EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
This
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of July 16, 2024, between Vicinity Motor Corp., a company
incorporated under the laws of the Province of British Columbia, Canada (the “Company”), and each purchaser identified
on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to the terms and
conditions set forth in this Agreement and pursuant to (i) an effective registration statement under the Securities Act (as defined below)
as to the Shares (as defined below), the Pre-Funded Warrants, and the Pre-Funded Warrant Shares (each as defined below), and (ii) an exemption
from the registration requirements of Section 5 of the Securities Act (as defined below) contained in Section 4(a)(2) thereof and/or Regulation
D thereunder as to the Common Warrants and the Common Warrant Shares (each as defined below), the Company desires to issue and sell to
each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more
fully described in this Agreement.
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 each Purchaser agree as follows:
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:
“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.5.
“Action” shall
have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Beneficial Ownership
Limitation” shall have the meaning ascribed to such term in Section 2.1.
“BHCA” shall
have the meaning ascribed to such term in Section 3.1(kk).
“Board of Directors”
means the board of directors, or any authorized committee thereof, 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 and the Province of British Columbia are authorized or required by law or other governmental action
to close.
“Buy-In Price”
shall have the meaning ascribed to such term in Section 4.1(d).
“Canadian Authorities”
means the Canadian securities regulatory authorities in each of British Columbia, Alberta, Manitoba and Ontario.
“Canadian Securities Laws”
means all applicable securities legislation of British Columbia, Alberta, Manitoba and Ontario and the respective rules and regulations
under such laws together with applicable published instruments, policies, notices and orders of the Canadian Authorities.
“Closing” means
the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the first (1st) Trading
Day following the date hereof.
“Code” shall
have the meaning ascribed to such term in Section 3.1(bb).
“Commission”
means the United States Securities and Exchange Commission.
“Common Shares”
means the common shares of the Company, no par value, 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.
“Common Warrant Shares”
means the Common Shares issuable upon exercise of the Common Warrants.
“Common Warrants”
means, collectively, the Common Share purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof,
which Common Warrants shall be immediately exercisable and have a term equal to five (5) years from the issuance date, in the form of
Exhibit B attached hereto.
“Company Counsel”
means Cozen O’Connor P.C., U.S. counsel to the Company, and Cozen O’Connor LLP, Canadian counsel to the Company.
“Company Covered Person”
means, with respect to the Company as an “issuer” for purposes of Rule 506 promulgated under the Securities Act, any Person
listed in the first paragraph of Rule 506(d)(1).
“Consents” shall
have the meaning ascribed to such term in Section 3.1(n).
“Decision Document”
shall have the meaning ascribed to such term in Section 3.1(f)(ii).
“Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disclosure Time”
means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight
(New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless
otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City
time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise
instructed as to an earlier time by the Placement Agent.
“Disqualification Event”
shall have the meaning ascribed to such term in Section 3.1(pp).
“Environmental Laws”
shall have the meaning ascribed to such term in Section 3.1(m).
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt Issuance”
means the issuance of (a) Common Shares or options, restricted stock units, deferred share units or other equity awards to employees,
officers, consultants, or directors of the Company pursuant to any share option plan or other arrangement duly adopted for such purpose
by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors
established for such purpose for services rendered to the Company, (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 (other than in connection
with share splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to mergers, consolidations,
acquisitions or strategic transactions approved by the Board of Directors, provided that such securities are issued as “restricted
securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement
in connection therewith during the prohibition period set forth in Section 4.12(a) herein, and provided, further, that any such issuance
shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business
of the Company and in which the Company receives benefits in addition to any investment of funds, but shall not include a transaction
in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing
in securities.
“FCPA” means
the Foreign Corrupt Practices Act of 1977, as amended.
“Federal
Reserve” shall have the meaning ascribed to such term in Section 3.1(kk).
“Hazardous Materials”
shall have the meaning ascribed to such term in Section 3.1(m).
“IFRS” means
International Financial Reporting Standards as issued by the International Accounting Standards Board.
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).
“Intellectual Property
Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Issuer Covered Person”
shall have the meaning ascribed to such term in Section 3.1(pp).
“IT Systems and Data”
shall have the meaning ascribed to such term in Section 3.1(mm).
“Legend Removal Date”
shall have the meaning ascribed to such term in Section 4.1(c).
“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, dated as of the date hereof, by and among the Company and the directors and executive officers of the Company,
in the form of Exhibit C attached hereto.
“Material Adverse Effect”
shall have the meaning ascribed to such term in Section 3.1(b).
“Misconduct”
shall have the meaning ascribed to such term in Section 3.1(k)(ii).
“OFAC”
shall have the meaning ascribed to such term in Section 3.1(jj).
“Other
Written Information” shall have the meaning ascribed to such term in Section 3.2(f).
“Per
Pre-Funded Warrant Purchase Price” means the Per Share Purchase Price minus $0.001.
“Per Share Purchase Price”
equals $0.52, subject to adjustment for reverse and forward share splits, share dividends, share combinations and other similar transactions
of the Common Shares that occur after the date of this Agreement and before the Closing Date.
“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.
“Placement Agent”
means A.G.P./Alliance Global Partners.
“Pre-Funded Warrant Shares”
means the Common Shares issuable upon exercise of the Pre-Funded Warrants.
“Pre-Funded Warrants”
means, collectively, the pre-funded Common Share purchase warrants delivered to the Purchasers at Closing in accordance with Section 2.2(a)
hereof, in the form of Exhibit A attached hereto.
“Pre-Settlement Period”
shall have the meaning ascribed to such term in Section 5.21.
“Pre-Settlement Securities”
shall have the meaning ascribed to such term in Section 5.21.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition) pending or, to the Company’s knowledge, threatened in writing against 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).
“Prospectus”
means the final prospectus filed with the Commission under the Registration Statement complying with Rule 424(b) of the Securities Act.
Any reference herein to the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein as of the
date of filing thereof; and any reference herein to any “amendment” or “supplement” with respect to the Prospectus
shall be deemed to refer to and include (i) the filing of any document with the Commission incorporated or deemed to be incorporated therein
by reference after the date of filing of such Prospectus and (ii) any such document so filed.
“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that will be filed with
the Commission and delivered by the Company to each Purchaser at or prior to the Closing. Any reference herein to the Prospectus Supplement
shall be deemed to refer to and include the documents incorporated by reference therein as of the date of filing thereof; and any reference
herein to any “amendment” or “supplement” with respect to the Prospectus Supplement shall be deemed to refer to
and include (i) the filing of any document with the Commission incorporated or deemed to be incorporated therein by reference after the
date of filing of such Prospectus Supplement and (ii) any such document so filed.
