Spectra7 Microsystems Inc.

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NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

AND

MANAGEMENT INFORMATION CIRCULAR

May 17, 2021

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS ........................................... 3 MANAGEMENT INFORMATION CIRCULAR ....................................................................................... 6 SOLICITATION OF PROXIES .................................................................................................................. 6 APPOINTMENT AND REVOCATION OF PROXIES ............................................................................. 6 EXERCISE OF DISCRETION BY PROXIES ........................................................................................... 7 ADVICE TO BENEFICIAL SHAREHOLDERS ....................................................................................... 7 NOTE TO NON-OBJECTING BENEFICIAL OWNERS .......................................................................... 8 INSTRUCTIONS FOR ATTENDING THE MEETING ONLINE ............................................................ 8 VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF ......................................................... 9 COMPENSATION DISCUSSION AND ANALYSIS ............................................................................. 10 SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS ......... 20 INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS .................................................... 21 REPORT ON CORPORATE GOVERNANCE ........................................................................................ 21 AUDIT COMMITTEE DISCLOSURE ..................................................................................................... 21 INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS ...................................... 22 PARTICULARS OF MATTERS TO BE ACTED UPON ........................................................................ 23 INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON ...................................... 38 ADDITIONAL INFORMATION .............................................................................................................. 38 APPROVAL OF BOARD OF DIRECTORS ............................................................................................ 39 SCHEDULE "A" STATEMENT OF GOVERNANCE PRACTICES .................................................... A-1 SCHEDULE "B" AUDIT COMMITTEE CHARTER ............................................................................ B-1 SCHEDULE "C" STOCK OPTION PLAN ............................................................................................. C-1 SCHEDULE "D" RESTRICTED SHARE UNIT PLAN ........................................................................ D-1 SCHEDULE "E" OBCA CONTINUANCE ARTICLES ........................................................................ E-1 SCHEDULE "F" OBCA CONTINUANCE BY-LAWS ......................................................................... F-1 SCHEDULE "G" BCBCA CONTINUANCE APPLICATION AND NOTICE OF ARTICLES ........... G-1 SCHEDULE "H" BCBCA CONTINUANCE ARTICLES ..................................................................... H-1 SCHEDULE "I" SUMMARY OF KEY PROVISIONS OF THE CBCA, OBCA AND BCBCA ........... I-1 SCHEDULE "J" SECTION 190 OF THE CBCA .................................................................................... J-1

SPECTRA7 MICROSYSTEMS INC.

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that an annual and special meeting (the “ Meeting ”) of the holders of the common shares (collectively, the “ Shareholders ” or individually, a “ Shareholder ”) of Spectra7 Microsystems Inc. (the “ Corporation ”) will be held on Friday, June 18, 2021 at the hour of 10:00 a.m. (Toronto time). The Meeting will be a virtual meeting conducted via live audio webcast. The purpose of the Meeting is as follows:

to receive the audited financial statements of the Corporation for the financial years ended December 31, 2020 and December 31, 2019, together with the reports of the auditor thereon;
to elect the directors of the Corporation;
to appoint MNP LLP, Chartered Accountants, as auditor of the Corporation for the ensuing year and to authorize the directors of the Corporation to fix its remuneration;
to consider and, if thought appropriate, pass, with or without variation, a resolution to adopt the Corporation’s stock option plan and restricted share unit plan, as more fully described in the accompanying management information circular dated May 17, 2021 (the “ Circular ”);
to consider and, if thought appropriate, pass, with or without variation, a resolution to approve the continuance of the Corporation from the laws of Canada to a corporation continued under the laws of either British Columbia or Ontario (the “ Continuance Resolution ”), as more fully described in the Circular;
to consider and, if thought appropriate, pass, with or without variation, a special resolution approving the consolidation of the Common Shares by a ratio of up to 100:1, as more fully described in the Circular; and
to transact such other business as may properly be brought before the Meeting or any adjournment or adjournments thereof.

Accompanying this Notice of Annual and Special Meeting of Shareholders is the Circular and a copy of the audited financial statements of the Corporation for the financial years ended December 31, 2020 and December 31, 2019, together with the reports of the auditor thereon. The record date for the determination of those Shareholders entitled to receive the Notice of Annual and Special Meeting of Shareholders and to vote at the Meeting was the close of business on Monday, May 7, 2021.

A Shareholder who dissents in respect of the Continuance Resolution is entitled to be paid the fair value of his, her or its shares in accordance with Section 190 of the Canada Business Corporations Act . This right of dissent is described in the accompanying Circular. Failure to comply strictly with the dissent procedures may result in the loss or unavailability of the right to dissent. Shareholders who do not hold their Common Shares in their own name (“ Beneficial Shareholders ”) whose Common Shares are registered in the name of a broker, investment dealer or other intermediary and who wish to dissent should be aware that only registered Shareholders are entitled to dissent. Accordingly, a Beneficial Shareholder who desires to exercise rights of dissent must make arrangements for the registered holder of such Common Shares to dissent on the Beneficial Shareholder’s behalf.

The Meeting will be held virtually and Shareholders who choose to attend the Meeting will do so by accessing a live audio webcast of the Meeting via the internet. Shareholders and duly appointed proxyholders can access the Meeting by visiting https://web.lumiagm.com/283863758. Registered shareholders and duly appointed proxyholders can participate in the Meeting by clicking “I have a login” and entering a username and password before the start of the Meeting. At this website, Shareholders will be able to listen to the Meeting live, submit questions and submit their vote while the Meeting is being held. The Corporation believes hosting the Meeting virtually will enable increased Shareholder attendance from different geographic locations and will encourage more active Shareholder engagement and participation at the Meeting.

Registered shareholders: The 15-digit control number located on the form of proxy or in the e-mail notification you received is the username and the password is “spectra72021” (case sensitive).

Duly appointed proxyholders : Computershare Trust Company of Canada (“ Computershare ”) will provide the proxyholder with a username after the voting deadline has passed. The password to the Meeting is “spectra72021” (case sensitive).

It is important that you are connected to the internet at all times during the Meeting in order to vote when balloting commences.

Only registered shareholders and duly appointed proxyholders will be able to vote and ask questions at the Meeting. Beneficial Shareholders who have not appointed themselves may attend (but not participate in) the Meeting by clicking “I am a guest” and completing the online form.

Beneficial Shareholders wishing to be represented by proxy at the Meeting or any adjournment thereof must have deposited their duly completed voting instruction form in accordance with the directions provided on the voting instruction form.

Shareholders, including Beneficial Shareholders, who wish to appoint a third party proxyholder to represent them at the Meeting must submit their proxy or voting instruction form (as applicable) prior to registering their proxyholder. Registering the proxyholder is an additional step once the Shareholder has submitted their proxy or voting instruction form. Failure to register a duly appointed proxyholder will result in the proxyholder not receiving a username that would allow them to participate in the online Meeting. To register a proxyholder, shareholders and unitholders MUST visit https://web.lumiagm.com/283863758 and provide Computershare with their proxyholder’s contact information by 10:00 a.m. (Toronto time) on June 16, 2021 so that Computershare may provide the proxyholder with a username via e-mail. In order to participate online, shareholders must have a valid 15-digit control number and proxyholders must have received an e-mail from Computershare.

United States Beneficial Shareholders: To attend and vote at the Meeting virtually, you must first obtain a valid legal proxy from your broker, bank or other agent and then register in advance to attend the Meeting. Follow the instructions from your broker or bank included with these proxy materials or contact your broker or bank to request a legal proxy form. After first obtaining a valid legal proxy from your broker, bank or other agent, to then register to attend the Meeting, you must submit a copy of your legal proxy to Computershare. Requests for registration should be directed to:

Computershare 100 University Avenue, 8[th] Floor Toronto, Ontario M5J 2Y1 OR Email at [email protected]

Requests for registration must be labeled as “Legal Proxy” and be received no later than 10:00 a.m. (Toronto time) on June 16, 2021. You will receive a confirmation of your registration by email after Computershare receives your registration materials. You may attend the Meeting and vote your shares at https://web.lumiagm.com/283863758 during the meeting. Please note that you are required to register your appointment at www.computershare.com/appointee.

DATED at Toronto, Ontario this 17[th] day of May, 2021.

BY ORDER OF THE BOARD

“Raouf Halim” Raouf Halim Director, President & Chief Executive Officer

SPECTRA7 MICROSYSTEMS INC.

MANAGEMENT INFORMATION CIRCULAR

SOLICITATION OF PROXIES

This management information circular (the “ Circular ”) is furnished in connection with the solicitation of proxies by the management of Spectra7 Microsystems Inc. (the “ Corporation ”) for use at the annual and special meeting (the “ Meeting ”) of holders (collectively, the “ Shareholders ” or individually, a “ Shareholder ”) of common shares in the capital of the Corporation (“ Common Shares ”) to be held virtually at the time and place and for the purposes set forth in the attached Notice of Annual and Special Meeting of Shareholders (the “ Notice ”). The solicitation will be primarily by mail, but proxies may also be solicited personally or by telephone by regular employees of the Corporation. The cost of solicitation will be borne by the Corporation.

Except as noted below, the Corporation has distributed or made available for distribution, copies of the Notice, Circular and form of proxy or voting instruction form (if applicable) (the “ Meeting Materials ”) to clearing agencies, securities dealers, banks and trust companies or their nominees (collectively, the “ Intermediaries ” and each, an “ Intermediary ”) for distribution to Beneficial Shareholders (as defined below) whose Common Shares are held by or in custody of such Intermediaries. Such Intermediaries are required to forward such documents to Beneficial Shareholders unless a Beneficial Shareholder has waived the right to receive them. The Corporation has elected to pay for the delivery of the Meeting Materials to objecting Beneficial Shareholders by the Intermediaries. The Corporation is sending proxy-related materials directly to non-objecting Beneficial Shareholders, through the services of its transfer agent and registrar, Computershare Trust Company of Canada (“ Computershare ”). The solicitation of proxies from Beneficial Shareholders will be carried out by the Intermediaries or by the Corporation if the names and addresses of the Beneficial Shareholders are provided by Intermediaries. The Corporation will pay the permitted fees and costs of Intermediaries incurred in connection with the distribution of the Meeting Materials. The Corporation is not relying on the notice-and-access provisions of securities laws for delivery of the Meeting Materials to registered Shareholders or Beneficial Shareholders.

APPOINTMENT AND REVOCATION OF PROXIES

The persons named in the enclosed form of proxy are officers and/or directors of the Corporation. A Shareholder has the right to appoint a person (who need not be a Shareholder) to attend and act for such Shareholder and on his, her or its behalf at the Meeting other than the persons designated in the enclosed form of proxy (the “Appointee”). Such right may be exercised by inserting in the blank space provided for that purpose the name of the desired person or by completing another proper form of proxy and, in either case, delivering the completed and executed proxy to the Corporation’s transfer agent and registrar, Computershare Trust Company of Canada, 100 University Avenue, 8[th] Floor, Toronto, Ontario, M5J 2Y1 not later than 10:00 a.m. on Wednesday, June 16, 2021.

Shareholders, including Beneficial Shareholders, who wish to appoint an Appointee to represent them at the Meeting must submit their proxy or voting instruction form (as applicable) prior to registering their Appointee. Registering the Appointee is an additional step once the Shareholder has submitted their proxy or voting instruction form. Failure to register an Appointee will result in the Appointee not receiving a username that would allow them to participate in the online Meeting. To register an Appointee, Shareholders MUST visit https://web.lumiagm.com/283863758 and provide Computershare with their Appointee’s contact information by 10:00 a.m. (Toronto time) on June 16, 2021, so that Computershare may provide the Appointee with a username via e-mail. In order to participate online, shareholders must

have a valid 15-digit control number and Appointees must have received an e-mail from Computershare. See “Instructions for Attending the Meeting Online” below for further instructions.

Proxies given by Shareholders for use at the Meeting may be revoked prior to their use:

(a) by depositing an instrument in writing executed by the Shareholder or by such Shareholder’s attorney duly authorized in writing or, if the Shareholder is a corporation, by an officer or attorney thereof duly authorized indicating the capacity under which such officer or attorney is signing at the registered office, 181 Bay Street, Suite 1800, Toronto, Ontario, M5J 2T9, at any time up to and including Wednesday, June 16, 2021; or
(b) in any other manner permitted by law.

EXERCISE OF DISCRETION BY PROXIES

The persons named in the accompanying form of proxy will vote the Common Shares in respect of which they are appointed in accordance with the direction of the Shareholders appointing them. In the absence of such direction, such Common Shares will be voted in favour of the passing of the matters set out in the Notice. The form of proxy confers discretionary authority upon the persons named therein with respect to amendments or variations to matters identified in the Notice and with respect to other matters which may properly come before the Meeting or any adjournment thereof . At the time of the printing of this Circular, the management of the Corporation knows of no such amendments, variations or other matters to come before the Meeting other than the matters referred to in the Notice. However, if any other matters which at present are not known to the management of the Corporation should properly come before the Meeting, the proxy will be voted on such matters in accordance with the best judgment of the named proxies .

ADVICE TO BENEFICIAL SHAREHOLDERS

Shareholders should note that only proxies deposited by Shareholders whose names appear on the records of the Corporation as the registered holders of Common Shares, or non-objecting beneficial owners whose names has been provided to the Corporation’s registrar and transfer agent, can be recognized and acted upon at the Meeting . The information set forth in this section is therefore of significant importance to a substantial number of Shareholders who do not hold their Common Shares in their own name (referred to in this section as “ Beneficial Shareholders ”). If Common Shares are listed in an account statement provided to a Shareholder by an Intermediary, then in almost all cases those Common Shares will not be registered in such Shareholder’s name on the records of the Corporation. Such Common Shares will more likely be registered under the name of the Shareholder’s Intermediary or an agent of that Intermediary. In Canada, the vast majority of such Common Shares are registered under the name of CDS & Co., as nominee for CDS Clearing and Depository Services Inc., which acts as a depository for many Canadian Intermediaries. Common Shares held by Intermediaries or their nominees can only be voted for or against resolutions upon the instructions of the Beneficial Shareholder. Without specific instructions, Intermediaries are prohibited from voting Common Shares for their clients.

Applicable regulatory policy requires Intermediaries to seek voting instructions from Beneficial Shareholders in advance of shareholders’ meetings. Every Intermediary has its own mailing procedures and provides its own return instructions, which should be carefully followed by Beneficial Shareholders in order to ensure that their Common Shares are voted at the Meeting. Often the form of proxy supplied to a Beneficial Shareholder by its Intermediary is identical to the form of proxy provided by the Corporation to the Intermediaries. However, its purpose is limited to instructing the Intermediary how to vote on behalf of the Beneficial Shareholder. The majority of Intermediaries now delegate responsibility for obtaining

instructions from clients to Broadridge Financial Solutions, Inc. (“ Broadridge ”). Broadridge typically mails the voting instruction forms or proxy forms to the Beneficial Shareholders and asks the Beneficial Shareholders to return the voting instruction forms or proxy forms to Broadridge. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of Common Shares to be represented at the Meeting. A Beneficial Shareholder receiving a proxy or voting instruction form from Broadridge cannot use that proxy to vote Common Shares directly at the Meeting - the proxy must be returned to Broadridge well in advance of the Meeting in order to have the Common Shares voted.

Although Beneficial Shareholders may not be recognized directly at the Meeting for the purposes of voting Common Shares registered in the name of their Intermediary, a Beneficial Shareholder may attend the Meeting as proxyholder for the Intermediary and vote their Common Shares in that capacity. Beneficial Shareholders who wish to attend the Meeting and indirectly vote their own Common Shares as proxyholder for the Intermediary should enter their own names in the blank space on the management form of proxy or voting instruction form provided to them and return the same to their Intermediary (or the agent of such Intermediary) in accordance with the instructions provided by such Intermediary or agent well in advance of the Meeting. Beneficial Shareholders who have not appointed themselves may attend (but not participate in) the Meeting by clicking “I am a guest” and completing the online form. Beneficial Shareholders should carefully follow the instructions of their Intermediaries and their service companies .

All references to shareholders in this Circular and the accompanying form of proxy and Notice are to Shareholders of record unless specifically stated otherwise.

NOTE TO NON-OBJECTING BENEFICIAL OWNERS

The Meeting Materials are being sent to both registered and Beneficial Shareholders. If you are a Beneficial Shareholder, and the Corporation or its agent has sent the Meeting Materials directly to you, your name and address and information about your holdings of Common Shares, have been obtained in accordance with applicable securities regulatory requirements from the Intermediary holding on your behalf. By choosing to send the Meeting Materials to you directly, the Corporation (and not the Intermediary holding on your behalf) has assumed responsibility for (i) delivering the Meeting Materials to you, and (ii) executing your proper voting instructions. Please return your voting instructions as specified in the request for voting instructions.

INSTRUCTIONS FOR ATTENDING THE MEETING ONLINE

The Meeting will be held virtually and Shareholders who choose to attend the Meeting will do so by accessing a live audio webcast of the Meeting via the internet. Shareholders and Appointees can access the Meeting by visiting https://web.lumiagm.com/283863758. Registered Shareholders and Appointees can participate in the Meeting by clicking “I have a login” and entering a username and password before the start of the Meeting. At this website, Shareholders will be able to listen to the Meeting live, submit questions and submit their vote while the Meeting is being held. The Corporation believes hosting the Meeting virtually will enable increased Shareholder attendance from different geographic locations and will encourage more active Shareholder engagement and participation at the Meeting.

Registered Shareholders: The 15-digit control number located on the form of proxy or in the e-mail notification you received is the username and the password is “spectra72021” (case sensitive).

Appointees : Computershare Trust Company of Canada (“ Computershare ”) will provide the Appointee with a username after the voting deadline has passed. The password to the Meeting is “spectra72021” (case sensitive).

It is important that you are connected to the internet at all times during the Meeting in order to vote when balloting commences.

Only registered Shareholders and duly appointed proxyholders (including Appointees) will be able to vote and ask questions at the Meeting. Beneficial Shareholders who have not appointed themselves may attend (but not participate in) the Meeting by clicking “I am a guest” and completing the online form.

Shareholders, including Beneficial Shareholders, who wish to appoint a third party proxyholder to represent them at the Meeting must submit their proxy or voting instruction form (as applicable) prior to registering their proxyholder. Registering the proxyholder is an additional step once the Shareholder has submitted their proxy or voting instruction form. Failure to register a duly appointed proxyholder will result in the proxyholder not receiving a username that would allow them to participate in the online Meeting. To register a proxyholder, shareholders MUST visit https://web.lumiagm.com/283863758 and provide Computershare with their Appointee’s contact information by 10:00 a.m. (Toronto time) on June 16, 2021, so that Computershare may provide the Appointee with a username via e-mail. In order to participate online, Shareholders must have a valid 15-digit control number and proxyholders must have received an e-mail from Computershare.

Computershare Trust Company of Canada 100 University Avenue, 8[th] Floor Toronto, Ontario M5J 2Y1 OR Email at [email protected]

Requests for registration must be labeled as “Legal Proxy” and be received no later than 10:00 a.m. (Toronto time) on June 16, 2021. You will receive a confirmation of your registration by email after Computershare receives your registration materials. You may attend the Meeting and vote your Common Shares at https://web.lumiagm.com/283863758 during the meeting. Please note that you are required to register your appointment at www.computershare.com/appointee.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The Corporation has fixed the close of business on Friday, May 7, 2021 as the record date (the “ Record Date ”) for the purposes of determining Shareholders entitled to receive the Notice and vote at the Meeting. As at the Record Date, 843,571,976 Common Shares carrying the right to one vote per share at the Meeting were issued and outstanding.

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In accordance with the provisions of the Canada Business Corporations Act , the Corporation will prepare a list of the holders of Common Shares on the Record Date. Each holder of Common Shares named on the list will be entitled to vote the Common Shares shown opposite his, her or its name on the list at the Meeting.

To the knowledge of the directors and executive officers of the Corporation, as at the date of this Circular, no person beneficially owns, or controls or directs, directly or indirectly, voting securities of the Corporation carrying 10% or more of the voting rights attached to the Common Shares.

All amounts in this Circular are expressed in Canadian dollars unless otherwise noted.

COMPENSATION DISCUSSION AND ANALYSIS

Overview

The general objectives of the Corporation’s compensation strategy are to: (a) compensate management in a manner that encourages and rewards a high level of performance and outstanding results with a view to increasing long-term shareholder value; (b) align management’s interests with the long-term interests of shareholders; and (c) attract and retain highly qualified executive officers.

Management Contracts

The following is a description of the management contracts for the Named Executive Officers (as such term is defined below):

Raouf Halim

Raouf Halim currently receives a Base Salary of US$425,000 per annum for his services as Chief Executive Officer of the Corporation. He has entered into an employment agreement (the “ CEO Employment Agreement ”) with the Corporation and Spectra7 Microsystems Ltd. (“ Spectra7 US ”), a wholly owned subsidiary of the Corporation, which is for an indefinite term and includes provisions relating to, among other things, base salary, eligibility for benefits and an annual performance bonus, equity awards, and eligibility for short-term incentives and long-term incentive plan awards (“ LTIP ”).

Mr. Halim is eligible to be considered for an annual performance bonus (“ Annual Bonus ”) for each fiscal year of the Corporation. For the 2017 calendar year, the Annual Bonus was guaranteed and was to be no less than 75% of Mr. Halim’s Base Salary. For the 2018 and subsequent calendar years, Mr. Halim’s target Annual Bonus is no less than 75% up to a maximum of 200% of Base Salary and shall be based on criteria established by the Board and the Compensation Committee in consultation with Mr. Halim. As per the CEO Employment Agreement, beginning with the calendar year 2017, Mr. Halim is entitled to an annual LTIP award (denominated in restricted share units (“ RSUs ”)) equal to 100% of Base Salary, with 25% of such RSUs vesting on the one year anniversary of the date of the award and the remaining 75% vesting quarterly in equal instalments over the 12 calendar quarter end dates following the first anniversary of the date of the award.

Capitalized terms used but not otherwise defined in this section (“Compensation Discussion and Analysis – Management Contracts – Raouf Halim”) have the meanings ascribed to such terms below.

If Mr. Halim is subject to an Involuntary Termination upon or within the CIC Protection Period, 100% of Mr. Halim’s then-outstanding and unvested Options and RSUs will vest and (if applicable) become exercisable.

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In the event of any termination, including without limitation a termination for Cause (as defined in the CEO Employment Agreement), death, voluntary resignation, Involuntary Termination (as defined in the CEO Employment Agreement) or Resignation for Good Reason (as defined in the CEO Employment Agreement), Mr. Halim shall be entitled to all accrued but unpaid Base Salary, bonuses, business expenses and unused vacation time. In addition to such amounts and any LTIP, RSU or Option benefits provided for under the CEO Employment Agreement or any other arrangement with the Corporation or Spectra7 US, (A) if Mr. Halim is subject to an Involuntary Termination, subject to certain preconditions, Spectra7 US will pay Mr. Halim: (i) a prorated Annual Bonus in cash for the year of termination based on the number of days in the bonus period worked (the “ Prorated Bonus ”) and based on actual performance of the Corporation for the bonus period (and deeming all individual criteria for such Annual Bonus as having been met), (ii) any unpaid 2016 Annual Bonus and 2017 Annual Bonus, in full (the “ Guaranteed Bonuses ”), and (iii) a cash severance payment equal to twelve (12) months Base Salary and target Annual Bonus (equal to target Annual Bonus of 75% of Base Salary) for the same period (the “ Severance Payment ”), and (iv) a continuation of benefits and accelerated vesting of granted Options and RSUs that would have vested in the twelve (12) month period following the termination; or (B) if Mr. Halim is subject to an Involuntary Termination upon or during the CIC Protection Period, subject to certain preconditions, Mr. Halim shall be entitled to: (i) a Prorated Bonus, (ii) the Guaranteed Bonuses, (iii) a cash severance payment equal to two years’ Base Salary and target Annual Bonus for the same period; and (iv) and a continuation of benefits for two years following the termination.

Assuming an Involuntary Termination occurred on December 31, 2018 that was not within the CIC Protection Period, the estimated severance payment to Mr. Halim would have been approximately US$656,250 and Mr. Halim would have been eligible for continued benefits for twelve months following the termination, and accelerated vesting of granted Options and RSUs that would have vested in the twelve month period following the termination. Assuming an Involuntary Termination occurred on December 31, 2018 that was within a CIC Protection Period, the estimated severance payment to Mr. Halim would have been approximately US$1,312,500 and the continuation of benefits for two years following the termination.

For the purposes of this section only (“Compensation Discussion and Analysis – Management Contracts – Raouf Halim”), the following terms have the following meanings:

“ Base Salary ” means annual base salary at the rate in effect immediately prior to an Involuntary Termination; provided, however, that in the event of a Resignation for Good Reason due to a reduction in Base Salary, “Base Salary” means annual Base Salary at the rate in effect immediately prior to such reduction.

“ Change in Control ” means:

a) Any “person” or “company” (as such terms are defined in the Securities Act (Ontario)) acquires or becomes the beneficial owner of, directly or indirectly, more than 50% of the Corporation’s or Spectra7 US’ then-outstanding voting securities;
b) The consummation of the sale or disposition by the Corporation of more than 50% of the Corporation’s or Spectra7 US’ assets;
c) The consummation of a merger or consolidation of the Corporation or Spectra7 US with or into any other entity, other than a merger or consolidation which would result in the voting securities of the Parent outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) more than 50% of the total voting power represented by the voting securities of the Corporation or Spectra7
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US or such surviving entity or its parent outstanding immediately after such merger or consolidation; or

d) Individuals who are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Corporation’s board of directors over a period of 12 months; provided, however, that if the appointment or election (or nomination for election) of any new board member was approved by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Agreement, be considered as a member of the Incumbent Board.

A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Corporation’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Corporation’s securities immediately before such transaction. In addition, if a Change in Control constitutes a payment event with respect to any amount which is subject to Code Section 409A, then the transaction must also constitute a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Code Section 409A.

“ CIC Protection Period ” means the period beginning ninety (90) days prior to and ending twenty four (24) months after a Change of Control.

David Mier

Mr. Mier performs services as the Corporation’s Chief Financial Officer pursuant to the terms of a consulting agreement between Mr. Mier and Spectra7 Microsystems Ltd. (the “ CFO Consulting Agreement ”). Pursuant to the CFO Consulting Agreement, Mr. Mier is entitled to consulting fees at a rate of US$50.00 per hour, and to the reimbursement of expenses incurred in connection with the performance of services pursuant to the CFO Consulting Agreement. The minimum expected time commitment by Mr. Meir is two days per week, subject to additional hours as agreed upon between the Corporation and Mr. Meir on an as-needed basis. Pursuant to the CFO Consulting Agreement, Mr. Mier received an award of 1,300,000 RSUs, with 50% of such RSUs vesting on April 20, 2021 and the remaining 50% vesting on July 20, 2021. The term of the CFO Consulting Agreement currently terminates on July 20, 2021, subject to renewal in writing for successive periods upon the mutual consent of the parties to the agreement.

The Corporation is entitled to terminate the CFO Consulting Agreement upon 15 days’ prior written notice to Mr. Mier. Upon termination of the CFO Consulting Agreement, Mr. Mier is entitled to any accrued but unpaid Consulting Fees and expenses incurred prior to the effective date of the termination.

Assuming a termination by the Corporation of the CFO Consulting Agreement effective December 31, 2020, there would have been no cash severance payment owed to Mr. Mier and any unvested RSUs would have been immediately forfeited to the Company.

Darren Ma

Until his resignation on July 24, 2020, Darren Ma received an annual base salary of US$280,000 per annum for his services as Chief Financial Officer of the pursuant to an employment agreement (the “ CFO Employment Agreement ”) with the Corporation and Spectra7 Microsystems Ltd., a wholly-owned subsidiary of the Corporation. The CFO Employment Agreement included provisions relating to, among other things, base salary, eligibility for benefits and an annual performance bonus, equity awards, and eligibility for short-term incentives and LTIP awards and was terminated in July 2020.

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Pursuant to the CFO Employment Agreement, Mr. Ma was eligible to be considered for an Annual Bonus for each fiscal year of the Corporation starting in 2018. The target Annual Bonus was 40% of his annual base salary and was based on criteria established by the Chief Executive Officer, the Board and the Compensation Committee in consultation with Mr. Ma. Pursuant to the CFO Employment Agreement, beginning with the calendar year commencing on January 1, 2019, Mr. Ma was entitled to an annual LTIP award (denominated in RSUs) equal to 50% of his annual base salary, with 25% of such RSUs vesting on the one year anniversary of the date of the award and the remaining 75% vesting quarterly in equal instalments over the 12 calendar quarter end dates following the first anniversary of the date of the award.

In addition to the CFO Employment Agreement, on October 13, 2017, Mr. Ma entered into a severance protection agreement (the “ Severance Agreement ”) with Spectra7 Microsystems Ltd. and the Corporation. Capitalized terms used but not otherwise defined in this section (“Compensation Discussion and Analysis – Management Contracts – Darren Ma”) have the meanings ascribed to such terms below.

