Exhibit 1.1
SECURITIES PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”), dated as of July 13, 2023, by and between Greenbrook
TMS Inc., an Ontario corporation (the “Company”), and Alumni Capital LP, a Delaware limited
partnership (the “Investor”).
RECITALS
WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company wishes to sell to the Investor, and the Investor wishes to
buy from the Company, up to $4,458,156 of common shares, no par value, of the Company (“Common Shares”).
NOW
THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and the Investor hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Defined
Terms. As used in this Agreement, the following terms shall have the following meanings specified
or indicated (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“Affiliate”
shall mean, with respect to a Party, any individual, a corporation or any other legal entity, directly or indirectly, controlling, controlled
by or under common control with such Party. For purpose of this definition, the term “control,” as used with respect
to any corporation or other entity, means (a) direct or indirect ownership of fifty percent (50%) or more of the securities or other
ownership interests representing the equity voting stock or general partnership or membership interest of such corporation or other entity
or (b) the power to direct or cause the direction of the management or policies of such corporation or other entity, whether through
the ownership of voting securities, by contract or otherwise.
“Agreement”
shall have the meaning specified in the preamble hereof.
“Average
Daily Trading Volume” shall mean the average daily trading volume of the Common Shares on the Principal Market over
the most recent five (5) Business Days prior to the respective Purchase Notice Date, as reported by Bloomberg.
“Bankruptcy Law”
shall mean Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.
“Beneficial Ownership
Limitation” shall have the meaning specified in Section 8.2(f).
“Bloomberg”
shall mean Bloomberg, L.P.
“Business Day”
shall mean a day on which the Principal Market shall be open for business.
“Clearing Costs”
shall mean all of the Investor’s broker and Transfer Agent costs with respect to the deposit of the Purchase Notice Securities.
“Closing”
shall mean any one of the closings of a purchase and sale of Purchase Notice Securities pursuant to Section 2.3(c).
“Closing Date”
shall mean the date on which a Closing occurs.
“Closing Date
I” shall mean a Closing Date for a Purchase Price I Purchase Notice, which shall occur no later than three (3) Business
Days after delivery of the first Purchase Price I Purchase Notice and shall occur no later than four (4) Business Days after delivery
of any subsequent first Purchase Price I Purchase Notice.
“Closing Date
II” shall mean a Closing Date for a Purchase Price II Purchase Notice, which shall occur no later than two (2) Business
Days after delivery of a Purchase Price II Purchase Notice.
“Closing Date
III” shall mean a Closing Date for a Purchase Price III Purchase Notice, which shall occur no later than three (3) Business
Days after delivery of a Purchase Price III Purchase Notice.
“Commitment
Amount” shall mean $4,458,156.
“Commitment
Period” shall mean the period commencing on the date on which the Investor received the Commitment Securities and
ending on the earlier of (i) December 31, 2023, (ii) the date on which the Common Shares cease trading on NASDAQ, or
(iii) the date on which the Investor shall have received such number of Securities pursuant to this Agreement for consideration
equal to the Commitment Amount.
“Commitment Securities”
shall have the meaning set forth in Section 6.3.
“Common Shares”
shall have the meaning set forth in the Recitals.
“Company”
shall have the meaning specified in the preamble hereof.
“Custodian”
shall mean any receiver, trustee, assignee, liquidator, or similar official under any Bankruptcy Law.
“Damages”
shall mean any loss, claim, damage, liability, cost, and expense (including, without limitation, reasonable attorneys’ fees and
disbursements and costs and expenses of expert witnesses and investigation).
“Dispute Submission
Deadline” shall have the meaning set forth in Section 11.16(a).
“DRS”
shall mean the DTC’s Direct Registration System.
“DRS
Eligible” shall mean that (a) the Common Shares are eligible at DTC for full services pursuant to DTC’s
operational arrangements, including, without limitation, transfer through DTC’s DRS system, (b) the Company has been approved
(without revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program,
(d) the Purchase Notice Securities and Commitment Securities are otherwise eligible for delivery via DRS, and (e) the Transfer
Agent does not have a policy prohibiting or limiting delivery of the Purchase Notice Securities and Commitment Securities, as applicable,
via DRS.
“DRS
Shares” shall mean Common Shares that are (i) issued in electronic form, (ii) freely tradable
and transferable and without restriction on resale, and (iii) timely credited by the Company to the Investor’s or its designee’s
specified DRS account with DTC under the DTC/FAST Program, or any similar program hereafter adopted by DTC performing substantially the
same function.
“DTC”
shall mean The Depository Trust Company, or any successor performing substantially the same function for the Company.
“DTC/FAST Program”
shall mean the DTC’s Fast Automated Securities Transfer Program.
“DWAC”
shall mean Deposit Withdrawal at Custodian as defined by DTC.
“DWAC
Eligible” shall mean that (a) the Common Shares are eligible at DTC for full services pursuant to DTC’s
operational arrangements, including, without limitation, transfer through DTC’s DWAC system, (b) the Company has been approved
(without revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program,
(d) the Purchase Notice Securities and Commitment Securities are otherwise eligible for delivery via DWAC, and (e) the Transfer
Agent does not have a policy prohibiting or limiting delivery of the Purchase Notice Securities and Commitment Securities, as applicable,
via DWAC.
“DWAC
Shares” shall mean Common Shares that are (i) issued in electronic form, (ii) freely tradable
and transferable and without restriction on resale, and (iii) timely credited by the Company to the Investor’s or its designee’s
specified DWAC account with DTC under the DTC/FAST Program, or any similar program hereafter adopted by DTC performing substantially the
same function.
“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Execution Date”
shall mean the date of the last signature of this Agreement.
“FINRA”
shall mean the Financial Industry Regulatory Authority, Inc.
“Floor
Prices” shall mean the VWAP Floor Price and the Purchase Floor Price.
“Future SEC Documents”
shall have the meaning set forth in Section 8.2(k).
“Indemnified Party”
shall have the meaning set forth in Section 10.1.
“Indemnifying
Party” shall have the meaning set forth in Section 10.1.
“Investor”
shall have the meaning specified in the preamble to this Agreement.
“Lien”
shall mean a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right, or other restriction.
“Material Adverse
Effect” shall mean any effect on the business, operations, properties, or financial condition of the Company that is material
and adverse to the Company and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with
the ability of the Company to enter into and perform its obligations under any Transaction Document.
“NASDAQ”
shall mean The NASDAQ Stock Market LLC.
“Party”
shall mean a party to this Agreement.
“Person”
shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
“Principal
Market” shall mean any of the national securities exchanges (i.e. NYSE, NYSE American, NASDAQ), or principal quotation systems
(i.e. OTCQX, OTCQB, OTC Pink), or other principal exchange or recognized quotation system which is at the time the principal trading platform
or market for the Common Shares.
“Prospectus”
shall have the meaning specified in Section 4.14.
“Prospectus Supplement”
shall have the meaning specified in Section 7.1.
“Purchase
Floor Price” shall mean $0.27 per Common Share, subject to adjustment pursuant to Section 2.4(b).