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.
“Registration Statement”
means the effective registration statement on Form F-3 filed with the Commission on June 27, 2023 (File No. 333-272964), including all
information, documents and exhibits filed with or incorporated by reference into such registration statement, which registers the sale
of the Shares, the Pre-Funded Warrants, and the Pre-Funded Warrant Shares to the Purchasers.
“Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).
“Rule 144” means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means for each Purchaser, the Shares, the Warrants and the Warrant Shares purchased pursuant to this Agreement.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares” means
the Common Shares issued or issuable to each Purchaser pursuant to this Agreement.
“Short Sales”
means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include
locating and/or borrowing Common Shares).
“Standard Settlement Period”
shall have the meaning ascribed to such term in Section 4.1(c).
“Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for Shares or Pre-Funded Warrants (in lieu of Shares) and Common Warrants
purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription
Amount,” in United States dollars and in immediately available funds.
“Subsidiary”
means any principal subsidiary of the Company set forth on Schedule 3.1(a) to this Agreement, 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 TSX Venture Exchange, 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
Nasdaq Capital Market, TSX Venture Exchange or the Frankfurt Stock Exchange (or any successors to any of the foregoing).
“Transaction Documents”
means this Agreement, the Lock-Up Agreements, the Warrants, all exhibits and schedules thereto and hereto and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means Computershare Trust Company of Canada, the current transfer agent of the Company, with a mailing address of 510
Burrard Street, 3rd Floor, Vancouver, BC, Canada V6C 3B9, and any successor transfer agent of the Company.
“Variable Rate Transaction”
shall have the meaning ascribed to such term in Section 4.12(b).
“Warrants” means,
collectively, the Pre-Funded Warrants and the Common Warrants.
“Warrant Shares”
means, collectively, the Common Warrant Shares and the Pre-Funded Warrant Shares.
ARTICLE II.
PURCHASE AND SALE
2.1. Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery
of this Agreement by the parties hereto, the Company agrees to sell, and each Purchaser, severally and not jointly, agrees to purchase,
(i) the number of Shares set forth under the heading “Subscription Amount” on the Purchaser’s signature page hereto,
at the Per Share Purchase Price, and (ii) Common Warrants exercisable for Common Warrant Shares as calculated pursuant to Section 2.2(a);
provided, however, that, to the extent that a Purchaser determines, in its sole discretion, that as a result of such Purchaser’s
Subscription Amount, such Purchaser (together with such Purchaser’s Affiliates) would beneficially own Shares in excess of the Beneficial
Ownership Limitation, such Purchaser may elect to purchase Pre-Funded Warrants in lieu of purchasing Common Shares as determined pursuant
to Section 2.2(a). The “Beneficial Ownership Limitation” shall be 4.99% (or, at the election of the Purchaser at the
Closing, 9.99%) of the number of Common Shares outstanding immediately after giving effect to the issuance of the Securities on the Closing
Date. Each Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser shall be made available
for “Delivery Versus Payment” (“DVP”) settlement with the Company or its designees. The Company shall deliver
to each Purchaser its respective Shares, Common Warrants and/or Pre-Funded Warrants (as applicable to such Purchaser) as determined pursuant
to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing.
Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur remotely via the exchange
of documents and signatures or at such other location as the parties shall mutually agree. Unless otherwise directed by the Placement
Agent, settlement of the Shares shall occur via DVP (i.e., on the Closing Date, the Company shall issue the Shares registered in the Purchasers’
names and addresses and released by the Transfer Agent directly to the accounts designated by the Placement Agent, and, upon receipt of
such Shares, the Placement Agent shall promptly electronically deliver such Shares to the applicable Purchaser, and payment therefor shall
be made by the Placement Agent (or its clearing firm) by wire transfer to the Company). Unless otherwise directed by the Placement Agent,
the Warrants shall be issued to each Purchaser in originally signed form.
2.2. Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) for
each Purchaser of Pre-Funded Warrants pursuant to Section 2.1, an originally signed Pre-Funded Warrant registered in the name of such
Purchaser to purchase up to a number of Common Shares equal to the portion of such Purchaser’s Subscription Amount applicable to
Pre-Funded Warrants divided by the Per Pre-Funded Warrant Purchase Price, with an exercise price equal to $0.001, subject to adjustment
therein;
(iii) an
originally signed Common Warrant registered in the name of such Purchaser to purchase up to a number of Common Shares equal to 100% of
such Purchaser’s Shares (and Pre-Funded Warrant Shares underlying such Purchaser’s Pre-Funded Warrant, if applicable) with
an exercise price equal to $0.64 per Common Warrant Share, subject to adjustment therein;
(iv) legal
opinions of Company Counsel, in form and substance reasonably satisfactory to the Placement Agent;
(v) the
duly executed Lock-Up Agreements;
(vi) the
Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Company’s
Chief Executive Officer or Chief Financial Officer;
(vii) subject
to the penultimate sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent
to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian
system (“DWAC”) Shares equal to the number of Shares set forth on such Purchaser’s signature page hereto, registered
in the name of such Purchaser and free and clear of all restrictive and other legends; and
(viii) the
Prospectus and the Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:
(i) this
Agreement duly executed by such Purchaser; and
(ii) such
Purchaser’s Subscription Amount, which shall be made available for DVP settlement with the Company or its designees.
2.3. Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect
(as defined below), in all respects) when made and on the Closing Date of the representations and warranties of the Purchasers contained
herein (unless as of a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement; and
(iv) TSX
Venture Exchange shall have provided its approval on or prior to the Closing Date of amendments to warrants issued by the Company on March
28, 2022.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(v) from
the date hereof to the Closing Date, trading in the Common Shares shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred after the date of this Agreement any material outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any material adverse change (excluding volatility) in, any financial market
which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at
the Closing.
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 warranty made herein to the extent of the disclosure contained in the corresponding section
of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:
(a) Subsidiaries.
The Subsidiaries are set forth on Schedule 3.1(a). The Company owns, directly or indirectly, all of the share capital or other
equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of share capital 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.
(b) Organization
and Qualification. The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly existing
and in good standing (or the foreign equivalent thereof, if any) 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 each Subsidiary 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, could
not have or reasonably be expected to result in: (i) a material adverse effect on the results of operations, assets, business or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (ii) 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 (any of (i) or (ii), a “Material
Adverse Effect”). 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 and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Board of Directors or the Company’s shareholders in connection herewith or therewith other
than in connection with the Required Approvals (as defined below). This Agreement and each other Transaction Document to which the Company
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.