If Mr. Ma had been subject to an Involuntary Termination within the Change in Control Period, Mr. Ma would have been entitled to accrued but unpaid base salary, bonuses, business expenses, and unused vacation time (collectively, the “ Accrued Amounts ”). In addition to the Accrued Amounts, Mr. Ma would have also be entitled to: (i) a Prorated Bonus, (ii) a cash severance payment equal to one year of base salary and target bonus compensation for the same period, (iii) continuation of benefits (including health, dental, vision, life and short term and long term disability) for one year, and (iv) accelerated vesting of all Options, RSUs and any other equity awards held immediately prior to the Involuntary Termination.

If Mr. Ma had been subject to an Involuntary Termination outside of the Change in Control Period, Mr. Ma would have been entitled to the Accrued Amounts together with: (i) a Prorated Bonus, (ii) cash severance equal to six months of base salary, and (iii) continuation of benefits (including health, dental, vision, life and short term and long term disability) for six months following termination.

Mr. Ma resigned as Chief Financial Officer of the Corporation voluntarily effective July 24, 2020 and such resignation did not constitute an Involuntary Termination in accordance with the terms of the CFO Employment Agreement. In connection with his departure, Mr. Ma was not paid any cash termination or severance fees.

For the purposes of this section only (“Compensation Discussion and Analysis – Management Contracts – Darren Ma”), the following terms have the following meanings:

“ Change in Control ” shall have the meaning ascribed it (or change of control) in any of Spectra7 US or the Corporation’s stock option plan, restricted stock unit plan, or other equity participation plan as in effect on the date hereof, and for the avoidance of doubt, shall include any of the following:

i) Any “person” or “company” (as such terms are defined in the Securities Act (Ontario)) acquires or becomes the beneficial owner of, directly or indirectly, more than 50% of Spectra7 US or the Corporation’s then-outstanding voting securities;
ii) The consummation of the sale or disposition by the Corporation of more than 50% of Spectra7 US or the Corporation’s assets;
iii) The consummation of a merger or consolidation of Spectra7 US or the Corporation’s with or into any other entity, other than a merger or consolidation which would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) more than 50% of the total voting power represented by the voting
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securities of Spectra7 US or the Corporation or such surviving entity or its parent outstanding immediately after such merger or consolidation; or

iv) Individuals who are members of the Corporation’s Board of Directors (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the members of the Corporation’s board of directors over a period of 12 months; provided, however, that if the appointment or election (or nomination for election) of any new board member was approved by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of the Severance Agreement, be considered as a member of the Incumbent Board.

A transaction shall not constitute a Change in Control if its sole purpose is to change the state or jurisdiction of the Corporation’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Corporation’s securities immediately before such transaction.

“ Change in Control Protection Period ” means the period beginning on the execution of a binding letter of intent (or similar writing) describing a Change in Control (or if none, the consummation of a Change in Control) and ending twelve (12) months after a Change in Control.

“Involuntary Termination ” means either a termination of Mr. Ma’s employment by (i) Spectra7 US, the Corporation or their successor(s) without Cause (as defined in the Severance Agreement) or (ii) by Mr. Ma for Good Reason (as defined in the Severance Agreement).

“ Prorated Bonus ” means a prorated cash bonus for the bonus period in which the termination occurred based on the number of days in the bonus period worked and based on actual performance of Spectra7 US, the Corporation or its successors, as the case may be, for such bonus period (and deeming all individual criteria for such bonus as having been met).

Elements of Compensation

1. Base Salary

Each Named Executive Officer (as such term is defined below) receives a base salary, which constitutes a significant portion of the Named Executive Officer’s compensation package. Base salary is provided in recognition for discharging day-to-day duties and responsibilities and reflects the Named Executive Officer’s performance over time, as well as that individual’s particular experience and qualifications. A Named Executive Officer’s base salary is reviewed by the board of directors of the Corporation (the “ Board ”) or the Compensation Committee on an annual basis and may be adjusted to take into account performance contributions for the year and to reflect sustained performance contributions over a number of years. At the discretion of the Board or the Compensation Committee, each of the Named Executive Officers is eligible to receive performance bonuses, which are contingent on the Named Executive Officer achieving certain performance objectives set annually by the Compensation Committee.

2. Incentive Plans

Both the stock option plan of the Corporation (the “ Stock Option Plan ”) and the restricted share unit plan of the Corporation (the “ RSU Plan ”, collectively the “ Incentive Plans ”) are intended to reinforce commitment to long-term growth in profitability and shareholder value by encouraging share ownership and entrepreneurship on the part of the senior management and other employees. The Board believes that the Incentive Plans align the interests of the Named Executive Officers and the Board with Shareholders by linking a component of executive compensation to the longer term performance of the Common Shares.

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(a) Stock Option Plan

Officers, directors, employees and service providers are eligible under the Corporation’s stock option plan to receive grants of stock options. The Stock Option Plan is an important part of the Corporation’s longterm incentive strategy for its officers, directors, employees and service providers, permitting them to participate in appreciation of the market value of the Common Shares over a stated period of time. The Stock Option Plan is intended to reinforce commitment to long-term growth in profitability and shareholder value. The size of the stock option grants to officers, directors, employees and service providers is dependent on each such person’s level of responsibility, authority and position with the Corporation and to the degree to which such person’s long term contribution to the Corporation will be key to its long term success.

Options are granted by either the Board or the Compensation Committee. In monitoring or adjusting the option allotments, the Board or the Compensation Committee, as the case may be, takes into account its own observations on individual performance (where possible) and its assessment of individual contribution to shareholder value, previous option grants and the objectives set for the Named Executive Officers. The scale of options is generally commensurate to the appropriate level of base compensation for each level of responsibility. The Board or the Compensation Committee will make these determinations subject to and in accordance with the provisions of the Stock Option Plan.

The combined maximum aggregate number of Common Shares reserved for issuance under both the Stock Option Plan and RSU Plan is currently 47,838,517 Common Shares, representing approximately 4.65% of the issued and outstanding Common Shares as at the date of this Circular. As at the date of this Circular, options to purchase up to an aggregate of 15,917,729 Common Shares were outstanding (representing approximately 1.54% of the issued and outstanding Common Shares as at the date of this Circular) and 350,000 options have been exercised under the Stock Option Plan (representing less than 0.03% of the issued and outstanding Common Shares as at the date of this Circular). At the Meeting, Shareholders will be asked to consider and, if thought appropriate, approve a resolution providing for an increase to the combined maximum aggregate number of Common Shares reserved for issuance under both the Stock Option Plan and RSU Plan to such number of Common Shares as is equal to 20.0% of the issued and outstanding Common Shares as at the date of the Meeting.

(b) RSU Plan

The purpose of the RSU Plan is to advance the interests of the Corporation by encouraging equity participation in the Corporation by its directors, officers, employees and service providers.

Awards under the RSU Plan are granted by either the Board or the Compensation Committee. In monitoring or adjusting the awards, the Board or the Compensation Committee, as the case may be, takes into account its own observations on individual performance (where possible) and its assessment of individual contribution to shareholder value, previous awards and the objectives set for the Named Executive Officers. The Board or the Compensation Committee will make these determinations subject to and in accordance with the provisions of the RSU Plan.

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appropriate, approve a resolution providing for an increase to the combined maximum aggregate number of Common Shares reserved for issuance under both the Stock Option Plan and RSU Plan to such number of Common Shares as is equal to 20.0% of the issued and outstanding Common Shares as at the date of the Meeting.

Compensation of Directors

Independent members of the Board are paid US$2,000 per regularly scheduled Board meeting to a maximum of four meetings per year and an additional US$500 per extraordinary Board meeting to a maximum of four meetings per quarter. In addition, the Chairman of the Board, the Chairman of the Audit Committee, the Chairman of the Compensation Committee and the Chairman of the Corporate Governance and Nominating Committee receive an additional annual cash fee of US$5,000, US$3,000, US$3,000 and US$3,000, respectively. Directors of the Corporation are also compensated for their services through the granting of US$60,000 per year of stock options and RSU awards, and may also be reimbursed for out-ofpocket expenses incurred in carrying out their duties as directors.

Officers of the Corporation who also act as directors will not receive any additional compensation for services rendered in such capacity, other than as paid by the Corporation in their capacity as officers.

Compensation Risk

The Board and, as applicable, the Compensation Committee, considers and assesses the implications of risks associated with the Corporation’s compensation policies and practices and devotes such time and resources as is believed to be necessary in the circumstances. The Corporation’s practice of compensating its officers primarily through a mix of salary, stock options and RSUs is designed to mitigate risk by: (i) ensuring that the Corporation retains such officers; and (ii) aligning the interests of its officers with the short-term and long-term objectives of the Corporation and its shareholders. As at the date of this Circular, the Board had not identified risks arising from the Corporation’s compensation policies and practices that are reasonably likely to have a material adverse effect on the Corporation.

Financial Instruments

Pursuant to the terms of the Corporation’s Insider Trading Policy, the Corporation’s officers and directors are prohibited from purchasing financial instruments, such as prepaid variable forward contracts, equity swaps, collars or units of exchange funds, that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by an officer or director.

Compensation Governance

In order to assist the Board in fulfilling its oversight responsibilities with respect to compensation matters, the Board has established the Compensation Committee and has reviewed and approved the Compensation Committee’s Charter. The Compensation Committee is composed of Ronald Pasek and John Vettese, each of whom is independent as such term is defined in National Instrument 58-101 – Disclosure of Corporate Governance Practices (“ NI 58-101 ”).

The Compensation Committee meets on compensation matters as and when required with respect to executive compensation. The primary goal of the Compensation Committee as it relates to compensation matters is to ensure that the compensation provided to the Named Executive Officers and the Corporation’s other executive officers is determined with regard to the Corporation’s business strategies and objectives, such that the financial interest of the executive officers is aligned with the financial interest of shareholders, and to ensure that their compensation is fair and reasonable and sufficient to attract and retain qualified and

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experienced executives. The Compensation Committee is given the authority to engage and compensate any outside advisor that it determines to be necessary to carry out its duties.

As a whole, the members of the Compensation Committee have direct experience and skills relevant to their responsibilities in executive compensation, including with respect to enabling the Compensation Committee in making informed decisions on the suitability of the Corporation’s compensation policies and practices.

Summary Compensation Table – Named Executive Officers

The following table sets forth the compensation paid or awarded to the following individuals: (i) the President and Chief Executive Officer; (ii) the former Chief Financial Officer; and (iii) the Chief Financial Officer (collectively, the “ Named Executive Officers ”) for the Corporation’s financial years ended December 31, 2020, 2019 and 2018.

Name and principal position	Year	Salary/ Fee ($)(1)	Share- based awards ($)(2)	Option- based awards ($)(3)	Non-equity incentive plan compensation ($)	Non-equity incentive plan compensation ($)	Pension value ($)	All other compensa- tion ($)	Total compensa -tion ($)
					Annual incentive plans	LTIP
Raouf Halim, President and Chief Executive Officer	2020 2019 2018	21,347(4) 280,011 445,397	304,492 708,054 823,319	37,951 (144,08 4) 155,935	Nil 92,651 364,416	Nil Nil Nil	Nil Nil Nil	49,596(5) 957,735(6) Nil	760,405 1,894,367 1,789,067
Darren Ma, Former Chief Financial Officer	2020 2019 2018	21,347(4) 184,478 305,569	Nil 231,525 189,400	Nil Nil 23,124	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	14,166(7) 312,405(8) Nil	35,513 728,408 518,093
David Mier, Chief Financial Officer	2020 2019 2018	19,468(4) Nil Nil	53,911 Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	73,379 Nil Nil

Notes:

(1) The amounts denominated in Canadian dollars under “Salary” were paid/payable in US$. Such amounts were paid on a monthly basis and therefore all US$ amounts are converted at an exchange rate of US$1.00:$1.3415 for fiscal 2020.
(2) Calculated based on the Black-Scholes model for share-based award valuation. The fair value of the share-based awards under the RSU Plan has been calculated based on the following weighted average assumptions: dividend yield 0%, expected volatility 132.82%, risk free rate of return 0.95% and forfeiture rate of 10%.
(3) Calculated based on the Black-Scholes model for option valuation. The fair value of the stock options has been calculated based on the following weighted average assumptions (the grant date fair value equals the accounting fair value for stock options): dividend yield – 0%, expected volatility – 134.33% risk free rate of return 0.84%, forfeiture rate of 10% and expected life – 6.5 years.
(4) The Named Executive Officers were furloughed from January 10, 2020 to April 31, 2020 and from July 1, 2020 to December 31, 2020 and did not receive salary or deferred compensation during this time.
(5) Consists of $18,921 in deferred salary and $30,675 in deferred bonus.
(6) Consists of $274,178 in deferred salary and $683,557 in deferred bonus.
(7) Represents deferred salary.
(8) Consists of $180,635 in deferred salary and $131,770 in deferred bonus.

Incentive Plan Awards – Named Executive Officers

Outstanding Share-Based Awards and Option-Based Awards

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The following table sets forth all share-based and option-based awards outstanding for the Named Executive Officers as of December 31, 2020:

		Option-Based Awards	Option-Based Awards		Share-Based Awards	Share-Based Awards	Share-Based Awards
Name	Number of securities underlying unexercised options (#)	Option exercise price ($)	Option expiration date	Value of unexercised in-the- money options(1) ($)	Number of shares or units of shares that have not vested (#)	Market or payout value of share based awards that have not vested(2) ($)	Market or payout value of vested share- based awards not paid out or distributed ($)
Raouf Halim, President and Chief Executive Officer	1,875,000	0.03	02/10/2027	Nil	69,411 681,851 2,343,750 12,124,412	2,429 23,865 82,031 424,354	12,147 6,363 75,469 141,451
Darren Ma, Former Chief Financial Officer	Nil	Nil	Nil	Nil	Nil	Nil	Nil
David Mier, Chief Financial Officer	Nil	Nil	Nil	Nil	650,000	22,750	22,750

Notes:

(1) The “value of unexercised in-the-money options” is calculated based on the difference between the closing price of $0.035 for the Common Shares on the TSX Venture Exchange (the “ TSXV ” or “ Exchange ”) on December 31, 2020 and the exercise price of the options, multiplied by the number of unexercised options.
(2) The “market or payout value of share-based awards that have not vested” is calculated based on the closing price of $0.035 for the Common Shares on the Exchange on December 31, 2020 multiplied by the number of Common Shares that have not vested.

Incentive Plan Awards – Value Vested or Earned During the Year

The following table sets forth the value of all incentive plan awards vested or earned for each Named Executive Officer during the year ended December 31, 2020:

Name	Option-based awards – Value vested during the year(1) ($)	Share-based awards – Value vested during the year ($)	Non-equity incentive plan compensation – Value earned during the year ($)
Raouf Halim, President and Chief Executive Officer	Nil	235,431	30,675
Darren Ma, Former Chief Financial Officer	Nil	4,755	Nil
David Mier, Chief Financial Officer	Nil	22,750	Nil

Note:

(1) The “value vested during the year” is calculated based on the difference between the closing price for the Common Shares on the TSXV as of the date of vesting (or the most recent closing price on the TSXV) and the exercise price of the options, multiplied by the number of vested options.
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Director Compensation

Director Compensation Table

The following table sets forth all amounts of compensation provided to the directors of the Corporation (other than directors who are also Named Executive Officers) during the financial year ended December 31, 2020:

Name	Fees Earned(1) ($)	Share-based awards(2) ($)	Option-based awards(3) ($)	All other compensation ($)	Total ($)
Brian Antonen	9,740	8,655	3,809	Nil	22,204
Robert Dobkin	13,635	8,655	3,809	Nil	69,295
Roger Maggs	8,441	8,655	3,809	Nil	53,101
John Vettese	10,389	12,069	5,293	Nil	73,491
Ronald Pasek	20,128	13,655	6,194	Nil	109,547

Notes:

(1) Certain amounts denominated in Canadian dollars under “Fees Earned” were paid/payable in US$. All US$ amounts are converted at an exchange rate of US$1.00:$1.3415 for fiscal 2020.
(2) Calculated based on the Black-Scholes model for share-based award valuation. The fair value of the share-based awards under the RSU Plan has been calculated based on the following weighted average assumptions: dividend yield 0%, expected volatility 132.82%, risk free rate of return 0.95% and forfeiture rate of 10%.
(3) Calculated based on the Black-Scholes model for option valuation. The fair value of the stock options has been calculated based on the following weighted average assumptions (the grant date fair value equals the accounting fair value for stock options): dividend yield – 0%, expected volatility – 134.33% risk free rate of return 0.84%, forfeiture rate of 10% and expected life – 6.5 years.

Incentive Plan Awards - Outstanding Share-Based Awards and Option-Based Awards

The following table sets forth all awards outstanding for each of the directors of the Corporation (other than directors who are also Named Executive Officers) as of December 31, 2020:

	Option-Based Awards	Option-Based Awards	Option-Based Awards	Option-Based Awards	Share-Based Awards	Share-Based Awards	Share-Based Awards
Name	Number of securities underlying unexercised options (#)	Option exercise price ($)	Option expiration date	Value of unexercised in-the- money options(1) ($)	Number of shares or units of shares that have not vested (#)	Market or payout value of share based awards that have not vested(2) ($)	Market or payout value of vested share- based awards not paid out or distributed ($)
Brian Antonen	32,820	$0.68	May 12, 2023	Nil	218,575	7,656	2,473
RobertDobkin	32,820	$0.68	May12,2023	Nil	218,575	7,656	2,473
Roger Maggs	32,820	$0.68	May 12, 2023	Nil	219,383	7,678	2,655
John Vettese	50,000 32,820	$0.73 $0.68	Dec 18, 2021 May 12, 2023	Nil Nil	218,575	7,656	3,020
Ronald Pasek	50,000 32,820	$0.62 $0.68	June 18, 2022 May12,2023	Nil Nil	218,575	7,656	2,728

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Notes:

(1) The “value of unexercised in-the-money options” is calculated based on the difference between the closing price of $0.035 for the Common Shares on the TSXV on December 31, 2020 and the exercise price of the options, multiplied by the number of unexercised options.
(2) The “market or payout value of share-based awards that have not vested” is calculated based on the closing price of $0.035 for the Common Shares on the TSXV on December 31, 2020 multiplied by the number of Common Shares that have not vested.

Incentive Plan Awards – Value Vested or Earned During the Year

The following table sets forth the value of all incentive plan awards vested or earned by each director of the Corporation (other than directors who are also named Executive Officers) during the year ended December 31, 2020:

Name	Option-based awards – Value vested during the year ($)	Share-based awards – Value vested during the year(1) ($)	Non-equity incentive plan compensation – Value earned during the year ($)
Brian Antonen	Nil	2,473	Nil
Robert Dobkin	Nil	2,473	Nil
Roger Maggs	Nil	2,655	Nil
John Vettese	Nil	3,020	Nil
Ronald Pasek	Nil	2,728	Nil

Note:

(1) The “value vested during the year” is calculated based on the difference between the closing price for the Common Shares on the TSXV as of the date of vesting (or the most recent closing price on the TSXV) and the exercise price of the options, multiplied by the number of vested options.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table provides information regarding the number of Common Shares to be issued upon exercise of outstanding options pursuant to the Stock Option Plan and upon settlement of RSUs under the RSU Plan, as at December 31, 2020:

Plan Category	Number of Common Shares to be issued upon exercise of outstanding options	Weighted-average exercise price of outstanding options	Number of Common Shares remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders	16,667,736 (1) 27,065,325(2)	$0.046 N/A	4,105,456(3)
Equity compensation plans not approved by security holders	Nil	Nil	Nil
Total	43,733,061	$0.046(1)	4,105,456(3)

Notes:

(1) Issuable upon exercise of outstanding options pursuant to the Stock Option Plan.
(2) Issuable pursuant to the RSU Plan.
(3) Combined maximum aggregate number of Common Shares available under both the Stock Option Plan and RSU Plan.
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INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

As at the date of this Circular, no individual who is an executive officer, director, employee or former executive officer, director or employee of the Corporation or any of its subsidiaries is indebted to the Corporation or any of its subsidiaries pursuant to the purchase of securities or otherwise.

No individual who is, or at any time during the financial year ended December 31, 2020 was, a director or executive officer of the Corporation, a proposed management nominee for election as a director of the Corporation, or an associate of any such director, executive officer or proposed nominee, was indebted to the Corporation or any of its subsidiaries during the financial year ended December 31, 2020 or as at the date of this Circular in connection with security purchase programs or other programs.

REPORT ON CORPORATE GOVERNANCE

Maintaining a high standard of corporate governance is a priority for the Board and the Corporation’s management as both believe that effective corporate governance will help create and maintain shareholder value in the long term. A description of the Corporation’s corporate governance practices, which addresses the matters set out in NI 58-101, is set out at Schedule “A” to this Circular.

AUDIT COMMITTEE DISCLOSURE

Audit Committee’s Charter

The charter (the “ Charter ”) of the Corporation’s Audit Committee is reproduced as Schedule “B”.

Composition of Audit Committee

As at the date of this Circular, the Audit Committee is composed of Ronald Pasek (Chair), Brian Antonen and Roger Maggs, each of whom is a director of the Corporation.

All of the members of the Audit Committee are “independent” as such term is defined in National Instrument 52-110 – Audit Committees (“ NI 52-110 ”). The Corporation is of the opinion that all three members of the Audit Committee are “financially literate” as such term is defined in NI 52-110.

Relevant Education and Experience

All the members of the Audit Committee have the education and/or practical experience required to understand and evaluate financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Corporation’s financial statements.

Ronald Pasek holds a Bachelor of Science degree in Finance from San Jose State University and a Master of Business Administration from Santa Clara University. From 2016 until March 20, 2020, Mr. Pasek was the Executive Vice President, Chief Financial Officer of NetApp, Inc. (NASDAQ). Mr. Pasek was previously the senior Vice President of Finance and Chief Financial Officer of Altera Corporation (“ Altera ”) (NASDAQ) from December 2009 to 2016. Prior to his employment with Altera, Mr. Pasek held a variety of positions in finance in Sun Microsystems over a period of 19 years including Vice President of Worldwide Field Finance, World Manufacturing and U.S. Field Finance and most recently as Vice President and Corporate Treasurer.

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Brian Antonen holds a Bachelor of Applied Science degree in Electrical Engineering from the University of Waterloo and a Master of Business Administration degree from the Richard Ivey School of Business at the University of Western Ontario. He is a member of the Association of Professional Engineers of Ontario and of the Certified Management Accountants of Ontario. He has held directorships on more than 17 public and private boards.

Roger Maggs earned a Bachelor of Science degree in Physics from the University of Wales, and a Master’s degree from Warwick Business School. He has extensive venture capital experience, including founding Celtic House in 1994. Over his career, he has held directorships on more than 30 public and private boards and served as an audit committee member on two public companies.

Audit Committee Oversight

At no time since the commencement of the Corporation’s most recently completed financial year have any recommendations by the Audit Committee respecting the nomination and/or compensation of the Corporation’s external auditors not been adopted by the Board.

Reliance on Certain Exemptions

At no time since the commencement of the Corporation’s most recently completed financial year has the Corporation relied on exemptions in relation to “De Minimis Non-audit Services” or any exemption provided by Part 8 of NI 52-110.

Pre-Approval Policies and Procedures

Pursuant to the terms of the Audit Committee Charter, the Audit Committee shall pre-approve all non-audit services to be provided to the Corporation or its subsidiary entities by the Corporation’s external auditor.

External Auditor Service Fees (By Category)

Audit Fees – The Corporation’s external auditors billed $41,718 and $153,350 for the audit of the financial years ended December 31, 2020 and 2019, respectively.

Audit-Related Fees – The Corporation’s external auditors billed $2,920 and $9,549 for the review of financial statements during the financial years ended December 31, 2020 and 2019, respectively.

Tax Fees – The Corporation’s external auditors billed the Corporation $13,625 and $32,414 during the financial years ended December 31, 2019 and 2021, respectively, for services related to tax compliance, tax advice and tax planning.

All Other Fees – The Corporation did not pay any other fees during the financial years ended December 31, 2019 and 2020 respectively, for services other than those reported above.

INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

Other than as disclosed herein, no “informed person” (as such term is defined in NI 51-102) or proposed nominee for election as a director of the Corporation or any associate or affiliate of the foregoing has any material interest, direct or indirect, in any transaction in which the Corporation has participated since the commencement of the Corporation’s most recently completed financial year or in any proposed transaction which has materially affected or will materially affect the Corporation.

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PARTICULARS OF MATTERS TO BE ACTED UPON

1. Election of Directors

The Board presently consists of five directors, namely, Raouf Halim, Brian Antonen, Roger Maggs, Ronald Pasek and John Vettese. Mr. Antonen and Mr. Vettese are not standing for re-election at the Meeting. Each director elected will hold office until the next annual meeting of shareholders or until his successor is duly elected or appointed pursuant to the by-laws of the Corporation. The enclosed form of proxy permits Shareholders to vote for all nominees together or for each nominee on an individual basis.

COMMON SHARES REPRESENTED BY PROXIES IN FAVOUR OF MANAGEMENT WILL BE VOTED IN FAVOUR OF EACH OF THE PROPOSED NOMINEES UNLESS A SHAREHOLDER HAS SPECIFIED IN HIS, HER OR ITS PROXY THAT HIS, HER OR ITS COMMON SHARES ARE TO BE WITHHELD FROM VOTING IN RESPECT OF ANY PARTICULAR NOMINEE OR NOMINEES. MANAGEMENT DOES NOT CONTEMPLATE THAT ANY OF SUCH NOMINEES WILL BE UNABLE TO SERVE AS DIRECTORS. HOWEVER, IF FOR ANY REASON, ANY OF THE PROPOSED NOMINEES DO NOT STAND FOR ELECTION OR ARE UNABLE TO SERVE AS SUCH, PROXIES IN FAVOUR OF MANAGEMENT NOMINEES WILL BE VOTED FOR ANOTHER NOMINEE IN THEIR DISCRETION UNLESS THE SHAREHOLDER HAS SPECIFIED IN HIS, HER OR ITS PROXY THAT HIS, HER OR ITS COMMON SHARES ARE TO BE WITHHELD FROM VOTING IN RESPECT OF ANY PARTICULAR NOMINEE OR NOMINEES.

Advance Notice Requirement

The Corporation’s By-Law No. 1, as amended pursuant to By-Law No. 1A, contains a requirement providing for advance notice of nominations of directors (the “ Advance Notice Requirement ”) in certain circumstances where nominations for election to the Board are made by Shareholders. For an annual meeting of Shareholders, notice to the Corporation must be provided not less than 30 and not more than 65 days prior to the date of the annual meeting; save and except where the annual meeting is to be held on a date less than 50 days after the date on which the first public announcement of the date of such annual meeting was made, in which event notice may be given not later than the close of business on the 10th day following such public announcement. For a special meeting of Shareholders (that is not also an annual meeting), notice to the Corporation must be given not later than the close of business on the 15th day following the day on which the first public announcement of the date of such special meeting was made. The Corporation’s By-Law No. 1, as amended by By-Law No. 1A, is available under the Corporation’s profile on SEDAR at www.sedar.com.

The following tables set out certain information as of the date of this Circular (unless otherwise indicated) with respect to the persons being nominated at the Meeting for election as directors. Information regarding Common Shares owned by each director of the Corporation is presented to the best knowledge of management of the Corporation and has been furnished to management of the Corporation by such directors.

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RAOUF HALIM Principal Occupation and Biographical Information California, U.S.A. Raouf Halim is the President and Chief Executive Officer of the Corporation. Mr. Halim was the Chairman and one of the co-founders of icClarity, Inc. Director Since: September 26, 2016 (“icClarity”), a private company developing a 3D Video capture solution for NOT INDEPENDENT applications in augmented reality, virtual reality, mobile, and automotive markets until April 2020. Prior to icClarity, Mr. Halim was CEO of Mindspeed Technologies, Inc. which designed and developed semiconductor solutions for communications applications in wireless and wireline network infrastructure markets. Other Public Board Current Board/Committee Membership 2020 Attendance (Total) Memberships Member of the Board 11 of 11 100% None. Number of Common Shares Beneficially Owned, Controlled or Directed 18,459,479

ROGER MAGGS Principal Occupation and Biographical Information Gloucestershire, United Kingdom Roger Maggs followed a 27-year career at Alcan Aluminum, with senior postings around the world, including three Vice Presidencies of the global Director Since: February 5, 2013 company, based in Montreal, Quebec. In 1994 he left Alcan and co-founded INDEPENDENT Celtic House International, a leading Canadian venture fund specializing in technology start-ups.

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Mr. Maggs earned a Bachelor of Science degree in Physics from the University of Wales, and a Master’s degree from Warwick Business School in the UK. He was made an honorary fellow of his college in 1998. Over his career, Mr. Maggs has held directorships on more than 30 public and private boards.

