Company has filed with the Commission the Registration Statement, including any related Prospectus or Prospectuses, for the registration of the Securities under the Securities Act, which Registration Statement has been prepared by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and regulations of the Commission under the Securities Act. The Registration Statement has been declared effective by the Commission on the date hereof (the “Effective Date”).

(f) Issuance of Securities. The Closing Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable securities, free and clear of all Liens imposed by the Company. The Warrant Shares, when issued in accordance with the terms of the Warrant Indenture or Warrants, as applicable, will be validly issued, fully paid and nonassessable shares, free and clear of all Liens imposed by the Company. The

Company has reserved for issue the maximum number of Common Shares issuable pursuant to this Agreement, the Warrant Indenture and the Warrants. The holder of the Securities will not be subject to personal liability by reason of being such holders. The Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. All corporate action required to be taken for the authorization, issuance and sale of the Closing Securities has been duly and validly taken. All corporate action required to be taken to reserve a sufficient number of Common Shares for the purpose of enabling the Company to issue Warrant Shares pursuant to any exercise of the Warrants has been duly and validly taken. The Closing Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement.

(g) Capitalization. The capitalization of the Company is as set forth in the SEC Reports. The Company has not issued any Common Shares since May 31, 2016, other than pursuant to the exercise of employee stock options under the Company’s equity incentive plans, the issuance of Common Shares to employees pursuant to the Company’s employee share purchase plan and pursuant to the conversion and/or exercise of Common Share Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents except as provided herein or rights that have been waived prior to the date hereof. Except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any Common Shares, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional Common Shares or Common Share Equivalents, other than those set forth in the SEC Reports, pursuant to the Loan and Security Agreement, or with respect to employee stock options that were granted under the Company’s equity incentive plan since May 31, 2016. The issuance and sale of the Securities will not obligate the Company to issue Common Shares or other securities to any Person (other than the Underwriters) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities, except as disclosed in the SEC Reports. All of the outstanding Common Shares of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. The authorized shares of the Company conform in all material respects to all statements relating thereto contained in the Registration Statement and the Prospectus. The offers and sales of the Company’s securities were at all relevant times either registered under the Securities Act and the applicable state securities or Blue Sky laws or, based in part on the representations and warranties of the purchasers, exempt from such registration requirements. No further

approval or authorization of any shareholder, the Board of Directors or others is required for the issuance and sale of the Securities. Except as disclosed in the SEC Reports, there are no shareholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders.

(h) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. Giving due consideration that all reports on Form 6-K are “furnished” but not “filed” with Commission, as of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The agreements and documents described in the Registration Statement, the Prospectus, the Prospectus Supplement and the SEC Reports conform to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the rules and regulations thereunder to be described in the Registration Statement, the Prospectus, the Prospectus Supplement or the SEC Reports or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Prospectus, the Prospectus Supplement or the SEC Reports, or (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s

knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefore may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the best of the Company’s knowledge, any other party is in default thereunder and, to the best of the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best of the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to environmental laws and regulations.

(i) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity incentive plans and (vi) no officer or director of the Company has resigned from any position with the Company. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made. Unless otherwise disclosed in an SEC Report filed prior to the date hereof, the Company has not: (i) issued any securities other than Exempt Securities, incurred any liability or obligation, direct or contingent, for borrowed money; or

(ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.

(j) Litigation. Except as otherwise disclosed in an SEC Report, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor, to the knowledge of the Company, any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current director or executive officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

(k) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which is reasonably likely to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(l) Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or

any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is, or within the past twelve months has been, in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all applicable foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not have or would not reasonably be expected to result in a Material Adverse Effect. Any such violation in (iii) above prior to the prior twelve months has been either resolved favorably to the Company or reserved on the Company’s balance sheet.

(m) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits would not reasonably be expected to result in a Material Adverse Effect (each, a “Material Permit”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. The disclosures in the Registration Statement concerning the effects of applicable Federal, State, local and all foreign regulation on the Company’s business as currently contemplated are correct in all material respects.

(n) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights to lease or otherwise use, all real property and all personal property that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in accordance with GAAP, and the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance in all material respects.

(o) Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to do so would reasonably be expected to have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Except as disclosed in the Prospectus, neither the Company nor any Subsidiary has received written notice that any of the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or

terminate or be abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as would not have or would not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights, except where such inability to enforce or such infringement, as applicable, is not reasonably likely to result in a Material Adverse Effect. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(p) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

(q) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from, any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, shareholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including equity award agreements under any equity incentive plan of the Company.

(r) Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. Except as disclosed in the SEC Reports, the Company and the Subsidiaries maintain a system of internal accounting controls

sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

(s) Certain Fees. Except as set forth in the Prospectus, no brokerage or finder’s fees or commissions are or will be payable by the Company, any Subsidiary or any Affiliate of the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. To the Company’s knowledge, there are no other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its shareholders that may affect the Underwriters’ compensation, as determined by FINRA. The Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve months prior to the Execution Date, other than the prior payment of $100,000.00 to the Representative as provided hereunder in connection with the Offering. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.

(t) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities will not be or be an Affiliate of, a company required to register as an “investment company” within the meaning of the

Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become required to register as an “investment company” under the Investment Company Act of 1940, as amended.

(u) Registration Rights. Except as disclosed in the SEC Reports, no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

(v) Listing and Maintenance Requirements. The Common Shares are registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except as set forth in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Shares are or have been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements, except as would not have or would not reasonably be expected to result in a Material Adverse Effect.

(w) Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its jurisdiction of incorporation that is or would reasonably be expected to become applicable as a result of the Underwriters and the Company fulfilling their obligations or exercising their rights under the Transaction Documents.

(x) Disclosure; 10b-5. The Registration Statement (and any further documents to be filed with the Commission in connection with the Offering) contains all exhibits and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, if any, at the time it became effective, complied in all material respects with the Securities Act and the Exchange Act and the applicable rules and regulations under the Securities Act and did not and, as amended or supplemented, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Prospectus and the Prospectus Supplement, each as of its respective date, comply in all material respects with the Securities Act and the Exchange Act and the applicable rules and regulations. Each of the Prospectus and the Prospectus Supplement, as amended or supplemented, did not and will not contain as of the date thereof any untrue statement of a material fact or omit to state a material fact necessary in

order to make the statements therein, in light of the circumstances under which they were made, not misleading. The SEC Reports, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the applicable rules and regulations, and none of such documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein (with respect to the SEC Reports incorporated by reference in the Prospectus or Prospectus Supplement), in light of the circumstances under which they were made not misleading; and any further documents so filed and incorporated by reference in the Prospectus or Prospectus Supplement, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the applicable rules and regulations, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is required to be filed with the Commission. There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time period. There are no contracts or other documents required to be described in the Prospectus or Prospectus Supplement, or to be filed as exhibits or schedules to the Registration Statement, which have not been described or filed as required.

(y) No Integrated Offering. The Company has not, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

(z) Solvency. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports set forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has material commitments.

(aa) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and

other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the executive officers of the Company or of any Subsidiary know of no basis for any such claim. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. The term “taxes” mean all federal, state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements, and other documents required to be filed in respect to taxes.

(bb) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the FCPA.

(cc) Accountants. To the knowledge and belief of the Company, the Company Auditor (i) is an independent registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending February 29, 2017.

(dd) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.

(ee) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the

Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Representative’s request.

(ff) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in material compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

(gg) D&O Questionnaires. To the Company’s knowledge, all information contained in the questionnaires completed by each of the Company’s directors and officers most recently prior to the Offering as well as in the Lock-Up Agreement provided to the Underwriters is true and correct in all material respects and the Company has not become aware of any information which would cause the information disclosed in such questionnaires become inaccurate and incorrect in any material respect.

(hh) FINRA Affiliation. No officer, director or any beneficial owner of 5% or more of the Company’s unregistered securities has any direct or indirect affiliation or association with any FINRA member (as determined in accordance with the rules and regulations of FINRA). The Company will advise the Representative and EGS if it learns that any executive officer or director or owner of 5% or more of the Company’s outstanding Common Shares or Common Share Equivalents which has filed a Schedule 13D or 13G or Canadian equivalent is or becomes an affiliate or associated person of a FINRA member firm.

(ii) Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to EGS shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

(jj) Board of Directors. The Board of Directors is comprised of the persons set forth in the Company’s report on Form 20-F for the fiscal year ended February 29, 2016 under the heading “Directors, Senior Management, and Employees”, as updated from time to time by the SEC Reports. The qualifications of the persons serving as board members and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder applicable to the Company and the rules of the Trading Market. At least one member of the Board of Directors qualifies as a “financial expert” as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and the rules of the Trading Market. In addition, at least a majority of the persons serving on the Board of Directors qualify as “independent” as defined under the rules of the Trading Market.

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1 Amendments to Registration Statement. The Company has delivered, or, upon the request of the Representative, will as promptly as practicable deliver, to the Underwriters complete conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits), the Prospectus and the Prospectus Supplement, as amended or supplemented, in such quantities and at such places as an Underwriter reasonably requests. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Securities other than the Prospectus, the Prospectus Supplement, the Registration Statement, and copies of the documents incorporated by reference therein. The Company shall not file any such amendment or supplement to which the Representative shall reasonably object in writing within two Business Days, provided that the Company may file any document or report determined by the Company to be required to be filed pursuant to the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder within the time periods required for such filing irrespective of any such objection by the Representative.

4.2 Federal Securities Laws.

(a) Compliance. During the time when a Prospectus is required to be delivered under the Securities Act, the Company will use its best efforts to comply with all requirements imposed upon it by the Securities Act and the rules and regulations thereunder and the Exchange Act and the rules and regulations thereunder, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Securities in accordance with the provisions hereof and the Prospectus. If at any time when a Prospectus relating to the Securities is required to be delivered under the Securities Act, any event shall have occurred as a result of which, in the opinion of counsel for the Company or counsel for the Underwriters, the Prospectus, as then amended or supplemented, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Securities Act, the Company will notify the Representative promptly and prepare and file with the Commission, subject to Section 4.1 hereof, an appropriate amendment or supplement in accordance with Section 10 of the Securities Act.

(b) Exchange Act Registration. For a period of three years from the Execution Date, the Company will use its best efforts to maintain the registration of the Common Shares and Warrants under the Exchange Act. For a period of three years from the Execution Date, the Company will not deregister the Common Shares or the Warrants under the Exchange Act without the prior written consent of the Representative, other than in the event that all of the Long-Term Warrants have been exercised, or the

Company is the party to a going-private transaction or the non-surviving party to an acquisition transaction or where a failure to take such action would be inconsistent with the Board of Directors’ fiduciary duties to the Company’s shareholders under applicable law.

(c) Free Writing Prospectuses. The Company represents and agrees that it has not made and will not make any offer relating to the Securities that would constitute an issuer free writing prospectus, as defined in Rule 433 of the rules and regulations under the Securities Act, without the prior written consent of the Representative. Any such free writing prospectus consented to by the Representative is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus” as defined in rule and regulations under the Securities Act, and has complied and will comply with the applicable requirements of Rule 433 of the Securities Act, including timely Commission filing where required, legending and record keeping.

4.3 Delivery to the Underwriters of Prospectuses. The Company will deliver to the Underwriters, without charge, from time to time during the period when the Prospectus is required to be delivered under the Securities Act or the Exchange Act such number of copies of each Prospectus as the Underwriters may reasonably request.

4.4 Effectiveness and Events Requiring Notice to the Underwriters. The Company will use its commercially reasonable efforts to cause the Registration Statement to remain effective with a current prospectus until twelve (12) months from the Execution Date. While the Warrants remain outstanding, the Company will notify the Representative and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of any event during the period described in this Section that, in the judgment of the Company, makes any statement of a material fact made in the Registration Statement or the Prospectus untrue or that requires the making of any changes in the Registration Statement or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company will make every reasonable effort to obtain promptly the lifting of such order.

4.5 Underwriter Expenses.

(a) General Expenses Related to the Offering. The Company hereby agrees to pay on or by the Closing Date all expenses incident to the performance of the obligations

of the Company under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the Securities to be sold in the Offering with the Commission; (b) all FINRA Public Offering Filing System fees associated with the review of the Offering by FINRA; (c) all fees and expenses relating to the listing of such Closing Shares and Warrant Shares on the Trading Market and such other stock exchanges as the Company and the Representative together determine; (d) all fees, expenses and disbursements relating to the registration or qualification of such Securities under the “blue sky” securities laws of such states and other foreign jurisdictions as the Representative may reasonably designate; (e) the costs of all mailing and printing of Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary; (f) the costs of preparing, printing and delivering the Securities; (g) fees and expenses of the Transfer Agent for the Securities (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company); (h) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriters; (i) the fees and expenses of the Company’s accountants; and (j) the fees and expenses of the Company’s legal counsel and other agents and representatives.

(b) Non-accountable Expenses. The Company further agrees that, in addition to the expenses payable pursuant to paragraph (a) of this Section, on the Closing Date it will pay to the Representative a non-accountable expense allowance equal to $100,000.00 received by the Company from the sale of the Securities by deduction from the proceeds of the Offering contemplated herein.

4.6 Application of Net Proceeds. The Company will apply the net proceeds from the Offering received by it in a manner consistent with the application described under the caption “Use Of Proceeds” in the Prospectus.

4.7 Delivery of Earnings Statements to Security Holders. The Company will make generally available to its security holders as soon as practicable, but not later than the first day of the fifteenth full calendar month following the Execution Date, an earnings statement (which need not be certified by independent public or independent certified public accountants unless required by the Securities Act or the Rules and Regulations under the Securities Act, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities Act) covering a period of at least twelve consecutive months beginning after the Execution Date.

4.8 Stabilization. Neither the Company, nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative) has taken or will take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.

4.9 Internal Controls. The Company will use its commercially reasonable efforts to maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

4.10 Accountants. The Company shall continue to retain a nationally recognized independent certified public accounting firm for a period of at least three year after the Execution Date, except under the circumstances set forth in Section 4.2(b). The Underwriters acknowledge that the Company Auditor is acceptable to the Underwriters.

4.11 FINRA. The Company shall advise the Representative (who shall make an appropriate filing with FINRA) if it is aware that any 5% or greater shareholder of the Company becomes an affiliate or associated person of an Underwriter.

4.12 No Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely contractual and commercial in nature, based on arms-length negotiations and that neither the Underwriters nor their affiliates or any selected dealer shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, the Company acknowledges that the Underwriters may have financial interests in the success of the Offering that are not limited to the difference between the price to the public and the Unit Purchase Prices and the Underwriters have no obligation to disclose, or account to the Company for, any of such additional financial interests. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters with respect to any breach or alleged breach of fiduciary duty.

4.13 Warrant Shares. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the issuance of the Warrant Shares or if the Warrant is exercised via cashless exercise at a time when such Warrant Shares would be eligible for resale under Rule 144 by a non-affiliate of the Company, the Warrant Shares issued pursuant to any such exercise shall be issued free of all restrictive legends.

4.14 Board Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as board members and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and with the listing requirements of the Trading Market and (ii) if applicable, at least one member of the Board of Directors qualifies as a “financial expert” as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.

4.15 Securities Laws Disclosure; Publicity. At the request of the Representative, by 9:00 a.m. (New York City time) on the date hereof, the Company shall issue a press release disclosing the material terms of the Offering; provided, however, that, if this Agreement is entered into after 4:00 p.m. (New York City time) on the Execution Date, then such press release shall be issued by 9:00 a.m. (New York City time) on the Trading Day immediately following the Execution Date. The Company and the Representative shall consult with each other in issuing any other press releases with respect to the Offering, and neither the Company nor any Underwriter shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of such Underwriter, or without the prior consent of such Underwriter, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.

4.16 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Underwriter of the Securities is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Underwriter of Securities would be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities.

4.17 Reservation of Common Shares. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of Common Shares for the purpose of enabling the Company to issue the Warrant Shares pursuant to any exercise of the Warrants.

4.18 Listing of Common Shares. The Company hereby agrees to use commercially reasonable efforts to maintain the listing or quotation of the Common Shares on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Closing Shares and Warrant Shares on such Trading Market and promptly secure the listing of all of the Closing Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Shares traded on any other Trading Market, it will then include in such application all of the Closing Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Closing Shares and Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible. Until such date that no Warrants remain outstanding, the Company will then take all action reasonably necessary to continue the listing and trading of its Common Shares on a Trading Market, other than in the event that the Company seeks to deregister its Common Shares under the Exchange Act in the event that the Company is party to a going-private transaction or the non-surviving party to an acquisition transaction or where a failure to take such action would be inconsistent with the Board of Directors’ fiduciary duties to the Company’s shareholders under applicable law, and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market.

4.19 Right of First Refusal. The Company agrees that if the Closing Securities are sold in accordance with the terms of this Agreement, the Representative shall have an irrevocable preferential right for a period of twelve (12) months from the Closing Date to purchase for its account or to sell for the account of the Company, or any Subsidiary of or successor to the Company any of its or their securities (whether debt or equity or any combination thereof) which the Company or any such Subsidiary or successor may seek to sell whether with or without or through an underwriter, placement agent or broker-dealer and whether pursuant to registration under the Securities Act or otherwise, except for any Exempt Issuance. The Company and any such Subsidiary or successor will consult the Representative with regard to any such proposed financing and will offer the Representative the opportunity to purchase or sell any such securities on terms not more favorable to the Company or any such Subsidiary or successor, as the case may be, than it or they can secure elsewhere. If the Representative fails to accept such offer within 10 business days after provision of a written notice (as provided in Section 7.3 hereunder) containing the material terms of the proposed financing proposal, then the Representative shall have no further claim or right with respect to the financing proposal contained in such notice. If, however, the terms of such financing proposal are subsequently modified in any material respect, the preferential right referred to herein shall apply to such modified proposal as if the original proposal had not been made. The Representative’s failure to exercise its preferential right with respect to any particular proposal shall not affect its preferential rights relative to future proposals.

4.20 Company Lock-up. From the date hereof until the date that ninety (90) days hereafter, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Common Shares or Common Share Equivalents, except for any Exempt Issuance.

4.21 Research Independence. In addition, the Company acknowledges that each Underwriter’s research analysts and research departments, if any, are required to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and that such Underwriter’s research analysts may hold and make statements or investment recommendations and/or publish research reports with respect to the Company and/or the offering that differ from the views of its investment bankers. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against such Underwriter with respect to any conflict of interest that may arise from the fact that the views expressed by their independent research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Company by such Underwriter’s investment banking divisions. The Company acknowledges that the Representative is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short position in debt or equity securities of the Company.

4.22 No Sales in Canada. The Underwriters, severally and not jointly, each covenant and agree with the Company that they will not knowingly confirm any sale of any of the Units to any Person resident in Canada.

ARTICLE V.

DEFAULT BY UNDERWRITERS

If on the Closing Date any Underwriter shall fail to purchase and pay for the portion of the Closing Securities, which such Underwriter has agreed to purchase and pay for on such date (otherwise than by reason of any default on the part of the Company), the Representative, or if the Representative is the defaulting Underwriter, the non-defaulting Underwriters, shall use their reasonable efforts to procure within 36 hours thereafter one or more of the other Underwriters, or any others, to purchase from the Company such amounts as may be agreed upon and upon the terms set forth herein, the Closing Securities, which the defaulting Underwriter or Underwriters failed to purchase. If during such 36 hours the Representative shall not have procured such other Underwriters, or any others, to purchase the Closing Securities agreed to be purchased by the defaulting Underwriter or Underwriters, then (a) if the aggregate number of Closing Securities with respect to which such default shall occur does not exceed 10% of the Closing Securities covered hereby, the other Underwriters shall be obligated, severally, in proportion to the respective numbers of Closing Securities which they are obligated to purchase hereunder, to purchase the Closing Securities which such defaulting Underwriter or Underwriters failed to purchase, or (b) if the aggregate number of Closing Securities with respect to which such default shall occur exceeds 10% of the Closing Securities covered hereby, the Company or the Representative will have the right to terminate this Agreement without liability on the part of the non-defaulting Underwriters or of the Company except to the extent provided in Article VI hereof. In the event of a default by any Underwriter or Underwriters, as set forth in this Article V, the applicable Closing Date may be postponed for such period, not exceeding seven days, as the Representative, or if the Representative is the defaulting Underwriter, the non-defaulting Underwriters, may determine in order that the required changes in the Prospectus or in any other documents or arrangements may be effected. The term “Underwriter” includes any person substituted for a defaulting Underwriter. Any action taken under this Section shall not relieve any defaulting Underwriter from its obligations or any liabilities hereunder.

ARTICLE VI.
INDEMNIFICATION

6.1 Indemnification of the Underwriters. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless the Underwriters, and each dealer selected by each Underwriter that participates in the offer and sale of the Securities (each a “Selected Dealer”) and each of their respective directors, officers and employees and each Person, if any, who controls such Underwriter or any Selected Dealer (“Controlling Person”) within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between such Underwriter and the Company or between such Underwriter and any third party or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (i) any Preliminary Prospectus, if any, the Registration Statement or the Prospectus (as from time to time each may be amended and supplemented); (ii) any materials or information provided to investors by, or with the approval of, the Company in connection with

the marketing of the offering of the Securities, including any “road show” or investor presentations made to investors by the Company (whether in person or electronically); or (iii) any application or other document or written communication (in this Article VI, collectively called “application”) executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Securities under the securities laws thereof or filed with the Commission, any state securities commission or agency, Trading Market or any securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon and in conformity with written information furnished to the Company with respect to the applicable Underwriter by or on behalf of such Underwriter expressly for use in any Preliminary Prospectus, if any, the Registration Statement or Prospectus, or any amendment or supplement thereto, or in any application, as the case may be. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Preliminary Prospectus, if any, the indemnity agreement contained in this Section 6.1 shall not inure to the benefit of an Underwriter to the extent that any loss, liability, claim, damage or expense of such Underwriter results from the fact that a copy of the Prospectus was not given or sent to the Person asserting any such loss, liability, claim or damage at or prior to the written confirmation of sale of the Securities to such Person as required by the Securities Act and the rules and regulations thereunder, and if the untrue statement or omission has been corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under this Agreement. The Company agrees promptly to notify the Representative of the commencement of any litigation or proceedings against the Company or any of its officers, directors or Controlling Persons in connection with the issue and sale of the Closing Securities or in connection with the Registration Statement or Prospectus.

6.2 Procedure. If any action is brought against an Underwriter, a Selected Dealer or a Controlling Person in respect of which indemnity may be sought against the Company pursuant to Section 6.1, such Underwriter, such Selected Dealer or Controlling Person, as the case may be, shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the reasonable approval of such Underwriter or such Selected Dealer, as the case may be) and payment of actual expenses. Such Underwriter, such Selected Dealer or Controlling Person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter, such Selected Dealer or Controlling Person unless (i) the employment of such counsel at the expense of the Company shall have been authorized in writing by the Company in connection with the defense of such action, or (ii) the Company shall not have employed counsel to have charge of the defense of such action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected by such Underwriter (in addition to local counsel), Selected Dealer and/or Controlling Person shall be borne by the Company.

Notwithstanding anything to the contrary contained herein, if any Underwriter, Selected Dealer or Controlling Person shall assume the defense of such action as provided above, the Company shall have the right to approve the terms of any settlement of such action which approval shall not be unreasonably withheld.

6.3 Indemnification of the Company. Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, its directors, officers and employees and agents who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to such Underwriter, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions made in any Preliminary Prospectus, if any, the Registration Statement or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in strict conformity with, written information furnished to the Company with respect to such Underwriter by or on behalf of such Underwriter expressly for use in such Preliminary Prospectus, if any, the Registration Statement or Prospectus or any amendment or supplement thereto or in any such application. In case any action shall be brought against the Company or any other Person so indemnified based on any Preliminary Prospectus, if any, the Registration Statement or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be sought against such Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other Person so indemnified shall have the rights and duties given to such Underwriter by the provisions of this Article VI. Notwithstanding the provisions of this Section 6.3, no Underwriter shall be required to indemnify the Company for any amount in excess of the underwriting discounts and commissions applicable to the Securities purchased by such Underwriter. The Underwriters’ obligations in this Section 6.3 to indemnify the Company are several in proportion to their respective underwriting obligations and not joint.