(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, anti-dilution or similar adjustments, 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 U.S. or Canadian court or governmental
authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as 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, 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 filings required pursuant
to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) application(s) to each applicable
Trading Market for the listing of the Shares and the Warrant Shares for trading thereon, and the issuance of the Warrants (as the case
may be), in the time and manner required thereby, (iv) such filings as are required to be made under applicable provincial or state securities
laws, and (v) any ordinary course report of distribution and other filings with any Canadian Authorities related hereto (collectively,
the “Required Approvals”).
(f) Issuance
of the Securities; Registration.
(i) The
Shares and Warrant Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will
be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company, other than restrictions on transfer
provided for in the Transaction Documents or imposed by applicable securities laws, and shall not be subject to preemptive or similar
rights of shareholders. The Warrants are duly authorized, and when issued in accordance with this Agreement, will be binding obligations
of the Company under the law of the jurisdiction governing the Warrants, validly issued, free and clear of all Liens imposed by the Company,
other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable securities laws, and shall not
be subject to preemptive or similar rights of shareholders.
(ii) The
Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which Registration
Statement became effective on July 5, 2023 (the “Effective Date”), including the Prospectus, and such amendments and
supplements thereto as may have been required to the date of this Agreement. The Company was at the time of the filing of the Registration
Statement eligible to use Form F-3. The Company is eligible to use Form F-3 under the Securities Act and meets the transaction requirements
as set forth in General Instruction I.B.5 of Form F-3. The Registration Statement is effective under the Securities Act, and no stop order
preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been
issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened
by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus Supplement with
the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective, at the date
of this Agreement, and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material
respects to the requirements of the Securities Act and did not and will 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 the Prospectus,
the Prospectus Supplement, and any amendments or supplements thereto, at the time the Prospectus, the Prospectus Supplement, or any amendment
or supplement thereto was or will be issued and at the Closing Date, conformed and will conform in all material respects to the requirements
of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(g) Capitalization.
The Company is authorized to issue an unlimited number of Common Shares of which, as of the date of this Agreement, there are 45,667,706
Common Shares issued and outstanding. All of the issued and outstanding Common Shares are fully paid and non-assessable and have been
duly and validly authorized and issued, in compliance with all applicable Canadian, United States and other securities laws and not in
violation of or subject to any preemptive or similar right that entitles any Person to acquire from the Company any Common Shares or other
security of the Company or any security convertible into, or exercisable or exchangeable for, Common Shares or any other such security,
except for such rights as may have been fully satisfied or waived prior to the date hereof. Except as set forth on Schedule 3.1(g),
or as a result of the issuance and sale of the Securities, the Company has 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 is or may become bound to issue additional Common Shares or Common Share Equivalents. No Person has
any right of first refusal, pre-emptive right, right of participation, or any similar right to participate in the transactions contemplated
by the Transaction Documents. 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 Purchasers) 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. There are no outstanding securities or instruments of the Company with any provision
that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company.
Except as set forth on Schedule 3.1(g), there are no outstanding securities or instruments of the Company that contain any redemption
or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound
to redeem a security of the Company. Other than as provided for under the Company’s omnibus long-term incentive plan, the Company
does not have any share appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. Except
for the Required Approvals, no further approval or authorization of any shareholder of the Company, the Board of Directors or others is
required for the issuance and sale of the Securities. 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 or, to the knowledge of the Company, between or among
any of the Company’s shareholders.
(h) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the one year preceding the date hereof (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, 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 Company has never been an issuer subject to Rule 144(i) under
the Securities Act. The consolidated financial statements, including the notes thereto,
included or incorporated by reference in the Registration
Statement and the Prospectus comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in all material
respects in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“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, immaterial, year-end audit adjustments.
(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest consolidated financial statements included
or incorporated by reference in the Registration Statement and the Prospectus, (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 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, (iii) the
Company has not altered its method of accounting in any material respect, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its share
capital and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company
share option plans. 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 one (1) Trading Day prior to the date that this representation is made.
(j) Litigation.
Except as disclosed in the SEC Reports, 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, provincial, 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) could, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director
or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any current or former 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 Securities Act.
(k) Labor
Relations.
(i) 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 effort is underway to unionize or organize the employees of the Company
or any Subsidiary. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be,
in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition
agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of
each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing
matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local, provincial, 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.
(ii) To
the Company’s knowledge (A) no allegations of sexual harassment, sexual misconduct or discrimination, whether such discrimination
arises from race, ethnic background, sex, gender status, age or otherwise (“Misconduct”) have been made involving any
current or former director, officer, or independent contractor of the Company or any of its Subsidiaries, and (B) neither the Company
nor any of its Subsidiaries have entered into any settlement agreements related to allegations of Misconduct by any current/current or
former director, officer, employee, or independent contractor of the Company or any of its Subsidiaries.
(l) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default
or violation has been waived), (ii) is in violation of any federal, provincial, territorial, state, municipal, local, or foreign law,
regulation, judgment, decree or order of any court, arbitrator or other governmental authority governing its business, or any other federal,
provincial, territorial, state, municipal, local, or foreign agencies or bodies in Canada,
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 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 of (i), (ii) and (iii) as could not have or reasonably be expected to
result in a Material Adverse Effect.
(m) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all applicable federal, state, local and foreign laws relating to
pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface
strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or
toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well
as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have
received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses;
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii),
the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(n) Regulatory
Permits. Each of the Company and its Subsidiaries has all requisite power, capacity and
authority, and all necessary consents, approvals, authorizations, orders, registrations, qualifications, licenses, filings and permits
of, with and from all judicial, regulatory and other legal or governmental agencies and bodies and all third parties, Canadian, U.S.,
or foreign, including without limitation, those administered by any other governments, regulatory authorities, governmental departments,
agencies, commissions, bureaus, officials, ministers, Crown corporations, courts, bodies, boards, tribunals, commercial registers or dispute
settlement panels or other law, rule or regulation-making organizations or entities in Canada (collectively, the “Consents”),
to own, lease and operate its properties and conduct its business as it is now being conducted or, except as disclosed in the Registration
Statement and the Prospectus, proposed to be conducted, in each case as disclosed in the Registration Statement and the Prospectus, and
each such Consent is valid, existing, in good standing and in full force and effect, except in each case as would not have a Material
Adverse Effect. Neither the Company nor any Subsidiary has received notice of any investigation or Proceedings which, if decided adversely
to the Company or any such Subsidiary would have a Material Adverse Effect. The Company and each Subsidiary are in compliance with the
terms and conditions of all such Consents, except where the failure to so comply would not, individually or in the aggregate, have a Material
Adverse Effect.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good
and marketable title in all personal property owned by them 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 therefor 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, except where the failure
to be in compliance would not reasonably be expected to have a Material Adverse Effect.