Current Board/Committee Membership	2020 Attendance (Total)	2020 Attendance (Total)	Other Public Board Memberships
Member of the Board	11 of 11	100%	None.
Member of the Audit Committee	3 of 3	100%
Member of the Corporate Governance and	N/A	-
Nominating Committee(1)
Number of Common Shares Beneficially Owned, Controlled or Directed			10,604,668

Note:

(1) The Corporate Governance and Nominating Committee did not hold a formal meeting during the year ended December 31, 2020.

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RONALD J. PASEK Principal Occupation and Biographical Information	RONALD J. PASEK Principal Occupation and Biographical Information	RONALD J. PASEK Principal Occupation and Biographical Information	RONALD J. PASEK Principal Occupation and Biographical Information
California, U.S.A. Director Since: June 18, 2015 INDEPENDENT	Ronald Pasek was the Executive Vice President, Chief Financial Officer of NetApp, Inc. (NASDAQ: NTAP), a worldwide provider of software, systems and services to manage data from 2016 to 2020. Prior to his position with NetApp, Inc., Mr. Pasek was Senior Vice President of Finance and Chief Financial Officer of Altera Corporation (NASDAQ: ALTR), a worldwide provider of programmable logic devices. Mr. Pasek was previously employed by Sun Microsystems where he most recently served as Vice President and Corporate Treasurer. In his 19 years at Sun Microsystems, Mr. Pasek held a variety of positions in finance, including Vice President of Worldwide Field Finance, Worldwide Manufacturing, and U.S. Field Finance.
Current Board/Committee Membership	2020 Attendance (Total)		Other Public Board Memberships
Member of the Board Member of the Audit Committee Member of the Compensation Committee(1) Member of the Corporate Governance and Nominating Committee(1)	11 of 11 3 of 3 N/A N/A	100% 100% - -	None.
Number of Common Shares Beneficially Owned, Controlled or Directed			85,322,765

Note:

(1) The Compensation Committee and Corporate Governance and Nominating Committee did not hold a formal meeting during the year ended December 31, 2020.

Corporate Cease Trade Orders

To the knowledge of the Corporation, no proposed director is, as at the date of this Circular, or has been, within 10 years before the date of this Circular, a director, chief executive officer or chief financial officer of any company (including the Corporation) that:

(a) was subject to a cease trade order, an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under applicable securities legislation, and which in all cases was in effect for a period of more than 30 consecutive days (an “ Order ”), which Order was issued while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer of such company; or
(b) was subject to an Order that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer of such company

The foregoing information, not being within the knowledge of the Corporation, has been furnished by the proposed directors.

Bankruptcies, or Penalties or Sanctions

Except as disclosed herein, to the knowledge of the Corporation, no proposed director:

(a) is, as at the date of this Circular, or has been within 10 years before the date of this Circular, a director or executive officer of any company (including the Corporation) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that
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capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets;

(b) has within 10 years before the date of this Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or become subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold his assets;
(c) has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or
(d) has been subject to any penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.

Roger Maggs served as a director of Global Silicon Limited, a private venture capital-backed United Kingdom based company. Global Silicon Limited was a portfolio company in a CHVP Fund. CHVP withdrew further financing in 2006 and the Company’s securities ceased trading in December 2006. In November 2007, Global Silicon Limited voluntarily appointed joint liquidators to liquidate the company and the company was officially dissolved on April 15, 2013.

The foregoing information, not being within the knowledge of the Corporation, has been furnished by the proposed directors.

2. Appointment of Auditor

Management proposes to nominate MNP LLP, Chartered Accountants, which firm has been auditor of the Corporation since May 2015, as auditor of the Corporation to hold office until the next annual meeting of Shareholders.

COMMON SHARES REPRESENTED BY PROXIES IN FAVOUR OF MANAGEMENT WILL BE VOTED IN FAVOUR OF THE APPOINTMENT OF MNP LLP, CHARTERED ACCOUNTANTS, AS AUDITOR OF THE CORPORATION AND THE AUTHORIZING OF THE DIRECTORS TO FIX ITS REMUNERATION, UNLESS THE SHAREHOLDER HAS SPECIFIED IN THE PROXY THAT HIS, HER OR ITS COMMON SHARES ARE TO BE WITHHELD FROM VOTING IN RESPECT THEREOF.

3. Amendments to RSU Plan and Stock Option Plan

At the Meeting, Shareholders will be asked to consider and, if thought appropriate, pass an ordinary resolution approving the Stock Option Plan and the RSU Plan in the form set out in Schedules “C” and “D”, respectively.

On May 22, 2020, the Corporation’s common shares commenced trading on the TSXV following the voluntary delisting from the Toronto Stock Exchange effective at the close of trading on May 21, 2020 (the “ TSXV Listing ”). In connection with the TSXV Listing, the Board passed a resolution to amend the Corporation’s stock option plan (the “ Stock Option Plan ”) and the Corporation’s restricted share unit plan (the “ RSU Plan ”) to comply with the policies of the TSXV relating to equity incentive plans.

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The Stock Option Plan and the RSU Plan that Shareholders will be asked to approve at the Meeting will reserve for issuance an aggregate maximum number of Common Shares equal to 20% of the issued and outstanding common shares on the date of the Meeting, subject to TSXV and Shareholder approvals.

The Board believes the increased maximum of options and RSUs is necessary to ensure that there will be a sufficient number of options and RSUS in order to retain and attract qualified directors, officers, employees and service providers to achieve the Corporation’s business objectives and growth, and to provide the Board with sufficient flexibility in determining the relative number of options and RSUs issuable under the Stock Option Plan and the RSU Plan from time to time.

The following are summaries of the Stock Option Plan and the RSU Plan, which are qualified in their entirety by reference to the text of the Stock Option Plan and the RSU Plan, respectively.

Summary of Stock Option Plan

All capitalized terms used in this summary that are not specifically defined herein shall have the meanings ascribed to them in the Stock Option Plan.

The Stock Option Plan provides that the Board may from time to time, in its discretion, and in accordance with the Exchange requirements, grant to directors, officers, employees and consultants of the Corporation and its affiliates, non-transferable options to purchase Common Shares for a period of up to ten years from the date of grant, provided that the maximum number of Common Shares reserved for issuance under the Stock Option Plan and the RSU Plan, inclusive of existing outstanding options and RSUs, shall not exceed such number of Common Shares as is equal to 20% of the issued and outstanding Common Shares as at the date of the Meeting

The purpose of the Stock Option Plan, pursuant to which the Corporation may grant incentive stock options, is to promote the profitability and growth of the Corporation by facilitating the efforts of the Corporation to obtain and retain key individuals. The Stock Option Plan provides an incentive for and encourages ownership of the Common Shares by its key individuals so that they may increase their stake in the Corporation and benefit from increases in the value of the Common Shares.

The aggregate number of incentive stock options issuable to Insiders under the Stock Option Plan or any other security-based compensation arrangement of the Corporation (including, without limitation, the RSU Plan), may not at any time exceed 10% of the combined total number of Common Shares issued and outstanding (on a non-diluted basis). Common Shares issued to Insiders under the Stock Option Plan or any other security-based compensation arrangement of the Corporation within a 12 month period may not exceed 10% of the total number of Common Shares issued and outstanding (on a non-diluted basis). The Stock Option Plan does not provide for a maximum number of Common Shares which may be issued to an individual pursuant to the plan or any other share compensation arrangement (expressed as a percentage or otherwise).

The price at which an optionee may purchase a Common Share upon the exercise of an Option is determined at the Board’s discretion, and shall not be less than the Market Price of the Common Shares as of the date of grant. The term of incentive stock options under the Stock Option Plan is determined at the time of grant by the Board and may not be more than 10 years from the date of grant. Pursuant to the Stock Option Plan, the Board, subject to the policies of the TSXV, may determine and impose terms upon which incentive stock options shall become vested and exercisable.

The Board may make amendments to the Stock Option Plan which it may deem necessary, without having to obtain Shareholder approval. Such changes include, without limitation: (a) amendments of a

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“housekeeping nature”; (b) to correct any defect, supply or information or reconcile any inconsistency in the Stock Option Plan in such manner and to such extend as shall be deemed necessary or advisable to carry out the purposes of the Stock Option Plan; (c) a change to the vesting provisions of any incentive stock option or the Stock Option Plan; (d) amendments to reflect any changes in requirements of any regulatory authority to which the Corporation is subject; (e) a change to the termination provisions of an incentive stock option which does not result in an extension beyond the original term of the option; (f) substitutions and/or adjustments to an incentive stock option required in connection with transactions such as arrangements, amalgamations or a declaration of dividends upon the Common Shares.

Shareholder approval is required pursuant to the Stock Option Plan in respect of: (a) any amendments to the number of Common Shares (or other securities) issuable under the Stock Option Plan; (b) any amendment which reduces the exercise price of an option that is held by an Insider; (c) any amendment extending the term of an option held by an Insider beyond its original expiry date except as otherwise permitted by the Stock Option Plan; and (d) amendments required to be approved by Shareholders under applicable law, including, without limitation, the rules of the TSXV.

Options granted under the Stock Option Plan may not be assigned or transferred, provided however that if an option holder is deceased or is for any reason unable to manage his or her affairs, the personal representative of the holder of incentive stock options may, to the extent permitted under the Stock Option Plan, exercise the option prior to the expiry date.

Incentive stock options may be exercised until the earlier of: (a) the expiry time of such option; and (b) 90 days (or such other period as may be determined by the Board, provided such period is not more than one year) following the date the optionee ceases to be a director, officer, consultant or employee of the Corporation or its affiliates or a consultant or a management company employee, provided that if the cessation of such position or arrangement was by reason of death, the option may be exercised within a maximum period of one year after such death, subject to the expiry date of such option. Notwithstanding the foregoing, in the event of termination for cause, all options held by such terminated optionee will be cancelled immediately. If an incentive stock option expires during a Black-Out Period, then, notwithstanding any other provision of the Stock Option Plan, the option shall expire 10 Business Days after the Black-Out Period is lifted by the Corporation.

Summary of RSU Plan

The purpose of the RSU Plan is to promote the interests of the Corporation and shareholders through the grant of Awards by: (i) providing an incentive mechanism to foster the interest of Eligible Persons in the success of the Corporation, its Affiliates and its Subsidiaries; (ii) encouraging Eligible Persons to remain with the Corporation, its Affiliates or its Subsidiaries; and (iii) attracting new Directors, Officers, Employees and Consultants. For the purposes of the RSU Plan, “Eligible Person” means a person who is a Director, Officer, Employee or Consultant. Capitalized terms used in this summary that are not otherwise defined shall have the same meaning as defined in the RSU Plan.

The RSU Plan is administered by the Board or, at its option, a committee of the Board consisting of not less than three directors of the Corporation duly appointed to administer the RSU Plan. The Board has the authority: (i) to determine the Eligible Persons to whom Awards are granted, to determine whether such Awards shall be in respect of Common Shares, to grant such Awards, and to determine any terms and conditions, limitations and restrictions in respect of any particular Award grant, including but not limited to the nature and duration of the restrictions, if any, to be imposed upon the acquisition, pledge, sale or other disposition of RSU Shares delivered pursuant to the grants of Awards, and the nature of the events and the duration of the period, if any, in which any Participant’s rights in respect of an Award may be forfeited; and (ii) to interpret the terms of the RSU Plan, to make all such determinations and take all such

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other actions in connection with the implementation, operation and administration of the RSU Plan, and to adopt, amend and rescind such administrative guidelines and other rules and regulations relating to RSU Plan.

The maximum number of Common Shares reserved for issuance under the Stock Option Plan and the RSU Plan, inclusive of existing outstanding options and RSUs, shall not exceed such number of Common Shares, as is equal to 20% of the issued and outstanding Common Shares as at the date of the Meeting.

The number of RSU Shares subject to any Award (or any portion thereof) that: (i) has vested and been redeemed; or (ii) that has expired or is forfeited, surrendered, cancelled or otherwise terminated prior to the delivery of RSU Shares pursuant to the Award, shall, in each case, automatically become available again to be made the subject of new Awards under the RSU Plan. In addition, the number of RSU Shares subject to an Award (or portion thereof) that the Corporation permits to be settled in cash in lieu of settlement in RSU Shares shall automatically become available again to be made the subject of new Awards under the RSU Plan.

The aggregate number of Common Shares issuable to Insiders under the RSU Plan or any other securitybased compensation arrangement of the Corporation (including, without limitation, the Stock Option Plan), may not at any time exceed 10% of the combined total number of Common Shares issued and outstanding (on a non-diluted basis). Common Shares issued to Insiders under the RSU Plan or any other security-based compensation arrangement of the Corporation within a 12 month period may not exceed 10% of the total number of Common Shares issued and outstanding (on a non-diluted basis). The RSU Plan does not provide for a maximum number of Common Shares which may be issued to an individual pursuant to the plan or any other share compensation arrangement (expressed as a percentage or otherwise).

The Board will have discretion to establish at the time of grant of an Award, within the restrictions set forth in the RSU Plan, the Award Date, the Vesting Date or Vesting Dates, the conditions under which Awards may be granted, including, without limitation, the passage of time or the attainment of performance objectives which must be attained for the Award to vest, if any, and other particulars applicable to an Award granted under the RSU Plan. The Vesting Date or Vesting Dates of an Award will be determined in accordance with the instructions of the Board issued at the time of grant and will be subject to the provisions of the RSU Plan relating to expiry and to the RSU Holder having been in active employment or engagement with the Corporation throughout the intervening period from the Award Date, subject to certain exceptions as set out in the RSU Plan. Unless otherwise determined by the Board or after the time of grant where vesting of an Award is subject to conditions (including, without limitation, the passage of time or the attainment of performance objectives), such Award, or part thereof, shall expire unexercised on the applicable Vesting Date if such conditions have not been satisfied and the number of RSU Shares subject to such Award (or any portion thereof) shall become available again to be made the subject of new Awards under the RSU Plan. Finally, an Award will not be assignable or transferred, except in accordance with the applicable policies and rules of the Exchange and applicable securities laws.

Unless an Award has expired in accordance with the provisions of the RSU Plan, Awards shall be settled, at the sole discretion of the Corporation, either: (i) through the issue from treasury of the number of RSU Shares represented by such vested Award; (ii) through the purchase on the secondary market by the Corporation (or a trustee appointed by the Corporation for such purpose) of the number of RSU Shares represented by such vested Award and delivery to such RSU Holder; or (iii) by payment to the RSU Holder of such vested Award an amount in cash per RSU Share represented by such Award equal to the Market Price on the applicable Vesting Date. In the event that a RSU Holder receives Common Shares from the Corporation in satisfaction of an Award during a Black-Out Period, the RSU Holder shall not be entitled to sell or otherwise dispose of such Common Shares until receipt from the Corporation that such Black-Out Period has expired.

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If a RSU Holder who is an Officer, Employee or Consultant is terminated for Cause, any Awards held by the RSU Holder that have not yet vested at the date of termination are immediately forfeited to the Corporation and the number of RSU Shares subject to such Award (or any portion thereof) shall become available again to be made the subject of new Awards under the RSU Plan. If a RSU Holder dies prior to otherwise ceasing to be an Eligible Person: (i) any Awards held such RSU Holder that are not yet vested at the time of death are immediately forfeited to the Corporation at such time and the number of RSU Shares subject to such Award (or any portion thereof) shall become available again to be made the subject of new Awards under RSU Plan; and (ii) any Awards held by such RSU Holder that have vested as at the time of death will enure to the benefit of such RSU Holder’s legal representative. Unless an Award Agreement specifies otherwise, if a RSU Holder ceases to be an Eligible Person for any reason whatsoever other than death or termination for Cause, any Awards held by the RSU Holder that are not yet vested at the date that such RSU Holder ceases to be an Eligible Person are immediately forfeited to the Corporation on such date and the number of RSU Shares subject to such Award (or any portion thereof) shall become available again to be made the subject of new Awards under the RSU Plan.

Awards of RSUs are not assignable or transferrable, except in accordance with the applicable policies and rules of the TSXV and applicable securities laws.

Pursuant to the RSU Plan, the Board retains the right to amend from time to time or to suspend, terminate or discontinue the terms and conditions of the RSU Plan by resolution of the Board, and any amendments shall be subject to the prior consent of any applicable regulatory bodies, including the TSXV, as may be required. The Board has the power and authority to approve amendments relating to the RSU Plan or to awards of RSUs, without further approval of the Shareholders, to the extent that such amendment: (a) is for the purpose of curing any ambiguity, error or omission in the RSU Plan or to correct or supplement any provision of the RSU Plan that is inconsistent with any other provision of the RSU Plan; (i) is necessary to comply with applicable law or the requirements of the TSXV; (c) is an amendment to the RSU Plan respecting administration and eligibility for participation under the RSU Plan; (d) alters, extends or accelerates the terms of vesting applicable to any awards of RSUs; (e) changes the termination provisions of an RSU award or the RSU Plan which does not entail an extension beyond the original expiry date of an RSU award; (f) is an amendment to the RSU Plan of a “housekeeping nature”); or (g) does not require Shareholder approval under applicable law (including the rules of the TSXV).

Shareholder approval is required when a proposed amendment to the RSU Plan: (a) amends the number of Common Shares issuable under the RSU Plan; (b) adds any form of financial assistance by the Corporation for the exercise of an RSU award; (c) results in a material or unreasonable dilution in the number of outstanding Common Shares or any material benefit to an Eligible Person; (d) changes the class of eligible participants to the RSU Plan which would have the potential of broadening or increasing participation by Insiders of the Corporation; or (e) constitutes any amendment proscribed and/or requiring Shareholder approval under the rules of the TSXV.

Shareholder Approval

At the Meeting, Shareholders will be asked to consider and, if thought appropriate, approve an ordinary resolution ratifying the adoption of the Stock Option Plan and the RSU Plan (the “ Plan Resolution ”). In order to be effective, an ordinary resolution requires approval by a majority of the votes cast by Shareholders for such resolution.

The Board has unanimously approved the Stock Option Plan and the RSU Plan and recommends that Shareholders vote FOR the resolution regarding the Stock Option Plan and the RSU Plan. An affirmative vote of a majority of the votes cast at the Meeting is sufficient to pass the resolution approving the resolution regarding the Stock Option Plan and the RSU Plan.

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The complete text of the resolution which management intends to place before the Meeting for approval, confirmation and adoption of the Stock Option Plan and the Amended and RSU Plan is as follows:

“RESOLVED THAT:

the Stock Option Plan, in the form attached as Schedule “C” to the management information circular of the Corporation dated May 17, 2021, is hereby confirmed, ratified and approved;
the RSU Plan, in the form attached as Schedule “D” to the management information circular of the Corporation dated May 17, 2021, is hereby confirmed, ratified and approved;
the Board is hereby authorized to make such amendments to the Stock Option Plan and RSU Plan from time to time, as may be required by the applicable regulatory authorities, or as may be considered appropriate by the Board, in its sole discretion, provided always that such amendments be subject to the approval of the regulatory authorities, if applicable, and in certain cases, in accordance with the terms of the Stock Option Plan and the RSU Plan, the approval of the Shareholders; and
any one officer and director of the Company be and is hereby authorized for and on behalf of the Company to execute and deliver all such instruments and documents and to perform and do all such acts and things as may be deemed advisable in such individual’s discretion for the purpose of giving effect to this resolution, the execution of any such document or the doing of any such other act or thing being conclusive evidence of such determination.”

COMMON SHARES REPRESENTED BY PROXIES IN FAVOUR OF MANAGEMENT NOMINEES WILL BE VOTED IN FAVOUR OF THE PLAN RESOLUTION IN THE ABSENCE OF DIRECTION TO THE CONTRARY FROM THE SHAREHOLDER APPOINTING THEM. AN AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST AT THE MEETING BY SHAREHOLDERS IS SUFFICIENT FOR THE APPROVAL OF THE PLAN RESOLUTION.

4. Continuance Resolution

The Corporation is currently a corporation incorporated under the federal laws of Canada and is subject to the provisions of the Canada Business Corporations Act (the “ CBCA ”). Under the CBCA, at least 25% of the directors of the Corporation must be resident Canadians unless there are fewer than four directors, in which case, at least one director must be a resident Canadian (the “ Director Residency Requirement ”). Given that the Corporation’s activities are primarily conducted in the United States, and in order to provide the Corporation with the opportunity to attract and retain the most suitable candidates to serve on the board regardless of their jurisdiction of residence, management believes it is in the best interests of the Corporation to continue into an alternative jurisdiction in Canada without a Director Residency Requirement (the “ Continuance ”).

The Business Corporations Act (British Columbia) (the “ BCBCA ”) does not contain a Director Residency Requirement and has therefore been a desirable jurisdiction of incorporation for public corporations in Canada. The Business Corporations Act (Ontario) (“ OBCA ”) does currently contain a Director Residency Requirement, however, on December 8, 2020, the Ontario Better for People, Smarter for Business Act, 2020 (Bill 213) received Royal Assent. This will, among other things, amend the OBCA by eliminating the current Director Residency Requirement (the “ Amendment ”). The Amendment comes into force on a day to be named by a forthcoming proclamation and will apply to privately and publicly held Ontario corporations.

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Management believes that Ontario is a more desirable jurisdiction for the Continuance than British Columbia given that the Corporation’s auditors, corporate records, transfer agent and registrar, warrant agent and legal counsel are all located in Ontario. However, given that it is uncertain when the Amendment will come into force, management believes that continuing to the BCBCA is the second best alternative. Shareholders will be therefore asked to consider, and if deemed appropriate, to pass, with or without variation, a special resolution to approve and authorize the Corporation to continue to the OBCA or, should the Amendment not be in force at the applicable time, to the BCBCA (the “ Continuance Resolution ”).

As part of the Continuance Resolution, Shareholders will also be asked to approve the adoption by the Corporation, in substitution for the existing articles of incorporation and by-laws of the Corporation, either:

the articles of continuance substantially in the form attached hereto as Schedule “E”, and new bylaws, substantially in the form attached hereto as Schedule “F”, in connection with a continuance to the OBCA, should the Amendment be in force at the time of the Continuance; or
the continuation application (including a notice of articles reflecting the information that will apply to the Corporation upon a continuance to the BCBCA) (the substantially in the form attached hereto as Schedule “G” and articles substantially in the form attached hereto Schedule “H” in connection with a continuance to the BCBCA, should the Amendment not be in force at the time of the Continuance.

Regardless of the jurisdiction chosen, the Continuance will affect certain of the rights of Shareholders as they currently exist under the CBCA and Shareholders should consult their legal advisors regarding the implications of the Continuance which may be of a particular importance to them. A summary comparison of certain provisions of the CBCA, the OBCA and the BCBCA that pertain to the rights of Shareholders is attached hereto as Schedule “I”. The Continuance will not result in any change of the business of the Corporation or its assets, liabilities or net worth, or in the persons who constitute the board and management. The Continuance is not a reorganization, an amalgamation or merger. If the Continuance Resolution is approved by Shareholders, then the Corporation intends to complete the Continuance as soon as reasonably practical thereafter.

Shareholders’ Right to Dissent with Respect to the Continuance Resolution

Any registered Shareholder is entitled to be paid fair value for all, but not less than all, of such Shareholder’s Common Shares in accordance with Section 190 of the CBCA if the Shareholder dissents to the Continuance Resolution and the Board elects to follow through on the Continuance. A Shareholder is not entitled to dissent with respect to the Continuance Resolution if the Shareholder votes any of his, her or its Common Shares in favour of the Continuance Resolution.

To dissent, a Shareholder must send a written objection to the Corporation at or before the Meeting. The execution or exercise of a proxy does not constitute a written objection for purposes of the CBCA. A dissenting Shareholder may only make a claim under Section 190 of the CBCA with respect to all the Common Shares held on behalf of any one Beneficial Shareholder and registered in the name of the dissenting Shareholder. If you are a Beneficial Shareholder who wishes to dissent, you will need to contact your broker or other intermediary who holds your Common Shares on your behalf and make arrangements to either (a) register your Common Shares in your name; or (b) make arrangements for the registered holder of your Common Shares to exercise your dissent rights on your behalf.

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Procedure for Dissent under the CBCA

The text of Section 190 of the CBCA appears in Schedule “J” to this Circular. The following summary does not purport to provide a comprehensive statement of the procedures to be followed by a dissenting Shareholder under the CBCA. However, the CBCA requires adherence to the procedures established therein and failure to do so may result in the loss of all dissent rights. Accordingly, each Shareholder who might desire to exercise dissent rights under the CBCA should carefully consider and comply with the provisions of these sections and consult his or her legal adviser. A dissenting Shareholder who seeks payment of the fair value of his or her Common Shares is required to send to the Corporation a written objection to the Continuance Resolution that sets out the dissenting Shareholder’s intention to exercise his or her dissent rights, which must be received by the Corporation at or before the Meeting. The Corporation’s address for such purpose is 181 Bay Street, Suite 1800, Toronto, Ontario, M5J 2T9, Attention: Richard Kimel, Corporate Secretary. A vote against the Continuance Resolution or withholding votes does not constitute a written objection.

Within 10 days after the Continuance Resolution is approved by Shareholders, the Corporation must notify the dissenting Shareholder that sent the Corporation a written objection in accordance with section 190 of the CBCA and that has not voted for the Continuance Resolution or withdrawn his or her objection. Such dissenting Shareholder is then required, within 20 days after receipt of notice (or if he , she or it does not receive such notice, within 20 days after he, she or it learns of the approval of the Continuance Resolution), to send the Corporation a written notice containing his, her or its name and address, the number of Common Shares in respect of which he, she or it dissents (which must be all of his, her or its Common Shares) and a demand for payment of the fair value of such Common Shares (the “ Demand for Payment Notice ”) and, within 30 days after sending the Demand for Payment Notice, to send to the Corporation the appropriate certificate or certificates representing such Common Shares.

If the Continuance becomes effective, the Corporation is required to determine the fair value of the Common Shares and to make a written offer to pay such amount to the dissenting Shareholder. If such offer is not made to, or not accepted by, the Shareholder within 50 days after the proposal in the Continuance Resolution becomes effective or such further period as a court may order, the Corporation may apply to the court to fix the fair value of such Common Shares. There is no obligation on the Corporation to apply to the court. If the Corporation fails to make such an application to the court, a dissenting Shareholder has the right to so apply to the court within a further 20 days or such further period as a court may order. If an application is made by either party, the dissenting Shareholder will be entitled to be paid the amount fixed by the court. The fair value of the Common Shares as determined for such purpose by a court will not necessarily be the same as, and could vary significantly from, the market value of such Common Shares on the date of the Continuance Resolution.

Effect of Dissent

A Shareholder who dissents and gives the Demand for Payment Notice will, as of the sending of such notice, cease to have any rights as a Shareholder of the Corporation other than the right to be paid the fair value of the Shareholder’s Common Shares as of the close of business on the day before the Continuance Resolution was adopted by the Shareholders, unless such Shareholder withdraws his, her or its dissent in accordance with Section 190 of the CBCA or the Continuance is not completed. The board of directors of the Corporation reserves the right, at its discretion, to refrain from submitting the Continuance Resolution to Shareholders or to refrain from completing the Continuance if the number of dissenting Shareholders is considered too high, or if, for any other reason, the board of directors deems it is not in the best interests of the Corporation to follow through on the Continuance as set out in the Continuance Resolution.

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Special Resolution

The Board has unanimously approved the Continuance Resolution and recommends that Shareholders vote FOR the Continuance Resolution. To be effective, the special resolution approving the Continuance Resolution must be approved by at least 66 2/3% of the votes cast in person or by proxy at the Meeting.

Notwithstanding the foregoing, as indicated in the text of the special resolution below, the Board may, in its sole discretion, determine that the Corporation not proceed with the Continuance.

