Exhibit 99.1
34,800,000 COMMON SHARES and
34,800,000 Warrants of
POET TECHNOLOGIES INC.
PLACEMENT AGENCY AGREEMENT
October 28, 2016
H.C. Wainwright & Co., LLC
As the Representative of the
Several Placement Agents named in Schedule I hereto
430 Park Avenue, 4th Floor
New York, New York 10022
Ladies and Gentlemen:
The undersigned, Poet Technologies Inc., a company
incorporated under the laws of the Province of Ontario, 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 Poet Technologies
Inc., the “Company”), hereby confirms its agreement (this “Agreement”) with the several placement
agents (such placement agents, including the Representative (as defined below), the “Placement Agents” and each
a “Placement Agent”) named in Schedule I hereto for which H.C. Wainwright & Co., LLC is acting as
representative to the several Placement Agents (the “Representative”) and Cormark Securities Inc. (as lead placement
agent in Canada) on the terms and conditions set forth herein.
It is understood that the several Placement
Agents are to make a public offering of the Closing Securities (as defined below) as soon as the Representative deems it advisable
to do so. The Closing Securities are to be offered on a reasonable “best efforts” basis for sale by the Company to
the public at the public offering price set forth in the Prospectus.
It is further understood that H.C. Wainwright
& Co., LLC will act as the representative for the Placement Agents in the Offering (as defined below) and sale of the Closing
Securities (other than those placed by limited dealers in Canada), if any.
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(k).
“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 Canada or any day
on which banking institutions in the State of New York or the Province of Ontario are authorized or required by law or other governmental
action to close.
“Canadian Base Shelf Prospectus”
means the short form base shelf prospectus of the Company dated October 6, 2016 and filed with the securities regulatory authorities
in each Canadian Jurisdiction providing for the offer and sale, from time to time, of up to $50,000,000 of the Company’s
common shares, debt securities, convertible securities, subscription receipts, warrants, rights or units.
“Canadian Jurisdiction”
means each province of Canada other than Quebec.
“Canadian Prospectus”
means, together, the Canadian Base Shelf Prospectus, the Canadian Preliminary Prospectus and the Canadian Prospectus Supplement.
“Canadian Prospectus Supplement”
means each prospectus supplement to the Canadian Base Shelf Prospectus filed or to be filed with the securities regulatory authorities
in each Canadian Jurisdiction to qualify for distribution the Securities in each Canadian Jurisdiction.
“Canadian Disclosure Record”
means the public disclosure of the Company filed on the System for Electronic Document Analysis and Retrieval since January 1,
2013.
“CFPOA” means the
Corruption of Foreign Public Officials Act (Canada).
“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 Placement Agents’ obligations
to forward the Closing Purchase Price from the investors to the Company 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 different time as shall be agreed upon by the Representative and the
Company.
“Closing Purchase Price”
shall have the meaning ascribed to such term in Section 2.1(b).
“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).
“Combined Purchase Price”
shall have the meaning ascribed to such term in Section 2.1(b).
“Commission” means
the United States Securities and Exchange Commission as well as the Ontario Securities Commission.
“Common Share”
means a common share in the capital 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 Marcum LLP, with offices located at City Place II, 185 Asylum Street, 17th Floor, Hartford, Connecticut 06103.
“Company Canadian Counsel”
means Bennett Jones LLP, with offices located at 3400 One First Canadian Place, P.O. Box 130, Toronto, Ontario M5X 1A4.
“Company US Counsel”
means Katten Muchin Rosenman LLP, with offices located at 525 West Monroe Street, Chicago, Illinois 60661.
“Disclosure Record”
means, together, the SEC Reports and the Canadian Disclosure Record.
“Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently herewith.
“Effective Date”
shall have the meaning ascribed to such term in Section 3.1(f).
“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”
shall mean 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 stock or
option plan duly adopted for such purpose by the Board of Directors, (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,
and (c) securities issued pursuant to acquisitions of businesses (or securities or assets thereof) or other strategic transactions
approved by the Board of Directors, provided that any such issuance 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.
“IFRS” 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 $100,000 (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 $100,000 due under leases required to be capitalized
in accordance with IFRS.
“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 D attached hereto, delivered on the date hereof by each of the Company’s
officers and directors.
“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).
“PCMLTFA” means
the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada).
“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.
“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, together with the Prospectus Supplement.
“Prospectus Supplement”
means, if any, any preliminary or final supplement to the Prospectus which discloses the proposed terms of the Offering, the public
offering price and other terms of the Securities and is filed with the Commission pursuant to General Instruction II.L of Form
F-10.
“Registration Statement”
means, collectively, the various parts of the registration statement prepared by the Company on Form F-10 (File No. 333-213422)
with respect to the Securities, each as amended as of the date hereof, including the Prospectus and Prospectus Supplement, if any,
and all exhibits filed with or incorporated by reference into such registration statement, including all information deemed part
of the Registration Statement pursuant to applicable rules of the Commission under the Securities Act.
“Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).
“SEC Reports” shall
have the meaning ascribed to such term in Section 3.1(i).
“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.
“Share Purchase Price”
shall have the meaning ascribed to such term in Section 2.1(b).
“Shares” means,
collectively, the Common Shares delivered to the Placement Agents in accordance with Section 2.1(a)(i).
“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.
“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 Toronto Stock Exchange, the TSX Venture Exchange, or the OTCQX (or any successors to any of the foregoing).
“Transaction Documents”
means this Agreement, the Warrants, the Lock-Up Agreements, and any other documents or agreements executed in connection with the
transactions contemplated hereunder.
“Transfer Agent”
means TSX Trust Company., with offices located at 200 University Avenue, Suite 300, Toronto, Ontario M5H 4H1, and facsimile number
of 416-361-0470, and any successor transfer agent of the Company.
“Warrant Purchase Price”
shall have the meaning ascribed to such term in Section 2.1(b).
“Warrant Shares”
means the Common Shares issuable upon exercise of the Warrants.
“Warrants” means,
collectively, the Common Share purchase warrants delivered to the Placement Agents in accordance with Section 2.1(a)(ii), which
Warrants shall be exercisable immediately and have a term of exercise equal to five (5) years, each in the form of Exhibit A
attached hereto.
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 to investors introduced to the Company
by the Placement Agents:
(i)
The number of Common Shares (the “Closing Shares”) set forth on Schedule I hereof; and
(ii)
Warrants to purchase the number of Common Shares set forth on Schedule I hereof (the “Closing Warrants”
and, collectively with the Closing Shares, the “Closing Securities”), which Warrants shall have an exercise
price of $Cdn 0.52 per Common Share, subject to adjustment as provided in the Warrants.
For clarity, the Placement Agents are not committed to
purchase any of the Closing Securities for their own accounts, but are transmitting orders solicited by them.