(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 Registration Statement and the Prospectus (collectively, the “Intellectual Property Rights”), except where the
failure to have such Intellectual Property Rights would not have or reasonably be excepted to have a Material Adverse Effect. 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. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial
statements included or incorporated by reference into the Registration Statement and the Prospectus, a written notice of a claim or otherwise
has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or
reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are
enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. 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 could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has no knowledge of any facts that would preclude it from having valid license rights or clear title to the Intellectual Property Rights.
The Company has no knowledge that it lacks or will be unable to obtain any rights or licenses to use all Intellectual Property Rights
that are necessary to conduct its business.
(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 at least equal to the aggregate Subscription Amount. Neither the Company nor any Subsidiary
has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(r) Transactions
With Affiliates and Employees. Neither the Company nor any of the Subsidiaries owes any
amount to, nor has the Company or any of the Subsidiaries made any present loans to, or borrowed any amount from or is otherwise indebted
to, any officer, director, employee or securityholder of any of them or any Person not dealing at “arm’s-length” (as
such term is defined in the Income Tax Act (Canada)) with any of them, except for usual employee reimbursements and compensation paid
in the ordinary and normal course of the business of the Company or any of the Subsidiaries. Except as disclosed in the SEC Reports and
for usual employee or consulting arrangements made in the ordinary and normal course of business, neither the Company nor any of the Subsidiaries
is a party to any contract, agreement or understanding with any officer, director, employee or securityholder of any of them or any other
Person not dealing at arm’s-length with the Company and the Subsidiaries.
(s) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in compliance with all applicable requirements of the Sarbanes-Oxley
Act of 2002, as amended, that are effective as of the date hereof, 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 its Subsidiaries maintain a system of
internal accounting and other controls sufficient to provide reasonable assurances 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 applicable securities laws and 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 accounting for assets is
compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and
its Subsidiaries’ internal control over financial reporting (as defined under Rules 13a-15(f) and 15d-15(f) under the Exchange Act
and within the meaning of Canadian Securities Laws) is effective in all material respects, and there has been no material weakness in
their internal control over financial reporting other than as set forth in the SEC Reports. Since the Evaluation Date (as defined below),
there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial reporting other than as disclosed in the documents incorporated
by reference in the Prospectus. The Company and its Subsidiaries maintain disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act and within the meaning of Canadian Securities Laws) that comply with the requirements
of the Exchange Act and Canadian Securities Laws; such disclosure controls and procedures have been designed, in part, to provide reasonable
assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s
certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as
of the end of the period covered by the Company’s most recently filed annual report under the Exchange Act (such date, the “Evaluation
Date”). The Company presented in its most recently filed annual report filed 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.
(t) Certain
Fees. Except for fees payable to the Placement Agent, no brokerage or finder’s fees or commissions are or will be payable by
the Company or any Subsidiary 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. Other than to Persons engaged by any Purchaser, the
Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.
(u) Investment
Company. The Company is not and, immediately after receipt of payment for the Securities, will not be required to register as an “investment
company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner
so that it will not be required to register as 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 Share under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such
registration. Except as set forth in the SEC Reports, the Registration Statement and the Prospectus, the Company has not, in the twelve
(12) months preceding the date hereof, received notice from any Trading Market on which the Common Share is or has been listed or quoted
to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set
forth in the SEC Reports, the Registration Statement and the Prospectus, 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. The Common Share is currently
eligible for electronic transfer through The Depository Trust Company or another established clearing corporation and the Company is
current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such
electronic transfer.
(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 jurisdiction
of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations
or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of
the Securities and the Purchasers’ ownership of the Securities.
(y) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers
or their agents or counsel with any information that constitutes or might constitute material, non-public information which will not otherwise
be disclosed in the Prospectus Supplement. The Company understands and confirms that the Purchasers will rely on the foregoing representation
in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers
regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including pursuant to
the SEC Reports and the Disclosure Schedules to this Agreement, is true and correct in all material respects and does not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve
(12) 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 the light of the circumstances
under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section
3.2 hereof.
(z) No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, 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 (1) year from the Closing Date. All outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for
which the Company or any Subsidiary has commitments that is required to be disclosed under IFRS, is set forth in the SEC Reports. For
the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess
of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) 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 (z) the present value of any lease payments in excess of $50,000 due under
leases required to be capitalized in accordance with IFRS. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(bb) Tax
Status. Except as disclosed in each of the Registration Statement and the Prospectuses or as will be disclosed in the Prospectus Supplement,
each of the Company and the Subsidiaries has accurately prepared and timely filed all U.S., Canadian and foreign tax returns that are
required to be filed by it and has paid or made provision for the payment of all taxes, assessments, governmental or other similar charges
with respect to the periods covered by such tax returns, except to the extent that the failure to do any of the foregoing would not be
expected to have a Material Adverse Effect. Each of the Company and the Subsidiaries has paid all sales and use taxes and all taxes which
the Company or any Subsidiary is obligated to withhold from amounts owing to employees, creditors and third parties, except in any such
case as would not have a Material Adverse Effect. No deficiency assessment with respect to a proposed adjustment of the Company’s,
or any Subsidiary’s Canadian federal, provincial and territorial, U.S. federal and state, local or foreign taxes is pending or,
to the best of the Company’s knowledge, threatened. The accruals and reserves on the books and records of the Company and the Subsidiaries
in respect of tax liabilities for any taxable period not finally determined are adequate to meet any assessments and related liabilities
for any such period and, since the date of the most recent audited consolidated financial statements of the Company, the Company and the
Subsidiaries have not incurred any liability for taxes other than in the ordinary course of their business. There is no tax Lien, whether
imposed by any U.S., Canadian or other taxing authority, outstanding against the assets, properties or business of the Company or any
Subsidiary. The Company does not expect to be a “passive foreign investment company” for U.S. federal income tax purposes
within the meaning of Section 1297 of the Internal Revenue Code of 1986, as amended (the “Code”), for its current taxable
year ending December 31, 2024 or for the foreseeable future. The Company is not currently a “controlled foreign corporation”
for U.S. federal income tax purposes within the meaning of Section 957 of the Code and does not expect to become a controlled foreign
corporation in the foreseeable future.
