●

pursuant to the Arrangement (as defined herein); and

●

as provided in this Agreement,

●

fair to the Company Shareholders; and

●

is in the best interests of the Company,

1.1

Definitions

(a)

confidentiality restrictions that are reasonable in the circumstances for transactions of this nature;

(b)

restrictions on the acquisition of voting or equity securities of such Party or securities convertible into voting or equity securities of such Party that provide that such third party may not acquire any of the issued and outstanding voting or equity securities of such Party for a period of not less than one year from the date of such confidentiality agreement; and

(c)

a standstill or similar provision that restricts such person from announcing an intention to acquire or acquiring any securities or assets of such Party for a period of not less than one year from the date of such confidentiality agreement and the making, or amendment, of an Acquisition Proposal, except that such provision may include an exception solely to the extent necessary to allow a person to make a non-public proposal to the board of directors of such Party;

(a)

proposal to a Party with respect to:

(i)

any direct or indirect acquisition, take-over bid, tender offer, exchange offer, treasury issuance or other transaction that, if consummated, would result in any person or group of persons other than the other Party (or any affiliate of the other Party) beneficially owning voting or equity securities of such Party (or securities convertible into or exchangeable or exercisable for voting or equity securities of such Party) representing 20% or more of the voting or equity securities of such Party then outstanding (assuming, if applicable, the conversion, exchange or exercise of such securities convertible into or exchangeable or exercisable for voting or equity securities of such Party);

(ii)

any plan of arrangement, amalgamation, merger, share exchange, consolidation, reorganization, recapitalization, liquidation, dissolution, winding up, exclusive license, business combination or other similar transaction in respect of such Party or any of its subsidiaries; or

(iii)

any direct or indirect acquisition by any person or group of persons of any assets of such Party and/or any interest in one or more of its subsidiaries (including shares or other equity interest of subsidiaries) that:

(A)

represent 20% or more of the voting, equity or other securities of any such subsidiary (or rights or interests therein or thereto); or

(B)

constitute or hold 20% or more of the fair market value of the assets of such Party and its subsidiaries (taken as a whole), based on the financial statements of such Party most recently filed prior to such time as part of the Company Public Disclosure Record or the Purchaser Public Disclosure Record, as applicable;

(iv)

any direct or indirect sale, disposition, lease, license, royalty, alliance or joint venture, long-term supply agreement or other arrangement having a similar economic effect, whether in a single transaction or a series of related transactions;

(b)

inquiry, expression or other indication of interest or offer to, or public announcement of or of an intention to do any of the foregoing;

(c)

modification or proposed modification of any such proposal, inquiry, expression, indication of interest, or announcement; or

(d)

any other transaction or agreement, the consummation of which could reasonably be expected to materially impede, prevent or delay the transactions contemplated by this Agreement or completion of the Arrangement,

(a)

any change in general political, economic or financial or capital market conditions in Canada;

(b)

any change in Laws;

(c)

any change affecting securities markets in general;

(d)

any change relating to currency exchange, interest rates or rates of inflation;

(e)

any change in IFRS;

(f)

any change or development in global, national or regional political conditions (including any act of terrorism, any outbreak of hostilities or war, or any global pandemics, including COVID 19, or any escalation or worsening thereof) or any natural disaster;

(g)

anything that has been disclosed in the Company Public Disclosure Record;

(h)

a change as a result of the announcement of the execution of this Agreement or of the transactions contemplated hereby (including changes in the market price of the Company’s securities); or

(i)

any securityholder class action, or other litigation arising from allegations of a breach of fiduciary duty with respect to this Agreement,

(a)

in accordance with either:

(i)

this Agreement; or

(ii)

Section 6.1 of the Plan of Arrangement,

(b)

at the direction of the Court in the Final Order,;

(a)

any change in general political, economic or financial or capital market conditions in Canada, or the United States;

(b)

any change in Laws;

(c)

any change or development in global, national or regional political conditions (including any act of terrorism, any outbreak of hostilities or war, or any global pandemics, including COVID 19, or any escalation or worsening thereof) or any natural disaster;

(d)

any change affecting the industry in which the Purchaser operates

(e)

any change affecting securities markets in general;

(f)

any change relating to currency exchange, interest rates or rates of inflation;

(g)

any change in U.S. GAAP;

(h)

any failure by the Purchaser or any of its subsidiaries to meet any public estimates or expectations regarding its revenues, earnings or other financial performance or results of operations;

(i)

anything that has been disclosed in the Purchaser Public Disclosure Record;

(j)

any securityholder class action, or other litigation arising from allegations of a breach of fiduciary duty with respect to this Agreement; or

(k)

a change as a result of the announcement of the execution of this Agreement or of the transactions contemplated hereby (including changes in the market price of the Purchaser’s securities, as applicable),

(a)

the Securities Act and all other applicable Canadian provincial and territorial securities Laws;

(b)

the U.S. Securities Act, the U.S. Exchange Act and all other U.S. federal and state securities Laws; and

(c)

the rules and regulations of the CSE, or any applicable securities exchange, as applicable;

(a)

corporation of which issued and outstanding voting securities of such corporation to which are attached more than 50% of the votes that may be cast to elect directors of the corporation (whether or not shares of any other class or classes will or might be entitled to vote upon the happening of any event or contingency) are owned by such specified entity and the votes attached to those voting securities are sufficient, if exercised, to elect a majority of the directors of such corporation;

(b)

partnership, unlimited liability company, joint venture or other similar entity in which such specified entity has more than 50% of the equity interests and the power to direct the policies, management and affairs thereof; and

(c)

a subsidiary (as defined in clauses (a) and (b) above) of any subsidiary (as so defined) of such specified entity;

(a)

complies with Securities Laws and did not result from, or arise in connection with:

(i)

 a breach of Article 5; or

(ii)

any agreement between the person making such Acquisition Proposal and such Party other than an Acceptable Confidentiality Agreement;

(b)

the board of directors of such Party has determined, in good faith, after consultation with its financial advisors and outside legal counsel, that such Acquisition Proposal would, if consummated in accordance with its terms (but not assuming away any risk of non-completion), result in a transaction which is more favourable to the shareholders of such Party from a financial point of view than the Arrangement (taking into account any amendment proposed to be made to this Agreement by the other Party in accordance with the terms of Article 5) and the failure to recommend such Acquisition Proposal to the shareholders of such Party would be inconsistent with its fiduciary duties under applicable Law;

(c)

if it relates to the acquisition of not less than all of the outstanding voting or equity securities of such Party, then the consideration for the voting or equity securities of such Party is made available to all shareholders of such Party on the same terms and conditions;

(d)

is not subject to any financing condition and in respect of which adequate arrangements have been made to ensure that the required funds to complete such Acquisition Proposal will be available;

(e)

is not subject to any due diligence and/or access condition; and

(f)

the board of directors of such Party has determined, in good faith, after consultation with its financial advisors and outside legal counsel, is reasonably capable of being completed in accordance with its terms, without undue delay, taking into account all legal, financial, regulatory and other aspects of such Acquisition Proposal and the person making such Acquisition Proposal;

(a)

vote all Company Shares of which they are the registered or beneficial holder or over which they have control or direction, in favour of the Arrangement; and

(b)

not dispose of their Company Shares;

1.2

Currency

1.3

Interpretation Not Affected by Headings

(a)

The division of this Agreement into Articles and Sections and the insertion of a table of contents and headings are for convenience of reference only and do not affect the construction or interpretation of this Agreement.

(b)

The terms “this Agreement”, “hereof”, “herein”, “hereunder” and similar expressions refer to this Agreement, including the Schedules hereto, and not to any particular Article, Section or other portion hereof.

(c)

Unless something in the subject matter or context is inconsistent therewith, references herein to an Article, Section or Schedule by number or letter or both are to that Article, Section or Schedule in or to this Agreement.

1.4

Knowledge

(a)

Company, means to the actual knowledge and information of the Company Senior Management and Directors, after making due inquiry regarding the relevant matter; and

(b)

Purchaser, means to the actual knowledge and information of the Purchaser Senior Management, after making due inquiry regarding the relevant matter.

1.5

Extended Meanings, Etc.

(a)

Unless the context otherwise requires, words importing the singular number only include the plural and vice versa; words importing any gender include all genders.

(b)

The terms “including” or “includes” and similar terms of inclusion, unless expressly modified by the words “only” or “solely”, mean “including without limiting the generality of the foregoing” and “includes without limiting the generality of the foregoing”.

(c)

All accounting terms in respect of the Company are to be interpreted in accordance with IFRS and all accounting terms in respect of the Purchaser are to be interpreted in accordance with U.S. GAAP. All determinations of an accounting nature in respect of the Company required to be made shall be made in a manner consistent with IFRS and all determinations of an accounting nature in respect of the Purchaser required to be made shall be made in a manner consistent with U.S. GAAP.

(d)

Any reference to a statute refers to such statute and all rules and regulations made under it, as it or they may have been or may from time to time be amended or re-enacted, unless stated or otherwise.

1.6

Date of any Action; Computation of Time

(a)

If any date on which any action is required to be taken hereunder by any of the Parties is not a Business Day, then such action will be required to be taken on the next succeeding day which is a Business Day.

(b)

A period of time is to be computed as beginning on the day following the event that began the period and ending, if the last day of the period is:

(i)

a Business Day, then at 4:30 p.m. (Vancouver time) on the last day of the period; and

(ii)

is not a Business Day, then at 4:30 p.m. (Vancouver time) on the next Business Day.

1.7

Schedules

2.1

The Arrangement

(a)

The Parties agree that the Arrangement will be implemented in accordance with and subject to the terms and conditions contained in this Agreement and the Plan of Arrangement.

(b)

The Arrangement Filings, if required, shall implement the Plan of Arrangement

(c)

From and after the Effective Time, the steps to be carried out pursuant to the Arrangement shall become effective in accordance with the Plan of Arrangement.

(d)

The closing of the transactions contemplated hereby and by the Plan of Arrangement will take place at the offices in Vancouver, BC of Fasken Martineau DuMoulin LLP.