The complete text of the resolution which management intends to place before the Meeting for approval, confirmation and adoption, with or without modification, is as follows:

“RESOLVED AS A SPECIAL RESOLUTION THAT:

the continuance of the Corporation out of the federal jurisdiction of Canada (the “ Continuance ”) and into, at the discretion of the Corporation’s board of directors, either the Province of Ontario under the Business Corporations Act (Ontario) (the “ OBCA ”) or the Province of British Columbia under the Business Corporations Act (British Columbia) (the “ BCBCA ”) be and is hereby authorized and approved;
in the event that the board of directors of the Corporation shall elect to continue the Corporation under the OBCA (the “ Ontario Continuance ”):
a. the application to the director under the CBCA for consent to continue under the OBCA be and is hereby authorized and approved;
b. the application by the Corporation to the Ministry of Government and Consumer Services for the Province of Ontario in accordance with section 180(1) of the OBCA for a certificate of continuance (the “ Ontario Certificate ”) in order to continue out of the federal law of Canada and into the Province of Ontario under the OBCA under the name “Spectra7 Microsystems Inc.”, or such other name as the board of directors may approve, be and is hereby authorized and approved;
c. effective upon issuance of the Ontario Certificate, the Corporation is hereby authorized and directed to adopt the articles of continuance substantially in the form attached to the management information circular of the Corporation dated May 17, 2021 (the “ Circular ”) as Schedule “F” and the by-laws substantially in the form attached to the Circular as Schedule “G” (the “ OBCA Continuance By-laws ”) with such amendments, modifications and alterations thereto as the board of directors of the Corporation may approve in order to comply with the requirements of the OBCA, in substitution for the current articles and by-laws of the Corporation and all amendments to the current articles and by-laws of the Corporation reflected therein are adopted and confirmed; and
d. concurrently with, and subject to the completion of, the Ontario Continuance, the OBCA Continuance By-laws, as approved by the Corporation’s board of directors, are hereby confirmed, ratified and approved;
in the event that the board of directors of the Corporation shall elect to continue the Corporation under the BCBCA (the “ British Columbia Continuance ”):
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a. the application to the director under the CBCA for consent to continue under the BCBCA be and is hereby authorized and approved;
b. the application (including a notice of articles reflecting the information that will apply to the Corporation upon the British Columbia Continuance) substantially in the form attached to the Circular as Schedule “G” by the Corporation to the British Columbia Register of Companies in accordance with section 302 of the BCBCA for a certificate of continuance (the “ BC Certificate ”) in order to continue out of the federal law of Canada and into the Province of British Columbia under the BCBCA under the name “Spectra7 Microsystems Inc.”, or such other name as the board of directors may approve, be and is hereby authorized and approved;
c. effective upon issuance of the BC Certificate, the Corporation is hereby authorized and directed to adopt the articles substantially in the form attached to the Circular as Schedule “G” (the “ BCBCA Continuance Articles ”) with such amendments, modifications and alterations thereto as the board of directors of the Corporation may approve in order to comply with the requirements of the BCBCA, in substitution for the current articles and by-laws of the Corporation and all amendments to the current articles and by-laws of the Corporation reflected therein are adopted and confirmed; and
d. concurrently with, and subject to the completion of, the British Columbia Continuance, the BCBCA Continuance Articles, as approved by the Corporation’s board of directors, are hereby confirmed, ratified and approved;
any one director or officer of the Corporation is hereby authorized and directed for and on behalf of the Corporation to execute and deliver, under corporate seal of the Corporation or otherwise, all such documents and instruments and to do all such acts and things as in his or her opinion may be necessary or desirable to give full effect to this special resolution, the execution of any such documents and instruments or the doing of any such acts or things being conclusive evidence of such determination; and
notwithstanding any approval of the shareholders of the Corporation as provided herein, the board of directors may, in its sole discretion, revoke this special resolution and abandon the Continuance before it is acted upon without further approval of the shareholders.”

5. Consolidation of Common Shares

Subject to approval of the TSXV, the Corporation proposes to consolidate the issued and outstanding Common Shares by a ratio to be determined by the Board of up to 100:1 (the “ Share Consolidation ”) with any resulting fraction being rounded either up or down to the next highest or lowest number of the whole consolidated Common Shares, as the case may be. If approved by Shareholders, the Board will determine the effective time of the Share Consolidation and the appropriate consolidation ratio. Accordingly, Shareholders will be asked at the Meeting to pass a special resolution authorizing the Share Consolidation. Although approval for the Share Consolidation is being sought at the Meeting, such a Share Consolidation would ultimately become effective at a date in the future to be determined by the Board when the Board considers it to be in the best interests of the Corporation to implement such a Share Consolidation. The special resolution also authorizes the Board to elect not to proceed with, and abandon, the Share Consolidation at any time if it determines, in its sole discretion to do so. The Share Consolidation is subject to approval by the shareholders and acceptance by the TSXV.

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TSXV Approval

Assuming shareholder approval is received at the Meeting, and assuming that the Board determines to proceed with the Share Consolidation, the Share Consolidation will be subject to acceptance by TSXV, and confirmation that, on a post-Share Consolidation basis, the Corporation would meet all of TSXV’s applicable continuous listing requirements. If the TSXV does not accept the Share Consolidation, the Corporation will not proceed with the Share Consolidation.

Risks Associated with the Share Consolidation

There is no assurance that the market price of the consolidated Common Shares will increase as a result of the Share Consolidation. The marketability and trading liquidity of the consolidated shares of the Corporation may not improve. The Share Consolidation may result in some shareholders owning “odd lots” of less than 100 or 1,000 Common Shares which may be more difficult for such shareholders to sell or which may require greater transaction costs per Common Share to sell.

Principal Effects of the Share Consolidation

The Share Consolidation will not have a dilutive effect on the Corporation’s shareholders since each shareholder will hold the same percentage of Common Shares outstanding immediately following the Share Consolidation as such shareholder held immediately prior to the Share Consolidation. The Share Consolidation will not affect the relative voting and other rights that accompany the Common Shares.

If the Board decides to proceed with the Share Consolidation at the time they deem appropriate, the principal effects of the Share Consolidation include the following:

(a) the fair market value of each Common Share may increase and will, in part, form the basis upon which further Common Shares or other securities of the Corporation will be issued (recognizing that the Board may elect to consolidate on the basis of a lesser ratio that it deems appropriate);
(b) based on the number of issued and outstanding Common Shares as at the Record Date (May 7, 2021), the current number of issued and outstanding Common Shares, being 843,571,976, would be reduced as follows:

Ratio	Number of Post-Consolidation Common Shares
10 for 1	84,357,198
25 for 1	33,742,879
50 for 1	16,871,440
75 for 1	11,247,626
100 for 1	8,435,720

(c) the exercise prices and the number of Common Shares issuable upon the exercise or deemed exercise of any stock options or other convertible or exchangeable securities of the Corporation will be automatically adjusted based on the consolidation ratio selected by the Board; and
(d) as the Corporation currently has an unlimited number of Common Shares authorized for issuance, the Share Consolidation will not have any effect on the number of Common Shares of the Corporation available for issuance.
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Effect on Fractional Shareholders

No fractional shares will be issued, and no cash consideration will be paid, if, as a result of the Share Consolidation, a shareholder would otherwise become entitled to a fractional Common Share. After the Share Consolidation, the then current shareholders of the Corporation will have no further interest in the Corporation with respect to their fractional Common Shares.

Effect on Share Certificates

If the Share Consolidation is approved by the shareholders and implemented by the Board, registered shareholders will be required to exchange their Common Share certificates representing pre-consolidation Common Shares for new Common Share certificates representing the post-consolidation Common Shares. Following the determination of the consolidation ratio by the Board and as soon as possible following the effective date of the Share Consolidation, registered shareholders will be sent a letter of transmittal by the Corporation’s transfer agent, Computershare. The letter of transmittal that contains instructions on how to surrender Common Share certificate(s) representing pre-consolidation Common Shares to Computershare. Computershare will forward to each registered shareholder who has sent the required documents a new Common Share certificate representing the number of post-consolidation Common Shares to which the shareholder is entitled. Until surrendered, each Common Share certificate representing pre-consolidation Common Shares will be deemed for all purposes to represent the number of whole post-consolidation Common Shares to which the holder is entitled as a result of the Share Consolidation. Shareholders should not destroy any Common Share certificate(s) and should not submit any Common Share certificate(s) until requested to do so. The method of delivery of certificates representing Common Shares and the letter of transmittal and all other required documents will be at the option and risk of the person surrendering them. It is recommended that such documents be delivered by hand to Computershare, at the address noted in the letter of transmittal, and a receipt obtained therefore, or, if mailed, that registered mail, with return receipt requested, be used and that proper insurance be obtained.

No new Common Share certificates will be issued to a shareholder until such shareholder has surrendered the corresponding “old” Common Share certificates, together with a properly completed and executed letter of transmittal, to the transfer agent. Consequently, following the Share Consolidation, shareholders will need to surrender their old Common Share certificates before they will be able to sell or transfer their Common Shares. If an old Common Share certificate has any restrictive legends on the back thereof, the new Common Share certificate will be issued with the same restrictive legends, if any, that are on the back of the old Common Share certificate.

If the Share Consolidation is implemented by the Board, Intermediaries will be instructed to effect the Share Consolidation for Beneficial Shareholders. However, such Intermediaries may have different procedures than registered shareholders for processing the Share Consolidation. If you hold your Common Shares with such an Intermediary and if you have any questions in this regard, the Corporation encourages you to contact your Intermediary.

Special Resolution

The Board has unanimously approved the Share Consolidation and recommends that Shareholders vote FOR the Share Consolidation. To be effective, the special resolution approving the Share Consolidation must be approved by at least 66 2/3% of the votes cast in person or by proxy at the Meeting.

Notwithstanding the foregoing, as indicated in the text of the special resolution below, the Board may, in its sole discretion, determine that the Corporation not proceed with the Share Consolidation.

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The complete text of the resolution which management intends to place before the Meeting for approval, confirmation and adoption, with or without modification, is as follows:

“RESOLVED AS A SPECIAL RESOLUTION THAT:

Subject to the acceptance by the TSXV, the Corporation is hereby authorized to consolidate the issued and outstanding common shares in the capital of the Corporation by a ratio to be determined by the directors of the Corporation of up to 100:1 (the “ Share Consolidation ”). Any resulting fractional shares shall be either rounded up or down to the nearest whole common share.
Notwithstanding that this resolution has been passed by the Shareholders, the directors of the Corporation are hereby authorized and empowered without further notice to, or approval of, the Shareholders, to determine not to proceed with the Share Consolidation at any time prior to the filing of the articles of amendment giving effect to the Share Consolidation. The directors of the Corporation may, at their sole discretion, revoke this resolution before it is acted upon without further approval or authorization of the shareholders of the Corporation.
Upon articles of amendment having become effective in accordance with the Canada Business Corporations Act or the Business Corporations Act (Ontario) or the Business Corporations Act (British Columbia), as may be applicable, the articles of the Corporation are amended accordingly.
Any one officer and director of the Corporation be and is hereby authorized for and on behalf of the Corporation to execute and deliver all such instruments and documents and to perform and do all such acts and things as may be deemed advisable in such individual’s discretion for the purpose of giving effect to this special resolution, the execution of any such document or the doing of any such other act or thing being conclusive evidence of such determination.”

IT IS INTENDED THAT THE COMMON SHARES REPRESENTED BY PROXIES IN FAVOUR OF MANAGEMENT NOMINEES WILL BE VOTED IN FAVOUR OF THE RESOLUTION TO APPROVE THE SHARE CONSOLIDATION IN THE ABSENCE OF DIRECTION TO THE CONTRARY FROM THE SHAREHOLDER APPOINTING THEM. AN AFFIRMATIVE VOTE OF AT LEAST 66 2/3% OF THE VOTES CAST BY SHAREHOLDERS AT THE MEETING IS SUFFICIENT FOR THE APPROVAL OF THE PLAN.

INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

No person or company who has been a director or executive officer of the Corporation at any time since the beginning of the Corporation’s last completed financial year, no proposed nominee for election as a director of the Corporation and no associate or affiliate of any of the foregoing persons has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting other than the election of directors.

ADDITIONAL INFORMATION

Additional information relating to the Corporation is available under the Corporation’s profile on SEDAR at www.sedar.com. Financial information is provided in the Corporation’s audited financial statements and Management’s Discussion and Analysis (“ MD&A ”) for the year ended December 31, 2020. In addition,

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copies of the Corporation’s annual financial statements and MD&A and this Circular may be obtained upon request to the Corporation. The Corporation may require the payment of a reasonable charge if the request is made by a person who is not a shareholder of the Corporation.

APPROVAL OF BOARD OF DIRECTORS

The contents of this Circular and the sending of it to each director of the Corporation, to the auditor of the Corporation, to the Shareholders and to the appropriate governmental agencies, have been approved by the directors of the Corporation.

Dated: May 17, 2021.

“Raouf Halim”

Raouf Halim Director, President & Chief Executive Officer

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SCHEDULE "A" STATEMENT OF GOVERNANCE PRACTICES

Governance Disclosure Requirement Under the Corporate Governance National Instrument 58-101 (“NI 58-101”)	Comments
Board of Directors
1. Board of Directors—Disclose how the board of directors (the “Board”) of Spectra7 Microsystems Inc. (the “Corporation”) facilitates its exercise of independent supervision over management, including (i) the identity of directors that are independent, and (ii) the identity of directors who are not independent, and the basis for that determination.	The Board currently consists of a total of five directors of which Messrs. Brian Antonen, Ronald Pasek, John Vettese and Roger Maggs are considered “independent” as such term is defined in NI 58-101. The proposed Board consists of a total of three directors of which Messrs. Ronald Pasek and Roger Maggs are considered “independent” as such term is defined in NI 58-101. Raouf Halim is not considered independent as he is an executive officer of the Corporation.
2. Directorships—If a director is presently a director of any other issuer that is a reporting issuer (or the equivalent) in a jurisdiction or a foreign jurisdiction, identify both the director and the other issuer.	Please refer to the Circular under the heading “Particulars of Matters to be Acted Upon - Election of Directors”.
Orientation and Continuing Education
3. Describe what steps, if any, the Board takes to orient new Board members, and describe any measures the Board takes to provide continuing education for directors.	Each director ultimately assumes responsibility for keeping himself informed about the Corporation’s business and relevant developments outside the Corporation that affect its business. Management assists directors by providing them with regular updates on relevant developments and other information that management considers of interest to the Board. Directors may also attend other Board committee meetings if they are not active members, to broaden their knowledge base and receive additional information on the Corporation’s business and developments in areas where they are not commonly exposed.
Ethical Business Conduct
4. Describe what steps, if any, the Board takes to encourage and promote a culture of ethical business conduct.	The Board is responsible for promoting an ethical business culture. The Board monitors compliance, including through receipt by the Audit Committee of reports of unethical behaviour. To ensure that an ethical business culture is maintained and promoted, directors are encouraged to exercise their independent judgment. If a director has a material interest in any transaction or agreement that the Corporation proposes to enter into, such director is expected to disclose such interest to the Board in compliance with the applicable laws, rules and policies which govern conflicts of interest in connection with such transaction or agreement. Further, any director who has a material interest in any proposed transaction or agreement will be excluded from the portion of the Board meeting concerning such matters and will be further precluded from voting on such matters.
Nomination of Directors
5. Disclose what steps, if any, are taken to identify new candidates for Board nomination, including: (i) who identifies new candidates, and (ii) the process of identifying new candidates.	The Corporate Governance and Nominating Committee is responsible for the identification and assessment of potential directors. While no formal nomination procedures are in place to identify new candidates, the Corporate Governance and Nominating Committee does review the experience and performance of nominees for election to the Board. Members of the Corporate Governance and Nominating Committee are

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Governance Disclosure Requirement Under the Corporate Governance National Instrument 58-101 (“NI 58-101”)	Comments
	canvassed with respect to the qualifications of a prospective candidate and each candidate is evaluated with respect to his or her experience and expertise, with particular attention paid to those areas of expertise that could complement and enhance current management. The Corporate Governance and Nominating Committee also assesses any potential conflicts, independence or time commitment concerns that the candidate may present.
Compensation
6. Disclose what steps, if any, are taken to determine compensation for the directors and officers, including: (i) who determines compensation, and (ii) the process of determining compensation.	The process undertaken by the Board and the Compensation Committee in respect of compensation is more fully described in the “Compensation Discussion and Analysis” section of the accompanying Circular.
Other Board Committees
7. If the Board has standing committees other than the audit, compensation and nominating committees, identify the committees and describe their function.	The Board does not have any standing committees other than the Corporate Governance and Nominating Committee, the Compensation Committee and the Audit Committee.
Assessments
8. Disclose what steps, if any, that the Board takes to satisfy itself that the Board, its committees, and its individual directors are performing effectively.	The entire Board will evaluate the effectiveness of the Board, its committees and individual directors on an annual basis. To facilitate this evaluation, each committee will conduct an annual assessment of its performance, consisting of a review of its charter, the performance of the committee as a whole and the performance of the committee Chair.

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SCHEDULE "B" AUDIT COMMITTEE CHARTER

(Implemented pursuant to National Instrument 52-110 – Audit Committees)

National Instrument 52-110 – Audit Committees (the “ Instrument ”) relating to the composition and function of audit committees was implemented for reporting issuers and, accordingly, applies to every Toronto Stock Exchange listed company, including the Corporation. The Instrument requires all affected issuers to have a written audit committee charter which must be disclosed, as stipulated by Form 52-110F2, in the management information circular of the Corporation wherein management solicits proxies from the security holders of the Corporation for the purpose of electing directors to the board of directors.

This Charter has been adopted by the board of directors in order to comply with the Instrument and to more properly define the role of the Committee in the oversight of the financial reporting process of the Corporation. Nothing in this Charter is intended to restrict the ability of the board of directors or Committee to alter or vary procedures in order to comply more fully with the Instrument, as amended from time to time.

PART 1 Purpose:

The purpose of the Committee is to:

(a) improve the quality of the Corporation’s financial reporting;
(b) assist the board of directors to properly and fully discharge its responsibilities;
(c) provide an avenue of enhanced communication between the directors and external auditors;
(d) enhance the external auditor’s independence;
(e) increase the credibility and objectivity of financial reports; and
(f) strengthen the role of the directors by facilitating in depth discussions between directors, management and external auditors.

1.1 Definitions

“ accounting principles ” has the meaning ascribed to it in National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards ;

“ Affiliate ” means a Corporation that is a subsidiary of another Corporation or companies that are controlled by the same entity;

“ audit services ” means the professional services rendered by the Corporation’s external auditor for the audit and review of the Corporation’s financial statements or services that are normally provided by the external auditor in connection with statutory and regulatory filings or engagements;

“ Charter ” means this audit committee charter;

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“ Committee ” means the committee established by and among certain members of the board of directors for the purpose of overseeing the accounting and financial reporting processes of the Corporation and audits of the financial statements of the Corporation;

“ Control Person ” means any individual or company that holds or is one of a combination of individuals or companies that holds a sufficient number of any of the securities of the Corporation so as to affect materially the control of the Corporation, or that holds more than 20% of the outstanding voting shares of the Corporation except where there is evidence showing that the holder of those securities does not materially affect the control of the Corporation;

“ financially literate ” has the meaning set forth in Section 1.2;

“ immediate family member ” means an individual’s spouse, parent, child, sibling, mother or father-inlaw, son or daughter-in-law, brother or sister-in-law, and anyone (other than an employee of either the individual or the individual’s immediate family member) who shares the individual’s home;

“independent” means independent only as determined by the Instrument;

“ Instrument ” means National Instrument 52-110 – Audit Committees ;

“ MD&A ” has the meaning ascribed to it in National Instrument 51-102;

“ Member ” means a member of the Committee;

“ National Instrument 51-102 ” means National Instrument 51-102 – Continuous Disclosure Obligations ; and

“ non-audit services ” means services other than audit services.

1.2 Meaning of Financially Literate

For the purposes of this Charter, an individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation’s financial statements.

PART 2 2.1 Audit Committee

The board of directors has hereby established the Committee for, among other purposes, compliance with the Instrument.

2.2 Relationship with External Auditors

The Corporation will require its external auditor to report directly to the Committee and the Members shall ensure that such is the case.

2.3 Committee Responsibilities

The Committee shall be responsible for making the following recommendations to the board of directors:
(a) the external auditor to be nominated for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Corporation; and
(b) the compensation of the external auditor.

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The Committee shall be directly responsible for overseeing the work of the external auditor engaged for the purpose of preparing or issuing an auditor's report or performing other audit, review or attest services for the Corporation, including the resolution of disagreements between management and the external auditor regarding financial reporting. This responsibility shall include:
(a) reviewing the audit plan with management and the external auditor;
(b) reviewing with management and the external auditor any proposed changes in major accounting policies, the presentation and impact of significant risks and uncertainties, and key estimates and judgements of management that may be material to financial reporting;
(c) questioning management and the external auditor regarding significant financial reporting issues discussed during the fiscal period and the method of resolution;
(d) reviewing any problems experienced by the external auditor in performing the audit, including any restrictions imposed by management or significant accounting issues on which there was a disagreement with management;
(e) reviewing audited annual financial statements, in conjunction with the report of the external auditor, and obtaining an explanation from management of all significant variances between comparative reporting periods;
(f) reviewing the post-audit or management letter, containing the recommendations of the external auditor, and management's response and subsequent follow up to any identified weakness;
(g) reviewing interim unaudited financial statements before release to the public;
(h) reviewing all public disclosure documents containing audited or unaudited financial information before release, including any prospectus, the annual report and management's discussion and analysis;
(i) reviewing the evaluation of internal controls by the external auditor, together with management's response;
(j) reviewing the terms of reference of the internal auditor, if any;
(k) reviewing the reports issued by the internal auditor, if any, and management's response and subsequent follow up to any identified weaknesses; and
(l) reviewing the appointments of the chief financial officer and any key financial executives involved in the financial reporting process, as applicable.
The Committee shall pre-approve all non-audit services to be provided to the Corporation or its subsidiary entities by the issuer’s external auditor.
The Committee shall review the Corporation’s financial statements, MD&A, and annual and interim earnings press releases before the Corporation publicly discloses this information.

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The Committee shall ensure that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation's financial statements, and shall periodically assess the adequacy of those procedures.
When there is to be a change of auditor, the Committee shall review all issues related to the change, including the information to be included in the notice of change of auditor called for under National Instrument 51-102, and the planned steps for an orderly transition.
The Committee shall review all reportable events, including disagreements, unresolved issues and consultations, as defined in National Instrument 51-102, on a routine basis, whether or not there is to be a change of auditor.
The Committee shall, as applicable, establish procedures for:
(a) the receipt, retention and treatment of complaints received by the issuer regarding accounting, internal accounting controls, or auditing matters; and
(b) the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters.
As applicable, the Committee shall establish, periodically review and approve the Corporation’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditor of the issuer.
The responsibilities outlined in this Charter are not intended to be exhaustive. Members should consider any additional areas which may require oversight when discharging their responsibilities.

2.4 De Minimis Non-Audit Services

The Committee shall satisfy the pre-approval requirement in subsection 2.3(2) if:

(a) the aggregate amount of all the non-audit services that were not pre-approved is reasonably expected to constitute no more than five per cent of the total amount of fees paid by the issuer and its subsidiary entities to the issuer's external auditor during the financial year in which the services are provided;
(b) the Corporation or the subsidiary of the Corporation, as the case may be, did not recognize the services as non-audit services at the time of the engagement; and
(c) the services are promptly brought to the attention of the Committee and approved by the Committee or by one or more of its Members to whom authority to grant such approvals has been delegated by the Committee, prior to the completion of the audit.

2.5 Delegation of Pre-Approval Function

The Committee may delegate to one or more independent Members the authority to pre-approve nonaudit services in satisfaction of the requirement in subsection 2.3(2).
The pre-approval of non-audit services by any Member to whom authority has been delegated pursuant to subsection 2.5(1) must be presented to the Committee at its first scheduled meeting following such pre-approval.

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PART 3 3.1 Composition

The Committee shall be composed of a minimum of three Members.
Every Member shall be a director of the issuer.
Every Member shall be independent.
Every Member shall be financially literate.
The board of directors of the Corporation shall appoint or re-appoint the Members after each annual meeting of shareholders of the Corporation.

PART 4 4.1 Authority

Until the replacement of this Charter, the Committee shall have the authority to:

(a) engage independent counsel and other advisors as it determines necessary to carry out its duties;
(b) set and pay the compensation for any advisors employed by the Committee;
(c) communicate directly with the internal and external auditors; and
(d) recommend the amendment or approval of audited and interim financial statements to the board of directors.

PART 5 5.1 Required Disclosure

The Corporation must include in its Annual Information Form the disclosure required by Form 52-110F1.

5.2 Disclosure in Information Circular

If management of the Corporation solicits proxies from the security holders of the Corporation for the purpose of electing directors to the board of directors, the Corporation shall include in its management information circular a cross-reference to the sections in the Corporation’s Annual Information Form that contain the information required by section 5.1.

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PART 6 6.1 Meetings

Meetings of the Committee shall be scheduled to take place at regular intervals and, in any event, not less frequently than quarterly.
Opportunities shall be afforded periodically to the external auditor, the internal auditor and to members of senior management to meet separately with the Members.
Minutes shall be kept of all meetings of the Committee.

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SCHEDULE "C" STOCK OPTION PLAN

ARTICLE 1 DEFINITIONS AND INTERPRETATION

1.1 Definitions

As used herein, unless there is something in the subject matter or context inconsistent therewith, the following terms shall have the meanings set forth below:

(a) “Administrator” means, initially, the Chief Executive Officer of the Corporation and thereafter shall mean such director or other senior officer or employee of the Corporation as may be designated as Administrator by the Board from time to time.
(b) “Award Date” means the date on which the Board awards a particular Option.
(c) “Board” means the board of directors of the Corporation or any committee thereof to which the board of directors of the Corporation has delegated the power to administer and grant Options under the Plan.
(d) “Business Day” means any day, other than a Saturday or Sunday, on which banks in Toronto, Ontario, Canada are open for commercial banking business during normal banking hours.
(e) “Cause” means:
(i) in the case of an Employee or Officer (1) cause as such term is defined in the written employment agreement with the Employee or Officer or if there is no written employment agreement or cause is not defined therein, the usual meaning of just cause under the common law or the laws of the jurisdiction in which the employee is employed; or (2) the termination of employment as a result of an order made by any Regulatory Authority having jurisdiction to so order;
(ii) in the case of a Consultant (1) the occurrence of any event which, under the written consulting contract with the Consultant or the common law or the laws of the jurisdiction in which the Consultant provides services, gives the Corporation or any of its affiliates the right to immediately terminate the consulting contract; or (2) the termination of the consulting contract as a result of an order made by any Regulatory Authority having jurisdiction to so order; or
(iii) in the case of a Director, ceasing to be a Director as a result of (1) ceasing to be qualified pursuant to subsection 105(1) of the Canada Business Corporations Act ; (2) a resolution having been passed under section 109 of the Canada Business Corporations Act or by the resolution or method specified in the Corporation’s Articles; or (3) an order made by any Regulatory Authority having jurisdiction to so order.
(f) “Change of Control” means and shall be deemed to have occurred if one of the following events takes place:

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(i) the sale, transfer or other disposition of all or substantially all of the Corporation’s assets in complete liquidation or dissolution of the Corporation;
(ii) the Corporation amalgamates or enters into a plan of arrangement with another Corporation at arm’s length to the Corporation and its affiliates, other than an amalgamation or plan of arrangement that would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or resulting entity) more than 50% of the combined voting power of the surviving or resulting entity outstanding immediately after such amalgamation or plan of arrangement; or
(iii) any Person or combination of Persons at arm’s length to the Corporation and its affiliates acquires or becomes the beneficial owner of, directly or indirectly, more than 50% of the voting securities of the Corporation, whether through the acquisition of previously issued and outstanding voting securities, or of voting securities that have not been previously issued, or any combination thereof, or any other transaction having a similar effect.
(g) “Code” means the United States Internal Revenue Code of 1986, as amended from time to time, together with the regulations and official guidance promulgated thereunder.
(h) “Common Share” or “Common Shares” means, as the case may be, one or more common shares in the capital of the Corporation.
(i)
“Corporation” means Spectra7 Microsystems Inc.
(j) “Consultant” has the meaning given to that term in the policies of the TSX Venture Exchange.
(k) “Director” means the directors of the Corporation, and for purposes of the Plan includes directors of any Related Entity of the Corporation.
(l)
“Eligible Persons” means Directors, Officers, Employees, and Consultants.
(m) “Employee” means an employee of the Corporation and any Related Entity of the Corporation.
(n) “Exchange Hold Period” means such restricted period as required by the TSX Venture Exchange where an Option is granted at a discount to the Market Price.
(o) “Exercise Period” means the period during which a particular Option may be exercised and is the period from and including the Award Date through to and including the Expiry Date.
(p) “Exercise Price” means the price at which an Option may be exercised as determined in accordance with paragraph 3.5.
(q) “Expiry Date” means the date determined in accordance with paragraph 3.4 and after which a particular Option cannot be exercised.
(r) “Expiry Period” has the meaning given to that term under paragraph 3.4(b).

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(s) “Fixed Expiry Date” has the meaning given to that term under paragraph 3.4.
(t) “Insider” has the meaning given to that term in the Securities Act (Ontario).
(u) “Market Price” of the Common Shares for a particular Award Date shall be determined as follows:
(i) for each organized trading facility on which the Common Shares are listed, Market Price shall be the closing trading price of the Common Shares on the last trading day immediately preceding the Award Date;
(ii) if the Common Shares are listed on more than one organized trading facility, then Market Price shall be the greater of the Market Prices determined for each organized trading facility on which those Common Shares are listed as determined for each organized trading facility in accordance with section (i) above;
(iii) if the Common Shares are listed on one or more organized trading facility but have not traded during the 10 trading day period immediately preceeding the Award Date, then the Market Price shall be, subject to the necessary approvals of the applicable Regulatory Authorities, such value as is determined by resolution of the Board; and
(iv) if the Common Shares are not listed on any organized trading facility, then the Market Price shall be, subject to the necessary approvals of the applicable Regulatory Authorities, the fair market value of the Common Shares on the Award Date as determined by the Board in its discretion.
(v) “Management Corporation Employee” means an individual employeed by a Person providing management services to the Corporation, which are required for the ongoing successful operation of the business enterprise of the Corporation, but excluding a Person engaged in investor relations activities.
(w) “Officer” means an officer of the Corporation or Management Corporation Employee and for the purposes of the Plan includes officers of the Corporation and Management Corporation Employees and any Related Entity of the Corporation.
(x) “Option” means an option to acquire Common Shares, awarded to an Eligible Person pursuant to the Plan.
(y) “Option Certificate” means the certificate, in the form set out as Schedule “A” hereto, evidencing an Option.
(z) “Option Holder” means a Person who holds an unexercised and unexpired Option or, where applicable, the Personal Representative of such person.
(aa) “Person” means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, Corporation or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency or entity however designated or constituted.

