UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2024
Commission File Number: 001-40858
XORTX THERAPEUTICS
INC.
(Translation of registrant’s name into
English)
3710 – 33rd Street NW
Calgary, Alberta T2L 2M1
Canada
(Address of
principal executive office)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
x Form 20-F ¨ Form 40-F
INCORPORATION BY REFERENCE
Exhibit 99.2, 99.3, 99.4, 99.5, and
99.6 to this report on Form 6-K are hereby incorporated by reference as an Exhibit to the Registration Statement on Form F-3 of
XORTX Therapeutics Inc. (File No. 333-269429), as amended and supplemented.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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XORTX Therapeutics Inc. |
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(Registrant) |
| Date: October 18, 2024 |
By: |
/s/ Allen Davidoff |
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Name: Allen Davidoff |
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Title: President and Chief Executive Officer |
Form 6-K Exhibit Index
Exhibit 99.1
XORTX Announces Closing of US$1.5 Million Registered
Direct Offering and Concurrent Private Placement
CALGARY, AB – October 18, 2024 – XORTX
Therapeutics Inc. ("XORTX" or the “Company”) (NASDAQ: XRTX | TSXV: XRTX | Frankfurt: ANU), a late-stage
clinical pharmaceutical company focused on developing innovative therapies to treat progressive kidney disease, today announced that it
has closed its registered direct offering and concurrent private placement, announced on October 17, 2024, for the purchase and sale of
810,810 common shares (or pre-funded warrants in lieu thereof) in a registered direct offering and common warrants to purchase up to 810,810
common shares in a concurrent private placement (together with the registered direct offering, the “Offering”) at a combined
purchase price of US$1.85 per common share. The common warrants issued pursuant to the concurrent private placement have an exercise price
of US$2.18, are immediately exercisable and expire five years from issuance.
The gross proceeds from
the Offering were approximately US$1.5 million, excluding any proceeds that may be received upon the exercise of the common warrants,
before deducting placement agent fees and other offering expenses payable by the Company. The Company intends to use the net proceeds
from the Offering for working capital and general corporate purposes.
A.G.P./Alliance Global Partners acted as sole placement agent for
the Offering.
The common shares (and
pre-funded warrants in lieu thereof) were issued in a registered direct offering pursuant to an effective shelf registration statement
on Form F-3 (File No. 333-269429) previously filed with the U.S. Securities and Exchange Commission (the “SEC”), under the
Securities Act of 1933, as amended (the “Securities Act”), and declared effective by the SEC on February 3, 2023. A prospectus
supplement describing the terms of the proposed registered direct offering was filed with the SEC and is available on the SEC’s
website located at http://www.sec.gov. Electronic copies of the prospectus supplement may be obtained
from A.G.P./Alliance Global Partners, 590 Madison Avenue, 28th Floor, New York, NY 10022, or by telephone at (212) 624-2060, or by email
at prospectus@allianceg.com.
The private placement
of the common warrants and the underlying common shares was made in reliance on an exemption from registration under Section 4(a)(2) of
the Securities Act and Regulation D thereunder. Accordingly, the securities issued in the concurrent private placement may not be offered
or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration
requirements of the Securities Act and applicable state securities laws.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state
or jurisdiction.
About XORTX Therapeutics Inc.
XORTX is a pharmaceutical company with two clinically
advanced products in development: 1) our lead, XRx-008 program for ADPKD; and 2) our secondary program in XRx-101 for acute kidney and
other acute organ injury associated with Coronavirus / COVID-19 infection. In addition, XRx-225 is a pre-clinical stage program for Type
2 Diabetic Nephropathy. XORTX is working to advance its clinical development stage products that target aberrant purine metabolism and
xanthine oxidase to decrease or inhibit production of uric acid.
 |
XORTX Therapeutics Inc.
3710 – 33rd Street NW, Calgary, Alberta, Canada T2L 2M1
T + 1 403 455 7717 | xortx.com | TSXV | NASDAQ : XRTX I Frankfurt Borse : ANU |
2
For more information, please contact:
| Allen Davidoff, CEO |
Nick Rigopulos, Director of Communications |
| adavidoff@xortx.com or +1 403 455 7727 |
nick@alpineequityadv.com or +1 617 901 0785 |
Neither the TSX Venture Exchange nor Nasdaq
has approved or disapproved the contents of this news release. No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein.
Forward Looking Statements
This press release contains express or implied
forward-looking statements pursuant to applicable securities laws. For example, the Company is using forward-looking statement in this
press release when it discusses the intended use of proceeds from the Offering. These forward-looking statements and their implications
are based on the current expectations of the management of XORTX only, and are subject to a number of factors and uncertainties that
could cause actual results to differ materially from those described in the forward-looking statements. Except as otherwise required
by applicable law and stock exchange rules, XORTX undertakes no obligation to publicly release any revisions to these forward-looking
statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. More detailed
information about the risks and uncertainties affecting XORTX is contained under the heading “Risk Factors” in XORTX’s
Annual Report on Form 20-F filed with the SEC, which is available on the SEC's website, www.sec.gov (including any documents forming
a part thereof or incorporated by reference therein), as well as in our reports, public disclosure documents and other filings with the
securities commissions and other regulatory bodies in Canada, which are available on www.sedarplus.ca.
Exhibit 99.2
October 17, 2024
XORTX Therapeutics Inc.
Attention: Dr. Allen Davidoff Ph.D.
3710 – 33rd Street NW
Calgary, Alberta AB T2L 2M1
Canada
Dear Mr. Davidoff:
This letter (the “Agreement”)
constitutes the agreement between A.G.P./Alliance Global Partners (the “Placement Agent” or “A.G.P.”)
and XORTX Therapeutics Inc., a British Columbia corporation (the “Company”), that the Placement Agent shall serve as
the exclusive placement agent for the Company, on a “best efforts” basis, in connection with the proposed placement (the “Placement”)
of (i) common shares (the “Shares”) of the Company, no par value per share (the “Common Shares”)
(ii) pre-funded warrants to purchase Common Shares (the “Pre-Funded Warrants”) and (iii) warrants to purchase
Common Shares (“Common Warrants” and collectively with the Pre-Funded Warrants, the “Warrants”).
The Shares and Warrants actually placed by the Placement Agent are referred to herein as the “Placement Agent Securities.”
The terms of the Placement shall be mutually agreed upon by the Company and the purchasers of the Placement Agent Securities (each, a
“Purchaser” and collectively, the “Purchasers”), and nothing herein constitutes that the Placement
Agent would have the power or authority to bind the Company or any Purchaser, or an obligation for the Company to issue any Placement
Agent Securities or complete the Placement. The Company expressly acknowledges and agrees that the Placement Agent’s obligations
hereunder are on a best efforts basis only and that the execution of this Agreement does not constitute a commitment by the Placement
Agent to purchase the Placement Agent Securities and does not ensure the successful placement of the Placement Agent Securities or any
portion thereof or the success of the Placement Agent with respect to securing any other financing on behalf of the Company. The Shares
and Pre-Funded Warrants shall be offered and sold under the Company’s registration statement on Form F-3 (File No. 333-269429);
the Common Warrants will be sold pursuant to a concurrent private placement exempt from registration under the Securities Act. The Placement
Agent may retain other duly registered brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the
Placement. Certain affiliates of the Placement Agent may participate in the Placement by purchasing some of the Placement Agent Securities.
The sale of Placement Agent Securities to any Purchaser will be evidenced by a securities purchase agreement (the “Purchase Agreement”)
between the Company and such Purchaser, in a form reasonably acceptable to the Company and the Purchaser. Capitalized terms that are not
otherwise defined herein have the meanings given to such terms in the Purchase Agreement. Prior to the signing of any Purchase Agreement,
officers of the Company will be available to answer inquiries from the prospective Purchasers.
SECTION 1. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY.
A. Representations of the
Company. With respect to the Placement Agent Securities, each of the representations and warranties (together with any related disclosure
schedules thereto) and covenants made by the Company to the Purchasers in the Purchase Agreement in connection with the Placement, is
hereby incorporated herein by reference into this Agreement (as though fully restated herein) and is, as of the date of this Agreement
and as of the date of the sale of the Placement Agent Securities (the “Closing Date”), hereby made to, and in favor
of, the Placement Agent. In addition to the foregoing, the Company represents and warrants that there are no affiliations with any Financial
Industry Regulatory Authority (“FINRA”) member firm among the Company’s officers, directors or, to the knowledge
of the Company, any five percent (5.0%) or greater securityholder of the Company, except as set forth in the Purchase Agreement.
B. Covenants of the Company.
From the date hereof until forty-five (45) days after the Closing Date (the “Restriction Period”), neither the Company
nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Common Shares or
Common Share Equivalents; provided that the foregoing shall not apply to a private placement of Common Shares or Common Share Equivalents
conducted solely in Canada. In addition, from the date hereof until one year after the Closing Date, the Company shall not effect or enter
into an agreement to effect any issuance of Common Shares or Common Share Equivalents involving an at-the-market offering or Variable
Rate Transaction (as defined in the Purchase Agreement). Notwithstanding the foregoing, the Company may enter into and effect sales pursuant
to an at-the-market facility following forty-five (45) days after the Closing Date.
SECTION 2. REPRESENTATIONS
OF THE PLACEMENT AGENT. The Placement Agent represents and warrants that it (i) is a member in good standing of FINRA, (ii) is
registered as a broker/dealer under the Exchange Act and the securities laws of each state in which an offer or sale of Placement Agent
Securities is made (unless exempted from the respective state’s broker-dealer registration requirements), (iii) is licensed
as a broker/dealer under the laws of the United States of America, applicable to the offers and sales of the Placement Agent Securities
by the Placement Agent, (iv) is and will be a corporate body validly existing under the laws of its place of incorporation, (v) has
full power and authority to enter into and perform its obligations under this Agreement, and (vi) is not subject to any of the “Bad
Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act. The Placement Agent will
immediately notify the Company in writing of any change in its status with respect to subsections (i) through (vi) above. The
Placement Agent covenants that it will use its best efforts to conduct the Placement hereunder in compliance with the provisions of this
Agreement and the requirements of applicable law.
SECTION 3. COMPENSATION.
In consideration of the services to be provided for hereunder, the Company shall pay to the Placement Agent and/or its respective designees
a cash fee of 7.0% of the aggregate gross proceeds raised from the sale of the Placement Agent Securities (the “Cash Fee”).
SECTION 4. EXPENSES.