(b)
The aggregate purchase price for the Closing Securities shall equal the amount set forth on Schedule I hereto (the “Closing
Purchase Price”). The combined purchase price for one Common Share and a Warrant to purchase one Warrant Share shall
be $Cdn 0.36 (the “Combined Purchase Price”).
(c)
On the Closing Date, the Representative, on behalf of the investors, shall deliver or cause to be delivered to the Company, via
wire transfer, immediately available funds equal to the Closing Purchase Price (less the Placement Agents’ commissions and
expenses as set forth in Section 4.5) 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 2.3 deliverable at the Closing. Upon satisfaction of
the covenants and conditions set forth in Sections 2.3 and 2.4, 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 sold to the public at the offering price
set forth on the cover page of the Prospectus Supplement (the “Offering”). At the request of the Company, the
Representative shall deliver the Closing Purchase Price to the Company in the form of United States Dollars, which shall be at
the exchange rate provided to the Representative by its clearing firm, ICBC on the Closing Date. The Company agrees that such payment
in United States Dollars shall constitute payment in full of the Closing Purchase Price.
2.2
RESERVED.
2.3
Deliveries. The Company shall deliver or cause to be delivered to each Placement Agent (if applicable) the following:
(i)
At the Closing Date, the Closing Shares, which shall be delivered via The Depository Trust Company’s Deposit and Withdrawal
at Custodian system or the Canadian Depository for Securities for the accounts of the several Placement Agents;
(ii)
At the Closing Date, the Closing Warrants, which shall be delivered in certificated form registered in the name or names and in
such authorized denominations as directed at least two days prior to the Closing Date as directed by the several Placement Agents;
(iii)
At the Closing Date, a legal opinion of Company Canadian Counsel addressed to the Placement Agents, substantially in the form of
Exhibit C-1 attached hereto;
(iv)
At the Closing Date, a legal opinion of Company US Counsel addressed to the Placement Agents, including, without limitation, a
negative assurance letter, substantially in the form of Exhibit C-2 attached hereto;
(v)
Contemporaneously herewith, a cold comfort letter, addressed to the Placement Agents and in form and substance satisfactory in
all respects 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;
(vi)
On the Closing Date, the duly executed and delivered Officer’s Certificate, in a form acceptable to the Agents, acting reasonably;
(vii)
On the Closing Date, the duly executed and delivered Secretary’s Certificate, in a form acceptable to the Agents, acting
reasonably; and
(viii)
Contemporaneously herewith, the duly executed and delivered Lock-Up Agreements.
2.4
Closing Conditions. The respective obligations of each Placement Agent 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 2.3 of this Agreement;
(iv)
the Registration Statement shall be effective on the date of this Agreement and at the Closing Date, 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 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)
the Closing Shares and the Warrant Shares have been approved for listing on the TSX Venture Exchange; and
(vi)
prior to and on the Closing Date: (i) there shall have been no 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, Prospectus and Canadian Prospectus; (ii) no Action, suit or Proceeding, at law or in equity, shall
have been pending or threatened against the Company or any Affiliate of the Company before or by any court or federal, state or
provincial commission, board or other administrative agency wherein an unfavorable decision, ruling or finding would be reasonably
likely to materially adversely affect the business, operations, prospects or financial condition or income of the Company, except
as set forth in the Registration Statement, Prospectus and Canadian Prospectus; (iii) no stop order under the Securities Act
shall have been issued with respect to the Registration Statement and no Proceedings therefor shall have been initiated or threatened
by the Commission; (iv) no order of any securities commission, securities regulatory authority or stock exchange in Canada to cease
distribution of the Securities under the Canadian Prospectus, as amended or supplemented, shall have been issued and no Proceedings
for such purpose shall have been instituted or, to the knowledge of the Company, threatened; and (v) the Registration Statement,
the Prospectus, the Canadian 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 applicable Canadian
securities laws and shall conform in all material respects to the requirements of the Securities Act and the rules and regulations
thereunder and applicable Canadian securities laws, and neither the Registration Statement, the Prospectus, the Canadian Prospectus,
in each case as amended or supplemented as applicable, 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. Except as set forth in the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained
in the corresponding section of the Disclosure Schedules, the Company represents and warrants to the Placement Agents as of the
Execution Date and as of the Closing Date as follows:
(a)
Subsidiaries. All of the direct and indirect Subsidiaries of the Company are set forth in the SEC Reports and the Canadian
Disclosure Record. The Company owns, directly or indirectly, all of the capital stock or other equity interests 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.
(b)
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 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.
(c)
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 stockholders 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 and
public policy with respect thereto.
(d)
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, or (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, state and provincial 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 could not have or reasonably be expected to result in a Material Adverse Effect.
(e)
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, provincial, 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 Supplement, and (ii) such filings and approvals as are required
to be made with and obtained from the TSX Venture Exchange, and (iii) such filings as are required to be made under applicable
state securities laws (collectively, the “Required Approvals”).
(f)
Registration Statement and Prospectuses.
(i)
The Company has filed with the Commission the Registration Statement under the Securities Act, which became effective on October
11, 2016 (the “Effective Date”), for the registration under the Securities Act of the Securities. At the time
of such filing, the Company met the requirements of Form F-10 under the Securities Act. The Company has advised the Representative
of all further information (financial and other) with respect to the Company required to be set forth therein in the Registration
Statement and Prospectus Supplement. Any reference in this Agreement to the Registration Statement, the Prospectus or the Prospectus
Supplement shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 4 of Form F-10
which were filed under the Exchange Act, on or before the date of this Agreement, or the issue date of the Prospectus or the Prospectus
Supplement, as the case may be.
(ii)
The Canadian Base Shelf Prospectus and the Canadian Prospectus Supplement complied as of the time of filing thereof, and any further
amendments or supplements thereto will comply, in all material respects with the applicable requirements of the applicable Canadian
securities laws; the Canadian Prospectus, as of the time of filing thereof, did not, and any further amendments or supplements
thereto will not, as of the time of filing thereof and through the Closing Date include any untrue statement of a material fact
or omit to state a material fact that is required to be stated or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not false or misleading, and the Canadian Prospectus, as of the time of filing thereof,
constituted, and any further amendments or supplements thereto will, as of the time of filing thereof and through the Closing Date
constitute, full, true and plain disclosure of all material facts relating to the Securities and to the Company.
(iii)
Any reference in this Agreement to the terms “amend,” “amendment” or “supplement” with respect
to the Registration Statement, the Prospectus, the Prospectus Supplement or the Canadian Prospectus Supplement shall be deemed
to refer to and include (a) the filing of any document under the Exchange Act after the date of this Agreement, or the issue date
of the Prospectus or the Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference, and (b) the
filing of any document under applicable Canadian securities laws after the date of this Agreement, or the date of the Canadian
Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference.