“Purchase Notice
Amount” shall mean the product of the number of Purchase Notice Securities referenced in the Purchase Notice multiplied
by the applicable Purchase Price (Purchase Price I, Purchase Price II, or Purchase Price III) in accordance with Section 2.1.
“Purchase Notice”
shall mean a written notice from Company, substantially in the form of Exhibit A hereto, to the Investor setting forth the
Purchase Notice Securities which the Company requires the Investor to purchase pursuant to the terms of this Agreement.
“Purchase Notice
Date” shall have the meaning specified in Section 2.3(a).
“Purchase Notice
Limitation” shall mean either Purchase Notice Limitation Option I for a Purchase Notice electing Purchase Price I, Purchase
Notice Limitation Option II for a Purchase Notice electing Purchase Price II, or Purchase Notice Limitation Option III for a Purchase
Notice electing Purchase Price III.
“Purchase Notice
Limitation Option I” shall mean $500,000, unless the Company and the Investor mutually agree in writing to increase Purchase
Notice Limitation Option I to an amount not to exceed the Commitment Amount.
“Purchase Notice
Limitation Option II” shall mean the lesser of (i) a number of Common Shares equal to one and one-half percent (1.5%)
of the Commitment Amount divided by the closing price per Common Share on the Principal Market on the Execution Date (as reported by Bloomberg)
or (ii) $500,000.
“Purchase Notice
Limitation Option III” the lesser of (i) fifty percent (50%) of the Average Daily Trading Volume, or (ii) $500,000.
“Purchase Notice
Securities” shall mean all Common Shares that the Company shall be entitled to issue as set forth in all Purchase Notices
in accordance with the terms and conditions of this Agreement.
“Purchase Price”
shall mean either Purchase Price I, Purchase Price II, or Purchase Price III, as elected by the Company on each Purchase Notice.
“Purchase
Price I” shall mean the lowest daily VWAP for the Common Shares for the five (5) Business Days prior to the
Closing Date with respect to a Purchase Notice multiplied by eighty-five percent (85%). Any Purchase Notice setting forth Purchase Price
I will be subject to the Purchase Notice Limitation Option I.
“Purchase
Price II” shall mean the lesser of (i) the average of the three (3) lowest closing prices per Common Share
on the Principal Market for the ten (10) Business Days prior to the Purchase Notice Date, or (ii) ninety-nine percent (99%)
of the lowest trading price per Common Share on the Principal Market on the Purchase Notice Date. Any Purchase Notice setting forth Purchase
Price II will be subject to the Purchase Notice Limitation Option II.
“Purchase
Price III” shall mean the lowest daily VWAP of the Common Shares for the three (3) Business Days prior to the
Closing Date with respect to a Purchase Notice multiplied by ninety-nine percent (99%). Any Purchase Notice setting forth Purchase Price
III will be subject to the Purchase Notice Limitation Option III.
“Registration
Expenses” shall mean all expenses incurred in effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification and filing fees (including fees with respect to filings required to be made with FINRA, and
any fees of the securities exchange or automated quotation system on which the Common Shares are then listed or quoted), printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses (including reasonable fees and disbursements
of counsel for the Investor in connection with blue sky compliance), and any fees and disbursements of accountants retained by the Company
incident to or required by any such registration.
“Registration
Statement” shall have the meaning specified in Section 4.14.
“Registrable
Securities” shall mean (i) the Purchase Notice Securities, (ii) the Commitment Securities, and (iii) any
other equity security of the Company issued or issuable with respect to any such Securities by way of a stock dividend or stock split
or in connection with a combination of shares, capitalization, merger, consolidation or reorganization; provided, however,
that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (1) a registration
statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have
been sold, transferred, disposed of, or exchanged in accordance with such registration statement; (2) such securities shall have
ceased to be outstanding; (3) such securities have been sold pursuant to Rule 144 promulgated under the Securities Act; or (4) such
securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
“Regulation D”
shall mean Regulation D promulgated under the Securities Act.
“Report of Foreign
Issuer” shall have the meaning set forth in Section 6.2.
“Rule 144”
shall mean Rule 144 under the Securities Act or any similar provision then in force under the Securities Act.
“Required Dispute
Documentation” shall have the meaning set forth in Section 11.16(a).
“SEC”
shall mean the United States Securities and Exchange Commission.
“SEC Documents”
shall have the meaning specified in Section 4.5.
“Securities”
shall mean the Purchase Notice Securities and the Commitment Securities to be issued to the Investor pursuant to the terms of this Agreement.
“Securities Act”
shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share Equivalents”
shall mean any securities of the Company entitling the holder thereof to acquire at any time Common Shares, including, without limitation,
any debt, preferred shares, 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.
“Subsidiary”
shall mean any Person that the Company wholly owns or controls, or in which the Company, directly or indirectly, owns a majority of the
voting stock or similar voting interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated
under the Securities Act.
“Transaction Documents”
shall mean this Agreement and all exhibits hereto.
“Transfer Agent”
shall mean the current transfer agent of the Company, and any successor transfer agent of the Company.
“VWAP”
shall mean, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if
the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market
on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time,
or if the foregoing does not apply, the dollar volume-weighted average price of such security in any principal quotation system operated
by OTC Markets Group Inc. or other principal exchange or recognized quotation system which is at the time the principal trading platform
or market for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, or, if no
dollar volume-weighted average price is reported, the average of the highest closing bid price and the lowest closing ask price of any
of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. If the VWAP cannot be calculated
for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as
mutually determined by the Company and the Investor. If the Company and the Investor are unable to agree upon the fair market value of
such security, then such dispute shall be resolved in accordance with the procedures in Section 11.16. All such determinations
shall be appropriately adjusted for any share dividend, share split, share combination, recapitalization, or other similar transaction
during such period.
“VWAP
Floor Price” shall mean $0.45 per Common Share, subject to adjustment pursuant to Section 2.4(b).
ARTICLE II
PURCHASE AND SALE OF SECURITIES
Section 2.1 Purchase
Notices. Subject to the conditions set forth herein, at any time during the Commitment Period,
the Company shall have the right, but not the obligation, to direct the Investor, by its delivery to the Investor of a Purchase Notice
from time to time, to purchase, and the Investor shall have the obligation to purchase from the Company, the number of Purchase Notice
Securities set forth on the Purchase Notice at the Purchase Price, provided that the amount of Purchase Notice Securities shall not exceed
the Purchase Notice Limitation or the Beneficial Ownership Limitation set forth in Section 8.2(f). The Company may not deliver
a subsequent Purchase Notice until the Closing of an active Purchase Notice, except if waived by the Investor in writing.
Section 2.2 Purchase
Price Election. For each Purchase Notice, the Company shall have the right to select Purchase
Price I, Purchase Price II, or Purchase Price III at which to sell the Purchase Notice Securities subject to such Purchase Notice.
Section 2.3 Deliveries;
Closing.