(e)

The Effective Date shall occur:

(i)

on the date that is three Business Days following satisfaction or waiver (subject to applicable Laws) of the last of the conditions set forth in Article 7 (excluding conditions that by their terms cannot be satisfied until the Effective Date, but subject to the satisfaction or, when permitted, waiver of those conditions as of the Effective Date); or

(ii)

at such other time or such other place as may be agreed to by the Parties; and

2.2

Implementation Steps by the Company

(a)

subject to compliance with applicable Securities Laws:

(i)

immediately after the execution of this Agreement; or

(ii)

such later time prior to the next opening of markets in Toronto as is agreed to by the Company and the Purchaser,

(b)

file such news release and a corresponding material change report in prescribed form in accordance with applicable Securities Laws;

(c)

as soon as reasonably practicable after the execution of this Agreement and, in any event, within thirty (30) days of the date of this Agreement, make application for a hearing before the Court pursuant to Section 291 of the BCBCA, seeking the Interim Order, in a manner and form acceptable to the Purchaser, acting reasonably;

(d)

proceed with such application and diligently pursue obtaining the Interim Order;

(e)

lawfully convene and hold the Company Meeting in accordance with the Interim Order, the Company’s notice of articles and articles and applicable Laws, as soon as reasonably practicable after the Interim Order is issued, and in any event, not later than forty-five (45) days after the Interim Order is issued, for the purpose of having the Company Shareholders consider the Arrangement Resolution;

(f)

not adjourn, postpone or cancel (or propose the adjournment, postponement or cancellation of) such Company Meeting without the prior written consent of the Purchaser; provided, however, if the Company Meeting is scheduled to occur during a Superior Proposal Notice Period, then the Company may, and upon the request of the Purchaser shall, adjourn or postpone the Company Meeting to:

(i)

a date specified by the Purchaser that is not later than three Business Days after the date on which the Company Meeting was originally scheduled to be held; or

(ii)

if the Purchaser does not specify such date, then the fifth Business Day after the date on which the Company Meeting was originally scheduled to be held;

(g)

solicit, from the Company Shareholders, proxies:

(i)

in favour of the approval of the Arrangement Resolution; and

(ii)

against any resolution submitted by any person that is inconsistent with, or which seeks to hinder or delay the Arrangement Resolution or the completion of the transactions contemplated by this Agreement;

(h)

recommend to all Company Shareholders that they vote in favour of the Arrangement Resolution;

(i)

take all other actions that are reasonably necessary or desirable to obtain the approval of the Arrangement by the Company Shareholders;

(j)

provide the Purchaser with copies of or access to information regarding the Company Meeting generated by any dealer or proxy solicitation agents, as reasonably requested from time to time by the Purchaser;

(k)

consult with the Purchaser in fixing the date of the Company Meeting;

(l)

give notice to the Purchaser of the Company Meeting;

(m)

advise the Purchaser:

(i)

as reasonably requested; and

(ii)

on a daily basis commencing 10 Business Days prior to the Company Meeting,

(n)

promptly provide the Purchaser with any notice relating to the Company Meeting;

(o)

allow Representatives of the Purchaser to attend the Company Meeting;

(p)

not change the record date for the Company Shareholders entitled to vote at the Company Meeting in connection with any adjournment or postponement of the Company Meeting unless required by Law or the Company’s articles;

(q)

subject to obtaining such approvals as are required by the Interim Order, as soon as reasonably practicable after the Company Meeting and, in any event, not later than two Business Days thereafter, make application to the Court pursuant to Section 291 of the BCBCA for the Final Order;

(r)

proceed with such application and diligently pursue obtaining the Final Order;

(s)

if at any time after the issuance of the Final Order and on or before the Effective Date, the Company is required by the terms of the Final Order or by Law to return to the Court with respect to the Final Order, then do so after prior notice to, and in consultation and cooperation with, the Purchaser; and

(t)

carry out the terms of the Plan of Arrangement applicable to it prior to the Outside Date.

2.3

Implementation Steps by the Purchaser

(a)

cooperate with, assist and consent to the Company seeking the Interim Order and the Final Order;

(b)

subject to the Company obtaining the Final Order and to the satisfaction or waiver (subject to applicable Laws) of each of the conditions set forth in Article 7 (excluding conditions that by their terms cannot be satisfied until the Effective Date, but subject to the satisfaction or, when permitted, waiver of those conditions as of the Effective Date), as soon as reasonably practicable thereafter, take all steps and actions including, if applicable, making all filings with Governmental Authorities necessary to give effect to the Arrangement; and

(c)

carry out the terms of the Plan of Arrangement applicable to it prior to the Outside Date.

2.4

Interim Order

(a)

for the class of persons to whom notice is to be provided in respect of the Arrangement and the Company Meeting and the manner in which such notice is to be provided;

(b)

for a record date, for the purposes of determining the Company Shareholders entitled to receive notice of and vote at the Company Meeting, of not later than the date of the issue of the Initial Order, which date shall be fixed and published by the Company in consultation with the Purchaser;

(c)

that the Company Meeting may be adjourned or postponed from time to time by the Company in accordance with the terms of this Agreement without the need for additional approval by the Court;

(d)

that, except as required by Law, the record date, for the Company Shareholders entitled to receive notice of and to vote at the Company Meeting, will not change in respect of or as a consequence of any adjournment or postponement of the Company Meeting;

(e)

that the requisite approvals of the Arrangement Resolution will be at least 66⅔% of the votes cast on the Arrangement Resolution by the Company Shareholders present in person or by proxy at the Company Meeting;

(f)

that in all other respects, the terms, conditions and restrictions of the Company’s constating documents, including quorum requirements with respect to meetings of Company Shareholders and other matters, shall apply with respect to the Company Meeting;

(g)

for the grant of Dissent Rights to the Company Shareholders who are registered holders of Company Shares, as contemplated in the Plan of Arrangement;

(h)

for the notice requirements with respect to the presentation of the application to the Court for the Final Order; and

(i)

that the Parties intend to rely upon the exemption from registration provided by Section 3(a)(10) of the U.S. Securities Act, subject to and conditioned on the Court’s determination that the Arrangement is substantively and procedurally fair to the Company Shareholders,

2.5

Circular

(a)

Subject to the Purchaser complying with Section 2.5(g), the Company will, in consultation with the Purchaser:

(i)

as soon as reasonably practicable after the execution of this Agreement, promptly prepare the Circular together with any other documents required by the BCBCA or any other applicable Laws in connection with the approval of the Arrangement Resolution by the Company Shareholders at the Company Meeting; and

(ii)

as soon as reasonably practicable after the issuance of the Interim Order, cause the Circular to be sent to the Company Shareholders in compliance with the abridged timing requirements contemplated by National Instrument 54-101 – Communication with Beneficial Owners of Securities of a Reporting Issuer and filed as required by the Interim Order and applicable Laws.

(b)

The Company shall ensure that the Circular complies in all material respects with applicable Laws, and, without limiting the generality of the foregoing, that the Circular (including with respect to any information incorporated therein by reference):

(i)

will not contain any misrepresentation (other than in each case with respect to any information furnished in writing by the Purchaser); and

(ii)

provides the Company Shareholders with information in sufficient detail to permit them to form a reasoned judgment concerning the matters to be placed before them at the Company Meeting.

(c)

The Company, and the Purchaser will cooperate in the preparation, filing and mailing of the Circular.

(d)

Prior to filing the Circular with applicable Governmental Authorities and printing and mailing the Circular to the Company Shareholders, the Company will:

(i)

provide the Purchaser and legal counsel to the Purchaser with a reasonable opportunity to review and comment on drafts of the Circular and other documents related thereto; and

(ii)

give reasonable consideration to such comments.

(e)

All information relating solely to the Purchaser included in the Circular shall:

(i)

be provided by the Purchaser in accordance with Section 2.5(g); and

(ii)

be in form and content satisfactory to the Purchaser.

(f)

The Circular will include:

(i)

a copy of the Company Board Fairness Opinion;

(ii)

a statement that the Company Board has unanimously determined, that the Arrangement is:

(A)

fair to the Company Shareholders; and

(B)

in the best interests of the Company;

(iii)

the unanimous recommendation of the Company Board that the Company Shareholders vote in favour of the Arrangement Resolution;

(iv)

the rationale for that recommendation; and

(v)

a statement that each Support Shareholder intends to vote all Company Shares held by him or her in favour of the Arrangement Resolution.

(g)

The Purchaser will, in a timely manner, furnish the Company with all such information regarding the Purchaser as may reasonably be required to be included in the Circular pursuant to applicable Laws and any other documents related thereto.

(h)

The Company and the Purchaser will each promptly notify the other if, at any time before the Effective Date, it becomes aware (in the case of the Company, only with respect to the Company and in the case of the Purchaser only with respect to the Purchaser) that the Circular or any other document referred to in Section 2.5(g):

(i)

contains any misrepresentation; or

(ii)

otherwise requires any amendment or supplement,

(i)

The Company and the Purchaser will cooperate with each other in the preparation, filing and dissemination of any:

(i)

required supplement or amendment to the Circular or such other document, as the case may be; and

(ii)

related news release or other document necessary or desirable in connection therewith.

(j)

The Company shall keep the Purchaser fully informed, in a timely manner, of any requests or comments made by the Canadian regulatory authorities in connection with the Circular.

2.6

Court Proceedings

(a)

The Company will provide the Purchaser and its counsel with a reasonable opportunity to review and comment upon drafts of all materials to be filed with the Court in connection with the Arrangement prior to the service and filing of such materials and will give reasonable consideration to such comments.

(b)

The Company will ensure that all materials filed with the Court in connection with the Arrangement are consistent in all material respects with the terms of this Agreement and the Plan of Arrangement.

(c)

Subject to applicable Law, the Company will not file any material with the Court in connection with the Arrangement or serve any such material, and will not agree to modify or amend materials so filed or served, except as contemplated by this Section 2.6 or with the Purchaser’s prior written consent, such consent not to be unreasonably withheld, conditioned or delayed, provided, however, that nothing herein shall require the Purchaser to agree or consent to any increase or change in the consideration payable under the terms of the Plan of Arrangement or any modification or amendment to such filed or served materials that expands or increases the Purchaser’s obligations set forth in any such filed or served materials or under this Agreement or the Arrangement.