(cc) Foreign
Corrupt Practices; Criminal Acts. None of the Company, any Subsidiary, any director or officer thereof or, to the knowledge of the
Company, any agent, employee, affiliate or other Person acting on behalf of the Company or any Subsidiary is aware of or has taken any
action, directly or indirectly, that would result in a violation by such Persons of the FCPA, the CFPOA, or any applicable anti-corruption
laws, rules, or regulation of Canada, the United States or any other jurisdiction in which the Company or any Subsidiary conducts business,
including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization
of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political
party or official thereof or any candidate for foreign political office, in contravention of the FCPA or the CFPOA and the Company, the
Subsidiaries and, to the knowledge of the Company, the Affiliates of the Company and the Subsidiaries have conducted their businesses
in compliance with the FCPA and the CFPOA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance therewith. Neither the Company nor any Subsidiary has engaged in, or will engage
in, (i) any direct or indirect dealings or transactions in violation of U.S. federal or state criminal laws, including, without limitation,
the Controlled Substances Act (except as otherwise disclosed in the SEC Reports), the Racketeer Influenced and Corrupt Organizations Act,
the Travel Act or any anti-money laundering statute, or (ii) any “aiding and abetting” in any violation of U.S. federal or
state criminal laws.
(dd) Accountants.
PricewaterhouseCoopers LLP, who have audited the consolidated financial statements of the Company that are included or incorporated by
reference in the Registration Statement and the Prospectus and who is the Company’s current auditor, and whose reports appear or
are incorporated by reference in the Registration Statement and the Prospectus, is independent with respect to the Company within the
meaning of the Chartered Professional Accountants of British Columbia Code of Professional Conduct and is an independent registered public
accounting firm in compliance with Public Company Accounting Oversight Board Rule 3520, Auditor Independence.
(ee) Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely
incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(ff) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers
has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities
of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified
term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short
Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative”
transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the
Common Share, and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party
in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage
in hedging activities (in material compliance with applicable laws) at various times during the period that the Securities are outstanding,
including, without limitation, during the periods that the value of the Warrant Shares deliverable with respect to the Warrants are being
determined, and (z) such hedging activities (if any) could reduce the value of the existing shareholders’ equity interests in the
Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging
activities do not constitute a breach of any of the Transaction Documents.
(gg) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf (other than the Placement Agent, as to which no
representation is made) has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased,
or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation
for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation
paid to the Placement Agent in connection with the placement of the Securities.
(hh) Share
Option Plans. Each share option granted by the Company under the Company’s share option plan, or as an inducement grant outside
of a share option plan, was granted (i) in accordance with the terms of the Company’s share option plan or under its terms, respectively,
and (ii) with an exercise price at least equal to the fair market value of the Common Shares on the date such share option would be considered
granted under IFRS and applicable law. No share option granted under the Company’s share option plan has been backdated. The Company
has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, share options prior to, or otherwise
knowingly coordinate the grant of share options with, the release or other public announcement of material information regarding the Company
or its Subsidiaries or their financial results or prospects.
(ii) 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 (“OFAC”).
(jj) 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 Code, and the Company shall so certify upon any Purchaser’s request.
(kk) 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, 5% or more
of the outstanding shares of any class of voting securities or 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.
(ll) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance in all material
respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no Action 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.
(mm) Cybersecurity.
Except as would not, individually or in the aggregate, have a Material Adverse Effect, (i)(x) there has been no security breach
or other compromise of or relating to any of the Company’s or any Subsidiary’s information technology and computer systems,
networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party
data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”) and (y) the
Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably be expected
to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries are presently
in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or
governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems
and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification; (iii) the
Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential
information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company and
the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices.
(nn) Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Common Warrants or the Common Warrant Shares by the Company to the
Purchasers as contemplated hereby.
(oo) No
General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Common Warrants
or Common Warrant Shares by any form of general solicitation or general advertising. The Company has offered the Common Warrants and Common
Warrant Shares for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under
the Securities Act.
(pp) No
Disqualification Events. With respect to the Common Warrants and Common Warrant Shares to be offered and sold hereunder in reliance
on Rule 506 under the Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer,
other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding
voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities
Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”), to the Company’s
knowledge, is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities
Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company
has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has
complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of
any disclosures provided thereunder.
(qq) Notice
of Disqualification Events. The Company will notify the Purchasers and the Placement Agent in writing, prior to the Closing Date
of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, reasonably
be expected to become a Disqualification Event relating to any Issuer Covered Person, in each case of which it is aware.
(rr) Other
Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that
has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
(ss) Absence
of Schedule. In the event that the Company does not deliver any disclosure schedule contemplated by this Agreement, the Company hereby
acknowledges and agrees that (i) to the extent the Company has (x) previously delivered to the Purchasers such disclosure schedule, the
information therein has not changed as of such date, and (y) not previously delivered to the Purchasers such disclosure schedule, each
such undelivered disclosure schedule shall be deemed to read as follows: “Nothing to Disclose,” and (ii) the Purchasers have
not otherwise waived delivery of such disclosure schedule.
3.2. Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate
as of such date):
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company
or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such
Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized
by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each
Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance
with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it 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. The Purchaser is not a resident of any jurisdiction in Canada.
(b) Understandings
or Arrangements. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser understands
that the Common Warrants and the Common Warrant Shares are “restricted securities” and have not been registered under the
Securities Act or any applicable state securities law and is acquiring the Securities as principal for his, her or its own account and
not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable
state or provincial securities law, has no present intention of distributing any of such Securities in violation of the Securities Act
or any applicable state or provincial securities law and has no direct or indirect arrangement or understandings with any other persons
to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state or provincial
securities law (this representation and warranty not limiting such Purchaser’s right to sell such Securities pursuant to a registration
statement or otherwise in compliance with applicable federal, provincial and state securities laws).
(c) General
Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any
seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.
(d) Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which
it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7),
(a)(8), (a)(9), (a)(12), or (a)(13) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act. The Purchaser is not resident or domiciled in any province or territory in Canada and is not purchasing
the Securities with a view to their resale in Canada.
(e) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such investment.
(f) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports, the Registration Statement and the Prospectus. Such Purchaser is not deemed to have any knowledge
of any information not included in the SEC Reports, the Registration Statement and the Prospectus unless such information is delivered
in the manner described in the next sentence. In addition, such Purchaser may have received in writing from the Company such other information
concerning its operations, financial condition and other matters as such Purchaser has requested, identified thereon as OTHER WRITTEN
INFORMATION (such other information is collectively, the “Other Written Information”), and considered all factors such
Purchaser deems material in deciding on the advisability of investing in the Securities. Such Purchaser was afforded (i) the opportunity
to ask such questions as such Purchaser deemed necessary of, and to receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Securities and the merits and risks of acquiring the Securities; (ii) the right of access
to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient
to enable the Purchaser to evaluate the Securities; and (iii) the opportunity to obtain such additional information that the Company possesses
or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to acquiring
the Securities. Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of
the Securities and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such
Purchaser agrees need not be provided to it. In connection with the issuance of the Securities to such Purchaser, neither the Placement
Agent, nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.