(a) Purchase
Notice Delivery. In accordance with Section 2.1 and subject to the satisfaction of the conditions set forth in Section 8.2,
the Company shall agree to deliver the Purchase Notice Securities as DWAC Shares or DRS Shares to the Investor pursuant to Section 2.3(b) by
the delivery of each Purchase Notice by email at the Investor’s email address set forth in Section 11.17 and by overnight
courier at the Investor’s address set forth in Section 11.17. A Purchase Notice shall be deemed delivered on (i) the
Business Day that the Purchase Notice has been received by email by the Investor if the conditions are met on or prior to 8:00 a.m. New
York time or (ii) the next Business Day if the conditions are met after 8:00 a.m. New York time on a Business Day or at any
time on a day which is not a Business Day (the “Purchase Notice Date”).
(b) Delivery
of Purchase Notice Securities. No later than 12:00 p.m. New York time on the Closing Date specified in the applicable Purchase
Notice, the Company shall deliver the applicable Purchase Notice Securities as DWAC Shares or DRS Shares to the Investor, against payment
to the Company by the Investor of the Purchase Notice Amount set forth in the applicable Purchase Notice in accordance with Section 2.3(c).
(c) Closing.
The Investor shall pay to the Company the Purchase Notice Amount with respect to the applicable Purchase Notice as full payment for such
Purchase Notice Securities purchased by the Investor under the applicable Purchase Notice via wire transfer of immediately available funds
as set forth below on (i) Closing Date I if the Company elects Purchase Price I, (ii) Closing Date II if the Company elects
Purchase Price II, or (iii) Closing Date III if the Company elects Purchase Price III. The Company shall not issue any fraction of
a Common Share under any Purchase Notice. If the issuance would result in the issuance of a fraction of a Common Share, the Company shall
round such fraction of a Common Share down to the nearest whole Common Share. All payments made under this Agreement shall be made in
lawful money of the United States of America by wire transfer of immediately available funds to such account as the Company may from time
to time designate by written notice in accordance with the provisions of this Agreement. Whenever any amount or issuance of Common Shares
expressed to be due by the terms of this Agreement is due on any day that is not a Business Day, the same shall instead be due on the
next succeeding day that is a Business Day.
Section 2.4 Floor
Price Limitations; Adjustments.
(a)
Floor Price Limitations. If the VWAP for the Common Shares for the five (5) Business Days prior to the Purchase Notice
Date is less than the VWAP Floor Price, the Company shall have no obligation to sell, and the Investor shall be under no obligation to
purchase, any of the Purchase Notice Securities set forth in such Purchase Notice. If the VWAP for the Common Shares for the Business Days between the Purchase Notice Date and the Closing Date
is less than the Purchase Floor Price, the Company shall have no obligation to sell, and the Investor shall be under no obligation to
purchase, any of the Purchase Notice Securities set forth in such Purchase Notice.
(b)
Adjustments. If the Company shall (i) pay a share dividend or otherwise make a distribution or distributions on Common Shares,
or any other equity or equity equivalent securities payable in Common Shares, (ii) subdivide outstanding Common Shares into a larger
number of Common Shares, (iii) combine (including by way of reverse stock split or share consolidation) outstanding Common Shares into
a smaller number of Common Shares, or (iv) issue by reclassification of Common Shares any securities of the Company, then each of the
Floor Prices and the Purchase Price (if applicable) shall be multiplied by a fraction of which the numerator shall be the number of Common
Shares (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of Common Shares
outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for
the determination of security holders 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.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor represents and
warrants the following to the Company:
Section 3.1 Intent.
The Investor is entering into this Agreement and purchasing the Securities for its own account, and not as nominee or agent, for investment
purposes and not with a view towards, or for a sale in connection with, a “distribution” (as such term is defined in the Securities
Act), and the Investor has no present arrangement (whether or not legally binding) at any time to sell the Securities to or through any
Person in violation of the Securities Act or any applicable state securities laws; provided, however, that the Investor
reserves the right to dispose of the Securities at any time in accordance with federal and state securities laws applicable to such disposition.
Section 3.2 No
Legal Advices From The Company. The Investor acknowledges that it has had the opportunity
to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors.
The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its
representatives or agents for legal, tax, or investment advice with respect to this investment, the transactions contemplated by this
Agreement or the securities laws of any jurisdiction.
Section 3.3 Accredited
Investor. The Investor is an “accredited investor” (as such term is defined in
Rule 501(a)(3) of Regulation D), and the Investor has such experience in business and financial matters that it is capable of
evaluating the merits and risks of an investment in the Securities. The Investor acknowledges that an investment in the Securities is
speculative and involves a high degree of risk.
Section 3.4 Authority.
The Investor has the requisite power and authority to enter into and perform its obligations under the Transaction Documents and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of the Transaction Documents and the consummation by it of
the transactions contemplated hereby and thereby have been duly authorized by all necessary action and no further consent or authorization
of the Investor is required. The Transaction Documents to which it is a party has been duly executed by the Investor, and when delivered
by the Investor in accordance with the terms hereof, will constitute the valid and binding obligation of the Investor enforceable against
it in accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the
enforcement of, creditors’ rights and remedies or by other equitable principles of general application.
Section 3.5 Not
An Affiliate. The Investor is not an officer, director, or “affiliate” (as that
term is defined in Rule 405 of the Securities Act) of the Company.
Section 3.6 Organization
and Standing. The Investor is an entity duly formed, validly existing, and in good standing
under the laws of the State of Delaware with full right and limited partnership or similar power and authority to enter into and to consummate
the transactions contemplated by the Transaction Documents.
Section 3.7 Absence
of Conflicts. The execution and delivery of the Transaction Documents and the consummation
of the transactions contemplated hereby and thereby and compliance with the requirements hereof and thereof, will not (a) violate
any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Investor, (b) violate any provision
of any indenture, instrument or agreement to which the Investor is a party or is subject, or by which the Investor or any of its assets
is bound, or conflict with or constitute a material default thereunder, (c) result in the creation or imposition of any lien pursuant
to the terms of any such indenture, instrument or agreement, or constitute a breach of any fiduciary duty owed by the Investor to any
third party, or (d) require the approval of any third-party (that has not been obtained) pursuant to any material contract, instrument,
agreement, relationship or legal obligation to which the Investor is subject or to which any of its assets, operations or management may
be subject.
Section 3.8 Disclosure;
Access to Information. The Investor has had an opportunity to review copies of the SEC Documents
and the Prospectus Supplement filed on behalf of the Company and has had access to all publicly available information with respect to
the Company. The Investor understands that its investment in the Securities involves a high degree of risk. The Investor is able to bear
the economic risk of an investment in the Securities including a total loss. The Investor has sought such accounting, legal and tax advice
as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities. The Investor
understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation
or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon
or endorsed the merits of the offering of the Securities.
Section 3.9 Manner
of Sale. At no time was the Investor presented with or solicited by or through any leaflet,
public promotional meeting, television advertisement or any other form of general solicitation or advertising.