(d)

The Company will not object to legal counsel to the Purchaser making such submissions on the hearing of the motion for the Interim Order and the application for the Final Order as such counsel considers appropriate, provided that the Company or its legal counsel is advised of the nature of any submissions prior to the hearing and such submissions are consistent in all material respects with the terms of this Agreement and the Plan of Arrangement.

(e)

The Company will provide the Purchaser, on a timely basis, with:

(i)

copies of any notice of appearance and evidence or other documents served on the Company or its legal counsel in respect of:

(A)

the application for the Interim Order or the Final Order; or

(B)

any appeal therefrom;

(ii)

any notice, whether or not in writing, received by the Company or its legal counsel indicating any intention to:

(A)

oppose the granting of the Interim Order or the Final Order; or

(B)

appeal the Interim Order or the Final Order.

2.7

Dissent Rights

(a)

The Company will give the Purchaser prompt notice of receipt of any:

(i)

written notice of any dissent or purported exercise by any Company Shareholder of Dissent Rights;

(ii)

withdrawal of such a notice; and

(iii)

other instruments served pursuant to Dissent Rights and received by the Company.

(b)

The Company shall not:

(i)

make any payment or settlement offer;

(ii)

agree to any such settlement; or

(iii)

conduct any negotiations,

2.8

List of Securityholders

(a)

Upon the reasonable request from time to time of the Purchaser, the Company will promptly provide the Purchaser with lists (in electronic form) of the:

(i)

Registered:

(A)

Company Shareholders; and

(B)

holders of the Company Warrants,

(ii)

names and addresses and respective holdings of all persons having rights (other than Company Warrants) issued or granted by the Company to acquire or otherwise related to Company Shares; and

(iii)

names of non-objecting beneficial owners of Company Shares and participants in bookbased nominee registers (such as CDS & Co., Cede & Co. and the Depositary Trust Company), together with their respective addresses and holdings of Company Shares.

(b)

The Company will from time to time require that its registrar and transfer agent furnish the Purchaser with such additional information, including:

(i)

updated or additional lists of Company Shareholders;

(ii)

information regarding beneficial ownership of Company Shares; and

(iii)

other assistance as the Purchaser may reasonably request.

2.9

Securityholder Communications

(a)

The Company and the Purchaser agree to cooperate in the preparation of any presentations regarding the Arrangement, including to any:

(i)

Company Shareholders;

(ii)

other securityholders of the Company; or

(iii)

the analyst community,

2.10

Payment of Consideration

2.11

Withholding Taxes

(a)

The Company, the Purchaser, and the Depositary, as the case may be, will be entitled to deduct and withhold from any consideration otherwise payable to any securityholder of the Company (including any Company Shareholder) under the Plan of Arrangement (including any payment to Company Shareholders exercising Dissent Rights) such amounts as the Company, the Purchaser, or the Depositary is required to deduct and withhold with respect to such payment under the Tax Act, the Code and the rules and regulations promulgated thereunder, or any provision of any provincial, state, local or foreign Tax Law as counsel may advise is required to be so deducted and withheld by the Company, the Purchaser, or the Depositary, as the case may be.

(b)

For the purposes of such deduction and withholding:

(i)

all withheld amounts shall be treated as having been paid to the person in respect of which such deduction and withholding was made on account of the obligation to make payment to such person hereunder; and

(ii)

such deducted or withheld amounts shall be remitted to the appropriate Governmental Authority in the time and manner required by the applicable Law by or on behalf of the Company, the Purchaser, or the Depositary, as the case may be.

2.12

U.S. Securities Law Matters

(a)

The Parties agree that the Arrangement will be carried out with the intention that all the Consideration issued on completion of the Arrangement will be issued by the Purchaser in reliance on:

(i)

the exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10) thereof; and

(ii)

pursuant to exemptions from applicable state securities laws.

(b)

In order to ensure the availability of the exemption under Section 3(a)(10) of the U.S. Securities Act and to facilitate the Purchaser’s compliance with other United States Securities Laws, the Parties agree that the Arrangement will be carried out on the following basis:

(i)

the Arrangement will be subject to the approval of the Court;

(ii)

prior to the hearing required to issue the Interim Order, the Court will be advised of the intention of the Parties to rely on the exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10) thereof;

(iii)

prior to the issuance of the Interim Order, the Company will file with the Court a copy of the proposed text of the Circular together with any other documents required by Law in connection with the Company Meeting;

(iv)

the Court will be required to satisfy itself as to the substantive and procedural fairness of the Arrangement to the Company Shareholders;

(v)

the Company will ensure that each Company Shareholder will be given adequate notice:

(A)

advising them of their right to attend the hearing of the Court to consider approval of the Arrangement; and

(B)

providing them with sufficient information necessary for them to exercise such right;

(vi)

the Company Shareholders entitled to receive Consideration will be advised that the Consideration issued pursuant to the Arrangement:

(A)

has not been registered under the U.S. Securities Act; and

(B)

will be issued by the Purchaser in reliance on the exemption from registration provided under Section 3(a)(10) of the U.S. Securities Act;

(vii)

the Final Order will expressly state that the Arrangement is approved by the Court as being substantially and procedurally fair to the Company Shareholders;

(viii)

the Interim Order will specify that each Company Shareholder, so long as they enter an appearance within a reasonable time, will have the right to appear before the Court at the hearing of the Court to consider approval of the Arrangement; and

(ix)

the Final Order shall include a statement to substantially the following effect:

2.13

Company Warrants

(a)

The Purchaser agrees that for the period from the Effective Date until expiry of the Company Warrants (in accordance with their respective terms), the Purchaser will assume all of the covenants and obligations of the Company under the Company Warrants and in accordance with the terms and conditions of the respective warrant certificates, do all things necessary to provide for the application of the provisions set forth in such warrant certificates with respect to the rights and interests of the holders thereof, such that upon exercise a Company Warrant will entitle the holder thereof to receive the Consideration which the holder thereof would have been entitled to had they exercised their Company Warrants immediately prior to the Effective Time, and will otherwise be valid and binding obligations of the Purchaser entitling the holders thereof, as against the Purchaser, to all the rights of such holders as set out in their respective warrant certificates.

(b)

Section 2.13(a) shall survive the execution and delivery of this Agreement and the completion of the Arrangement.

3.1

Representations and Warranties of the Company

(a)

Organization and Qualification.

(i)

The Company:

(A)

has been duly incorporated and validly exists;

(B)

is in good standing under the BCBCA;

(C)

has the requisite corporate and legal power and capacity to:

(I)

own its assets as now owned; and

(II)

carry on its business as it is now being carried on; and

(D)

is duly qualified to carry on business in each jurisdiction in which the nature or character of its properties and assets, owned, leased or operated by it, or the nature of its business or activities, makes such qualification necessary.

(ii)

The Company Diligence Information includes complete and correct copies of the constating documents of the Company, as amended to the date of this Agreement, and the Company has not taken any action to amend or supersede such documents.

(iii)

A complete list of the directors and officers of the Company are set out in Schedule 3.1(a)(iii) of the Company Disclosure Letter and each person is duly elected or appointed as a director and/or officer, as applicable, as set out in such Schedule 3.1(a)(iii).

(b)

Subsidiaries.

(i)

Except as disclosed in Schedule 3.1(b) of the Company Disclosure Letter, the Company does not have any direct or indirect subsidiaries.

(ii)

Except as disclosed in Schedule 3.1(b) of the Company Disclosure Letter, each of the Company’s direct or indirect subsidiaries is:

(A)

a corporation validly subsisting under the Laws of its jurisdiction of organization;

(B)

has all requisite corporate power and authority to:

(I)

carry on its business as now conducted; and

(II)

own or lease and to operate its properties and assets,

(C)

duly qualified to carry on business in each jurisdiction in which:

(I)

the nature or character of its properties and assets, owned, leased or operated by it; or

(II)

the nature of its business or activities, makes such qualification necessary, except where the failure to be so qualified has not had or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

(iii)

Except as disclosed in Schedule 3.1(b) of the Company Disclosure Letter, the Company, or a wholly-owned subsidiary of the Company, is the direct registered and beneficial owner of all of the outstanding common shares or other equity interests of each of its direct and indirect subsidiaries, free and clear of any Liens, and all such shares or other equity interests so owned by the Company, or its wholly-owned subsidiary, have been validly issued and are fully paid and non-assessable, as the case may be, and no such shares or other equity interests have been issued in violation of any pre-emptive or similar rights.

(iv)

Except for the shares or other equity interests owned by the Company in any subsidiary, the Company does not own, beneficially or of record, directly or indirectly, any equity interests of any kind in any other person.

(c)

Authority Relative to this Agreement.

(i)

The Company has the requisite corporate power, authority and capacity to enter into this Agreement and all other agreements and instruments to be executed by the Company as contemplated by this Agreement and (subject to obtaining the approval of the Company Shareholders of the Arrangement Resolution and the Final Order as contemplated in Section 2.2) to perform its obligations hereunder and under all such agreements and instruments and to complete the transactions contemplated by this Agreement.

(ii)

The execution and delivery of this Agreement and the completion by the Company of the transactions contemplated by this Agreement have been duly authorized by the Company Board and no other corporate proceedings on the part of the Company are necessary to authorize:

(A)

the execution and delivery by it of this Agreement;

(B)

subject to obtaining the approval of the Company Shareholders of the Arrangement Resolution and the Final Order as contemplated in Section 2.2, the completion by the Company of the transactions contemplated hereby and the performance by the Company of its obligations under the Agreement.

(iii)

This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to:

(A)

bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other Laws relating to or affecting the availability of equitable remedies and the enforcement of creditors’ rights generally;

(B)

general principles of equity and public policy; and

(C)

the qualification that equitable remedies such as specific performance and injunction may be granted only in the discretion of a court of competent jurisdiction.

(d)

Required Approvals. No material authorization, licence, Permit, certificate, registration, consent or approval of, or filing with, or notification to, any Governmental Authority is required to be obtained or made by or with respect to the Company or any of its subsidiaries in connection with the execution and delivery of this Agreement or, the performance by the Company of its obligations hereunder, the completion by the Company of the Arrangement and the other transactions contemplated hereby or the ability of the Company to conduct operations as currently conducted, other than the following:

(i)

the Interim Order and any filings required in order to obtain, and approvals required under, the Interim Order;

(ii)

the Final Order, and any filings required in order to obtain the Final Order; and

(iii)

such filings and other actions required under applicable Securities Laws as are contemplated by this Agreement.