The Company agrees to pay all costs, fees and expenses incurred by the Company in connection with the performance of its obligations hereunder
and in connection with the transactions contemplated hereby, including, without limitation: (i) all expenses incident to the issuance,
delivery and qualification of the Shares (including all printing and engraving costs); (ii) all fees and expenses of the registrar
and transfer agent of the Shares; (iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale
of the Placement Agent Securities; (iv) all fees and expenses of the Company’s counsel, independent public or certified public
accountants and other advisors; (v) all costs and expenses incurred in connection with the preparation, printing, filing, shipping
and distribution of the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts),
the Base Prospectus and each applicable Prospectus Supplement, and all amendments and supplements thereto, and this Agreement; (vi) all
filing fees, reasonable attorneys’ fees and expenses incurred by the Company in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the Placement Agent Securities for offer and sale under the state
securities or blue sky laws or the securities laws of any other country; (vii) the fees and expenses associated with including the
Placement Agent Securities on the Trading Market; and (viii) $85,000 for accountable, documented expenses related to legal fees of
counsel to the Placement Agent (which, for the avoidance of doubt shall only be paid by the Company in the event that the Placement is
consummated); provided, that this sentence in no way limits or impairs the indemnification or contribution provisions contained herein.
The Placement Agent reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event
that a determination shall be made by FINRA to the effect that the Placement Agent’s aggregate compensation is in excess of FINRA
Rules or that the terms thereof require adjustment.
SECTION 5. INDEMNIFICATION.
A. To the extent permitted by
law, with respect to the Placement Agent Securities, the Company will indemnify the Placement Agent and its affiliates, stockholders,
directors, officers, employees, members and controlling persons (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) (collectively the “Indemnified Persons”) against all losses, claims, damages, expenses and liabilities,
as the same are incurred (including the reasonable and documented fees and expenses of counsel), (a) relating to or arising out of
(i) any actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be made) by the Company
in connection with the Placement, or (ii) any actions taken or omitted to be taken by any Indemnified Persons in connection with
the Company’s engagement of the Placement Agent, or (b) otherwise relate to or arise out of the Placement Agent’s activities
on the Company’s behalf under the Placement Agent’s engagement hereunder or pursuant to this Agreement, except to the extent
that any losses, claims, damages, expenses or liabilities (or actions in respect thereof) are found in a final judgment (not subject to
appeal) by a court of law to have resulted primarily and directly from the Placement Agent’s fraud, willful misconduct or gross
negligence in performing the services described herein. Notwithstanding anything set forth herein to the contrary, but provided that the
representations, warranties and covenants of the Placement Agent set forth in Section 2 are true and correct, the Company agrees
to indemnify the Placement Agent to the fullest extent set forth in this Section 5, against any and all claims asserted by any or
person or entity alleging that the Placement Agent was not permitted or entitled to act as a placement agent herein, or that the Company
was not permitted to hire or retain the Placement Agent herein, including but not limited to any claims arising out of any purported right
of first refusal another person or entity claims to have to act as a placement agent or any similar role with respect to the Company or
its securities. In no event shall the Company or any Indemnified Person be responsible for any special, indirect or consequential damages
incurred by the other.
B. Promptly after receipt by
the Placement Agent of notice of any claim or the commencement of any action or proceeding with respect to which the Placement Agent is
entitled to indemnity hereunder, the Placement Agent will promptly notify the Company in writing of such claim or of the commencement
of such action or proceeding, but failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder,
except and only to the extent such failure results in the forfeiture by the Company of substantial rights and defenses. If the Company
so elects or is requested by the Placement Agent, the Company will assume the defense of such action or proceeding and will employ counsel
reasonably satisfactory to the Placement Agent and will pay the reasonable and documented fees and expenses of such counsel. Notwithstanding
the preceding sentence, the Placement Agent will be entitled to employ counsel separate from counsel for the Company and from any other
party in such action if counsel for the Placement Agent reasonably determines that it would be inappropriate under the applicable rules of
professional responsibility for the same counsel to represent both the Company and the Placement Agent. In such event, the reasonable
and documented fees and disbursements of no more than one (1) such separate counsel will be paid by the Company, in addition to fees
of local counsel. The Company will have the right to settle the claim or proceeding provided that the Company will not settle any such
claim, action or proceeding without the prior written consent of the Placement Agent, which will not be unreasonably withheld. The Company
shall not be liable for any settlement of any action effected without its written consent, which will not be unreasonably withheld.
C. The Company agrees to notify
the Placement Agent promptly of the assertion against it or any other person of any claim or the commencement of any action or proceeding
relating to a transaction contemplated by this Agreement.
D. If for any reason the foregoing
indemnity is unavailable to the Placement Agent or insufficient to hold the Placement Agent harmless, then the Company shall contribute
to the amount paid or payable by the Placement Agent as a result of such losses, claims, damages or liabilities in such proportion as
is appropriate to reflect not only the relative benefits received by the Company on the one hand and the Placement Agent on the other,
but also the relative fault of the Company on the one hand and the Placement Agent on the other that resulted in such losses, claims,
damages or liabilities, as well as any relevant equitable considerations. The amounts paid or payable by a party in respect of losses,
claims, damages and liabilities referred to above shall be deemed to include any legal or other fees and expenses incurred in defending
any litigation, proceeding or other action or claim. Notwithstanding the provisions hereof, the Placement Agent’s share of the liability
hereunder shall not be in excess of the amount of fees actually received, or to be received, by the Placement Agent under this Agreement.
E. These indemnification provisions
shall remain in full force and effect whether or not the transaction contemplated by this Agreement is completed and shall survive the
termination of this Agreement, and shall be in addition to any liability that the Company might otherwise have to any indemnified party
under this Agreement or otherwise.
SECTION 6. ENGAGEMENT
TERM. The Placement Agent’s engagement hereunder will commence on the date hereof and continue until the earlier of the Closing
Date and 60 days after the date hereof, provided that A.G.P. shall retain the right to act as sole, lead or co-lead U.S. agent, U.S. underwriter
or U.S. advisor in connection with any financing conducted during the six (6) months following the Closing Date and shall be entitled
to the same compensation outlined hereunder for any funds raised by A.G.P. in the case a subsequent financing is consummated. The foregoing
6 month right shall not apply to any royalty or similar arrangement with respect to future development for the XRx-008 program. The date
of termination of this Agreement is referred to herein as the “Termination Date.” In the event, however, in the course
of the Placement Agent’s performance of due diligence it deems it necessary to terminate the engagement, the Placement Agent may
do so prior to the Termination Date. The Company may elect to terminate the engagement hereunder for any reason prior to the Termination
Date but will remain responsible for fees and incurred expenses pursuant to Section 3 and Section 4 hereof and fees and expenses
with respect to the Placement Agent Securities, if sold in the Placement. Notwithstanding anything to the contrary contained herein, the
provisions concerning the Company’s obligation to pay any fees actually earned or expenses actually incurred pursuant to Section 3
and Section 4 hereof and the provisions concerning confidentiality, indemnification and contribution, no fiduciary duty and governing
law (including the waiver of the right to trial by jury) contained herein will survive any expiration or termination of this Agreement.
If this Agreement is terminated prior to the completion of the Placement, all fees or expenses due to the Placement Agent shall be paid
by the Company to the Placement Agent on or before the Termination Date (in the event such fees or expenses are earned, incurred or owed
as of the Termination Date). The Placement Agent agrees not to use any confidential information concerning the Company provided to the
Placement Agent by the Company for any purposes other than those contemplated under this Agreement.
SECTION 7. PLACEMENT
AGENT INFORMATION. The Company agrees that any information or advice rendered by the Placement Agent in connection with this engagement
is for the confidential use of the Company only in their evaluation of the Placement and, except as otherwise required by law, the Company
will not disclose or otherwise refer to the advice or information in any manner without the Placement Agent’s prior written consent.
SECTION 8. NO
FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall not be construed as creating rights enforceable by any person or
entity not a party hereto, except those entitled hereto by virtue of the indemnification provisions hereof. The Company acknowledges and
agrees that the Placement Agent is not and shall not be construed as a fiduciary of the Company and shall have no duties or liabilities
to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention of the Placement
Agent hereunder, all of which are hereby expressly waived.
SECTION 9. CLOSING.
The obligations of the Placement Agent, and the closing of the sale of the Placement Agent Securities hereunder, are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties on the part of the Company contained herein and in the Purchase
Agreement, to the performance by the Company of its obligations hereunder and in the Purchase Agreement, and to each of the following
additional terms and conditions, except as otherwise disclosed to and acknowledged and waived by the Placement Agent:
A. All corporate proceedings
and other legal matters incident to the authorization, form, execution, delivery and validity of each of this Agreement, the Placement
Agent Securities, and all other legal matters relating to this Agreement and the transactions contemplated hereby with respect to the
Placement Agent Securities shall be reasonably satisfactory in all material respects to the Placement Agent.
B. The Placement Agent shall
have received from the Company U.S. Counsel and Company Canadian Counsel (as defined in the Purchase Agreement) such counsels’ written
opinions with respect to the Placement Agent Securities, addressed to the Placement Agent and dated as of the Closing Date, in form and
substance reasonably satisfactory to the Placement Agent.
C. The Placement Agent shall
have a received customary certificate of the Company’s Chief Executive Officer, as to the accuracy of the representations and warranties
contains in the Purchase Agreement, and a certificate of the Company’s secretary certifying (i) that the Company’s articles
of association is true and complete, have not been modified and is in full force and effect; (ii) that the resolutions of the Company’s
Board of Directors (or any authorized committee thereof) relating to the Placement are in full force and effect and have not been modified;
and (iii) as to the incumbency of the officers of the Company.
D. The Shares shall be registered
under the Exchange Act. The Company shall have taken no action designed to terminate, or likely to have the effect of terminating, the
registration of the Shares under the Exchange Act or delisting or suspending from trading the Shares from the Trading Market or other
applicable U.S. national exchange, nor has the Company received any information suggesting that the Commission or the Trading Market or
other U.S. applicable national exchange is contemplating terminating such registration or listing except as otherwise publicly disclosed.
E. No action shall have been
taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would
or would reasonably be expected to, as of the Closing Date, prevent the issuance or sale of the Placement Agent Securities or materially
and adversely affect the business or operations of the Company; and no injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would or would reasonably be expected
to prevent the issuance or sale of the Placement Agent Securities or materially and adversely affect the business or operations of the
Company.
F. The Company shall have entered
into a Purchase Agreement with each of the several Purchasers of the Placement Agent Securities and such agreements shall be in full force
and effect and shall contain representations, warranties and covenants of the Company as agreed upon between the Company and the Purchasers.