Section 3.10 No
Prior Short Selling. At no time prior to the date of this Agreement has any of the Investor,
its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any (i) “short
sale” (as such term is defined in Section 242.200 of Regulation SHO of the Exchange Act) of the Securities or (ii) hedging
transaction, which establishes a net short position with respect to the Securities or any other Company’s securities.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except
as set forth in the SEC Documents and the Prospectus Supplement, the Company represents and warrants the following to the Investor,
as of the Execution Date:
Section 4.1 Organization
of the Company. The Company is an entity duly organized, validly existing and in good standing
under the laws of the Province of Ontario, Canada, with the requisite power and authority to own and use its properties and assets and
to carry on its business as currently conducted. The Company is not in violation or default of any of the provisions of its organizational
or charter documents. The Company is duly qualified to conduct business and is in good standing as a foreign company 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, could 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. The Company has Subsidiaries as disclosed in the SEC Documents.
Section 4.2 Authority.
The Company has the requisite corporate power and authority to enter into and perform its obligations under the Transaction Documents.
The execution and delivery of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its
Board of Directors or shareholders is required. The Transaction Documents have been duly executed and delivered by the Company and constitutes
a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as such enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application and (ii) to the extent the enforceability of any provisions
for indemnification may be limited by public policy.
Section 4.3 Capitalization.
As of the date hereof, the Company is authorized to issue an unlimited number of Common Shares, of which 40,800,180 Common Shares are
issued and outstanding, and an unlimited number of preferred shares, issuable in series, of which nil preferred shares are issued and
outstanding. The Company has not issued any securities 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 securities to employees
pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Share Equivalents outstanding
as of the date of the most recently filed periodic report under the Exchange Act. No Person has elected to use 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 set forth in the SEC Documents, the Prospectus Supplement and this Agreement, 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 securities, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to issue additional securities or Share Equivalents. The issuance
and sale of the Securities will not obligate the Company to issue other securities to any Person (other than the Investor) and will not
result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities,
except to the extent that the exercise or conversion price of such securities are calculated based on the market price of the Common Shares
on the applicable exercise or conversion date. Except as disclosed in the SEC Documents, there are no shareholders agreements, voting
agreements, or other similar agreements with respect to the Company’s Common Shares to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s shareholders.
Section 4.4 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 SEC is contemplating
terminating such registration. Except as disclosed in the SEC Documents or the Prospectus Supplement, the Company has not, in the twelve
(12) months preceding the date hereof, received notice from the Principal 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 Principal Market. Except
as disclosed in the SEC Documents or the Prospectus Supplement, 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.
Section 4.5 SEC
Documents; Disclosure. 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) thereof,
for the one (1) year 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, being collectively
referred to herein as the “SEC Documents”) on a timely basis or has received a valid extension of such time
of filing and has filed any such SEC Documents prior to the expiration of any such extension. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and other federal laws,
rules, and regulations applicable to such SEC Documents, and none of the SEC Documents 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 light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC
Documents comply as to form and substance in all material respects with applicable accounting requirements and the published rules and
regulations of the SEC or other applicable rules and regulations with respect thereto. Such financial statements have been prepared
in accordance with international financial reporting standards as issued by the International Accounting Standards Board applied on a
consistent basis during the periods involved (except (a) as may be otherwise indicated in such financial statements or the notes
thereto or (b) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary
statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results
of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments). Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents
and the information contained within the Prospectus Supplement, the Company confirms that neither it nor any other Person acting on its
behalf has provided the Investor or its agents or counsel with any information that it believes constitutes or might constitute material,
non-public information. The Company understands and confirms that the Investor will rely on the foregoing representation in effecting
transactions in securities of the Company.
Section 4.6 Valid
Issuances. The Securities are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validly issued, fully paid, and non-assessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. Assuming the accuracy of the representations
of the Investor in Article III of this Agreement and subject to the filings described in Section 4.7 of this Agreement,
the Securities will be issued in compliance with all applicable federal and state securities laws.
Section 4.7 No
Conflicts. The execution, delivery, and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of
the Purchase Notice Securities and Commitment Securities, do not and will not (a) result in a violation of the Company’s certificate
or articles of incorporation, by-laws or other organizational or charter documents, (b) conflict with, or constitute a material default
(or an event that with notice or lapse of time or both would become a material default) under, result in the creation of any Lien upon
any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture, instrument or any “lock-up” or similar provision of any underwriting or similar agreement to which
the Company is a party, or (c) result in a violation of any federal, state or local law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations) applicable to the Company or by which any property or asset of the Company
is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect) nor is the Company otherwise in violation of, conflict with or
in default under any of the foregoing. The business of the Company is not being conducted in violation of any law, ordinance or regulation
of any governmental entity, except for possible violations that either singly or in the aggregate do not and will not have a Material
Adverse Effect. The Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization
or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform
any of its obligations under the Transaction Documents (other than (i) any SEC or state securities filings that may be required to
be made by the Company in connection with the execution of this Agreement or the issuance of Securities pursuant hereto, or (ii) the
filing of a Listing of Additional Shares Notification Form with the Principal Market, which, in each case, have been made or will
be made in a timely manner); provided that, for purposes of the representation made in this sentence, the Company is assuming and relying
upon the accuracy of the relevant representations and agreements of the Investor herein.
Section 4.8 No
Material Adverse Effect. No event has occurred that would have a Material Adverse Effect
on the Company that has not been disclosed in the SEC Documents or the Prospectus Supplement.
Section 4.9 Litigation
and Other Proceedings. Except as disclosed in the SEC Documents or the Prospectus Supplement,
there are no material actions, suits, investigations, SEC inquiries, FINRA inquiries, NASDAQ inquiries, or similar proceedings (however
any governmental agency may name them) pending or, to the actual knowledge of the Company, threatened against or affecting the Company
or its properties, nor has the Company received any written or oral notice of any such action, suit, proceeding, SEC inquiry, FINRA inquiry,
NASDAQ inquiry or investigation, which would have a Material Adverse Effect. No judgment, order, writ, injunction or decree or award against
the Company has been issued by or, to the actual knowledge of the Company, requested of any court, arbitrator or governmental agency which
would have a Material Adverse Effect. There has not been, and to the actual knowledge of the Company, there is no pending investigation
by the SEC involving the Company or any current officer or director of the Company.
Section 4.10 Acknowledgment
Regarding Investor’s Purchase of Securities. Based solely on the Investor’s representations
and warranties, the Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser
with respect to this Agreement and the transactions contemplated hereby and thereby and that the Investor is not (i) an officer or
director of the Company, or (ii) an “affiliate” (as defined in Rule 144) of the Company. The Company further acknowledges
that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement
and the transactions contemplated hereby and thereby, and any advice given by the Investor or any of its representatives or agents in
connection with this Agreement and the transactions contemplated hereby and thereby is merely incidental to the Investor’s purchase
of the Purchase Notice Securities. The Company further represents to the Investor that the Company’s decision to enter into this
Agreement has been based solely on the independent evaluation by the Company and its representatives.
Section 4.11 No
General Solicitation. Neither the Company, nor any Person acting on its behalf, has engaged
in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection
with the offer or sale of the Securities.
Section 4.12 No
Integrated Offering. None of the Company, its Affiliates, and any Person acting on 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 for purposes of any applicable shareholder approval
provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which
any of the securities of the Company are listed or designated, but excluding shareholder consents required to authorize and issue the
Securities or waive any anti-dilution provisions in connection therewith.