(e)

No Violation. Subject to obtaining the authorizations, consents and approvals and making the filings referred to in Section 3.1(d), the execution and delivery by the Company of this Agreement and the performance by it of its covenants hereunder and the completion of the Arrangement do not and will not violate, conflict with or result in a breach of any provision of the constating documents or any resolutions of the board of directors (or any committee thereof) of shareholders of the Company or those of any of its subsidiaries or affiliates, will not:

(i)

violate, conflict with or result in a breach of:

(A)

any Contract, authorization, note, bond, mortgage, indenture, instrument, lease, or Permit to which the Company or any of its subsidiaries or affiliates is a party, or by which the Company or any of its subsidiaries or affiliates is bound;

(B)

any Law to which the Company or any of its subsidiaries or affiliates is subject or by which the Company or any of its subsidiaries or affiliates is bound; or

(C)

any judgment, decree, order or award of any Governmental Authority or arbitrator;

(ii)

give rise to any right of termination, cancellation, change of any right or obligation, loss of any benefit to which the Company or any of its subsidiaries are entitled or acceleration of any indebtedness, under any such Contract, authorization, note, bond, mortgage, indenture, instrument, lease, or material Permit;

(iii)

result in the creation or imposition of any Liens upon any of the properties or assets of the Company or its subsidiaries or affiliates or restrict, hinder, impair or limit the ability of the Company or any of its subsidiaries or affiliates to conduct its business as and where it is now being conducted; or

(iv)

give rise to any rights of first refusal or rights of first offer, trigger any change in control or influence provisions or any restriction or limitation under any such Contract, note, bond, mortgage, indenture, instrument, lease, authorization or Permit.

(f)

Capitalization.

(i)

The authorized capital of the Company consists of an unlimited number of Company Shares.

(ii)

As at the date hereof, there were:

(A)

40,124,502 Company Shares issued and outstanding all of which have been duly authorized and validly issued and are fully paid and non-assessable; and

(B)

16,800,000 Company Warrants providing for the issuance of 16,800,000 Company Shares upon the exercise thereof, all of which have been duly authorized and validly issued and created.

(iii)

The Subscription Receipts, if and when issued upon completion of the Concurrent Financing, and the Company Sub Receipt Warrants if and when issued upon conversion of the Subscription Receipts, will be duly authorized and validly issued and created.

(iv)

No Company Shares have been issued and no Company Warrants have been, and the Subscription Receipts and Company Sub Receipt Warrants, when issued, will not be, granted in violation of any pre-emptive right or similar rights applicable to them.

(v)

There are no outstanding obligations of the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any such Company Shares.

(vi)

No Company Options are outstanding and the Company has:

(A)

no other outstanding agreement, subscription, warrant, option, right or commitment or other right or privilege (whether by law, pre-emptive or contractual); and

(B)

not granted any right or privilege capable of becoming an agreement, subscription, warrant, option, right or commitment, obligating it,

(vii)

No securities of the Company are listed or quoted for trading on any stock or securities exchange or market.

(viii)

Schedule 3.1(f) of the Company Disclosure Letter sets out:

(A)

a complete and correct list of all outstanding Company Warrants, the number of Company Shares subject to such Company Warrants; and

(B)

the grant date, exercise price, vesting schedule and expiration date, as applicable, and the names of the holders of such Company Warrants.

(ix)

No grants in respect of Company Warrants involved any “back dating”, “forward dating”, “spring loading” or similar practices.

(x)

All Company Shares that may be issued pursuant to the exercise of outstanding Company Warrants and, if and when issued upon conversion of the Subscription Receipts, the exercise of the Company Sub Receipt Warrants:

(A)

will, when issued in accordance with the terms thereof, be duly authorized, validly issued, fully-paid and non-assessable;

(B)

are not and will not be subject to or issued in violation of any Law or any preemptive rights; and

(C)

if such Company Warrants are issued as of the date thereof, have been recorded on the Company’s financial statements in accordance with IFRS.

(xi)

All dividends and distribution on securities of the Company that have been declared or authorized have been paid in full.

(g)

Shareholder and Similar Agreements. The Company is not party to any shareholder, pooling, voting trust, registration rights, or other similar agreement relating to the issued and outstanding shares in the capital of the Company or any of its subsidiaries.

(h)

Reporting Issuer Status and Securities Laws Matters.

(i)

The Company is:

(A)

a “reporting issuer” within the meaning of applicable Securities Laws in each of the provinces of British Columbia and Alberta; and

(B)

not on the list of reporting issuers in default under applicable Canadian Securities Laws,

(ii)

The Company:

(A)

is not in default of any material provision of applicable Securities Laws or the rules and regulations of any stock or securities exchange or market;

(B)

has not taken any action to cease to be a reporting issuer in any province or territory of Canada; and

(C)

has not received notification from any securities commission or similar regulatory authority seeking to revoke the reporting issuer status of the Company.

(iii)

The Company:

(A)

is a Foreign Private Issuer (as defined in Rule 3b-4 under the U.S. Exchange Act);

(B)

has no class of securities outstanding that is or is required to be registered under section 12 of the U.S. Exchange Act or that is subject to the reporting requirements of section 13 or 15(d) of the U.S. Exchange Act; and

(C)

is not, and is not required to be, registered as an “investment company” pursuant to the United States Investment Company Act of 1940, as amended.

(iv)

There are no current, pending, or, to the knowledge of the Company, threatened proceedings before any Governmental Authority relating to any alleged non-compliance with any applicable Securities Laws.

(v)

Trading in the Company Shares is not currently halted or suspended on any stock or securities exchange or market.

(vi)

No delisting, suspension of trading, cease trading or similar order or restriction with respect to any securities of the Company is pending, in effect, or, to the knowledge of the Company, threatened or is expected to be implemented or undertaken.

(vii)

To the knowledge of the Company, the Company is not subject to any formal or informal review, enquiry, investigation or other proceeding relating to any order or restriction.

(viii)

The Company is not subject to continuous disclosure or other public reporting requirements under any Securities Laws outside of Canada.

(ix)

None of the Company’s subsidiaries are subject to continuous disclosure or other disclosure requirements under any Securities Laws.

(x)

Since March 22, 2021, the Company has timely filed or furnished to all applicable Governmental Authorities all material forms, reports, schedules, statements and other documents required to be filed or furnished by the Company under applicable Securities Laws.

(xi)

The documents comprising the Company Public Disclosure Record

(A)

as filed, complied in all material respects with Law; and

(B)

did not, as of the date filed (or, if amended or superseded by a subsequent filing prior to the date of this Agreement, on the date of such filing), contain any misrepresentation.

(xii)

The Company has not filed or furnished any:

(A)

confidential material change report (which at the date of this Agreement remains confidential); or

(B)

other confidential filings (including redacted filings other than material contracts which required redaction),

(xiii)

There are no outstanding or unresolved comments in comments letters from any securities commission or similar regulatory authority with respect to any of the Company Public Disclosure Record.

(xiv)

Neither the Company nor any of the Company Public Disclosure Record is the subject of an ongoing audit, review, comment or investigation by any securities commission or similar regulatory authority or any stock or securities exchange or market.

(i)

Financial Statements and Internal Control over Financial Reporting.

(i)

The Annual Financial Statements and the Company’s interim financial statements for the period ended June 30, 2021 have been prepared in accordance with IFRS and all applicable Laws and present fairly, in all material respects, as applicable, the assets, liabilities (whether accrued, absolute, contentment or otherwise), consolidated financial position, results of operations or financial performance and cash flows of the Company and its subsidiaries as at March 31, 2021 or June 30, 2021, respectively, for the periods covered thereby applied on a basis consistent with the immediately prior period and throughout the periods indicated (except as may be indicated expressly in the notes thereto).

(ii)

The Company does not intend to correct or restate, nor, to the knowledge of the Company is there any basis for any correction or restatement of, any aspect of any of the financial statements referred to in Section 3.1(i)(i).

(iii)

There are no, nor are there any commitments to become a party to, any:

(A)

off-balance sheet transaction;

(B)

arrangement, obligation (including contingent obligations) or other relationship of the Company or of any of its subsidiaries, with unconsolidated entities or other persons.

(iv)

The financial books, records and accounts of the Company and each of its subsidiaries:

(A)

have been maintained, in all material respects, in accordance with IFRS;

(B)

are stated in reasonable detail;

(C)

accurately and fairly reflect all the material transactions, acquisitions and dispositions of the Company and its subsidiaries; and

(D)

accurately and fairly reflect the basis of the Company’s consolidated financial statements.

(v)

None of the Company, or any of its subsidiaries or, to the knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any of its subsidiaries has received or otherwise obtained knowledge of any complaint, allegation, assertion, or claim, whether written or oral, regarding accounting, internal accounting controls or auditing matters, including:

(A)

any complaint, allegation, assertion, or claim that the Company or any of its subsidiaries has engaged in questionable accounting or auditing practices; or

(B)

any expression of concern from its employees regarding questionable accounting or auditing matters.

(vi)

The Annual Financial Statements and the Company’s interim financial statements reflect appropriate and adequate reserves in accordance with IFRS in respect of all contingent liabilities, if any, of the Company and its subsidiaries on a consolidated basis.

(vii)

There has been no material change in the Company’s accounting policies, except as described in the notes to the Annual Financial Statements and the Company’s interim financial statements.

(viii)

The Company has complied with NI 52-109.

(ix)

To the knowledge of the Company, there has been no fraud involving management or any other employees who have a significant role in the internal control over financial reporting of the Company

(j)

Undisclosed Liabilities. Except the liabilities and obligations:

(i)

that are specifically presented on the audited balance sheet of the Company as of March 31, 2021 or disclosed in the notes thereto; and

(ii)

incurred in the ordinary course of business consistent with past practice since March 31, 2021,

(k)

Auditors. The auditors of the Company are independent public accountants as required by applicable Laws and there is not now, and there has not been, any reportable disagreement (within the meaning of Section 4.11 of National Instrument 51-102 – Continuous Disclosure Obligations) with the Company’s auditors.