6.4 Contribution.

(a) Contribution Rights. In order to provide for just and equitable contribution under the Securities Act in any case in which (i) any Person entitled to indemnification under this Article VI makes a claim for indemnification pursuant hereto but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Article VI provides for indemnification in such case, or (ii) contribution under the Securities Act, the Exchange Act or otherwise may be required on the part of any such Person in circumstances for which indemnification is provided under this Article VI, then, and in each such case, the Company and each Underwriter, severally and not jointly, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and such Underwriter, as incurred, in such proportions that such Underwriter is responsible for that portion represented by the percentage that the underwriting discount appearing on the cover page of the Prospectus bears to the initial offering price appearing thereon and the Company is responsible for the balance; provided, that, no Person guilty

of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. If the allocation provided for in the preceding sentence is not permitted by applicable law, the Company and each Underwriter, severally and not jointly, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and such Underwriter, as incurred, in such proportion as is appropriate to reflect not only the allocation referred to in the preceding sentence but also the relative fault of the Company, on the one hand, and such Underwriter, on the other, with respect to the statements or omissions that resulted in such loss, liability, claim, damage or expense. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriter, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. For purposes of this Section, each director, officer and employee of such Underwriter or the Company, as applicable, and each Person, if any, who controls such Underwriter or the Company, as applicable, within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as such Underwriter or the Company, as applicable. Notwithstanding the provisions of this Section 6.4, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions applicable to the Securities purchased by such Underwriter. The Underwriters’ obligations in this Section 6.4 to contribute are several in proportion to their respective underwriting obligations and not joint.

(b) Contribution Procedure. Within fifteen days after receipt by any party to this Agreement (or its representative) of notice of the commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party or its representative of the commencement thereof within the aforesaid fifteen days, the contributing party will be entitled to participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution without the written consent of such contributing party. The contribution provisions contained in this Section 6.4 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise available.

ARTICLE VII.

MISCELLANEOUS

7.1 Termination.

(a) Termination Right. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic or international event or act or occurrence has materially disrupted, or in its opinion will in the immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on any Trading Market shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction, or (iii) if the United States shall have become involved in a new war or an increase in major hostilities, or (iv) if a banking moratorium has been declared by a New York State or federal authority, or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets, or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in the Representative’s opinion, make it inadvisable to proceed with the delivery of the Securities, or (vii) if the Company is in material breach of any of its representations, warranties or covenants hereunder, or (viii) if the Representative shall have become aware after the date hereof of such a material adverse change in the conditions or prospects of the Company, or such adverse material change in general market conditions as in the Representative’s judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Securities or to enforce contracts made by the Underwriters for the sale of the Securities.

(b) Expenses. In the event this Agreement shall be terminated pursuant to Section 7.1(a), within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Representative its actual and accountable out of pocket expenses related to the transactions contemplated herein then due and payable, including the fees and disbursements of EGS up to $25,000 (provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement set forth in Article VI). For purposes of clarity, if this Agreement shall be terminated pursuant to Section 7.1(a), the Company shall have no obligation to reimburse any Underwriter’s expenses other than those of the Representative as set forth in this Section 7.1(b).

(c) Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Article VI shall not be in any way effected by such election or termination or failure to carry out the terms of this Agreement or any part hereof.

7.2 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

7.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile or email at the facsimile number or email address set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile or email at the facsimile number or email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

7.4 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Representative. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

7.5 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

7.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.

7.7 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and

hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Article VI, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

7.8 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

7.9 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

7.10 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

7.11 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Underwriters and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

7.12 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

7.13 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and Common Shares in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Shares that occur after the date of this Agreement.

7.14 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER ANY RIGHT TO TRIAL BY JURY.

(Signature Page Follows)

If the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Company and the several Underwriters in accordance with its terms.

		Very truly yours,

		DRAGONWAVE INC.


		By:
			Name:
			Title:


Address for Notice:


Copy to:

Accepted on the date first above written.
H.C. Wainwright & Co., LLC
As the Representative of the several
Underwriters listed on Schedule I
By: H.C. Wainwright & Co., LLC


By:
	Name:
	Title:


Address for Notice:


Copy to:

SCHEDULE I

SCHEDULE OF UNDERWRITERS

Underwriter	Class A Units	Class B Units	Closing Purchase Price



Total:

EXHIBIT A

FORM OF LOCK-UP AGREEMENT

, 2016

H.C. Wainwright & Co., LLC,

As the Representative of the several underwriters, if any

430 Park Avenue

New York, New York 10022

Re: Underwriting Agreement, dated August , 2016, by and between DragonWave Inc. and H.C. Wainwright & Co., LLC, as representative of the several underwriters, if any, named in therein

Ladies and Gentlemen:

The undersigned irrevocably agrees with the Company that, from the date hereof until ninety (90) days following the date of the Underwriting Agreement (the “Underwriting Agreement”) entered into by and between DragonWave Inc. (the “Company”) and H.C. Wainwright & Co., LLC (the “Representative”), as representative of the several underwriters, if any, named therein (such period, the “Restriction Period” and the underwriters collectively, the “Underwriters”)), the undersigned will not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any Affiliate (as defined in the Underwriting Agreement) of the undersigned or any person in privity with the undersigned or any Affiliate of the undersigned), directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) with respect to, any common shares of the Company or securities convertible, exchangeable or exercisable into, common shares of the Company beneficially owned, held or hereafter acquired by the undersigned (the “Securities”). Beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. In order to enforce this covenant, the Company shall impose irrevocable stop-transfer instructions preventing the transfer agent of the Company from effecting any actions in violation of this letter agreement. The Representative may consent to an early release from the Restriction Period if, in its sole and absolute discretion, the market for the Securities would not be adversely impacted by sales and in cases of financial emergency. The restrictions contained in this letter agreement shall not apply to the Securities to be sold pursuant to the Underwriting Agreement on behalf of the undersigned, if any. Notwithstanding the foregoing, if (i) the Company issues an earnings release or material news, or a material event relating to the Company occurs, during the last 17 days of the Restriction Period, or (ii) prior to the expiration of the Restriction Period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the Restriction Period, the restrictions imposed by this letter agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, unless the Representative waives such extension.

The undersigned acknowledges that the execution, delivery and performance of this letter agreement is a material inducement to each Underwriter to perform under the Underwriting Agreement and that each Underwriter (which shall be a third party beneficiary of this letter agreement) and the Company shall be entitled to specific performance of the undersigned’s obligations hereunder. The undersigned hereby represents that the undersigned has the power and authority to execute, deliver and perform this letter agreement, that the undersigned has received adequate consideration therefor and that the undersigned will indirectly benefit from the closing of the transactions contemplated by the Underwriting Agreement.

This letter agreement may not be amended or otherwise modified in any respect without the written consent of each of the Company, the Representative and the undersigned. This letter agreement shall be construed and enforced in accordance with the laws of the State of New York without regard to the principles of conflict of laws. The undersigned hereby irrevocably submits to the exclusive jurisdiction of the United States District Court sitting in the Southern District of New York and the courts of the State of New York located in Manhattan, for the purposes of any suit, action or proceeding arising out of or relating to this letter agreement, and hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that (i) it is not personally subject to the jurisdiction of such court, (ii) the suit, action or proceeding is brought in an inconvenient forum, or (iii) the venue of the suit, action or proceeding is improper. The undersigned hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by receiving a copy thereof sent to the Company at the address in effect for notices to it under the Underwriting Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. The undersigned hereby waives any right to a trial by jury. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. The undersigned agrees and understands that this letter agreement does not intend to create any relationship between the undersigned and each Underwriter and that no issuance or sale of the Securities is created or intended by virtue of this letter agreement.

By its signature below, the transfer agent of the Company hereby acknowledges and agrees that, reflecting this letter agreement, it has placed an irrevocable stop transfer instruction on all Securities beneficially owned by the undersigned until the end of the Restriction Period. This letter agreement shall be binding on successors and assigns of the undersigned with respect to the Securities and any such successor or assign shall enter into a similar agreement for the benefit of the Underwriters.

*** SIGNATURE PAGE FOLLOWS***

This letter agreement may be executed in two or more counterparts, all of which when taken together may be considered one and the same agreement.


Signature


Print Name


Position in Company, if any

Address for Notice:






Number of Common Shares

Number of Common Shares underlying subject to warrants, options, debentures or other convertible securities

By signing below, the Company agrees to enforce the restrictions on transfer set forth in this letter agreement.



By:
Name:
Title:

Acknowledged and agreed to

as of the date set forth above:

[insert name of Transfer Agent]

By:
Name:
Title:

EX-4.1 3 a2229241zex-4_1.htm EX-4.1

Exhibit 4.1

DRAGONWAVE INC.

and

COMPUTERSHARE TRUST COMPANY OF CANADA

and

COMPUTERSHARE TRUST N.A.

WARRANT INDENTURE

[ ], 2016

TABLE OF CONTENTS

		Page
ARTICLE 1 INTERPRETATION		1
1.1	Definitions	1
1.2	Meaning of “Outstanding” for Certain Purposes	7
1.3	Certain Rules of Interpretation	7
1.4	Interpretation not Affected by Headings, etc.	8
1.5	Language Clause	8
1.6	Day Not A Business Day	8
1.7	Conflict	8
1.8	Governing Law	8
1.9	Time of The Essence	9
1.10	Currency	9
1.11	Severability	9
1.12	Schedules	9

ARTICLE 2 ISSUE OF WARRANTS		9
2.1	Creation and Issue of Warrants	9
2.2	Terms of Warrants	10
2.3	Form of Warrants	10
2.4	Warrants to Rank Pari Passu	10
2.5	Signing of Warrant Certificates	11
2.6	Certification by the Warrant Agent	11
2.7	Holder Not A Shareholder	12
2.8	Issue in Substitution for Lost Warrant Certificate	12
2.9	Registers for Warrants	12
2.10	Transfer of Warrants	13
2.11	Transferee Entitled to Registration	14
2.12	Ownership of Warrants	15
2.13	Exchange of Warrant Certificates	15
2.14	Global NCI Position	16

ARTICLE 3 EXERCISE OF WARRANTS		18
3.1	Rights of Exercise of Warrants	18
3.2	Method of Exercise of Warrants	18
3.3	Effect of Exercise of Warrants	21
3.4	Partial Exercise of Warrants	22
3.5	Cancellation of Warrants	23
3.6	Warrants Void after the Expiry Time	23
3.7	Accounting and Recording	23
3.8	Securities Restrictions	23

ARTICLE 4 CERTAIN ADJUSTMENTS		25
4.1	Adjustment upon Common Share Reorganization or Capital Reorganization	25
4.2	Adjustment Upon Rights Offering	28
4.3	Adjustment to Exercise Price	29
4.4	Entitlement to Shares and Other Securities on Exercise of Warrants	30

4.5	No Adjustment for Stock Options, etc.	30
4.6	Determination by Corporation’s Auditors	30
4.7	Proceedings Prior to Any Action Requiring Adjustment	30
4.8	Action Requiring Adjustment	31
4.9	Certificate of Adjustment	31
4.10	Notice of Special Matters	31
4.11	No Action After Notice	31
4.12	Protection of Warrant Agent	31
4.13	Adjustments Cumulative	32

ARTICLE 5 COVENANTS OF THE CORPORATION		32
5.1	Purchases by the Corporation	32
5.2	Issuance of Common Shares	32
5.3	Warrant Agent Remuneration and Expenses	33
5.4	To Perform Covenants	34
5.5	Warrant Agent May Perform Covenants	34
5.6	Securities Qualification Requirements	34

ARTICLE 6 ENFORCEMENT		34
6.1	Suits by Holders of Warrants	34
6.2	Waiver of Default	35

ARTICLE 7 MEETINGS OF HOLDERS OF WARRANTS		35
7.1	Right to Convene Meetings	35
7.2	Notice of Meetings	35
7.3	Chairman	36
7.4	Quorum	36
7.5	Power to Adjourn	36
7.6	Show Of Hands	36
7.7	Poll	36
7.8	Voting	37
7.9	Regulations	37
7.10	Corporation and Warrant Agent May Be Represented	37
7.11	Powers Exercisable By Extraordinary Resolution	37
7.12	Meaning of “Extraordinary Resolution”	38
7.13	Powers Cumulative	39
7.14	Minutes	39
7.15	Instruments in Writing	39
7.16	Binding Effect of Resolutions	40
7.17	Holdings by Corporation and its Subsidiaries Disregarded	40

ARTICLE 8 NOTICES		40
8.1	Notice to the Corporation and the Warrant Agent	40
8.2	Notice to Holders of Warrants	41
8.3	Mail Service Information	41

ARTICLE 9 CONCERNING THE WARRANT AGENT		41
9.1	Warrant Indenture Legislation	41
9.2	No Conflict of Interest	42

9.3	Replacement of Warrant Agent	42
9.4	Evidence, Experts and Advisers	43
9.5	Warrant Agent May Deal in Securities	44
9.6	Warrant Agent Not Ordinarily Bound	44
9.7	Warrant Agent Not Required To Give Security	44
9.8	Warrant Agent Not Required To Give Notice of Default	44
9.9	Acceptance of Appointment	44
9.10	Duties of Warrant Agent	44
9.11	Actions by Warrant Agent	45
9.12	Protection of Warrant Agent	45
9.13	Indemnification of the Warrant Agent	46
9.14	Third Party Interests	46
9.15	Not Bound To Act	46
9.16	Privacy Laws	47
9.17	Documents, Monies, etc. Held by Warrant Agent	47
9.18	Actions by Warrant Agent to Protect Interest	48
9.19	Warrant Agent Not to be Appointed Receiver	48
9.20	Compliance with Privacy Code	48

ARTICLE 10 SUPPLEMENTAL INDENTURES		48
10.1	Supplemental Indentures	48
10.2	Successor Entities	49

ARTICLE 11 GENERAL PROVISIONS		50
11.1	Execution	50
11.2	Rights of Rescission	50
11.3	Force Majeure	50
11.4	Termination	50
11.5	Warrants Owned by the Corporation or its Subsidiaries — Certificate to be Provided	51
11.6	Provisions of Indenture and Warrants for the Sole Benefit of Parties and Holders	51
11.7	Stock Exchange Consents	51

SCHEDULE “A”		1
SCHEDULE “B”		1
SCHEDULE “C”		1

WARRANT INDENTURE

THIS WARRANT INDENTURE is dated [ ], 2016

BETWEEN:

DRAGONWAVE INC., a corporation incorporated under the federal laws of Canada (the “Corporation”)

AND

COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada

AND

COMPUTERSHARE TRUST N.A., a national banking association (together with Computershare Trust Company of Canada, the “Warrant Agent”)

WHEREAS:

A. All capitalized terms used in these recitals have the meanings ascribed to them in Section 1.1 below;

B. In connection with the Offering, the Corporation proposes to create and issue up to a maximum of [ ] Long-Term Warrants and up to a maximum of [ ] Short-Term Warrants, all as further set forth in the Underwriting Agreement dated [ ], 2016 between the Corporation and the Underwriter;

C. Each Warrant shall entitle the Holder thereof to receive, upon payment of the Exercise Price, and subject to adjustment in certain circumstances, one Warrant Share at any time prior to the Expiry Time upon the terms and conditions herein set forth; and

D. The Warrant Agent has agreed to enter into this Indenture and to hold all rights, interests and benefits contained herein for and on behalf of those Persons who from time to time become Holders of Warrants issued pursuant to this Indenture;

NOW THEREFORE THIS INDENTURE WITNESSES that for good and valuable consideration mutually given and received, the receipt and sufficiency of which are hereby acknowledged by each of the Corporation and the Warrant Agent, the Corporation appoints the Warrant Agent as agent for the Holders, to hold all rights, interests and benefits contained in this Indenture for and on behalf of those Persons who from time to time become holders of Warrants issued pursuant to this Indenture, and the parties hereby covenant, agree and declare as follows:

ARTICLE 1
INTERPRETATION

1.1 Definitions

In this Indenture, including the recitals and schedules hereto, the following words and phrases shall have the following meanings:

“Affiliate” means an “affiliate” as such term is used in the Securities Act (Ontario);

“Attribution Parties” shall have the meaning ascribed thereto in Section 3.8.3;

“Authenticated” means: (a) with respect to the issuance of a Warrant Certificate, one which has been duly signed by the Corporation and authenticated by manual signature of an authorized officer of the Warrant Agent; and (b) with respect to the issuance of an Uncertificated Warrant, one in respect of which the Warrant Agent has completed all Internal Procedures such that the particulars of such Uncertificated Warrant as required by Section 2.3 are entered in the register of holders of Warrants; and “Authenticate”, “Authenticating” and “Authentication” have the appropriate correlative meanings;

“Beneficial Owner” means a Person that has the beneficial ownership interest in a Warrant that is represented by a Global NCI Position;

“Beneficial Ownership Limitation” shall have the meaning ascribed thereto in Section 3.8.3;

“Black Scholes Value” shall have the meaning ascribed thereto in Section 4.1.1(e);

“Bloomberg” means Bloomberg, L.P.;

“Business Day” means any day (other than a Saturday, Sunday or statutory holiday or any other day on which banks are not open for business) on which the principal transfer office of the Warrant Agent in Toronto, Ontario is open for business;

“Buy-in” shall have the meaning ascribed thereto in Section 3.3.5;

“Capital Reorganization” shall have the meaning ascribed thereto in Section 4.1.1(c);

“CDS” means CDS Clearing and Depository Services Inc. or its successor, or such other depository offering a book based securities registration and transfer system similar to that administered by CDS that the Corporation, with the consent of the Warrant Agent, acting reasonably, may designate;

“Certificated Warrant” means a Warrant evidenced by a writing or writings substantially in the form of the Warrant Certificate attached hereto at Schedule “A” or Schedule “B”, as applicable;

“Common Share Reorganization” shall have the meaning ascribed thereto in Section 4.1.1(a);

“Common Shares” means the fully paid and non-assessable common shares in the capital of the Corporation and “Common Share” means any one of them;

“Confirmation” shall have the meaning ascribed thereto in Section 3.2.6(a);

“Convertible Security” means a security of the Corporation (other than the Warrants) or of any other issuer convertible into or exchangeable for or otherwise carrying the right to acquire Common Shares;

“Corporation” means DragonWave Inc.;

“Corporation’s Auditors” means an independent firm of chartered accountants duly appointed as auditors of the Corporation;

“Current Market Price” in respect of a Common Share at any date means the VWAP for the twenty (20) consecutive Trading Days immediately preceding such date;

“Director” means a director of the Corporation and “Directors” or “Board of Directors” means the board of directors of the Corporation or, whenever duly empowered, a committee

of the board of directors of the Corporation, and reference to “action by the directors” means action by the directors of the Corporation as a board or action by a committee as a committee;

“DTC” means The Depository Trust Company or its successor, or such other depository offering a book based securities registration and transfer system similar to that administered by DTC that the Corporation, with the consent of the Warrant Agent, acting reasonably, may designate;

“Equity Shares” means the Common Shares and any shares of any other class or series of the Corporation which may from time to time be authorized for issue if by their terms such shares confer on the holders thereof the right to participate in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation beyond a fixed sum or a fixed sum plus accrued dividends;

“Exercise Date” means, with respect to any Warrant, the Business Day on which the Exercise Form attached to such Warrant is surrendered by a Holder for exercise or deemed to be validly exercised in accordance with the provisions of Article 3, so long as the Exercise Price is delivered to the Warrant Agent within two Business Days of such surrender;

“Exercise Form” has the meaning ascribed thereto in Section 3.2.1;

“Exercise Price” means, as applicable, the Long-Term Warrant Exercise Price or the Short-Term Warrant Exercise Price;

“Expiry Date” means, as applicable, the Long-Term Warrant Expiry Date or the Short-Term Warrant Expiry Date;

“Expiry Time” means 4:30 p.m. (Eastern time) on the applicable Expiry Date or such earlier time on the Expiry Date as is required by the Internal Procedures;

“Extraordinary Resolution” has the meaning ascribed thereto in Sections 7.12 and 7.15;

“Fundamental Transaction” means the occurrence of any of the following: (a) any merger, consolidation, arrangement or amalgamation of the Corporation, or (b) the liquidation or dissolution of the Corporation, or (c) any sale of all or substantially all of the Corporation’s assets in one transaction or a series of related transactions, or (d) by the issuance of securities of the Corporation or tender offer or otherwise, the Corporation issues or the shareholders transfer more than 50% of the voting power of the Corporation in a single transaction or series of related transactions;

“Global NCI Position” means the Warrants issued to and registered in the name of CDS, DTC or its respective nominee pursuant to the NCI system in accordance with Section 2.14;

“Holder” means a Person from time to time who is the registered holder of a Warrant;

“Holders’ Request” means, as applicable, (a) an instrument signed in one or more counterparts by Long-Term Holders entitled to acquire in the aggregate not less than 25% of the aggregate number of Warrant Shares that could be acquired pursuant to the exercise of all Long-Term Warrants then unexercised and outstanding, requesting the Warrant Agent to

take some action or proceeding specified therein or, (b) an instrument signed in one or more counterparts by Short-Term Holders entitled to acquire in the aggregate not less than 25% of the aggregate number of Warrant Shares that could be acquired pursuant to the exercise of all Short-Term Warrants then unexercised and outstanding, requesting the Warrant Agent to take some action or proceeding specified therein;

“Indenture” or “this Indenture” and “hereto”, “herein”, “hereby”, “hereunder”, “hereof” and similar expressions refer to this instrument and not to any particular Article, section, subsection, clause, subdivision or other portion hereof, and include each instrument supplemental or ancillary hereto or required to implement this instrument;

“Indenture Legislation” has the meaning ascribed thereto in Section 9.1.1;

“Internal Procedures” means, in respect of the making of any one or more entries to, changes in or deletions of any one or more entries in the register at any time (including without limitation, original issuance or registration of transfer of ownership) the minimum number of the Warrant Agent’s internal procedures customary at such time for the entry, change or deletion made to be complete under the operating procedures followed at the time by the Warrant Agent;

“Long-Term Warrant Exercise Price” has the meaning ascribed thereto in Section 3.2.1 subject to adjustment in accordance with Article 4;

“Long-Term Warrant Expiry Date” means the date that is five (5) years from the date on which such Long-Term Warrants were issued, provided that if such date is not a Business Day the Expiry Date will be the next succeeding Business Day;

“Long-Term Holder” means a Person from time to time who is the registered holder of a Long-Term Warrant;

“Long-Term Warrants” means the up to [ ] fully-paid share purchase warrants of the Corporation created and issued hereunder and for the time being outstanding entitling the Holders thereof to acquire, upon the valid exercise thereof and subject to adjustment in certain circumstances, one Common Share in accordance with the terms hereof, and “Long-Term Warrant” means any one of them;

“NCI” means non-certificated inventory;

“Offered Shares” has the meaning ascribed thereto in Section 4.2;

“Offering” means the registered offering of (a) up to [ ] class A units of the Corporation comprised of one Common Share, one Long-Term Warrant and two Short-Term Warrants, and (b) up to [ ] class B units of the Corporation comprised of one pre-paid warrant (not subject to this Indenture), one Long-Term Warrant and two Short-Term Warrants, for gross proceeds of approximately $[ ], pursuant to the terms of the Underwriting Agreement;

“Participant” means a member firm of the CDS who participates in the NCI system;

“Person” includes any individual, corporation, company, partnership, association, joint venture, trust, unincorporated association, government or governmental authority;

“Privacy Laws” has the meaning ascribed thereto in Section 9.16;

“Rights Offering” has the meaning ascribed thereto in Section 4.2;

“SEC” means the United States Securities and Exchange Commission;

“Securities Commissions” means, the securities regulatory authority in each of the provinces of Canada;

“Securities Laws” means, as applicable, the securities laws, regulations, rules, rulings and orders in each of the Provinces of Canada, the United States or any state and the rules of the Toronto Stock Exchange and Nasdaq Capital Market;

“Short-Term Warrant Exercise Price” has the meaning ascribed thereto in Section 3.2.1, subject to adjustment in accordance with Section 3.2.2 or Article 4;

“Short-Term Warrant Expiry Date” means the date that is six (6) months from the date on which such Short-Term Warrants were issued, provided that if such date is not a Business Day the Expiry Date will be the next succeeding Business Day;

“Short-Term Holder” means a Person from time to time who is the registered holder of a Short-Term Warrant;

“Short-Term Warrants” means the up to [ ] fully-paid share purchase warrants of the Corporation created and issued hereunder and for the time being outstanding entitling the Holders thereof to acquire, upon the valid exercise thereof and subject to adjustment in certain circumstances, one Common Share in accordance with the terms hereof, and “Short-Term Warrant” means any one of them;

“Special Distribution” has the meaning ascribed thereto in Section 4.2.2;

“Subsidiary” shall have the meaning ascribed thereto in the Securities Act (Ontario);

“this Warrant Indenture”, “this Indenture”, “this Agreement”, “hereto” “herein”, “hereby”, “hereof” and similar expressions mean and refer to this Indenture and any indenture, deed or instrument supplemental hereto; and the expressions “Article”, “Section”, “subsection” and “paragraph” followed by a number, letter or both mean and refer to the specified article, section, subsection or paragraph of this Indenture;

“Trading Day” means a day on which the principal Trading Market is open for trading;

“Trading Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on the date in question: the NYSE MKT, the Toronto Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing);

“TSX” means the Toronto Stock Exchange;

“Uncertificated Warrant” means any Warrant which is not a Certificated Warrant;

“Underwriter” means H.C. Wainwright & Co., LLC as the representative of the several underwriters, if any, named in Schedule I of the Underwriting Agreement;

“Underwriting Agreement” means the underwriting agreement dated [ ], 2016 between the Corporation and the Underwriter in respect of the Offering;

“U.S. Person” means a “U.S. person” as that term is defined in Regulation S of the U.S. Securities Exchange Act;

“U.S. Securities Act” means the United States Securities Act of 1933, as amended;

“U.S. Securities Exchange Act” means the United States Securities Exchange Act of 1934, as amended;

“United States” or “U.S.” means the United States of America, its territories and possessions, any state of the United States and the District of Colombia;

“Voting Shares” means shares in the capital of any class or classes pursuant to which the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital shares of any other class or classes shall have or might have voting power by reason of the happening of any contingency);

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the principal Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (Eastern time) to 4:02 p.m. (Eastern time)), (b) if the Common Shares are not listed or quoted on a Trading Market and is then quoted on OTCQB or OTCQX, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Shares so reported, or (d) in all other cases, the fair market value of a share of Common Shares as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Corporation, the fees and expenses of which shall be paid by the Corporation;

“Warrant Agency” means the principal office of the Warrant Agent in the City of Toronto, Ontario and Denver, Colorado, and such other locations as the Corporation may designate with the approval of the Warrant Agent;

“Warrant Agent” means Computershare Trust Company of Canada and Computershare Trust N.A., as co-agents, or their respective successor or successors for the time being as co-warrant agents appointed hereunder, at its principal offices in the City of Toronto, Ontario and Denver, Colorado;

“Warrant Certificate” means a certificate, substantially in the form set forth in Schedule “A” or Schedule “B”, as applicable, to evidence those Certificated Warrants;

“Warrants” means, as applicable, the Long-Term Warrants or the Short-Term Warrants;

“Warrant Shares” means the Common Shares issuable upon valid exercise of the Warrants;

“Warrant Share Delivery Date” shall have the meaning ascribed thereto in Section 3.3.2;

“Written order of the Corporation”, “written request of the Corporation”, “written consent of the Corporation”, “Officer’s Certificate” and “certificate of the Corporation” mean respectively a written order, request, consent and certificate signed in the name of the Corporation by any one or more of the officers or Directors of the Corporation and may consist of one or more instruments so executed and any other documents referred to herein which is required or contemplated to be provided or given by the Corporation; and

a derivative of any defined word or phrase has the meaning appropriate to the derivation of the word or phrase.