(g) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has
any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or
sales, including Short Sales, of the securities of the Company or “derivative” securities based on securities issued by the
Company during the period commencing as of the time that such Purchaser first held discussions (written or oral) from the Company or
any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately
prior to execution of this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives,
including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser
has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms
of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation
or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement to borrow, identification of the
availability of, and/or securing of, securities of the Company in order for such Purchaser (or its broker or other financial representative)
to effect Short Sales or similar transactions following the Closing Date.
(h) No
Voting Agreements. The Purchaser is not a party to any agreement or arrangement, whether written or oral, between the Purchaser and
any other Purchaser and any of the Company’s shareholders as of the date hereof, regulating the management of the Company, the
shareholders’ rights in the Company, the transfer of shares in the Company, including any voting agreements, shareholder agreements
or any other similar agreement, even if its title is different or has any other relations or agreements with any of the Company’s
shareholders, directors or officers.
(i) Brokers.
Except as set forth in the Prospectus, no agent, broker, investment banker, person or firm acting in a similar capacity on behalf of or
under the authority of the Purchaser is or will be entitled to any broker’s or finder’s fee or any other commission or similar
fee, directly or indirectly, for which the Company or any of its Affiliates after the Closing could have any liabilities in connection
with this Agreement, any of the transactions contemplated by this Agreement, or on account of any action taken by the Purchaser in connection
with the transactions contemplated by this Agreement.
(j) Independent
Advice. Each Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company
to the Purchaser in connection with the purchase of the Securities constitutes legal, tax or investment advice.
The Company acknowledges and agrees
that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s
representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document
or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions
contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation
or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1. Removal
of Legends
(a) The
Common Warrants and Common Warrant Shares may only be disposed of in compliance with state and U.S. federal securities laws and Canadian
Securities Laws. In connection with any transfer of Common Warrants or Common Warrant Shares other than pursuant to an effective registration
statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b),
the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that
such transfer does not require registration of such transferred securities under the Securities Act.
(b) The
Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Common Warrants or the Common
Warrant Shares in the following form:
[NEITHER] THIS SECURITY
[NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
The Company acknowledges and agrees
that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security
interest in some or all of the Common Warrants or Common Warrant Shares to a financial institution that is an “accredited investor”
as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer pledged
or secured Common Warrants or Common Warrant Shares to the pledgees or secured parties. Such a pledge or transfer would not be subject
to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection
therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute
and deliver such reasonable documentation as a pledgee or secured party of Common Warrants and Common Warrant Shares may reasonably request
in connection with a pledge or transfer of the Common Warrants or Common Warrant Shares.
(c) Certificates
evidencing the Common Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while
a registration statement covering the resale of such security is effective under the Securities Act, or (ii) following any sale of such
Common Warrant Shares pursuant to Rule 144 without volume or manner of sale limitations (assuming cashless exercise of the Common Warrants),
or (iii) if such Common Warrant Shares are eligible for sale under Rule 144 (assuming cashless exercise of the Common Warrants), or (iv)
if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent or the Purchaser
promptly if required by the Transfer Agent to effect the removal of the legend hereunder,
or if requested by a Purchaser, respectively.
If all or any portion of a Common Warrant is exercised at a time when there is an effective registration statement to cover the resale
of the Common Warrant Shares, or if such Common Warrant Shares may be sold under Rule 144 without volume or manner of sale limitations
(assuming cashless exercise of the Common Warrants) or if such legend is not otherwise required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Common Warrant Shares shall
be issued free of all legends. The Company agrees that following such time as such legend is no longer required under this Section 4.1(c),
the Company will, no later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement
Period (as defined below) following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Common
Warrant Shares, as applicable, issued with a restrictive legend (such date, the “Legend Removal Date”), deliver or
cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends. The
Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer
set forth in this Section 4. Common Warrant Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the
Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by such
Purchaser. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number
of Trading Days, on the Company’s primary Trading Market with respect to the Common Shares as in effect on the date of delivery
of a certificate representing Common Warrant Shares issued with a restrictive legend.
(d) In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, either (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Common Warrant Shares (based on the VWAP of the Common Shares on the date such Securities
are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(b) and Section 4.1(c),
$10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading
Day after the Legend Removal Date until such certificate is delivered without a legend or (ii) if the Company fails to (a) issue and deliver
(or cause to be delivered) to a Purchaser by the Legend Removal Date a certificate representing the Common Warrant Shares so delivered
to the Company by such Purchaser that is free from all restrictive and other legends or (b) if after the Legend Removal Date such Purchaser
purchases (in an open market transaction or otherwise) Common Shares to deliver in satisfaction of a sale by such Purchaser of all or
any portion of the number of Common Shares, or a sale of a number of Common Shares equal to all or any portion of the number of Common
Shares, that such Purchaser anticipated receiving from the Company without any restrictive legend, then an amount equal to the excess
of such Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the Common
Shares so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”)
over the product of (A) such number of Common Warrant Shares that the Company was required to deliver to such Purchaser by the Legend
Removal Date multiplied by (B) the lowest closing sale price of the Common Share on any Trading Day during the period commencing on the
date of the delivery by such Purchaser to the Company of the applicable Common Warrant Shares (as the case may be) and ending on the date
of such delivery and payment under this Section 4.1(d).
(e) The
Shares and Pre-Funded Warrant Shares shall be issued free of legends.
4.2. Reserved.
4.3. Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of
any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval
is obtained before the closing of such subsequent transaction.
4.4. Securities
Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time issue a press release
disclosing the material terms of the transactions contemplated hereby, and (b) furnish a Report on Form 6-K, including the Transaction
Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such
press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered
to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents
in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such press
release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written
or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors,
agents, employees or Affiliates
on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, with respect to the transactions contemplated
hereby shall terminate. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect
to the transactions contemplated hereby, and neither the Company nor any Purchaser 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 any Purchaser, or without the
prior consent of each Purchaser, 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. Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing or submission with or to the Commission, the Canadian Authorities,
or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities
law in connection with the filing or submission of final Transaction Documents with or to the Commission or the Canadian Authorities,
and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers
with prior notice of such disclosure permitted under this clause (b).
4.5. 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 Purchaser
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 Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchasers.