(l)

Absence of Certain Changes. Since March 31, 2021, except as disclosed in Schedule 3.1(l) of the Company Disclosure Letter, and other than for the purposes of the transactions contemplated herein:

(i)

the Company and each of its subsidiaries has conducted its business only in the ordinary course of business;

(ii)

there has not occurred one or more changes, events or occurrences which would, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect;

(iii)

the Company and its subsidiaries have not incurred any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) which would, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect;

(iv)

there has not been a material change in the level of accounts receivable or payable, inventories or employees, other than those changes in the ordinary course;

(v)

there has not been any satisfaction or settlement of any material claims or material liabilities that were not reflected in the Company’s audited financial statements, other than the settlement of claims or liabilities incurred in the ordinary course of business;

(vi)

there has not been any material increase in the salary, bonus, or other remuneration payable to any employees of any of Company or its subsidiaries

(vii)

there has not been any:

(A)

increase in the salary, bonus, or other remuneration payable to any officers of the Company or its subsidiaries; or

(B)

amendment or modification to the vesting or exercisability schedule or criteria, including any acceleration, right to accelerate or acceleration event or other entitlement under any stock option, restricted stock, deferred compensation or other compensation award of any officer of the Company or any of its subsidiaries;

(viii)

there has not been any entering into, or an amendment of, any Material Contract other than in the ordinary course of business;

(ix)

there has not been any:

(A)

incurrence, assumption or guarantee by the Company or any of its subsidiaries of any debt for borrowed money or creation or assumption by the Company or any of its subsidiaries of any Liens; or

(B)

making, by the Company or any of its subsidiaries, of any loan, advance or capital contribution to or investment in any other person;

(x)

the Company has not effected any change in its accounting methods, principles or practices, except as required by applicable Laws.

(m)

Derivative Transactions. Neither the Company nor any of its subsidiaries have any material obligations or liabilities, direct or indirect, vested or contingent in respect of any rate swap transactions, basis swaps, forward rate- transactions, commodity swaps, commodity options, equity or equity index swaps, equity or equity index options, bond options, interest rate options, foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions or currency options or any other similar transactions (including any option with respect to any of such transactions) or any combination of such transactions.

(n)

Compliance with Laws.

(i)

The business of the Company and its subsidiaries has been and is currently being conducted in material compliance with all applicable Laws and the Company has not received any written notice during the past twelve (12) months from a Governmental Authority concerning any violation and/or failure to comply with any applicable Law.

(ii)

Neither the Company nor any of its subsidiaries are or have been under any investigation with respect to, are or have been charged or threatened to be charged with, or have received any notice, written or oral, of, any alleged material violation of or non-compliance with any applicable Laws or disqualification by a Governmental Authority.

(iii)

The Company does not have any knowledge of any future or potential changes in any Law that may materially impact the business, operations, financial condition, prospects or otherwise of the Company or its subsidiaries.

(iv)

Without limiting the generality of the foregoing, all issued and outstanding Company Shares and Company Warrants have been issued in compliance with all applicable Securities Laws.

(v)

Neither the Company nor any of its subsidiaries and, to the Company’s knowledge, none of their respective directors, officers, supervisors, managers, employees, or agents has:

(A)

violated or is in violation of any applicable anti-bribery, export control, and economic sanctions Laws, including the Corruption of Foreign Public Officials Act (Canada) and the United States Foreign Corrupt Practice Act;

(B)

made or authorized any direct or indirect contribution, payment or gift of funds, property or anything else of value to any official, employee or agent of any Governmental Authority, authority or instrumentality in Canada, other jurisdictions in which the Company or any of its subsidiaries has assets other than in accordance with applicable Laws;

(C)

used any corporate funds, or made any direct or indirect unlawful payment from corporate funds, to any foreign or domestic government official or employee or any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; or

(D)

violated or is in violation of any provision of the Criminal Code (Canada) relating to foreign corrupt practices, including making any contribution to any candidate for public office, in either case, where either the payment or gift or the purpose of such contribution payment or gift was or is prohibited under the foregoing.

(vi)

The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with:

(A)

applicable financial recordkeeping and reporting requirements of the money laundering statutes of all applicable jurisdictions;

(B)

the rules and regulations thereunder; and

(C)

any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority,

(vii)

No action, claim, notice of assessment, suit or proceeding by or before any commission, court, Governmental Authority, arbitrator or non-Governmental Authority involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

(o)

Permits.

(i)

The Company has no material Permits.

(ii)

None of the Company or any of its subsidiaries is required to obtain, acquire or enter into any material Permits required by applicable Laws necessary to conduct its businesses as it is now being conducted (as described in the Company Public Disclosure Record) or contemplated to be conducted.

(iii)

There have been no material defaults or actions, proceedings or investigations, pending or threatened, whether written or oral, against the Company or any of its subsidiaries in connection with any past material Permit held by the Company and that could reasonably be expected to result in any action, claim, liability or other Proceedings against the Company.

(p)

Litigation.

(i)

There is no court, administrative, regulatory or similar proceeding (whether civil, quasi-criminal or criminal), arbitration or other dispute settlement procedure, investigation or inquiry before or by any Governmental Authority, or any claim, action, suit, demand, arbitration, charge, indictment, hearing, demand letter or other similar civil, quasi-criminal or criminal, administrative or investigative matter or proceeding, including by any third party whatsoever (collectively, “Proceedings”) against or involving the Company or any of its subsidiaries, or affecting the their respective assets or properties (whether in progress or, to the knowledge of the Company, threatened).

(ii)

There is no judgment, writ, decree, injunction, rule, award or order of any Governmental Authority outstanding against:

(A)

the Company; or

(B)

its subsidiaries,

(q)

Insolvency.

(i)

No act or proceeding has been taken by or against the Company or any of its subsidiaries in connection with the:

(A)

dissolution, liquidation, winding up, bankruptcy or reorganization of the Company or any of its subsidiaries; or

(B)

appointment of a trustee, receiver, manager or other administrator of the Company or any of its subsidiaries or any of its properties or assets,

(ii)

Neither the Company nor any of its subsidiaries has sought protection under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) or similar legislation.

(iii)

Neither the Company nor any of its subsidiaries nor any of their respective properties or assets is subject to any outstanding judgment, order, writ, injunction or decree that involves or may involve, or restricts or may restrict, the right or ability of the Company or its subsidiaries to conduct its business in all material respects as it has been carried on prior to the date hereof.

(r)

Interest in Company Properties and Assets. The Company does not currently hold or own any Company Properties.

(s)

Taxes.

(i)

Each of the Company and its subsidiaries has filed all income and other material Returns required to be filed by it with any Governmental Authority and each such Return was:

(A)

filed on or before the applicable due date; and

(B)

complete and correct in all material respects at the time of filing and have not been amended.

(ii)

Each of the Company and its subsidiaries has duly paid or caused to be paid to the appropriate Governmental Authority all Taxes which are due and payable by it, including pursuant to all assessments and reassessments, and all other Taxes due and payable by it, whether or not assessed by the appropriate Governmental Authority or shown on a Return, on or before the date hereof, other than those which are being or have been contested in good faith by appropriate proceedings and in respect of which reserves have been provided in the most recently published consolidated financial statements of the Company.

(iii)

The Company and its subsidiaries have provided adequate accruals in accordance with applicable accounting rules in the most recently published consolidated financial statements of the Company for any Taxes of the Company and each of its subsidiaries for the period covered by such financial statements that have not been paid whether or not shown as being due on any Returns.

(iv)

Since the publication date of the most recently published consolidated financial statements of the Company, no material liability in respect of Taxes not reflected in such statements or otherwise provided for has been assessed, proposed to be assessed, incurred or accrued, other than in the ordinary course of business.

(v)

No audit, action, investigation, deficiency, litigation, or proposed adjustment is pending or, to the knowledge of the Company, has been threatened with respect to Taxes or Returns of the Company or any of its subsidiaries.

(vi)

No written claim has been made by any Governmental Authority in a jurisdiction where the Company and any of its subsidiaries does not file Returns that the Company or any of its subsidiaries is or may be subject to Tax by that jurisdiction.

(vii)

No Lien for Taxes has been filed or exists with respect to any assets or properties of the Company or any of its subsidiaries other than for Taxes not yet due and payable.

(viii)

The Company and each of its subsidiaries has withheld or collected all amounts required to be withheld or collected by it on account of Taxes and has remitted all such amounts to the appropriate Governmental Authority when required by Law to do so.

(ix)

The Company and each of its subsidiaries has made available to the Purchaser true, correct and complete copies of all Returns, examination reports and statements of deficiencies for taxable periods, or transactions consummated, for which the applicable statutory periods of limitations have not expired.

(x)

Neither the Company nor any of its subsidiaries has ever directly or indirectly transferred any property to or supplied any services to or acquired any property or services from a person with whom it was not dealing at arm’s length (for the purposes of the Tax Act) for consideration other than consideration equal to the fair market value of the property or services at the time of the transfer, supply or acquisition of the property or services.

(xi)

There are no currently effective elections, agreements or waivers extending the statutory period or providing for an extension of time with respect to the assessment or reassessment of any Taxes, the filing of any Return or any payment of Taxes by the Company or any of its subsidiaries.

(xii)

There are no circumstances existing which could result in the application of Section 78 or Sections 80 to 80.04 of the Tax Act, or any equivalent provision under provincial Law, to the Company or any of its subsidiaries, and neither the Company nor any of its subsidiaries has received a ruling from any Governmental Authority in respect of Taxes or signed an agreement in respect of Taxes with any Governmental Authority.

(xiii)

The Company and its subsidiaries have not claimed nor will they claim any reserve under any provision of the Tax Act or any equivalent provincial provision, if any amount could be included in the income of the Company or its subsidiaries for any period ending after the Effective Time.

(xiv)

Neither the Company nor any of its subsidiaries is a party to any agreement, understanding or arrangement relating to allocating or sharing any amount of Taxes, nor does the Company or any of its subsidiaries owe any amount under any such agreement.