1.2 Meaning of “Outstanding” for Certain Purposes

Except as provided in Section 3.6, every Warrant Certificate countersigned and delivered by the Warrant Agent under this Indenture shall be deemed to be outstanding until it has been surrendered to the Warrant Agent pursuant to this Indenture, provided however that:

1.2.1 a Warrant Certificate that has been partially exercised or exchanged shall be deemed to be outstanding only to the extent of the unexercised or unexchanged, as the case may be, part of the Warrants evidenced thereby;

1.2.2 where a Warrant Certificate has been issued in substitution for a Warrant Certificate that has been lost, stolen or destroyed, only one of them shall be counted for the purpose of determining the Warrants outstanding; and

1.2.3 for the purpose of any provision of this Indenture entitling Holders of outstanding Warrants to vote, sign consents, requests or other instruments or take any other action under this Indenture, Warrants owned legally or beneficially by the Corporation or any Subsidiary shall be disregarded, except that:

(a) for the purpose of determining whether the Warrant Agent will be protected in relying on any vote, consent, request or other instrument or other action, only the Warrants of which the Warrant Agent has notice that they are so owned shall be so disregarded; and

(b) Warrants so owned that have been pledged in good faith other than to the Corporation or any Subsidiary shall not be so disregarded if the pledgee establishes to the satisfaction of the Warrant Agent the pledgee’s right to vote the Warrants in the pledgee’s discretion free from the control of the Corporation or any Subsidiary pursuant to the terms of the pledge.

1.3 Certain Rules of Interpretation

Unless otherwise specified in this Indenture:

1.3.1 words importing the singular number include the plural and vice versa;

1.3.2 words importing gender include both genders and vice versa and words importing individuals include firms and corporations and vice versa;

1.3.3 “in writing” or “written” includes printing, typewriting or any electronic means of communication capable of being visibly reproduced at the point of reception, including telecopy and scan (in PDF format);

1.3.4 “including” is used for illustration only and not to limit the generality of any preceding words, whether or not non-limiting language (such as, “without limitation”, “but not limited to” and similar expressions) is used with reference thereto; and

1.3.5 reference to any statute, regulation or by-law includes amendments, consolidations, re-enactments and replacements thereof and instruments and legislation thereunder.

1.4 Interpretation not Affected by Headings, etc.

The division of this Indenture into Articles, sections, subsections and other subdivisions, the inclusion of a table of contents and the insertion of headings are for convenience of reference only and do not affect the construction or interpretation of this Indenture.

1.5 Language Clause

The parties hereto have required that this Indenture and all documents and notices related thereto or resulting therefrom be drawn up only in the English language. Les parties ont expressément demandé que la présente convention ainsi que tout autre document à être ou pouvant être donné ou conclu en vertu des dispositions des présentes, soient rédigés en langue anglaise seulement.

1.6 Day Not A Business Day

In the event that any day on or before which any other action is required to be taken under this Indenture is not a Business Day, such action must be taken on or as of the next succeeding day that is a Business Day.

1.7 Conflict

In the event of a conflict or inconsistency between a provision of this Indenture and in the Warrant Certificates issued hereunder, the relevant provision in this Indenture shall prevail to the extent of the inconsistency.

1.8 Governing Law

This Indenture, the Warrants and the Warrant Certificates shall be construed and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. Each of the parties hereto, which for certainty shall include the Holders, irrevocably attorns to the exclusive jurisdiction of the courts of the Province of Ontario with respect to all matters arising out of this Indenture and the transactions contemplated herein.

1.9 Time of The Essence

Time shall be of the essence of this Indenture, the Warrants and the Warrant Certificates.

1.10 Currency

Except as otherwise stated, all dollar amounts herein and on the Warrant Certificates are expressed in United States dollars.

1.11 Severability

In the event that any provision of this Indenture is determined to be invalid or unenforceable in any respect, such determination shall not affect such provision in any other respect or any other provision of this Indenture, all of which shall remain in full force and effect.

1.12 Schedules

Schedule “A” and Schedule “B” to this Indenture is incorporated into this Indenture by reference.

ARTICLE 2
ISSUE OF WARRANTS

2.1 Creation and Issue of Warrants

2.1.1 Subject to the terms and conditions of this Indenture, a total of up to [ ] Long-Term Warrants entitling Holders thereof to acquire up to [ ] Common Shares on the terms and subject to the provisions herein provided, are hereby created and authorized to be issued. One or more Warrant Certificates may be executed by the Corporation and delivered to the Warrant Agent, certified by the Warrant Agent upon the written direction of the Corporation and delivered by the Warrant Agent to the Holders and record the name of the Holders on the Long-Term Warrant register. Registration of interests in Long-Term Warrants held by CDS or DTC may be evidenced by a position appearing on the register for the Long-Term Warrants of the Warrant Agent for an amount representing the aggregate number of such Long-Term Warrants outstanding from time to time.

2.1.2 Subject to the terms and conditions of this Indenture, a total of up to [ ] Short-Term Warrants entitling Holders thereof to acquire up to [ ] Common Shares on the terms and subject to the provisions herein provided, are hereby created and authorized to be issued. One or more Warrant Certificates may be executed by the Corporation and delivered to the Warrant Agent, certified by the Warrant Agent upon the written direction of the Corporation and delivered by the Warrant Agent to the Holders and record the name of the Holders on the Short-Term Warrant register. Registration of interests in Short-Term Warrants held by CDS or DTC may be evidenced by a position appearing on the register for the Short-Term Warrants of the Warrant Agent for an amount representing the aggregate number of such Short-Term Warrants outstanding from time to time.

2.1.3 The Warrant Agent is hereby appointed as warrant agent in respect of the Long-Term Warrants and the Short-Term Warrants.

2.2 Terms of Warrants

2.2.1 Subject to Section 3.2 hereof, each Warrant shall entitle the Holder to acquire, subject to adjustment in accordance with Article 4 hereof, one Common Share.

2.2.2 No certificate or other forms of ownership statement evidencing fractional Warrants shall be issued or otherwise provided for and a Holder shall not be entitled to any cash or other consideration in lieu of any fractional interest in a Warrant or claim thereto. If any fraction of a Warrant would otherwise be issuable, the number of Warrants so issued shall be rounded down to the nearest whole Warrant.

2.2.3 The number of Common Shares that may be acquired pursuant to the exercise of the Warrants and the Exercise Price therefor shall be adjusted in the events and in the manner specified in Article 4.

2.2.4 The Warrants and any rights thereunder shall expire in accordance with the provisions of Section 3.6.

2.3 Form of Warrants

2.3.1 The Warrants may be issued as Certificated Warrants and Uncertificated Warrants.

2.3.2 Any Certificated Warrants which are evidenced by Warrant Certificates (including all replacements issued in accordance with this Indenture) shall be substantially in the form set out in Schedule “A” (with respect to Long-Term Warrants) or Schedule “B” (with respect to Short-Term Warrants), shall be dated as of the date hereof, shall bear such legends and distinguishing letters and numbers as the Corporation may, with the approval of the Warrant Agent, prescribe and shall be issuable in any denomination excluding fractions.

2.3.3 Any Warrants issued pursuant to a Global NCI Position may be issued as Uncertificated Warrants or Certificated Warrants in accordance with Section 2.14, shall be issued by the Corporation and Authenticated by the Warrant Agent upon the written order of the Corporation and such Uncertificated Warrants shall be evidenced by a book position entered into the applicable register of Holders to be maintained by the Warrant Agent in accordance with Section 2.9.

2.3.4 The Warrant Certificates may be engraved, lithographed or printed (the expression “printed”, including for purposes hereof, mechanically, photographically, photostatically or electronically reproduced, typewritten or other written material), or partly in one form and partly in another, as the Warrant Agent may determine.

2.4 Warrants to Rank Pari Passu

2.4.1 All Long-Term Warrants shall rank pari passu with all other Long-Term Warrants, whatever may be the actual date or dates of issue of the Warrant Certificates or date of deposit into CDS or DTC by which they are evidenced.

2.4.2 All Short-Term Warrants shall rank pari passu with all other Short-Term Warrants, whatever may be the actual date or dates of issue of the Warrant Certificates or date of deposit into CDS or DTC by which they are evidenced.

2.5 Signing of Warrant Certificates

The Warrant Certificates shall be signed by any duly authorized Director or officer of the Corporation and may be, but need not be, under the seal of the Corporation. The signatures of any such Director or officer may be mechanically reproduced by way of photocopy or facsimile engraved, printed or lithographed and Warrant Certificates bearing such photocopy or facsimile signatures shall be binding upon the Corporation as if they had been manually signed by such Director or officer. Notwithstanding that any person whose manual or facsimile signature appears on any Warrant Certificate as a Director or officer may no longer hold office at the date of such Warrant Certificate or at the date of certification or delivery thereof, any Warrant Certificate signed as aforesaid shall, subject to Section 2.6, be valid and binding upon the Corporation and the Holder thereof shall be entitled to the benefits of this Indenture.

2.6 Certification by the Warrant Agent

2.6.1 No Warrant Certificate shall be considered issued and Authenticated or, if Authenticated, shall be valid for any purpose or entitle the Holder thereof to the benefits of this Indenture until it has been Authenticated by manual signature by or on behalf of the Warrant Agent by its authorized signing officers substantially in the form set out in Schedule “A” (in respect of Long-Term Warrants) or Schedule “B” (in respect of Short-Term Warrants) and such certification by the Warrant Agent upon any such Warrant Certificate shall be conclusive evidence as against the Corporation that the said Warrant Certificate so certified has been duly issued hereunder and that the holder thereof is entitled to the benefits of this Indenture.

2.6.2 The Authentication of the Warrant Agent on the Warrant Certificates issued hereunder shall not be construed as a representation or warranty by the Warrant Agent as to the validity of this Indenture or the Warrant Certificates (except the due Authentication thereof), or as to the performance by the Corporation of its obligations hereunder, and the Warrant Agent shall in no respect be liable or answerable for the use made of the Warrant Certificates or any of them or of the consideration therefor except, as otherwise specified herein.

2.6.3 Any Warrant Certificate validly issued in accordance with the terms of this Indenture in effect at the time of issue of such Warrant Certificate shall, subject to the terms of this Indenture and applicable Securities Laws, validly entitle the Holder to acquire Common Shares, notwithstanding that the form of such Warrant Certificate may not be in the form currently required by this Indenture.

2.6.4 No Uncertificated Warrant shall be considered issued and shall be obligatory or shall entitle the Holder thereof to the benefits of this Indenture, until it has been Authenticated by entry on the register of the particulars of the Uncertificated Warrant. Such entry on the register of the particulars of an Uncertificated Warrant shall be conclusive evidence that such Uncertificated Warrant is a valid and binding obligation of the Corporation and that the holder is entitled to the benefits of this Indenture.

2.6.5 The Authentication of the Warrant Agent of any Uncertificated Warrants issued hereunder shall not be construed as a representation or warranty by the Warrant Agent as to the validity of this Indenture or such Warrants (except the due Authentication thereof), or as to the performance by the Corporation of its obligations hereunder, and the Warrant Agent shall in

no respect be liable or answerable for the use made of such Warrants or any of them or of the consideration therefor except, as otherwise specified herein.

2.7 Holder Not A Shareholder

Nothing in this Indenture or in the holding of a Warrant itself, evidenced by a Warrant Certificate or otherwise, shall be construed as conferring upon a Holder any right or interest whatsoever as a shareholder of the Corporation, including, but not limited to, the right to vote at, to receive notice of, or to attend, meetings of shareholders or any other proceedings of the Corporation, or the right to receive dividends and other distributions, except as may be provided herein or in the Warrant Certificates.

2.8 Issue in Substitution for Lost Warrant Certificate

2.8.1 If any of the Warrant Certificates shall become mutilated or lost, destroyed or stolen, the Corporation, subject to applicable law and to Section 2.8.2, shall issue and thereupon the Warrant Agent shall countersign and deliver a new Warrant Certificate of like date and tenor as the one mutilated, lost, destroyed or stolen upon surrender and in place of and upon cancellation of such mutilated Warrant Certificate, or in lieu of and in substitution for such lost, destroyed or stolen Warrant Certificate, and the substituted Warrant Certificate shall be in a form approved by the Warrant Agent and shall be entitled to the benefits hereof and shall rank equally in accordance with its terms with all other Warrant Certificates issued or to be issued hereunder.

2.8.2 The applicant for the issue of a new Warrant Certificate pursuant to Section 2.8.1 shall bear the cost of the issue thereof and in case of loss, destruction or theft shall, as a condition precedent to the issue thereof, furnish to the Corporation and to the Warrant Agent evidence of ownership and of the loss, destruction or theft of the Warrant Certificate so lost, destroyed or stolen satisfactory to the Corporation and to the Warrant Agent in their sole discretion, in each case acting reasonably, and such applicant may also be required to furnish an indemnity or surety bond in amount and form satisfactory to the Corporation and the Warrant Agent in their sole discretion, in each case acting reasonably, and shall pay the reasonable charges of the Corporation and the Warrant Agent in connection therewith.

2.9 Registers for Warrants

2.9.1 The Warrant Agent shall maintain records and accounts concerning the Warrants, whether for Certificated Warrants or Uncertificated Warrants, which shall contain the information called for below with respect to each Warrant, together with such other information as may be required by law or as the Warrant Agent may elect to record. All such information shall be kept in a segregated set of accounts and records for each of the Long-Term Warrants and the Short-Term Warrants, which the Warrant Agent shall designate (in such manner as shall permit it to be so identified as such by an unaffiliated party) as the registers of the Holders of the Long-Term Warrants and Short-Term Warrants, as applicable. The information to be entered for each account in the registers of Warrants at any time shall include (without limitation):

(a) the name and address of the Holder, the date of Authentication thereof and the number of Warrants;

(b) whether such Warrant is a Certificated Warrant or an Uncertificated Warrant and, if a Certificated Warrant, the unique number or code assigned to and imprinted thereupon and, if an Uncertificated Warrant, the unique number or code assigned thereto if any;

(d) a register of transfers in which all transfers of Warrants and the date and other particulars of each transfer shall be entered.

2.9.2 The registers shall be available for inspection by the Corporation and or any Holder during the Warrant Agent’s regular business hours on a Business Day and upon payment to the Warrant Agent of its reasonable fees. Any Holder exercising such right of inspection shall first provide an affidavit in form satisfactory to the Corporation and the Warrant Agent stating the name and address of the Holder and agreeing not to use the information therein except in connection with an effort to call a meeting of Holders or to influence the voting of Holders at any meeting of Holders. For greater certainty, a Holder of Long-Term Warrants shall not enjoy the foregoing rights of inspection for the register of the Short-Term Warrants unless such Holder is also a Holder of Short-Term Warrants (and vice versa).

2.9.3 Once an Uncertificated Warrant has been Authenticated, the information set forth in the register with respect thereto at the time of Authentication may be altered, modified, amended, supplemented or otherwise changed only to reflect exercise or proper instructions to the Warrant Agent from the Holder as provided herein, except that the Warrant Agent may act unilaterally to make purely administrative changes internal to the Warrant Agent and changes to correct errors. Each Person who becomes a Holder of an Uncertificated Warrant, by his, her or its acquisition thereof shall be deemed to have irrevocably: (a) consented to the foregoing authority of the Warrant Agent to make such corrections, and (b) agreed to pay to the Warrant Agent, promptly upon written demand, the full amount of all loss and expense (including without limitation reasonable legal fees of the Corporation and the Warrant Agent), sustained by the Corporation or the Warrant Agent as a proximate result of such error if but only if and only to the extent that such present or former Holder realized any benefit as a result of such error and could reasonably have prevented, forestalled or minimized such loss and expense by prompt reporting of the error or avoidance of accepting benefits thereof whether or not such error is or should have been timely detected and corrected by the Warrant Agent; provided, that no person who is a bona fide purchaser shall have any such obligation to the Corporation or to the Warrant Agent.

2.10 Transfer of Warrants

2.10.1 Subject to Section 3.2.4 and the requirements of the Warrant Agent set forth in this Indenture and all applicable Securities Laws and requirements of regulatory authorities, the Warrants may only be transferred on the register kept at the Warrant Agency by the Holder or its legal representatives or its attorney duly appointed by an instrument in writing in form and manner of execution satisfactory to the Warrant Agent only upon the surrendering of the relevant Warrant Certificate with the transfer form forming part thereof duly completed and signed. After receiving the surrendered Warrant Certificate(s) and upon the Person surrendering the same meeting the requirements set forth above and upon the required signature and

countersignature in accordance with Section 2.5 and Section 2.6, the Warrant Agent shall issue to the transferee a Warrant Certificate representing the Warrants transferred.

2.10.2 No transfer of a Warrant shall be valid: (a) unless made in accordance with the provisions hereof, (b) until, upon compliance with such reasonable requirements as the Warrant Agent may prescribe, such transfer is recorded on the register maintained by the Warrant Agent pursuant to Section 2.9.1, (c) until all governmental or other charges arising by reason of such transfer have been paid, and (d) unless made in compliance with all applicable Securities Laws.

2.10.3 Transfers of beneficial ownership in any Warrant represented by a Global NCI Position will be effected only: (a) with respect to the interest of a CDS participant, through records maintained by CDS or its nominee for such Global NCI Position, (b) with respect to the interest of a DTC participant, through records maintained by DTC or its nominee for such Global NCI Position, and (c) with respect to the interest of any person other than a CDS participant or DTC participant, through records maintained by CDS participants or DTC participants, as applicable. Beneficial Owners who are not CDS or DTC participants, as applicable, but who desire to sell or otherwise transfer ownership of or any other interest in Warrants represented by such Global NCI Position may do so through a CDS or DTC participant.

2.10.4 Notwithstanding anything to the contrary, neither the Corporation, the Underwriter nor the Warrant Agent nor any respective agent thereof shall have any responsibility or liability for: (a) the records maintained by CDS or DTC relating to any ownership interests or any other interests in the Warrants or the depository system maintained by CDS or DTC, or payments made on account of any ownership interest or any other interest of any person in any Warrant represented by any Global NCI Position (other than the applicable depository or its nominee), (b) maintaining, supervising or reviewing any records of CDS, DTC or any CDS or DTC participant relating to any such interest, or (c) any advice or representation made or given by CDS, DTC or those contained herein that relate to the rules and regulations of CDS or DTC, including the Internal Procedures, or any action to be taken by CDS or DTC on its own direction of any CDS or DTC participant.

2.11 Transferee Entitled to Registration

2.11.1 The transferee of a Warrant shall, in the case of Certificated Warrants, after the transfer form attached to the Warrant Certificate is duly completed and the Warrant Certificate and transfer form are lodged with the Warrant Agent, and, in the case of Certificated Warrants and Uncertificated Warrants, upon compliance with all other conditions in that regard required by this Indenture and by all applicable Securities Laws and requirements of regulatory authorities, be entitled to have such transferee’s name entered on the register as the owner of such Warrant free from all equities or rights of set off or counterclaim between the Corporation and the transferor or any previous Holder of such Warrant, save in respect of equities of which the Corporation or the transferee is required to take notice by statute or by order of a court of competent jurisdiction.

2.11.2 Upon compliance with all such applicable requirements, the Warrant Agent shall issue (a) to the transferee of a Certificated Warrant, a Warrant Certificate, and (b) to the transferee of an Uncertificated Warrant, an Uncertificated Warrant (or it shall Authenticate and deliver a Certificated Warrant instead, upon request), representing the Warrants transferred.

Transfers within the systems of CDS or DTC are not the responsibility of the Warrant Agent and will not be noted on the register maintained by the Warrant Agent.

2.11.3 Subject to Section 2.14, the Corporation will be entitled, and may direct the Warrant Agent, in writing, to refuse to recognize any transfer, or enter the name of any transferee, of any Warrant on the registers referred to in this Article, if such transfer, or the issue of Common Shares on exercise of such Warrant following such transfer, would constitute a violation of the Indenture Legislation, Securities Laws of any jurisdiction or the rules, regulations or policies of any regulatory authority having jurisdiction.

2.12 Ownership of Warrants

2.12.1 The Corporation and the Warrant Agent may deem and treat the Holder of any Warrant Certificate as the absolute owner of the Warrants represented thereby for all purposes and the Corporation and the Warrant Agent shall not be affected by any notice or knowledge to the contrary, except where the Corporation or the Warrant Agent is required to take notice by statute or by order of a court of competent jurisdiction. For greater certainty, subject to applicable law, neither the Corporation nor the Warrant Agent shall be bound to take notice of or see to the execution of any trust, whether express, implied or constructive, in respect of any Warrant, and may transfer any Warrant on the direction of the Holder thereof, whether named as trustee or otherwise, as though that Person were the Beneficial Owner thereof.

2.12.2 Subject to the provisions of this Indenture and applicable law, each Holder shall be entitled to the rights and privileges attaching to the Warrants held thereby. The exercise of the Warrants in accordance with the terms hereof and the receipt by any such Holder of Common Shares pursuant thereto shall be a good discharge to the Corporation and the Warrant Agent with respect to such Warrants and neither the Corporation nor the Warrant Agent shall be bound to inquire into the title of any such Holder except where the Corporation or the Warrant Agent is required to take notice by statute or by order of a court of competent jurisdiction.

2.13 Exchange of Warrant Certificates

2.13.1 Warrant Certificates, representing Warrants entitling the Holders to receive any specified number of Common Shares, may, prior to the Expiry Time and upon compliance with the reasonable requirements of the Warrant Agent, be exchanged for another Warrant Certificate or Warrant Certificates entitling the Holder thereof to receive in the aggregate the same number of Common Shares as are issuable under the Warrant Certificate or Warrant Certificates so exchanged.