(iv)
All references in this Agreement to financial statements and schedules and other information which is “contained,”
“included,” “described,” “referenced,” “set forth” or “stated” in the
Registration Statement, the Prospectus, the Prospectus Supplement or the Canadian Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement, the Prospectus, the Prospectus Supplement or the Canadian Prospectus,
as the case may be. No stop order suspending the effectiveness of the Registration Statement or the use of the Prospectus or the
Prospectus Supplement has been issued, and no Proceeding for any such purpose is pending or has been initiated or, to the knowledge
of the Company, is threatened by the Commission. No order of any securities commission, securities regulatory authority or stock
exchange in Canada to cease distribution of the Securities under the Canadian Prospectus, as amended or supplemented, has been
issued and no Proceedings for such purpose have been initiated or, to the knowledge of the Company, threatened.
(v)
For purposes of this Agreement, “Free Writing Prospectus” has the meaning set forth in Rule 405 under the Securities
Act. The Company will not, without the prior consent of the Representative, prepare, use or refer to, any Free Writing Prospectus.
(g)
Issuance of Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, the Closing Shares will be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company. The Warrants, when issued and paid for in accordance with this Agreement, will be duly and validly
issued, valid and binding obligations of the Company, free and clear of all Liens imposed by the Company. The Warrant Shares, when
issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of Common Shares
issuable pursuant to this Agreement 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 Securities has been duly and validly taken. The Securities conform in all material respects to all statements
with respect thereto contained in the Registration Statement and the Canadian Prospectus.
(h)
Capitalization. The capitalization of the Company is as set forth in the SEC Reports and the Canadian Disclosure Record.
The Company has not issued any share capital since its most recently filed periodic report under the Exchange Act, other than pursuant
to the exercise of employee stock options under the Company’s stock option plans, the issuance of Common Shares to employees
pursuant to the Company’s employee stock purchase plans 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 a result of the purchase and sale of the Securities and as set forth in the SEC Reports and the
Canadian Disclosure Record, 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. 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 Placement Agents) 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. All of the outstanding share in the capital of the Company are duly authorized,
validly issued, fully paid and nonassessable, have been issued in compliance with all federal, state and provincial 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, the Prospectus and the Canadian 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, qualified
for distribution in Canada pursuant to a valid prospectus or, based in part on the representations and warranties of the purchasers,
exempt from such registration or prospectus requirements. No further approval or authorization of any stockholder, the Board of
Directors or others is required for the issuance and sale of the Securities as provided herein. There are no shareholders agreements,
voting agreements or other similar agreements with respect to the Company’s share capital to which the Company is a party.
(i)
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. 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 (including, to the extent applicable, requirements under the Canada-U.S.
Multijurisdictional Disclosure System), 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 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 International
Financial Reporting Standards applied on a consistent basis during the periods involved (“IFRS”), 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 IFRS, 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, year-end audit adjustments. The agreements and documents described
in the Registration Statement, the Prospectus, the Prospectus Supplement, the Canadian Prospectus and the Disclosure Record conform
in all material respects 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 or applicable Canadian securities laws to be described in the Registration
Statement, the Prospectus, the Prospectus Supplement, the Canadian Prospectus 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, the Canadian Prospectus or the Disclosure
Record, 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 (a) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (b) as enforceability of any indemnification or
contribution provision may be limited under the federal and state securities laws and public policy with respect thereto, and (c) 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, except in each case as would not reasonably be expected to
have a Material Adverse Effect. 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, except in each case as would not reasonably be expected to have a Material
Adverse Effect.
(j)
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 could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any material 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 IFRS 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 of its share
capital, (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing
Company stock option 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 or 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 share capital.
(k)
Litigation. Except as noted below and as set out in the Prospectus and the Canadian Prospectus, 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) if there were an unfavorable decision, would have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any Subsidiary, nor any current director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal, state or provincial 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 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. The Representative has been advised by the Company of the fact that POET was under investigation for potential
violations of the False Claim Act (“FCA”) related to the SBIR grants received by the Company. Conversations between
NASA, the U.S. Attorney’s Office (“USAO”) and POET’s lawyers occurred in early October 2016, where the
USAO indicated that is conducting an investigation into where the structure of ODIS was misleading.
(l)
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 could reasonably be expected 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, in each case except as would not reasonably be
expected to have a Material Adverse Effect. The Company and its Subsidiaries are in compliance with all federal, state, provincial,
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 could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(m)
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 has been in violation of any statute, rule, ordinance
or regulation of any governmental authority, including without limitation all foreign, federal, state, provincial 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 reasonably be expected to result in a Material Adverse Effect.
(n)
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 Disclosure Record, 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 federal, state, provincial, local and all foreign regulation on the Company’s business as currently
contemplated are correct in all material respects.
(o)
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
IFRS, 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.
(p)
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 Disclosure
Record and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) 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 Disclosure Record, 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. All such Intellectual Property Rights
are enforceable and, to the knowledge of the Company, there is no existing infringement by another Person of any of the Intellectual
Property Rights. 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.
(q)
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.
(r)
Transactions With Affiliates and Employees. Except as set forth in the Disclosure Record, 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, stockholder, member or partner,
in each case in excess of $100,000 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 stock option agreements under any stock
option plan of the Company.
(s)
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. 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 IFRS 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. If required under the Exchange Act,
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”). If required under the Exchange Act, 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.
(t)
Certain Fees. Except as set forth in the Prospectus Supplement and the Canadian Prospectus, no brokerage or finder’s
fees or commissions are or will be payable by the Company, any Subsidiary or 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 stockholders that may affect the Placement Agents’ 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, in each case within the twelve
months prior to the Execution Date, other than the prior payment of $25,000 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.
(u)
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, 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 an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.
(v)
Registration Rights. 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.
(w)
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. 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.
(x)
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 state of incorporation that is or could become applicable as a result of the Placement Agents
and the Company fulfilling their obligations or exercising their rights under the Transaction Documents.
(y)
Disclosure; 10b-5. The Registration Statement (and any further documents to be filed with the Commission) 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 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 incorporated by reference into the Prospectus, 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 the 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 the 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 or under applicable Canadian securities laws in connection with the transaction contemplated hereby that
(a) have not been filed as required pursuant to the Securities Act or applicable Canadian securities laws or (b) will not be filed
within the requisite time period. There are no contracts or other documents required to be described in the Prospectus, Prospectus
Supplement or Canadian Prospectus, or to be filed as exhibits or schedules to the Registration Statement, which have not been described
or filed as required. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement
taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when
made, not misleading.
(z)
No Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has,
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.
(aa)
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the
receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. 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 Disclosure Record sets
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 commitments.
(bb)
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, Canadian
federal, provincial 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 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 or Canadian Prospectus 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, provincial, 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.
(cc)
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 the FCPA or the CFPOA. 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 and the CFPOA.
(dd)
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 December 31, 2016. The Company Auditor has not, during the periods
covered by the financial statements included in the Prospectus, provided to the Company any non-audit services, as such term is
used in Section 10A(g) of the Exchange Act.
(ee)
[RESERVED]
(ff)
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.
(gg)
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.
(hh)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System
(the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%)
or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(ii)
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, the PCMLTFA, 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.