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(bb) “Personal Representative” means:
(i) in the case of a deceased Option Holder, the executor or administrator of the deceased duly appointed by a court or public authority having jurisdiction to do so; and
(ii) in the case of an Option Holder who for any reason is unable to manage his or her affairs, the person entitled by law to act on behalf of such Option Holder.
(cc) “Plan” means this stock option plan.
(dd) “Regulatory Authorities” means all stock exchanges, inter-dealer quotation networks and other organized trading facilities on which the Corporation’s Shares are listed and all securities commissions or similar securities regulatory bodies having jurisdiction over the Corporation.
(ee) “Related Entity” has the meaning given to that term in National Instrument 45-106 – Prospectus and Registration Exemptions .
(ff) “RSU” means a restricted share unit awarded under the RSU Plan;
(gg) “RSU Plan” means the restricted share unit plan of the Corporation, as it may be amended from time to time.
(hh) “Securities Laws” means securities legislation, securities regulations and securities rules, as amended, and the instruments, forms, notices and policy documents in force from time to time that are applicable to the Corporation.
(ii) “Share” or “Shares” means, as the case may be, one or more shares of any class in the share capital of the Corporation from time to time.
(jj) “Subsidiary” means any entity (other than the Corporation), that is a subsidiary of the Corporation as such term is defined in the Canada Business Corporations Act , as amended, varied or re-enacted from time to time.
(kk) “Termination Date” means:
(i) in the case of the Option Holder’s resignation from employment or the termination of the Option Holder’s consulting contract by the Option Holder, the date that the Option Holder provides notice of such resignation or termination to the Corporation or any of its affiliates; or
(ii) in the case of the termination of the Option Holder’s employment or consulting contract by the Corporation or any of its affiliates for any reason (whether such termination is lawful or unlawful) other than death, the date that the Corporation or any of its affiliates delivers written notice of such lawful or unlawful termination of the Option Holder’s employment or consulting contract to the Option Holder; or
(iii) in the case of the expiry of a fixed-term employment agreement or consulting contract that is not renewed or extended, the last day of the term.

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1.2 Choice of Law

The Plan is established under, and the provisions of the Plan shall be subject to and interpreted and construed in accordance with, the laws of the Province of Ontario.

1.3 Headings

The headings used herein are for convenience only and are not to affect the interpretation

of the Plan.

ARTICLE 2 PURPOSE AND PARTICIPATION

2.1 Purpose

The purpose of the Plan is to provide the Corporation with a share-related mechanism to attract, retain and motivate qualified Directors, Officers, Consultants and Employees, to reward such of those Directors, Officers, Consultants and Employees as may be awarded Options under the Plan by the Board from time to time for their contributions toward the long term goals of the Corporation and to enable and encourage such Directors, Officers, Consultants and Employees to acquire Common Shares as long term investments.

2.2 Participation

The Board shall, from time to time and in its sole discretion, determine which of the Eligible Persons, if any, shall be awarded Options. The Board shall only award an Option to a Consultant, Employee, or Management Corporation Employee if the Consultant, Employee, or Management Corporation Employee is a bona fide Consultant, Employee, or Management Corporation Employee of the Corporation or an affiliate of the Corporation, and the Corporation and the Option Holder shall make such a representation if required by the Regulatory Authorities. In addition, an Eligible Person subject to taxation in the United States must be employed by or providing consulting services to the Corporation or a Subsidiary on the Award Date in order to be granted an Option pursuant to the Plan. The Board may, in its sole discretion, grant the majority of the Options to Insiders of the Corporation. However, in no case shall:

(a) the number of Options awarded in a one year period to any one Consultant exceed 2% of the issued Shares of the Corporation (calculated at the time of the award);
(b) the number of Options awarded in a one year period to any one individual exceed 5% of the outstanding Shares of the Corporation (calculated at the time of the award), unless disinterested shareholder approval has been obtained;
(c) the aggregate number of Options awarded in a one year period to Persons employed to provide investor relations services exceed 2% of the issued Shares of the Corporation (calculated at the time of the award);
(d) the aggregate number of Options awarded to insiders under the Plan and any previously established and outstanding stock option plans or grants in a one year period exceed 10% of the issued Shares of the Corporation (calculated at the time of the award), unless disinterested shareholder approval has been obtained; or

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(e) the aggregate number of Common Shares reserved for issuance to insiders upon the exercise of Options awarded under the Plan and any previously established and outstanding stock option plans or grants, exceed 10% of the issued Shares of the Corporation (calculated at the time of the award), unless disinterested shareholder approval has been obtained.

2.3 Notification of Award

Following the award of an Option by the Board, the Administrator shall notify the Option Holder in writing of the award and shall enclose with such notice the Option Certificate representing the Option so awarded. Where such Options are subject to an Exchange Hold Period, the Option Certificate representing the Options so awarded will bear the such legend as required by the TSX Venture Exchange.

2.4 Copy of Plan

Each Option Holder, concurrently with the notice of the award of the Option, shall be provided with a copy of the Plan. A copy of any amendment to the Plan shall be promptly provided by the Administrator to each Option Holder.

2.5 Limitation

The Plan does not give any Option Holder that is a Director or Officer the right to serve or continue to serve as a Director or Officer of the Corporation or any of its affiliates nor does it give any Option Holder that is an Employee or Consultant the right to be or to continue to be employed with or have a consulting relationship with the Corporation or any of its affiliates.

2.6 Option Granted to Corporations

Except in relation to consultant corporations, Options may only be granted to an individual or a corporation that is wholly owned by Eligible Persons. If a corporation is an Option Holder, it must provide the TSX Venture Exchange with a completed Form 4F – Certification and Undertaking Required from a Corporation Granted an Incentive Stock Option . The corporation must agree not to effect or permit any transfer of ownership or option of shares of the corporation nor to issue further shares of any class in the corporation to any other individual or entity as long as the Option remains outstanding, except with the written consent of the TSX Venture Exchange.

2.7 Jurisdictions

Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in the jurisdictions in which the Corporation and its Related Entities operate or have Eligible Persons, or in order to comply with the requirements of any Regulatory Authorities, the Board, in its sole discretion, shall have the power and authority to: (a) determine which Related Entities shall be covered by the Plan; (b) establish or modify the terms and conditions of any Option granted to Eligible Persons to comply with any applicable laws; (c) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable; provided, however, that no such subplans and/or modifications shall increase the share limitations contained in sections 2.2 and 3.2 of this Plan; and (d) take any action, before or after an Option is granted, that it deems advisable to obtain approval or comply with any applicable laws including necessary local governmental regulatory exemptions or approvals or listing requirements of any Regulatory Authorities.

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ARTICLE 3 TERMS AND CONDITIONS OF OPTIONS

3.1 Board to Issue Common Shares

The Common Shares to be issued to Option Holders upon the exercise of Options shall be authorized and unissued Common Shares the issuance of which shall have been authorized by the Board.

3.2 Number of Common Shares

The aggregate maximum number of Common Shares which may be issued under Options issued and outstanding pursuant to this Plan and RSUs issued and outstanding pursuant to the RSU Plan is [insert 20% of the number of issued and outstanding Common Shares as of the date of the Meeting] . Any issuance of Common Shares from treasury pursuant to the exercise of Options shall cause such number of Common Shares to no longer be available for Option grants under the Plan. Common Shares in respect of which Options are cancelled or not exercised prior to expiry, for any reason, shall be available for subsequent Option grants under the Plan. No fractional shares may be purchased or issued hereunder.

3.3 Term of Option

Subject to such other terms or conditions that may be attached to an Option granted hereunder, an Option Holder may exercise any vested portion or portions of an Option in whole or in part at any time or from time to time during the Exercise Period. Any Option or part thereof not exercised within the Exercise Period shall terminate and become null, void and of no effect as of 5:00 p.m. local time in Toronto, Ontario on the Expiry Date.

3.4 Termination

Subject to subparagraphs (a) to (e) below, the Expiry Date of an Option shall be the date fixed by the Board at the time the particular Option is awarded (the “Fixed Expiry Date”), provided that the Expiry Date shall be no later than the date that is 10 years following the Award Date of such Option:

(a) Death

If the Option Holder dies while his or her Option is outstanding, then unless otherwise provided for in the Option Certificate, the following shall apply. The Expiry Date for any vested portion or portions of the Option shall be the earlier of the Fixed Expiry Date and the date that is 12 months after the date of the Option Holder’s death. The Expiry Date for any unvested portion of the Option shall be the date of the Option Holder’s death. The right to purchase Common Shares under an Option shall not vest after the date of the Option Holder’s death.

(b) Ceasing to be a Director or Officer

If the Option Holder holds an Option as a Director or Officer and the Option Holder ceases to be a Director or Officer (other than by reason of death), then the following shall apply. The Expiry Date for any vested portion or portions of the Option shall be the earlier of the Fixed Expiry Date and the date that is 90 days after the Option Holder ceases to be a Director and Officer (or such other period as may be determined by the Board, provided that such period is not more than one year) (the “Expiry Period”). Notwithstanding the foregoing, if the Option Holder ceases to be a Director or Officer for Cause, the Expiry

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Date shall be the date that the Option Holder ceases to be a Director or Officer. The Expiry Date for any unvested portion of the Option shall be the date that the Option Holder ceases to be a Director or Officer. The right to purchase Common Shares under an Option shall not vest after the date that the Option Holder ceases to be a Director or Officer.

(c) Ceasing to be an Employee or Consultant

If the Option Holder holds an Option as an Employee or Consultant and the Option Holder ceases to be an Employee or Consultant (other than by reason of death), then the following shall apply. The Expiry Date for any vested portion or portions of the Option shall be the earlier of the Fixed Expiry Date and the date that is 90 days after the Option Holders ceases to be an Employee or Consultant (or such other period as may be determined by the Board, provided that such period is not more than one year). Notwithstanding the foregoing, if the Option Holder ceases to be an Employee or Consultant for Cause, the Expiry Date shall be the Termination Date. The Expiry Date for any unvested portion of the Option shall be the Termination Date. The right to purchase Common Shares under an Option shall not vest after the Termination Date. For greater certainty, if the Corporation gives an Employee or Consultant working notice of termination of employment or the consulting contract or payment in lieu of notice or if the Corporation wrongfully or constructively dismisses the Employee or Consultant, no vesting shall occur during the working notice period or deemed notice period that the Employee or Consultant receives or should have received. The Expiry Period shall commence on the first day of such working notice period or deemed notice period.

(d) Change of Control

In the event of a Change of Control or impending Change of Control, the Board may, subject to any necessary prior written approval of the Regulatory Authorities, in its sole discretion, deal with outstanding Options in the manner it deems fair and reasonable in light of the circumstances. Without limiting the generality of the foregoing, the Board may, without any action or consent required on the part of any Option Holder:

(i) deliver a notice to the Option Holder advising the Option Holder that the unvested portion of the Option held by the Option Holder, if any, shall immediately vest;
(ii) deliver a notice to an Option Holder advising the Option Holder that the Expiry Date for any vested portion or portions of the Option shall be the earlier of the Fixed Expiry Date and the day that is 10 days following the date of the notice and the Expiry Date for any unvested portion of the Option shall be the date of the notice; or
(iii) take such other actions, and combinations of the foregoing actions, as it deems fair and reasonable under the circumstances.

(e)

Black-out Period

If an Option expires during a Black-Out Period, then, notwithstanding any other provision of the Plan, the Option shall expire 10 Business Days after the Black-Out Period is lifted by the Corporation. For the purposes hereof, a “Black-Out Period” means that period

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during which a trading black-out period is imposed by the Corporation to restrict trades in the Corporation’s securities by an Option Holder.

The foregoing subparagraphs (b) and (c) shall only apply once an Option Holder ceases to fall into any of the categories of Eligible Persons. The Board and the Administrator shall look to which of the definitions of Employee, Director, Officer or Consultant the Option Holder met immediately prior to the Option Holder ceasing to be an Eligible Person to determine which of subparagraphs (b) or (c) shall apply. If the Option Holder met more than one definition, then the following shall apply. If the Option Holder was an Employee or Consultant, then the Option Holder shall be deemed to hold his or her Option as an Employee or Consultant regardless of whether the Option Holder was also a Director or Officer.

3.5 Exercise Price

The price at which an Option Holder may purchase a Common Share upon the exercise of an Option shall be as set forth in the Option Certificate issued in respect of such Option and in any event shall not be less than the Market Price of the Common Shares as of the Award Date. If the Award Date is within ninety days following a distribution of Common Shares by the Corporation under a prospectus, the Exercise Price for such Options shall not be less than the per share price paid by the public investors for the Common Shares acquired in that distribution. For clarity, the ninety day period beings on the date the final receipt is issued for the prospectus. Notwithstanding anything else contained herein, in no case shall the Exercise Price be less than the minimum prescribed by each of the organized trading facilities as would apply to the Award Date in question. Any reduction in the Exercise Price of an Option held by an Insider at the time of the proposed amendment requires disinterested shareholder approval

3.6 Additional Terms

Subject to all applicable Securities Laws and the rules and policies of all applicable Regulatory Authorities, the Board may attach other terms and conditions to the award of a particular Option, such terms and conditions to be referred to in a schedule attached to the Option Certificate. These terms and conditions may include, but are not necessarily limited to, providing that an Option or a portion or portions of an Option expire on a certain date, after certain periods of time or upon the occurrence of certain events other than as provided for herein, provided that no Option shall expire more than ten years after the Award Date.

3.7 Assignment of Options

Options may not be assigned or transferred, provided however that the Personal Representative of an Option Holder may, to the extent permitted by section 4.1, exercise the Option within the Exercise Period.

3.8 Adjustments

If:

(a) the Common Shares are changed into or exchanged for a different number or kind of Shares of the Corporation or securities of another corporation, whether through an arrangement, amalgamation or other similar procedure or otherwise, or a share recapitalization, subdivision or consolidation;
(b) a dividend is declared upon the Common Shares, payable in Common Shares (other than in lieu of dividends paid in the ordinary course);

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(c) the Corporation distributes by way of a dividend, or otherwise, to all or substantially all holders of Common Shares, property, evidences of indebtedness or Shares or other securities of the Corporation (other than Common Shares) or rights, options or warrants to acquire Common Shares or securities convertible into or exchangeable for Common Shares or other securities or property of the Corporation, other than as a dividend in the ordinary course; or
(d) there is any other change that the Board, in its sole discretion, determines equitably requires an adjustment to be made,

then, subject to any required action by the shareholders of the Corporation and any necessary approval of the Regulatory Authorities, any term that the Board determines requires adjustment (including the number of Common Shares subject to each outstanding Option and the number of Common Shares that have been authorized for issuance under the Plan but as to which no Options have yet been granted or that have again become available for the purposes of the Plan, the Exercise Price of each outstanding Option, as well as any other terms that the Board determines require adjustment) shall be adjusted by the Board in the manner the Board deems appropriate and its determination shall be final, binding and conclusive. Except as the Board determines, no issuance by the Corporation of Shares of any class, or securities convertible into Shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Common Shares subject to an Option. No fractional shares shall be issued upon the exercise of an Option and accordingly, if as a result of the adjustment, an Option Holder would become entitled to a fractional Common Share, such Option Holder shall have the right to purchase only the next lowest whole number of Common Shares and no payment or other adjustment shall be made with respect to the fractional interest so disregarded.

3.9 Vesting

The Board, subject to the policies of the TSX Venture Exchange, may determine and impose terms upon which an Option shall become vested and exercisable. Unless otherwise specified by the Board at the time of the Option award, and subject to such other limits as may be imposed by TSX Venture Exchange policies from time to time, all Options granted under the Plan shall vest and become exercisable in full upon grant.

Notwithstanding the foregoing, Options awarded to Consultants performing investor relations activities must vest in stages over 12 months with no more than one-quarter vesting in any three month period.

3.10 Personal Information Form and Monitoring of Trading

An Option Holder who becomes a new Insider of the Corporation or who is undertaking investor relations activities must file a Personal Information Form or such other documents as may be required by the Regulatory Authorities. An Option Holder who performs investor relations activities must comply with all procedures established by the Board or the Regulatory Authorities to monitor the Option Holder’s trading in the securities of the Corporation.

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ARTICLE 4 EXERCISE OF OPTION

4.1 Exercise of Option

(a) An Option may be exercised only by the Option Holder or the Personal Representative of the Option Holder. An Option Holder or the Personal Representative of the Option Holder may exercise the vested portion or portions of an Option in whole or in part at any time or from time to time during the Exercise Period up to 5:00 p.m. local time in Toronto, Ontario on the Expiry Date by delivering to the Administrator a Exercise Notice, the applicable Option Certificate and a certified cheque or bank draft payable to the Corporation in an amount equal to the aggregate Exercise Price of the Common Shares to be purchased pursuant to the exercise of the Option.
(b) Unless otherwise required by applicable laws, or as determined in the discretion of the Board or the Administrator, the Exercise Price for Options shall be designated in Canadian dollars. A foreign Option Holder may be required to provide evidence that any currency used to pay the Exercise Price of any Option was acquired and taken out of the jurisdiction in which the Option Holder resides in accordance with applicable laws, including foreign exchange control laws and regulations. In the event the Exercise Price for an Option is paid in another foreign currency, if permitted by the Administrator, the amount payable will be determined by conversion from Canadian dollars at the exchange rate as selected by the Administrator on the date of exercise. For Option Holders subject to United States income tax, such conversion shall be determined in a manner which does not result in any adverse tax consequences to the Option Holder pursuant to Section 409A of the Code.

4.2 Issue of Share Certificates

As soon as practicable following the receipt of the Exercise Notice, the Administrator shall cause to be delivered to the Option Holder a certificate for the Common Shares purchased by the Option Holder. Where such Common Shares are subject to an Exchange Hold Period, the certificate representing such Common Shares will bear the such legend required by the TSX Venture Exchange. If the number of Common Shares in respect of which the Option was exercised is less than the number of Common Shares subject to the Option Certificate surrendered, the Administrator shall forward a new Option Certificate to the Option Holder concurrently with delivery of the share certificate for the balance of the Common Shares available under the Option.

4.3 Condition of Issue

The Options and the issue of Common Shares by the Corporation pursuant to the exercise of Options are subject to the terms and conditions of the Plan and compliance with the rules and policies of all applicable Regulatory Authorities with respect to the granting of such Options and the issuance and distribution of such Common Shares, and to all applicable Securities Laws. The Option Holder agrees to comply with all such laws, regulations, rules and policies and agrees to furnish to the Corporation any information, reports or undertakings required to comply with, and to fully cooperate with, the Corporation in complying with such laws, regulations, rules and policies.

4.4 Taxes

The Board and the Corporation may take all such measures as they deem appropriate to ensure that the Corporation’s obligations under the withholding provisions under income tax laws

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applicable to the Corporation and other provisions of applicable laws are satisfied with respect to the issuance of Common Shares pursuant to the Plan or the grant or exercise of Options under the Plan. Issuance of Common Shares or delivery of share certificates for Common Shares purchased pursuant to the Plan may be delayed, at the discretion of the Board, until the Board is satisfied that the applicable requirements of income tax laws and other applicable laws have been met.

ARTICLE 5 ADMINISTRATION

5.1 Administration

The Plan shall be administered by the Board. The Board may make, amend and repeal at any time and from time to time such regulations not inconsistent with the Plan as it may deem necessary or advisable for the proper administration and operation of the Plan and such regulations shall form part of the Plan. The Board may delegate to the Administrator or any director, officer or employee of the Corporation such administrative duties and powers as it may see fit.

5.2 Interpretation

The interpretation by the Board of any of the provisions of the Plan and any determination by it pursuant thereto shall be final and conclusive and shall not be subject to any dispute by any Option Holder. No member of the Board or any person acting pursuant to authority delegated by it hereunder shall be liable for any action or determination in connection with the Plan made or taken in good faith and each member of the Board and each such person shall be entitled to indemnification with respect to any such action or determination in the manner provided for by the Corporation.

ARTICLE 6 AMENDMENT, TERMINATION AND NOTICE

6.1 Amendments

The Board may, subject to the approval of any Regulatory Authority whose approval is required and the approval of shareholders where required by such Regulatory Authority, amend the Plan or any Option at any time. Without limiting the generality of the foregoing, the Board is specifically authorized to amend the terms of the Plan or any Option without obtaining the approval of shareholders in the following circumstances, subject to any limitations that may be prescribed by the policies of the TSX Venture Exchange from time to time:

(a) amendments of a “housekeeping” nature including, but not limited to, of a clerical, grammatical or typographical nature;
(b) to correct any defect, supply any information or reconcile any inconsistency in the Plan in such manner and to such extent as shall be deemed necessary or advisable to carry out the purposes of the Plan;
(c) a change to the vesting provisions of any Option or the Plan;
(d) amendments to reflect any changes in requirements of any Regulatory Authority to which the Corporation is subject;

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(e) a change to the termination provisions of an Option which does not result in an extension beyond the original term of the Option;
(f) in the case of any Option, the substitutions and/or adjustments contemplated under section 3.8 of this Plan; and
(g) a change to the class of Eligible Persons that may participate under the Plan,

provided that, in the case of any Option, no such amendment may, without the consent of the Option Holder, materially decrease the rights or benefits accruing to such Option Holder or materially increase the obligations of such Option Holder. Notwithstanding the foregoing, shareholder approval shall be required in respect of:

(a) any amendments to the number of Common Shares (or other securities) issuable under the Plan;
(b) any amendment which reduces the exercise price of an option that is held by an Insider;
(c) any amendment extending the term of an option held by an Insider beyond its original expiry date except as otherwise permitted by the Plan; and
(d) amendments required to be approved by shareholders under applicable law (including, without limitation, the rules, regulations and policies of the Regulatory Authorities).

Where shareholder approval is sought for amendments under subsections (b) or (c) above, the votes attached to Common Shares held directly or indirectly by Insiders benefiting from the amendment will be excluded.

6.2 Amendment Subject to Approval

If the amendment of an Option requires regulatory or shareholder approval, such amendment may be made prior to such approvals being given, but no such amended Options may be exercised unless and until such approvals are given.

6.3 Approvals

The Plan and any amendments hereto are subject to all necessary approvals of the applicable Regulatory Authorities and shareholders.

6.4 Termination

The Board may terminate the Plan at any time provided that such termination shall not alter the terms or conditions of any Option or impair any right of any Option Holder pursuant to any Option awarded prior to the date of such termination which shall continue to be governed by the provisions of the Plan.

6.5 Agreement

The Corporation and every Option awarded hereunder shall be bound by and subject to the terms and conditions of the Plan. By accepting an Option granted hereunder, the Option Holder has expressly agreed with the Corporation to be bound by the terms and conditions of the Plan.

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6.6 Notice

Any notice or other communication contemplated under the Plan to be given by the Corporation to an Option Holder shall be given by the Corporation delivering or faxing the notice to the Option Holder at the last address for the Option Holder in the Corporation’s records. Any such notice shall be deemed to have been given on the date on which it was delivered, or in the case of fax, the next Business Day after transmission. An Option Holder may, at any time, advise the Corporation of a change in the Option Holder’s address or fax number.

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SCHEDULE “A”

STOCK OPTION PLAN OPTION CERTIFICATE

This Certificate is issued pursuant to the provisions of Spectra7 Microsystems Inc.’s (the “Corporation”) Stock Option Plan (the “Plan”) and evidences that h is the holder (the “Option Holder”) of an option (the “Option”) to purchase up to h Common shares (the “Common Shares”) in the capital stock of the Corporation at a purchase price of Cdn. $h per Common Share.

Subject to the provisions of the Plan:

(a) the Award Date of the Option is h;
(b) the Fixed Expiry Date of the Option is h; and
h
(c) the Expiry Period is .

The vested portion or portions of the Option may be exercised at any time and from time to time from and including the Award Date through to 5:00 p.m. local time in Toronto, Ontario on the Expiry Date by delivering to the Administrator of the Plan Exercise Notice in the form attached, together with this Certificate and a certified cheque or bank draft payable to the Corporation in an amount equal to the aggregate of the Exercise Price of the Common Shares in respect of which the Option is being exercised.

This Certificate and the Option evidenced hereby is not assignable, transferable or negotiable and is subject to the detailed terms and conditions contained in the Plan, the terms and conditions of which the Option Holder hereby expressly agrees with the Corporation to be bound by. This Certificate is issued for convenience only and in the case of any dispute with regard to any matter in respect hereof, the provisions of the Plan and the records of the Corporation shall prevail.

The Option is also subject to the terms and conditions contained in the schedules, if any, attached hereto. All terms not otherwise defined in this Certificate shall have the meanings given to them under the Plan.

Dated this h day of h.

SPECTRA7 MICROSYSTEMS INC.

Per:

Administrator, Stock Option Plan

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OPTION CERTIFICATE - SCHEDULE

The additional terms and conditions attached to the Option represented by this Option Certificate are as follows:

h; and
h.

SPECTRA7 MICROSYSTEMS INC.

Per:

Administrator, Stock Option Plan

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SCHEDULE “A”

STOCK OPTION PLAN EXERCISE NOTICE

TO: The Administrator, Stock Option Plan Spectra7 Microsystems Inc. (the “Corporation”)

The undersigned hereby irrevocably gives notice, pursuant to the Corporation’s Stock Option Plan (the “Plan”), of the exercise of the Option to acquire and hereby subscribes for (cross out inapplicable item) :

(d) all of the Common Shares; or

(e) _______ of the Common Shares;

which are the subject of the Option Certificate attached hereto.

The undersigned tenders herewith a certified cheque or bank draft (circle one) payable to the Corporation in an amount equal to the aggregate Exercise Price of the aforesaid Common Shares exercised and directs the Corporation to issue the certificate evidencing said Common Shares in the name of the undersigned to be mailed to the undersigned at the following address:

By executing this Exercise Notice, the undersigned hereby confirms that the undersigned has read the Plan and agrees to be bound by the provisions of the Plan. All terms not otherwise defined in this Exercise Notice shall have the meanings given to them under the Plan or the attached Option Certificate.

DATED the _ day of ____, _.

Signature of Option Holder

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SCHEDULE "D" RESTRICTED SHARE UNIT PLAN

1. Defined Terms

For the purposes of this Plan, the following terms shall have the following meanings:

“ Affiliate ” shall have the meaning ascribed thereto by the Exchange;

“ Associate ” shall have the meaning ascribed thereto by the Exchange;

“ Award ” means the RSUs granted to an Eligible Person under this Plan on an Award Date, evidenced by an Award Agreement and subject to the terms and conditions of this Plan and the Award Agreement;

“ Award Agreement ” means an agreement entered into by an Eligible Person and the Corporation pursuant to which an Award is granted to the Eligible Person in accordance with this Plan, and containing such additional terms and conditions not inconsistent with this Plan as the Board shall deem desirable;

“ Award Date ” means the date on which an Award is granted, which date may be on or, if determined by the Board at the time of grant, after the date that the Board resolves to grant the Award;

“ Black-Out Period ” means the period of time during which the Corporation has imposed trading restrictions on a RSU Holder;

“ Board ” means the board of directors of the Corporation or any committee thereof to which the board of directors of the Corporation has delegated the power to administer and grant securities under the Plan;

“ Cause ” means, as determined by the Board and unless otherwise provided in an applicable agreement between a RSU Holder and the Corporation or an Affiliate or Subsidiary of the Corporation: (i) gross negligence or wilful misconduct by a RSU Holder in connection with the performance of duties; (ii) commission by a RSU Holder of a criminal offence (other than minor traffic offences); or (iii) material breach by a RSU Holder of any term of any employment, consulting or other services, confidentiality, intellectual property or non-competition agreement between the RSU Holder and the Corporation or an Affiliate or Subsidiary of the Corporation;

“ Change of Control Transaction ” means and shall be deemed to have occurred if one of the following events takes place:

(a) the sale, transfer or other disposition of all or substantially all of the Corporation’s assets in complete liquidation or dissolution of the Corporation;
(b) the Corporation amalgamates or enters into a plan of arrangement with another Corporation at arm’s length to the Corporation and its affiliates, other than an

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amalgamation or plan of arrangement that would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or resulting entity) more than 50% of the combined voting power of the surviving or resulting entity outstanding immediately after such amalgamation or plan of arrangement; or

(c) any Person or combination of Persons at arm’s length to the Corporation and its affiliates acquires or becomes the beneficial owner of, directly or indirectly, more than 50% of the voting securities of the Corporation, whether through the acquisition of previously issued and outstanding voting securities, or of voting securities that have not been previously issued, or any combination thereof, or any other transaction having a similar effect;

“ Code ” means the United States Internal Revenue Code of 1986, as amended from time to time, together with the regulations and official guidance promulgated thereunder;

“ Common Shares ” means the common shares in the capital of the Corporation;

“ Consultant ” has the meaning given to that term in the policies of the Exchange and includes a Consultant Company;

“ Consultant Company ” means, for an individual consultant, a company or partnership of which the individual is an employee, shareholder or partners;

“ Corporation ” means Spectra7 Microsystems Inc.;

“ Director ” means a director of the Corporation or a Subsidiary, to whom Awards and RSU Shares can be granted in reliance on a prospectus exemption under applicable securities laws;

“ Disinterested Shareholder Approval ” means approval by a majority of the votes cast by all shareholders entitled to vote at a meeting of shareholders of the Corporation excluding votes attached to shares beneficially owned by Insiders to whom Awards may be granted under this Plan and their Associates;

“ Eligible Person ” means a person who is a Director, Officer, Employee, or Consultant and includes companies that are wholly owned by Eligible Persons;

“ Employee ” means an employee of the Corporation and any Related Entity of the Corporation;

“ Exchange ” means the TSX Venture Exchange and any successor entity thereof;

“ Exchange Act ” means the United States Securities Exchange Act of 1934 , as amended;

“ Insider ” shall have the meaning given to that term in the Securities Act (Ontario).