2.13.2 Warrant Certificates may be exchanged only at the Warrant Agency or at any other place that is designated by the Corporation with the approval of the Warrant Agent. Any Warrant Certificates tendered for exchange shall be surrendered to the Warrant Agent and shall, upon the valid completion of the exchange in accordance with the terms of this Indenture, be cancelled.

2.13.3 Except as otherwise herein provided, the Warrant Agent shall charge to the Holder requesting an exchange a reasonable sum for each new Warrant Certificate issued in exchange for Warrant Certificate(s) and payment of such charges and reimbursement to the

Warrant Agent or the Corporation for any and all taxes or governmental or other charges required to be paid shall be made by such Holder as a condition precedent to such exchange.

2.14 Global NCI Position

2.14.1 Reregistration of beneficial interests in and transfers of Warrants held by CDS or DTC shall be made only through the NCI system and no Warrant Certificates shall be issued in respect of such Warrants except where physical certificates evidencing ownership in such securities are required or as set out herein or as may be requested by CDS or DTC, as determined by the Corporation, from time to time. Except as provided in this Section 2.14, owners of beneficial interests in any Global NCI Position shall not be entitled to have Warrants registered in their names and shall not receive or be entitled to receive Warrants in definitive form or to have their names appear in the registers referred to in Section 2.9 herein.

2.14.2 Notwithstanding any other provision in this Indenture, no Global NCI Position may be exchanged in whole or in part for Warrants registered, and no transfer of any Global NCI Position in whole or in part may be registered, in the name of any person other than CDS or DTC for such Global NCI Position or a nominee thereof unless:

(a) CDS or DTC, as applicable, notifies the Corporation that it is unwilling or unable to continue to act as depository in connection with the NCI system and the Corporation is unable to locate a qualified successor;

(b) the Corporation determines that CDS or DTC, as applicable, is no longer willing, able or qualified to discharge properly its responsibilities as holder of the Global NCI Position and the Corporation is unable to locate a qualified successor;

(c) CDS or DTC, as applicable, ceases to be a clearing agency or otherwise ceases to be eligible to be a depository and the Corporation is unable to locate a qualified successor;

(d) the Corporation determines that the Warrants shall no longer be held as a Global NCI Position through CDS or DTC;

(e) such right is required by applicable law, as determined by the Corporation and the Corporation’s counsel; or

(f) such registration is effected in accordance with the internal procedures of CDS or DTC, as applicable, and the Warrant Agent,

following which, Warrants for those holders requesting the same shall be registered and issued to the Beneficial Owners of such Warrants or their nominees as directed by the holder. The Corporation shall provide an Officer’s Certificate giving notice to the Warrant Agent of the occurrence of any event outlined in this Section 2.14.2.

2.14.3 Subject to the provisions of this Section 2.14.3, any exchange of the Global NCI Position for Warrants which is not a Global NCI Position may be made in whole or in part in accordance with the provisions of Section 2.13, mutatis mutandis. All such Warrants issued in exchange

for a Global NCI Position or any portion thereof shall be registered in such names as CDS or DTC, as applicable, for such Global NCI Position shall direct and shall be entitled to the same benefits and subject to the same terms and conditions (except insofar as they relate specifically to Global NCI Position) as the Global NCI Position or portion thereof surrendered upon such exchange.

2.14.4 Every Warrant that is Authenticated upon registration or transfer of a Global NCI Position, or in exchange for or in lieu of a Global NCI Position or any portion thereof, whether pursuant to this Section 2.14, or otherwise, shall be Authenticated in the form of, and shall be, a Global NCI Position, unless such Warrant is registered in the name of a person other than CDS or DTC for such Global NCI Position or a nominee thereof.

2.14.5 Notwithstanding anything to the contrary in this Indenture, subject to applicable law, the Global NCI Position will be issued as an Uncertificated Warrant, unless otherwise requested in writing by CDS, DTC or the Corporation.

2.14.6 The rights of Beneficial Owners of Warrants who hold securities entitlements in respect of the Warrants through the NCI system shall be limited to those established by applicable law and agreements between CDS and the CDS participants, DTC and the DTC participants and between such CDS or DTC participants and the Beneficial Owners of Warrants who hold securities entitlements in respect of the Warrants through the NCI system, and such rights must be exercised through a CDS or DTC participant in accordance with the rules and procedures of CDS or DTC, as applicable.

2.14.7 Notwithstanding anything herein to the contrary, neither the Corporation nor the Warrant Agent nor any agent thereof shall have any responsibility or liability for:

(a) the electronic records maintained by CDS or DTC relating to any ownership interests or any other interests in the Warrants or the NCI system maintained by CDS or DTC, or payments made on account of any ownership interest or any other interest of any person in any Warrant represented by an electronic position in the NCI system (other than CDS, DTC or its respective nominee);

(b) maintaining, supervising or reviewing any records of CDS, DTC or any CDS or DTC participant relating to any such interest; or

(c) any advice or representation made or given by CDS or DTC or those contained herein that relate to the rules and regulations of CDS or DTC or any action to be taken by CDS or DTC on its own respective direction or at the direction of any CDS or DTC participant.

2.14.8 The Corporation may terminate the application of this Section 2.14 in its sole discretion in which case all Warrants shall be evidenced by Warrant Certificates registered in the name of a Person other than CDS or DTC.

ARTICLE 3
EXERCISE OF WARRANTS

3.1 Rights of Exercise of Warrants

Subject to the further provisions hereof, (a) the Long-Term Warrants may be exercised during the period commencing from the date of original issuance until the Long-Term Warrant Expiry Time, and (b) the Short-Term Warrants may be exercised during the period commencing from the date of original issuance until the Short-Term Warrant Expiry Time.

3.2 Method of Exercise of Warrants

3.2.1 Subject always to the provisions of this Article 3 and compliance by both the Corporation and the Holder with applicable law, the Holder of any Warrant Certificate may exercise the right thereby conferred on him, her or it to acquire Warrant Shares (subject to adjustment pursuant to Article 4) in respect of each Warrant held during the applicable exercise period prescribed in Section 3.1 by delivering to the Warrant Agent (a) the exercise form forming part of the Warrant (the “Exercise Form”) duly completed and executed by the Holder or his, her or its executors, administrators or other legal representatives or his, her or its attorney duly appointed by an instrument in writing in form and manner satisfactory to the Warrant Agent, acting reasonably, and (b) a certified cheque, bank draft or money order payable to or to the order of the Corporation or wire transfer of funds directed to the account specified in Schedule “C” of this Indenture in lawful money of the United States in an amount equal to (i) $[ ] per Warrant Share in respect of the Long-Term Warrants (the “Long-Term Warrant Exercise Price”) (subject to adjustment pursuant to Article 4) multiplied by the number of Warrant Shares subscribed for pursuant to such Exercise Form, or (ii) $[ ] per Warrant Share in respect of the Short-Term Warrants (the “Short-Term Warrant Exercise Price”) (subject to amendment or adjustment pursuant to Section 3.2.2 or Article 4) multiplied by the number of Warrant Shares subscribed for pursuant to such Exercise Form. A duly completed and executed Exercise Form and payment of the applicable Exercise Price shall be deemed to be delivered upon actual receipt thereof by the Warrant Agent at the Warrant Agency by fax to 416-981-9777 and payment of the Exercise Price by certified cheque, bank draft on money order delivered to 100 University Ave., 11TH Floor, Toronto, Ontario, Canada, MSJ 241 or by wire transfer to the account specified in Schedule “C” of this Indenture. Uncertificated Warrants shall be deemed to be surrendered upon receipt of the Exercise Form and aggregate Exercise Price upon actual receipt thereof by the Warrant Agent at the office referred to above.

3.2.2 Subject to receipt of all regulatory approvals, if any, prior to the Short-Term Warrant Expiry Date, the Corporation may, at any time during the term of the Short-Term Warrants, with respect to all of the then outstanding Short-Term Warrants, reduce the then current Short-Form Warrant Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Corporation, in its sole discretion. Any such adjustment to the Short-Term Warrant Exercise Price shall be effective immediately upon written notice of such adjustment having been delivered to the Warrant Agent.

3.2.3 The Exercise Form shall be executed as set out in Section 3.2.1 and shall specify the number of Warrant Shares that the Holder wishes to acquire (being not more than that number which he or she is entitled to acquire pursuant to the Warrants so surrendered). Such Warrant Shares shall be issued in the name of the Holder.

3.2.4 In the event that a Holder has not exercised its Warrants in accordance with the provisions hereof prior to the Expiry Time, all Warrants then held by such Holder shall expire and be of no further force and effect as at the Expiry Time. Such expiry shall be automatic with no requirement for notice or other formalities.

3.2.5 If the principal transfer office of the Warrant Agent in the city where the Warrant Agency is situate is for any reason not available to act in connection with the exchange of Warrant Certificates or exercise of Warrants as contemplated by this Indenture, the Corporation and the Warrant Agent shall arrange for another office in such city to act in connection with the exchange of Warrant Certificates and exercise of Warrants and shall give notice of the change of such office to the Holders.

3.2.6 Each Warrant held in a Global NCI Position may be exercised by the Holder thereof at any time on or after the date of issue of the Global NCI Position, but not after the Expiry Time, upon the terms and subject to the conditions set forth in this Section 3.2.6.

(a) No Warrant represented by a Global NCI Position may be exercised unless, prior to such exercise, the holder of such Warrant shall have taken all other action necessary to exercise such Warrant in accordance with this Warrant Indenture and the Internal Procedures. Notwithstanding anything to the contrary contained herein and subject to the Internal Procedures in force from time to time, a Beneficial Owner of Warrants represented by a Global NCI Position who desires to exercise his, her or its Warrants must do so by causing a CDS or DTC participant, as applicable, to deliver to CDS or DTC, on behalf of the Beneficial Owner, a written notice of the Beneficial Owner’s intention to exercise Warrants in a manner acceptable to CDS or DTC. Forthwith upon receipt by CDS or DTC of such notice, as well as payment in an amount equal to the product obtained by multiplying the Exercise Price by the number of Warrant Shares subscribed for, CDS or DTC shall deliver to the Warrant Agent confirmation of its intention to exercise Warrants (the “Confirmation”) including by electronic means through the NCI system.

(b) Payment representing the Exercise Price must be provided to the appropriate office of the CDS or DTC participant in a manner acceptable to it. A notice in a form acceptable to the CDS or DTC participant and payment from such Beneficial Owner should be provided to the CDS or DTC participant sufficiently in advance so as to permit the CDS or DTC participant to deliver notice and payment to CDS or DTC and for CDS or DTC in turn to deliver notice and payment to the Warrant Agent prior to Expiry Time. CDS or DTC will initiate the exercise by way of the Confirmation and forward the Exercise Price electronically to the Warrant Agent and the Warrant Agent will execute the exercise by issuing to CDS or DTC through the NCI system the Warrant Shares to which the exercising Beneficial Owner is entitled pursuant to the exercise. Any expense associated with the exercise process will be for the account of the Beneficial Owner exercising the Warrants and/or the CDS or DTC participant exercising the Warrants on its behalf.

(c) By causing a CDS or DTC participant to deliver to CDS or DTC a written notice of the Beneficial Owner’s intention to exercise Warrants, the Beneficial Owner shall be

deemed to have irrevocably surrendered his, her or its Warrants so exercised and appointed such CDS or DTC participant to act as his or her exclusive settlement agent with respect to the exercise and the receipt of Warrant Shares in connection with the obligations arising from such exercise.

(d) Any notice of the Beneficial Owner’s intention to exercise Warrants that CDS or DTC determines to be incomplete, not in proper form or not duly executed shall for all purposes be void and of no effect and the exercise to which it relates shall be considered for all purposes not to have been exercised thereby. A failure by a CDS or DTC participant to exercise or to give effect to the settlement thereof in accordance with the Beneficial Owner’s instructions will not give rise to any obligations or liability on the part of the Corporation or Warrant Agent to the CDS participant, DTC participant or the Beneficial Owner.

(e) Any Confirmation received by the Warrant Agent after business hours on any Business Day other than the date on which the Warrants expire will be deemed to have been received by the Warrant Agent on the next following Business Day. The Confirmation (together with payment representing the Exercise Price for the Warrant Shares for which the Warrant is being exercised) in connection with any exercise by a Beneficial Owner must be received by the Warrant Agent prior to the Expiry Time. Any Warrant with respect to which a Confirmation (together with payment representing the Exercise Price for the Warrant Shares for which the Warrant is being exercised) is not received by the Warrant Agent before the Expiry Time shall be deemed to have expired and become void and all rights with respect to such Warrant shall terminate and be cancelled.

3.2.7 Any Exercise Form referred to in this Section 3.2 shall be signed by the registered Holder of the Warrants, or its executors or administrators or other legal representatives or an attorney of the Holder, duly appointed by an instrument in writing satisfactory to the Warrant Agent but such Exercise Form need not be executed by CDS or DTC.

3.2.8 Any exercise referred to in this Section 3.2 shall require that the entire Exercise Price for Warrant Shares subscribed must be paid within two business days of the time of subscription and such Exercise Price and original Exercise Form executed by the Holder or the Confirmation from CDS or DTC must be received by the Warrant Agent prior to the Expiry Time.

3.2.9 Warrants may only be exercised pursuant to this Section 3.2 by or on behalf of a Holder, as applicable, who makes the certifications set forth on the Exercise Form set out in Warrant Certificate or as provided herein.

3.2.10 If the form of Exercise Form set forth in the Warrant Certificate shall have been amended, the Corporation shall cause the amended Exercise Form to be forwarded to all Holders.

3.2.11 Exercise Forms must be delivered to the Warrant Agent at any time during the Warrant Agent’s actual business hours on any Business Day prior to the Expiry Time. Any Exercise Notice received by the Warrant Agent after business hours on any Business Day other than the Expiry Date will be deemed to have been received by the Warrant Agent on the next following Business Day.

3.2.12 If any of the Warrant Shares subscribed for are to be issued to a person or persons other than the Holder, the Holder shall execute the transfer form and will comply with such reasonable requirements as the Warrant Agent may stipulate and will pay to the Corporation or the Warrant Agent on behalf of the Corporation, all applicable transfer or similar taxes and the Corporation will not be required to issue or deliver certificates evidencing Warrant Shares unless or until such Holder shall have paid to the Corporation or the Warrant Agent on behalf of the Corporation, the amount of such tax or shall have established to the satisfaction of the Corporation and the Warrant Agent that such tax has been paid or that no tax is due.

3.2.13 If, at the time of exercise of any Warrant in accordance with this Indenture, there is no effective registration statement registering the Warrant Shares under the U.S. Securities Act, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder under the U.S Securities Act, then the Warrants may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

A = the last VWAP immediately preceding the time of delivery of the Exercise Form giving rise to the applicable “cashless exercise” (to clarify, the “last VWAP” will be the last VWAP as calculated over an entire Trading Day such that, in the event that a Warrant is exercised at a time when the Trading Market is open, the prior Trading Day’s VWAP shall be used in this calculation);

B = the Exercise Price of the Warrant, as adjusted hereunder (if any); and

X = the number of Warrant Shares that would be issuable upon exercise of the Warrant in accordance with the terms of such Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

If Warrant Shares are issued pursuant to such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the U.S. Securities Act, such Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Corporation agrees not to take any position contrary to this Section 3.2.13.

3.3 Effect of Exercise of Warrants

3.3.1 If the Warrants are duly exercised in accordance with Section 3.2, the Warrant Shares subscribed for shall be deemed to have been issued and the Person or Persons to whom such Warrant Shares are to be issued shall be deemed to have become the holder or holders of record of such Warrant Shares on the Exercise Date unless the transfer registers for the Common Shares shall be closed on such date, in which case the Warrant Shares subscribed for shall be deemed to have been issued and such Person or Persons shall be deemed to have become the holder or holders of record of the same on the date on which such transfer registers are re-opened.

3.3.2 In the case of Warrants that are exercised in accordance with the provisions of Section 3.2, within three (3) Business Days after the Exercise Date of such Warrants (the “Warrant Share Delivery Date”), the Corporation shall cause to be deposited with CDS or DTC or mailed to the Person in whose name the Warrant Shares so subscribed for are to be delivered, as

specified in the Exercise Form, at the address specified in such Exercise Form, or, if so specified in such Exercise Form, cause to be held for such Person for pick-up at the Warrant Agency, certificates representing the Warrant Shares to be issued pursuant to such Exercise Form, registered in such name.

3.3.3 Within five (5) Business Days following the due exercise of a Warrant in accordance with Section 3.1 and Section 3.2 and forthwith after the Expiry Time, the Warrant Agent shall deliver to the Corporation a notice setting forth the particulars of all Warrants exercised, if any, and the persons in whose names the Warrant Shares are to be issued (as applicable) and the addresses of such holders of the Warrant Shares.

3.3.4 If the Corporation fails to cause the Warrant Agent to deliver to the Holder the Warrant Shares issuable pursuant to Section 3.3.2 by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

3.3.5 In addition to any other rights available to a Holder, if the Corporation fails to cause the Warrant Agent to deliver to the Holder the Warrant Shares issuable in accordance with Section 3.3.2 pursuant to an exercise on or before the Warrant Share Delivery Date and, if after such date, the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Common Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares that the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Corporation shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Corporation was required to deliver to the Holder in connection with the exercise at issue, times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honoured (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Corporation timely complied with its delivery obligations under Section 3.3.2. For example, if the Holder purchases Common Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrant Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay to the Holder $1,000. The Holder shall provide the Corporation written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Corporation, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it under this Indenture, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation’s failure to timely deliver Warrant Shares as required under Section 3.3.2 following the valid exercise of Warrants under this Indenture.

3.4 Partial Exercise of Warrants

3.4.1 Any Holder may exercise its right to acquire Warrant Shares in part and may thereby acquire a number of Warrant Shares less than the aggregate number to which such Holder is entitled to acquire pursuant to the Warrants exercised in connection therewith. In the event of any acquisition of a number of Warrant Shares less than the maximum number that the Holder is

entitled to acquire, the Holder shall, upon exercise thereof, be entitled to receive, without charge therefor, a new Warrant Certificate representing the balance of the Warrant Shares that the Holder was entitled to acquire pursuant to his, her or its Warrants and which were not then acquired in connection with the applicable exercise thereof.

3.4.2 Notwithstanding anything contained in this Indenture (including any adjustment provided for in Article 4), the Corporation shall not be required, upon the exercise of any Warrants, to issue fractions of Common Shares or to distribute certificates that evidence the same. Any fractional Common Shares to which a Holder is entitled shall be aggregated to form whole Common Shares with any remaining fractional Common Shares rounded down to a whole Common Share.

3.5 Cancellation of Warrants

All Warrant Certificates surrendered to the Warrant Agent pursuant hereto (including those exercised and surrendered under Section 3.2) shall be cancelled and, after the expiry of any period of retention prescribed by law, destroyed by the Warrant Agent, and the Warrant Agent shall furnish the Corporation on request with a cancellation certificate identifying the Warrant Certificates so cancelled, the number of Warrants evidenced thereby and the number of Warrant Shares that could have been or were acquired pursuant to each cancelled Warrant Certificate.

3.6 Warrants Void after the Expiry Time

No Holder shall have any further rights under this Indenture or the Warrant Certificates (other than the right to receive Warrant Shares in respect of Warrants duly exercised prior to or at the Expiry Time, as the case may be) after the Expiry Time and the Warrants shall be null and void and of no effect.

3.7 Accounting and Recording

3.7.1 The Warrant Agent shall promptly notify the Corporation with respect to Warrants exercised and forward to the Corporation (or into an account or accounts of the Corporation as designated by the Corporation) all monies received for the purchase of Warrant Shares. All such monies, and any securities or other instruments, from time to time received by the Warrant Agent, shall be received on behalf of the Corporation.

3.7.2 The Warrant Agent shall record the particulars of Warrants exercised which shall include the names and addresses of the Persons who become holders of Common Shares on exercise and the Exercise Date. Within three (3) Business Days of each Exercise Date, the Warrant Agent shall provide such particulars in writing to the Corporation.

3.8 Securities Restrictions

3.8.1 Notwithstanding anything to the contrary, Warrants may only be transferred, Warrant Shares shall only be issued by the Corporation (upon exercise of the Warrants), and Warrant Shares may only be transferred in compliance with applicable law, including without limitation Securities Laws. Without limiting the generality of the foregoing, the Corporation may direct the Warrant Agent to prohibit exercise of the Warrants or to legend any Warrant Certificates or certificates representing the Warrant Shares if, in the opinion of counsel to the Corporation, such prohibition or legend is necessary or appropriate in order to avoid a violation of applicable Securities Laws; provided that if, at any time, the Holder of any such

Warrant or legended certificate, at his, her or its expense, provides the Corporation with evidence in form and substance reasonably satisfactory to the Corporation (which may include an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Corporation) to the effect that such Holder is entitled to exercise such Warrant or to sell or otherwise transfer such legended Warrant Share, such Warrant may thereafter be exercised or such legended Warrant Share may thereafter be surrendered to the Warrant Agent in exchange for a certificate which does not bear such legends.

3.8.2 The Warrant Agent shall be entitled to assume that Warrant Shares may be issued pursuant to the exercise of any Warrant without violating any applicable Securities Laws and without legending any certificate representing the Warrant Shares unless the Warrant Agent has received notice in writing from the Corporation stating otherwise and setting forth the restrictions on the exercise of the Warrants and any legend the certificates representing the Warrant Shares should bear.

3.8.3 Neither the Corporation nor the Warrant Agent shall effect any exercise of a Warrant, and a Holder shall not have the right to exercise any portion of a Warrant, pursuant to Article 3 or otherwise, to the extent that, after giving effect to such issuance after exercise as set forth on the applicable Exercise Form, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Warrant Shares issuable upon exercise of a Warrant with respect to which such determination is being made, but shall exclude the number of Warrant Shares that would be issuable upon (i) exercise of the remaining, non-exercised portion of a Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties, and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation (including, without limitation, any other Equity Share equivalents), subject to a limitation on conversion or exercise analogous to the limitation contained herein, beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 3.8.3, beneficial ownership shall be calculated in accordance with Section 13(d) of the U.S. Securities Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that neither the Warrant Agent nor the Corporation is representing to the Holder that such calculation is in compliance with Section 13(d) of the U.S. Securities Exchange Act and the Holder further acknowledges that it is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 3.8.3 applies, the determination of whether a Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of a Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of an Exercise Form shall be deemed to be the Holder’s determination of whether a Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of a Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and neither the Warrant Agent nor the Corporation shall have any obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the U. S. Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 3.8.3, in determining the number of

outstanding Common Shares, a Holder may rely on the number of outstanding Common Shares as reflected in (A) the Corporation’s most recent periodic or annual report filed with the SEC or on SEDAR, as the case may be, (B) a more recent public announcement by the Corporation, or (C) a more recent written notice by the Corporation or the Corporation’s transfer agent setting forth the number of Common Shares outstanding. Upon the written or oral request of a Holder, the Corporation shall, within two Trading Days, confirm orally and in writing to the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined after giving effect to the conversion or exercise of securities of the Corporation, including the Warrant being exercised, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Common Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Warrant Shares issuable upon exercise of the Warrant in question. The Holder, upon written notice to the Corporation, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 3.8.3, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Warrant Shares upon exercise of the Warrant in question held by the Holder and the provisions of this Section 3.8.3 shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the sixty-first (61st) day after such notice is delivered to the Corporation. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3.8.3 to correct this paragraph (or any portion hereof) that may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this Section 3.8.3 shall apply to a successor holder of a Warrant.

ARTICLE 4
CERTAIN ADJUSTMENTS

4.1 Adjustment upon Common Share Reorganization or Capital Reorganization

4.1.1 Each Exercise Price and the number of Warrant Shares purchasable upon the exercise of the Warrants shall be subject to adjustment from time to time as follows:

(a) If, at any time prior to the Expiry Time, the Corporation shall:

(i) subdivide, redivide or change its then outstanding Common Shares into a greater number of shares; or

(ii) consolidate, reduce or combine its then outstanding Common Shares into a lesser number of shares; or

(iii) issue Common Shares or Convertible Securities to all or substantially all or substantially all of the holders of the Common Shares as a stock dividend or other distribution (other than a dividend paid in the ordinary course or a distribution of Common Shares upon exercise of the Warrants or pursuant to the exercise of directors, officers or employee stock options granted under stock option plans of the Corporation);

(any such event being herein called a “Common Share Reorganization”), then the number of Warrant Shares that a Holder is entitled to receive upon exercise shall be adjusted, effective immediately after the effective date of the Common Share Reorganization, by multiplying the number of Warrant Shares that a Holder was entitled to upon exercise of Warrants immediately prior to such effective date by a fraction of which:

(i) the numerator shall be the number of Common Shares outstanding immediately after giving effect to such Common Share Reorganization, including, without limitation, in the case of a distribution of securities exchangeable for or convertible into Common Shares, the number of Common Shares that would have been outstanding if such securities had been exchanged for or converted into Common Shares on such date; and

(ii) the denominator shall be the number of Common Shares outstanding on such effective date before giving effect to such Common Share Reorganization.