(jj)
[RESERVED]
(kk)
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) that is participating in the Offering. The Company will advise the Representative and EGS if it learns that any officer,
director or owner of 5% or more of the Company’s outstanding Common Shares or Common Share Equivalents is or becomes an affiliate
or associated Person of a FINRA member firm.
(ll)
Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Representative
or EGS shall be deemed a representation and warranty by the Company to the Placement Agents as to the matters covered thereby.
(mm)
Board of Directors. The Board of Directors is comprised of the Persons set forth in the Company’s Annual Report on
Form 20-F for the fiscal year ended December 31, 2015 under the caption of “Directors, Senior Management and Employees.”
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.
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 and the rules of the Trading Market. In addition, if
applicable, 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. The Company has delivered, or will as promptly as practicable deliver, to the Placement Agents 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, each Prospectus Supplement and the Canadian
Prospectus, as amended or supplemented, in such quantities and at such places as an Placement Agent 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 preliminary or
final Prospectus Supplement, the Canadian Prospectus, 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.
4.2
Securities Laws.
(a)
Compliance. During the time when a Prospectus is required to be delivered under the Securities Act, the Company will use
its commercially reasonable 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 Placement Agents,
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 Placement Agents 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)
Material Changes. During the period prior to the completion of the distribution of the Securities, the Company will comply
with section 57 of the Securities Act (Ontario) and with the comparable provisions of applicable securities laws on the Canadian
Jurisdictions, and the Company will prepare and file promptly at the request of the Placement Agents any supplementary material
that, in the opinion of the Placement Agents, may be necessary or advisable, and will otherwise comply with all legal requirements
necessary to continue to qualify the Securities for distribution in each Canadian Jurisdiction.
(c)
Filing of Prospectus Supplements. The Company will file each Prospectus Supplement (in form and substance satisfactory to
the Representative) with the Commission pursuant to the requirements of General Instruction II.L of Form F-10 and the Canadian
Prospectus Supplement with each securities regulatory authority in the Canadian Jurisdictions pursuant to the requirements of National
Instrument 44-102.
(d)
Exchange Act Registration. From the Execution Date until the later of (i) three years from the Execution Date or (ii) the
date on which no Warrants remain outstanding (the “Exchange Act Registration Period”), the Company will use
its commercially reasonable best efforts to maintain the registration of the Common Shares under the Exchange Act. The Company
will not deregister the Common Shares under the Exchange Act without the prior written consent of the Representative.
(e)
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 Placement Agents of Prospectuses. The Company will deliver to the Placement Agents, without charge, from
time to time during the period when the Prospectus is required to be delivered under the Securities Act, the Exchange Act or applicable
Canadian securities laws, which delivery requirement may be satisfied electronically unless a Placement Agent reasonably requests
printed copies of such Prospectus and Canadian Prospectus, such number of copies of each Prospectus and the Canadian Prospectus
as the Placement Agents may reasonably request and, as soon as the Registration Statement or any amendment or supplement thereto
becomes effective, deliver to the Representative two original executed Registration Statements, including exhibits, and all post-effective
amendments thereto and copies of all exhibits filed therewith or incorporated therein by reference and all original executed consents
of certified experts.
4.4
RESERVED.
4.5
Expenses Related to the Offering.
(a)
Commissions. The Company shall pay the Placement Agents a commission of seven percent (7.0%) of the aggregate gross Offering
proceeds on gross Offering proceeds up to and including $10,000,000, and four percent (4.0%) on incremental gross Offering proceeds
in excess of $10,000,000. Such commissions may be deducted (together with the expense noted in the following subsection) from the
Offering proceeds remitted to the Company by the Representative at Closing.
(b)
General Expenses Related to the Offering. The Company hereby agrees to pay on 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 (including the Option Securities)
with the Commission; (b) all FINRA Public Offering Filing System fees associated with the review of the Offering by FINRA if applicable;
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; (c) 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 (including, without limitation, all filing and registration fees, and the fees and
expenses of Blue Sky counsel); (d) the costs of all mailing and printing of the underwriting documents (including, without limitation,
this Placement Agency Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Placement Agents or Selected Dealers’
Agreement), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary
and final Prospectuses as the Representative may reasonably deem necessary; (e) the costs of preparing, printing and delivering
the Securities; (f) fees and expenses of the Transfer Agent and any warrant agent for the Securities (including, without limitation,
any fees required for same-day processing of any instruction letter delivered by the Company); (g) stock transfer and/or stamp
taxes, if any, payable upon the transfer of securities from the Company to the Placement Agents or from the Placement Agents to
several accounts of the ultimate investors; (h) the fees and expenses of the Company’s accountants; (i) the fees and expenses
of the Company’s legal counsel and other agents and representatives; (j) up to $10,000 with respect to the fees and expenses
of Representative’s clearing firm; and (k) the Placement Agents’ costs of mailing prospectuses to prospective investors.
The Placement Agents may also deduct from the net proceeds of the Offering payable to the Company on the Closing Date, the expenses
set forth herein to be paid by the Company to the Placement Agents.
(c)
Expenses of the Representative. The Company further agrees that, in addition to the expenses payable pursuant to Section
4.5(b), on the Closing Date, the Company will pay to the Representative a non-accountable expense allowance of $150,000, of which
$25,000 has been paid prior to the date hereof (and which shall be reimbursed to the extent not incurred pursuant to FINRA Rule
5110(f)(2)(D)), 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 and the Canadian Prospectus.
4.7
Delivery of Earnings Statements to Security Holders. The Company will make generally available to its security holders,
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. During the Exchange Act Registration Period, the Company will maintain a system of internal accounting
controls designed 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 IFRS 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 during
the Exchange Act Registration Period. The Placement Agents acknowledge that the Company Auditor is acceptable to the Placement
Agents.
4.11
FINRA. The Company shall advise the Placement Agents (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 Placement Agent.
4.12
No Fiduciary Duties. The Company acknowledges and agrees that the Placement Agents’ responsibility to the Company
is solely contractual and commercial in nature, based on arms-length negotiations, and that neither the Placement Agents 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 Placement Agents 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 purchase
price paid to the Company by the Placement Agents for the shares and the Placement Agents 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 Placement Agents 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. If at any time following the date hereof the Registration Statement (or any subsequent
registration statement registering the sale or resale of the Warrant Shares) is not effective or is not otherwise available for
the issuance of the Warrant Shares upon exercise of the Warrants, the Company shall promptly notify the holders of the Warrants
in writing that such registration statement is not then effective and thereafter shall promptly notify such holders when the registration
statement is effective again and available for the issuance of the Warrant Shares upon exercise of the Warrant (it being understood
and agreed that the foregoing shall not limit the ability of the Company to issue, or any holder thereof to sell, any of the Warrant
Shares in compliance with applicable federal and state securities laws).