D - 3

“ Investor Relations Activities ” means any activities, by or on behalf of the Corporation or a shareholder of the Corporation, that promote or could reasonably be expected to promote the sale of securities of the Corporation

“ Market Price ” of the Common Shares for a particular Vesting Date shall be determined as follows:

(a) for each organized trading facility on which the Common Shares are listed, Market Price shall be the closing trading price of the Common Shares on the last trading day immediately preceding the Vesting Date;
(b) if the Common Shares are listed on more than one organized trading facility, then Market Price shall be the greater of the Market Prices determined for each organized trading facility on which those Common Shares are listed as determined for each organized trading facility in accordance with section (a) above;
(c) if the Common Shares are listed on one or more organized trading facility but have not traded during the 10 trading day period immediately preceding the Vesting Date, then the Market Price shall be, subject to the necessary approvals of the applicable Regulatory Authorities, such value as is determined by resolution of the Board; and
(d) if the Common Shares are not listed on any organized trading facility, then the Market Price shall be, subject to the necessary approvals of the applicable Regulatory Authorities, the fair market value of the Common Shares on the Vesting Date as determined by the Board in its discretion;

“ Offer ” means an offer made generally to the holders of Common Shares (or any class of common shares of the Corporation) in one or more jurisdictions to acquire, directly or indirectly, the Common Shares and which is in the nature of a “takeover bid” as defined in the Securities Act (Ontario) and, where any of the Common Shares are listed and posted for trading on a stock exchange, not exempt from the formal bid requirements of the Securities Act (Ontario);

“ Officer ” means an officer of the Corporation and for the purposes of the Plan includes officers of the Corporation and any Related Entity of the Corporation;

“ Option ” means an option to subscribe for either Common Shares granted pursuant to the terms of the Stock Option Plan;

“ Other Share Compensation Arrangement ” means, other than this Plan and any Awards, any previously established and outstanding stock option plans or grants;

“ Person ” means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, Corporation or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency or entity however designated or constituted;

D - 4

“ Plan ” means this Restricted Share Unit Plan of the Corporation, as it may be amended from time to time;

“ Regulatory Authorities ” means all stock exchanges, inter-dealer quotation networks and other organized trading facilities on which the Common Shares are listed or quoted for trading and all securities commissions or similar securities regulatory bodies having jurisdiction over the Corporation;

“ Related Entity ” has the meaning given to that term in National Instrument 45-106 – Prospectus and Registration Exemptions ;

“ Restricted Share Unit ” or “ RSU ” means a restricted share unit granted under the Plan;

“ RSU Holder ” shall have the meaning as set forth in subsection 9(b);

“ RSU Shares ” means the Common Shares that a RSU Holder may receive pursuant to a particular Award Agreement;

“ Stock Option Plan ” means the incentive stock option plan of the Corporation, as it may be amended from time to time;

“ Subsidiary ” means any entity (other than the Corporation), that is a subsidiary of the Corporation as such term is defined in the Canada Business Corporations Act , as amended, varied or re-enacted from time to time;

“ Unsolicited Offer ” means an Offer in respect of which neither the Board nor management of the Corporation solicited, sought out, or otherwise arranged for the offeror party to make such Offer; and

“ Vesting Date ” or “ Vesting Dates ” shall have the meaning as set forth in subsection 9(c).

2. Interpretation

References to the outstanding Common Shares at any point in time shall be computed on a nondiluted basis.

3. Purpose of the Plan

The purpose of this Plan is to promote the interests of the Corporation and its shareholders through the grant of Awards, by:

(a) providing an incentive mechanism to foster the interest of Eligible Persons in the success of the Corporation, its Affiliates and its Subsidiaries;
(b) encouraging Eligible Persons to remain with the Corporation, its Affiliates or its Subsidiaries; and
(c) attracting new Directors, Officers, Employees and Consultants.

D - 5

4. Administration of the Plan

(a) This Plan shall be administered by the Board. Subject to the provisions of this Plan, the Board shall have the authority:
(i) to determine the Eligible Persons to whom Awards are granted, to determine whether such Awards shall be in respect of Common Shares, to grant such Awards, and to determine any terms and conditions, limitations and restrictions in respect of any particular Award grant, including but not limited to the nature and duration of the restrictions, if any, to be imposed upon the acquisition, pledge, sale or other disposition of RSU Shares deliverable pursuant to the grants of Awards, and the nature of the events and the duration of the period, if any, in which any RSU Holders’ rights in respect of an Award may be forfeited; and
(ii) to interpret the terms of this Plan, to make all such determinations and take all such other actions in connection with the implementation, operation and administration of this Plan, and to adopt, amend and rescind such administrative guidelines and other rules and regulations relating to this Plan, as it shall from time to time deem advisable, including without limitation for the purpose of ensuring compliance with section 5 hereof.
(b) The Board’s interpretations, determinations, guidelines, rules and regulations shall be conclusive and binding upon the Corporation, Eligible Persons, RSU Holders and all other persons.

5. Compliance with Legislation

(a) This Plan, the grant of Awards hereunder and the Corporation’s obligation to issue and/or deliver any RSU Shares pursuant to Awards shall be subject to all applicable federal, provincial and foreign laws, policies, rules and regulations, to the policies, rules and regulations of any stock exchange or other market on which the Common Shares are listed or quoted for trading and to such approvals by any governmental or regulatory agency as may, in the opinion of counsel to the Corporation, be required. The Corporation shall not be obligated by the existence of this Plan or any provision of this Plan or the grant of Awards hereunder to issue and/or deliver RSU Shares in satisfaction of grants of Awards in violation of such laws, policies, rules and regulations or any condition or requirement of such approvals. Each RSU Holder shall agree to comply with such laws, regulations and rules and to provide to the Corporation any information or undertaking required to comply with such laws, regulations and rules.
(b) No Award shall be granted and no RSU Shares shall be issued or delivered hereunder where such grant, issue and/or delivery would require registration or other qualification of this Plan or the Common Shares under the securities laws of any foreign jurisdiction, and any purported grant of any Award or any issue and/or delivery of RSU Shares hereunder in violation of this provision shall be void.

D - 6

(c) RSU Shares issued or delivered to RSU Holders pursuant to an Award shall be subject to restrictions on resale and transfer under applicable securities laws and the requirements of any stock exchange or other market on which the Common Shares are listed or quoted for trading, and any certificates representing such RSU Shares shall bear, as required, a restrictive legend in respect thereof.
(d) An Eligible Person subject to taxation in the United States must be employed by or providing services to the Corporation or a Subsidiary on the Award Date in order to be granted an Award under the Plan.
(e) Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in the jurisdictions in which the Corporation and its Related Entities operate or have Eligible Persons, or in order to comply with the requirements of any Regulatory Authorities, the Board, in its sole discretion, shall have the power and authority to: (i) determine which Related Entities shall be covered by the Plan; (ii) establish or modify the terms and conditions of any Award granted to Eligible Persons to comply with any applicable laws; (iii) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable; provided, however, that no such subplans and/or modifications shall increase the share limitations contained in subsection 6(a) of this Plan; and (iv) take any action, before or after an Award is granted, that it deems advisable to obtain approval or comply with any applicable laws including necessary local governmental regulatory exemptions or approvals or listing requirements of any securities exchange.
(f) To the extent desirable to qualify applicable Awards granted pursuant to the Plan as exempt under Exchange Act Rule 16b-3, such transactions will be approved by the entire Board (or a committee of the Board consisting of two or more “nonemployee directors” within the meaning of Exchange Act Rule 16b-3) and any Award granted to an individual who is then subject to Section 16 of the Exchange Act with respect to Common Shares shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3 of the Exchange Act and any amendments thereto).

6. Shares Reserved

(a) The aggregate number of Common Shares that may be reserved for issuance pursuant to this Plan and the Stock Option Plan shall not exceed [insert 20% of the number of issued and outstanding Common Shares as of the date of the Meeting] . The number of RSU Shares subject to any Award (or any portion thereof) that has vested and been redeemed shall no longer be available again to be made the subject of new Awards under this Plan. The number of RSU Shares subject to any Award (or any portion thereof) that has expired or is forfeited, surrendered, cancelled or otherwise terminated prior to the delivery of RSU Shares pursuant to the Award, shall automatically become available again to be made the subject of new Awards under this Plan. In addition, the number of RSU Shares subject to an Award (or portion thereof) that the Corporation permits to be settled in cash in lieu of

D - 7

settlement in RSU Shares shall automatically become available again to be made the subject of new Awards under this Plan.

(b) Subject to any required approvals of applicable Regulatory Authorities and stock exchanges, in the event of any change in the Common Shares by reason of any stock dividend, recapitalization, merger, consolidation, division, combination or exchange of shares, or rights offering to purchase the Common Shares at a price substantially below fair market value, or of any similar change affecting the Common Shares, the number and kind of shares which thereafter may be delivered under this Plan and the number and kind of shares subject to an Award in outstanding Award Agreements shall be appropriately adjusted consistent with such change in such manner as the Board may deem equitable to prevent substantial dilution or enlargement of the rights granted to, or available for, RSU Holders.
(c) The Corporation shall not be required to issue fractional Common Shares in satisfaction of its obligations hereunder. Any fractional interest in a Common Share that would, except for the provisions of this subsection 6(c), be deliverable upon the exercise of any Award settled by the delivery of Common Shares shall be cancelled and not be deliverable by the Corporation, provided that any fractional interest in a Common Share underlying an Award may only be exercised with other fractional interests to result in the issuance of a whole Common Share.
(d) The Corporation shall, at all times while this Plan is in effect, reserve and keep available such number of Common Shares as will be sufficient to satisfy the requirements of this Plan.
(e) The issuance of Common Shares under this Plan shall be subject to the following:
(i) To any one person. The number of Common Shares reserved for issuance to any one person in any 12-month period under this Plan and any Other Share Compensation Arrangement shall not exceed 5% of the outstanding Common Shares at the time of the grant unless the Corporation has obtained Disinterested Shareholder Approval to exceed such limit.
(ii) To Consultants. The number of Common Shares reserved for issuance to any one Consultant in any 12-month period under this Plan and any Other Share Compensation Arrangement shall not exceed 2% of the outstanding Common Shares at the time of the grant.
(iii) To person conducting Investor Relations Activities. The number of Common Shares reserved for issuance to any persons primarily conducting Investor Relations Activities in any 12-month period under this Plan and any Other Share Compensation Arrangement shall not exceed an aggregate of 2% of the outstanding Common Shares at the time of the grant.
(iv) To Insiders. Unless the Corporation has received Disinterested Shareholder Approval to do so:

D - 8

the aggregate number of Common Shares reserved for issuance to Insiders under this Plan and any Other Share Compensation Arrangements shall not exceed 10% of the outstanding Common Shares at the time of the grant; and
the aggregate number of Common Shares reserved for issuance pursuant to awards granted to Insiders in any 12-month period under this Plan and any Other Share Compensation Arrangements shall not exceed 10% of the outstanding Common Shares at the time of the grant.

7. Non-Exclusivity

Nothing contained herein shall prevent the Board from adopting such other incentive or compensation arrangements as it shall deem advisable, including any other share compensation arrangement.

8. Effective Date

This Plan shall be subject to the approval of any Regulatory Authority whose approval is required.

9. Grant of Awards

(a) Grant of Awards . In addition to the Board’s authority as set out in section 4, the Board shall determine the number of RSUs granted under each Award. The Board shall further have discretion to establish at the time of grant, within the restrictions set forth in this Plan, the Award Date, the Vesting Date or Vesting Dates, the conditions under which Awards may be granted, including, without limitation, the passage of time or the attainment of performance objectives which must be attained for the Award to vest, if any, and other particulars applicable to an Award granted hereunder.
(b) Award Agreement . Upon the grant of an Award, the Corporation will deliver to the Eligible Person selected to receive such Award an Award Agreement dated as of the Award Date, containing the terms of the Award and executed by the Corporation, and upon delivery to the Corporation of the Award Agreement executed by the Eligible Person in question, the Eligible Person in question will be a RSU holder (a “ RSU Holder ”) under this Plan and, subject to vesting, have the right to receive the RSU Shares (or, at the Corporation’s option, cash equal to the Market Price of such RSU Shares on the applicable Vesting Date) on the terms set out in the Award Agreement and in the Plan. Award Agreements will be subject to the applicable provisions of this Plan and will contain such provisions as are required by this Plan and any other provisions the Board may direct. Each RSU Holder will, when requested by the Corporation, sign and deliver all such documents relating to the granting of Awards which the Corporation deems necessary or desirable.
(c) Vesting Date .

D - 9

(i) The vesting date or vesting dates of an Award will be determined in accordance with the instructions of the Board issued at the time of grant (the “ Vesting Date ” or “ Vesting Dates ”, as applicable), and will be subject to the provisions of subsection 9(d) relating to expiry and to the RSU Holder having been in active employment or engagement with the Corporation throughout the intervening period from the Award Date.
(ii) Unless the Board determines otherwise in accordance with subsection 9(c)(i), Awards shall vest in four equal portions on Vesting Dates to occur on the first, second, third and fourth anniversaries from the date of grant of such Award.

(d) Expiry of Awards .

(i) Unless otherwise determined by the Board at or after the time of grant where vesting of an Award is subject to conditions (including, without limitation, the passage of time or the attainment of performance objectives), such Award, or part thereof, shall expire unexercised on the applicable Vesting Date if such conditions have not been satisfied and the number of RSU Shares subject to such Award (or any portion thereof) shall automatically become available again to be made the subject of new Awards under this Plan.
(ii) If a RSU Holder who is an Officer, Employee or Consultant is terminated for Cause, any Awards held by the RSU Holder that have not yet vested at the date of termination are immediately forfeited to the Corporation and the number of RSU Shares subject to such Award (or any portion thereof) shall automatically become available again to be made the subject of new Awards under this Plan.
(iii) If a RSU Holder dies prior to otherwise ceasing to be an Eligible Person: (i) any Awards held such RSU Holder that are not yet vested at the time of death are immediately forfeited to the Corporation at such time and the number of RSU Shares subject to such Award (or any portion thereof) shall automatically become available again to be made the subject of new Awards under this Plan; and (ii) any Awards held by such RSU Holder that have vested as at the time of death will enure to the benefit of such RSU Holder’s legal representative.
(iv) Unless an Award Agreement specifies otherwise, if a RSU Holder ceases to be an Eligible Person for any reason whatsoever other than death or termination for Cause, any Awards held by the RSU Holder that are not yet vested at the date that such RSU Holder ceases to be an Eligible Person are immediately forfeited to the Corporation on such date and the number of RSU Shares subject to such Award (or any portion thereof) shall automatically become available again to be made the subject of new Awards under this Plan.

D - 10

(e) Non-Assignable . An Award will not be assignable or transferred, except in accordance with the applicable policies and rules of the Exchange and applicable securities laws.
(f) Settlement of the Award . Unless an Award has expired in accordance with subsection 9(d), the Corporation shall, as soon as practicable and within the time permitted by legislation after the applicable Vesting Date:
(i) issue from treasury the number of RSU Shares represented by such vested Award and direct its transfer agent to issue a certificate in the name of the RSU Holder of such vested Award (or, if deceased, his or her legal representative) which will be issued as fully paid and non-assessable shares; or
(ii) purchase the number of RSU Shares represented by such vested Award on the secondary market for delivery to the RSU Holder of such vested Award (or, if deceased, his or her legal representative); or
(iii) unless the Award Agreement provides otherwise, pay to the RSU Holder of such vested Award (or, if deceased, his or her legal representative), an amount in cash per RSU Share represented by such Award equal to the Market Price on the applicable Vesting Date.

Whether an Award is settled in accordance with subsections 9(f)(i), 9(f)(ii) or 9(f)(iii) shall be at the sole discretion of the Corporation. In addition to the foregoing, with respect to an Award granted to an Eligible Person who is subject to taxation in the United States on the Award Date, except as otherwise determined by the Board and set forth in any applicable Award Agreement, in no event shall the settlement date occur following the later of (1) the 15th day of the third month following the end of calendar year in which the applicable portion of the Award vests; or (2) the 15th day of the third month following the end of the Corporation’s fiscal year in which the applicable portion of the Award vests.

(g) Black-Out Period . In the event that a RSU Holder receives Common Shares from the Corporation in satisfaction of an Award during a Black-Out Period, the RSU Holder shall not be entitled to sell or otherwise dispose of such Common Shares until receipt from the Corporation of notice that such Black-Out Period has expired.

10. Change of Control Transactions and Unsolicited Offers

Notwithstanding any provisions to the contrary contained in this Plan, the Board shall have the power to accelerate the time at which a RSU may vest or the time during which a RSU or any part thereof will become fully vested including, without limitation, prior to or in connection with a Change of Control Transaction or an Unsolicited Offer; provided, however, that with respect to an RSU granted to an Eligible Person who is subject to taxation in the United States at the effective time of such Board action, the Board’s action must either (a) preserve the exemption of the Award from Code Section 409A or (b) comply with Code Section 409A.

D - 11

11. Amendment and Termination of Plan

The Board retains the right to amend from time to time or to suspend, terminate or discontinue the terms and conditions of the Plan by resolution of the Board. Any amendments shall be subject to the prior consent of any applicable regulatory bodies, including the Exchange, as may be required. Any amendment to the Plan shall take effect only with respect to Awards granted after the effective date of such amendment, provided that it may apply to any outstanding Awards with the mutual consent of the Corporation and the RSU Holders to whom such Awards have been granted. If this Plan is suspended or terminated, the provisions of this Plan and any administrative guidelines, rules and regulations relating to this Plan shall continue in effect for the duration of such time as any Award remains outstanding. The Board shall have the power and authority to approve amendments relating to the Plan or to Awards, without further approval of the shareholders, to the extent that such amendment:

(a) is for the purpose of curing any ambiguity, error or omission in the Plan or to correct or supplement any provision of the Plan that is inconsistent with any other provision of the Plan;
(b) is necessary to comply with applicable law or the requirements of the Exchange;
(c) is an amendment to the Plan respecting administration and eligibility for participation under the Plan;
(d) alters, extends or accelerates the terms of vesting applicable to any Awards;
(e) changes the termination provisions of an Award or the Plan which does not entail an extension beyond the original expiry date of an Award;
(f) is an amendment to the Plan of a “housekeeping nature”; or
(g) does not require shareholder approval under applicable law (including, without limitation, the rules, regulations and policies of the Exchange),

provided that in the case of any alteration, amendment or variance referred to in this section 11 the alteration, amendment or variance does not:

(i) amend the number of Common Shares issuable under the Plan;
(ii) add any form of financial assistance by the Corporation for the exercise of an Award;
(iii) result in a material or unreasonable dilution in the number of outstanding Common Shares or any material benefit to an Eligible Person; or
(iv) change the class of eligible participants to the Plan which would have the potential of broadening or increasing participation by Insiders of the Corporation;

D - 12

(v) constitute any amendment proscribed and/or requiring shareholder approval under the rules of the Exchange;

and further provided that:

(vi) any Awards granted prior to the acceptance and approval of such amendments by the Exchange shall be conditional upon such approval and acceptance being given and no such Awards may be exercised unless and until such approval and acceptance are given.

Without limiting the generality of the foregoing, but subject to any required approval of any Regulatory Authority or stock exchange, the Board may amend the expiry date and the termination provisions of Awards granted pursuant to the Plan, without shareholder approval, provided that if the Board proposes to extend the expiry date of an Award held by a RSU Holder who is an Insider of the Corporation at the time of the amendment, such amendment will require Disinterested Shareholder Approval.

12. General Provisions

(a) Nothing in this Plan or any Award shall confer upon a RSU Holder any rights as a shareholder of the Corporation with respect to any RSU Shares underlying any Award unless and until such RSU Holder shall have become a holder of RSU Shares, if any, that the RSU Holder has received upon the vesting of an Award in accordance with its terms.
(b) The participation in the Plan of an Eligible Person shall be entirely optional. Nothing in this Plan or any Award shall confer upon a RSU Holder any right to continue in the employ of the Corporation or any Affiliate or Subsidiary of the Corporation or affect in any way the right of the Corporation or any Affiliate or Subsidiary of the Corporation to terminate the RSU Holders’ employment, with or without Cause, at any time; nor shall anything in this Plan or any Award be deemed or construed to constitute an agreement, or an expression of intent, on the part of the Corporation or any Affiliate or Subsidiary of the Corporation to extend the employment of any RSU Holder beyond the time which the RSU Holder would normally be retired pursuant to the provisions of any present or future retirement plan of the Corporation or any Affiliate or Subsidiary of the Corporation, or beyond the time at which he would otherwise be retired pursuant to the provisions of any contract of employment with the Corporation or any Affiliate or Subsidiary of the Corporation. No RSU Holder has any claim or right to be granted an Award and the granting of any Award is not to be construed as giving a RSU Holder a right to remain as an Employee, Director, Officer of Consultant of the Corporation or any Affiliate or Subsidiary of the Corporation.
(c) No Eligible Person shall acquire the automatic right to be granted one or more RSUs under the terms of the Plan by reason of any previous grant of RSUs under the terms of the Plan.

D - 13

(d) The Plan does not provide for any guarantee in respect of any loss or profit that may result from fluctuations in the price of the Common Shares.
(e) To the extent the vesting of an Award hereunder gives rise to any tax or other statutory withholding obligation (including, without limitation, income and payroll withholding taxes imposed by any jurisdiction), the Board may implement appropriate procedures to ensure that the tax withholding obligations are met. These procedures may include, without limitation, increased withholding from a RSU Holder’s regular compensation, cash payments by a RSU Holder or the sale of a portion of the RSU Shares issued pursuant to an Award, which sale may be required and initiated by the Board. Unless otherwise determined by the Board, any such procedure, including offering choices among procedures, will be applied consistently with respect to all similarly situated RSU Holders, except to the extent any procedure may not be permitted under the laws of the applicable jurisdiction. The Corporation shall assume no responsibility as regards to the tax consequences that participation in the Plan will have for a RSU Holder and such persons are urged to consult their own tax advisors in such regard. Except as otherwise expressly set forth in an Award Agreement, it is intended that Awards granted under the Plan to Eligible Persons subject to taxation in the United States either be exempt from, or comply with, the requirements of Code Section 409A. To the extent an Award is subject to Code Section 409A (a “409A Award”), the terms of the Plan, the Award and any related Award Agreement shall be interpreted to comply with the requirements of Code Section 409A so that the RSU Holder is not subject to additional tax or interest under Code Section 409A, unless the Board expressly provides otherwise. A 409A Award shall be subject to such additional rules and requirements as specified by the Board from time to time in order for it to comply with the requirements of Code Section 409A. In this regard, if any amount under a 409A Award is payable upon a “separation from service” to an individual who is considered a “specified employee” (as each term is defined under Code Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the RSU Holder’s separation from service or (ii) the RSU Holder’s death, but only to the extent such delay is necessary to prevent such payment from being subject to Code Section 409A(a)(1).
(f) This Plan, all Award Agreements, the grant of Awards hereunder, and the issue and/or delivery of RSU Shares hereunder shall be, as applicable, governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein without regard to principles of conflicts of laws that would impose the laws of another jurisdiction. The Courts of the Province of Ontario shall have the exclusive jurisdiction to hear and decide any disputes or other matters arising herefrom.
(g) This Plan is effective as of February 5, 2013, as amended on June 18, 2014, July 22, 2015, June 16, 2016, June 15, 2017, June 20, 2019, and June 18, 2021.

E - 1

SCHEDULE "E" OBCA CONTINUANCE ARTICLES

See following page.

Ontario Corporation Number Numéro de la société en Ontario

For Ministry Use Only À l'usage exclusif du ministère

ARTICLES OF CONTINUANCE STATUTS DE MAINTIEN

Form 6 Business Corporations Act

Formule 6 Loi sur les sociétés par actions

The name of the corporation is: (Set out in BLOCK CAPITAL LETTERS) Dénomination sociale de la société : (Écrire en LETTRES MAJUSCULES SEULEMENT) :

==> picture [433 x 97] intentionally omitted <==

----- Start of picture text -----

S P E C T R A 7 M I C R O S Y S T E M S I N C .
----- End of picture text -----

The corporation is to be continued under the name (if different from 1 ):
Nouvelle dénomination sociale de la société (si elle différente de celle inscrite ci-dessus) :

==> picture [433 x 98] intentionally omitted <==

Name of jurisdiction the corporation is leaving: / Nom du territoire (province ou territoire, État ou pays) que quitte la société :

Canada

Name of jurisdiction / Nom du territoire

Date of incorporation/amalgamation: / Date de la constitution ou de la fusion :

2010/10/12

Year, Month, Day / année, mois, jour

The address of the registered offi ce is: / Adresse du siège social en :

110 Cochrane Drive, Suite 202

Street & Number or R.R. Number & if Multi-Offi ce Building give Room No.

Rue et numéro ou numéro de la R.R. et, s'il s'agit d'un édifi ce à bureaux, numéro du bureau

ONTARIO

Regional Municipality of York

Name of Municipality or Post Offi ce / Nom de la municipalité ou du bureau de poste

L 3 R 9 S 1

Postal Code/Code postal

07171 (2011/05)

Page 1 of/de 7

6. Number of directors is/are: Nombre d'administrateurs : Fixed number ORminimum and maximum Nombre fi xe OUminimum et maximum 7. The director(s) is/are: / Administrateur(s) : First name, middle names and sur- name Prénom, autres prénoms et nom de famille Address for service, giving Street & No. or R.R. No., Municipality, Province, Country and Postal Code Domicile élu, y compris la rue et le numéro ou le numéro de la R.R., le nom de la municipalité, la province, le pays et le code postal Resident Canadian State 'Yes' or 'No' Résident canadien Oui/Non 3 11 Ronald Pasek 16235 Oak Glen Avenue Morgan Hill CA United States 95037 No Raouf Halim 7 Pelican Vista Drive, Newport Coast CA United States 92657 No Roger Maggs Westrip Barns, Cherington Tetbury Gloucestershire GL8 8SL United Kingdom No	6. Number of directors is/are: Nombre d'administrateurs : Fixed number ORminimum and maximum Nombre fi xe OUminimum et maximum 7. The director(s) is/are: / Administrateur(s) : First name, middle names and sur- name Prénom, autres prénoms et nom de famille Address for service, giving Street & No. or R.R. No., Municipality, Province, Country and Postal Code Domicile élu, y compris la rue et le numéro ou le numéro de la R.R., le nom de la municipalité, la province, le pays et le code postal Resident Canadian State 'Yes' or 'No' Résident canadien Oui/Non 3 11	6. Number of directors is/are: Nombre d'administrateurs : Fixed number ORminimum and maximum Nombre fi xe OUminimum et maximum 7. The director(s) is/are: / Administrateur(s) : First name, middle names and sur- name Prénom, autres prénoms et nom de famille Address for service, giving Street & No. or R.R. No., Municipality, Province, Country and Postal Code Domicile élu, y compris la rue et le numéro ou le numéro de la R.R., le nom de la municipalité, la province, le pays et le code postal Resident Canadian State 'Yes' or 'No' Résident canadien Oui/Non 3 11	6. Number of directors is/are: Nombre d'administrateurs : Fixed number ORminimum and maximum Nombre fi xe OUminimum et maximum 7. The director(s) is/are: / Administrateur(s) : First name, middle names and sur- name Prénom, autres prénoms et nom de famille Address for service, giving Street & No. or R.R. No., Municipality, Province, Country and Postal Code Domicile élu, y compris la rue et le numéro ou le numéro de la R.R., le nom de la municipalité, la province, le pays et le code postal Resident Canadian State 'Yes' or 'No' Résident canadien Oui/Non 3 11
		16235 Oak Glen Avenue Morgan Hill CA United States 95037 7 Pelican Vista Drive, Newport Coast CA United States 92657 Westrip Barns, Cherington Tetbury Gloucestershire GL8 8SL United Kingdom	No No No

Restrictions, if any, on business the corporation may carry on or on powers the corporation may exercise. Limites, s'il y a lieu, imposées aux activités commerciales ou aux pourvoirs de la société.