(b) To the extent that any adjustment in the number of Warrant Shares issuable upon exercise of the Warrants occurs pursuant to Section 4.1.1(a) as a result of the distribution of securities exchangeable for or convertible into Common Shares, the number of Warrant Shares to which a Holder is entitled on the exercise of its Warrants shall be readjusted immediately after the expiration of any relevant exchange or conversion right to the number of Warrant Shares to which such Holder is entitled on the exercise of its Warrants that would then be in effect based upon the number of Common Shares actually issued and remaining issuable after such expiration.

(i) a reclassification or redesignation of the Common Shares or any other capital reorganization (other than a Common Share Reorganization); or

(ii) a Fundamental Transaction;

(any such event being herein called a “Capital Reorganization”), then immediately upon the effective time of such Capital Reorganization and at all times thereafter, a Holder who exercises its right to acquire Warrant Shares shall be entitled to be issued and receive and shall accept for the same aggregate consideration, upon such exercise, in lieu of the number of Warrant Shares to which it was theretofore entitled upon exercise of its Warrants the kind and aggregate number of shares or other securities or property of the Corporation or of the body corporate, trust, partnership or other entity resulting from such Capital Reorganization or any other corporation that a Holder would have been entitled to be issued and receive upon such Capital Reorganization if, immediately prior to the effective time thereof, such Holder had been the registered holder of the number of Common Shares to which it was theretofore entitled upon exercise of his Warrants.

(d) If determined appropriate by the Warrant Agent to give effect to or to evidence the provisions of Section 4.1.1(c) on the advice of counsel, the Corporation, its successor, or such purchasing body corporate, partnership, trust or other entity, as the case may be, shall, prior to or contemporaneously with any such Capital Reorganization, enter into an indenture which shall provide, to the extent possible, for the application of the provisions set forth in this Indenture with respect to the rights and interests thereafter of the Holders to the end that the provisions set forth in this Indenture shall thereafter correspondingly be made applicable, as nearly as may reasonably be possible, with respect to any shares, other securities or property to which a Holder is entitled on the exercise of its acquisition rights thereafter. Any indenture entered into between the Corporation and the Warrant Agent pursuant to the provisions of this Section 4.1.1(d) shall be a supplemental indenture entered into pursuant to the provisions of Article 10 hereof. Any indenture entered into between the Corporation, any successor to the Corporation or such purchasing body corporate, partnership, trust or other entity and the Warrant Agent shall provide for adjustments which shall be as nearly equivalent as may be practicable, as determined by the Corporation, acting reasonably, to the adjustments provided in Section 4.1.1(c) and which shall apply to successive Capital Reorganizations.

(e) Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Corporation or any successor entity (in a Fundamental Transaction in which the Corporation is not the survivor) shall, at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction, purchase a Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of such Warrant on the date of the consummation of such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black - Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Expiry Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction, and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Expiry Date. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction).

4.2 Adjustment Upon Rights Offering

4.2.1 If and whenever at any time from the date hereof and prior to each applicable Expiry Time, the Corporation fixes a record date for the issuance of rights, options or warrants to all or substantially all the holders of Common Shares pursuant to which those holders are entitled to subscribe for, purchase or otherwise acquire Common Shares or Convertible Securities within a period of not more than ninety (90) days from such record date at a price per share, or at a conversion price per share, of less than 95% of the Current Market Price on such record date (any such issuance being herein called a “Rights Offering” and the Common Shares that may be acquired in exercise of the Rights Offering, or upon conversion of the Convertible Securities offered by the Rights Offering, being herein called the “Offered Shares”) then, in addition to any adjustments pursuant to Section 4.1 above, the Holder will be entitled to acquire, upon the terms applicable to such Rights Offering, the aggregate number of Offered Shares that the Holder could have acquired if the Holder had held the number of Common Shares acquirable upon complete exercise of the Holder’s Warrants then held (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Rights Offering, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the grant, issue or sale of such Rights Offering (provided, however, to the extent that the Holder’s right to participate in any such Rights Offering would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Rights Offering to such extent (or beneficial ownership of such Common Shares as a result of such Rights Offering to such extent) and such Rights Offering, to such extent, shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). Any Offered Shares owned by or held for the account of the Corporation or a Subsidiary shall be deemed not to be outstanding for the purpose of any such computation. If all the rights, options or warrants are not so issued or if all rights, options or warrants are not exercised prior to the expiration thereof, the number of Warrant Shares issuable upon exercise of a Warrant shall be readjusted to that number in effect immediately prior to the record date, and such number shall be further adjusted based upon the number of Offered Shares (or Convertible Securities that are convertible into Offered Shares) actually delivered upon the exercise of the rights, options or warrants, as the case may be, but subject to any other adjustment required hereunder by reason of any event arising after that record date.

4.2.2 If and whenever at any time from the date hereof and prior to the Expiry Time, the Corporation issues or distributes to all or substantially all the holders of Common Shares: (a) shares of any class other than Common Shares, or (b) rights, options or warrants other than rights, options or warrants to acquire Common Shares or securities convertible into Common Shares exercisable within forty-five (45) days from the date of issue thereof at a price, or at a

conversion price, of at least 95% of the Current Market Price at the record date for such distribution, or (c) evidences of indebtedness, or (d) any other cash, securities or other property or assets and that issuance or distribution does not constitute a dividend paid in the ordinary course, a Common Share Reorganization or a Rights Offering (any of those non-excluded events being herein called a “Special Distribution”) then, in each such case, the Holder shall be entitled to participate in such Special Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Common Shares acquirable upon complete exercise of the Holder’s Warrants then held (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Special Distribution, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the participation in such Special Distribution (provided, however, to the extent that the Holder’s right to participate in any such Special Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Special Distribution to such extent (or in the beneficial ownership of any Common Shares as a result of such Special Distribution to such extent) and the portion of such Special Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that a Holder’s Warrants have not been partially or completely exercised at the time of such Special Distribution, such portion of the Special Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised the Holder’s Warrants as to such undistributed amount of the Special Distribution. Any Common Shares owned by or held for the account of the Corporation or a Subsidiary shall be deemed not to be outstanding for the purpose of any such computation. To the extent that the distribution of shares, rights, options, warrants, evidences of indebtedness or assets is not so made or to the extent that any rights, options or warrants so distributed are not exercised, the number of Warrant Shares issuable upon exercise of a Warrant shall be readjusted to the number that would then be in effect based upon shares, rights, options, warrants, evidences of indebtedness or assets actually distributed or based upon the number of Common Shares or Convertible Securities actually delivered upon the exercise of the rights, options or warrants, as the case may be, but subject to any other adjustment required hereunder by reason of any event arising after the record date.

4.3 Adjustment to Exercise Price

4.3.1 If at any time after the date hereof and prior to each applicable Expiry Time any adjustment in the number of Common Shares purchasable upon the exercise of any Warrant shall occur as a result of the operation of

Section 4.1.1 then the applicable Exercise Price payable upon the subsequent exercise of any Warrants shall be simultaneously adjusted by multiplying the applicable Exercise Price in effect immediately prior to such adjustment by a fraction which shall be the reciprocal of the fraction employed in the adjustment of the number of Warrant Shares issuable upon exercise of the Warrant, subject to readjustment upon the operation of, and in accordance with, the provisions of Sections 4.1.1(a).

4.4 Entitlement to Shares and Other Securities on Exercise of Warrants

All shares of any class or other securities that a Holder is at the time in question entitled to receive on the exercise of his Warrants, whether or not as a result of adjustments made pursuant to this Article 4, shall, for the purposes of the interpretation of this Indenture, be deemed to be shares or other securities which such Holder is entitled to acquire pursuant to such Warrants.

4.5 No Adjustment for Stock Options, etc.

Notwithstanding anything in this Article 4, no adjustment shall be made in the acquisition rights attached to the Warrants if the issue of Common Shares, rights, options, warrants or securities exchangeable or convertible into Common Shares, is being made pursuant to this Indenture or pursuant to any stock option, stock purchase or other equity compensation plan in force from time to time for Directors, officers, employees, consultants or other service providers of the Corporation, or being made to satisfy existing instruments issued and outstanding as of the date of this Indenture.

4.6 Determination by Corporation’s Auditors

In the event of any question arising with respect to any adjustments provided for in this Article 4, including the failure to adjust, such question shall be conclusively determined by the Corporation’s Auditors or if they are unwilling or unable to act, by such other firm of independent accountants accredited by the Canadian Public Accountability Board as may be selected by the Directors, and they shall have access to all necessary records of the Corporation, and such determination shall be binding upon the Corporation, the Warrant Agent, all Holders and all other Persons interested therein.

4.7 Proceedings Prior to Any Action Requiring Adjustment

As a condition precedent to the taking of any action which would require an adjustment in any of the acquisition rights pursuant to any of the Warrants, including the number of Warrant Shares that are to be received upon the exercise thereof, the Corporation shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation has sufficient authorized capital and that the Corporation may validly and legally issue as fully-paid and non-assessable all the

shares, warrants and other securities which the holders of such Warrants are entitled to receive on the full exercise thereof in accordance with the provisions hereof.

4.8 Action Requiring Adjustment

In case the Corporation, after the date hereof, shall take any action affecting the Common Shares, other than the actions described in this Article 4 which, in the opinion of the Directors or the Warrant Agent would materially affect the rights of the Holders and/or the acquisition rights of the Holders, then that number of Warrant Shares that are to be received upon the exercise of the Warrants shall be adjusted in such manner, if any, and at such time, by action of the Directors, in their discretion as they may reasonably determine to be equitable to the Holders in such circumstances, subject to the prior consent of any stock exchange on which the Corporation’s securities are then listed.

4.9 Certificate of Adjustment

The Corporation shall from time to time immediately after the occurrence of any event which requires an adjustment or readjustment as provided in Article 4, deliver a certificate of the Corporation to the Warrant Agent specifying the nature of the event requiring the same and the amount of the adjustment necessitated thereby and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based, which certificate shall be supported by a certificate of the Corporation’s Auditors verifying such calculation. The Warrant Agent shall rely, and shall be protected in so doing, upon the certificate of the Corporation or of the Corporation’s Auditor and any other document filed by the Corporation pursuant to this Article 4 for all purposes. The Corporation shall file such certificate of adjustment on a Form 6-K with the SEC on the same date it is submitted to the Warrant Agent.

4.10 Notice of Special Matters

The Corporation covenants with the Warrant Agent that, so long as any Warrant remains outstanding, it will give notice to the Warrant Agent and to the Holders of its intention to fix a record date that is prior to the Expiry Date for any matter for which an adjustment may be required pursuant to this Article 4. Such notice shall specify the particulars of such event and the record date for such event, provided that the Corporation shall only be required to specify in the notice such particulars of the event as shall have been fixed and determined on the date on which the notice is given. The notice shall be given in each case not less than fourteen (14) days prior to such applicable record date. If notice has been given and the adjustment is not then determinable, the Corporation shall promptly, after the adjustment is determinable, file with the Warrant Agent a computation of the adjustment and give notice to the Holders of such adjustment computation.

4.11 No Action After Notice

The Corporation covenants with the Warrant Agent that it will not close its transfer books or take any other corporate action which might deprive the Holder of the opportunity to exercise its right of acquisition pursuant thereto during the period of fourteen (14) days after the giving of the certificate or notices set forth in Section 4.9 and Section 4.10, respectively.

4.12 Protection of Warrant Agent

4.12.1 The Warrant Agent:

(a) shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist which may require any adjustment contemplated by Article 4, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed in making the same;

(b) shall not be accountable with respect to the validity or value (or the kind or amount) of any Warrant Shares or any shares or other securities or property which may at any time be issued or delivered upon the exercise of the rights attaching to any Warrant;

(c) shall not be responsible for any failure of the Corporation to issue, transfer or deliver Warrant Shares or certificates for the same upon the surrender of any Warrants for the purpose of the exercise of such rights or to comply with any of the covenants contained in this Article 4;

(d) shall not incur any liability or responsibility whatsoever or be in any way responsible for the consequences of any breach on the part of the Corporation of any of the representations, warranties or covenants herein contained or of any acts of the directors, officers, employees, agents or servants of the Corporation; and

(e) shall be entitled to act and rely upon the certificates or adjustment calculations of the Corporation and the auditor of the Corporation and any other documents filed by the Corporation pursuant to Section 4.9, without verification or liability.

4.13 Adjustments Cumulative

The adjustments provided in this Article 4 shall be cumulative and such adjustments shall be made successively whenever an event referred to herein shall occur.

ARTICLE 5
COVENANTS OF THE CORPORATION

5.1 Purchases by the Corporation

Subject to compliance with Securities Laws and approval of applicable regulatory authorities, the Corporation may from time to time purchase on any stock exchange, in the open market, by private contract or otherwise any of the Warrants. Any such purchase shall be made at the lowest price or prices at which such Warrants are then obtainable (and accepted by the applicable seller(s) of Warrants), plus reasonable costs of purchase, and may be made in such manner, from such Persons, and on such other terms as the Corporation and the applicable seller(s) of such Warrants may agree. The Warrant Certificates representing Warrants purchased pursuant to this Section 5.1 shall forthwith be delivered to and cancelled by the Warrant Agent upon the written direction of the Corporation. No Warrants shall be issued in replacement thereof.

5.2 Issuance of Common Shares

5.2.1 As long as any Warrants remain outstanding, the Corporation covenants and agrees with the Warrant Agent for the benefit of the Warrant Agent and the Holders as follows:

(a) it will reserve and keep available a sufficient number of Warrant Shares for the purpose of enabling it to satisfy its obligations to issue Warrant Shares upon the exercise of the Warrants;

(b) it will cause the Warrant Shares and the electronic deposit or certificates representing the Warrant Shares from time to time acquired pursuant to the exercise of the Warrants to be duly issued and deposited or delivered in accordance with the Warrant Certificates and the terms hereof, as applicable;

(c) all Warrant Shares which shall be issued upon exercise of the right to acquire provided for herein and in the Warrant Certificates, upon payment of the applicable Exercise Price provided for herein and in the Warrant Certificates and compliance with all of the applicable terms and conditions hereof and thereof, shall be fully paid and non-assessable;

(d) it will make all requisite filings under applicable law and stock exchange rules, including those necessary to remain a reporting issuer not in default in at least one jurisdiction of Canada and those necessary to report the exercise of the right to acquire Warrant Shares pursuant to Warrants, provided that the foregoing shall not prevent or be construed to prevent or impair the Corporation from completing any merger, arrangement, reorganization, amalgamation, recapitalization, business combination or other similar transaction;

(e) generally, it will well and truly perform and carry out all of the acts or things to be done by it as provided in this Indenture;

(f) it will cause the Warrant Agent to keep open the registers of Holders and transfers of Warrants referred to in Section 2.9 and will not take any action or omit to take any action which would have the effect of preventing the Holders from exercising any of the Warrants or receiving any of the Warrant Shares upon such exercise; and

(g) it will promptly notify the Warrant Agent and the Holders in writing of any default under the terms of this Warrant Indenture which remains unrectified for more than five days following its occurrence.

5.3 Warrant Agent Remuneration and Expenses

The Corporation covenants that it shall pay to the Warrant Agent from time to time reasonable remuneration for its services hereunder and shall pay or reimburse the Warrant Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Warrant Agent in the administration or execution of its duties hereunder (including the reasonable compensation and the disbursements of its counsel and all other advisers and assistants not regularly in its employ) both before any default hereunder and thereafter until all duties of the Warrant Agent hereunder shall be finally and fully performed, except any such expenses, disbursement or advance as may arise out of or result from the Warrant Agent’s gross negligence, wilful misconduct or bad faith. The Warrant Agent shall not have any recourse against the securities or any other property held by it pursuant to this Indenture for payment of its fees. This Section 5.3 shall survive the resignation of the Warrant Agent or the termination of this Indenture. Any amount owing under this Section 5.3 and unpaid thirty (30) days after request for such payment will bear interest from the

expiration of such thirty (30) days at a rate per annum equal to the then current rate charged by the Warrant Agent, payable on demand.

5.4 To Perform Covenants

The Corporation shall duly and punctually perform and carry out all of the acts or things to be done by it as provided in this Indenture and that it shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all other acts, deeds and assurances in law as the Warrant Agent may reasonably require for the better accomplishing and effecting the intentions and provisions of this Indenture.

5.5 Warrant Agent May Perform Covenants

If the Corporation shall fail to perform any of its covenants contained in this Indenture, the Warrant Agent may notify the Holders of such failure on the part of the Corporation or may itself perform any of the covenants capable of being performed by it but shall be under no obligation to perform said covenants or to notify the Holders of such performance by it. All sums expended or advanced by the Warrant Agent in so doing shall be repayable as provided in Section 5.3. No such performance, expenditure or advance by the Warrant Agent shall relieve the Corporation of any default hereunder or of its continuing obligations under the covenants herein contained.

5.6 Securities Qualification Requirements

5.6.1 If, in the opinion of counsel to the Warrant Agent, any instrument (not including a prospectus) is required to be filed with, or any permission is required to be obtained from the SEC, the Securities Commissions or any stock exchange upon which the Common Shares or the Warrants are listed or any other step is required under Securities Laws before any Warrant Shares, which a Holder is entitled to acquire pursuant to the exercise of any Warrant, may properly and legally be issued upon due exercise thereof and thereafter traded, without further formality or restriction, the Corporation covenants that it will use its commercially reasonable best efforts to take such action as is required or appropriate in the circumstances.

5.6.2 The Corporation will give or cause to be given notice of the issue of Warrant Shares pursuant to the exercise of Warrants, in such detail as may be required, to the SEC, the Securities Commissions or any stock exchange upon which the Common Shares or the Warrants are listed.

ARTICLE 6
ENFORCEMENT

6.1 Suits by Holders of Warrants

Subject to Section 7.11, all or any of the rights conferred upon any Holder by any of the terms of the Warrant Certificates, Uncertificated Warrants or this Indenture may be enforced by the Holder by appropriate legal proceedings but without prejudice to the right which is hereby conferred upon the Warrant Agent to proceed in its own name to enforce each and all of the provisions herein contained for the benefit of the Holders.

6.2 Waiver of Default

Upon the happening of any default hereunder:

(a) the Holders holding Long-Term Warrants exercisable to acquire not less than 66 2/3% of the aggregate number of Warrant Shares that may be acquired pursuant to the exercise of all of the then outstanding Long-Term Warrants, and

(b) the Holders holding Short-Term Warrants exercisable to acquire not less than 66 2/3% of the aggregate number of Warrant Shares that may be acquired pursuant to the exercise of all of the then outstanding Short-Term Warrants,

shall each have the power (in addition to the powers exercisable by Extraordinary Resolution) by requisition in writing to instruct the Warrant Agent to waive any default hereunder affecting the Long-Term Warrants or the Short-Term Warrants, respectively, and the Warrant Agent shall thereupon waive the default upon such terms and conditions as shall be prescribed in such requisition, provided, however, that the Warrant Agent shall have the power to waive any default hereunder upon such terms and conditions as the Warrant Agent may deem advisable, if, in the Warrant Agent’s opinion based on the advice of counsel, the same shall have been cured or adequate provision made therefor.

No delay or omission of the Warrant Agent or of the Holders, as applicable, to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein and provided further that no act or omission either of the Warrant Agent or the Holders in the premises shall extend to or be taken in any manner whatsoever to affect any subsequent default hereunder or the rights resulting therefrom.

ARTICLE 7
MEETINGS OF HOLDERS OF WARRANTS

7.1 Right to Convene Meetings

The Warrant Agent may at any time and from time to time and shall on receipt of a written request of the Corporation or a Holders’ Request and upon being indemnified and funded to its reasonable satisfaction by the Corporation or by the Holders signing such request against the costs which may be incurred in connection with the calling and holding of such meeting, convene a meeting of the Long-Term Holders and/or the Short-Term Holders. In the event of the Warrant Agent failing, within seven (7) days after receipt of any such request and such indemnity and funding, to give notice convening a meeting, the Corporation or such Holders, as the case may be, may convene such meeting. Every such meeting shall be held in the City of Ottawa, Ontario, or at such other place as may be approved or determined by the Warrant Agent.

7.2 Notice of Meetings

At least twenty-one (21) calendar days’ notice of any meeting of the Holders shall be given to the Holders in the manner provided in Section 8.2 and a copy thereof must be sent to the Warrant Agent unless the meeting has been called by it and to the Corporation unless the meeting has been called by it. Such notice must state the time when and the place where the meeting is to be held and state briefly the general nature of the business to be transacted thereat with such information as to enable

the Holders to make a reasoned decision on the matter, but it shall not be necessary for any such notice to set out the terms of any resolution to be proposed or any of the provisions of this Article.

7.3 Chairman

An individual (who need not be a Holder) designated in writing by the Warrant Agent, shall be the chairman of the meeting and if no individual is so designated, or if the individual so designated is not present within fifteen (15) minutes from the time fixed for the holding of the meeting, the Holders present in Person or by proxy shall choose an individual present to be chairman.

7.4 Quorum

Subject to Section 7.12, at any meeting of (a) the Long-Term Holders a quorum shall consist of Long-Term Holders present in Person or by proxy and entitled to acquire at least ten percent (10%) of the aggregate number of Warrant Shares that could be acquired pursuant to the exercise of all of the then outstanding Long-Term Warrants, provided that at least two Persons entitled to vote thereat are personally present or represented by proxy, and (b) the Short-Term Holders a quorum shall consist of Short-Term Holders present in Person or by proxy and entitled to acquire at least ten percent (10%) of the aggregate number of Warrant Shares that could be acquired pursuant to the exercise of all of the then outstanding Short-Term Warrants, provided that at least two Persons entitled to vote thereat are personally present or represented by proxy. If a quorum is not present within thirty (30) minutes from the time fixed for holding any meeting, the meeting, if summoned by the Holders or pursuant to a Holders’ Request, shall be dissolved; but in any other case the meeting shall be adjourned to the same day in the next week (unless such day is not a Business Day in which case it shall be adjourned to the next following Business Day) at the same time and place and no notice shall be required to be given in respect of such adjourned meeting. At the adjourned meeting the Long-Term Holders or Short-Term Holders, as applicable, present in Person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened notwithstanding that they may not be entitled to acquire at least ten percent (10%) of the Warrant Shares which may be acquired pursuant to the exercise of all of the then outstanding Warrants.

7.5 Power to Adjourn

The chairman of any meeting at which a quorum is present may with the consent of the meeting adjourn any such meeting and no notice of such adjournment need be given except such notice, if any, as the meeting may prescribe.

7.6 Show Of Hands

Every question submitted to a meeting shall be decided in the first place by a majority of the votes given on a show of hands except that votes on Extraordinary Resolutions shall be given in the manner hereinafter provided. At any such meeting, unless a poll is duly demanded as herein provided, a declaration by the chairman that a resolution has been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact.

7.7 Poll

On every Extraordinary Resolution, and on any other question submitted to a meeting when demanded by the chairman or by one or more Holders and/or proxies for Holders, a poll must be

taken in such manner and either at once or after an adjournment, as the chairman directs. Questions other than Extraordinary Resolutions shall, if a poll is taken, be decided by a majority of the votes cast on the poll.

7.8 Voting

On a show of hands, every Person who is present and entitled to vote, whether as a Holder or as proxy for one or more Holders or both, shall have one vote. On a poll, each Holder present in Person or represented by a proxy duly appointed by an instrument in writing shall be entitled to one vote in respect of each Warrant Share to which that Person is entitled to acquire pursuant to the Warrant or Warrants held or represented by that Person. A proxy need not be a Holder. In the case of joint Holders of a Warrant, any one of them present in Person or by proxy at the meeting may vote in the absence of the other or others; but in case more than one of them is present in Person or by proxy, they must vote together in respect of the Warrants of which they are joint Holders. The chairman of any meeting shall be entitled, both on a show of hands and on a poll, to vote in respect of any Warrants held or represented by him, but shall not have a second or deciding vote.

7.9 Regulations

7.9.1 The Warrant Agent or the Corporation with the approval of the Warrant Agent, may from time to time make or vary or restate such regulations as it shall from time to time think fit for the setting of the record date for a meeting for the purpose of determining Holders entitled to receive notice of and to vote at the meeting.