G. FINRA shall have raised no
objection to the fairness and reasonableness of the terms and arrangements of this Agreement. In addition, the Company shall, if requested
by the Placement Agent, make or authorize Placement Agent's counsel to make on the Company’s behalf, any filing with the FINRA Corporate
Financing Department pursuant to FINRA Rule 5110 with respect to the Placement and pay all filing fees required in connection therewith.
H. The Placement Agent shall
have received an executed lock-up agreement from each of the Company’s current executive officers and directors prior to the Closing
Date.
If any of the conditions specified
in this Section 9 shall not have been fulfilled when and as required by this Agreement, all obligations of the Placement Agent hereunder
may be cancelled by the Placement Agent at, or at any time prior to, the Closing Date. Notice of such cancellation shall be given to the
Company in writing or orally. Any such oral notice shall be confirmed promptly thereafter in writing.
SECTION 10. GOVERNING
LAW. This Agreement will be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements
made and to be performed entirely in such State, without regard to its conflict of laws principles. This Agreement may not be assigned
by either party without the prior written consent of the other party. This Agreement shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns. Any right to trial by jury with respect to any dispute arising
under this Agreement or any transaction or conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought
into the courts of the State of New York or into the Federal Court located in New York, New York and, by execution and delivery of this
Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid
courts. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by delivering a copy thereof via 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 manner permitted by law. If either
party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
SECTION 11. ENTIRE
AGREEMENT/MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes
all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement is determined to be
invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision
of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified or waived except
by an instrument in writing signed by both the Placement Agent and the Company. The representations, warranties, agreements and covenants
contained herein shall survive the Closing Dates of the Placement and delivery of the Placement Agent Securities. 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 the other party, it being understood that both parties need
not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or a .pdf format file, such signature
shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or .pdf signature page were an original thereof.
SECTION 12. NOTICES.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is sent to the email
address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day, (b) the
next business day after the date of transmission, if such notice or communication is sent to the email address on the signature pages attached
hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c) the third business
day following the date of mailing, if sent by U.S. internationally recognized air 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 hereto.
SECTION 13. PRESS
ANNOUNCEMENTS. The Company agrees that the Placement Agent shall, on and after the Closing Date, have the right to reference
the Placement and the Placement Agent’s role in connection therewith in the Placement Agent’s marketing materials and on its
website and to place advertisements in financial and other newspapers and journals, in each case at its own expense and in compliance
with applicable securities laws.
Please confirm that the foregoing
correctly sets forth our agreement by signing and returning to the Placement Agent the enclosed copy of this Agreement.
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Very truly yours, |
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A.G.P./ALLIANCE GLOBAL PARTNERS |
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By: |
/s/ Thomas J. Higgins |
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Name: |
Thomas J. Higgins |
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Title: |
Managing Director |
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Address for notice: |
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590 Madison Avenue 28th Floor |
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New York, New York 10022 |
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Attn: Thomas J. Higgins |
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Email: thiggins@allianceg.com |
Accepted and Agreed to as of
the date first written above:
| XORTX Therapeutics Inc. |
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| By: |
/s/ Dr. Allen Davidoff Ph.D |
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| Name: |
Dr. Allen Davidoff Ph.D. |
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| Title: |
Chief Executive Officer |
|
Address for notice:
3710 – 33rd Street NW
Calgary, Alberta AB T2L 2M1
Attn: Dr. Allen Davidoff Ph.D.
Email: adavidoff@xortx.com
[Signature Page to Placement Agency Agreement]
Exhibit 99.3
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement
(this “Agreement”) is dated as of October 17, 2024, between XORTX Therapeutics Inc., a British Columbia corporation
(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, the Pre-Funded Warrants and the Pre-Funded Warrant Shares and (ii) an exemption from the registration requirements
of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and Rule 506(b) of Regulation D under
the Securities Act as to the Common Warrants and the Common Warrant Shares, 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.
“BHCA”
shall have the meaning ascribed to such term in Section 3.1(qq).
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York or the City of
Calgary are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall
not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York or the City of Calgary generally are open for use by customers on such day.
“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 Trading Day following
the date hereof.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Shares” means the common shares of the Company, no par value per share, and any other class of securities into which such securities
may hereafter be reclassified or changed.
“Common
Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Shares, including, without limitation, any debt, preferred shares, right, option, warrant or other instrument that
is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Shares.
“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)(v) hereof in the form of Exhibit B attached hereto.
“Company
Canadian Counsel” means Fasken Martineau DuMoulin LLP, with offices located at 350 7th Ave SW, Suite 3400, Calgary,
Alberta, Canada T2P 3N9.
“Company
U.S. Counsel” means Troutman Pepper Hamilton Sanders LLP, with offices located at125 High Street, 19th Floor, Boston,
MA 02110.
“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, 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.
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).
“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 to employees, officers or directors of the Company pursuant
to any share or option plan duly adopted for such purpose under applicable securities laws, and (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 accordance with the terms of such outstanding Securities or in connection with share splits or combinations)
or to extend the term of such securities and (c) securities issued pursuant to acquisitions or strategic transactions in compliance
with applicable securities laws, 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 in Section 4.11(a) herein, and provided that any such issuance shall only be to a Person (or to the equityholders of
a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the
business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business
is investing in securities.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.
“FDA”
shall have the meaning ascribed to such term in Section 3.1(ll).
“FDCA”
shall have the meaning ascribed to such term in Section 3.1(ll).
“IFRS”
shall have the meaning ascribed to such term in Section 3.1(h).
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Issuer
Covered Person” shall have the meaning assigned to such term in Section 3.1(ss).
“Liens”
means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up
Agreement” means the Lock-Up Agreement, dated as of the date hereof, by and between the Company and each of the Company’s
current directors and officers, in the form of Exhibit C attached hereto.
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Per Share
Purchase Price” equals $1.85, 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, provided that the purchase price per
Pre-Funded Warrant shall be the Per Share Purchase Price minus $0.00001.
“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.
“Pharmaceutical
Product” shall have the meaning ascribed to such term in Section 3.1(jj).
“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 the Closing in accordance
with Section 2.2(a)(iv) hereof, if applicable, in the form of Exhibit A attached hereto.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or, to the knowledge of the Company, threatened.
“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.2(b).
“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.2(b).
“Prospectus”
means the final prospectus filed with the Registration Statement.
“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed
with the Commission and delivered by the Company to each Purchaser at the Closing, which, together with the Prospectus in the Registration
Statement, registers the sale of the Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares.
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.
“Registration
Statement” means the shelf registration statement filed with and declared effective by the Commission (File No. 333-269429)
which registers US$50 million of Common Shares, warrants to purchase Common Shares, and units comprised of Common Shares and warrants
to purchase Common Shares.
“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.
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Shares, the Warrants and the Warrant Shares.
“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, but excludes the Warrant Shares.
“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).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares (and/or Pre-Funded Warrants) 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 (minus, if applicable, a Purchaser’s
aggregate exercise price of the Pre-Funded Warrants, which amounts shall be paid as and when such Pre-Funded Warrants are exercised for
cash).
“Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports and shall, where applicable, also include any direct or indirect subsidiary
of the Company formed or acquired after the date hereof.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange or the TSX Venture Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Warrants, and the Lock-Up Agreements, all exhibits and schedules thereto and hereto and
any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means the TSX Trust Company in Canada, with an address at 650 West Georgia St. Suite 2700, Vancouver, British Columbia,
V6B 4N9, Canada, and Continental Stock Transfer & Trust Company in the United States, with an address at 1 State Street, 30th
Floor, New York, NY 10004, and any successor transfer agent of the Company.
“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.11(b).
“Warrants”
means the Common Warrants and the Pre-Funded Warrants.
“Warrant
Shares” means 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, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase up to an aggregate of $1.5 million of Shares and Common Warrants. Notwithstanding anything herein to
the contrary, to the extent that a Purchaser determines, in its sole discretion, that the Subscription Amount (together with such Purchaser’s
Affiliates and any Person acting as a group together with such Purchaser or any of such Purchaser’s Affiliates) would cause such
Purchaser’s beneficial ownership of the Common Shares to exceed the Beneficial Ownership Limitation, or as such Purchaser may otherwise
choose, such Purchaser may elect to purchase Pre-Funded Warrants to purchase Pre-Funded Warrant Shares in lieu of the 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. In each case, the election to receive a Pre-Funded Warrant is solely at the option of a Purchaser. 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 designee. The Company shall deliver to each Purchaser
its respective Shares in a single tranche and/or Pre-Funded Warrants (as applicable to such Purchaser) and Common Warrants 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 at the offices
of legal counsel to the Placement Agent or such other location as the parties shall mutually agree and shall take place remotely by electronic
transfer of Closing documentation. 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 in a single tranche registered in the Purchaser’s name and address and released
by the Transfer Agent directly to the account(s) at the Placement Agent identified by the Purchaser; upon receipt of such Shares,
the Placement Agent shall promptly electronically deliver such Shares in a single tranche to the applicable Purchaser, and payment therefor
shall be made by the Placement Agent (or its clearing firm) by wire transfer to the Company). To the extent that a Purchaser’s beneficial
ownership of the Shares would otherwise be deemed to exceed the Beneficial Ownership Maximum, such Purchasers’ Subscription Amount
shall automatically be reduced as necessary in order to comply with this paragraph. 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 the Shares to be issued hereunder to such Purchaser at the Closing (collectively, the “Pre-Settlement Shares”),
such Purchaser shall, automatically hereunder (without any additional required actions by such Purchaser or the Company), be deemed to
be unconditionally bound to purchase such Pre-Settlement Shares 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 Subscription Amount for such Pre-Settlement Shares
hereunder; 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 such Purchaser will elect to sell any Pre-Settlement Shares during the Pre-Settlement
Period. The decision to sell any Common Shares will be made in the sole discretion of such Purchaser from time to time, including
during the Pre-Settlement Period.
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) legal
opinions of Company U.S. Counsel and Company Canadian Counsel in a form reasonably acceptable to the Placement Agent;
(iii) 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 Subscription Amount divided by
the Per Share Purchase Price, registered in the name of such Purchaser;
(iv) if applicable,
a Pre-Funded Warrant registered in the name of such Purchaser to purchase up to a number of Pre-Funded Warrant Shares equal to the difference
between (A) the Subscription Amount divided by the Per Share Purchase Price and (B) the number of Shares otherwise issuable
to such Purchaser that would cause such Purchaser’s beneficial ownership of Common Shares to be more than the Beneficial Ownership
Limitation with an exercise price equal to $0.00001 per Pre-Funded Warrant Share, subject to adjustment therein;
(v) a Common
Warrant registered in the name of such Purchaser to purchase up to a number of Common Warrant Shares equal to 100% of the sum of the Shares
and Pre-Funded Warrant Shares, with an exercise price equal to $2.18 and which shall be exercisable immediately and have a term of exercise
equal to five (5) years, subject to adjustment therein;
(vi) the Company
shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Chief Executive
Officer or Chief Financial Officer;
(vii) the
Lock-Up Agreements;
(viii) a certificate
executed by the Chief Executive Officer of the Company, in form and substance reasonably satisfactory to the Placement Agent;
(ix) Secretary’s
Certificate, in form and substance reasonably satisfactory to the Placement Agent; and
(x) the Prospectus
and 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) the Subscription
Amount, which shall be made available via DVP settlement with the Company or its designee.