Section 4.13 Placement
Agent; Other Covered Persons. The Company has not engaged any Person to act as a placement
agent, underwriter, broker, dealer, or finder in connection with the sale of the Securities hereunder. The Company is not aware of any
Person that has been or will be paid (directly or indirectly) remuneration for solicitation of the Investor in connection with the sale
of any Securities.
Section 4.14 Registration
Statement. The Company has prepared and filed a Registration Statement on Form F-3 with
the SEC in accordance with the provisions of the Securities Act, which was declared effective by order of the SEC on April 15, 2022
(File No. 333-264067) (the “Registration Statement”). The Registration Statement is effective under the
Securities Act and the Company has not received any written notice that the SEC has issued or intends to issue a stop order or other similar
order with respect to the Registration Statement or the base prospectus contained therein (the “Prospectus”),
or that the SEC otherwise has (i) suspended or withdrawn the effectiveness of the Registration Statement or (ii) issued any
order preventing or suspending the use of the Prospectus or any prospectus supplement thereto, in either case, either temporarily or permanently
or intends or has threatened in writing to do so. The “Plan of Distribution” section of the Prospectus permits the issuance
of the Securities hereunder. The SEC has not notified the Company of any objection to the use of the form of the Registration Statement
pursuant to Rule 401(g)(1) of the Securities Act. The Company was, at the time of the filing of the Registration Statement,
eligible to use Form F-3. As of the Execution Date, the Company is currently eligible to use Form F-3 under the Securities Act
and it meets the transaction requirements with respect to up to $4,458,156 worth of Common Shares, as set forth in General Instruction
I.B.5 of Form F-3. 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, the Prospectus, and the Prospectus Supplement. At the time of the filing of the Registration Statement and the Prospectus,
the Company had, and at the time of the filing of the Prospectus Supplement or any amendment to the Registration Statement, the Company
shall have no knowledge of any untrue statement (or alleged untrue statement) of a material fact in the Registration Statement, Prospectus,
or Prospectus Supplement, as the case may be, or omission (or alleged omission) 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, and there shall be no such untrue
statement of material fact or omission in any effective registration statement filed or any post-effective amendment or prospectus which
is a part of the foregoing.
Section 4.15 Foreign
Private Issuer. The Company is permitted to rely on “foreign private issuer” exemptions from the shareholder approval requirements of NASDAQ
Listing Rule 5635 during the Commitment Period.
ARTICLE V
COVENANTS OF INVESTOR
Section 5.1 Short
Sales and Confidentiality. During the period from the Execution Date to the end of the Commitment
Period, neither the Investor, nor any Affiliate of the Investor acting on its behalf or pursuant to any understanding with it, shall execute
(i) any “short sale” (as such term is defined in Section 242.200 of Regulation SHO of the Exchange Act) of the Securities
or (ii) hedging transaction which establishes a net short position with respect to the Securities or any other Company’s securities.
For the purposes hereof, and in accordance with Regulation SHO, the sale after delivery of the Purchase Notice of such number of Securities
reasonably expected to be purchased under the Purchase Notice shall not be deemed a short sale. The Investor shall, until such time as
the transactions contemplated by the Transaction Documents are publicly disclosed by the Company in accordance with the terms of the Transaction
Documents, maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction
Documents.
Section 5.2 Compliance
with Law; Trading in Securities. The Investor’s trading activities with respect to
the Securities shall be in compliance with all applicable state and federal securities laws and regulations and the rules and regulations
of the Principal Market.
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1 Listing
of Shares. The Company shall use its commercially reasonable efforts to continue the listing
or quotation and trading of the Securities on the Principal Market (including, without limitation, maintaining sufficient net tangible
assets, if required) and will comply in all material respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of the Principal Market.
Section 6.2 Filing
of Report of Foreign Issuer. The Company agrees that it shall file a Report of Foreign Private
Issuer on Form 6-K, including the Transaction Documents as exhibits thereto, with the SEC within the time required by the Exchange
Act, relating to the execution of the transactions contemplated by, and describing the material terms and conditions of, the Transaction
Documents (the “Report of Foreign Issuer”). The Company shall permit the Investor to review and comment upon
the final pre-filing draft version of the Report of Foreign Issuer prior to its filing with the SEC, and the Company shall give reasonable
consideration to all such comments.
Section 6.3 Issuance
of Commitment Securities. In consideration for the Investor’s execution and
delivery of, and performance under, this Agreement, on or before the first Business Day after the Execution Date, the Company shall
cause the Transfer Agent to issue and deliver as DWAC Shares or DRS Shares to the Investor a number of Common Shares (the
“Commitment Securities”) in an amount equal to three percent (3%) of the Commitment Amount divided by the
VWAP for the Common Shares for the five (5) Business Days prior to the Execution Date.
ARTICLE VII
REGISTRATION RIGHTS
Section 7.1 Registration.
The Company shall file with the SEC, within two (2) Business Days from the Execution Date, a prospectus supplement covering the offering
and sale of the Securities (the “Prospectus Supplement”). The Prospectus Supplement shall relate to the transactions
contemplated by, and describing the material terms and conditions of, this Agreement, containing required information previously omitted
from the Prospectus at the time of effectiveness of the Registration Statement in reliance on Rule 430B under the Securities Act,
and disclosing all information relating to the transactions contemplated hereby required to be disclosed in the Registration Statement
and the Prospectus as of the date of the Prospectus Supplement, including, without limitation, information required to be disclosed in
the section captioned “Plan of Distribution” in the Prospectus. The Company shall permit the Investor to review and comment
upon the Prospectus Supplement within a reasonable time prior to its filing with the SEC, the Company shall give reasonable consideration
to all such comments, and the Company shall not file the Report of Foreign Issuer or the Prospectus Supplement with the SEC in a form
to which the Investor reasonably objects. The Investor shall furnish to the Company such information regarding itself, the Company’s
securities beneficially owned by the Investor, and the intended method of distribution thereof, including any arrangement between the
Investor and any other person or relating to the sale or distribution of the Company’s securities, as shall be reasonably requested
by the Company in connection with the preparation and filing of the Report of Foreign Issuer and the Prospectus Supplement, and shall
otherwise cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Report
of Foreign Issuer and the Prospectus Supplement with the SEC. At the time of the filing of the Prospectus Supplement, the Company shall
have no knowledge of any untrue statement (or alleged untrue statement) of a material fact in the Prospectus (as supplemented by the Prospectus
Supplement) or omission (or alleged omission) 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, and there shall be no such untrue statement of material fact
or omission in any effective registration statement filed or any post-effective amendment or prospectus which is a part of the foregoing.
