Spectra7 Microsystems Inc.

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COMPUTERSHARE TRUST COMPANY OF CANADA

FIRST SUPPLEMENTAL CONVERTIBLE DEBENTURE INDENTURE

August 25, 2022

THIS FIRST SUPPLEMENTAL CONVERTIBLE DEBENTURE INDENTURE (this “ First Supplemental Indenture ”) is dated as of the 25[th] day of August, 2022

BETWEEN:

SPECTRA7 MICROSYSTEMS INC. , a corporation incorporated and existing under the law of the Province of Ontario

(hereinafter call the “ Corporation ”)

AND:

COMPUTERSHARE TRUST COMPANY OF CANADA , a trust company existing under the laws of Canada and registered to carry on business in the Province of Ontario

(hereinafter called the “ Trustee ”).

WHEREAS:

A. The Corporation and the Trustee entered into a convertible debenture indenture dated as of July 26, 2022 (the “ Indenture ”) providing for the issuance of debentures in an aggregate principal amount of up to $8,000,000, designated as “14% Convertible Unsecured Debentures” and due on December 31, 2024 (the “ Debentures ”);
B. The Corporation wishes to amend the Indenture to allow for the issuance of Debentures in an aggregate principal amount of up to $9,000,000;
C. The requisite Debentureholders have passed an Extraordinary Resolution in writing in accordance with sections 12.12 and 12.15 of the Indenture providing for the amendment set out in recital B above;
D. Section 12.11(c) of the Indenture gives the Debentureholders the power to assent to any modification of or change in or addition to or omission from the provisions contained in the Indenture or any Debenture which shall be agreed to by the Corporation, and to authorize the Trustee to concur in and execute any indenture supplemental thereto embodying any such modification, change, addition or omission;
E. Section 12.11(e) of the Indenture gives the Debentureholders the power to direct or authorize the Trustee to exercise any power, right, remedy or authority given to it by this Indenture in any manner specified in any such Extraordinary Resolution or to refrain from exercising any such power, right, remedy or authority;
F. Section 15.1(d) of the Indenture permits the Corporation and the Trustee to execute and deliver supplemental indentures giving effect to any Extraordinary Resolution passed in accordance with Article 12;
G. The board of directors of the Corporation has determined that it is in the best interest of the Corporation to supplement the Indenture;
H. The execution, acknowledgment and delivery of this First Supplemental Indenture by the Corporation has been duly authorized by a resolution of the board of directors of the Corporation; and
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I. The forgoing recitals are made as representations and statements of fact by the Corporation and not by the Trustee.

NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSES that for good and valuable consideration mutually given and received, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed and declared as follows:

ARTICLE 1 INTERPRETATION

1.1 Definitions and Interpretation

This First Supplemental Indenture is supplemental to the Indenture, and the Indenture shall henceforth be read in conjunction with this First Supplemental Indenture, and all the provisions of the Indenture, except only insofar as the same may be inconsistent with the express provisions hereof, shall apply and have the same effect as if all the provisions of the Indenture and this First Supplemental Indenture were contained in one instrument, and the capitalized terms used herein shall have the same meanings as are ascribed to the corresponding expressions in the Indenture.

On and after the date hereof, each reference in the Indenture to the Indenture, as supplemented by this First Supplemental Indenture, “this indenture”, “herein”, “hereby” and similar references, and each reference to the Indenture in any other agreement, certificate, document or instrument relating thereto, shall mean and refer to the Indenture as amended hereby. Except as specifically amended by this First Supplemental Indenture, all other terms and conditions of the Indenture shall remain in full force and unchanged.

1.2 Gender and Number.

Unless herein otherwise expressly provided or unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders.

1.3 Interpretation not Affected by Headings, etc.

The division of this First Supplemental Indenture into Articles, Sections, Subsections and paragraphs, and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this First Supplemental Indenture.

1.4 Time of the Essence.

Time shall be of the essence in all respects in this First Supplemental Indenture.

1.5 Severability.

In the event that any provision hereof shall be determined to be invalid or unenforceable in any respect, such determination shall not affect such provision in any other respect or any other provision hereof, all of which shall remain in full force and effect.

1.6 Conflicts.

In the event of any conflict between the provisions of this First Supplemental Indenture and the Indenture, the provisions of this First Supplemental Indenture will govern.

1.7 Requirement of Writing.

This First Supplemental Indenture may not be amended, modified or waived except by written instrument signed by the Corporation and the Trustee.

1.8 Successors and Assigns.

This First Supplemental Indenture shall enure to the benefit of and be binding upon the Corporation and the Trustee hereto and their respective successors and assigns.

1.9 Execution.

This First Supplemental Indenture may be simultaneously executed by facsimile in counterparts, each of which when so executed and delivered shall be deemed to be an original and such counterparts together shall constitute one and the same instrument and notwithstanding their date of execution they shall be deemed to be dated as of the date hereof.

ARTICLE 2 AMENDMENTS

2.1 Amendment of Principal Amount

(a) Subsection 2.1(a) of the Indenture is hereby amended so that all references to “$8,000,000” are amended to read “$9,000,000”.
(b) Schedule A to the Indenture is hereby amended so that all references to “$8,000,000” are amended to read “$9,000,000”.

ARTICLE 3 MISCELLANEOUS PROVISIONS

3.1 Confirmation of Indenture

On the date hereof, the Indenture shall be supplemented in accordance with this First Supplemental Indenture, and this First Supplemental Indenture shall form part of the Indenture for all purposes, and the holder of every Debentures heretofore or hereafter authenticated and delivered under the Indenture shall be bound thereby. The Indenture, as supplemented by this First Supplemental Indenture, shall remain in full force and effect as supplemented by this First Supplemental Indenture and is in all respects ratified and confirmed.

3.2 Acceptance

The Corporation hereby accepts the Indenture, as amended and supplemented by this First Supplemental Indenture, and agrees to perform the same upon the terms and conditions and subject to the provisions set forth in the Indenture as supplemented by this First Supplemental Indenture.

3.3 Counterparts and Formal Date

This First Supplemental Indenture may be executed in several counterparts, each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument and notwithstanding their date of execution shall be deemed to be dated as of the day and year first above written.

3.4 Applicable Law

This First Supplemental Indenture shall be construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein and treated in all respects as an Ontario contract and shall be binding upon the parties hereto and their respective successors and assigns.

[ Signature Page Follows ]
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IN WITNESS WHEREOF the parties hereto have executed this First Supplemental Convertible Indenture as of the day and year first above written.