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, in
all respects) 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) all
Required Approvals set forth in clauses (i) through (iii) of the definition in Section 3.1(e) shall have been obtained;
and
(iv) the delivery
by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(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) all
Required Approvals set forth in clauses (i) through (iii) of the definition in Section 3.1(e) have been obtained;
(iv) the delivery
by the Company of the items set forth in Section 2.2(a) of this Agreement;
(v) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(vi) 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 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 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 otherwise made herein to the extent of the disclosure contained in the corresponding section of
the Disclosure Schedules, or as set forth in the SEC Reports, the Company hereby makes the following representations and warranties to
each Purchaser:
(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth in the SEC Reports. Except as set forth in the SEC Reports, 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 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. If the Company has no subsidiaries, all other references to
the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing
and in good standing (or its foreign equivalent) under the laws of the jurisdiction of its incorporation or organization, with the requisite
power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws
or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could
not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial
or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability
to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”); provided that a change in the market price or trading volume of the Common Shares alone
shall not be deemed, in and of itself, to constitute a Material Adverse Effect. To the knowledge of the Company, 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 to which it is a party by the Company and the consummation
by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, the Board of Directors or the Company’s shareholders in connection herewith or
therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party
has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof,
will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by
applicable law.
(d) No Conflicts.
The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the
issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not
(i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the
Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise)
or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary
is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is
subject (including federal 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) the notice and/or
application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Shares and Warrant
Shares for trading thereon in the time and manner required thereby and (iv) the filing of Form D with the Commission and such
filings as are required to be made under applicable state securities laws with respect to the Common Warrants and the Common Warrant Shares
(collectively, the “Required Approvals”).
(f) Issuance
of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction Documents. The Warrant Shares, when issued in accordance with the
terms of the Warrants, will be validly issued, fully paid and (in the case of the Shares) nonassessable, free and clear of all Liens imposed
by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved from its duly authorized
share capital the maximum number of Common Shares issuable pursuant to this Agreement and the Warrants. The Company has prepared and filed
the Registration Statement in conformity with the requirements of the Securities Act, which became effective on February 3, 2023,
including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement. 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 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
and any amendments or supplements thereto, at the time the Prospectus or any amendment or supplement thereto was 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. 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 it meets the transaction requirements
with respect to the aggregate market value of securities being sold pursuant to this offering and during the twelve (12) months prior
to this offering, as set forth in General Instruction I.B.5 of Form F-3.
(g) Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall
also include, to the knowledge of the Company, the number of Common Shares owned beneficially, and of record, by Affiliates of the Company
as of the date hereof. The Company has not issued any share capital since its most recently filed periodic report under the Exchange Act,
other than pursuant to the exercise of stock options under the Company’s stock option plans, the issuance of Common Shares to employees
pursuant to the Company’s employee share purchase plans and pursuant to the conversion and/or exercise of Common Share Equivalents
outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.
Except as set forth on Schedule 3.1(g) and as a result of the purchase and sale of the Securities, there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any Common
Shares or the share capital of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary
is or may become bound to issue additional Common Shares or Common Share Equivalents or share capital of any Subsidiary. The issuance
and sale of the Securities will not obligate the Company or any Subsidiary to issue Common Shares or other securities to any Person (other
than the Purchasers). There are no outstanding securities or instruments of the Company or any Subsidiary 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 or any
Subsidiary. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become
bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom
stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of the Company are duly authorized, validly
issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except for the Required
Approvals, no further approval or authorization of any shareholder, 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 two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus
and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As
of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, 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 been subject to Rule 144(i) under the Securities Act; it has filed all reports
and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12
months (or for such shorter period that the issuer was required to file such reports and materials). The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with 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 audited financial statements included within
the SEC Reports, except as set forth in the SEC Reports, (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 or disclosed
in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared
or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase
or redeem any share capital and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential
treatment of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth in the SEC Reports,
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.
There has not been, and to the knowledge of the Company there is not pending or contemplated any action, suit, inquiry, notice of violation,
proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or
any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal,
state, county, local or foreign) (collectively, an “Action”). None of the Actions set forth on Schedule 3.1(j),
(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, to the Company’s knowledge, 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.
To the knowledge of the Company, there has not been, and 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 Exchange Act or the Securities Act.
(k) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any
of the foregoing matters that would reasonably be expected to have a Material Adverse Effect. The Company and its Subsidiaries are in
compliance with all applicable U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(l) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default
or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator or other governmental
authority or (iii) is or 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 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. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification
of any Material Permit.
(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 result in 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
it believes are necessary or required for use in connection with their respective businesses as described in the SEC Reports and which
the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None
of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights
has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date
of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included
within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe
upon the rights of any Person, except as 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.
(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 for companies of the Company’s size and in the businesses in which the Company and the Subsidiaries
are engaged, including, but not limited to, directors and officers insurance coverage in an amount deemed appropriate and reasonable for
the Company. 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. None of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company,
none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing
of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending
of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, shareholder,
member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option
agreements under any stock option plan of the Company.
(s) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission
thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in
conformity with IFRS and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and
designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it
files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures
of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange
Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the
Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting
(as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely
to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
(t) Certain
Fees. Except as set forth in the Prospectus Supplement, 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. 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) [Reserved].
(v) Investment
Company. The Company is not, and immediately after receipt of payment for the Securities, will not be registered or required to register
as an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct
its business in a manner so that it will not become registered or required to register as an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.
(w) Registration
Rights. Other than the Purchasers, 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.
(x) Listing
and Maintenance Requirements. The Common Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act,
and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the
Common Shares are or have been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements
of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance
in all material respects with all such listing and maintenance requirements. The Common Shares are 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.
(y) 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 respective
obligations or exercising their respective 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.
(z) 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, to its knowledge, acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes material, non-public information, which is not otherwise 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 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.
To the Company’s knowledge, the press releases disseminated by the Company during the twelve months preceding the date of this Agreement
are true and correct in all material respects. 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.
(aa) 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 (i) the Securities Act which would require the registration of the
Common Warrants or Common Warrant Shares under the Securities Act, or (ii) any applicable shareholder approval provisions of any
Trading Market on which any of the securities of the Company are listed or designated.
(bb) 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 but excluding amounts owed to the Company’s current and former officers and directors under salary/fee deferral
arrangements) 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 (excluding amounts owed to the Company’s current and former officers and directors under salary/fee
deferral arrangements). The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date.
(cc) Tax Status.
Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect,
the Company and its Subsidiaries each (i) has made or filed all material United States federal, state and local income and all foreign
income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all
material taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes
for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no
basis for any such claim.
(dd) No General
Solicitation. Neither the Company nor any Person acting on behalf of the Company (other than the Placement Agent, as to which the
Company makes no representation or warranty) has offered or sold any of the Common Warrants or Common Warrant Shares by any form of general
solicitation or general advertising.
(ee) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company, any agent or other person acting on
behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment
or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed
to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company
is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.
(ff) Accountants.
The Company’s accounting firm is set forth in the SEC Reports. To the knowledge of the Company, such accounting firm (i) is
a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial
statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2024.
(gg) No Disagreements
with Accountants. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between
the Company and the accountants formerly or presently employed by the Company and the Company is current with respect to any fees owed
to its accountants which could affect the Company’s ability to perform any of its obligations under any of the Transaction Documents.
(hh) 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.
(ii) Acknowledgment
Regarding Purchasers’ Trading Activity. 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 Shares 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 at various times during the period that the Securities are outstanding, 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. Each Purchaser agrees that any and all activities described in this Section 3.1(ii) have been and shall
be carried out in compliance with all applicable laws.
(jj) 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 the
Company makes no representation or warranty) 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.
(kk) Form Eligibility.
The Company is eligible to register the resale of the Common Warrant Shares for resale by the Purchasers on Form F-3 (or, if not
Form F-3, then Form F-1) promulgated under the Securities Act.
(ll) FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food,
Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled,
tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”),
such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance
with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use,
premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices,
product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would
not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge, threatened, action (including any lawsuit,
arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its
Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the
FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses
of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical
Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of
advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical
investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries,
(v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise
alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually
or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of the Company have been and are being
conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not
been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to
be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any
product being developed or proposed to be developed by the Company.
(mm) Stock Option
Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance with
the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the
Common Shares on the date such stock option would be considered granted under IFRS and applicable law. No stock option granted under the
Company’s stock 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, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release
or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(nn) Cybersecurity.
(i)(x) To the Company’s knowledge, 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) to the Company’s knowledge, 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, except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and (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.
(oo) 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”).
(pp) U.S. Real
Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of
Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
(qq) Bank Holding
Company Act. Neither the Company nor any of its Subsidiaries 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 owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class
of voting securities or twenty-five (25%) percent 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 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.
(rr) Money Laundering.
The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes
and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action 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.
(ss) No Disqualification
Events. With respect to the Common Warrants and Common Warrant Shares to be offered and sold hereunder in reliance on Rule 506(b) of
Regulation D 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” and,
together, “Issuer Covered Persons”) 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 each
Purchaser a copy of any disclosures provided thereunder.
(tt) 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.
(uu) Notice of
Disqualification Events. The Company will notify each Purchaser 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.
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.
(b) Own
Account. Such Purchaser understands that the Common Warrants and 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 its own account and not with a view to or for distributing or reselling the Securities or any part thereof in violation of the Securities
Act or any applicable state securities law, has no present intention of distributing any of the Securities in violation of the Securities
Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute
or regarding the distribution of the Securities in violation of the Securities Act or any applicable state securities law (this representation
and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its
business.
(c) 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 Common 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 (an “Institutional Accredited Investor”)
or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act (that is also
an Institutional Accredited Investor).
(d) 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.
(e) General
Solicitation. Such Purchaser is not purchasing the Common Warrants or Common Warrant Shares as a result of any advertisement, article,
notice or other communication regarding the Securities published in any newspaper, magazine or similar media or on the Internet, or broadcast
over television or radio or the Internet, or any seminar or meeting whose attendees have been invited by general solicitation or general
advertising, or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.