Section 7.2 Registration
Procedures. At its sole expense, the Company will do the following during the Commitment
Period:
(a) use
its best efforts to keep the Registration Statement and the Prospectus Supplement continuously effective under the Securities Act until
the Investor ceases to hold Registrable Securities;
(b) prepare
and file with the SEC such amendments, post-effective amendments, and supplements to the Registration Statement and the Prospectus Supplement
as may be reasonably requested by the Investor or as may be necessary to keep the Registration Statement and the Prospectus Supplement
effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered
by the Registration Statement and the Prospectus Supplement;
(c) promptly
give the Investor notice of any event (including the passage of time) which makes the Registration Statement or the Prospectus Supplement
not to be in compliance with Sections 5(b) or 10 of the Securities Act and shall use its best efforts thereafter to file with the
SEC any post-effective amendment to the Registration Statement, amended prospectus, or prospectus supplement in order to comply with Sections
5(b) or 10 of the Securities Act;
(d) notify
the Investor at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any
event as a result of which the prospectus included in the Registration Statement relating to the Securities, including, without limitation,
the Prospectus Supplement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances under
which they were made, and following such notification promptly prepare and file a post-effective amendment to the Registration Statement
or a supplement to the related prospectus or Prospectus Supplement or any document incorporated therein by reference, and file any other
required document that would be incorporated by reference into such Registration Statement, prospectus, and Prospectus Supplement, so
that the Registration Statement, prospectus, and Prospectus Supplement do not 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 not misleading, and that such prospectus
does not 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 the light of the circumstances under which they were made, not misleading, and, in the case of a post-effective
amendment to the Registration Statement, use best efforts to cause it to be declared effective as promptly as is reasonably practicable,
and give to the Investor a written notice of such amendment or supplement, and, upon receipt of such notice, the Investor agrees not to
sell any Registrable Securities pursuant to the Registration Statement and Prospectus Supplement until the Investor’s receipt of
copies of the supplemented or amended prospectus or until it receives further written notice from the Company that such sales may re-commence;
(e) use
its best efforts to prevent, or obtain the withdrawal of, any order suspending the effectiveness of the Registration Statement (and promptly
notify in writing the Investor covered by the Registration Statement of the withdrawal of any such order);
(f) cause
all such Registrable Securities registered hereunder to be listed on each securities exchange or automated quotation system on which
similar securities issued by the Company are then listed; and
(g) take
all such other reasonable actions as are necessary or advisable in order to facilitate the disposition of such Registrable Securities.
Section 7.3 Expenses
of Registration. All Registration Expenses incurred by the Company in connection with registration
pursuant to this Article VII shall be borne by the Company.
ARTICLE VIII
CONDITIONS TO DELIVERY OF
PURCHASE NOTICE AND CONDITIONS TO CLOSING
Section 8.1 Conditions
Precedent to the Obligation of the Company to Issue and Sell Purchase Notice Securities.
The obligation of the Company hereunder to issue and sell the Purchase Notice Securities to the Investor is subject to the satisfaction
of each of the conditions set forth below:
(a) Accuracy
of the Investor’s Representations and Warranties. The representations and warranties of the Investor shall be true and correct
in all material respects as of the Execution Date and as of the date of each Closing as though made at each such time.
(b) Performance
by the Investor. The Investor shall have performed, satisfied, and complied in all respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied, or complied with by the Investor at or prior to each Closing.
(c) Principal
Market Regulation. The Company shall have no obligation to issue any Purchase Notice Securities, and the Investor shall have no right
to receive any Purchase Notice Securities, if the issuance of such Purchase Notice Securities would exceed the aggregate number of Securities
which the Company may issue without breaching the Company’s obligations under the rules or regulations of the Principal Market.
Section 8.2 Conditions
Precedent to the Obligation of the Investor to Purchase the Purchase Notice Securities. The
obligation of the Investor hereunder to purchase the Purchase Notice Securities is subject to the satisfaction of each of the following
conditions:
(a) Effective
Registration Statement. The Registration Statement, and any amendment or supplement thereto, shall have been declared effective
and shall remain effective for the sale of the Registrable Securities (including reoffers by the Investor, affiliated purchasers,
and selling agents of the Investor) at all times until the Closing with respect to the subject Purchase Notice, the Company shall
not have received notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or
that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or
permanently, or intends or has threatened to do so, and no other suspension of the use of, or withdrawal of the effectiveness of,
such Registration Statement, the Prospectus, or the Prospectus Supplement shall exist. The Investor shall not have received any
notice from the Company that the Prospectus, Prospectus Supplement, and/or any prospectus supplement or amendment thereto fails to
meet the requirements of Section 5(b) or Section 10 of the Securities Act.
(b) Accuracy
of the Company’s Representations and Warranties. The representations and warranties of the Company shall be true and correct
in all material respects as of the Execution Date and as of the date of each Closing (except for representations and warranties specifically
made as of a particular date).
(c) Performance
by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied, or complied with by the Company at or prior to such Closing.
(d) No
Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or adopted by any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely affects
any of the transactions contemplated by the Transaction Documents, and no proceeding shall have been commenced that may have the effect
of prohibiting or materially adversely affecting any of the transactions contemplated by the Transaction Documents.
(e) No
Suspension of Trading in or Delisting of Shares. The trading of the Securities shall not have been suspended by the SEC or the Principal
Market, or otherwise halted for any reason, and the Securities shall have been approved for listing or quotation on and shall not have
been delisted from or no longer quoted on the Principal Market. In the event of a suspension, delisting, or halting for any reason, of
the trading of the Securities, as contemplated by this Section 8.2(e) following delivery of a Purchase Notice and prior
to the Closing for the Purchase Notice Securities for such Purchase Notice, the Investor shall, subject to applicable securities laws,
have the right to return to the Company any amount of Purchase Notice Securities that the Investor continues to hold, and the Commitment
Amount with respect to such Purchase Notice Securities, shall be refunded accordingly.
(f) Beneficial
Ownership Limitation. The number of Purchase Notice Securities to be purchased by the Investor
at any time under this Agreement shall not exceed the number of such Common Shares that, when aggregated with all other Common Shares
then beneficially owned (as such term is defined under the Exchange Act) by the Investor, would result in the Investor beneficially owning
more than the Beneficial Ownership Limitation (as defined below), as determined in accordance with Section 13 of the Exchange Act. For
purposes of this Section 8.2(f), if the amount of Common Shares outstanding is greater or lesser on a Closing Date than on the
date on which the Purchase Notice associated with such Closing Date is given, the amount of Common Shares outstanding on such Closing
Date shall govern for purposes of determining whether the Investor, when aggregating all purchases of Common Shares made pursuant to this
Agreement, would beneficially own more than the Beneficial Ownership Limitation following a purchase on any such Closing Date. If the
Investor claims that compliance with a Purchase Notice would result in the Investor owning more than the Beneficial Ownership Limitation,
upon request of the Company, the Investor will provide the Company with evidence of the Investor’s then existing Common Shares beneficially
owned. The “Beneficial Ownership Limitation” shall be 9.99% of the number of Common Shares outstanding immediately
prior to the issuance of Common Shares issuable pursuant to a Purchase Notice. To the extent that the Beneficial Ownership Limitation
would be exceeded in connection with a Closing, the number of Securities issuable to the Investor shall be reduced so it does not exceed
the Beneficial Ownership Limitation.
(g) Reserved.