4.14
Board Composition and Board Designations. During the Exchange Act Registration Period, the Company shall use its commercially
reasonable best efforts to 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, as and to the extent applicable, 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. 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
Placement Agent 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 Placement Agent, or without the prior consent of such Placement Agent, 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. The Company will not issue press releases or engage in any other publicity, without the Representative’s
prior written consent, for a period ending at 5:00 p.m. (New York City time) on the first Business Day following the 40th day following
the Closing Date, other than normal and customary releases issued in the ordinary course of the Company’s business or as
may be required pursuant to the Company’s continuous disclosure obligations.
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 Placement Agent or purchaser 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 Placement Agent or purchaser of Securities could 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 Warrant Shares pursuant to any exercise of the Warrants.
4.18
Listing of Common Shares. During the Exchange Act Registration Period, the Company hereby agrees to use commercially reasonable
best efforts to maintain the listing or quotation of the Common Shares on the Trading Market on which it is currently listed, provided
that, for greater certainty, the foregoing shall not prevent the Company from pursuing or participating in any transaction involving
a change of control that would result in the Company ceasing to maintain such listing or quotation, 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. During the Exchange Act Registration Period, the Company
will then take all action reasonably necessary to continue the listing and trading of its Common Shares on a Trading Market 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
Subsequent Equity Sales.
(a)
From the date hereof until 180 days following the Closing Date, 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.
(b)
From the date hereof until 180 days following the Closing Date, the Company shall be prohibited from effecting or entering into
an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Shares or Common Share Equivalents (or
a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction
in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for,
or include the right to receive, additional Common Shares either (A) at a conversion price, exercise price or exchange rate or
other price that is based upon, and/or varies with, the trading prices of or quotations for the Common Shares at any time after
the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to
being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified
or contingent events directly or indirectly related to the business of the Company or the market for the Common Shares or (ii)
enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the
Company may issue securities at a future determined price. Any Placement Agent shall be entitled to obtain injunctive relief against
the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.
(c)
Notwithstanding the foregoing, this Section 4.19 shall not apply in respect of an Exempt Issuance, except that no Variable Rate
Transaction shall be an Exempt Issuance.
4.20
Research Independence. The Company acknowledges that each Placement Agent’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 Placement Agent’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
Placement Agent 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 Placement Agent’s investment banking divisions. The Company acknowledges that each Placement Agent 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.
ARTICLE V.
RESERVED
5.1 RESERVED
ARTICLE VI.
INDEMNIFICATION
6.1
Indemnification of the Placement Agents. Subject to the conditions set forth below, the Company agrees to indemnify and
hold harmless each Placement Agent, and each dealer selected by each Placement Agent 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 Placement Agent 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 Placement Agent and the Company or between such Placement Agent 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) the Registration Statement, the Prospectus or the Canadian 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 light of the circumstances under
which they were made, not misleading, unless, in each case, such statement or omission was made in reliance upon and in conformity
with written information furnished to the Company with respect to the applicable Placement Agent by or on behalf of such Placement
Agent expressly for use in the Registration Statement, the Prospectus or the Canadian Prospectus, or any amendment or supplement
thereto, or in any application, as the case may be. The Company agrees promptly to notify each Placement Agent 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, the Prospectus or the Canadian Prospectus.
6.2
Procedure. If any Action is brought against an Placement Agent, a Selected Dealer or a Controlling Person in respect of
which indemnity may be sought against the Company pursuant to Section 6.1, such Placement Agent, 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 Placement
Agent or such Selected Dealer, as the case may be) and payment of actual expenses. Such Placement Agent, 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 Placement Agent, 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, upon the advice of counsel, 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 Placement Agent (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 Placement Agent, 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 Placement Agent 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 Placement Agent, as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions made in 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
Placement Agent by or on behalf of such Placement Agent expressly for use in the Registration Statement, Prospectus or the Canadian
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 the Registration Statement, the Prospectus or the Canadian Prospectus or any amendment
or supplement thereto or any application, and in respect of which indemnity may be sought against such Placement Agent, such Placement
Agent 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 Placement Agent by the provisions of this Article VI. Notwithstanding the provisions of this Section
6.3, no Placement Agent 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 Placement Agent. The Placement Agents' 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 Placement Agent, 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 Placement Agent, as incurred, in such proportions that such Placement Agent 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. For purposes of this Section, each director, officer and employee of such Placement Agent
or the Company, as applicable, and each Person, if any, who controls such Placement Agent or the Company, as applicable, within
the meaning of Section 15 of the Securities Act shall have the same rights to contribution as such Placement Agent or the Company,
as applicable. Notwithstanding the provisions of this Section 6.4, no Placement Agent shall be required to contribute any amount
in excess of the underwriting discounts and commissions applicable to the Securities purchased by such Placement Agent. The Placement
Agents' 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, arrived
at acting reasonably, 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, the securities
regulatory authorities in the Canadian Jurisdictions 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 or Canadian 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 a previously undisclosed material
adverse change in the conditions of the Company, or a adverse material change in general market conditions such 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 Placement Agents with investors 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 the Representative’s legal counsel up to $37,500 (provided, however, that such expense cap
in no way limits or impairs the indemnification and contribution provisions of this Agreement).
(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, the Prospectus
Supplement and the Canadian Prospectus, 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. Notwithstanding anything herein to the contrary, the
Engagement Agreement, dated June 15, 2016 (“Engagement Agreement”), between the Company and Rodman & Renshaw,
a unit of the Representative, shall continue to be effective and the terms therein, including, without limitation, Section A.1
and Section A.3 with respect to any future offerings, shall continue to survive and be enforceable by the Representative in accordance
with its terms, provided that, in the event of a conflict between the terms of the Engagement Agreement and this Agreement, the
terms of this Agreement shall prevail.
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 e-mail attachment 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 e-mail attachment 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 Option Closing, if any,
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 Placement Agents 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 Pages Follow)
If the foregoing correctly sets forth the understanding
between the Placement Agents 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 Placement Agents in accordance with its terms.
Very truly yours,
POET TECHNOLOGIES INC.
By: /s/ Suresh Venkatesan
Name: Suresh Venkatesan
Title: CEO
Address for Notice:
121 Richmond Street West, Suite 501
Toronto, Ontario, M5H 2K1, Canada
Attention: Suresh Venkatesan
E-mail: svv@poet-technologies.com
Facsimile: None
Copy to:
3400 One First Canadian Place
P.O. Box 130, Toronto, Ontario, M5X 1A4, Canada
Attention: James Clare
Email: clarej@bennettjones.com
Facsimile: +1 416 863 1716
Copy to:
525 West Monroe Street
Chicago, Illinois, 60661-3693, United States of America
Attention: Mark Wood
Email: mark.wood@kattenlaw.com
Facsimile: +1 312 902 1061
Accepted on the date first above written.