(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 and has been afforded (i) the opportunity to ask such questions as it has 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 investing in the Securities; (ii) access to information about the Company and its financial condition,
results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; 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 the investment in the Securities. Such Purchaser acknowledges and
agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice
with respect to the Securities nor is such information or advice necessary or desired. 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 or made any agreement
to execute any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time
that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company or the
Placement Agent setting forth the material terms of the transactions contemplated hereunder and ending upon the Company’s making
the public disclosure required by 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 representation 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. Other than to other Persons party to this Agreement
or to such Purchaser’s representatives involved in the transactions contemplated by this Agreement, 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). The Purchaser
has taken reasonable steps to ensure that the Purchaser’s representatives that were involved in the transactions contemplated by
this Agreement, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates
that were involved in the transactions contemplated by this Agreement, have maintained the confidentiality of all disclosures made to
it in connection with the transactions contemplated by this Agreement otherwise as required by this Agreement. 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 in the future, in compliance with all applicable
laws.
(h) No Disqualification
Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506(b) of Regulation D under
the Securities Act, such Purchaser at the time of sale is subject to any of the “Bad Actor” disqualifications described in
Rule 506(d)(1)(i) to (viii) under the Securities Act.
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 in the future.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Removal of Legends.
(a) The Common
Warrants and Common Warrant Shares issuable thereunder may only be disposed of in compliance with state and federal securities laws. In
connection with any transfer of Common Warrants or Common Warrant Shares issuable thereunder 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 Common Warrant 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 and Common Warrant
Shares issuable thereunder in the following form:
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAS BEEN REGISTERED WITH THE SECURITIESAND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANYSTATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDERTHE 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 ORPURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
provided, that,
if the Common Warrants or Common Warrant Shares are being sold in compliance with the requirements of Rule 904 of Regulation S under
the Securities Act and in compliance with applicable local laws and regulations, the legend may be removed by providing a customary declaration
to the Company and to the Transfer Agent, in the form as reasonably required by the Company or the Transfer Agent; provided further, if
any of the Common Warrants or Common Warrant Shares are being sold pursuant to Rule 144, if available, the legend shall be removed
by delivering to the Company and the Transfer Agent customary and reasonable representations as to the availability of Rule 144 (subject,
as applicable, to Rule 144(i)). Each Purchaser understands and acknowledges that (i) if the Company is ever deemed to be, or
to have been at any time previously, an issuer with no or nominal operations and no or nominal assets other than cash and cash equivalents,
Rule 144 may not be available for resales of the Common Warrants or Common Warrant Shares, and (ii) the Company is not obligated
to take, and has no present intention of taking, any action to make Rule 144 (or any other exemption) available for resales of the
Common Warrants or Common Warrant Shares.
(c) Certificates
evidencing the Common Warrant Shares issuable upon exercise of the Common Warrants 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 (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) without the requirement for the Company to be in compliance with the current public information requirement of
Rule 144 as to such Common Warrant Shares and without volume or manner of sale restrictions, 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), subject to receipt of appropriate representations and warranties from the holder. 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. 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 issuable thereunder, or if such Common Warrant Shares may be sold under Rule 144 and the
Company is then in compliance with the current public information requirement of Rule 144 (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), or if the Common Warrant Shares may be sold under Rule 144 without the
requirement for the Company to be in compliance with the current public information requirement of Rule 144 as to such Common Warrant
Shares, 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) one (1) Trading Day
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 such 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, subject to receipt of appropriate representations and warranties from
the holder. 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 Warrant 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, (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 Common Warrant
Shares are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per
Trading Day (increasing to $20 per Trading Day five (5) Trading Days after the Legend Removal Date) for each Trading Day after the
Legend Removal Date until such certificate is delivered without a legend and (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 and (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 Warrant Shares, or a sale of a number of Common Shares equal to all or any portion of the
number of Common Warrant 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 for the Common Shares so purchased (including documented 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 Shares 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,
Pre-Funded Warrants, and Pre-Funded Warrant Shares shall be issued free of legends. If all or any portion of a Pre-Funded Warrant is exercised
at a time when there is an effective registration statement to cover the issuance or resale of the Pre-Funded Warrant Shares or if the
Pre-Funded Warrant is exercised via cashless exercise, the Pre-Funded Warrant Shares issued pursuant to any such exercise shall be issued
free of all legends. If at any time following the date hereof the Registration Statement (or any subsequent registration statement registering
the sale or resale of the Pre-Funded Warrant Shares) is not effective or is not otherwise available for the sale or resale of the Pre-Funded
Warrant Shares, the Company shall immediately notify the holders of the Pre-Funded Warrants in writing that such registration statement
is not then effective and thereafter shall promptly notify such holders when the registration statement is effective again and available
for the sale or resale of the Pre-Funded Warrant Shares (it being understood and agreed that the foregoing shall not limit the ability
of the Company to issue, or any Purchaser to sell, any of the Pre-Funded Warrant Shares in compliance with applicable federal and state
securities laws). The Company shall use commercially reasonable efforts to keep a registration statement (which may be the Registration
Statement) registering the issuance or resale of the Pre-Funded Warrant Shares effective for five years following the date of issuance
of the Pre-Funded Warrants.
4.2 Furnishing of Information;
Public Information.
(a) Until
the earlier of the time that (i) no Purchaser owns any Securities or (ii) the Common Warrants have expired, the Company shall
use commercially reasonable efforts to maintain the registration of the Common Shares under Section 12(b) or 12(g) of the
Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required
to be filed by the Company after the date hereof pursuant to the Exchange Act.
(b) At
any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the
Common Warrant Shares (assuming cashless exercise) may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and
otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the
current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or
becomes an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public
Information Failure”) then, in addition to the Purchasers’ other available remedies, the Company shall pay to each Purchaser,
in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Common
Warrant Shares, an amount in cash equal to one percent (1.0%) of the aggregate Exercise Price of such Purchaser’s Common Warrants
on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for
periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and
(b) such time that such public information is no longer required for such Purchaser to transfer the Common Warrant Shares pursuant
to Rule 144. The payments to which the Purchasers shall be entitled pursuant to this Section 4.2(b) are referred to herein
as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the
last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd)
Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails
to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate
of one percent (1.0%) per month (prorated for partial months) until paid in full. Nothing herein shall limit any Purchaser’s right
to pursue actual damages for the Public Information Failure, and each Purchaser shall have the right to pursue all remedies available
to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
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 Common Warrants or Common Warrant Shares in a manner that
would require the registration under the Securities Act of the sale of the Common Warrants or Common Warrant Shares or 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) file a Report of Foreign Private issuer 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,
on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, 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 with
the Commission 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 (i) the registration for resale of the Common Warrant Shares and (ii) the filing
of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations,
in which case the Company shall, to the extent reasonably practicable, 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 and the information
set forth on the Disclosure Schedules, 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, any of its Subsidiaries, or any of their respective officers, directors, agents or employees 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 or employees,
or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents or employees not to trade on
the basis of, such material, non-public information, provided that the Purchasers 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 of Foreign Private
Issuer on Form 6-K. 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.
The Company shall use the net proceeds from the sale of the Securities hereunder for working capital 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 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, agents,
members, partners or employees (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 (other than loss of profits), 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 or relating to (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 or (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).
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 (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such
action there is, in the reasonable opinion of counsel, 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 (y) for any settlement by a
Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) 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. 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.
4.10 Listing of Common
Shares. For as long as any Common Warrants are outstanding and exercisable, 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 (or another Trading
Market), for a period of 12 months from the termination date of the Common Warrants, 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 promptly secure the listing of all of the Shares
and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Shares traded on any
other Trading Market, it will then include in such application all of the 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 use commercially reasonable efforts to maintain 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. For so long as the Company maintains a listing or quotation of the Common Shares on a Trading Market, the Company
agrees to use commercially reasonable efforts 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. The Purchasers acknowledge and
agree that this clause shall not be construed as limiting or restricting the Company to agree to a consolidation, amalgamation, arrangement,
takeover bid, merger or other like transaction that would result in the Company ceasing to be a reporting issuer and shall not otherwise
restrict or impair the fiduciary duties of the directors for the Company.
4.11 Subsequent Equity
Sales.
(a) From the
date hereof until forty-five (45) days after 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 or (ii) file
any registration statement or any amendment or supplement thereto, in each case other than (A) the filing of the Prospectus Supplement,
(B) to register the resale of the Common Warrant Shares and (D) as necessary to maintain the effectiveness of existing registration
statements which are effective as of the Closing Date.
(b) From the
date hereof until one year 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 Shares or Common Share Equivalents (or a combination of units thereof)
involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues
or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional
Common Shares either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies
with, the trading prices of or quotations for the Common Shares at any time after the initial issuance of such debt or equity securities
or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance
of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Common Shares or (ii) enters into, or effects a transaction under, any agreement, including,
but not limited to, an equity line of credit 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. Notwithstanding the foregoing, the Company may enter into and effect sales pursuant to an at-the-market
facility following forty-five (45) days after 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 4.11 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance.
4.12 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, each 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.
4.13 [Reserved].
4.14 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.
4.15 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 the Company becomes aware that
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.
4.16 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 any of the Transaction Documents unless the same consideration is also offered
to all of the parties to such Transaction Document. 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 Securities or otherwise.
4.17 Registration Rights.
On or before the thirtieth (30th) day following the Closing Date, the Company will file a registration statement with the Commission
registering for resale the Common Warrant Shares, and will use commercially reasonable efforts to have such registration statement declared
effective by the Commission no later than the sixtieth (60th) day following the Closing Date (or, in the event of a “full
review” by the Commission, the ninetieth (90th) day following the Closing Date) and to keep such registration statement
effective at all times until the earlier of (i) no Purchaser owns any Common Warrants or Common Warrant Shares issuable upon exercise
thereof, and (ii) one year following the expiration of the exercise period of the Common Warrants. Each Purchaser agrees to complete
and furnish to the Company a customary selling shareholder questionnaire on a date that is not less than five (5) Trading Days prior
to the filing date of the registration statement contemplated by this Section 4.17.
4.18 Form D.
To the extent required, the Company agrees to timely file a Form D with respect to the Common Warrants and Common Warrant Shares
issuable thereunder as required under Regulation D and to provide or make available a copy thereof, promptly upon request of any Purchaser.
ARTICLE V.
MISCELLANEOUS
5.1
Termination. This Agreement may be terminated 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 (5th) 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.
5.2 Fees and Expenses.
Except as expressly set forth 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. For the avoidance of
doubt, nothing contained herein shall obligate the Company to pay or reimburse for any taxes in respect of any capital gains or other
income of any Purchaser.