(xv)

None of the Company or its subsidiaries has received a refund to which it was not entitled.

(xvi)

The Company Shares are not taxable Canadian property as defined in subsection 248(1) of the Tax Act.

(t)

Contracts.

(i)

There is no Contract (or amendment thereto) to which the Company or its subsidiaries is a party or by which its respective assets are bound that:

(A)

is material to the operational activities of the Company;

(B)

if terminated by the other party, would reasonably be expected to result in a Company Material Adverse Effect;

(C)

under which the Company is entitled to receive, or is actually or contingently obligated to make, annual payments in excess of $50,000 or aggregate payments in excess of $100,000;

(D)

which is a lease for real property;

(E)

which is a partnership agreement, limited liability company agreement, joint venture or similar agreement;

(F)

relating to the acquisition or disposition of any business or any interest therein (whether by merger, sale of shares or other ownership interests, sale of assets or otherwise);

(G)

relating to any agreement, option or commitment to (i) acquire any securities of any person, (ii) acquire or lease real property, (iii) acquire or lease other assets which would require annual payments by the Company in excess of $50,000 or aggregate payments by the Company in excess of $100,000 or (iv) sell, dispose or otherwise transfer any assets with a book value in excess of $50,000 individually or $100,000 in the aggregate;

(H)

relating to indebtedness for borrowed money (whether incurred, assumed, guaranteed or secured by any asset);

(I)

relating to any interest rate, currency, equity or commodity swap, hedge, derivative, forward sale or off-take arrangement; or

(J)

is a Contract that contains any non-competition obligations restricting in any material way the business of the Company,

(u)

Employees.

(i)

The Company has no employees, whether actively at work or not, and no former employees of the Company to whom the Company or any of its subsidiaries has or may have any outstanding obligations.

(ii)

Schedule 3.1(v) of the Company Disclosure Letter contains:

(A)

a correct and complete list of each independent contractor engaged by the Company or any subsidiary;

(B)

their respective consulting fees;

(C)

any other forms of compensation or benefits to which they are entitled; and

(D)

whether they are subject to a written Contract.

(iii)

Current and complete copies of all such independent contractor Contracts have been provided to the Purchaser as part of Diligence Information.

(iv)

Each independent contractor of the Company and its subsidiaries has been properly classified as an independent contractor and neither the Company nor any subsidiary has received any notice from any Governmental Authority disputing such classification.

(v)

Other than as set out in Schedule 3.1(v), the Company has no outstanding obligations to pay to any director, officer, employee or consultant, currently, or in the future, any salary, wages, fees, benefits, or any other obligations related to their employment, engagement or otherwise with the Company.

(v)

Employment Agreements.

(i)

Neither the Company nor any of its subsidiaries is a party to or bound or governed by, or subject to:

(A)

any Contract in relation to any current or former employee;

(B)

any employment, consulting, retention or change of control agreement with, or any written or oral agreement, arrangement or understanding providing for retention, severance or termination payments (including, without limitation, bonus, golden parachute, retirement, retiring allowance or similar payment or any other benefit or enhanced benefit) to, any officer, employee or consultant of the Company or any of its subsidiaries in connection with the termination of their position or their employment as a direct result of a change in control of the Company (including as a result of the Arrangement);

(C)

any collective bargaining or union agreement, or any actual or, to the knowledge of the Company, threatened application for certification or bargaining rights in respect of the Company or any of its subsidiaries;

(D)

any labour dispute, strike or lock-out relating to or involving any employees of the Company or any of its subsidiaries; or

(E)

any actual or, to the knowledge of the Company, threatened material claim against the Company or any of its subsidiaries arising out of or in connection with employment or consulting relationship or the termination thereof.

(ii)

Neither the Company nor any of its subsidiaries is a party, either directly or indirectly, or by operation of law, to any Collective Agreements and no Collective Agreement is currently being negotiated in respect of employees of the Company or any subsidiary.

(iii)

There are no outstanding labour tribunal proceedings of any kind, including any proceedings which could result in certification of a trade union as bargaining agent for any employees of the Company or any subsidiary.

(iv)

None of the Company or any of its subsidiaries has engaged in any lay-off activities within the past two years that would violate or in any way subject the Company or any of its subsidiaries to the group termination or lay-off requirements of the applicable provincial employment standards Law or other Law.

(v)

The Company has not and is not engaged in any unfair labour practice.

(vi)

There is no current, pending, threatened or, to the knowledge of the Company, potential:

(A)

union organizing activities involving any employees of the Company or any subsidiary;

(B)

labour strike, dispute, work slowdown or stoppage involving or against the Company or any subsidiary; or

(C)

unfair labour practice complaint, grievance or arbitration proceeding against the Company or any subsidiary.

(vii)

There has been no labour strike, dispute, work slowdown or stoppage involving or against the Company or any subsidiary within the last five (5) years.

(viii)

No trade union has applied to have the Company or any of its subsidiaries declared a common, related or successor employer pursuant to applicable Law in any jurisdiction in which the Company or any of its subsidiaries carries on business.

(w)

Health and Safety.

(i)

Each of the Company and its subsidiaries have operated in all material respects in accordance with all applicable Laws with respect to employment and labour, including:

(A)

employment and labour standards;

(B)

occupational health and safety;

(C)

employment equity;

(D)

pay equity, workers’ compensation;

(E)

human rights;

(F)

labour relations; and

(G)

privacy.

(ii)

There are no current, pending, threatened or, to the knowledge of the Company, potential proceedings before any Governmental Authority with respect to any of the matters described in Section 3.1(y).

(iii)

There are no outstanding assessments, reassessments, penalties, fines, liens, charges, surcharges, or other amounts due or owing under any occupational health and safety legislation (“AROHS”) or any workers’ compensation, industrial, accident and occupational disease legislation (“ARIAOD”) by the Company or any subsidiary.

(iv)

Neither the Company nor any subsidiary has been reassessed in any respect under any safety and insurance legislation during the past five years.

(v)

To the knowledge of the Company, no audit of the Company or any subsidiary is currently being performed pursuant to any applicable workplace safety and insurance legislation.

(vi)

As of the date of this Agreement, there are no claims or potential claims which may adversely affect the Company or any subsidiary’s accident cost expense.

(vii)

The Company has provided as part of Diligence Information, all orders and inspection reports under applicable AROHS and/or ARIAOD.

(viii)

There are no charges pending under AROHS and/or ARIAOD.

(ix)

The Company has complied in all material respects with any orders issued under AROHS and/or ARIAOD and there are no appeals of any orders under AROHS and/or ARIAOD currently outstanding.

(x)

The Company and its subsidiaries are in compliance with all terms and conditions of any work permits and Labour Market Impact Assessments received in respect of the engagement of foreign workers.

(xi)

No audit by any Governmental Authority is being conducted, or to the knowledge of the Company pending, in respect of any foreign workers and no such prior audit has resulted in the revocation of any work permit or Labour Market Impact Assessment.

(x)

Acceleration of Benefits. No person will, as a result of any of the transactions contemplated herein or in the Plan of Arrangement, become entitled to:

(i)

any retirement, severance, bonus or other similar payment from the Company or any of its subsidiaries;

(ii)

the acceleration of the vesting or the time to exercise of any outstanding stock option or employee or director awards of the Company or any of its subsidiaries;

(iii)

the forgiveness or postponement of payment of any indebtedness owing by such person to the Company or any of its subsidiaries; or

(iv)

receive any additional payments or compensation under or in respect of any:

(A)

employee or director benefit plan;

(B)

incentive plan; or

(C)

other compensation plan,

(y)

Pension and Employee Benefits.

(i)

Each of the Company and its subsidiaries has complied in all material respects with terms of, and applicable Law in respect of, employee compensation and benefit obligations of the Company and its subsidiaries.

(ii)

Neither the Company nor any of its subsidiaries has any:

(A)

pension or retirement income plans; or

(B)

other material employee compensation or benefit plans, agreements, policies, programs, arrangements or practices,

(iii)

The Company is in material compliance with the terms of the Company Stock Option Plan and all applicable Laws related thereto.

(iv)

All amounts due or accrued due for all salary, wages, bonuses, commissions, vacation with pay, sick days and benefits under Employee Plans and other similar accruals have either:

(A)

been paid; or

(B)

are accurately reflected in the books and records of the Company or of the applicable subsidiary.

(v)

The Company does not have any stock option plan or similar arrangement, other than the Company Stock Option Plan, a copy of which have been provided to the Purchaser as part of the Company Diligence Information.

(vi)

The Company and its subsidiaries have no Employee Plans or former Employee Plans of the Company that have or may have any outstanding obligations, other than the Company Stock Option Plan, and the Company has provided as part of Diligence Information, a true, correct and complete copy of the Company Stock Option Plan, together with all related documentation.

(z)

Intellectual Property. Neither the Company nor any of its subsidiaries owns or possesses any registered intellectual property rights including any patents, copyrights, trade secrets, trademarks, service marks or trade names.

(aa)

Environmental.

(i)

The Company and its subsidiaries have carried on since the commencement of operations and are currently carrying on their operations in compliance with all applicable Environmental Laws.

(ii)

The Company Properties previously leased, owned or held under option and assets of the Company and its subsidiaries have materially complied and currently comply with all applicable Environmental Laws.

(iii)

Neither the Company nor any of its subsidiaries is subject to any material contingent or other liability relating to:

(A)

the restoration, remediation or rehabilitation of land, water or any other part of the Environment;

(B)

mine closure, reclamation, remediation or other post-operational requirements; or

(C)

non-compliance with Environmental Laws.

(iv)

The Company Properties previously leased, owned or held under option, have not been used to generate, manufacture, refine, treat, recycle, transport, store, handle, dispose of, transfer, produce or process Hazardous Substances, except in compliance in all material respects with all Environmental Laws.

(v)

Neither of the Company nor any of its subsidiaries has caused or permitted a Release at, in, on, under or from the Company Properties previously leased, owned or held under option or any other properties, except in material compliance with all Environmental Laws.

(vi)

All Hazardous Substances handled, recycled, disposed of, treated or stored on or off site of the Company Properties previously leased, owned or held under option or any other properties by the Company or its subsidiaries have been and are currently being handled, recycled, disposed of, treated and stored in material compliance with all Environmental Laws.