(h) No
Knowledge. The Company shall have no knowledge of any event more likely than not to have the effect of causing the effectiveness of
the Registration Statement to be suspended or the Prospectus or Prospectus Supplement failing to meet the requirement of Sections 5(b) or
10 of the Securities Act (which event is more likely than not to occur within the fifteen (15) Business Days following the Business Day
on which such Purchase Notice is deemed delivered).
(i) No
Violation of Shareholder Approval Requirement. The issuance of the Securities shall not violate the shareholder approval requirements
of the Principal Market.
(j) DWAC
Eligible. The Securities must be DWAC Eligible and not subject to a “DTC chill.”
(k) SEC
Documents. All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by
the Company with the SEC pursuant to the reporting requirements of the Securities Act and the Exchange Act after the Execution Date (the
“Future SEC Documents”) (1) shall have been filed with the SEC within the applicable time periods prescribed
for such filings under the Exchange Act, and (2) as of their respective dates, such Future SEC Documents complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and other federal laws, rules and regulations
applicable to such Future SEC Documents, and none of such Future SEC Documents 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, not misleading.
ARTICLE IX
LEGENDS
Section 9.1 No
Restrictive Legend. No restrictive stock legend shall be placed on the share certificates
representing the Purchase Notice Securities.
Section 9.2 Investor’s
Compliance. Nothing in this Article IX shall affect in any way the Investor’s
obligations hereunder to comply with all applicable securities laws upon the sale of the Securities.
ARTICLE X
indemnification
Section 10.1 Each
party (an “Indemnifying Party”) agrees to indemnify and hold harmless the other party along with its officers,
directors, employees, and authorized agents (an “Indemnified Party”) from and against any claim or suit by third
parties for Damages resulting from or arising out of (i) any misrepresentation, breach of warranty or nonfulfillment of or failure
to perform any covenant or agreement on the part of the Indemnifying Party contained in this Agreement, (ii) any untrue statement
or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or Prospectus
or Prospectus Supplement, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading, (iii) any untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof
or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements
made therein, in the light of the circumstances under which the statements therein were made, not misleading, or (iv) any violation
by the Indemnifying Party of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities
Act, the Exchange Act or any state securities law, as such Damages are incurred by the Indemnified Party except to the extent that such
Damages result primarily from the Indemnified Party’s failure to perform any covenant or agreement contained in this Agreement or
the Indemnified Party’s negligent, recklessness or willful misconduct; provided, however, that the foregoing indemnity agreement
shall not apply to any Damages of the Investor to the extent, but only to the extent, arising out of or based upon any untrue statement
or alleged untrue statement or omission or alleged omission made by the Company in reliance upon and in conformity with information furnished
to the Company by the Investor for use in the Registration Statement, any post-effective amendment thereof, Prospectus, Prospectus Supplement
thereto, or any preliminary prospectus or final prospectus (as amended or supplemented); and provided, further, that in no event shall
any indemnity by the Investor under this Section 10.1 exceed the Commitment Amount, except in the case of fraud or willful
misconduct by the Investor.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Force
Majeure. No Party shall be liable for any failure to fulfill its obligations hereunder due
to causes beyond its reasonable control, including but not limited to acts of God, epidemic or pandemic, natural disaster, labor disturbances,
terrorist attack, riots or wars, and any action taken, or restrictions or limitations imposed, by government or public authorities.
Section 11.2 Governing
Law. This Agreement shall be governed by and interpreted in accordance with the laws of the
State of Delaware without regard to the principles of conflicts of law.
Section 11.3 Assignment.
The Transaction Documents shall be binding upon and inure to the benefit of the Company and the Investor and their respective successors.
Neither any of the Transaction Documents nor any rights of the Investor or the Company hereunder may be assigned by either Party to any
other Person.
Section 11.4 No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the Company and
the Investor and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person,
except as contemplated in Article X.
Section 11.5 Termination.
This Agreement shall automatically terminate on the earlier of (i) the end of the Commitment Period, or (ii) the date that,
pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against
the Company, a Custodian is appointed for the Company or for all or substantially all of its property or the Company makes a general assignment
for the benefit of its creditors.
Section 11.6 Entire
Agreement. The Transaction Documents, together with the exhibits thereto, contain the entire
understanding of the Company and the Investor with respect to the matters covered herein and therein and supersede all prior agreements
and understandings, oral or written, with respect to such matters.
Section 11.7 Fees
and Expenses. Except as expressly set forth in the Transaction Documents or any other writing
to the contrary, each Party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such Party incidental to the negotiation, preparation, execution, delivery and performance of the Transaction Documents.
Section 11.8 Clearing
Costs. The Company shall pay the Clearing Costs associated with each Closing, and any Transfer
Agent fees (including any fees required for same-day processing of any instruction letter delivered by the Company), stamp taxes and other
taxes and duties levied on the Company in connection with the delivery of any Securities to the Investor.
Section 11.9 Counterparts
and Execution. The Transaction Documents may be executed in multiple counterparts, each of
which may be executed by less than all of the Parties, all of which together will constitute one instrument, will be deemed to be an original,
and will be enforceable against the Parties. The Transaction Documents may be delivered to the other Party hereto by email of a copy of
the Transaction Documents bearing the signature of the Party so delivering the Transaction Documents. The Parties agree that this Agreement
shall be considered signed when the signature of a Party is delivered by .PDF, DocuSign or other generally accepted electronic signature.
Such .PDF, DocuSign, or other generally accepted electronic signature shall be treated in all respects as having the same effect as an
original signature. The signatories to this Agreement each represent and warrant that they are duly authorized by the Parties with the
power and authority to bind the Parties to the terms and conditions thereof.
Section 11.10 Severability.
If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision; provided that such severability shall be ineffective if it materially
changes the economic benefit of this Agreement to any Party.
Section 11.11 Further
Assurances. Each Party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other
Party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
Section 11.12 Agreement
Not to be Construed Against Drafter. The Parties acknowledge that they have had an adequate
opportunity to review each and every provision contained in this Agreement and to submit the same to legal counsel for review and comment.
The Parties agree with each and every provision contained in this Agreement and agree that the rule of construction that a contract
be construed against the drafter, if any, shall not be applied in the interpretation and construction of this Agreement.
Section 11.13 Titles
and Subtitles. The titles and subtitles used in this Agreement are used for the convenience
of reference and are not to be considered in construing or interpreting this Agreement.
Section 11.14 Amendments;
Waivers. No provision of this Agreement may be amended other than by a written instrument
signed by both Parties hereto and no provision of this Agreement may be waived other than in a written instrument signed by the Party
against whom enforcement of such waiver is sought. No failure or delay in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.
Section 11.15 Publicity.
The Company and the Investor shall consult with each other in issuing any press releases or otherwise making public statements with respect
to the transactions contemplated hereby and no Party shall issue any such press release or otherwise make any such public statement, other
than as required by law or for legal compliance, without the prior written consent of the other Party, which consent shall not be unreasonably
withheld or delayed, except that no prior consent shall be required if such disclosure is required by law, in which case the disclosing
Party shall provide the other Party with prior notice of such public statement. The Investor acknowledges that the Transaction Documents
may be deemed to be “material contracts,” as that term is defined by Item 601(b)(10) of Regulation S-K, and that the
Company may therefore be required to file such documents as exhibits to reports or registration statements filed under the Securities
Act or the Exchange Act. The Investor further agrees that the status of such documents and materials as material contracts shall be determined
solely by the Company, in consultation with its counsel.