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 promptly disclose such information in accordance
with applicable law and file such notice with the Commission pursuant to a Report of Foreign Private Issuer on Form 6-K.
5.5 Amendments; Waivers.
No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of
an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Shares and Pre-Funded Warrants based on
the initial Subscription Amounts hereunder (or, prior to the Closing, the Company and each Purchaser) 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 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,
amalagamtion, arrangement or other business combination). No Purchaser may assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Company (other than by merger, amalgamation, arrangement or other business combination). Any
Purchaser may, after the Closing, assign any or all of its rights under this Agreement in respect of any Securities to any Person to whom
such Purchaser assigns or transfers such 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. 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 internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Action 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 six (6) years
form 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, 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” 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 shares and the restoration of such Purchaser’s right
to acquire such shares pursuant to such 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,
and the holder’s provision of a customary indemnity to the Company and the Transfer Agent. 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. Each party hereto agrees that it shall not have a remedy of punitive or consequential damages against the other and hereby
waives any right or claim to punitive or consequential damages it may now have or may arise in the future.
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 Liquidated Damages.
The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing
obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding
the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall
have been canceled.
5.18 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 non-performance
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
legal counsel to the Placement Agent. Legal counsel to 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.
5.19 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 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.
|
XORTX Therapeutics Inc. |
Address for Notice:
3710 – 33rd Street NW
Calgary, Alberta AB T2L 2M1
Canada
Email: *** |
| By: |
/s/ Dr. Allen Davidoff Ph.D |
|
| Name: |
Dr. Allen Davidoff Ph.D. |
|
| Title: |
Chief Executive Officer |
|
|
With a copy to (which shall not constitute notice): |
|
| |
|
|
[ ] |
|
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER SIGNATURE PAGES TO 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: ________________________________________________________
Signature
of Authorized Signatory of Purchaser: __________________________________
Name of Authorized Signatory: ____________________________________________________
Title of Authorized Signatory: _____________________________________________________
Email Address of Authorized Signatory: ______________________________________________
Address for Notice to Purchaser:
Address for Delivery of Warrants to Purchaser
(if not same as address for notice):
Subscription Amount: $_________________
Shares: _________________
Common
Warrant Shares: ______________ Beneficial Ownership Blocker ☐
4.99% or ☐ 9.99%
Pre-Funded
Warrant Shares: ______________ Beneficial Ownership Blocker ☐
4.99% or ☐ 9.99%
EIN Number: _______________________
¨ Notwithstanding
anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed to purchase the
securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations of the Company to sell
such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded, (ii) the Closing
shall occur on the first (1st) Trading Day following the date of this Agreement and (iii) any condition to Closing contemplated
by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the above-signed
of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition and shall instead
be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement, instrument, certificate
or the like or purchase price (as applicable) to such other party on the Closing Date.”
[SIGNATURE PAGES CONTINUE]
Exhibit A
Form of Pre-Funded Warrant
Exhibit B
Form of Warrant
Exhibit C
Form of Lock-Up Agreement
Exhibit 99.4
PRE-FUNDED COMMON SHARE PURCHASE WARRANT
XORTX THERAPEUTICS INC.
| Warrant Shares:
[ ] |
Issue
Date: October [_], 2024 |
THIS PRE-FUNDED COMMON SHARE
PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [ ] or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the Issue Date (the “Initial Exercise Date”) and until this Warrant is exercised in full (the “Termination
Date”) but not thereafter, to subscribe for and purchase from XORTX Therapeutics Inc., a British Columbia corporation (the “Company”),
up to [_] common shares of the Company (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price
of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1.
Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Purchase Agreement”), dated October 17, 2024, among the Company and the Purchasers signatory
thereto.
Section 2.
Exercise.
a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto as Exhibit A (the “Notice of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 4:00 p.m. (New York City time) on the Trading Day prior to the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by the Warrant Share Delivery Date. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise Price.
The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.00001 per Warrant Share, was pre-funded to the
Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise price
of $0.00001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder
shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance
or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination Date. The remaining
unpaid exercise price per Warrant Share under this Warrant shall be $0.00001, subject to adjustment hereunder (the “Exercise
Price”).
c) Cashless Exercise.
If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not
available for, the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in part, at such
time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to
the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) = | as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to
Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof
on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(77) of Regulation NMS promulgated
under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading
Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Shares on the principal
Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable
Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered
within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a
Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the
date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof
after the close of “regular trading hours” on such Trading Day; |
| |
(B) = |
the Exercise Price of this Warrant, as adjusted hereunder; and |
| |
(X) = |
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares
are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities
Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any
position contrary to this Section 2(c).
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed
or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Shares are then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New
York City time) to 4:02 p.m. (New York City time)), (b) if the OTCQB Venture Market (the “OTCQB”) or the
OTCQX Best Market (the “OTCQX”) is not a Trading Market, the volume weighted average price of the Common Shares for
such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then listed or quoted
for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported on The Pink Open Market (the “Pink Market”)
operated by the OTC Markets Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent
bid price per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent
appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to
the Company, the reasonable fees and expenses of which shall be paid by the Company.
“Trading
Day” means any day on which the Trading Market is open for trading, including any day on which the Trading Market is open for
trading for a period of time less than the customary time.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date)
on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume
weighted average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if
the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported on
The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent
appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to
the Company, the reasonable fees and expenses of which shall be paid by the Company.
d) Mechanics of Exercise.
i. Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system
and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate,
registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which
the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is
the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading
Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement
Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”),
provided that payment of the aggregate Exercise Price (other than in the case of cashless exercise) is received by the Warrant Share Delivery
Date. Upon delivery of the Notice of Exercise and payment of the aggregate Exercise Price, if applicable, the Holder shall be deemed for
all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date of delivery of the Warrant Shares. If the Company fails for any reason to deliver to the Holder the Warrant Shares
subject to a Notice of Exercise by the Warrant Share Delivery Date and the aggregate Exercise Price has been delivered (other than in
the case of cashless exercise), the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000
of Warrant Shares subject to such exercise (based on the VWAP of the Common Shares on the date of the applicable Notice of Exercise),
$10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after the Warrant Share Delivery Date) for each Trading
Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees
to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. 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 the Notice of
Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New
York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement,
the Company agrees to deliver, or cause to be delivered, the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York
City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder,
provided that payment of the aggregate Exercise Price is received by such Warrant Share Delivery Date.
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by
the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery Date (other than any such failure that is solely due to any action or
inaction by the Holder with respect to such exercise), and if after such date the Holder is required by its broker to purchase (in an
open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Common Shares to deliver in satisfaction
of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the
price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate
the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise
shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Company timely complied
with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrant Shares with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and
evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof.
v. No Fractional
Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election,
either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or
round up to the next whole share.
vi. Charges,
Taxes and Expenses. The issuance and the delivery of Warrant Shares shall be made without charge to the Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;
provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit B duly executed
by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees
to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic
delivery of the Warrant Shares.
vii. Closing
of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have
the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to
such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates,
and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the
foregoing sentence, the number of Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include
the number of Warrant Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall
exclude the number of Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised
or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Share Equivalents) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of
the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that
the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any
group status as contemplated above shall be determined by the Holder in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding
Common Shares, a Holder may rely on the number of outstanding Common Shares as reflected in (A) the Company’s most recent periodic
or annual report filed with or furnished to the Commission, as the case may be, (B) a more recent public announcement by the Company
or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Common Shares outstanding. Upon
the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number
of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since
the date as of which such number of outstanding Common Shares was reported. The “Beneficial Ownership Limitation” shall
be 9.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Warrant Shares issuable upon exercise
of this Warrant. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. The Holder, upon
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds [4.99%/ 9.99%] of the number of Common Shares outstanding immediately after giving
effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall
continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such
notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation, no alternate consideration is owing
to the Holder.
Section 3.
Certain Adjustments.
a) Share Dividends
and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution
or distributions on its Common Shares or any other equity or equity equivalent securities payable in Common Shares (which, for avoidance
of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding
Common Shares into a larger number of shares, (iii) combines (including by way of reverse share split) outstanding Common Shares
into a smaller number of shares, or (iv) issues by reclassification of Common Shares or any share capital of the Company, then in
each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Common Shares (excluding
treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Shares outstanding
immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that
the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues
or sells any Common Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders
of any class of Common Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number
of Warrant Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without
limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale
of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined
for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right
to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall
not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Warrant Shares as a result of such
Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever,
as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c) Pro Rata Distributions.
During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, plan of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance
of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the
Holder would have participated therein if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately
before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders
of Common Shares are to be determined for the participation in such Distribution (provided, however, that, to the extent
that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Common
Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit
of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person (excluding a merger or consolidation effected
solely to change the Company’s name), (ii) the Company (and all of its Subsidiaries, taken as a whole), directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one
or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common Shares are permitted to sell, tender or exchange their shares
for other securities, cash or property and has been accepted by the holders of more than 50% of the outstanding Common Shares, (iv) the
Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization
of the Common Shares or any compulsory share exchange pursuant to which the Common Shares are effectively converted into or exchanged
for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates
a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off, merger or plan of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than
50% of the outstanding Common Shares (not including any Common Shares held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination)
(each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right
to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant),
the number of shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of
the number of Warrant Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to
any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one Common Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor
(the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other
Transaction Documents in accordance with the provisions of this Section 3(d) pursuant to written agreements prior to such Fundamental
Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding
number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Warrant Shares acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction,
and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative
value of the Common Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares
of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction). Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other
Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right
and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents
with the same effect as if such Successor Entity had been named as the Company herein.
e) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date shall be the sum of
the number of Common Shares (excluding treasury shares, if any) issued and outstanding.
f) Notice to
Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to
Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C) the
Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any share capital
of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification
of the Common Shares, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Shares are converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile
number or email address as it shall appear upon the Warrant Register of the Company, at least 10 calendar days prior to the applicable
record or effective date hereinafter specified, a notice (unless such information is disseminated in a press release or filed with the
Commission, in which case a notice shall not be required) stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the
Common Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close,
and the date as of which it is expected that holders of the Common Shares of record shall be entitled to exchange their Common Shares
for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange;
provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains,
material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file or furnish such
notice with the Commission pursuant to a Current Report on Form 8-K or a Report on Form 6-K, as applicable. The Holder shall
remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.
Section 4.
Transfer of Warrant.
a) Transferability.
Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder (including, without limitation, any registration
rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full,
in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder
delivers an Assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may
be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New Warrants.
This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together
with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent
or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this
Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant Register.
The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual
notice to the contrary.