4.6. Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated
by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor
any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the
Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to
the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms
that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that
the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants
and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective
officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers,
directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser
shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Report on Form 6-K or shall issue a press release containing such material non-public information. The Company
understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the
Company.
4.7. Use
of Proceeds. Except as will be set forth in the Prospectus Supplement, the Company shall use
the net proceeds from the sale of the Securities hereunder for general corporate purposes and shall not use such proceeds: (a) for the
satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s
business and prior practices), (b) for the redemption of any Common Shares or Common Share Equivalents, (c) for the settlement of any
outstanding litigation or (d) in violation of FCPA or OFAC regulations.
4.8. Indemnification
of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify, to the fullest extent permitted by law,
and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person
who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including
all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of, relating to, or in connection with (a) any breach
of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction
Documents, (b) any action instituted against the Purchaser Parties in any capacity,
or any of them or their respective Affiliates, by any shareholder
of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction
Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations, warranties or covenants
under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such shareholder or any violations
by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially determined
to constitute fraud, gross negligence or willful misconduct), (c) any untrue or alleged untrue statement of a material fact contained
in the Registration, the Prospectus or the Prospectus Supplement, or in any amendment or supplement thereto or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus
or the Prospectus Supplement, in the light of the circumstances under which they were made) not misleading, except to the extent, but
only to the extent, that such untrue statements or omissions are based solely upon information regarding such Purchaser Party furnished
in writing to the Company by such Purchaser Party expressly for use therein, or (d) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act, any state securities law, any Canadian Securities Laws, or any rule or regulation thereunder
in connection therewith, except to the extent, but only to the extent, that such violation arises directly from untrue statements or omissions
made by the Company and based solely upon information regarding a Purchaser Party furnished in writing to the Company by such Purchaser
Party expressly for use in any disclosure document, report or other filing of the Company. If any action shall be brought against any
Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the
Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable
to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (x)
the employment thereof has been specifically authorized by the Company in writing, (y) the Company has failed after a reasonable period
of time to assume such defense and to employ counsel or (z) in such action there is, in the reasonable opinion of counsel to the applicable
Purchaser Party, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party,
in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company
will not be liable to any Purchaser Party under this Agreement (1) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (2) to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants
or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this
Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills
are received or are incurred; provided, that if any Purchaser Party is finally judicially
determined not to be entitled to indemnification or payment under this Section 4.8, such Purchaser Party shall promptly reimburse the
Company for any payments that are advanced under this sentence. The indemnity agreements contained herein shall be in addition to any
cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to
pursuant to law.
4.9. 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 Shares pursuant
to this Agreement and Warrant Shares pursuant to any exercise of the Warrants, if applicable.
4.10. Listing
of Common Shares. The Company hereby agrees to use commercially reasonable efforts to maintain the listing or quotation of the Common
Shares on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote
all of the Shares and Warrant Shares on such Trading Market and as soon as commercially practicable secure the listing of all of the Shares
and Warrant Shares on such Trading Market; provided, however, that the Purchasers acknowledge that the Common Shares are
currently subject to delisting by The Nasdaq Capital 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 Shares and Warrant Shares and will take such other
action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such other Trading Market as promptly as
possible. 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 material respects with the Company’s reporting, filing and other obligations under the bylaws or rules
of the Trading Market. The Company agrees to maintain the eligibility of the Common Shares for electronic transfer through the Depository
Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository
Trust Company or such other established clearing corporation in connection with such electronic transfer.
4.11. Reserved.
4.12. Subsequent
Equity Sales.
(a) For
the period that is 45 days following the Closing Date, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement
to issue or announce the issuance or proposed issuance of any Common Shares or Common Share Equivalents nor (ii) file any registration
statement or amendment or supplement thereto, other than the Prospectus Supplement, the filing of a registration statement or any amendment
thereto with respect to the Common Warrant Shares or filing a registration statement on Form S-8 in connection with any employee benefit
plan.
(b) From
the date hereof until six (6) months after 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 Share 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 shares of Common Stock 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 Share or (ii) enters into, or effects a transaction under, any agreement,
including, but not limited to, an equity line of credit or an “at-the-market offering,” whereby the Company may issue securities
at a future determined price, regardless of whether the shares pursuant to such agreement have actually been issued and regardless of
whether such agreement is subsequently cancelled; provided, however, that the Company may enter into and effect sales pursuant
to an at-the-market offering facility with the Placement Agent after 45 days following the Closing Date. Any Purchaser 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 4.12 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an
Exempt Issuance.
4.13. Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is
also offered to all of the parties to such Transaction Documents. For clarification purposes, this provision constitutes a separate right
granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers
as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition
or voting of Shares or otherwise.
4.14. Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor
any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales
of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that
the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section
4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated
by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser
will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules.
Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary,
the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will
not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted
or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and
after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the
Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate
portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect
to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this
Agreement.
4.15. Capital
Changes. Until the ninety (90) day anniversary of the Closing Date, the Company shall not effectuate a reverse or forward share split
or reclassification of the Common Share without the prior written consent of the Purchasers holding a majority in interest of the Shares;
provided, however, this Section 4.15 shall not prohibit, and no Purchaser consent shall be required for, the Company to
undertake actions during the ninety (90) days following the Closing Date, including, without limitation, the distribution of a management
information circulator and the holding of a shareholder meeting, to obtain shareholder approval to effectuate a reverse or forward share
split or reclassification of the Common Shares on a date after the ninety (90) day anniversary of the Closing Date.
4.16. Exercise
Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures required of the Purchasers
in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers
to exercise their Warrants. Without limiting the preceding sentences, 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 in order to exercise the
Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms, conditions
and time periods set forth in the Transaction Documents.
4.17. Lock-Up
Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements except to extend
the term of the lock-up period and shall enforce the provisions of each Lock-Up Agreement in accordance with its terms. If any party to
a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company shall promptly use its commercially reasonable efforts
to seek specific performance of the terms of such Lock-Up Agreement.
4.18. Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Common Warrants and the Common Warrant Shares
as required under Regulation D. The Company shall take such action as the Company shall reasonably determine is necessary in order to
obtain an exemption for, or to qualify the Common Warrants and the Common Warrant Shares for, sale to the Purchasers at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.