H.C. WAINWRIGHT & CO., LLC
As the Representative of the several
Placement Agents listed on Schedule I
By: /s/ Mark W. Viklund
Name: Mark W. Viklund
Title: CEO
Address for Notice:
430 Park Avenue, 4th Floor
New York, New York 10022
United States of America
Attention: Mark Viklund
E-mail: notices@hcwco.com
Facsimile: None
Copy to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
United States of America
Facsimile: (212) 401-4741
Attention: Joseph Smith
Confirmed on the date first above written.
CORMARK SECURITIES INC.
By: /s/ Jeff Kennedy
Name: Jeff Kennedy
Title: MD ECM
Address for Notice:
Cormark Securities Inc.
Suite 2800, 200 Bay Street
Toronto, Ontario
M5J 2J2
Facsimile: (416) 943-6496
Attention: Jeff Kennedy
With a copy (which shall not constitute notice) to:
Dentons Canada LLP
77 King Street West, Suite 400
Toronto, Ontario M5K 0A1
Attention: Corey MacKinnon
Facsimile Number: (416) 863-4592
SCHEDULE I
Schedule of Placement Agents
| Placement Agents |
Closing Shares |
Closing Warrants |
Closing Purchase Price |
| |
|
|
|
| H.C. Wainwright |
34,800,000 |
34,800,000 |
$Cdn 12,528,000 ($Cdn 0.36 per Unit) |
| & Co., LLC and |
|
|
| Cormark Securities |
|
|
| Inc. |
|
|
EXHIBIT A
The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of Section 2(a) hereof, 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.
COMMON SHARE PURCHASE WARRANT
POET TECHNOLOGIES INC.
| Warrant Shares: ______ |
|
Initial Exercise Date: October ___, 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 the date hereof (the
“Initial Exercise Date”) and on or prior to the close of business on the five (5) year anniversary of the Initial
Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Poet Technologies
Inc., a company incorporated under the laws of the province of Ontario, Canada (the “Company”), up to ______
Common Shares (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one Common Share
under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. The following
terms shall have the meanings indicated in this Section 1:
“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 the Province of Ontario are authorized or required by law or other governmental
action to close.
“Commission” means
the United States Securities and Exchange Commission.
“Common Share”
means a common share in the capital 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 share, 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.
“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“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.
“Principal Market”
means the primary Trading Market for the Common Shares, as determined in good faith by the Company. As of the Initial Exercise
Date, such primary Trading Market is TSX Venture Exchange.
“Registration Statement”
means the Company’s Form F-10 (File No. 333-213422).
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“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 business.
“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 Toronto Stock Exchange
or the TSX Venture Exchange, or, if the Common Shares are not listed or quoted for trading on any such securities exchange on the
date in question, OTCQX (or any successors to any of the foregoing).
“Transfer Agent”
means TMX Equity Transfer Services Inc., with offices located at 200 University Avenue, Suite 300, Toronto, Ontario M5H 4H1, and
any successor transfer agent of the Company.
“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 Market as reported by Bloomberg L.P. (based upon the hours the Principal Market is open for regular trading),
(b) if the Common Shares are not then listed or quoted on a Trading Market but are then quoted on OTCQB, the volume weighted
average price of the Common Shares for such date (or the nearest preceding date) on OTCQB, (c) if the Common Shares are not then
listed or quoted for trading on a Trading Market or OTCQB 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 Company, the fees and expenses of which shall be
paid by the Company.
“Warrants” means
this Warrant and the other Common Share Purchase Warrants issued by the Company pursuant to the Registration Statement.
Section 2. Exercise.
a)
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 on or before the Termination 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. Within
the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined
in Section 2(d)(i) herein) following the date of delivery of the Notice of Exercise to the Company as aforesaid, the Holder shall
deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or
certified check or bank draft unless 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 exercise price per Common Share under this Warrant shall be $Cdn0.52, subject to adjustment hereunder
(the “Exercise Price”).
c)
Cashless Exercise. If at the time of exercise hereof (i) there is no effective registration statement registering, or the
prospectus contained therein is not available for, the issuance of the Warrant Shares to the Holder, and (ii) the Company does
not advise the Holder in writing that it can then issue the Warrant Shares to the Holder free of any restrictions on transfer under
the Securities Act upon the exercise of this Warrant on a cash basis, then this Warrant 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 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 for regular trading, the prior Trading Day’s
VWAP shall be used in this calculation, or in the event that the Warrant is exercised on a Trading Day after the close of regular
trading on the Principal Market, such Trading Day’s VWAP will be used in this calculation);
(B) = the Exercise Price of this Warrant, as adjusted
hereunder; and
(X) = the number of Warrant Shares that would be issuable
upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather
than a cashless exercise.
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 registered characteristics of the Warrants being exercised. The
Company agrees not to take any position contrary to that set forth in the immediately preceding sentence.
d)
Mechanics of Exercise.
i.
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted
by the Transfer Agent to the Holder by (x) crediting the account of the Holder’s or its designee’s balance account
with The Depository Trust Company through its Deposit and Withdrawal at Custodian system (“DWAC”), if the Company
is then a participant in such system and the Holder or its designee (as applicable) is a DTC participant, (y) crediting the account
of the Holder’s or its designee’s balance account with CDS Clearing and Depository Services Inc., if the Holder or
its designee (as applicable) is a CDS participant, or (z) delivering a physical certificate representing the Warrant Shares, and
either (A) there is an effective registration statement covering the issuance of the Warrant Shares of the Warrant Shares to the
Holder, (B) the Company has advised the Holder in writing that, even though there is not such an effective registration statement,
the Company can issue the Warrant Shares to the Holder free of any restrictions on transfer under the Securities Act upon the exercise
of this Warrant on a cash basis, or (C) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery
of 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 date that is the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard
Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery
Date”), provided that, in connection with an exercise for cash, the Company shall not be obligated to deliver Warrant
Shares hereunder unless the Company has received the aggregate Exercise Price on or before 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 that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier
of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following the date
of delivery of the Notice of Exercise to the Company, provided further, however, that, if the Holder shall not have delivered the
aggregate Exercise Price by the applicable date, the Holder shall be deemed to be the holder of record on the date that such aggregate
Exercise Price is delivered to the Company. 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 $Cdn1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Shares on
the date of the applicable Notice of Exercise), $Cdn5 per Trading Day (increasing to $Cdn10 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. As used herein, “Standard Settlement Period” means the
standard settlement period, expressed in a number of Trading Days, on the Principal Market with respect to the Common Shares as
in effect on the date of delivery of the Notice of Exercise and set forth therein.
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 to 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 $Cdn11,000 to cover
a Buy-In with respect to an attempted exercise of Common Shares with an aggregate sale price giving rise to such purchase obligation
of $Cdn10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $Cdn1,000.
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 Common 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. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up 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 tax
incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and
all applicable fees to the Depository Trust Company or CDS (or another established clearing corporation performing similar functions)
required for same-day electronic delivery of the Warrant Shares.
vii.