(vii)

There are no Hazardous Substances at, in, on, under or migrating from any Company Property previously leased, owned or held under option, except in material compliance with all Environmental Laws.

(viii)

Neither the Company nor its subsidiaries has treated or disposed of, or arranged for the treatment or disposal of, any Hazardous Substances at any location except in compliance with all Environmental Laws and all Environmental Authorizations, and no such location is:

(A)

listed on any list of hazardous sites or sites requiring Remedial Action issued by any Governmental Authority;

(B)

to the knowledge of the Company, proposed for listing on any list issued by any Governmental Authority of hazardous sites or sites requiring Remedial Action, or any similar federal, state or provincial lists; or

(C)

the subject of enforcement actions by any Governmental Authority that creates the reasonable potential for any proceeding, action, or other claim against the Company or its subsidiaries.

(ix)

No site or facility now or previously owned, operated or leased by the Company or its subsidiaries:

(A)

is either:

(I)

listed; or

(II)

to the knowledge of the Company, is proposed for listing,

(B)

is the subject of Remedial Action.

(x)

Neither the Company nor any of its subsidiaries has caused or permitted a Release on or to any Company Property previously leased, owned or held under option or any other properties in such a manner as would reasonably be expected to:

(A)

impose liability for:

(I)

cleanup;

(II)

natural resource damages;

(III)

loss of life;

(IV)

personal injury;

(V)

nuisance; or

(VI)

damage to other property,

(B)

result in:

(I)

imposition of a lien, charge or other encumbrance on; or

(II)

the expropriation of,

(xi)

Neither the Company nor any of its subsidiaries has received from any Person or Governmental Authority any notice, formal or informal, of any proceeding, action or other claim, liability or potential liability arising under any Environmental Law that is pending or to the knowledge of the Company, threatened against the Company as of the date of this Agreement.

(xii)

The Company is not aware of any facts or circumstances that reasonably could be expected to give rise to any such notice, action or other claim, liability or potential liability.

(bb)

Insurance.

(i)

The Company and each of its subsidiaries do not maintain any insurance policies.

(cc)

Books and Records.

(i)

The corporate records and minute books of the Company and each of its subsidiaries:

(A)

have been maintained in accordance with all applicable Laws in all material respects.

(ii)

The financial books and records and accounts of the Company and each of its subsidiaries in all material respects have been maintained in accordance with

(A)

good business practices; and

(B)

in accordance with IFRS or the accounting principles generally accepted in the country of domicile of each such entity on a basis consistent with prior years.

(iii)

Neither the Company nor any of its subsidiaries has maintained or maintains any slush fund, off-book account, or unrecorded transactions

(dd)

Non-Arm’s Length Transactions. Except as disclosed in Schedule 3.1(ee) of the Company Disclosure Letter, there are no current contracts, commitments, agreements, arrangements or other transactions between the Company or any of its subsidiaries, on the one hand, and any:

(i)

officer or director of the Company or its subsidiaries;

(ii)

holder of record or, to the knowledge of the Company, beneficial owner or 5% or more of the outstanding Company Shares; or

(iii)

affiliate or associate of any such officer, director or Company Shareholder,

(ee)

Financial Advisors and Brokers.

(i)

Except as disclosed in Schedule 3.1(ff) of the Company Disclosure Letter, the Company has not:

(A)

incurred any obligation or liability, contingent or otherwise in respect of; or

(B)

retained or agreed to pay or reimburse any broker, finder, financial adviser, investment banker for,

(ii)

Schedule 3.1(ff) of the Company Disclosure Letter sets out the dollar amount payable or the manner in which such amount is to be calculated under such agreements if the Arrangement is completed.

(ff)

Opinions of Financial Advisor.

(i)

The Board has received the Company Board Fairness Opinion.

(ii)

True and complete copies of the engagement letters between the Company and the Company Board Financial Advisor have been provided as part of the Company Diligence Information.

(iii)

The Company has made true and complete disclosure to the Purchaser of all fees, commissions or other payments that may:

(A)

be incurred pursuant to the engagement of the Company Board Financial Advisor; or

(B)

otherwise be payable to the Company Board Financial Advisor.

(gg)

Company Board Approval.

(i)

The Company Board, at a meeting duly called and held, upon consultation with legal and financial advisors, has unanimously determined that the Arrangement is:

(A)

fair to the Company Shareholders; and

(B)

in the best interests of the Company.

(ii)

The Company Board has unanimously:

(A)

approved the:

(I)

execution and delivery of this Agreement; and

(II)

transactions contemplated by this Agreement

(B)

resolved to recommend that the Company Shareholders vote in favour of the Arrangement Resolution.

(iii)

No action has been taken to amend, or supersede such determinations, resolutions or authorizations of the Company Board.

(iv)

To the knowledge of the Company, each Support Shareholder intends to vote all Company Shares held by him, her or it in favour of the Arrangement Resolution and references to such intention may be made in any press release disclosing the Arrangement and this Agreement, the Circular and other documents relating to the Arrangement.

(hh)

Arrangements with Securityholders. Other than the Support Agreements, and this Agreement, the Company does not have any agreement, arrangement or understanding (whether written or oral) with any:

(i)

shareholder of the Purchaser;

(ii)

interested party of the Purchaser;

(iii)

related party of any interested party of the Purchaser; or

(iv)

any joint actor with any such persons,

(ii)

Confidentiality Agreements. All agreements entered into by the Company or any of its subsidiaries with persons regarding the confidentiality of information provided to such person or reviewed by such persons with respect to any transaction in the nature described in the definition of Acquisition Proposal each contain customary provisions, including standstill provisions, which have not been waived or released with respect to the applicability of any such “standstill” or other provisions of such confidentiality agreements, except to the extent such agreements contain provisions that provide for automatic exceptions to such standstill or other provisions resulting from the Arrangement.

(jj)

Funds Available on Termination. The maker of the applicable Superior Proposal or consummated Acquisition Proposal will provide the cash required in order to pay the Termination Fee.

(kk)

No Collateral Benefit. No related party of the Company (within the meaning of MI 61-101) together with its associated entities, will receive a “collateral benefit” (within the meaning of MI 61-101) as a consequence of the transactions contemplated by this Agreement.

3.2

Representations and Warranties of the Purchaser

(a)

Organization and Corporate Capacity.

(i)

The Purchaser:

(A)

has been duly organized and is validly existing;

(B)

is in good standing under the Laws governing its formation;

(C)

has the requisite corporate and legal power and capacity to:

(I)

own its assets as now owned; and

(II)

carry on its business as it is now being carried on;

(D)

is duly qualified to carry on business in each jurisdiction in which the nature or character of its properties and assets, owned, leased or operated by it, or the nature of its business or activities, makes such qualification necessary, except where the failure to be so qualified has not had or would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.

(b)

Authority Relative to this Agreement.

(i)

The Purchaser has the requisite corporate power, authority and capacity to enter into and perform its obligations under this Agreement and to complete the transactions contemplated hereby.

(ii)

The execution and delivery of this Agreement and the completion by the Purchaser of the transactions contemplated by this Agreement have been duly authorized by the directors of the Purchaser, and no other corporate proceedings on the part of the Purchaser are necessary to authorize the:

(A)

execution and delivery by it of this Agreement; or

(B)

completion by the Purchaser of the transactions contemplated hereby.

(iii)

This Agreement has been duly executed and delivered by the Purchaser and constitutes legal, valid and binding obligations of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to:

(A)

bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other Laws relating to or affecting the availability of equitable remedies and the enforcement of creditors’ rights generally;

(B)

general principles of equity and public policy; and

(C)

the qualification that equitable remedies such as specific performance and injunction may be granted only in the discretion of a court of competent jurisdiction.

(c)

Board Approval. The board of directors of the Purchaser has approved the execution and delivery of this Agreement and no action has been taken to amend, or supersede such approval.

(d)

Required Approvals. No authorization, licence, permit, certificate, registration, consent or approval of, or filing with, or notification to, any Governmental Authority is necessary for the execution and delivery by the Purchaser of this Agreement, the performance by the Purchaser of its obligations hereunder and the completion by the Purchaser of the Arrangement and the other transactions contemplated hereby, other than the following:

(i)

the Interim Order and any filings required in order to obtain, and approvals required under, the Interim Order;

(ii)

the Final Order, and any filings required in order to obtain the Final Order; and

(iii)

such filings and other actions required under applicable Securities Laws and the rules and policies of the CSE as are contemplated by this Agreement.

(e)

No Violation. The:

(i)

execution and delivery by the Purchaser of this Agreement;

(ii)

performance by the Purchaser of its obligations hereunder; and

(iii)

completion of the transactions contemplated hereby,

(iv)

result in a contravention, conflict, violation, breach or default of:

(A)

any contract, authorization, note, bond, mortgage, indenture, instrument, lease, or Permit to which the Purchaser or any of its subsidiaries or affiliates is a party, or by which the Purchaser or any of its subsidiaries or affiliates is bound;

(B)

any Law to which the Purchaser or any of its subsidiaries or affiliates is subject or by which the Purchaser or any of its subsidiaries or affiliates is bound; or

(C)

any judgment, decree, order or award of any Governmental Authority or arbitrator;

(v)

give rise to any right of termination, cancellation, change of any right or obligation, loss of any benefit to which the Purchaser or any of its subsidiaries are entitled or acceleration of any indebtedness, under any such contract, authorization, note, bond, mortgage, indenture, instrument, lease, or material Permit;

(vi)

result in the creation or imposition of any Liens upon any of the properties or assets of the Purchaser or its subsidiaries or affiliates or restrict, hinder, impair or limit the ability of the Purchaser or any of its subsidiaries or affiliates to conduct its business as and where it is now being conducted; or

(vii)

give rise to any rights of first refusal or rights of first offer, trigger any change in control or influence provisions or any restriction or limitation under any such contract, note, bond, mortgage, indenture, instrument, lease, authorization or Permit.

(f)

Capitalization.

(i)

The authorized capital of the Purchaser consists of up to 100,000,000 Purchaser Shares.