4.19. Resale
Registration Statement. As soon as practicable (and in any event within 15 calendar days of the date of this Agreement), the Company
shall file a registration statement on Form F-1 or Form F-3 providing for the resale by the Purchasers of the Common Warrant Shares issued
and issuable upon exercise of the Common Warrants. The Company shall use commercially reasonable efforts to cause such registration statement
to become effective within 30 days (45 days in the event the Commission elects to review such registration statement) following the filing
date of such registration statement and to keep such registration statement effective at all times until no Purchaser owns any Common
Warrants or Common Warrant Shares issuable upon exercise thereof. Each Purchaser agrees to properly notify the Company if it no longer
owns any Common Warrants or Common Warrant Shares issuable upon exercise thereof.
ARTICLE V.
MISCELLANEOUS
5.1. Termination.
This Agreement may be terminated with respect to any Purchaser by any Purchaser, as to such Purchaser’s obligations hereunder only
and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties,
if the Closing has not been consummated on or before the fifth Trading Day following the date hereof; provided, however,
that no such termination will affect the right of any party to sue for any breach by any other party (or parties).
5.2. Fees
and Expenses. Except as expressly set forth below and in the Transaction Documents 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 incident to
the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including,
without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice
delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
5.3. Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus Supplement,
contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements
and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents,
exhibits and schedules.
5.4. 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
time of transmission, if such notice or communication is delivered via email attachment at the email address as 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 time of transmission, if such notice or communication is delivered via email attachment at the 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. To the extent that any notice provided pursuant to any Transaction
Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously
file such notice with the Commission pursuant to a Report on Form 6-K or by issuing a press release containing such material non-public
information.
5.5. Amendments;
Waivers. Prior to Closing, 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 all of the Purchasers. Thereafter, 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 Purchasers which purchased at least 50.01% in interest of the Shares based on the initial Subscription Amounts hereunder
or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment,
modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately
impacted Purchaser (or group of Purchasers) shall also be required. 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. Any proposed amendment or waiver that disproportionately, materially and adversely
affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require
the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding
upon each Purchaser and holder of Securities and the Company.
5.6. 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.
5.7. Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other
than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by
the provisions of the Transaction Documents that apply to the Purchasers.
5.8. No
Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and warranties of the Company
in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. Except as provided in the immediately preceding
sentence, this Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and
this Section 5.8.
5.9. 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 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 or Proceeding, any claim that it
is not personally subject to the jurisdiction of any such court, that such 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
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 any 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 Section 4.8, the prevailing party in such action or Proceeding shall be reimbursed
by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or Proceeding.
5.10. Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities for a period of no longer
than two (2) years from the Closing.
5.11. 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 e-mail delivery of a “.pdf”
format data file, by other electronic signing created on an electronic platform (such as DocuSign) or by digital signing (such as Adobe
Sign), 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 “.pdf” or other electronic or digital signature page were an original thereof.
5.12. 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.
5.13. Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights; provided, however, that, in the case of a rescission of an exercise
of a Warrant, the applicable Purchaser shall be required to return any Common Shares subject to any such rescinded exercise notice concurrently
with the return to such Purchaser of the aggregate exercise price paid to the Company for such Common Shares and the restoration of such
Purchaser’s right to acquire such Common Shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement
warrant certificate evidencing such restored right).
5.14. Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15. Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers
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.
5.16. Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required
to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
5.17. Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or nonperformance
of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently
protect and enforce its rights including, without limitation, the rights arising out of this Agreement
or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in
any Proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of
the Transaction Documents. For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate
with the Company through the legal counsel of the Placement Agent. The legal counsel of the Placement Agent does not represent any of
the Purchasers and only represents the Placement Agent. The Company has elected to provide all Purchasers with the same terms and Transaction
Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly
understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and
a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.
5.18. Liquidated
Damages. The Company’s obligations to pay any liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid liquidated damages and other amounts have been paid notwithstanding
the fact that the instrument or security pursuant to which such liquidated damages or other amounts are due and payable shall have been
canceled.
5.19. 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.
5.20. 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 share splits, share
dividends, share combinations and other similar transactions of the Common Shares that occur after the date of this Agreement.
5.21. Sales
During Pre-Settlement Period. Notwithstanding anything herein to the contrary, if at any time on or after the time of execution of
this Agreement by the Company and an applicable Purchaser, through, and including the time immediately prior to the Closing (the “Pre-Settlement
Period”), such Purchaser sells to any Person all, or any portion, of any Common Shares to be issued hereunder to such Purchaser
at the Closing (collectively, the “Pre-Settlement Shares”), such Person shall, automatically hereunder (without any
additional required actions by such Purchaser or the Company), be deemed to be a Purchaser under this Agreement unconditionally bound
to purchase, and the Company shall be deemed unconditionally bound to sell, such Pre-Settlement Shares to such Purchaser at the Closing;
provided, that the Company shall not be required to deliver any Pre-Settlement Shares to such Purchaser prior to the Company’s receipt
of the purchase price of such Pre-Settlement Shares hereunder; and provided, further, that the Company hereby acknowledges
and agrees that the forgoing shall not constitute a representation or covenant by such Purchaser as to whether or not during the Pre-Settlement
Period such Purchaser shall sell any Common Shares to any Person and that any such decision to sell any Common Shares by such Purchaser
shall solely be made at the time such Purchaser elects to effect any such sale, if any.
5.22. WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY
AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES
FOREVER TRIAL BY JURY.
(Signature Pages Follow)
IN WITNESS WHEREOF, the parties
hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first
indicated above.
| VICINITY MOTOR CORP. |
|
| |
|
| By: |
/s/ William Trainer |
|
| Name: |
William R. Trainer |
|
| Title: |
Chief Executive Officer |
|
| |
|
| Address for Notice: |
|
| 3168, 262nd Street |
|
| Aldergrove, British Columbia |
|
| Canada V4W 2Z6 |
|
| Attn: Chief Executive Officer |
|
| Email: **** |
|
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
[Signature
Page to Securities Purchase Agreement]
[PURCHASER SIGNATURE PAGES TO VEV SECURITIES PURCHASE
AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this
Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Name of Purchaser: Armistice Capital Master Fund Ltd.
Signature of Authorized Signatory of Purchaser:
/s/ Steven Boyd
Name of Authorized Signatory: Steven Boyd
Title of Authorized Signatory: CIO of Armistice
Capital, LLC, the Investment Manager
Email Address of Authorized Signatory: ****
Address for Notice to Purchaser: ****
Address for Delivery of Securities to Purchaser (if not the same as address
for notice):
****
DWAC for Shares:
Subscription Amount:$2,499,999,.84
Shares: 4,807,692
Pre-Funded Warrants:______Beneficial
Ownership Blocker ☐ 4.99%
or ☐ 9.99%
Common Warrants:
4,807,692 Beneficial Ownership Blocker ☒ 4.99%
or ☐ 9.99%
EIN Number: ****