7.9.2 Any regulations so made shall be binding and effective and the votes given in accordance therewith shall be valid and shall be counted. Except as such regulations may provide, the only Persons who shall be recognized at any meeting as Holders, or as entitled to vote or be present at the meeting in respect thereof (subject to Section 7.10), shall be the Holders and Persons whom the Holders have by instrument in writing duly appointed as their proxies.

7.10 Corporation and Warrant Agent May Be Represented

The Corporation and the Warrant Agent, by their respective officers or directors, and the legal advisers of the Corporation and the Warrant Agent, may attend any meeting of the Holders, and shall be recognized and given reasonable opportunity to speak to any resolutions proposed for consideration by the meeting, but shall not be entitled to vote thereat, whether in respect of any Warrants held by them or otherwise.

7.11 Powers Exercisable By Extraordinary Resolution

7.11.1 In addition to all other powers conferred upon them by any other provisions of this Indenture or by law, the Holders at a meeting shall have the power, exercisable from time to time by Extraordinary Resolution:

(a) to agree to any modification, abrogation, alteration, compromise or arrangement of the rights of such Holders and/or the Warrant Agent in its capacity as Warrant Agent hereunder (subject to the Warrant Agent’s approval) or on behalf of such Holders against the Corporation, whether such rights arise under this
Indenture or the Warrants or otherwise;

(b) to amend, alter or repeal any Extraordinary Resolution previously passed or sanctioned by such Holders;

(c) to direct or authorize the Warrant Agent (subject to the Warrant Agent receiving funding and indemnity) to enforce any of the covenants on the part of the Corporation contained in this indenture or the Warrants or to enforce any of the rights of such Holders in any manner specified in such Extraordinary Resolution or to refrain from enforcing any such covenant or right;

(d) to waive, authorize and direct the Warrant Agent to waive any default on the part of the Corporation in complying with any provisions of this Indenture or the Warrants either unconditionally or upon any conditions specified in such Extraordinary Resolution;

(e) to restrain any such Holder from taking or instituting any suit, action or proceeding against the Corporation for the enforcement of any of the covenants on the part of the Corporation contained in this indenture or the Warrants or to enforce any of the rights of such Holders;

(f) to direct any such Holder who, as such, has brought any suit, action or proceeding to stay or discontinue or otherwise deal with any such suit, action or proceeding, upon payment of the costs, charges and expenses reasonably and properly incurred by such Holder in connection therewith;

(g) to assent to any compromise or arrangement with any creditor or creditors or any class or classes of creditors, whether secured or otherwise, and with the holders of any shares or securities of the Corporation, wherever such assent may be required;

(h) to assent to any change in or omission from the provisions contained in this Indenture or any ancillary or supplemental instrument which may be agreed to by the Corporation, and to authorize the Warrant Agent to concur in and execute any ancillary or supplemental indenture embodying the change or omission; and

(i) with the consent of the Corporation, such consent not to be unreasonably withheld, from time to time and at any time to remove the Warrant Agent or its successor in office and appoint a successor Warrant Agent to take the place of the Warrant Agent so removed.

7.12 Meaning of “Extraordinary Resolution”

7.12.1 The expression “Extraordinary Resolution” when used in this Indenture means, subject as provided in this Article, a resolution proposed to be passed at a meeting of Long-Term Holders or Short-Term Holders, as applicable, duly convened and held in accordance with the provisions of this Article 7 at which there are Long-Term Holders or Short-Term Holders, as applicable, present in Person or by proxy who are entitled to acquire at least ten percent (10%) of the aggregate number of Warrants Shares that may be acquired pursuant to the exercise of all of the then outstanding Long-Term Warrants or Short-Term Warrants, as applicable, and passed by the affirmative votes of the Long-Term Holders or Short-Term Holders, as applicable, entitled to acquire at least 66 2/3% of the aggregate number of

Warrant Shares that may be acquired pursuant to the exercise of all of the then outstanding Long-Term Warrants or Short-Term Warrants, as applicable, represented at the meeting and voted on a poll upon such resolution.

7.12.2 If, at any such meeting, the Holders entitled to acquire at least ten percent (10%) of the Warrant Shares that may be acquired pursuant to the exercise of all of the then outstanding Long-Term Warrants or Short-Term Warrants, as applicable, are not present in Person or by proxy within thirty (30) minutes after the time appointed for the meeting, then the meeting, if convened by or on the requisition of the Holders, shall be dissolved; but in any other case it shall stand adjourned to the third Business Day following the date of such meeting, at the same time and place. At the adjourned meeting, the Long-Term Holders or Short-Term Holders, as applicable, present in Person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened and a resolution proposed at such adjourned meeting and passed by the requisite vote as provided in Section 7.12.1 shall be an Extraordinary Resolution within the meaning of this Indenture, notwithstanding that Long-Term Holders or Short-Term Holders, as applicable, entitled to acquire at least ten percent (10%) of the Warrant Shares that may be acquired pursuant to the exercise of all of the then outstanding Long-Term Warrants or Short-Term Warrants, as applicable, are not present in Person or by proxy at such adjourned meeting.

7.12.3 Votes on an Extraordinary Resolution shall always be given on a poll and no demand for a poll on an Extraordinary Resolution shall be necessary.

7.13 Powers Cumulative

It is hereby declared and agreed that any one or more of the powers and/or any combination of the powers in this Indenture stated to be exercisable by the Holders by Extraordinary Resolution or otherwise may be exercised from time to time and the exercise of any one or more of such powers or any combination of powers from time to time shall not be deemed to exhaust the rights of the Holders to exercise the same or any other such power or combination of powers thereafter from time to time.

7.14 Minutes

Minutes of all resolutions and proceedings at every meeting of Holders shall be made and duly entered in books to be from time to time provided for that purpose by the Warrant Agent at the expense of the Corporation, and any such minutes as aforesaid, if signed by the chairman or secretary of the meeting at which such resolutions were passed or proceedings had, or by the chairman or secretary of the next succeeding meeting (if any) of the Holders, shall be prima facie evidence of the matters therein stated and, until the contrary is proved, every such meeting in respect of the proceedings of which minutes shall have been made shall be deemed to have been duly held and convened, and all resolutions passed thereat or proceedings taken thereat, to have been duly passed and taken.

7.15 Instruments in Writing

All actions which may be taken and all powers which may be exercised by the Holders at a meeting held as hereinbefore provided in this Article may also be taken and exercised by Holders entitled to acquire at least 66 2/3% of the Warrant Shares that may be acquired pursuant to the exercise of all of the then outstanding Long-Term Warrants or Short-Term Warrants, as applicable, by an instrument in

writing signed in one or more counterparts and the expression “Extraordinary Resolution” when used in this Indenture shall include an instrument so signed.

7.16 Binding Effect of Resolutions

Every resolution and every Extraordinary Resolution passed in accordance with the provisions of this Article 7 at a meeting of Holders shall be binding upon all Holders of the same series of Warrants, whether present at or absent from such meeting, and every instrument in writing signed by the Holders in accordance with Section 7.15 shall be binding upon all the Holders of the same series of Warrants, whether signatories thereto or not, and each and every Holder shall be bound to give effect accordingly to every such resolution, Extraordinary Resolution and instrument in writing. In the case of an instrument in writing, the Warrant Agent shall give notice of the effect of the instrument in writing to all Holders of such series and the Corporation as soon as reasonably practicable.

7.17 Holdings by Corporation and its Subsidiaries Disregarded

In determining whether a Holder holding Warrant Certificates evidencing the entitlement to acquire the required number of Warrant Shares are present at a meeting of Holders for the purpose of determining a quorum or have concurred in any consent, waiver, extraordinary resolution, Holders’ Request or other action under this Indenture, Warrants owned legally or beneficially by the Corporation or any Subsidiary of the Corporation and not cancelled shall be disregarded in accordance with the provisions of Section 11.5.

ARTICLE 8
NOTICES

8.1 Notice to the Corporation and the Warrant Agent

8.1.1 Unless herein otherwise expressly provided, any notice to be given hereunder to the Corporation or the Warrant Agent shall be deemed to be validly given if delivered or if sent by first class mail or registered letter, postage prepaid, email, or by facsimile transmission:

if to the Corporation:

411 Legget Drive, Suite 600
Ottawa, Ontario K2K 3C9
Attention: Chief Financial Officer

if to the Warrant Agent:

[insert]

and any such notice delivered in accordance with the foregoing shall be deemed to have been received on the date of delivery or if sent by facsimile or email transmission, on the first Business Day following such transmission or, if mailed, on the fifth Business Day following the date of the postmark on such notice.

8.1.2 The Corporation or the Warrant Agent, as the case may be, may from time to time notify the others in the manner provided in Section 8.1 of a change of address which, from the effective

date of such notice and until changed by like notice, shall be the address of the Corporation or the Warrant Agent, as the case may be, for all purposes of this Indenture.

8.2 Notice to Holders of Warrants

Except as herein otherwise expressly provided and subject to Section 8.3, any notice required or permitted to be given to Holders under the provisions of this Indenture shall be deemed to be validly given if personally delivered or if sent by ordinary post to the Holders at their addresses appearing in one of the registers hereinbefore mentioned. Any notice so sent shall be deemed to have been received on the next Business Day after the date of delivery to such address or, if mailed, on the fifth Business Day following the date on which it was mailed. In the event that Warrants are held in the name of CDS or DTC, a copy of such notice shall also be sent by electronic communication to CDS or DTC and shall be deemed received and given on the day it is so sent. Accidental error or omission in giving notice or accidental failure to give notice to Holders shall not invalidate any action or proceeding founded thereon. In determining under any provision hereof the date when notice of any meeting or other event must be given, the date of giving notice shall be included and the date of the meeting or other event shall be excluded.

8.3 Mail Service Information

8.3.1 If by reason of any interruption of mail service, actual or threatened, any notice to be given to the Holders, the Warrant Agent or the Corporation would be unlikely to reach its destination in the ordinary course of mail, such notice shall be valid and effective only if the notice is:

(a) in the case of the Warrant Agent or the Corporation, delivered to an officer of the party to which it is addressed or if sent to such party, at the appropriate address in accordance with Section 8.1 by facsimile or other means of prepaid transmitted or recorded communication; and

(b) If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving postal employees, any notice to be given to the Holders hereunder could reasonably be considered unlikely to reach its destination, such notice shall be valid and effective only if it is delivered to such Holders to the address for such Holder contained in the register maintained by the Warrant Agent or such notice may be given, at the Corporation’s expense, by means of publication in the Globe and Mail, National Edition, or any other English language daily newspaper or newspapers of general circulation in Canada and The Wall Street Journal, in each two successive weeks, the first such notice to be published within five (5) Business Days of such event.

8.3.2 Any notice given to the Holders by publication shall be deemed to have been given on the last day on which publication shall have been effected as required pursuant to Section 8.3.1.

ARTICLE 9
CONCERNING THE WARRANT AGENT

9.1 Warrant Indenture Legislation

9.1.1 The expression “Indenture Legislation” means the provisions, if any, of any statute of Canada or any province thereof, and of any regulations under any such statute, relating to

warrant indentures and to the rights, duties and obligations of warrant agents under warrant indentures and of corporations issuing their securities under warrant indentures, to the extent that such provisions may at the time be in force and applicable to this Indenture or the Corporation.

9.1.2 The Corporation and the Warrant Agent agree that each shall at all times in relation to this Indenture and in relation to any action to be taken hereunder observe and comply with and be entitled to the benefits of Indenture Legislation.

9.1.3 If and to the extent that any provision of this Indenture limits, qualifies or conflicts with any mandatory requirement of Indenture Legislation, such mandatory requirement shall prevail.

9.2 No Conflict of Interest

The Warrant Agent represents to the Corporation to the best of its knowledge that at the date of the execution and delivery of this Indenture there exists no material conflict of interest in its duties and obligations as a warrant agent hereunder. In the event of a material conflict of interest arising in the Warrant Agent’s role as warrant agent hereunder the Warrant Agent shall, as soon as practicable but in any case within ninety (90) days after ascertaining that it has such material conflict of interest, either eliminate the same or assign its duties and obligations hereunder to a successor Warrant Agent approved by the Corporation. Notwithstanding the foregoing provisions of this Section, if any such material conflict of interest exists or hereafter shall exist, the validity and enforceability of this Indenture and the Warrant Certificate(s) shall not be affected in any manner whatsoever by reason hereof.

9.3 Replacement of Warrant Agent

9.3.1 The Warrant Agent may resign and be discharged from all duties and liabilities hereunder by giving to the Corporation at least forty-five (45) days’ notice in writing or such shorter notice as the Corporation may accept as sufficient. The Holders by Extraordinary Resolution shall have the power at any time to remove the existing Warrant Agent and to appoint a new warrant agent. If the Warrant Agent resigns or is removed by Extraordinary Resolution or is dissolved, becomes bankrupt, goes into liquidation or otherwise becomes incapable of acting hereunder, the Corporation shall forthwith appoint a new warrant agent unless a new warrant agent has already been appointed by the Holders; failing such appointment by the Corporation, the retiring Warrant Agent or any Holder may apply to a judge of a court having jurisdiction, on such notice as such judge may direct, for the appointment of a new warrant agent; but any new warrant agent so appointed by the Corporation or by the Court shall be subject to removal as aforesaid by the Holders. Any new warrant agent appointed under any provision of this Section must be a corporation authorized to carry on the business of a trust company in the Province of Ontario and, if required by the applicable warrant indenture legislation of any other province, in that other province, and must be a corporation which is independent of the Corporation and has no material conflict of interest. On any new appointment the new warrant agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as Warrant Agent without any further assurances conveyance, act or deed. If, for any reason, it becomes necessary or expedient to execute any further deed or assurance, the former Warrant Agent shall, at the expense of the Corporation, execute the same in favour of the new warrant agent.

9.3.2 Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or amalgamated or any corporation resulting from any merger, consolidation or amalgamation to which the Warrant Agent shall be a party or any corporation succeeding to the corporate trust business of the Warrant Agent, shall be the successor warrant agent under this Indenture without the execution of any instrument or any further act.

9.3.3 Upon the appointment of a new warrant agent, the Corporation shall promptly notify the Holders thereof in the manner prescribed by Section 8.2 hereof.

9.4 Evidence, Experts and Advisers

9.4.1 In addition to the reports, certificates, opinions and other evidence required by this Indenture, the Corporation shall furnish to the Warrant Agent such additional evidence of compliance with any provision hereof, and in such form, as may be prescribed by Indenture Legislation or as the Warrant Agent may reasonably require by written notice to the Corporation.

9.4.2 In the exercise of its rights and duties hereunder, the Warrant Agent may, if it is acting in good faith, rely as to the truth of the statements and the accuracy of the opinions expressed in statutory declarations, opinions, reports, written requests, consents, or orders of the Corporation, certificates of the Corporation or other evidence furnished to the Warrant Agent pursuant to any provision hereof or any Indenture Legislation or pursuant to a request of the Warrant Agent, not only as to its due execution and the validity and effectiveness of its provisions, but also to the truth and acceptability of any information therein contained which the Warrant Agent in good faith believes to be genuine.

9.4.3 Proof of the execution of an instrument in writing, including a Holders’ Request, by any Holder may be made by the certificate of a notary public, or other officer with similar powers, that the Person signing such instrument acknowledged to it the execution thereof, or by an affidavit of a witness to such execution or in any other manner which the Warrant Agent may consider adequate.

9.4.4 The Warrant Agent may, at the expense of the Corporation, employ or retain such counsel, accountants, appraisers or other experts or advisers as it may reasonably require for the purpose of discharging its duties hereunder and may pay reasonable remuneration for all services so performed by any of them, without taxation of costs of any counsel, and shall not be responsible for any misconduct or gross negligence on the part of any such experts or advisers who have been appointed with reasonable care by the Warrant Agent. The Warrant Agent may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant, appraiser, engineer or other expert or adviser, whether retained or employed by the Corporation or by the Warrant Agent, in relation to any matter arising in the administration of the agency hereof.

9.4.5 The Warrant Agent may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant, appraiser, engineer or other expert or adviser, whether retained or employed by the Corporation or by the Warrant Agent, in relation to any matter arising in the administration of the agency hereof.

9.5 Warrant Agent May Deal in Securities

Subject to Section 9.2, the Warrant Agent may buy, sell, lend upon and deal in securities of the Corporation and generally contract and enter into financial transactions with the Corporation or otherwise, without being liable to account for any profits made thereby.

9.6 Warrant Agent Not Ordinarily Bound

Except as otherwise specifically provided herein, the Warrant Agent shall not, subject to the provisions of Indenture Legislation, be bound to give notice to any Person of the execution hereof, nor to do, observe or perform or see to the observance or performance by the Corporation of any of the obligations herein imposed upon the Corporation or of the covenants on the part of the Corporation herein contained.

9.7 Warrant Agent Not Required To Give Security

The Warrant Agent shall not be required to give any bond or security in respect of the execution or administration of its duties under this Indenture or otherwise in respect of the premises.

9.8 Warrant Agent Not Required To Give Notice of Default

The Warrant Agent shall not be bound to give any notice or do or take any act, action or proceeding by virtue of the powers conferred on it hereby unless and until it shall have been required to do so under the terms hereof; nor shall the Warrant Agent be required to take notice of any default hereunder, unless and until notified in writing of such default, which notice shall distinctly specify the default desired to be brought to the attention of the Warrant Agent and in the absence of any such notice the Warrant Agent may for all purposes of this Indenture conclusively assume that no default has been made in the observance or performance of any of the representations, warranties, covenants, agreements or conditions contained herein. Any such notice shall in no way limit any discretion herein given to the Warrant Agent to determine whether or not the Warrant Agent shall take action with respect to any default.

9.9 Acceptance of Appointment

The Warrant Agent hereby accepts its appointment as warrant agent under this Indenture and agrees to perform its duties hereunder upon the terms and conditions herein set forth or referred to unless and until discharged therefrom by resignation or in some other lawful way.

9.10 Duties of Warrant Agent

9.10.1 The Warrant Agent, in exercising its powers and discharging its duties hereunder, shall:

(a) act honestly and in good faith; and

(b) exercise the care, diligence and skill that a reasonably prudent warrant agent would exercise in comparable circumstances.

9.11 Actions by Warrant Agent

9.11.1 The Warrant Agent shall have the power to institute and to maintain such actions and proceedings as it may consider necessary or expedient to preserve, protect or enforce its interests and the interests of the Holders.

9.11.2 Subject only to Section 9.9, the obligation of the Warrant Agent to commence or continue any act, action or proceeding for the purpose of enforcing any rights of the Warrant Agent or the Holders hereunder shall be conditional upon the Holders delivering to the Warrant Agent:

(a) a Holders’ Request or Extraordinary Resolution directing the Warrant Agent to take such act, action, or proceeding;

(b) sufficient funds to commence or continue such act, action or proceeding; and

(c) an indemnity reasonably satisfactory to the Warrant Agent to protect and hold harmless the Warrant Agent against the costs, charges and expenses and liabilities to be incurred thereby and any loss and damages it may suffer by reason thereof.

9.11.3 None of the provisions contained in this Indenture shall require the Warrant Agent to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers unless indemnified and funded as aforesaid.

9.11.4 The Warrant Agent may, before commencing or at any time during the continuance of any such act, action or proceeding, require the Holders, at whose instance it is acting, to deposit with the Warrant Agent the Warrants held by them, for which Warrants the Warrant Agent shall issue receipts.

9.11.5 Every provision of this Indenture that by its terms relieves the Warrant Agent of liability or entitles it to rely upon any evidence submitted to it is subject to the provisions of applicable law.

9.12 Protection of Warrant Agent

9.12.1 By way of supplement to the provisions of any law for the time being relating to Warrant Agents it is expressly declared and agreed as follows:

(a) the Warrant Agent shall not be liable for or by reason of any statements of fact or recitals in this Indenture or in the Warrant Certificates (except the representation contained in Section 9.10 or in the Authentication of the Warrant Agent on the Warrant Certificates) or be required to verify the same, but all such statements or recitals are and shall be deemed to be made by the Corporation;

(b) nothing herein contained shall impose any obligation on the Warrant Agent to see to or to require evidence of the registration or filing (or renewal thereof) of this Indenture or any instrument ancillary or supplemental hereto;

(d) notwithstanding the foregoing or any other provision of this Indenture, any liability of the Warrant Agent shall be limited, in the aggregate, to the amount of annual retainer fees paid by the Corporation to the Warrant Agent under this Indenture in the twelve months immediately prior to the Warrant Agent receiving the first notice of the claim. Notwithstanding any other provision of this Indenture, and whether such losses or damages are foreseeable or unforeseeable, the Warrant Agent shall not be liable under any circumstances whatsoever for any (a) breach by any other party of securities law or other rule of any securities regulatory authority, (b) lost profits or (c) special, indirect, incidental, consequential, exemplary, aggravated or punitive losses or damages.

9.13 Indemnification of the Warrant Agent

The Warrant Agent and its officers, directors, employees, agents, successor and assigns shall at all times be indemnified and saved harmless by the Corporation from and against all claims, demands, losses, actions, causes of action, costs, charges, expenses, damages and liabilities whatsoever arising in connection with this Indenture, including, without limitation, those arising out of or related to actions taken or omitted to be taken by the Warrant Agent contemplated hereby, legal fees and disbursements on a solicitor and client basis and costs and expenses incurred in connection with the enforcement of this indemnity, which the Warrant Agent may suffer or incur, whether at law or in equity, in any way caused by or arising, directly or indirectly, in respect of any act, deed, matter or thing whatsoever made, done, acquiesced in or omitted in or about or in relation to the execution of its duties as Warrant Agent. The foregoing provisions of this Section 9.13 do not apply to the extent that in any circumstances there have been acts of gross negligence, wilful misconduct or bad faith by the Warrant Agent or its officers, directors, employees, agents, successor and assigns. This indemnity shall survive the termination or discharge of this Indenture and the resignation or removal of the Warrant Agent.

9.14 Third Party Interests

Each party to this Indenture hereby represents to the Warrant Agent that any account to be opened by, or interest to held by the Warrant Agent in connection with this Indenture, for or to the credit of such party, either (a) is not intended to be used by or on behalf of any third party, or (b) is intended to be used by or on behalf of a third party, in which case such party hereto agrees to complete and execute forthwith a declaration in the Warrant Agent’s prescribed form as to the particulars of such third party.

9.15 Not Bound To Act

The Warrant Agent shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Warrant Agent, in its sole judgment, determines that such act might cause it to be in non-compliance with any applicable anti-money laundering, anti-terrorist legislation or economic sanctions legislation, regulation or guideline. Further, should the Warrant Agent, in its sole judgment, determine at any time that its acting under this Indenture has resulted in its being in non-compliance with any applicable anti-money laundering, anti-terrorist legislation or economic sanctions legislation, regulation or guideline, then it shall have the right to resign on ten (10) days written notice to the Corporation, provided (a) that the Warrant Agent’s written notice shall describe the circumstances of such non-compliance, and (b) that if such

circumstances are rectified to the Warrant Agent’s satisfaction within such ten (10) day period, then such resignation shall not be effective.

9.16 Privacy Laws

The parties acknowledge that federal and/or provincial legislation that addresses the protection of individuals’ personal information (collectively, “Privacy Laws”) applies to obligations and activities under this Indenture. Despite any other provision of this Indenture, neither party shall take or direct any action that would contravene, or cause the other to contravene, applicable Privacy Laws. The Corporation shall, prior to transferring or causing to be transferred personal information to the Warrant Agent, obtain and retain required consents of the relevant individuals to the collection, use and disclosure of their personal information, or shall have determined that such consents either have previously been given upon which the parties can rely or are not required under the Privacy Laws. The Warrant Agent shall use commercially reasonable efforts to ensure that its services hereunder comply with Privacy Laws.

9.17 Documents, Monies, etc. Held by Warrant Agent

9.17.1 Any monies, securities, documents of title or other instruments that may at any time be held by the Warrant Agent shall be placed in the deposit vaults of the Warrant Agent or of any Canadian chartered bank listed in Schedule I of the Bank Act (Canada), or deposited for safekeeping with any such bank. Any monies held pending the application or withdrawal thereof under any provisions of this Indenture, shall be held, invested and reinvested in “Permitted Investments” as directed in writing by the Corporation. “Permitted Investments” shall be treasury bills guaranteed by the Government of Canada having a term to maturity not to exceed ninety (90) days, or term deposits or bankers’ acceptances of a Canadian chartered bank having a term to maturity not to exceed ninety (90) days, or such other investments that is in accordance with the Warrant Agent’s standard type of investments. Unless otherwise specifically provided herein, all interest or other income received by the Warrant Agent in respect of such deposits and investments shall belong to the Corporation.