(ii)

As at September 28, 2021, there were:

(A)

67,557,791 Purchaser Shares issued and outstanding all of which have been duly authorized and validly issued and are fully-paid and non-assessable;

(B)

3,194,573 options to acquire Purchaser Shares outstanding providing for the issuance of 3,194,573 Purchaser Shares upon the exercise thereof;

(C)

4,000,000 Purchaser Shares issuable upon the conversion of the Purchase Parent’s 5.00% Senior Unsecured Convertible Debenture due July 14, 2023; and

(D)

700,110 Purchaser Shares issuable pursuant to the conversion of the Purchaser’s outstanding convertible subordinated promissory notes.

(iii)

As of the date hereof, all dividends and distribution on securities of the Purchaser that have been declared or authorized have been paid in full.

(iv)

The Purchaser Shares to be issued as part of the Consideration will, when issued pursuant to the Arrangement, be duly and validly issued as fully paid and non-assessable common shares in the capital of the Purchaser. The Purchaser Shares underlying the Company Sub Receipt Warrants will, at the Effective Time when adjusted to become exercisable for Purchaser Shares, upon issuance thereof in accordance with the terms thereof and receipt by the Purchaser of the exercise price therefor, such Purchaser Shares will be duly and validly issued as fully paid and non-assessable Purchaser Shares.

(g)

Shareholders’ and Similar Agreements. Neither the Purchaser nor any of its subsidiaries is a party to any shareholder, pooling, voting trust or other similar agreement relating to the issued and outstanding shares in the capital of the Purchaser or any of its subsidiaries.

(h)

Financial Matters.

(i)

The:

(A)

audited consolidated financial statements of the Purchaser, consisting of:

(I)

balance sheets;

(II)

statements of:

(1)

income;

(2)

comprehensive income;

(3)

cash flows; and

(4)

changes in equity

(B)

Purchaser’s interim financial statements for the period ended June 30, 2021 and the notes thereto,

(ii)

The Purchaser does not intend to correct or restate, nor, to the knowledge of the Purchaser is there any basis for any correction or restatement of, any aspect of any of the financial statements referred to in this Section 3.2(h)(i).

(iii)

There are no, nor are there any commitments to become a party to, any material:

(A)

off-balance sheet transaction; or

(B)

arrangement, obligation (including contingent obligations) or other relationship of the Purchaser or of any of its subsidiaries with unconsolidated entities or other persons.

(iv)

The financial books, records and accounts of the Purchaser and each of its subsidiaries:

(A)

have been maintained, in all material respects, in accordance with U.S. GAAP;

(B)

are stated in reasonable detail;

(C)

accurately and fairly reflect all the material transactions, acquisitions and dispositions of the Purchaser and its subsidiaries; and

(D)

accurately and fairly reflect the basis of the Purchaser’s consolidated financial statements.

(v)

To the knowledge of the Purchaser, none of the Purchaser, any of its subsidiaries or any director, officer, employee, auditor, accountant or representative of the Purchaser or any of its subsidiaries has received or otherwise obtained knowledge of any complaint, allegation, assertion, or claim, whether written or oral, regarding accounting, internal accounting controls or auditing matters, including:

(A)

any complaint, allegation, assertion, or claim that the Purchaser or any of its subsidiaries has engaged in questionable accounting or auditing practices; or

(B)

any expression of concern from its employees regarding questionable accounting or auditing matters.

(i)

Undisclosed Liabilities. Except as disclosed in the Purchaser Disclosure Letter, other than:

(A)

liabilities and obligations that are specifically presented on the audited balance sheet of the Purchaser as of December 31, 2020, or disclosed in the notes thereto; and

(B)

liabilities and obligations incurred in the ordinary course of business consistent with past practice since December 31, 2020,

(j)

Absence of Certain Changes. Since December 31, 2020, except as disclosed in Schedule 3.2(j) of the Purchaser Disclosure Letter or the Purchaser Public Disclosure Record, and other than for the purposes of the transactions contemplated herein:

(i)

the Purchaser has conducted its business only in the ordinary course of business; and

(ii)

there has not occurred one or more changes, events or occurrences which would, individually or in the aggregate, reasonably be expected to result in a Purchaser Material Adverse Effect;

(k)

Insolvency.

(i)

No act or proceeding has been taken by or against the Purchaser or any of its subsidiaries in connection with the:

(A)

dissolution, liquidation, winding up, bankruptcy or reorganization of the Purchaser or any of its subsidiaries; or

(B)

appointment of a trustee, receiver, manager or other administrator of the Purchaser or any of its subsidiaries or any of its properties or assets,

(ii)

Neither the Purchaser nor any of its subsidiaries has sought protection under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) or similar legislation.

(iii)

Neither the Purchaser nor any of its subsidiaries nor any of their respective properties or assets is subject to any outstanding judgment, order, writ, injunction or decree that involves or may involve, or restricts or may restrict, the right or ability of the Purchaser or its subsidiaries to conduct its business in all material respects as it has been carried on prior to the date hereof.

(l)

Litigation. 

(i)

Except as disclosed in Schedule 3.2(k) of the Purchaser Disclosure Letter, there is no material Proceeding against or involving the Purchaser or its subsidiaries (whether in progress or, to the knowledge of the Purchaser, threatened).

(ii)

Except as disclosed in Schedule 3.2(k) of the Purchaser Disclosure Letter, there is no material judgment, writ, decree, injunction, rule, award or order of any Governmental Authority outstanding against the Purchaser or its subsidiaries in respect of its businesses, properties or assets.

(m)

Securities Laws Matters. 

(i)

The Purchaser Shares are registered pursuant to Section 12(g) of the U.S. Exchange Act and the Purchaser is in compliance with its reporting obligation pursuant to Section 13 of the U.S. Exchange Act

(ii)

The Purchaser is not in default of any material provision of applicable Securities Laws.

(iii)

The Purchaser Shares are quoted on a platform operated OTC, except for trading on the platforms operated by the OTC, no securities of the Purchaser are listed or quoted for trading on any other stock or securities exchange or market.

(iv)

No delisting, suspension of trading or cease trading order or other order or restriction with respect to any securities of the Purchaser is pending, in effect, or, to the knowledge of the Purchaser, threatened, has been threatened, or is expected to be implemented or undertaken.

(v)

The Purchaser is not subject to any formal or informal review, enquiry, investigation or other proceeding relating to any such order or restriction.

(vi)

None of the Purchaser’s subsidiaries are subject to continuous disclosure or other disclosure requirements under any Securities Laws.

(vii)

The Purchaser has timely filed or furnished with any Governmental Authority all material forms, reports, schedules, statements and other documents required to be filed or furnished by the Purchaser with the appropriate Governmental Authority since January 1, 2019.

(viii)

The documents comprising the Purchaser Public Disclosure Record:

(A)

as filed, complied in all material respects with Law; and

(B)

did not, as of the date filed (or, if amended or superseded by a subsequent filing prior to the date of this Agreement, on the date of such filing), contain any misrepresentation.

(n)

Compliance with Laws.

(i)

Except as disclosed in Schedule 3.2(o) of the Purchaser Disclosure Letter, the business of the Purchaser and its subsidiaries has been and is currently being conducted in material compliance with all applicable Laws and the Purchaser has not received any written notice during the past twelve (12) months from a Governmental Authority concerning any violation and/or failure to comply with any applicable Law.

(ii)

Except as disclosed in Schedule 3.2(o) of the Purchaser Disclosure Letter, neither the Purchaser nor any of its subsidiaries are or have been under any investigation with respect to, are or have been charged or threatened to be charged with, or have received any notice, written or oral, of, any alleged material violation of or non-compliance with any applicable Laws or disqualification by a Governmental Authority.

(iii)

The Purchaser does not have any knowledge of any future or potential changes in any Law that may materially impact the business, operations, financial condition, prospects or otherwise of the Purchaser or its subsidiaries.

(iv)

Without limiting the generality of the foregoing, all issued and outstanding Purchaser Shares and other securities of the Purchaser have been issued in compliance with all applicable Securities Laws.

(v)

Neither the Purchaser nor any of its subsidiaries and, to the Purchaser’s knowledge, none of their respective directors, officers, supervisors, managers, employees, or agents has:

(A)

violated or is in violation of any applicable anti-bribery, export control, and economic sanctions Laws, including the Corruption of Foreign Public Officials Act (Canada) and the United States Foreign Corrupt Practice Act or any other similar law of any other jurisdiction in which the Purchaser operates its business;

(B)

made or authorized any direct or indirect contribution, payment or gift of funds, property or anything else of value to any official, employee or agent of any Governmental Authority, authority or instrumentality in Canada, other jurisdictions in which the Purchaser or any of its subsidiaries operates or has assets other than in accordance with applicable Laws;

(C)

made any direct or indirect unlawful payment from corporate funds, in furtherance of any offer, promise, or payment to any foreign or domestic government official, agent or employee or for any expense, contribution, gift, entertainment or other expense relating to political activity; or

(D)

violated or is in violation of any provision of the Criminal Code (Canada) relating to foreign corrupt practices, including making any contribution to any candidate for public office, in either case, where either the payment or gift or the purpose of such contribution payment or gift was or is prohibited under the foregoing.

(vi)

The operations of the Purchaser and its subsidiaries are and have been conducted at all times in compliance with Money Laundering Law.

(vii)

No action, suit or proceeding by or before any court of governmental authority or any arbitrator non-Governmental Authority involving the Purchaser or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Purchaser, threatened.

(o)

Permits. Except as disclosed in Schedule 3.2(n) of the Purchaser Disclosure Letter:

(i)

Each of the Purchaser and its subsidiaries has obtained, acquired or entered into, and is in material compliance with all material Permits required by applicable Laws necessary to conduct its current businesses as it is now being conducted (as described in the Purchaser Public Disclosure Record);

(ii)

all material Permits are in good standing and:

(A)

there has been no material default under any such Permit; and

(B)

all material fees and other amounts required to be paid with respect to such Permits to the date hereof have been paid.

(iii)

there are no material actions, proceedings or investigations, pending or, to the knowledge of the Purchaser, threatened or received notice, whether written or oral, against the Purchaser or any of its subsidiaries that could reasonably be expected to result in the suspension, loss or revocation of any material Permits.

(p)