Section 5.
Miscellaneous.
a) Currency.
All dollar amounts referred to in this Warrant are in United States Dollars (“U.S. Dollars”). All amounts owing under this
Warrant shall be paid in U.S. Dollars.
b) No Rights
as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or
other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set
forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in
no event, including if the Company is for any reason unable to issue and deliver Warrant Shares upon exercise of the this Warrant as required
pursuant to the terms hereof, shall the Company be required to net cash settle an exercise of this Warrant or cash settle in any other
form.
c) Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant or any share certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (and the Holder’s provision of a customary
indemnity to the Company and the Transfer Agent, as applicable), and upon surrender and cancellation of such Warrant or share certificate,
if mutilated, the Company will make and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or share certificate.
d) 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 Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading
Day.
e) Authorized
Shares.
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Shares a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the
necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Shares may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate
to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately
prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall use its commercially reasonable efforts to obtain all such authorizations or exemptions thereof, or consents thereto,
as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
f) Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
g) [Reserved]
h) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this
Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder
in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
i) Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Purchase Agreement.
j) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Warrant Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
k) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages may not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for
specific performance that a remedy at law would be adequate.
l) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
m) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
n) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
o) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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XORTX THERAPEUTICS
INC. |
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By: |
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Name: |
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Title: |
EXHIBIT A
NOTICE OF EXERCISE
TO: XORTX THERAPEUTICS INC.
(1) The undersigned hereby
elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take
the form of (check applicable box):
¨ in lawful money of the United States;
or
¨ if permitted the cancellation of
such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant
Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following
DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE OF HOLDER]
| Name of Investing Entity: |
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| Signature of Authorized Signatory
of Investing Entity: |
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| Name of Authorized Signatory: |
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| Title of Authorized Signatory: |
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EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this
form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and
all rights evidenced thereby are hereby assigned to
| Name: |
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(Please
Print) |
| Address: |
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(Please Print) |
| Phone Number: |
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| Email Address: |
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| Dated:
_______________________________ __, ______ |
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| Holder’s
Signature: |
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| Holder’s
Address: |
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Exhibit 99.5
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH
THIS SECURITY IS EXERCISABLE HAVE 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.
COMMON SHARE PURCHASE WARRANT
XORTX THERAPEUTICS INC.
| Warrant Shares: |
Issue
Date: October [ ], 2024 |
THIS COMMON SHARE PURCHASE WARRANT
(this “Warrant”) certifies that, for value received, [ ] or its assigns (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the Issue
Date (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on the date that is the fifth
(5th) anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe
for and purchase from XORTX Therapeutics Inc., a British Columbia corporation (the “Company”), up to [ ] common shares
of the Company (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one Warrant Share
under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement
(the “Purchase Agreement”), dated October 17, 2024, among the Company and the Purchasers signatory thereto.
Section 2. Exercise.
a) Exercise of
Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or
after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or
PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto as Exhibit A (the “Notice
of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the
Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall
deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s
check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the
applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or
other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available
hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation
within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of
this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company
shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any
assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase
of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less
than the amount stated on the face hereof.
b) Exercise Price.
The exercise price per Common Share under this Warrant shall be $2.18 subject to adjustment hereunder (the “Exercise Price”).
c) Cashless Exercise.
If, at the time beginning 60 days following the Initial Exercise Date (or, in the event of a “full review” of the applicable
registration statement by the Commission, 90 days following the Initial Exercise Date), there is no effective registration statement registering,
or the prospectus contained therein is not available for the resale of the Warrant Shares by the Holder, then this Warrant may also be
exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive
a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
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(A) = |
as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice
of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both
executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours”
(as defined in Rule 600(b)(77) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at
the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise
or (z) the Bid Price of the Common Shares on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”)
as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular
trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after
the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on
the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is
both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such
Trading Day; |
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(B) = |
the Exercise Price of this Warrant, as adjusted hereunder; and |
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(X) = |
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares
are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities
Act, the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees
not to take any position contrary to this Section 2(c).
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed
or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Shares are then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New
York City time) to 4:02 p.m. (New York City time)), (b) if the OTCQB Venture Market (the “OTCQB”) or the
OTCQX Best Market (the “OTCQX”) is not a Trading Market, the volume weighted average price of the Common Shares for
such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then listed or quoted
for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported on The Pink Open Market (the “Pink Market”)
operated by the OTC Markets Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent
bid price per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent
appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to
the Company, the reasonable fees and expenses of which shall be paid by the Company.
“Trading
Day” means any day on which the Trading Market is open for trading, including any day on which the Trading Market is open for
trading for a period of time less than the customary time.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date)
on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume
weighted average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if
the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported on
The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent
appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to
the Company, the reasonable fees and expenses of which shall be paid by the Company.
d) Mechanics of Exercise.
i. Delivery of
Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent
to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system
and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations
pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by a physical delivery of a certificate, registered
in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder
is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest
of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day
after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement
Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”),
provided that payment of the aggregate Exercise Price (other than in the case of cashless exercise) is received by the Warrant Share Delivery
Date. Upon delivery of the Notice of Exercise and payment of the aggregate Exercise Price, as applicable, the Holder shall be deemed for
all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date of delivery of the Warrant Shares. If the Company fails for any reason to deliver to the Holder the Warrant Shares
subject to a Notice of Exercise by the Warrant Share Delivery Date and the aggregate Exercise Price has been delivered (other than in
the case of a cashless exercise), the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000
of Warrant Shares subject to such exercise (based on the VWAP of the Common Shares on the date of the applicable Notice of Exercise),
$10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after the Warrant Shares Delivery Date) for each Trading
Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees
to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. 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 the Notice of
Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New
York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement,
the Company agrees to deliver, or cause to be delivered, the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York
City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder,
provided that payment of the aggregate Exercise Price is received by such Warrant Share Delivery Date.
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by
the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery Date (other than any such failure that is solely due to any action or
inaction by the Holder with respect to such exercise), and if after such date the Holder is required by its broker to purchase (in an
open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Common Shares to deliver in satisfaction
of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the
price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate
the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise
shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Company timely complied
with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrant Shares with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and
evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof.
v. No Fractional
Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election,
either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or
round up to the next whole common share.
vi. Charges,
Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;
provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit B duly executed
by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees
to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic
delivery of the Warrant Shares.
vii. Closing
of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such
issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and
any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the
foregoing sentence, the number of Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include
the number of Warrant Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall
exclude the number of Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised
or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Share Equivalents) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance
with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance
therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant
is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall
be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the
Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject
to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated above shall be determined by the Holder in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the
number of outstanding Common Shares, a Holder may rely on the number of outstanding Common Shares as reflected in (A) the Company’s
most recent periodic or annual report filed with or furnished to the Commission, as the case may be, (B) a more recent public announcement
by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Common Shares
outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to
the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined after
giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of outstanding Common Shares was reported. The “Beneficial Ownership
Limitation” shall be 9.99% of the number of Warrant Shares outstanding immediately after giving effect to the issuance of Common
Shares issuable upon exercise of this Warrant. The limitations contained in this paragraph shall apply to a successor holder of this
Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e),
provided that the Beneficial Ownership Limitation in no event exceeds 4.99% of the number of Common Shares outstanding immediately after
giving effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall
continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is
delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. If the
Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation, no alternate consideration is owing to the
Holder.
Section 3. Certain
Adjustments.
a) Shares Dividends
and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution
or distributions on its Common Shares or any other equity or equity equivalent securities payable in Common Shares (which, for avoidance
of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding
Common Shares into a larger number of shares, (iii) combines (including by way of reverse share split) outstanding Common Shares
into a smaller number of shares, or (iv) issues by reclassification of Common Shares any share capital of the Company, then in each
case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Common Shares (excluding treasury
shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Shares outstanding
immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that
the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues
or sells any Common Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders
of any class of Common Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number
of Warrant Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without
limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale
of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined
for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right
to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall
not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Warrant Shares as a result of such
Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever,
as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c) Pro Rata Distributions.
During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, plan of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance
of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the
Holder would have participated therein if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately
before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders
of Common Shares are to be determined for the participation in such Distribution (provided, however, that, to the extent
that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Common
Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit
of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person (excluding a merger effected solely to change
the Company’s name), (ii) the Company (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any
sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series
of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or
another Person) is completed pursuant to which holders of Common Shares are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of more than 50% of the outstanding Common Shares, (iv) the Company,
directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common
Shares or any compulsory share exchange pursuant to which the Common Shares are effectively converted into or exchanged for other securities,
cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or plan of
arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Common
Shares (not including any Common Shares held by the other Person or other Persons making or party to, or associated or affiliated with
the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant
Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option
of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of the
successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Warrant Shares for which
this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on
the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Common Share in such
Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting
the relative value of any different components of the Alternate Consideration. If holders of Common Shares are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the
Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything
to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s
option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later,
the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the
Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the
date of the consummation of such Fundamental Transaction; provided, however, that if the Fundamental Transaction is not within the Company's
control, including not approved by the Company's Board of Directors, the Holder shall only be entitled to receive from the Company or
any Successor Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised
portion of this Warrant, that is being offered and paid to the holders of Common Shares of the Company in connection with the Fundamental
Transaction, whether that consideration be in the form of cash, shares or any combination thereof, or whether the holders of Common Shares
are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided,
further, that if holders of Common Shares of the Company are not offered or paid any consideration in such Fundamental Transaction, such
holders of Common Shares will be deemed to have received shares of the Successor Entity (which Successor Entity may be the Company following
such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant
based on the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation
of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the
U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT
function on Bloomberg (determined utilizing a 365-day annualization factor) as of the Trading Day immediately following the public announcement
of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the
sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such
Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Day immediately preceding the public
announcement of the applicable Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and
ending on the Trading Day of the Holder’s request pursuant to this Section 3(d) and (D) a remaining option time equal
to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date and (E) a
zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other
consideration) within the later of (i) five (5) Trading Days of the Holder’s election and (ii) the date of consummation
of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not
the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant
and the other Transaction Documents in accordance with the provisions of this Section 3(d) pursuant to written agreements prior
to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable
for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Warrant Shares
acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking
into account the relative value of the Common Shares pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction). Upon the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this
Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may
exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other
Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
e) Reserved.
f) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date shall be the sum of
the number of Common Shares (excluding treasury shares, if any) issued and outstanding.
g) Notice to
Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to
Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C) the
Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection
with any reclassification of the Common Shares, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party,
any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Shares are converted
into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the
Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar
days prior to the applicable record or effective date hereinafter specified, a notice (unless such information is filed with the Commission,
in which case a notice shall not be required)stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Shares
of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on
which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Shares of record shall be entitled to exchange their shares of the Common Shares
for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange;
provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains,
material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with
the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set
forth herein.
h) Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant, with the prior written consent of the Holder,
reduce the then current Exercise Price to any amount for any period of time deemed appropriate by the Board of Directors of the Company
unless such reduction would result in the Company violating any rules of its principal Trading Market.
i)
Minimum Exercise Price. Notwithstanding anything to the contrary in this Section 3, in no event will the Exercise Price of
this Warrant be adjusted to an amount that is less than the Minimum Exercise Price. As used herein, “Minimum Exercise Price”
means 20% of the Nasdaq Minimum Price (as defined in Nasdaq Listing Rule 5635(d) or its successor) calculated as of the date
of the Purchase Agreement as proportionately adjusted to reflect any share dividends or splits in the manner set forth in Section 3(a).