9.17.2 Any written direction for the investment or release of funds received shall be received by the Warrant Agent by 9:00 a.m. (Eastern time) on the Business Day on which such investment or release is to be made, failing which such direction will be handled on a commercially reasonable efforts basis and may result in funds being invested or released on the next Business Day.

9.17.3 The Warrant Agent shall have no responsibility or liability for any diminution of any funds resulting from any investment made in accordance with this Indenture, including any losses on any investment liquidated prior to maturity in order to make a payment required hereunder.

9.17.4 In the event that the Warrant Agent does not receive a direction or only a partial direction, the Warrant Agent may hold cash balances constituting part or all of such monies and may, but need not, invest same in its deposit department, the deposit department of one of its affiliates, or the deposit department of a Canadian chartered bank; but the Warrant Agent, its affiliates or a Canadian chartered bank shall not be liable to account for any profit to any parties to this Indenture or to any other person or entity.

9.18 Actions by Warrant Agent to Protect Interest

The Warrant Agent shall have power to institute and to maintain such actions and proceedings as it may consider necessary or expedient to preserve, protect or enforce its interests and the interests of the Holders.

9.19 Warrant Agent Not to be Appointed Receiver.

The Warrant Agent and any person related to the Warrant Agent shall not be appointed a receiver, a receiver and manager or liquidator of all or any part of the assets or undertaking of the Corporation.

9.20 Compliance with Privacy Code.

The Corporation acknowledges that the Warrant Agent may, in the course of providing services hereunder, collect or receive financial and other personal information about such parties and/or their representatives, as individuals, or about other individuals related to the subject matter hereof, and use such information for the following purposes:

(a) to provide the services required under this Indenture and other services that may be requested from time to time;

(b) to help the Warrant Agent manage its servicing relationships with such individuals;

(d) if Social Insurance Numbers are collected by the Warrant Agent, to perform tax reporting and to assist in verification of an individual’s identity for security purposes.

The Corporation acknowledges and agrees that the Warrant Agent may receive, collect, use and disclose personal information provided to it or acquired by it in the course of its acting as agent hereunder for the purposes described above and, generally, in the manner and on the terms described in its Privacy Code, which the Warrant Agent shall make available on its website or upon request, including revisions thereto. Some of this personal information may be transferred to servicers in the United States for data processing and/or storage. Further, the Corporation agrees that it shall not provide or cause to be provided to the Warrant Agent any personal information relating to an individual who is not a party to this Indenture unless the Corporation has assured itself that such individual understands and has consented to the aforementioned uses and disclosures.

ARTICLE 10
SUPPLEMENTAL INDENTURES

10.1 Supplemental Indentures

10.1.1 From time to time the Warrant Agent and, when authorized by a resolution of its Directors, the Corporation may, subject to the provisions hereof, and they shall, when required by this Indenture, but subject always to the prior written consent, if required, of any stock exchange on which the Common Shares or the Warrants may be listed, execute, acknowledge and deliver, by their proper officers, deeds or indentures supplemental hereto, which thereafter shall form part hereof, for any one or more of the following purposes:

(a) adding to the covenants of the Corporation herein contained for the protection of the Holders in addition to those herein specified;

(b) making such provision not inconsistent with this Indenture as may be necessary or desirable with respect to matters or questions arising hereunder provided that the Warrant Agent shall be of the opinion, relying on the advice of its counsel, that such provisions shall not be prejudicial to the interests of the Holders;

(c) adding to or altering the provisions hereof in respect of the transfer of Warrants, making provision for the exchange of Warrant Certificates and making any modification in the form of the Warrant Certificate which does not affect the substance thereof;

(d) evidencing the succession, or successive successions, of other corporations to the Corporation and the covenants of and obligations assumed by any such successor in accordance with the provisions of this Indenture;

(e) giving effect to any Extraordinary Resolution passed as provided in Article 7;

(f) setting forth adjustments in the application of the provisions of Article 4;

(g) modifying any of the provisions of this Indenture, including relieving the Corporation from any of the obligations, conditions or restrictions herein contained, provided that such modification or relief shall be or become operative or effective only if, in the opinion of the Warrant Agent, relying on the advice of counsel, such modification or relief in no way prejudices any of the rights of the Holders or of the Warrant Agent, and provided further that the Warrant Agent may in its sole discretion decline to enter into any such supplemental indenture which in its opinion may not afford adequate protection to the Warrant Agent when the same shall become operative;

(h) providing for the issuance of additional Warrants hereunder, including Warrants in excess of the number set out in Section 2.1.1 and any consequential amendments hereto as may be required by the Warrant Agent relying on the advice of counsel; and

(i) for any other purpose not inconsistent with the terms of this Indenture, provided that in the opinion of the Warrant Agent relying on the advice of counsel, the rights of the Warrant Agent and of the Holders are in no way prejudiced thereby.

10.1.2 The Warrant Agent may also, without the consent or concurrence of the Holders, by supplemental indenture or otherwise, concur with the Corporation in making any changes or corrections in this Indenture which it has been advised by its counsel are required for the purpose of curing or correcting any ambiguity or defective or inconsistent provision or clerical omission or mistake or manifest error contained herein or in any deed or indenture supplemental or ancillary hereto, provided that in the opinion of the Warrant Agent, relying on the advice of counsel, the rights of the Warrant Agent and of the Holders are in no way prejudiced thereby.

10.2 Successor Entities.

In the case of the consolidation, amalgamation, arrangement, merger or transfer of the undertaking or assets of the Corporation as an entirety or substantially as an entirety to or with another entity (“successor entity”), the successor entity resulting from such consolidation, amalgamation,

arrangement, merger or transfer (if not the Corporation) shall expressly assume, by supplemental indenture satisfactory in form to the Warrant Agent and executed and delivered to the Warrant Agent, the due and punctual performance and observance of each and every covenant and condition of this Indenture to be performed and observed by the Corporation.

ARTICLE 11
GENERAL PROVISIONS

11.1 Execution

This Indenture may be simultaneously executed in several counterparts, and may be executed by facsimile or other means of electronic communication producing a printed copy, each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument and notwithstanding their date of execution they shall be deemed to be dated as of the date hereof.

11.2 Rights of Rescission

Should a Holder exercise any legal, statutory, contractual or other right of withdrawal or rescission that may be available to it, and the Holder’s funds which were paid on exercise have already been released to the Corporation by the Warrant Agent, the Warrant Agent shall not be responsible for ensuring the exercise is cancelled and a refund is paid back to the Holder. In such cases, the Holder shall seek a refund directly from the Corporation and subsequently, the Corporation shall instruct the Warrant Agent in writing, to cancel the exercise transaction and any Warrant Shares on the register, which may have already been issued upon the Warrant exercise. In the event that any payment is received from the Corporation by virtue of the Holder being a stakeholder for such Warrants that were subsequently rescinded, such payment must be returned to the Corporation by such Holder. The Warrant Agent shall not be under any duty or obligation to take any steps to ensure that the funds are returned pursuant to this Section 11.2, nor shall the Warrant Agent be in any other way responsible in the event that any payment is not delivered or received pursuant to this Section 11.2. Notwithstanding the foregoing, in the event that the Corporation provides the refund to the Warrant Agent for distribution to the Holder, the Warrant Agent shall return such funds to the Holder as soon as reasonably practicable, and in so doing, the Warrant Agent shall incur no liability with respect to the delivery or non-delivery of any such funds.

11.3 Force Majeure

Neither party shall be liable to the other, or held in breach of this Indenture, if prevented, hindered, or delayed in the performance or observance of any provision contained herein by reason of act of God, riots, terrorism, acts of war, epidemics, governmental action or judicial order, earthquakes, or any other similar causes (including, but not limited to, mechanical, electronic or communication interruptions, disruptions or failures). Performance times under this Indenture shall be extended for a period of time equivalent to the time lost because of any delay that is excusable under this Section.

11.4 Termination

This Indenture shall continue in full force and effect until the earlier of: (a) the Long-Term Warrant Expiry Time, and (b) the date that no Warrants are outstanding hereunder; provided that this

Indenture shall continue in effect thereafter, if applicable, until the Corporation and the Warrant Agent have fulfilled all of their respective obligations under this Indenture.

11.5 Warrants Owned by the Corporation or its Subsidiaries — Certificate to be Provided

For the purpose of disregarding any Warrants owned legally or beneficially by the Corporation or any Subsidiary of the Corporation in Section 7.17 hereof, the Corporation shall provide to the Warrant Agent, from time to time, a certificate of the Corporation setting forth as at the date of such certificate:

(a) the names (other than the name of the Corporation) of the Holders which, to the knowledge of the Corporation, are owned by or held for the account of the Corporation or any Subsidiary of the Corporation; and

(b) the number of Warrants owned legally or beneficially by the Corporation or any Subsidiary of the Corporation which have not been cancelled;

and the Warrant Agent, in making the computations in Section 7.17 hereof, shall be entitled to rely on such certificate without any additional evidence.

11.6 Provisions of Indenture and Warrants for the Sole Benefit of Parties and Holders

Nothing in this Indenture or in the Warrant Certificates, expressed or implied, shall give or be construed to give to any Person other than the parties thereto and the Holders, as the case may be, any legal or equitable right, remedy or claim under this Indenture, or under any covenant or provision herein or therein contained, all such covenants and provisions being for the sole benefit of the parties hereto and the Holders.

11.7 Stock Exchange Consents

Any action provided for in this Indenture requiring the prior consent of any stock exchange upon which the Common Shares or Warrants, as applicable, may be listed shall not be completed until the requisite consent is obtained.

[Remainder of page left intentionally blank. Signature page follows.]

IN WITNESS WHEREOF the parties hereto have executed these presents under the hands of their proper officers in that behalf.

	DRAGONWAVE INC.


	By:
		Authorized Signing Officer


	COMPUTERSHARE TRUST COMPANY OF CANADA


	By:
		Authorized Signing Officer


	By:
		Authorized Signing Officer

	COMPUTERSHARE TRUST N.A.


	By:
		Authorized Signing Officer


	By:
		Authorized Signing Officer

[Signature Page to Warrant Indenture]

SCHEDULE “A”

FORM OF LONG-TERM WARRANT CERTIFICATE

Certificate No. · CUSIP: ·	Representing Long-Term Warrants
ISIN: ·

LONG-TERM COMMON SHARE PURCHASE WARRANTS

DRAGONWAVE INC.

THIS CERTIFICATE IS TO CERTIFY that for value received · (herein referred to as the “Holder”) is the registered holder of the number of Long-Term Warrants of DragonWave Inc. (the “Corporation”) stated above, and subject to adjustment and penalty provisions as set forth in the Warrant Indenture (as defined below), is entitled to acquire, at any time after the date hereof and up until 4:30 p.m. (Eastern time) on [date] or the next succeeding Business Day if such date is not a Business Day (the “Expiry Date”), upon payment of $[ ] (the “Exercise Price”), payable in United States currency, for each Long-Term Warrant represented hereby, one common share of the Corporation (a “Common Share”), all in the manner and subject to the restrictions and adjustments set forth in the Warrant Indenture (as hereinafter defined).

Any capitalized term in this Certificate that is not otherwise defined herein, shall have the meaning ascribed thereto in the warrant indenture (“Warrant Indenture”) dated as of [ ], 2016 between the Corporation and Computershare Trust Company of Canada (the “Warrant Agent”). In the event of any discrepancy between anything contained in this Warrant Certificate and the terms and conditions of the Warrant Indenture, the terms and conditions of the Warrant Indenture shall govern.

Reference is hereby made to the Warrant Indenture for a full description of the rights of the holders of the Long-Term Warrants, the Corporation and the Warrant Agent in respect thereof, and the terms and conditions upon which the Long-Term Warrants evidenced hereby are issued and held, all to the same effect as if the provisions of the Warrant Indenture were herein set forth. By acceptance of this Warrant Certificate, the Holder assents to all provisions of the Warrant Indenture. To the extent that the terms and conditions set forth in this Warrant Certificate conflict with the terms and conditions of the Warrant Indenture, the Warrant Indenture shall prevail. The Corporation will furnish to the holder of this Warrant Certificate, upon request and without charge, a copy of the Warrant Indenture.

In the event that prior to the Expiry Date, the Holder has not exercised the Long-Term Warrants represented hereby in accordance with the terms of the Warrant Indenture, then any Long-Term Warrants represented by this Warrant Certificate which have not been so exercised shall be deemed to have expired and shall be of no further force and effect as of 4:30 p.m. (Eastern time) on the Expiry Date.

Upon exercise, the Long-Term Warrants so exercised shall be void and of no value or effect.

Certificates representing the Common Shares issued upon exercise of the Long-Term Warrants (reflecting any adjustments as provided herein and in the Warrant Indenture) shall, within three (3) Business Days after the Exercise Date, be mailed by the Corporation to the address of the Holder

"A" - 1

thereof last appearing on the register of Holders maintained by the Warrant Agent or delivered via deposit and withdrawal at custodian (“DWAC”) to the participating broker and account specified by the Holder.

The right to acquire Common Shares may only be exercised by the Holder within the time set forth above by:

(a) duly completing and executing the Exercise Form attached hereto;

(b) by providing a certified cheque, bank draft or money order in lawful money of the United States payable to the order of the Corporation or a wire transfer of funds to the Warrant Agent as set forth in the Indenture for the aggregate purchase price of the Common Shares so subscribed; and

(c) if, but only if, this exercise is for the entire number of Warrant Shares issuable upon exercise of this Warrant, surrendering this Warrant Certificate to the Warrant Agent at the Warrant Agency,

all in accordance with Section 3.2 of the Warrant Indenture.

The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

The Long-Term Warrants represented by this Certificate shall be deemed to be surrendered only upon personal delivery hereof or, if sent by mail or other means of transmission, upon actual receipt thereof by the Warrant Agent at the offices referred to above.

Upon delivery of the Exercise Form, the Person or Persons in whose name or names the Common Shares issuable upon exercise of the Long-Term Warrants are to be issued shall be deemed for all purposes (except as provided in the Warrant Indenture) to be the holder or holders of record of such Common Shares so long as payment of the Exercise Price is made within two (2) Business Days, and the Corporation has covenanted that it will (subject to the provisions of the Warrant Indenture) cause a certificate or certificates representing the Warrant Shares to be delivered via DWAC or mailed to the Person or Persons at the address or addresses specified in the Exercise Form within three (3) Business Days.

The Warrant Indenture provides for adjustments to certain rights of Holders including the number of Common Shares issuable upon exercise of the Long-Term Warrants upon subdivision, consolidation or reclassification of the Common Shares or Capital Reorganizations and certain distributions of securities, including rights, options or warrants to purchase Common Shares or securities convertible or exchangeable into Common Shares or assets of the Corporation. The Holder should refer to the Warrant Indenture which provides for adjustments in certain other events.

The terms and conditions relating to the Long-Term Warrants and this Warrant Certificate may be modified, changed or added to in accordance with the provisions of the Warrant Indenture. The Warrant Indenture contains provisions making binding upon all Holders of Long-Term Warrants outstanding thereunder resolutions passed at meetings of such Holders held in accordance with such provisions and instruments in writing signed by the Holders entitled to acquire a specified percentage

"A" - 2

of the Common Shares which may be acquired pursuant to the exercise of all of the then outstanding Long-Term Warrants.

The holding of the Long-Term Warrants as evidenced by this Warrant Certificate shall not constitute, or be construed as conferring upon, a Holder any right or interest whatsoever as a shareholder of the Corporation except such rights as may be provided in the Warrant Indenture or in this Warrant Certificate.

The Holder of this Warrant Certificate may, upon compliance with the reasonable requirements of the Warrant Agent and upon surrender of this Warrant Certificate, exchange this Warrant Certificate for another Warrant Certificate or Warrant Certificates entitling the Holder thereof to receive, in the aggregate, the same number of Common Shares as are issuable under this Warrant Certificate.

The Long-Term Warrants evidenced by this Warrant Certificate may only be transferred in accordance with applicable Securities Laws and upon due execution and delivery to the Warrant Agent of a Transfer Form in the form attached hereto and in compliance with all the conditions prescribed in the Warrant Indenture and compliance with such other reasonable requirements as the Warrant Agent may prescribe.

This Warrant Certificate shall not be valid for any purpose until it has been countersigned by or on behalf of the Warrant Agent under the Warrant Indenture.

The Holder of this Warrant Certificate expressly acknowledges having requested, and consents to, the drawing in the English language only of this Warrant Certificate evidencing the Long-Term Warrants registered in his name and all documents relating to such Long-Term Warrants. Le détenteur inscrit du présent certificat de bons de souscription reconnaît expressément avoir demandé et consenti que le présent certificat attestant qu’il est le détenteur inscrit de bons de souscription, ainsi que tous les documents s’y rapportant, soient rédigés en anglais seulement.

Time shall be of the essence hereof.

[Remainder of page left intentionally blank. Signature page follows.]

"A" - 3

IN WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be signed as of the [ ], 2016.

	DRAGONWAVE INC.


	By:
		Authorized Signing Officer

This Warrant Certificate is one of the Warrant Certificates referred to in the Warrant Indenture.

	COMPUTERSHARE TRUST COMPANY OF CANADA


	By:
		Authorized Signing Officer

[Signature Page to Warrant Certificate]

"A" - 4

EXERCISE FORM

TO:	DRAGONWAVE INC. (the “Corporation”)

AND TO:	COMPUTERSHARE TRUST COMPANY OF CANADA

The undersigned holder of the Long-Term Warrants evidenced by this Warrant Certificate hereby exercises the right to acquire (A) Common Shares of the Corporation.

Exercise Price Payable:
	((A) multiplied by $[ ], subject to adjustment)

The undersigned hereby exercises the right of such holder to be issued, and hereby subscribes for, Common Shares that are issuable pursuant to the exercise of such Long-Term Warrants on the terms specified in such Warrant Certificate and in the Warrant Indenture.

The undersigned hereby acknowledges that the undersigned is aware that the Common Shares received on exercise may be subject to restrictions on resale under applicable securities legislation.

Any capitalized term in this Warrant Certificate that is not otherwise defined herein, shall have the meaning ascribed thereto in the Warrant Indenture.

It is understood that the Corporation and Computershare Trust Company of Canada may require evidence to verify compliance with applicable Securities Laws.

The undersigned hereby irrevocably directs that the said Common Shares be issued, registered and delivered as follows:

Name(s) in Full and Social Insurance Number(s) (if applicable)	Address(es)	Number of Common Shares

Please print full name in which certificates representing the Common Shares are to be issued. If any Common Shares are to be issued to a person or persons other than the Holder, the Holder must pay to the Warrant Agent all eligible transfer taxes or other government charges, if any, and the Transfer Form must be duly executed.

"A" - 5

Dated this day of , .


Signature Guaranteed		Signature of Registered Holder



		Name of Registered Holder

o Please check box if certificates representing these Common Shares are to be delivered at the office of the Warrant Agent where this Warrant Certificate is surrendered, failing which the certificates shall be mailed to the address set forth above.

Instructions:

The Holder may exercise his right to receive Common Shares by completing this form and surrendering this form and the Warrant Certificate representing the Warrants being exercised, together with the applicable payment therefor, to Computershare Trust Company of Canada, [insert Toronto address]. Certificates for Common Shares shall be delivered or mailed within three (3) Business Days after the exercise of the Long-Term Warrants.

If the Exercise Form indicates that Common Shares are to be issued to a Person or Persons other than the Holder of the Certificate, the signature on this Exercise Form must be guaranteed by a Canadian chartered bank or eligible guarantor institution with membership in an approved signature guarantee medallion program.

If the Exercise Form is signed by a trustee, executor, administrator, curator, guardian, attorney, officer of a corporation or any Person acting in a fiduciary or representative capacity, the certificate must be accompanied by evidence of authority to sign satisfactory to the Warrant Agent and the Corporation.

"A" - 6

TRANSFER FORM

TO: COMPUTERSHARE TRUST COMPANY OF CANADA

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers to

(print name and address) the Long-Term Warrants represented by this Warrant Certificate and hereby irrevocable constitutes and appoints as its attorney with full power of substitution to transfer the said securities on the appropriate register of the Warrant Agent.

DATED this day of , 20 .

SPACE FOR GUARANTEES OF SIGNATURES (BELOW)	)
SPACE FOR GUARANTEES OF SIGNATURES (BELOW)	)
	)	Signature of Transferor
	)
	)
Guarantor’s Signature/Stamp	)	Name of Transferor
	)

CERTAIN REQUIREMENTS RELATING TO TRANSFERS — READ CAREFULLY

The signature(s) of the transferor(s) must correspond with the name(s) as written upon the face of this certificate(s), in every particular, without alteration or enlargement, or any change whatsoever. All securityholders or a legally authorized representative must sign this form. The signature(s) on this form must be guaranteed in accordance with the transfer agent’s then current guidelines and requirements at the time of transfer. Notarized or witnessed signatures are not acceptable as guaranteed signatures. As at the time of closing, you may choose one of the following methods (although subject to change in accordance with industry practice and standards):

· Canada and the USA: A Medallion Signature Guarantee obtained from a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, NYSE, MSP). Many commercial banks, savings banks, credit unions, and all broker dealers participate in a Medallion Signature Guarantee Program. The Guarantor must affix a stamp bearing the actual words “Medallion Guaranteed”, with the correct prefix covering the face value of the certificate.

· Canada: A Signature Guarantee obtained from an authorized officer of the Royal Bank of Canada, Scotia Bank or TD Canada Trust. The Guarantor must affix a stamp bearing the actual words “Signature Guaranteed”, sign and print their full name and alpha numeric signing number. Signature Guarantees are not accepted from Treasury Branches, Credit Unions or Caisse Populaires unless they are members of a Medallion Signature Guarantee Program. For corporate holders, corporate signing resolutions, including certificate of incumbency, are also required to accompany the transfer, unless there is a “Signature & Authority to Sign Guarantee” Stamp affixed to the transfer (as opposed to a “Signature

"A" - 7

Guaranteed” Stamp) obtained from an authorized officer of the Royal Bank of Canada, Scotia Bank or TD Canada Trust or a Medallion Signature Guarantee with the correct prefix covering the face value of the certificate.

· Outside North America: For holders located outside North America, present the certificates(s) and/or document(s) that require a guarantee to a local financial institution that has a corresponding Canadian or American affiliate which is a member of an acceptable Medallion Signature Guarantee Program. The corresponding affiliate will arrange for the signature to be over-guaranteed.

The signature(s) of the transferor(s) must correspond with the name(s) as written upon the face of this certificate(s), in every particular, without alteration or enlargement, or any change whatsoever. The signature(s) on this form must be guaranteed by an authorized officer of Royal Bank of Canada, Scotia Bank or TD Canada Trust whose sample signature(s) are on file with the transfer agent, or by a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, NYSE, MSP). Notarized or witnessed signatures are not acceptable as guaranteed signatures. The Guarantor must affix a stamp bearing the actual words: “SIGNATURE GUARANTEED”, “MEDALLION GUARANTEED” OR “SIGNATURE & AUTHORITY TO SIGN GUARANTEE”, all in accordance with the transfer agent’s then current guidelines and requirements at the time of transfer. For corporate holders, corporate signing resolutions, including certificate of incumbency, will also be required to accompany the transfer unless there is a “SIGNATURE & AUTHORITY TO SIGN GUARANTEE” Stamp affixed to the Form of Transfer obtained from an authorized officer of the Royal Bank of Canada, Scotia Bank or TD Canada Trust or a “MEDALLION GUARANTEED” Stamp affixed to the Form of Transfer, with the correct prefix covering the face value of the certificate.

"A" - 8

SCHEDULE “B”

FORM OF SHORT-TERM WARRANT CERTIFICATE

Certificate No. · CUSIP: ·	Representing Short-Term Warrants
ISIN: ·

SHORT-TERM COMMON SHARE PURCHASE WARRANTS

DRAGONWAVE INC.

THIS CERTIFICATE IS TO CERTIFY that for value received · (herein referred to as the “Holder”) is the registered holder of the number of Short-Term Warrants of DragonWave Inc. (the “Corporation”) stated above, and subject to adjustment and penalty provisions as set forth in the Warrant Indenture (as defined below), is entitled to acquire, at any time after the date hereof and up until 4:30 p.m. (Eastern time) on [date] or the next succeeding Business Day if such date is not a Business Day (the “Expiry Date”), upon payment of $[ ] (the “Exercise Price”), payable in United States currency, for each Short-Term Warrant represented hereby, one common share of the Corporation (a “Common Share”), all in the manner and subject to the restrictions and adjustments set forth in the Warrant Indenture (as hereinafter defined).