Closing of Books. The Company will not close its shareholder 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 Common Shares issuable upon exercise of this Warrant with respect to which
such determination is being made, but shall exclude the number of Common Shares which 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 nonconverted 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 containedin
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 and shall have no liability for its
issuance of any Warrant Shares in excess of the Beneficial Ownership Limitation to the extent such issuance is in accordance with
a Notice of Exercise submitted by the Holder. 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, 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% (or, upon written
election given by a Holder to the Company at least one Trading Day prior to the issuance of any Warrants to such Holder, 9.99%)
of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Share 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 Common 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 written 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,
as the Holder advises the Company in writing. 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 its Common Shares payable in Common Shares, (ii) subdivides outstanding Common
Shares into a larger number of shares, (iii) combines (including by way of reverse share split) outstanding Common Shares into
a smaller number of shares, or (iv) changes the number of outstanding Common Shares by reclassification of the Common Shares, 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 shares, warrants, securities or other property pro rata to the
record holders of any class 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 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, to the extent permitted by applicable law, 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, to the
extent permitted by applicable law, 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 or consolidation of the Company with or into another Person, (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, (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 Share 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, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Share 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 stock or 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 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 stock
or 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. Notwithstanding anything to
the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s
option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction, purchase
this 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 this Warrant on the date of the consummation of such Fundamental Transaction. “Black Scholes Value”
means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function
on Bloomberg, L.P. (“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 Termination 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 Termination 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). The Company shall cause
any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section
3(e) pursuant to written agreements prior to such Fundamental Transaction. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction,
the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect
as if such Successor Entity had been named as the Company herein.
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 capital stock 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 15 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 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, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form
6-K or issue a press release containing such material non-public information that is broadly disseminated in the United States
and Canada. 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. 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 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. 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 initial
issuance date of this Warrant 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.
Section 5. Miscellaneous.
a)
No Rights as Stockholder 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 to it of the loss, theft, destruction or mutilation of this Warrant or any share certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or share certificate,
if mutilated, the Company will make and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or share certificate.
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) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately
prior to such increase in par value, (ii) 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 (iii) 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)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be governed by and construed and enforced in accordance with the internal laws of the Province of Ontario, without regard to the
principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement
and defense of this Warrant shall be commenced in the state and federal courts sitting in the Province of Ontario (the “Ontario
Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Ontario Courts for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of such Ontario Courts, or such Ontario Courts are improper or inconvenient venue for such proceeding. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Warrant. If any party shall commence an action or proceeding to enforce any
provisions of this Warrant, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its
attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or
proceeding.
f)
Restrictions. The Holder acknowledges that, notwithstanding anything to the contrary contained herein, (i) the Warrant Shares
acquired upon the exercise of this Warrant, if the issuance of such Warrant Shares is not registered and the Holder does not utilize
cashless exercise (an “Unregistered Cash Exercise”), may have restrictions upon resale imposed by state and
federal securities laws, and may bear legends to such effect, as determined in good faith by the Company, (ii) the Holder shall
be obligated to make such representations, and provide such information, as may be reasonably requested by the Company to determine
the availability of, and/or to make available, exemptions from the registration requirements of the Securities Act and applicable
state securities laws in connection with an Unregistered Cash Exercise, and the Company’s obligation to issue Warrant Shares
pursuant to an Unregistered Cash Exercise shall be subject to, and conditional upon, the Company’s receipt from the Holder
of the requested representations and information and the Company’s determination that the requisite registration exemptions
are available and (iii) in the case of a proposed cashless exercise of this Warrant pursuant to clause (ii) of Section 2(c) only,
the Holder shall be obligated to provide such information as may be reasonably requested by the Company for purposes of determining
whether, even though the issuance of the Warrant Shares to the Holder would not be registered, the Company can issue the Warrant
Shares to the Holder free of restrictions on transfer under the Securities Act.
g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting
any other provision of this Warrant, 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 and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile, by e-mail or sent by a nationally
recognized overnight courier service, addressed to the Company, at 121 Richmond Street West, Suite 501, Toronto, Ontario, M5H 2K1,
Canada, Attention: Suresh Venkatesan, Chief Executive Officer, E-mail: svv@poet-technologies.com, or such other facsimile number,
email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, by e-mail or
sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder
appearing on the books of the Warrant Agent. Any notice or other communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile
number or e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the
next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number
or e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York
City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
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)
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.
k)
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 or holder of Warrant Shares.
l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company
and the Holder.
m)
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.
n)
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.
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POET TECHNOLOGIES INC. |
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NOTICE OF EXERCISE
To: POET TECHNOLOGIES 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
related taxes, if any.
(2)
Payment shall take the form of (check applicable box):
[ ] in lawful money of Canada; 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 (check the appropriate box, as
provided in this Warrant): [ ] DWAC Account Number, [ ] CDS Account Number, or [ ] in physical form to the address below:
_______________________________
_______________________________
_______________________________
[SIGNATURE OF HOLDER]
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EXHIBIT B
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
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EXHIBIT C1
FORM OF CANADIAN LEGAL OPINION
| 1. | The Company is a corporation duly organized, validly existing and in good standing under the laws
of Ontario, Canada. The Company has all requisite power and authority, and all material governmental licenses, authorizations,
consents and approvals that are required to own and operate its properties and assets and to carry on its business as now conducted
and as currently proposed to be conducted (all as described in the Company's Annual Report on Form 20-F for its fiscal year ended
December 31, 2015). The Company is duly registered, licensed or qualified to transact business and is in good standing in each
jurisdiction in Canada in which it carries on business, or the ownership, leasing or operation of its properties and assets requires
such registration, licensing or qualification. |
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| 2. | The Transaction Documents have been duly authorized and executed by the Company and constitute
valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except
(a) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (b) as enforceability of any indemnification or contribution provisions may be limited under the Federal and
state securities laws and public policy with respect thereto, and (c) 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. |
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| 3. | The Closing Securities (including the issuance of the Warrant Shares upon exercise of the Warrants)