The Corporation is not restricted by these articles of incorporation from carrying on any business or businesses.

07171 (2011/05)

Page 2 of/de 7

The classes and any maximum number of shares that the corporation is authorized to issue: Catégories et nombre maximal, s'il y a lieu, d'actions que la société est autorisée à émettre :

The Corporation is authorized to issue an unlimited number of shares without nominal or par value of a class designated as common shares (hereinafter called the "Common Shares").

07171 (2011/05)

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Rights, privileges, restrictions and conditions (if any) attaching to each class of shares and directors authority with respect to any class of shares which may be issued in series:
Droits, privilèges, restrictions et conditions, s'il y a lieu, rattachés à chaque catégorie d'actions et pouvoirs des administrateurs relatifs à chaque catégorie d'actions qui peut être émise en série :

The holders of the Common Shares are entitled to: (i) vote at any meeting of the shareholders of the Corporation other than meetings of the holders of another class of shares; (ii) to receive the remaining property of the Corporation upon dissolution; and (iii) the received any dividend declared by the directors of the Corporation on the Common Shares

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The issue, transfer or ownership of shares is/is not restricted and the restrictions (if any) are as follows: L'émission, le transfert ou la propriété d'actions est/n'est pas restreint. Les restrictions, s'il y a lieu, sont les suivantes : None

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Other provisions, (if any):
Autres dispositions s'il y a lieu :

(a) The Corporation shall have a lien on any share registered in the name of a shareholder or his legal representative for a debt of that shareholder to the Corporation.

(b) The directors of the Corporation may, without authorization of the shareholders of the Corporation:

(i) borrow money upon the credit of the Corporation;

(ii) issue, reissue, sell or pledge debt obligations of the Corporation;

(iii) give a guarantee on behalf of the Corporation to secure performance of an obligation of any person; and (iv) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the Corporation, owned or subsequently acquired, to secure any debt, obligation or liability of the Corporation.

To the maximum extent permitted by law, the directors may by resolution delegate, either generally or in any particular case, any or all of the powers referred to in this clause to a director, a committee of directors or an officer of the Corporation, and any reference in this clause to the directors includes, for greater certainty, any further authorized delegate.

(c) The board of directors are hereby empowered from time to time to appoint one or more directors, who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of shareholders.

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The corporation has complied with subsection 180(3) of the Business Corporations Act . La société s'est conformée au paragraphe 180(3) de la Loi sur les sociétés par actions .
The continuation of the corporation under the laws of the Province of Ontario has been properly authorized under the laws of the jurisdiction in which the corporation was incorporated/amalgamated or previously continued on
Le maintien de la société en vertu des lois de la province de l'Ontario a été dûment autorisé en vertu des lois de l'autorité législative sous le régime de laquelle la société a été constituée ou fusionnée ou antérieurement maintenue le

Year, Month, Day année, mois, jour

The corporation is to be continued under the Business Corporations Act to the same extent as if it had been incorporated thereunder.
Le maintien de la société en vertu de la Loi sur les sociétés par actions a le même effet que si la société avait été constituée en vertu de cette loi.

These articles are signed in duplicate. Les présents statuts sont signés en double exemplaire.

SPECTRA7 MICROSYSTEMS INC.

Name of Corporation / Dénomination sociale de la société

By / Par

Signature / SIgnature

Print name of signatory / Nom du signataire en lettres moulées Description of Offi ce / Fonction

These articles must be signed by a director or offi cer of the corporation (e.g. president, secretary) Ces statuts doivent être signés par un administrateur ou un dirigeant de la société (p. ex. : président, secrétaire).

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F- 1

SCHEDULE "F" OBCA CONTINUANCE BY-LAWS

See following page.

BY-LAW NO. 2

A by-law relating generally to the transaction of the business and affairs of

SPECTRA7 MICROSYSTEMS INC.

(the “ Corporation ”)

ARTICLE 1 - DEFINITIONS AND INTERPRETATION ............................................................ 1	ARTICLE 1 - DEFINITIONS AND INTERPRETATION ............................................................ 1
1.1	Definitions ...................................................................................................................... 1
1.2	Interpretation .................................................................................................................. 3
1.3	Headings and Table of Contents .................................................................................... 3
ARTICLE 2 - GENERAL ............................................................................................................... 3
2.1	Registered Office............................................................................................................ 3
2.2	Corporate Seal ................................................................................................................ 4
2.3	Financial Year ................................................................................................................ 4
2.4	Execution of Documents ................................................................................................ 4
2.5	Resolutions in Writing ................................................................................................... 5
2.6	Divisions......................................................................................................................... 5
ARTICLE 3 - DIRECTORS ........................................................................................................... 5
3.1	General ........................................................................................................................... 5
3.2	Qualification ................................................................................................................... 6
3.3	Election........................................................................................................................... 6
3.4	Fixing Number of Directors ........................................................................................... 6
3.5	Term of Office ................................................................................................................ 6
3.6	Ceasing to Hold Office ................................................................................................... 6
3.7	Resignation of a Director ............................................................................................... 7
3.8	Removal ......................................................................................................................... 7
3.9	Vacancies ....................................................................................................................... 7
3.10	Remuneration ................................................................................................................. 8
3.11	Power to Borrow ............................................................................................................ 8
3.12	Delegation of Power to Borrow ..................................................................................... 8
ARTICLE 4 - NOMINATION OF DIRECTORS .......................................................................... 8
4.1	Nomination Procedure.................................................................................................... 8
4.2	Exclusive Means to Bring Nomination .......................................................................... 9
4.3	Timely Notice ................................................................................................................. 9
4.4	Time Period for Giving Timely Notice .......................................................................... 9
4.5	Form of Notice ............................................................................................................. 10
4.6	Currency of Information............................................................................................... 11
4.7	Corporate Governance.................................................................................................. 11
4.8	Additional Information ................................................................................................. 12
4.9	Notice ........................................................................................................................... 12

4.10	Additional Matters........................................................................................................ 12
ARTICLE 5 - ANNUAL OR SPECIAL MEETINGS OF SHAREHOLDERS ........................... 13
5.1	Business to be Transacted ............................................................................................ 13
5.2	Proposal ........................................................................................................................ 13
ARTICLE 6 - COMMITTEES ..................................................................................................... 14
6.1	Appointment ................................................................................................................. 14
6.2	Provisions Applicable .................................................................................................. 14
ARTICLE 7 - MEETINGS OF DIRECTORS .............................................................................. 15
7.1	Place of Meetings ......................................................................................................... 15
7.2	Calling of Meetings ...................................................................................................... 15
7.3	Notice of Meetings ....................................................................................................... 15
7.4	Regular Meetings ......................................................................................................... 15
7.5	First Meeting of New Board ........................................................................................ 16
7.6	Participation by Telephone........................................................................................... 16
7.7	Chairman ...................................................................................................................... 16
7.8	Quorum......................................................................................................................... 16
7.9	Voting ........................................................................................................................... 16
7.10	Auditor ......................................................................................................................... 17
ARTICLE 8 - STANDARD OF CARE OF DIRECTORS AND OFFICERS ............................. 17
8.1	Standard of Care ........................................................................................................... 17
8.2	Liability for Acts of Others .......................................................................................... 17
ARTICLE 9 - FOR THE PROTECTION OF DIRECTORS AND OFFICERS .......................... 17
9.1	Indemnification by Corporation ................................................................................... 17
9.2	Insurance ...................................................................................................................... 19
9.3	Directors’ Expenses...................................................................................................... 19
9.4	Performance of Services for Corporation..................................................................... 19
ARTICLE 10 - INTEREST OF DIRECTORS AND OFFICERS IN CONTRACTS .................. 19
10.1	Disclosure of Interest ................................................................................................... 19
10.2	Time of Disclosure by Director .................................................................................... 20
10.3	Time of Disclosure by Officer ..................................................................................... 20
10.4	Time of Disclosure in Extraordinary Cases ................................................................. 20
10.5	Voting by Interested Director ....................................................................................... 21
10.6	Nature of Disclosure..................................................................................................... 21
10.7	Effect of Disclosure ...................................................................................................... 21
10.8	Confirmation by Shareholders ..................................................................................... 22
ARTICLE 11 – OFFICERS .......................................................................................................... 22
11.1	Officers ......................................................................................................................... 22
11.2	Appointment of President or Chairman of the Board and Secretary ............................ 22
11.3	Remuneration and Removal of Officers....................................................................... 22
11.4	Duties of Officers may be Delegated ........................................................................... 23

11.5	Chairman of the Board ................................................................................................. 23
11.6	President ....................................................................................................................... 23
11.7	General Manager .......................................................................................................... 23
11.8	Vice-President .............................................................................................................. 23
11.9	Secretary ....................................................................................................................... 23
11.10	Treasurer .................................................................................................................. 24
11.11	Assistant Secretary and Assistant Treasurer ............................................................ 24
11.12	Delegation of Board Powers .................................................................................... 24
11.13	Vacancies ................................................................................................................. 24
11.14	Variation of Powers and Duties ............................................................................... 24
11.15	Chief Executive Officer ........................................................................................... 25
ARTICLE 12 - MEETINGS OF SHAREHOLDERS .................................................................. 25
12.1	Calling of Meetings ...................................................................................................... 25
12.2	Annual Meeting ............................................................................................................ 25
12.3	Special Meeting ............................................................................................................ 25
12.4	Place of Meetings ......................................................................................................... 25
12.5	Notice ........................................................................................................................... 25
12.6	Contents of Notice ........................................................................................................ 26
12.7	Waiver of Notice .......................................................................................................... 26
12.8	Notice of Adjourned Meetings ..................................................................................... 26
12.9	Record Date for Notice ................................................................................................ 26
12.10	Omission of Notice .................................................................................................. 27
12.11	List of Shareholders ................................................................................................. 27
12.12	Shareholders Entitled to Vote .................................................................................. 28
12.13	Persons Entitled to be Present .................................................................................. 28
12.14	Proxies ...................................................................................................................... 28
12.15	Revocation of Proxies .............................................................................................. 28
12.16	Deposit of Proxies .................................................................................................... 28
12.17	Joint Shareholders .................................................................................................... 29
12.18	Chairman and Secretary ........................................................................................... 29
12.19	Scrutineers ................................................................................................................ 29
12.20	Votes to Govern ....................................................................................................... 29
12.21	Show of Hands ......................................................................................................... 29
12.22	Ballots ...................................................................................................................... 30
12.23	Votes on Ballots ....................................................................................................... 30
12.24	Adjournment ............................................................................................................ 30
12.25	Quorum .................................................................................................................... 30
12.26	Only One Shareholder .............................................................................................. 31
ARTICLE 13 - SHARES AND TRANSFERS ............................................................................. 31
13.1	Issuance ........................................................................................................................ 31
13.2	Commissions ................................................................................................................ 31
13.3	Register of Transfers .................................................................................................... 31
13.4	Lien on Shares .............................................................................................................. 31
13.5	Share Certificates ......................................................................................................... 31
13.6	Transfer Agent.............................................................................................................. 33

13.7	Transfer of Shares ........................................................................................................ 33
13.8	Defaced, Destroyed, Stolen or Lost Certificates .......................................................... 33
13.9	Joint Shareholders ........................................................................................................ 34
13.10	Deceased Shareholders ............................................................................................ 34
ARTICLE 14 - DIVIDENDS........................................................................................................ 34
14.1	Declaration of Dividends ............................................................................................. 34
14.2	Joint Shareholders ........................................................................................................ 34
ARTICLE 15 - RECORD DATES ............................................................................................... 34
15.1	Fixing Record Dates ..................................................................................................... 34
15.2	No Record Date Fixed .................................................................................................. 35
15.3	Notice of Record Date .................................................................................................. 35
15.4	Effect of Record Date ................................................................................................... 35
ARTICLE 16 - CORPORATE RECORDS AND INFORMATION ........................................... 35
16.1	Keeping of Corporate Records ..................................................................................... 35
16.2	Access to Corporate Records ....................................................................................... 37
16.3	Copies of Certain Corporate Records........................................................................... 37
16.4	Report to Shareholders ................................................................................................. 37
16.5	No Discovery of Information ....................................................................................... 37
16.6	Conditions for Inspection ............................................................................................. 37
ARTICLE 17 - NOTICES ............................................................................................................ 38
17.1	Method of Giving ......................................................................................................... 38
17.2	Shares Registered in More Than One Name ................................................................ 38
17.3	Persons Becoming Entitled by Operation of Law ........................................................ 38
17.4	Deceased Shareholder .................................................................................................. 38
17.5	Signature to Notice ....................................................................................................... 39
17.6	Proof of Service ............................................................................................................ 39
17.7	Computation of Time ................................................................................................... 39
17.8	Waiver of Notice .......................................................................................................... 39
ARTICLE 18 - REPEAL OF FORMER BY-LAWS ................................................................... 39
18.1	Repeal of By-laws No. 1 and 1A ................................................................................. 39

BY-LAW NO. 2

A by-law relating generally to the transaction of the business and affairs of SPECTRA7 MICROSYSTEMS INC.

(herein called the “Corporation”)

BE IT PASSED AND MADE as a by-law of the Corporation as follows:

ARTICLE 1 - DEFINITIONS AND INTERPRETATION

1.1 Definitions

In this by-law, unless there is something in the subject matter or context inconsistent therewith,

(i) “Act” means the Business Corporations Act (Ontario), as amended or re-enacted from time to time, and includes the regulations made pursuant thereto;
(ii) “affiliate” means an affiliated body corporate, and one body corporate shall be deemed to be affiliated with another body corporate if, but only if, one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person;
(iii) “articles” means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of arrangement, articles of continuance, articles of dissolution, articles of reorganization, articles of revival, letters patent, supplementary letters patent, a special Act and any other instrument by which the Corporation is incorporated;
(iv) “auditor” means the auditor of the Corporation;
(v) “board” means the board of directors of the Corporation;
(vi) “by-law” means a by-law of the Corporation;
(vii) “Chairman of the Board”, “Chief Executive Officer”, “Chief Financial Officer”, “President”, “Vice-President, “Secretary”, “Treasurer”, “General Manager”, “Assistant Secretary”, “Assistant Treasurer” or any other officer means such officer of the Corporation, but shall not include the Chairman Emeritus;
(viii) “committee” means a committee appointed pursuant to section 6.1 of this by-law;
(ix) “director” means a director of the Corporation;

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(x) “day” means a clear day and a period of days shall be deemed to commence the day following the event that began the period and shall be deemed to terminate at midnight of the last day of the period except that if the last day of the period falls on a Saturday, Sunday or holiday the period shall terminate at midnight of the day next following that is not a Saturday, Sunday or holiday;
(xi) “employee” means an employee of the Corporation;
(xii) “number of directors” means the number of directors set out in the articles or, where a minimum and maximum number of directors is set out in the articles, the number of directors as shall be determined from time to time by special resolution or, if the special resolution empowers the directors to determine the number, by resolution of the directors;
(xiii) “officer” means an officer of the Corporation;
(xiv) “person” includes an individual, sole proprietorship, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, and a natural person in his or her capacity as trustee, executor, administrator or other legal representative;
(xv) “resident Canadian” means an individual who is,
(A) a Canadian citizen ordinarily resident in Canada,
(B) a Canadian citizen not ordinarily resident in Canada who is a member of a class of persons prescribed by the Act for the purposes of the definition of “resident Canadian”, or
(C) a permanent resident within the meaning of the Immigration and Refugee Protection Act (Canada) and ordinarily resident in Canada, except a permanent resident who has been ordinarily resident in Canada for more than one year after the time at which he first became eligible to apply for Canadian citizenship;
(xvi) “shareholder” means a shareholder of the Corporation;

(xvii) “special resolution” means a resolution that is

(A) submitted to a special meeting of the shareholders of the Corporation duly called for the purpose of considering the resolution and passed, with or without amendment, at such meeting by at least two-thirds of the votes cast, or

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(B) consented to in writing by each shareholder of the Corporation entitled to vote at such a meeting or his or her attorney authorized in writing;
(xviii) “subsidiary” means in relation to another body corporate, a body corporate which
(A) is controlled by
- (1) that other, or
- (2) that other and one or more bodies corporate each of which is controlled by that other, or
- (3) two or more bodies corporate each of which is controlled by that other; or
(B) is a subsidiary of a body corporate that is that other’s subsidiary;

subject to the foregoing, the words and expressions herein contained shall have the same meaning as corresponding words and expressions in the Act.

1.2 Interpretation

In each by-law and resolution, unless there is something in the subject matter or context inconsistent therewith, the singular shall include the plural and the plural shall include the singular and the masculine shall include the feminine. Wherever reference is made in this or any other bylaw or in any special resolution to any statute or section thereof, such reference shall be deemed to extend and refer to any amendment to or re-enactment of such statute or section, as the case may be.

1.3 Headings and Table of Contents

The headings and table of contents in this by-law are inserted for convenience of reference only and shall not affect the construction or interpretation of the provisions of this by-law.

ARTICLE 2 - GENERAL

2.1 Registered Office

The Corporation may by resolution of the directors change the location of its registered office within the municipality or geographic township specified in the articles.

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2.2 Corporate Seal

The Corporation may have a corporate seal which shall be adopted and may be changed by resolution of the directors.

2.3 Financial Year

The directors may by resolution fix the financial year end of the Corporation and the directors may from time to time by resolution change the financial year end of the Corporation.

2.4 Execution of Documents

(a) Instruments in writing requiring execution by the Corporation may be signed on behalf of the Corporation by any officer or director of the Corporation, and all instruments in writing so signed shall be binding upon the Corporation without any further authorization or formality. The board may from time to time by resolution appoint any officer or officers or any other person or persons on behalf of the Corporation either to sign instruments in writing generally or to sign specific instruments in writing.
(b) Any instrument in writing requiring execution by the Corporation may be signed manually or electronically.
(c) The corporate seal of the Corporation (if any) may be affixed to instruments in writing signed as aforesaid by any person authorized to sign the same or at the direction of any such person.
(d) The term “instruments in writing” as used herein shall include deeds, contracts, mortgages, hypothecs, charges, conveyances, transfers and assignments of property real or personal, immovable or movable, agreements, releases, receipts and discharges for the payment of money or other obligations, cheques, promissory notes, drafts, acceptances, bills of exchange and orders for the payment of money, conveyances, transfers and assignments of shares, instruments of proxy, powers of attorney, stocks, bonds, debentures or other securities or any paper writings.
(e) Subject to the provisions of section 13.5 hereof, the signature or signatures of an officer or director, person or persons appointed as aforesaid by resolution of the directors, may, if specifically authorized by resolution of the directors, be printed, engraved, lithographed or otherwise mechanically reproduced upon all instruments in writing executed or issued by or on behalf of the Corporation and all instruments in writing on which the signature or signatures of any of the foregoing officers, directors or persons shall be so reproduced, by authorization by resolution of the directors, shall be deemed to have been manually signed by such officers or persons whose signature or signatures is or are so reproduced and shall be as valid as if they had been signed manually and notwithstanding that the officers, directors or

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persons whose signature or signatures is or are so reproduced may have ceased to hold office at the date of the delivery or issue of such instruments in writing.

2.5 Resolutions in Writing

(a) A resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or a committee of directors, is as valid as if it had been passed at a meeting of directors or such committee of directors.
(b) A resolution in writing signed by all the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders unless a written statement with respect to the subject matter of the resolution is submitted by a director or representations in writing are submitted by the auditor in accordance with the Act.
(c) Where the Corporation has only one shareholder, or only one holder of any class or series of shares, the shareholder present in person or by proxy constitutes a meeting.

2.6 Divisions

The board may cause the business and operations of the Corporation or any part thereof to be divided into one or more divisions upon such basis, including without limitation, types of business or operations, geographical territories, product lines or goods or services, as the board may consider appropriate in each case. From time to time the board or any person authorized by the board may authorize, upon such basis as may be considered appropriate in each case:

(i) the further division of the business and operations of any such division into subunits and the consolidation of the business and operations of any such divisions or sub-units;
(ii) the designation of any such division or sub-unit by, and the carrying on of the business and operations of any such division or sub-unit under, a name other than the name of the Corporation; and
(iii) the appointment of officers for any such division or sub-unit, the determination of their powers and duties, and the removal of any such officer so appointed without prejudice to such officer’s rights under any employment contract or in law, provided that any such officer shall not, as such, be an officer of the Corporation.

ARTICLE 3 - DIRECTORS

3.1 General

The directors shall manage or supervise the management of the business and affairs of the Corporation.

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3.2 Qualification

(a) The following persons are disqualified from being a director:
(i) a person who is less than eighteen (18) years of age,
(ii) a person who has been found under the Substitute Decisions Act, 1992 or under the Mental Health Act to be incapable of managing property or who has been found to be incapable by a court in Canada or elsewhere,
(iii) a person who is not an individual, and
(iv) a person who has the status of bankrupt.
(b) Unless the articles otherwise provide, a director is not required to hold shares issued by the Corporation.

3.3 Election

Subject to the provisions of the Act the directors shall be elected at the first meeting of shareholders and at each succeeding annual meeting of the shareholders.

3.4 Fixing Number of Directors

If the articles provide for a minimum and maximum number of directors, the number of directors of the Corporation and the number of directors to be elected at the annual meeting of the shareholders shall be such number as shall be determined from time to time by special resolution or, if the special resolution empowers the directors to determine the number, by resolution of the directors.

3.5 Term of Office

Subject to the provisions of the articles, the term of office of a director not elected for an expressly stated term shall commence at the close of the meeting of shareholders at which he is elected and shall terminate at the close of the first annual meeting of shareholders following his or her election. If an election of directors is not held at the proper time the incumbent directors continue in office until their successors are elected.

3.6 Ceasing to Hold Office

A director ceases to hold office when:

(i) he or she dies or, subject to section 3.7 of this bylaw, he resigns;
(ii) he or she is removed from office in accordance with the provisions of the Act or the by-laws; or

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(iii) he or she becomes disqualified from being a director under the Act or by-laws.

3.7 Resignation of a Director

A director may resign his or her office as a director by giving to the Corporation his or her written resignation, which resignation shall become effective at the later of:

(i) the time at which such resignation is received by the Corporation, or
(ii) the time specified in the resignation.

3.8 Removal

Subject to the provisions of the Act, the shareholders may by resolution at an annual or special meeting of shareholders remove any director or directors from office and may by resolution at such meeting elect any person to fill the vacancy created by the removal of such director, failing which the vacancy created by the removal of such director may be filled by the directors.

3.9 Vacancies

(a) Subject to the provisions of the Act, a quorum of directors may fill a vacancy among the directors, except a vacancy resulting from:
(i) an increase in the number of directors or in the maximum number of directors, as the case may be, or
(ii) a failure to elect the number of directors required to be elected at any meeting of shareholders.
(b) A director appointed or elected to fill a vacancy holds office for the unexpired term of his or her predecessor.
(c) If there is not a quorum of directors, or if there has been a failure to elect the number of directors required by the articles or by section 3.4 hereof, the directors then in office shall forthwith call a special meeting of shareholders to fill the vacancy and, if they fail to call a meeting or if there are no directors then in office, the meeting may be called by any shareholder.
(d) Subject to the articles or by-laws, where there is a vacancy or vacancies on the board, the remaining directors may exercise all the powers of the board so long as a quorum of the board remains in office.

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3.10 Remuneration

Subject to the articles and the by-laws, the directors may fix the remuneration of the directors, officers and employees of the Corporation.

3.11 Power to Borrow

Unless the articles or by-laws otherwise provide, the directors may without authorization of the shareholders from time to time

(i) borrow money upon the credit of the Corporation;
(ii) issue, reissue, sell or pledge debt obligations of the Corporation;
(iii) subject to the Act, give a guarantee on behalf of the Corporation to secure performance of an obligation of any person; and
(iv) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the Corporation owned or subsequently acquired, to secure any obligation of the Corporation.

3.12 Delegation of Power to Borrow

Unless the articles or by-laws otherwise provide, the directors may by resolution delegate any or all of the powers referred to in section 3.11 of this by-law to a director, a committee or an officer.

ARTICLE 4 - NOMINATION OF DIRECTORS

4.1 Nomination Procedure

Only persons who are nominated in accordance with the procedures set out in this section 4.1 shall be eligible for election as directors to the board. Nominations of persons for election to the board may only be made at an annual meeting of shareholders, or at a special meeting of shareholders called for any purpose which includes the election of directors to the board, as follows:

(a) by or at the direction of the board or an authorized officer of the Corporation, including pursuant to a notice of meeting;
(b) by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the Act or a requisition of a meeting of shareholders made in accordance with the provisions of the Act; or

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(c) by any person entitled to vote at such meeting (a “ Nominating Shareholder ”), who: (A) is, at the close of business on the date of giving notice provided for in section 4.3 below and on the record date for notice of such meeting, either entered in the securities register of the Corporation as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting; and (B) has given timely notice in proper written form as set forth in this section 4.1.

4.2 Exclusive Means to Bring Nomination

For the avoidance of doubt, the foregoing section 4.1 shall be the exclusive means for any person to bring nominations for election to the board before any annual or special meeting of shareholders.

4.3 Timely Notice

For a nomination made by a Nominating Shareholder to be timely notice (a “ Timely Notice ”), the Nominating Shareholder's notice must be received by the Secretary at the registered office of the Corporation:

(a) in the case of an annual meeting of shareholders, not later than the close of business on the 30th day and not earlier than the opening of business on the 65th day before the date of the meeting: provided, however, if the first public announcement made by the Corporation of the date of the annual meeting is less than 50 days prior to the meeting date, not later than the close of business on the 10th day following the day on which the first public announcement of the date of such annual meeting is made by the Corporation; and
(b) in the case of a special meeting (which is not also an annual meeting) of shareholders called for any purpose which includes the election of directors to the board, not later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting is made by the Corporation.

4.4 Time Period for Giving Timely Notice

The time periods for giving of a Timely Notice shall in all cases be determined based on the original date of the annual meeting or the first public announcement of the annual or special meeting, as applicable. In no event shall an adjournment or postponement of an annual meeting or special meeting of shareholders or any announcement thereof commence a new time period for the giving of a Timely Notice.

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4.5 Form of Notice

To be in proper written form, a Nominating Shareholder's notice to the Secretary must comply with all the provisions of this section 4.5 and:

(a) disclose or include, as applicable, as to each person whom the Nominating Shareholder proposes to nominate for election as a director (a “ Proposed Nominee ”):
(i) their name, age, business and residential address, principal occupation or employment for the past five years and status as a resident Canadian;
(ii) their direct or indirect beneficial ownership in, or control or direction over, any class or series of securities of the Corporation, including the number or principal amount and the date(s) on which such securities were acquired;
(iii) any relationships, agreements or arrangements, including financial, compensation and indemnity related relationships, agreements or arrangements, between (i) the Proposed Nominee (or any affiliates or associates of, or any person or entity acting jointly or in concert with, the Proposed Nominee), and (ii) the Nominating Shareholder;
(iv) a statement that the Proposed Nominee would not be disqualified from being a director pursuant to subsection 105(1) of the Act;
(v) a statement as to whether the Proposed Nominee would be an “independent” director (within the meaning of sections 1.4 and 1.5 of National Instrument 52-110 Audit Committees of the Canadian Securities Administrators, as such provisions may be amended from time to time) if elected and the reasons and basis for such determination;
(vi) any other information that would be required to be disclosed in a dissident proxy circular or other filings required to be made in connection with the solicitation of proxies for election of directors pursuant to the Act or applicable securities law;
(vii) a duly completed personal information form in respect of the Proposed Nominee in the form prescribed by the principal stock exchange on which the securities of the Corporation are then listed for trading; and
(b) disclose or include, as applicable, as to each Nominating Shareholder giving the notice and each beneficial owner, if any, on whose behalf the nomination is made:
(i) their name, business and residential address, direct or indirect beneficial ownership in, or control or direction over, any class or series of securities of

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the Corporation, including the number or principal amount and the date(s) on which such securities were acquired;

(ii) their interests in, or rights or obligations associated with, an agreement, arrangement or understanding, the purpose or effect of which is to alter, directly or indirectly, the person's economic interest in a security of the Corporation or the person's economic exposure to the Corporation;
(iii) any proxy, contract, arrangement, agreement or understanding pursuant to which such person, or any of its affiliates or associates, or any person acting jointly or in concert with such person, has any interests, rights or obligations relating to the voting of any securities of the Corporation or the nomination of directors to the board;
(iv) any direct or indirect interest of such person in any contract with the Corporation or with any of the Corporation's affiliates or principal competitors;
(v) a representation that the Nominating Shareholder is a holder of record of securities of the Corporation, or a beneficial owner, entitled to vote at such meeting, and intends to appear in person or by proxy at the meeting to propose such nomination;
(vi) a representation as to whether such person intends to deliver a proxy circular and/or form of proxy to any shareholder in connection with such nomination or otherwise solicit proxies or votes from shareholders in support of such nomination; and
(vii) any other information relating to such person that would be required to be included in a dissident proxy circular or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to the Act or as required by applicable securities law.