Section 11.16 Dispute
Resolution.
| (a) | Average Daily Trading Volume, Purchase Notice Limit, or VWAP. |
(i) In
the case of a dispute relating to the Average Daily Trading Volume, Purchase Notice Limitation, or VWAP (as the case may be) (including,
without limitation, a dispute relating to the determination of any of the foregoing), the Company or the Investor (as the case may be)
shall submit the dispute to the other Party via facsimile or electronic mail within five (5) Business Days after the Party learned
of the circumstances giving rise to such dispute. If the Investor and the Company are unable to promptly resolve such dispute relating
to such Average Daily Trading Volume, Purchase Notice Limit, or VWAP (as the case may be), at any time after the second (2nd) Business
Day following such initial notice by the Company or the Investor (as the case may be) of such dispute to the Company or the Investor (as
the case may be), then the Company and the Investor may select an independent, reputable investment bank as mutually agreed upon to resolve
such dispute. If the Parties cannot agree upon such an investment bank within ten (10) Business Days of the date of the initial notice,
the Parties shall submit the dispute to arbitration pursuant to Section 11.16(b).
(ii) The
Investor and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in
accordance with the above and (B) written documentation supporting its position with respect to such dispute, in each case, no later
than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which such investment bank was selected
(the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding clauses (A) and
(B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood and
agreed that if either the Investor or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission
Deadline, then the Party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives
its right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute and such
investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such investment bank
prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Investor or otherwise requested
by such investment bank, neither the Company nor the Investor shall be entitled to deliver or submit any written documentation or other
support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii) The
Company and the Investor shall cause such investment bank to determine the resolution of such dispute and notify the Company and the Investor
of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses
of such investment bank shall be borne by the losing Party, and such investment bank’s resolution of such dispute shall be final
and binding upon all Parties. The terms of this Agreement, each other applicable Transaction Document, and the Required Dispute Documentation
shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be
entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines are
required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute such investment
bank shall apply such findings, determinations and the like to the terms of this Agreement and any other applicable Transaction Documents.
(iv) Both
the Company and the Investor expressly acknowledge and agree that (i) this Section 11.16(a) constitutes an agreement
to arbitrate between the Company and the Investor (and constitutes an arbitration agreement) under § 5701, et seq. of the Delaware
Code Title 10 with respect to the dispute described in Section 11.16(a)(i) and that both the Company and the Investor
are authorized to apply for an order to compel arbitration pursuant to Delaware Code Title 10 § 5703 in order to compel compliance
with this Section 11.16(a).
(b) Jurisdiction.
Subject to Section 11.16(a), each party hereby irrevocably submits that any dispute, controversy or claim arising out of or
relating to this Agreement or any Transaction Document (including whether any such dispute is arbitrable), shall be submitted to the exclusive
jurisdiction of the Chancery Court of the State of Delaware and the United States District Court for the District of Delaware. Each party
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 any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. 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 to such party at the address for such 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 manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. The Company and the Investor agree that all dispute resolution
proceedings in accordance with this Section 11.16 may be conducted in a virtual setting.
Section 11.17 Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (a) personally served, (b) delivered by reputable air courier service with charges
prepaid for next Business Day delivery, or (c) transmitted by hand delivery, or email as a PDF (with read receipt or a written confirmation
of delivery or receipt), addressed as set forth below or to such other address as such Party shall have specified most recently by written
notice given in accordance herewith. Any notice or other communication required or permitted to be given hereunder shall be deemed effective
upon hand delivery or delivery by email at the address designated below (if delivered on a Business Day during normal business hours where
such notice is to be received), or the first Business Day following such delivery (if delivered other than on a Business Day during normal
business hours where such notice is to be received).
The addresses for such communications
shall be:
If to the Company:
Address:
890 Yonge Street, 7th Floor, Toronto, Ontario, Canada M4W 3P4
Telephone:
(416) 322-9700
E-mail:
[REDACTED] and [REDACTED]
If to the Investor:
Address: 801 Brickell Ave., FL 8, Miami FL, 33131
Telephone: (917) 793-1173
E-mail:
[REDACTED]
Either
Party hereto may from time to time change its address or email for notices under this clause by giving prior written notice of such
changed address to the other party hereto.
[Signature Page Follows]
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized
as of the Execution Date.
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GREENBROOK TMS INC. |
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|
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|
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By: |
/s/
Bill Leonard |
| |
Name: |
Bill Leonard |
| |
Title: |
Chief Executive Officer |
| |
Date: |
July 13, 2023 |
| |
|
| |
|
| |
ALUMNI CAPITAL LP |
| |
|
| |
By: |
ALUMNI CAPITAL GP LLC |
| |
|
| |
|
| |
By: |
/s/ Ashkan Mapar |
| |
Name: |
Ashkan Mapar |
| |
Title: |
Manager |
| |
Date: |
July 13, 2023 |
| |
|
EXHIBIT A
FORM OF PURCHASE NOTICE
TO: ALUMNI CAPITAL LP
We refer to the Purchase Agreement, dated as of
July 13, 2023 entered into by and between Greenbrook TMS Inc. and you (the “Agreement”). Capitalized
terms defined in the Agreement shall, unless otherwise defined herein, have the same meaning when used herein.
We hereby certify that, as of the date hereof,
the conditions set forth in Article VIII of the Agreement are satisfied, and we hereby elect to exercise our right pursuant
to the Agreement to require you to purchase ___________ Purchase Notice Securities at the following Purchase Price (select only one):
[ ] Purchase Price I
[ ] Purchase Price II
[ ] Purchase Price III
The Closing Date in respect of the purchase and
sale of the Purchase Notice Securities referred to herein shall be ________, 2023.
The Company acknowledges and agrees that the amount
of Purchase Notice Securities shall not exceed the Purchase Notice Limitation applicable to such Purchase Notice or the Beneficial Ownership
Limitation. To the extent the Beneficial Ownership Limitation has been exceeded, you are requested to advise the Company promptly. Such
notice to the Company shall state the reduced amount of Purchase Notice Securities to sold hereby that shall not exceed the Beneficial
Ownership Limitation.
The Company’s wire instructions are as follows:
[Insert Wire Instructions]
| |
|
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GREENBROOK TMS INC. |
| |
|
| |
|
| |
By: |
|
| |
Name: |
Bill Leonard |
| |
Title: |
Chief Executive Officer |
| |
Date: |
_________, 2023 |
Acknowledged, received and agreed by:
| |
|
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ALUMNI CAPITAL LP |
| |
|
| |
By: |
ALUMNI CAPITAL GP LLC |
| |
|
| |
|
| |
By: |
|
| |
Name: |
Ashkan Mapar |
| |
Title: |
Manager |
| |
Date: |
____________, 2023 |