Reference is hereby made to the Warrant Indenture for a full description of the rights of the holders of the Short-Term Warrants, the Corporation and the Warrant Agent in respect thereof, and the terms and conditions upon which the Short-Term Warrants evidenced hereby are issued and held, all to the same effect as if the provisions of the Warrant Indenture were herein set forth. By acceptance of this Warrant Certificate, the Holder assents to all provisions of the Warrant Indenture. To the extent that the terms and conditions set forth in this Warrant Certificate conflict with the terms and conditions of the Warrant Indenture, the Warrant Indenture shall prevail. The Corporation will furnish to the holder of this Warrant Certificate, upon request and without charge, a copy of the Warrant Indenture.

In the event that prior to the Expiry Date, the Holder has not exercised the Short-Term Warrants represented hereby in accordance with the terms of the Warrant Indenture, then any Short-Term Warrants represented by this Warrant Certificate which have not been so exercised shall be deemed to have expired and shall be of no further force and effect as of 4:30 p.m. (Eastern time) on the Expiry Date.

Upon exercise, the Short-Term Warrants so exercised shall be void and of no value or effect.

Certificates representing the Common Shares issued upon exercise of the Short-Term Warrants (reflecting any adjustments as provided herein and in the Warrant Indenture) shall, within three (3) Business Days after the Exercise Date, be mailed by the Corporation to the address of the Holder

"B" - 1

The right to acquire Common Shares may only be exercised by the Holder within the time set forth above by:

(d) duly completing and executing the Exercise Form attached hereto;

(e) by providing a certified cheque, bank draft or money order in lawful money of the United States payable to the order of the Corporation or a wire transfer of funds to the Warrant Agent as set forth in the Indenture for the aggregate purchase price of the Common Shares so subscribed; and

(f) if, but only if, this exercise is for the entire number of Warrant Shares issuable upon exercise of this Warrant, surrendering this Warrant Certificate to the Warrant Agent at the Warrant Agency,

all in accordance with Section 3.2 of the Warrant Indenture.

The Short-Term Warrants represented by this Certificate shall be deemed to be surrendered only upon personal delivery hereof or, if sent by mail or other means of transmission, upon actual receipt thereof by the Warrant Agent at the offices referred to above.

Upon delivery of the Exercise Form, the Person or Persons in whose name or names the Common Shares issuable upon exercise of the Short-Term Warrants are to be issued shall be deemed for all purposes (except as provided in the Warrant Indenture) to be the holder or holders of record of such Common Shares so long as payment of the Exercise Price is made within two (2) Business Days, and the Corporation has covenanted that it will (subject to the provisions of the Warrant Indenture) cause a certificate or certificates representing the Warrant Shares to be delivered via DWAC or mailed to the Person or Persons at the address or addresses specified in the Exercise Form within three (3) Business Days.

The Warrant Indenture provides for adjustments to certain rights of Holders including the number of Common Shares issuable upon exercise of the Short-Term Warrants upon subdivision, consolidation or reclassification of the Common Shares or Capital Reorganizations and certain distributions of securities, including rights, options or warrants to purchase Common Shares or securities convertible or exchangeable into Common Shares or assets of the Corporation. The Holder should refer to the Warrant Indenture which provides for adjustments in certain other events.

The terms and conditions relating to the Short-Term Warrants and this Warrant Certificate may be modified, changed or added to in accordance with the provisions of the Warrant Indenture. The Warrant Indenture contains provisions making binding upon all Holders of Short-Term Warrants outstanding thereunder resolutions passed at meetings of such Holders held in accordance with such provisions and instruments in writing signed by the Holders entitled to acquire a specified percentage

"B" - 2

of the Common Shares which may be acquired pursuant to the exercise of all of the then outstanding Short-Term Warrants.

The holding of the Short-Term Warrants as evidenced by this Warrant Certificate shall not constitute, or be construed as conferring upon, a Holder any right or interest whatsoever as a shareholder of the Corporation except such rights as may be provided in the Warrant Indenture or in this Warrant Certificate.

The Short-Term Warrants evidenced by this Warrant Certificate may only be transferred in accordance with applicable Securities Laws and upon due execution and delivery to the Warrant Agent of a Transfer Form in the form attached hereto and in compliance with all the conditions prescribed in the Warrant Indenture and compliance with such other reasonable requirements as the Warrant Agent may prescribe.

This Warrant Certificate shall not be valid for any purpose until it has been countersigned by or on behalf of the Warrant Agent under the Warrant Indenture.

The Holder of this Warrant Certificate expressly acknowledges having requested, and consents to, the drawing in the English language only of this Warrant Certificate evidencing the Short-Term Warrants registered in his name and all documents relating to such Short-Term Warrants. Le détenteur inscrit du présent certificat de bons de souscription reconnaît expressément avoir demandé et consenti que le présent certificat attestant qu’il est le détenteur inscrit de bons de souscription, ainsi que tous les documents s’y rapportant, soient rédigés en anglais seulement.

Time shall be of the essence hereof.

[Remainder of page left intentionally blank. Signature page follows.]

"B" - 3

IN WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be signed as of the [ ], 2016.

	DRAGONWAVE INC.


	By:
		Authorized Signing Officer

This Warrant Certificate is one of the Warrant Certificates referred to in the Warrant Indenture.

	COMPUTERSHARE TRUST COMPANY OF CANADA


	By:
		Authorized Signing Officer

[Signature Page to Warrant Certificate]

"B" - 4

EXERCISE FORM

TO:	DRAGONWAVE INC. (the “Corporation”)

AND TO:	COMPUTERSHARE TRUST COMPANY OF CANADA

The undersigned holder of the Short-Term Warrants evidenced by this Warrant Certificate hereby exercises the right to acquire (A) Common Shares of the Corporation.

Exercise Price Payable:
	((A) multiplied by $[ ], subject to adjustment)

The undersigned hereby exercises the right of such holder to be issued, and hereby subscribes for, Common Shares that are issuable pursuant to the exercise of such Short-Term Warrants on the terms specified in such Warrant Certificate and in the Warrant Indenture.

The undersigned hereby acknowledges that the undersigned is aware that the Common Shares received on exercise may be subject to restrictions on resale under applicable securities legislation.

Any capitalized term in this Warrant Certificate that is not otherwise defined herein, shall have the meaning ascribed thereto in the Warrant Indenture.

It is understood that the Corporation and Computershare Trust Company of Canada may require evidence to verify compliance with applicable Securities Laws.

The undersigned hereby irrevocably directs that the said Common Shares be issued, registered and delivered as follows:

Name(s) in Full and Social Insurance Number(s) (if applicable)	Address(es)	Number of Common Shares

"B" - 5

Dated this day of , .


Signature Guaranteed		Signature of Registered Holder



		Name of Registered Holder

Instructions:

"B" - 6

TRANSFER FORM

TO: COMPUTERSHARE TRUST COMPANY OF CANADA

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers to

(print name and address) the Short-Term Warrants represented by this Warrant Certificate and hereby irrevocable constitutes and appoints as its attorney with full power of substitution to transfer the said securities on the appropriate register of the Warrant Agent.

DATED this day of , 20 .

SPACE FOR GUARANTEES OF SIGNATURES (BELOW)	)
SPACE FOR GUARANTEES OF SIGNATURES (BELOW)	)
	)	Signature of Transferor
	)
	)
Guarantor’s Signature/Stamp	)	Name of Transferor
	)

CERTAIN REQUIREMENTS RELATING TO TRANSFERS — READ CAREFULLY

The signature(s) of the transferor(s) must correspond with the name(s) as written upon the face of this certificate(s), in every particular, without alteration or enlargement, or any change whatsoever. All securityholders or a legally authorized representative must sign this form. The signature(s) on this form must be guaranteed in accordance with the transfer agent’s then current guidelines and requirements at the time of transfer. Notarized or witnessed signatures are not acceptable as guaranteed signatures. As at the time of closing, you may choose one of the following methods (although subject to change in accordance with industry practice and standards):

"B" - 7

The signature(s) of the transferor(s) must correspond with the name(s) as written upon the face of this certificate(s), in every particular, without alteration or enlargement, or any change whatsoever. The signature(s) on this form must be guaranteed by an authorized officer of Royal Bank of Canada, Scotia Bank or TD Canada Trust whose sample signature(s) are on file with the transfer agent, or by a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, NYSE, MSP). Notarized or witnessed signatures are not acceptable as guaranteed signatures. The Guarantor must affix a stamp bearing the actual words: “SIGNATURE GUARANTEED”, “MEDALLION GUARANTEED” OR “SIGNATURE & AUTHORITY TO SIGN GUARANTEE”, all in accordance with the transfer agent’s then current guidelines and requirements at the time of transfer. For corporate holders, corporate signing resolutions, including certificate of incumbency, will also be required to accompany the transfer unless there is a “SIGNATURE & AUTHORITY TO SIGN GUARANTEE” Stamp affixed to the Form of Transfer obtained from an authorized officer of the Royal Bank of Canada, Scotia Bank or TD Canada Trust or a “MEDALLION GUARANTEED” Stamp affixed to the Form of Transfer, with the correct prefix covering the face value of the certificate.

"B" - 8

SCHEDULE “C”

WIRE TRANSFER DETAILS

EX-4.2 4 a2229241zex-4_2.htm EX-4.2

Exhibit 4.2

PRE-FUNDED COMMON SHARE PURCHASE WARRANT

DRAGONWAVE INC.

Warrant Shares: [ ]	Issue Date: August [ ], 2016

	Initial Exercise Date: August [ ], 2016

THIS COMMON SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value received, or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after August , 2016 (the “Initial Exercise Date”) (and shall have no expiration date), to subscribe for and purchase from Dragonwave Inc., a corporation incorporated under the Canada Business Corporations Act (the “Company”), up to [ ] common shares of the Corporation (subject to adjustment hereunder, the “Warrant Shares”). This Warrant is one of the Pre-Funded Warrants comprising part of the Class B Units issued pursuant to (i) that certain underwriting agreement dated [ ], 2016 between the Company and any underwriter named therein (the “Underwriting Agreement”), and (ii) the Company’s registration statement on form F-1 (File No. 333-212428) (the “Registration Statement”).

The aggregate purchase price of this Warrant is an amount equal to $[ ] times the number of Warrant Shares (the “Aggregate Purchase Price”), all of which was pre-funded to the Company on or before the initial issuance date of this Warrant by virtue of purchasing the Class B Units of which this Warrant formed a part. The exercise price to purchase one Warrant Share is US$0.01 per Warrant Share (the “Exercise Price”). Consequently, no additional payment or other consideration (other than the Exercise Price) shall be required to be paid by the Holder to the Company to effect any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate purchase price under any circumstance or for any reason whatsoever.

Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Underwriting Agreement.

Section 2. Exercise.

(a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date (and have no expiration date) by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise in the form annexed hereto and, within two (2) Trading Days of the date said Notice of Exercise is delivered to the Company, payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a

United States bank or, if available, pursuant to the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

(b) Exercise Price. The Aggregate Purchase Price has been pre-funded by virtue of purchasing the Class B Units of which this Warrant formed a part, except for the payment of the Exercise Price. The Exercise Price per Warrant Share under this Warrant shall be US$0.01, subject to adjustment hereunder.

(c) Cashless Exercise. If, at the time of exercise of any Warrant in accordance with this certificate, there is no effective registration statement registering the Warrant Shares under the Securities Act, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder under the Securities Act, then the Warrants may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive upon such exercise the “Net Number” of Warrant Shares determined according to the following formula:

	Net Number	=	(A x B) — (A x C)
			B

where:

(A) = the total number of Warrant Shares with respect to which this Warrant is then being exercised;

(B) = the last VWAP immediately preceding the time of delivery of the Notice of Exercise giving rise to the applicable “cashless exercise”, as set forth in the applicable Notice of Exercise (to clarify, the “last VWAP” will be the last VWAP as calculated over an entire Trading Day such that, in the event that this Warrant is exercised at a time that the Trading Market is open, the prior Trading Day’s VWAP shall be used in this calculation); and

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

(d) Mechanics of Exercise.

i. Delivery of Warrant Shares Upon Exercise. Warrant Shares purchased hereunder shall be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder pursuant to Rule 144, and otherwise send by reputable overnight courier a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the later of (i) the third (3rd) Trading Day following the date on which the Company has received such Notice of Exercise; and (ii) the Trading Day following the payment of the aggregate Exercise Price for the shares specified in the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares; provided payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within two Trading Days of delivery of the

Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each US$1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Shares on the date of the applicable Notice of Exercise), US$10 per Trading Day (increasing to US$20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.

ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Common Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrant Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice

indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof.

v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant and the Holder shall not be entitled to any cash or other consideration in lieu of any fractional interest in a Warrant Share or claim thereto. As to any fraction of a share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall round such fraction down to the next whole share.

vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for the processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for electronic delivery of the Warrant Shares.

vii. Closing of Books. The Company will not close its shareholders’ books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

(e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Warrant Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Warrant Shares that would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or non-converted portion of any other securities of the

Company (including, without limitation, any other Common Share Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding Common Shares, a Holder may rely on the number of outstanding Common Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission or on SEDAR, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Common Shares outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Common Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Warrant Shares issuable upon exercise of this Warrant. The Holder, upon written notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

Section 3. Certain Adjustments.

(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on Common Shares or any other equity or equity equivalent securities payable in Common Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Common Shares into a smaller number of shares, or (iv) issues by reclassification of Common Shares any shares in the capital of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Common Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

(b) [RESERVED]

(c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Share Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of Common Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Common Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

(d) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to

any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Common Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

(e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger, consolidation, arrangement or amalgamation of the Company with or into another Person (whether or not the Company is the surviving corporation, provided however that the winding-up, consolidation, amalgamation or merger of a wholly-owned subsidiary of the Company into the Company, in which the Company is the continuing or surviving entity, shall not qualify as a Fundamental Transaction), (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions (other than a transfer of assets among the Company and its wholly-owned subsidiaries), (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Shares (not including any Common Shares held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares (for the avoidance of doubt, this subsection (iv) shall not include any forward splits or dividends on the Common Shares) or any compulsory share exchange pursuant to which the Common Shares are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Shares (not including any Common Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Common Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Common Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes

of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Common Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.

(f) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.

(g) Notice to Holder.

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C) the Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any shares of in the capital of the Company of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Common Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Shares is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Shares of record shall be entitled to exchange their shares of the Common Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery

thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission on Form 6-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Section 4. Transfer of Warrant.

(a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless (i) the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant full; or (ii) the Warrant has been purchased in accordance with the provisions of Section 3(e). The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

(b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original issuance date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

(c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

(d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered

pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, agree to such reasonable provisions as may be necessary to comply with applicable securities laws.

Section 5. Miscellaneous.

(a) No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.

(b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory (which, in the case of the Warrant, shall not include the posting of any bond), to it of the loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation of such Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor and dated as of such cancellation, in lieu of such Warrant.

(c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

(d) Authorized Shares.

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Shares a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Shares may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of

any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (ii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

(e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

(f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

(g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of the Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder may terminate as provided herein. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

(h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered to the address, email address, or facsimile number provided to the Underwriters by the Holder in connection with the offering contemplated by the Underwriting Agreement or such other address, email address, or facsimile number as the Holder shall provide to the Company for purposes of providing notice.

(i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

(j) Holder Not Deemed a Shareholder. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote

or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as the Holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of shares, reclassification of shares, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant.

(k) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

(l) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder.

(m) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

(n) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

(o) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

(Signature Page Follows)

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

	DRAGONWAVE INC.


	By:
		Name:
		Title:

NOTICE OF EXERCISE

TO: DRAGONWAVE INC.

(1) The undersigned hereby elects to purchase Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2) Payment shall take the form of (check applicable box):

[ ] in lawful money of the United States; or

[ ] [if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

The Warrant Shares shall be delivered to the following DWAC Account Number:

(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity:
Name of Authorized Signatory:
Title of Authorized Signatory:
Date:

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to:

Name:
			(Please Print)

Address:
			(Please Print)

Phone Number:

Email Address:

Dated: ,

Holder’s Signature:

Holder’s Address:

EX-5.1 5 a2229241zex-5_1.htm EX-5.1

Exhibit 5.1

Dentons Canada LLP

99 Bank Street, Suite 1420
Ottawa, ON, Canada K1P 1H4

大成 Salans FMC SNR Denton McKenna Long

dentons.com

July 29, 2016

DragonWave Inc.

600-411 Legget Drive
Ottawa, Ontario K2K 3C9

Ladies and Gentlemen:

Re: DragonWave Inc. — Registration Statement on Form F-1

We have acted as Canadian counsel to DragonWave Inc., a company existing under the federal laws of Canada (the “Company”) in connection with the preparation of the Registration Statement of the Company on Form F-1 (File No. 333-212428) (the “Registration Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, (the “Act”) including the form of prospectus contained therein (the “Prospectus”).

The Registration Statement relates to the offering and sale by the Company of (A) up to an aggregate 1,500,000 Class A Units each comprised of (i) one common share of the Company (the “Class A Unit Shares”), (ii) one common share purchase warrant exercisable to purchase one common share of the Company (each a “Warrant Share”) during the period commencing from the date of original issuance and ending on the date that is five years thereafter (the “Long-Term Warrants”) and (iii) two common share purchase warrants exercisable to purchase one Warrant Share during the period commencing from the date of original issuance and ending on the date that is six-months thereafter (the “Short-Term Warrants”), and (B) up to an aggregate 1,500,000 Class B Units each comprised of (i) one common share purchase warrant to purchase one Warrant Share exercisable on the date of original issuance with no expiration date (the “Pre-Funded Warrants” and, together with the Long-Term Warrants and the Short-Term Warrants, the “Warrants”), (ii) one Long-Term Warrant, and (iii) two Short-Term Warrants. The Class A Unit Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Offered Securities”. No opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or the Prospectus, other than as expressly stated herein with respect to the issuance of the Offered Securities.

In our capacity as such counsel, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such corporate and other records and documents as we considered appropriate including, without limitation:

a) the Registration Statement;

b) the Prospectus;

c) the Articles of the Company, as currently in effect;

d) the By-laws of the Company, as currently in effect (together with the Articles, the “Constating Documents”);

e) a form of warrant indenture to be entered into between the Company and Computershare Trust Company of Canada with respect to the creation and issuance of the Long-Term Warrants and the Short-Term Warrants (the “Indenture”);

f) a form of warrant certificate to be entered into between the Company and the purchasers of Pre-Funded Warrants with respect to the creation and issuance of the Pre-Funded Warrants (the “Warrant Certificate”);

g) a certificate of an officer of the Company as to certain matters of fact (the “Officer’s Certificate”); and

h) certified written resolutions of the Company’s board of directors dated July 26, 2016 relating to, among other things, the Registration Statement.

Our opinion expressed herein is limited to the current laws of the Province of Ontario and those federal laws of Canada applicable therein and should not be relied upon, nor are they given, in respect of the laws of any other jurisdiction.

As used herein, the term “Applicable Law” means the Canada Business Corporations Act (the “CBCA”) and the federal laws of Canada which, in our experience, are normally applicable to transactions of this type. The Warrant Shares may be issued from time to time on a delayed or continuous basis, and this opinion does not address any changes in Applicable Law after the date hereof.

In connection with the opinion expressed herein, we have considered such questions of law and examined such statutes, public and corporate records, certificates of governmental authorities and officers of the Company, other documents and conducted such other examinations as we have considered necessary for the purpose of our opinion.

In rendering our opinions set forth below, we have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures and the conformity to authentic originals of all documents submitted to us as copies or facsimile transmissions and the completeness and accuracy of all the Company’s corporate records in our possession as of the date hereof. We have also assumed the legal capacity for all purposes relevant hereto of all natural persons and, with respect to all parties to agreements or instruments relevant hereto other than the Company, that such parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform such agreements or instruments, that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise), executed and delivered by such parties and that such agreements or instruments are the legal, valid, binding and enforceable obligations of such parties. As to questions of fact material to our opinions, we have relied upon the Officer’s Certificate Company and certificates of public officials. We have not undertaken any independent investigation to verify the accuracy or completeness of any of the foregoing assumptions.

On the basis of such examination, our reliance upon the assumptions in this opinion and our consideration of these questions of law we considered relevant and subject to the limitations and qualifications in this opinion, we are of the opinion that:

1. In respect of the Class A Unit Shares, when (i) the Registration Statement, as finally amended, has become effective under the Act, and (ii) such Class A Unit Shares have been duly issued and delivered against payment of the consideration therefor as contemplated by the Registration Statement and Prospectus and any applicable agreements or corporate actions relating thereto, such Class A Unit Shares will be validly issued as fully paid and non-assessable shares in the capital of the Company.

2. In respect of the Long-Term Warrants, when (i) the Registration Statement, as finally amended, has become effective under the Act, (ii) the Indenture to be entered into in connection with the issuance of the Long-Term Warrants has been duly authorized, executed and delivered by each party thereto, (iii) the terms of the Long-Term Warrants have been duly established in conformity with the Indenture and applicable law and authorized by all necessary corporate action of the Company so as not to violate any applicable law or the Constating Documents, (iv) the Warrant Shares issuable upon exercise of the Long-Term Warrants have been duly authorized and reserved for issuance, and (v) the Long-Term Warrants have been duly executed, delivered, countersigned, issued and sold against payment therefor in accordance with the provisions of the Indenture, the Long-Term Warrants will constitute the valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms.

3. In respect of the Short-Term Warrants, when (i) the Registration Statement, as finally amended, has become effective under the Act, (ii) the Indenture to be entered into in connection with the issuance of the Short-Term Warrants has been duly authorized, executed and delivered by each party thereto, (iii) the terms of the Short-Term Warrants have been duly established in conformity with the Indenture and applicable law and authorized by all necessary corporate action of the Company so as not to violate any applicable law or the Constating Documents, (iv) the Warrant Shares issuable upon exercise of the Short-Term Warrants have been duly authorized and reserved for issuance, and (v) the Short-Term Warrants have been duly executed, delivered, countersigned, issued and sold against payment therefor in accordance with the provisions of the Indenture, the Short-Term Warrants will constitute the valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms.

4. In respect of the Pre-Funded Warrants, when (i) the Registration Statement, as finally amended, has become effective under the Act, (ii) the Warrant Certificates to be issued by the Company in connection with the issuance of the Pre-Funded Warrants each have been duly authorized, executed and delivered by the Company, (iii) the terms of the Pre-Funded Warrants have been duly established in conformity with applicable law and authorized by all necessary corporate action of the Company so as not to violate any applicable law or the Constating Documents, (iv) the Warrant Shares issuable upon exercise of the Pre-Funded Warrants have been duly authorized and reserved for issuance, and (v) the Pre-Funded Warrants have been duly executed, delivered, issued and sold against payment therefor in accordance with the provisions of the Warrant Certificates, the Pre-Funded Warrants will constitute the valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms

The opinions expressed herein are subject to the following exceptions, qualifications and limitations: (a) they are limited by the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or

similar law and principles affecting creditors’ rights generally, including without limitation fraudulent transfer or fraudulent conveyance laws, and (b) they are limited by the effect of general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing) and the availability of equitable remedies (including, without limitation, specific performance and equitable relief), regardless of whether considered in a proceeding in equity or at law.

This opinion has been prepared for use in connection with the filing of the Registration Statement. We assume no obligation to advise you of any changes in the foregoing subsequent to the effective date of the Registration Statement.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the Prospectus forming a part of the Registration Statement under the caption “Legal Matters.” In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, and the rules and regulations thereunder.

Yours truly,

Dentons Canada LLP

/s/Dentons Canada LLP

EX-23.1 6 a2229241zex-23_1.htm EX-23.1

Exhibit 23.1

Consent of Independent Registered Chartered Accountants

We consent to the reference to our firm under the caption “Experts” in Amendment No. 1 to in the Registration Statement (Form F-1) and related Prospectus of DragonWave Inc. for the registration of Class A Units each consisting of one common share (no par value), two short-term warrants and one long-term warrant (each to purchase common shares), as well as Class B Units each consisting of one pre-funded warrant, two short-term warrants and one long-term warrant (each to purchase common shares), and to the incorporation by reference therein of our reports dated May 18, 2016, with respect to the consolidated financial statements of DragonWave Inc., and May 12, 2015 with respect to the consolidated financial statements and the effectiveness of internal control over financial reporting of DragonWave Inc., included in its Annual Report (Form 20-F) for the year ended February 29, 2016, filed with the Securities and Exchange Commission.

	/s/ Ernst & Young LLP
Ottawa, Canada	Chartered Professional Accountants
July 28, 2016	Licensed Public Accountants

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