Section 4. Transfer
of Warrant.
a) Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions
of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration
rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full,
in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder
delivers an Assignment Form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith,
may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New Warrants.
This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together
with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent
or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this
Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant Register.
The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual
notice to the contrary.
d) Transfer Restrictions.
If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not
be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities
or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements
pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant,
as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.
e) Representation
by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise
hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or
reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law (provided
that the Holder may resell the Warrant and the Warrant Shares pursuant to an effective registration statement or otherwise in compliance
with applicable federal and state securities laws).
Section 5. Miscellaneous.
a) Currency. All
dollar amounts referred to in this Warrant are in United States Dollars (“U.S. Dollars”). All amounts owing under this Warrant
shall be paid in U.S. Dollars.
b) No Rights
as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or
other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set
forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in
no event including if the Company is for any reason unable to issue and deliver Warrant Shares upon exercise of the this Warrant as required
pursuant to the terms hereof, shall the Company be required to net cash settle an exercise of this Warrant or cash settle in any other
form.
c) Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant or any share certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (and the Holder’s provision of a customary
indemnity to the Company and the Transfer Agent, as applicable), and upon surrender and cancellation of such Warrant or share certificate,
if mutilated, the Company will make and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or share certificate.
d) 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 Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading
Day.
e) Authorized
Shares.
The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Shares a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the
necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Shares may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented
by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate
to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately
prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall use commercially reasonable efforts to obtain all such authorizations or exemptions thereof, or consents thereto, as
may be necessary from any public regulatory body or bodies having jurisdiction thereof.
f) Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
g) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
h) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this
Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder
in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
i) Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Purchase Agreement.
j) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Warrant Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
k) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages may not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for
specific performance that a remedy at law would be adequate.
l) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
m) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
n) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
o) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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XORTX THERAPEUTICS INC. |
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By: |
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Name: |
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Title: |
EXHIBIT A
NOTICE OF EXERCISE
TO: XORTX THERAPEUTICS INC.
(1) The undersigned hereby
elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take
the form of (check applicable box):
¨ in lawful money of the United States;
or
¨ if permitted the cancellation of
such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant
Shares in the name of the undersigned or in such other name as is specified below:
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The Warrant Shares shall be delivered to the following
DWAC Account Number:
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(4) Accredited Investor.
The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.
[SIGNATURE OF HOLDER]
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EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this
form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and
all rights evidenced thereby are hereby assigned to
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| Dated: _________________________________________ __, ______ |
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| Holder’s Signature: ___________________________________________ |
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| Holder’s Address:____________________________________________ |
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Exhibit 99.6
FORM LOCK-UP AGREEMENT
October [•], 2024
| Re: | Securities Purchase Agreement, dated as of October 17, 2024 (the “Purchase Agreement”),
between XORTX Therapeutics Inc. (the “Company”) and the purchasers signatory thereto (each, a “Purchaser”
and, collectively, the “Purchasers”) |
Ladies and Gentlemen:
Defined terms not otherwise
defined in this letter agreement (the “Letter Agreement”) shall have the meanings set forth in the Purchase Agreement.
Pursuant to Section 2.2(a) of the Purchase Agreement and in satisfaction of a condition of the Company’s obligations under
the Purchase Agreement, the undersigned irrevocably agrees with the Company that, from the date hereof until forty-five (45) days after
the Closing Date (such period, the “Restriction Period”) the undersigned will not offer, sell, contract to sell, hypothecate,
pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or
any Affiliate of the undersigned or any person in privity with the undersigned or any Affiliate of the undersigned), directly or indirectly,
or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to, any common shares of the
Company or securities convertible, exchangeable or exercisable into, common shares of the Company beneficially owned, held or hereafter
acquired by the undersigned (the “Securities”). Beneficial ownership shall be calculated in accordance with Section 13(d) of
the Exchange Act.
Notwithstanding the foregoing,
and subject to the conditions below, the undersigned may transfer the Securities provided that (1) the Company receives a signed
lock-up letter agreement (in the form of this Letter Agreement) for the balance of the Restriction Period from each donee, trustee, distributee,
or transferee, as the case may be, prior to such transfer, (2) any such transfer shall not involve a disposition for value, (3) such
transfer is not required to be reported with the Securities and Exchange Commission in accordance with the Exchange Act and no report
of such transfer shall be made voluntarily, and (4) neither the undersigned nor any donee, trustee, distributee or transferee, as
the case may be, otherwise voluntarily effects any public filing or report regarding such transfers, with respect to transfer:
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as a bona fide gift or gifts, charitable contribution or for bona fide estate planning purposes; |
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to any immediate family member or to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this Letter Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin); |
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to any corporation, partnership, limited liability company, or other business entity all of the equity holders of which consist of the undersigned and/or the immediate family of the undersigned; |
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if the undersigned is a corporation, partnership, limited liability company, trust or other business entity (a) to another corporation, partnership, limited liability company, trust or other business entity that is an Affiliate of the undersigned or (b) in the form of a distribution to limited partners, limited liability company members or shareholders of the undersigned; |
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if the undersigned is a trust, to the beneficiary of such trust; |
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by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary or a member of the immediate family of the undersigned; or |
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by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce decree; |
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pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction that is approved by the Board of Directors of the Company and made to all holders of the Company’s common shares the result of which is that any “person” (as defined in Section 13(d)(3) of the Exchange Act), or group of persons, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of more than 50% of total voting power of the voting shares of the Company or the surviving entity; |
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to the Company upon a vesting event of the Securities or upon the exercise of options or warrants to purchase Common Shares on a “cashless” or “net exercise” basis or to cover tax withholding obligations of the undersigned in connection with such vesting or exercise (but for the avoidance of doubt, excluding all manners of exercise that would involve a sale in the open market of any securities relating to such options or warrants, whether to cover the applicable aggregate exercise price, withholding tax obligations or otherwise); provided that any Securities issued upon such exercise shall be subject to the restrictions set forth in this Letter Agreement; |
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to the Company in connection with the termination of employment whereby the Company has the option to repurchase such shares or securities; or |
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of securities purchased in open market transactions after the Closing Date. |
In addition, notwithstanding
the foregoing, this Letter Agreement shall not restrict the delivery of common shares of the Company to the undersigned upon (i) exercise
any options granted under any employee benefit plan of the Company; provided that any common shares or Securities acquired in connection
with any such exercise will be subject to the restrictions set forth in this Letter Agreement, or (ii) the exercise of warrants;
provided that such common shares delivered to the undersigned in connection with such exercise are subject to the restrictions set forth
in this Letter Agreement.
Furthermore, the undersigned
may enter into any new plan established in compliance with Rule 10b5-1 of the Exchange Act; provided that (i) such plan may
only be established if no public announcement or filing with the Securities and Exchange Commission, or other applicable regulatory authority,
is made in connection with the establishment of such plan during the Restriction Period and (ii) no sale of common shares is made
pursuant to such plan during the Restriction Period.
The undersigned acknowledges
that the execution, delivery and performance of this Letter Agreement is a material inducement to each Purchaser to complete the transactions
contemplated by the Purchase Agreement and the Company shall be entitled to specific performance of the undersigned’s obligations
hereunder. The undersigned hereby represents that the undersigned has the power and authority to execute, deliver and perform this Letter
Agreement, that the undersigned has received adequate consideration therefor and that the undersigned will indirectly benefit from the
closing of the transactions contemplated by the Purchase Agreement.
This Letter Agreement may
not be amended or otherwise modified in any respect without the written consent of each of the Company and the undersigned. This Letter
Agreement shall be construed and enforced in accordance with the laws of the State of New York without regard to the principles of conflict
of laws. The undersigned hereby irrevocably submits to the exclusive jurisdiction of the United States District Court sitting in the Southern
District of New York and the courts of the State of New York located in Manhattan, for the purposes of any suit, action or proceeding
arising out of or relating to this Letter Agreement, and hereby waives, and agrees not to assert in any such suit, action or proceeding,
any claim that (i) it is not personally subject to the jurisdiction of such court, (ii) the suit, action or proceeding is brought
in an inconvenient forum, or (iii) the venue of the suit, action or proceeding is improper. The undersigned hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by receiving a copy thereof sent
to the Company at the address in effect for notices to it under the Purchase Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. The undersigned hereby waives any right to a trial by jury. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. The undersigned agrees and understands
that this Letter Agreement does not intend to create any relationship between the undersigned and any Purchaser and that no Purchaser
is entitled to cast any votes on the matters herein contemplated and that no issuance or sale of the Securities is created or intended
by virtue of this Letter Agreement.
This Letter Agreement shall
be binding on successors and assigns of the undersigned with respect to the Securities and any such successor or assign shall enter into
a similar agreement for the benefit of the Company. This Letter 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.
This Lock-Up Agreement may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S.
federal ESIGN Act of 2000, e.g., www.docusign.com or www.echosign.com) or other transmission method and any counterpart so delivered shall
be deemed to have been duly and validly delivered and be valid and effective for all purposes.
This Letter Agreement (and
for the avoidance of doubt, the Restriction Period described herein) and related restrictions shall automatically terminate upon the earliest
to occur, if any, of (i) the termination of the Purchase Agreement before the sale of any Securities to the Purchasers or (ii) October 31,
2024, in the event the Closing of the sale of any Securities contemplated by the Purchase Agreement shall not have occurred on or before
such date.
*** SIGNATURE PAGE FOLLOWS***
This Letter Agreement may
be executed in two or more counterparts, all of which when taken together may be considered one and the same agreement.
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By signing below, the Company
agrees to use commercially reasonable efforts to enforce the restrictions on transfer set forth in this Letter Agreement.
XORTX THERAPEUTICS INC.
XORTX Therapeutics (NASDAQ:XRTX)
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