have been duly authorized and, when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof
are not and will not be subject to personal liability solely by reason of being such holders. The Warrant Shares have been duly
and validly authorized and reserved for issuance, and when issued upon the exercise of the Warrants in accordance with the terms
therein, will be validly issued, fully paid and nonassessable. |
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| 4. | The authorized share capital of the Company consists of an aggregate of ______ Common Shares. |
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| 5. | The attributes of the Closing Securities (including the Warrant Shares upon exercise of the Warrants)
are consistent in all material respects with the description set forth in the Prospectus. |
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| 6. | The execution and delivery by the Company of the Placement Agency Agreement, including, without
limitation, the Warrant Certificates and the Lock-Up Agreements, and the consummation by the Company of the transactions contemplated
thereby, including the issuance and sale of the Closing Securities, do not (a) result in any violation of the provisions of
the articles, by-laws or any other governing documents of the Company, or (b) violate any statute, or any rule or regulation
thereunder, that we, in our exercise of customary professional diligence, have recognized as normally applicable to transactions
of the type contemplated by the Placement Agency Agreement (excluding securities laws). |
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| | 7. | No consent, approval, authorization or filing with or order of the Trading Market, any Canadian, provincial, court or governmental
agency or body having jurisdiction over the Company is required, under the laws, rules and regulations of the Province of
Ontario for the consummation by the Company of the transactions contemplated by the Agreement, except such as have been made
with or obtained and such as are otherwise expressly contemplated by the Placement Agency Agreement and the other Transaction
Documents. |
| 8. | All authorizations under applicable securities laws have been obtained, all necessary documents
have been filed, all requisite proceedings have been taken and all other legal requirements have been fulfilled by the Company
to qualify the issuance, distribution and sale of the Closing Securities (including the issuance of the Warrant Shares upon exercise
of the Warrants) to the public in each of the Canadian Jurisdictions through persons or companies duly registered under the applicable
laws of each Canadian Jurisdiction who have complied with the relevant provisions of such laws and the terms of their registration. |
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| 9. | The statements contained under the heading “Certain Canadian Federal Income Tax Considerations”
in the Prospectus contain a fair summary of the principal Canadian federal income tax considerations that generally apply to the
acquisition, holding and disposition of Closing Securities by a purchaser described under such heading who acquires Closing Securities
pursuant to the Prospectus, subject to the qualifications, assumptions, limitations and understandings set out in such summary. |
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| 10. | The Closing Securities will, upon issuance and delivery, as applicable, be qualified investments
under the Income Tax Act (Canada) for trusts governed by registered retirement savings plans, registered retirement income
funds, registered disability savings plans, deferred profit sharing plans, registered education savings plans and tax-free saving
accounts, subject to the qualifications, assumptions, limitations and understandings set out in the Prospectus under the heading
“Eligibility for Investment”. |
EXHIBIT C2
FORM OF UNITED STATES LEGAL OPINION
| 1. | | Each of the
following subsidiaries of the Company (the “Subsidiaries”) is a corporation, duly organized and in good standing under
the laws of its state of organization, as noted: OPEL Solar, Inc. (Delaware), ODIS Inc. (Delaware) and BB Photonics Inc. (Delaware). |
| 2. | | The Registration
Statement has been declared effective by the Commission. No stop order suspending the effectiveness of the Registration
Statement has been issued, and to our knowledge, no proceedings for that purpose have been instituted or overtly threatened by
the Commission. |
| 3. | | The Company
has filed all filings on Form 20-F required to be filed by it under Sections 13(a) or 15(d) of the Exchange Act during the last
two years. As of their respective dates, the filings on Form 20-F (as amended, as applicable) complied as to form in
all material respects with the applicable requirements of the Exchange Act and the rules and regulations of the Commission promulgated
thereunder. The Registration Statement and the Prospectus and any post-effective amendments or supplements thereto
(other than the financial statements included therein, as to which no opinion need be rendered) each as of their respective dates
complied as to form in all material respects with the applicable requirements of the Securities Act and the rules and regulations
thereunder. The Closing Securities offered pursuant to the Prospectus conform in all material respects to the description
thereof contained in the Registration Statement and the Prospectus. |
| 4. | | The execution
and delivery by the Company of the Placement Agency Agreement, the Warrant Certificates and the Lock-Up Agreements, and the consummation
by the Company of the transactions contemplated thereby, including the issuance and sale of the Securities, do not
violate any U.S. Federal or State of New York statute, or any rule or regulation thereunder, that we, in our exercise of customary
professional diligence, have recognized as normally applicable to transactions of the type contemplated by the Placement Agency
Agreement (excluding securities laws and other laws customarily excluded). |
| 5. | | No consent,
approval, authorization or filing with or order of the Trading Market, any U.S. Federal, State of New York court or governmental
agency or body having jurisdiction over the Company is required, under the laws, rules and regulations of the United States of
America or the State of New York for the consummation by the Company of the transactions contemplated by the Placement Agency
Agreement, except (i) such as have been made or obtained under the Securities Act, (ii) such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Shares and Warrants in the manner
contemplated in the Placement Agency Agreement and in the Prospectus, as to which we express no opinion; and (iii) such as are
otherwise expressly contemplated by the Placement Agency Agreement and the other Transaction Documents. |
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| 6. | | The Company
is not, and after the consummation of the transactions contemplated by the Transaction Documents will not be, an Investment Company
within the meaning of the Investment Company Act of 1940, as amended. |
This firm has participated in conferences with
officers and other representatives of the Company, the Agents and the independent registered public accounting firm of the Company,
at which conferences the contents of the Registration Statement and the Prospectus contained therein and related matters were discussed
and, although our firm is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the Prospectus contained therein, solely on the basis of the foregoing
without independent check or verification, no facts have come to the attention of this firm which cause us to believe that the
Registration Statement, at the time the Registration Statement became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or
the Prospectus (as amended or supplemented), at the time it was filed pursuant to General Instruction II.L of Form F-10 or at the
date of this opinion, contained an untrue statement of a material fact or omitted 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 (except
that this firm expresses no view and shall not be deemed to have rendered an opinion with respect to the financial statements,
related notes and schedules thereto, other financial information, statistical data and information, assessments of, or reports
on, the effectiveness of internal controls over financial reporting, and matters regarding non-United States laws, rules and regulations
contained in, or omitted from, the Registration Statement or the Prospectus)..
Exhibit D
FORM OF LOCK-UP AGREEMENT
October ___, 2016
H.C. Wainwright & Co., LLC,
acting as representative to the several underwriters:
| Re: | Underwriting Agreement, dated October ___, 2016, by and among POET Technologies Inc., H.C. Wainwright
& Co., LLC, acting as the representative to the several underwriters named therein, and Cormark Securities Inc. |
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 among POET Technologies Inc. (the “Company”), H.C. Wainwright & Co., LLC (the “Representative”)
acting as representative to the several underwriters named therein, and Cormark Securities Inc. (such period, the “Restriction
Period” and the underwriters, collectively, the “Underwriters” and, each, an “Underwriter”)),
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 Exchange Act of 1934, as amended (the “Exchange Act”), with respect to, any shares of common
stock of the Company or securities convertible, exchangeable or exercisable into, shares of common stock 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. 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. 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.
Notwithstanding the foregoing, the undersigned may transfer
the undersigned’s Securities (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree
to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the
restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or
(iii) with the prior written consent of the Representative on behalf of the Underwriters. For purposes of this letter agreement,
“immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. The
undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar
against the transfer of the undersigned’s Securities except in compliance with the foregoing restrictions.
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.
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.
This letter agreement shall automatically terminate and be of no
further force and effect if (i) the Representative advise the Company, or the Company advises the Representative, in writing, prior
to the execution of the Underwriting Agreement, that the Representative or the Company, as applicable, have determined not to proceed
with the offering, or (ii) the Underwriting Agreement is terminated pursuant to its terms.
*** 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.
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