4.6 Currency of Information

All information to be provided in a Timely Notice pursuant to section 4.5 shall be provided as of the date of such notice. The Nominating Shareholder shall update such information forthwith so that it is true and correct in all material respects as of the date that is 10 business days prior to the date of the meeting, or any adjournment or postponement thereof.

4.7 Corporate Governance

To be eligible to be a candidate for election as a director and to be duly nominated, a Proposed Nominee must have previously delivered to the Secretary at the registered office of the Corporation, not less than five days prior to the date of the meeting of shareholders, a written

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representation and agreement (in form provided by the Corporation) that the Proposed Nominee, if elected as a director, will comply with all applicable corporate governance, conflict of interest, confidentiality and insider trading policies and guidelines of the Corporation in effect during the Proposed Nominee’s term in office as a director. Upon the request of a Proposed Nominee or a Nominating Shareholder, the Secretary shall provide copies of all such policies and guidelines then in effect.

4.8 Additional Information

If requested by the Corporation, a Proposed Nominee shall furnish any other information as may reasonably be required by the Corporation to determine the eligibility of such Proposed Nominee to serve as a director of the Corporation or a member of any committee, with respect to any relevant criteria for eligibility, or that could be material to a shareholder's understanding of the eligibility, or lack thereof, of such Proposed Nominee.

4.9 Notice

Notwithstanding any other provision of this by-law, any notice, or other document or information required to be given to the Secretary pursuant to this Article 4 may only be given by personal delivery, facsimile transmission or by email (at such email address as may be stipulated from time to time by the Secretary for purposes of this notice), and shall be deemed to have been given and made only at the time it is served by personal delivery to the Secretary at the address of the registered office of the Corporation, email (at the address as aforesaid) or sent by facsimile transmission (provided that receipt of confirmation of such transmission has been received); provided that if such delivery or electronic communication is made on a day which is a not a business day or later than 5:00 p.m. (Toronto time) on a day which is a business day, then such delivery or electronic communication shall be deemed to have been made on the next following day that is a business day.

4.10 Additional Matters

(a) The chair of any meeting of shareholders shall have the power to determine whether any proposed nomination is made in accordance with the provisions of this Article 4, and if any proposed nomination is not in compliance with such provisions, must declare that such defective nomination shall not be considered at any meeting of shareholders.
(b) Despite any other provision of this Article 4, if the Nominating Shareholder (or a qualified representative of the Nominating Shareholder) does not appear in person at the meeting of shareholders of the Corporation to present the nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such nomination may have been received by the Corporation.
(c) Nothing in this Article 4 shall obligate the Corporation or the board to include in any proxy statement or other shareholder communication distributed by or on

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behalf of the Corporation or board any information with respect to any proposed nomination or any Nominating Shareholder or Proposed Nominee.

(d) The board may, in its sole discretion, waive any requirement of this Article 4.
(e)
For the purposes of this Article 4:
(i) “public announcement" means disclosure in a press release disseminated by the Corporation through a national news service in Canada, or in a document filed by the Corporation for public access under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com; and
(ii) “business day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of Toronto, Ontario.
(f) This Article 4 is subject to, and should be read in conjunction with, the Act and the articles. If there is any conflict or inconsistency between any provision of the Act or the articles and any provision of this Article 4, the provision of the Act or the articles will govern.

ARTICLE 5 - ANNUAL OR SPECIAL MEETINGS OF SHAREHOLDERS

5.1 Business to be Transacted

No business may be transacted at an annual or special meeting of shareholders other than business that is either (i) specified in the Corporation's notice of meeting (or any supplement thereto) given by or at the direction of the board, (ii) otherwise properly brought before the meeting by or at the direction of the board, or (iii) otherwise properly brought before the meeting by any shareholder of the Corporation who complies with the proposal procedures set forth in section 5.2 below.

5.2 Proposal

For business to be properly brought before a meeting by a shareholder, such shareholder must submit a proposal to the Corporation for inclusion in the Corporation's management proxy circular in accordance with the requirements of the Act; provided that any proposal that includes nominations for the election of directors shall also comply with the requirements of Article 4.

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ARTICLE 6 - COMMITTEES

6.1 Appointment

Subject to the Act, the articles or the by-laws, the directors may appoint from their number one or more committees and may by resolution delegate to any such committee any of the powers of the directors.

6.2 Provisions Applicable

The following provisions shall apply to any committee appointed by the directors:

(i) unless otherwise provided by resolution of the directors, each member of a committee shall continue to be a member thereof until the expiration of his or her term of office as a director;
(ii) the directors may from time to time by resolution specify which member of a committee shall be the chairman thereof and, subject to the provisions of section 6.1 of this by-law, may by resolution modify, dissolve or reconstitute a committee and make such regulations with respect to and impose such restrictions upon the exercise of the powers of a committee as the directors think expedient;
(iii) the meetings and proceedings of a committee shall be governed by the provisions of the by-laws of the Corporation for regulating the meetings and proceedings of the board so far as the same are applicable thereto and are not superseded by any regulations or restrictions made or imposed by the directors pursuant to the foregoing provisions hereof;
(iv) the members of a committee as such shall be entitled to such remuneration for their services as members of a committee as may be fixed by resolution of the directors, who are hereby authorized to fix such remuneration;
(v) unless otherwise provided by resolution of the board, the Secretary of the Corporation shall be the secretary of any committee;
(vi) subject to the provisions of section 6.1 of this by-law, the directors shall fill vacancies in a committee by appointment from among their number; and
(vii) unless otherwise provided by resolution of the board, meetings of a committee may be convened by the direction of any member thereof.

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ARTICLE 7 - MEETINGS OF DIRECTORS

7.1 Place of Meetings

Meetings of the board and of any committee may be held at any place within or outside Ontario. In any financial year of the Corporation, a majority of the meetings of the board and a majority of the meetings of any committee need not be held within Canada.

7.2 Calling of Meetings

A meeting of the board may be called at any time by the Chairman of the Board, the President (if he is a director), a Vice-President (if he is a director) or any two of the directors and the Secretary shall cause notice of a meeting of directors to be given when so directed by any such person or persons.

7.3 Notice of Meetings

(a) Notice of any meeting of the board specifying the time and, except where the meeting is to be held as provided for in section 7.6 of this by-law, the place for the holding of such meeting shall be given in accordance with the terms of section 17.1 hereof to every director not less than two days before the date of the meeting.
(b) Notice of an adjourned meeting of the board is not required to be given if the time and place of the adjourned meeting is announced at the original meeting.
(c) Meetings of the board may be held at any time without formal notice if all the directors are present or if all the directors who are not present, in writing or by cable, telegram or any form of transmitted or recorded communication, waive notice or signify their consent to the meeting being held without formal notice. Notice of any meeting or any irregularity in any meeting or in the notice thereof may be waived by any director either before or after such meeting. Attendance of a director at a meeting of the board is a waiver of notice of the meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

7.4 Regular Meetings

The board may by resolution fix a day or days in any month or months for the holding of regular meetings at a time and place specified in such resolution. A copy of any resolution of the board specifying the time and place for the holding of regular meetings of the board shall be sent to each director at least two days before the first of such regular meetings and no other notice shall be required for any of such regular meetings.

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7.5 First Meeting of New Board

For the first meeting of the board to be held immediately following the election of directors at an annual or other meeting of the shareholders or for a meeting of the board at which a director is appointed to fill a vacancy in the board, no notice need be given to the newly elected or appointed director or directors.

7.6 Participation by Telephone

If all the directors present at or participating in the meeting consent, a meeting of the board or of a committee may be held by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and a director participating in such a meeting by such means is deemed to be present in person at that meeting for the purposes of the Act and this by-law.

7.7 Chairman

The chairman of any meeting of the board shall be the first mentioned of such of the following officers as have been appointed and who is a director and who is present at the meeting: Chairman of the Board, President or a Vice-President. If no such officer is present, the directors present shall choose one of their number to be chairman.

7.8 Quorum

(a) Subject to the articles and subsection 7.8(b) of this by-law, a majority of the number of directors or minimum number of directors required by the articles constitutes a quorum at any meeting of the board, but in no case shall a quorum be less than twofifths of the number of directors or minimum number of directors, as the case may be.
(b) Where the Corporation has fewer than three directors, the director or both directors, as the case may be, must be present at any meeting of the board to constitute a quorum.
(c) Directors shall not transact business at a meeting of directors unless a quorum of the board is present.

7.9 Voting

All questions arising at any meeting of the board shall be decided by a majority of votes. In case of an equality of votes, the chairman of the meeting shall not have, in addition to his or her original vote, a second or casting vote.

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7.10 Auditor

The auditor shall be entitled to attend at the expense of the Corporation and be heard at meetings of the board on matters relating to his or her duties as auditor.

ARTICLE 8 - STANDARD OF CARE OF DIRECTORS AND OFFICERS

8.1 Standard of Care

Every director and officer in exercising his or her powers and discharging his or her duties

shall:

(i) act honestly and in good faith with a view to the best interests of the Corporation; and
(ii) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

8.2 Liability for Acts of Others

Subject to the provisions of section 8.1 of this by-law, no director or officer shall be liable for the acts, receipts, neglects or defaults of any other director or officer or employee or for joining in any receipts or acts for conformity or for any loss, damage, or expense happening to the Corporation through the insufficiency or deficiency of title to any property acquired by order of the board for or on behalf of the Corporation or for the insufficiency or deficiency of any security in or upon which any of the moneys of or belonging to the Corporation shall be placed out or invested or for any loss or damage arising from the bankruptcy, insolvency, or tortious act of any person, firm or corporation with whom or which any moneys, securities or effects of the Corporation shall be lodged or deposited or for any loss occasioned by any error of judgment or oversight on his or her part, or for any other loss, damage or misfortune whatsoever which may happen in the execution of the duties of his or her respective office or trust or in relation thereto, unless the same are occasioned by his or her own wilful neglect or default; provided that nothing herein shall relieve any director or officer from the duty to act in accordance with the Act and the regulations thereunder or from liability for any breach thereof.

ARTICLE 9 - FOR THE PROTECTION OF DIRECTORS AND OFFICERS

9.1 Indemnification by Corporation

(a) The Corporation shall indemnify a director or officer of the Corporation, a former director or officer of the Corporation, or another individual who acts or acted at the Corporation’s request as a director or officer, or an individual acting in a similar capacity, or another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the

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individual in respect of any civil, criminal, administrative investigative or other proceeding in which the individual is involved because of that association with the Corporation or other entity.

(b) The Corporation shall advance money to a director, officer or other individual for the costs, charges and expenses of a proceeding referred to in subsection 9.1(a) of this by-law, but the individual shall repay the money to the Corporation if the individual does not fulfil the conditions set out in subsection 9.1(c) of this by-law.
(c) The Corporation shall not indemnify an individual identified in subsection 9.1(a) of this by-law unless:
(i) the individual acted honestly and in good faith with a view to the best interests of the Corporation or, as the case may be, to the best interests of the other entity for which the individual acted as a director or officer or in a similar capacity at the Corporation’s request; and
(ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that his or her conduct was lawful.
(d) The Corporation shall, subject to the approval of the Ontario Superior Court of Justice, indemnify an individual referred to in subsection 9.1(a) of this by-law, or advance moneys under subsection 9.1(b) of this by-law, in respect of an action by or on behalf of the Corporation or other entity to obtain a judgment in its favour, to which the individual is made a party because of the individual’s association with the Corporation or other entity as described in subsection 9.1(a) of this by-law, against all costs, charges and expenses reasonably incurred by the individual in connection with such action, if the individual fulfils the conditions set out in clauses 9.1(c)(i) and 9.1(c)(ii) of this by-law.
(e) Notwithstanding anything in this Article, an individual referred to in subsection 9.1(a) of this by-law is entitled to indemnity from the Corporation in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the individual is made a party because of the individual’s association with the Corporation or other entity as described in subsection 9.1(a) of this by-law, if the individual seeking the indemnity:
(i) was not judged by a court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done; and
(ii) fulfils the conditions set out in clauses 9.1(c)(i) and 9.1(c)(ii) of this by-law.

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(f) The Corporation shall also indemnify an individual referred to in subsection 9.1(a) of this by-law in such other circumstances as the Act or the law permits or requires. Nothing in these by-laws shall limit the right of any person entitled to claim indemnity apart from the provisions of these by-laws.
(g) The Corporation may from time to time enter into agreements pursuant to which the Corporation agrees to indemnify one or more persons in accordance with the provisions of this section.

9.2 Insurance

The Corporation may, from time to time as the Board may determine, purchase and maintain insurance for the benefit of an individual referred to in subsection 9.1(a) of this by-law against any liability incurred by the individual:

(i) in the individual’s capacity as a director or officer of the Corporation; or
(ii) in the individual’s his or her capacity as a director or officer, or a similar capacity, of another entity, of the individual acts or acted in that capacity at the Corporation’s request.

9.3 Directors’ Expenses

The directors shall be reimbursed for their out-of-pocket expenses incurred in attending board, committee or shareholders’ meetings or otherwise in respect of the performance by them of their duties and no confirmation by the shareholders of any such reimbursement shall be required.

9.4 Performance of Services for Corporation

Subject to Article 8 of this by-law, if any director or officer shall be employed by or shall perform services for the Corporation otherwise than as a director or officer or shall be a member of a firm or a shareholder, director or officer of a body corporate which is employed by or performs services for the Corporation, the fact of his or her being a director or officer shall not disentitle such director or officer or such firm or company, as the case may be, from receiving proper remuneration for such services.

ARTICLE 10 - INTEREST OF DIRECTORS AND OFFICERS IN CONTRACTS

10.1 Disclosure of Interest

A director or officer who:

(i) is a party to a material contract or transaction or proposed material contract or transaction with the Corporation; or

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(ii) is a director or an officer of, or has a material interest in, any person who is a party to a material contract or transaction or proposed material contract or transaction with the Corporation,

shall disclose in writing to the Corporation or request to have entered in the minutes of meetings of directors the nature and extent of his or her interest.

10.2 Time of Disclosure by Director

The disclosure required by section 10.1 of this by-law shall be made, in the case of a director:

(i) at the meeting at which a proposed contract or transaction is first considered;
(ii) if the director was not then interested in a proposed contract or transaction, at the first meeting after he becomes so interested;
(iii) if the director becomes interested after a contract is made or a transaction is entered into, at the first meeting after he becomes so interested; or
(iv) if a person who is interested in a contract or transaction later becomes a director, at the first meeting after he becomes a director.

10.3 Time of Disclosure by Officer

The disclosure required by section 10.1 of this by-law shall be made, in the case of an officer who is not a director:

(i) forthwith after he becomes aware that the contract or transaction or proposed contract or transaction is to be considered or has been considered at a meeting of directors;
(ii) if the officer becomes interested after a contract is made or a transaction is entered into, forthwith after he becomes so interested; or
(iii) if a person who is interested in a contract or transaction later becomes an officer, forthwith after he becomes an officer.

10.4 Time of Disclosure in Extraordinary Cases

Notwithstanding sections 10.2 and 10.3 of this by-law, where section 10.1 of this by-law applies to a director or officer in respect of a material contract or transaction or proposed material contract or transaction that, in the ordinary course of the Corporation’s business, would not require approval by the directors or shareholders, the director or officer shall disclose in writing to the Corporation or request to have entered in the minutes of meetings of directors the nature and extent

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of his or her interest forthwith after the director or officer becomes aware of the contract or transaction or proposed contract or transaction.

10.5 Voting by Interested Director

A director referred to in section 10.1 of this by-law shall not attend any part of a meeting of directors during which the contract or transaction is discussed and shall not vote on any resolution to approve the contract or transaction unless the contract or transaction is:

(i) one relating primarily to his or her remuneration as a director of the Corporation or an affiliate;
(ii) one for indemnity or insurance pursuant to the provisions of the Act; or
(iii) one with an affiliate.

10.6 Nature of Disclosure

For the purposes of this Article, a general notice to the directors by a director or officer disclosing that he or she is a director or officer of or has a material interest in a person, or that there has been a material change in the director’s or officer’s interest in the person, and is to be regarded as interested in any contract made or any transaction entered into with that person, is a sufficient disclosure of interest in relation to any such contract or transaction.

10.7 Effect of Disclosure

Where a material contract is made or a material transaction is entered into between the Corporation and a director or officer of the Corporation, or between the Corporation and another person of which a director or officer of the Corporation is a director or officer or in which he has a material interest:

(i) the director or officer is not accountable to the Corporation or its shareholders for any profit or gain realized from the contract or transaction; and
(ii) the contract or transaction is neither void nor voidable,

by reason only of that relationship or by reason only that the director is present at or is counted to determine the presence of a quorum at the meeting of directors that authorized the contract or transaction, if the director or officer disclosed his or her interest in accordance with sections 10.2, 10.3, 10.4 or 10.6 of this by-law, as the case may be, and the contract or transaction was reasonable and fair to the Corporation at the time it was so approved.

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10.8 Confirmation by Shareholders

Notwithstanding anything in this Article, a director or officer, acting honestly and in good faith, is not accountable to the Corporation or to its shareholders for any profit or gain realized from any such contract or transaction by reason only of his or her holding the office of director or officer, and the contract or transaction, if it was reasonable and fair to the Corporation at the time it was approved, is not by reason only of the director’s or officer’s interest therein void or voidable, where:

(i) the contract or transaction is confirmed or approved by special resolution at a meeting of the shareholders duly called for that purpose; and
(ii) the nature and extent of the director’s or officer’s interest in the contract or transaction are disclosed in reasonable detail in the notice calling the meeting or in the information circular required pursuant to the provisions of the Act.

ARTICLE 11 – OFFICERS

11.1 Officers

Subject to the articles and by-laws, the board may, annually or as often as may be required, by resolution appoint a President or Chairman of the Board and a Secretary. In addition, the board may from time to time by resolution appoint such other officers as the board determines to be necessary or advisable in the interests of the Corporation, which officers shall, subject to the Act, have such authority and perform such duties as may from time to time be prescribed by resolution of the board. None of the said officers, other than the Chairman of the Board, need be a member of the board. Any two or more offices of the Corporation may be held by the same person, except those of President and Vice-President. If the same person holds both the office of Secretary and the office of Treasurer, he may be known as Secretary-Treasurer.

11.2 Appointment of President or Chairman of the Board and Secretary

At the first meeting of the board after each annual meeting of shareholders, the board may appoint a President or Chairman of the Board and a Secretary.

11.3 Remuneration and Removal of Officers

The remuneration of all officers shall be determined from time to time by the board. The fact that any officer is a director or shareholder shall not disqualify him or her from receiving such remuneration as may be so determined. All officers shall be subject to removal by resolution of the board at any time.

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11.4 Duties of Officers may be Delegated

In case of the absence or inability to act of the Chairman of the Board or the President, or any other officer of the Corporation, or for any other reason that the board may deem sufficient, the board may delegate the powers of such officer to any other officer or to any director for the time being.

11.5 Chairman of the Board

The Chairman of the Board shall, if present, preside at all meetings of directors and shareholders. He shall sign all instruments which require his or her signature and shall perform all duties incident to his or her office, and shall have such other powers and perform such other duties as may from time to time be prescribed by resolution of the board.

11.6 President

The President shall sign all instruments which require his or her signature and shall perform all duties incident to his or her office, and shall have such other powers and perform such other duties as may from time to time be prescribed by resolution of the board.

11.7 General Manager

The General Manager shall have such authority to manage the business of the Corporation and perform such duties as may from time to time be prescribed by resolution of the board.

11.8 Vice-President

During the President’s absence or inability or refusal to act, the President’s duties may be performed and his or her powers may be exercised by the Vice-President, or if there are more than one, by the Vice-Presidents in order of seniority or designation (as determined by the board), except that no Vice-President shall preside at a meeting of the board unless he is a director. A Vice-President shall also have such other authority and perform such other duties as may from time to time be prescribed by resolution of the board.

11.9 Secretary

The Secretary shall give, or cause to be given, all notices required to be given to shareholders, directors, auditors and members of any committee. He shall enter or cause to be entered in the books kept for that purpose minutes of all proceedings at meetings of directors and of shareholders. He shall be the custodian of the seal (if any) of the Corporation and of all books, papers, records, documents and other instruments belonging to the Corporation. The Secretary shall have such other authority and perform such other duties as may from time to time be prescribed by resolution of the board.

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11.10 Treasurer

The Treasurer shall have the care and custody of all the funds and securities of the Corporation and shall deposit the same in the name of the Corporation in such bank or banks or with such depositary or depositaries as the board may by resolution direct. He shall at all reasonable times exhibit his or her books and accounts to any director upon application at the office of the Corporation during business hours. He shall sign or countersign such instruments as require his or her signature and shall perform all duties incident to his or her office or that are properly required of him or her by resolution of the board. He may be required to give such bond for the faithful performance of his or her duties as the board in its uncontrolled discretion may require but no director shall be liable for failure to require any bond or for the insufficiency of any bond or for any loss by reason of the failure of the Corporation to receive any indemnity thereby provided. The Treasurer shall also have such other authority and perform such other duties as may from time to time be prescribed by resolution of the board.

11.11 Assistant Secretary and Assistant Treasurer

(a) During the Secretary’s absence or inability or refusal to act, the Assistant Secretary shall perform all the duties of the Secretary. The Assistant Secretary shall also have such other authority and perform such other duties as may from time to time be prescribed by resolution of the board.
(b) During the Treasurer’s absence or inability or refusal to act, the Assistant Treasurer shall perform all the duties of the Treasurer. The Assistant Treasurer shall also have such other authority and perform such other duties as may from time to time be prescribed by resolution of the board.

11.12 Delegation of Board Powers

In accordance with the by-laws and subject to the provisions of the Act, the board may from time to time by resolution delegate to any officer or officers power to manage the business and affairs of the Corporation.

11.13 Vacancies

If any office of the Corporation shall for any reason be or become vacant, the directors by resolution may appoint a person to fill such vacancy.

11.14 Variation of Powers and Duties

Notwithstanding the foregoing, the board may from time to time and subject to the provisions of the Act, add to or limit the powers and duties of an office or of an officer occupying any office.

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11.15 Chief Executive Officer

(a) The board may by resolution designate any one of the officers (including the Chairman of the Board, if any) as the Chief Executive Officer of the Corporation and may from time to time by resolution rescind any such designation and designate another officer as the Chief Executive Officer of the Corporation.
(b) The officer designated as the Chief Executive Officer of the Corporation pursuant to subsection (a) of this section shall exercise general supervision over the affairs of the Corporation.

ARTICLE 12 - MEETINGS OF SHAREHOLDERS

12.1 Calling of Meetings

A meeting of shareholders may be called at any time by resolution of the board or by the Chairman of the Board or by the President, and the Secretary shall cause notice of a meeting of shareholders to be given when directed so to do by resolution of the board or by the Chairman of the Board or by the President.

12.2 Annual Meeting

Subject to the provisions of the Act, the Corporation shall hold an annual meeting of shareholders not later than eighteen (18) months after the Corporation comes into existence and subsequently not later than fifteen (15) months after holding the last preceding annual meeting for the purpose of considering the financial statements and the auditor’s report, electing directors and appointing auditors.

12.3 Special Meeting

Subject to the provisions of the Act, a special meeting of shareholders may be called at any time and may be held in conjunction with an annual meeting of shareholders.

12.4 Place of Meetings

Subject to the articles, a meeting of shareholders shall be held at such place in or outside Ontario as the directors determine or, in the absence of such a determination, at the place where the registered office of the Corporation is located.

12.5 Notice

Notice of the time and place of each meeting of shareholders shall be given in the manner provided in section 17.1 in this by-law, in the case of an offering Corporation, not less than twenty one (21) days, and in the case of any other Corporation, not less than ten (10) days, but, in either case, not more than fifty (50) days, before the date of the meeting to each director, to the auditor

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and to each shareholder entitled to vote at such meeting. A notice of a meeting is not required to be sent to shareholders who were not registered on the records of the Corporation or its transfer agent on the record date determined under subsection 12.9(a) of this by-law but failure to receive a notice does not deprive a shareholder of the right to vote at the meeting.

12.6 Contents of Notice

The notice of a meeting of shareholders shall state the day, hour and place of the meeting, and shall state or be accompanied by a statement of

(i) the nature of any special business to be transacted at the meeting in sufficient detail to permit a shareholder to form a reasoned judgment thereon, and
(ii) the text of any special resolution or by-law to be submitted to the meeting.

For the purposes of this section “special business” includes all business transacted at a special meeting of shareholders and all business transacted at an annual meeting of shareholders, except consideration of the minutes of an earlier meeting, the financial statements and auditor’s report, election of directors and reappointment of the incumbent auditor.

12.7 Waiver of Notice

A shareholder and any other person entitled to attend a meeting of shareholders may in any manner and at any time waive notice of a meeting of shareholders, and attendance of any such person at a meeting of shareholders is a waiver of notice of the meeting, except where he attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

12.8 Notice of Adjourned Meetings

(a) If a meeting of shareholders is adjourned for less than thirty (30) days, it is not necessary to give notice of the adjourned meeting other than by announcement at the earliest meeting that is adjourned.
(b) If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of thirty (30) days or more, notice of the adjourned meeting shall be given as for an original meeting.

12.9 Record Date for Notice

(a) The directors may by resolution fix in advance a time and date as the record date for the determination of the shareholders entitled to receive notice of a meeting of the shareholders, which record date shall not precede by more than fifty (50) days or by less than twenty one (21) days the date on which the meeting is to be held. Where no such record date for the determination of the shareholders entitled to

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notice of a meeting of the shareholders is fixed by the directors as aforesaid, such record date shall be:

(i) at the close of business on the day immediately preceding the day on which notice of such meeting is given, or
(ii) if no notice is given, the day on which the meeting is held;
(b) If a record date is fixed pursuant to subsection (a) of this section, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice thereof shall be given, not less than seven days before the date so fixed, in accordance with section 15.3 hereof.

12.10 Omission of Notice

Subject to the provisions of the Act, the accidental omission to give notice of any meeting of shareholders to any person entitled thereto or the non-receipt of any notice by any such person shall not invalidate any resolution passed or any proceedings taken at any meeting of shareholders.

12.11 List of Shareholders

(a) The Corporation shall prepare a list of shareholders entitled to receive notice of a meeting, arranged in alphabetical order and showing the number of shares held by each shareholder, which list shall be prepared:
(i) if a record date is fixed under subsection 12.9(a) of this by-law not later than ten days after such record date; or
(ii) if no record date is fixed,
- (A) at the close of business on the day immediately preceding the day on which notice is given, or
- (B) where no notice is given, on the day on which the meeting is held.
(b) A shareholder may examine the list of shareholders,
(i) during usual business hours at the registered office of the Corporation or at the place where its central securities register is maintained, and
(ii) at the meeting of shareholders for which the list was prepared.

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12.12 Shareholders Entitled to Vote

Where the Corporation fixes a record date under subsection 12.9(a) of this by-law, a person named in the list prepared under section 12.11 of this by-law is entitled to vote the shares shown opposite his or her name at the meeting to which the list relates.

12.13 Persons Entitled to be Present

The only persons entitled to attend a meeting of shareholders shall be those entitled to vote thereat and the President, the Secretary, the directors, the scrutineer or scrutineers and the auditor and others who, although not entitled to vote, are entitled or required under any provision of the Act or the articles or the by-laws to be present at the meeting. Any other person may be admitted only on the invitation of the chairman of the meeting or with the consent of the meeting.

12.14 Proxies

(a) Every shareholder entitled to vote at a meeting of shareholders may by means of a proxy appoint a proxyholder, or one or more alternate proxyholders, who need not be shareholders, as his or her nominee to attend and act at the meeting in the manner, to the extent and with the authority conferred by the proxy.
(b) A proxy shall be executed by the shareholder or his or her attorney authorized in writing or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized and shall conform with the requirements of the Act.

12.15 Revocation of Proxies

A shareholder may revoke a proxy

(i) by depositing an instrument in writing executed by him or her or by his or her attorney authorized in writing,
(A) at the registered office of the Corporation at any time up to and including the last business day preceding the day of the meeting, or any adjournment thereof, at which the proxy is to be used, or
(B) with the chairman of the meeting on the day of the meeting or an adjournment thereof; or
(ii) in any other manner permitted by law.

12.16 Deposit of Proxies

The directors may by resolution fix a time not exceeding forty-eight (48) hours, excluding Saturdays and holidays, preceding any meeting or adjourned meeting of shareholders before which

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time proxies to be used at that meeting must be deposited with the Corporation or an agent thereof, and any period of time so fixed shall be specified in the notice calling the meeting.

12.17 Joint Shareholders

Where two (2) or more persons hold shares jointly, one of those holders present at a meeting of shareholders may in the absence of the others vote the shares, but if two (2) or more of those persons are present, in person or by proxy, they shall vote as one on the shares jointly held by them.

12.18 Chairman and Secretary

(a) The chairman of any meeting of shareholders shall be the first mentioned of such of the following officers as have been appointed and who is present at the meeting: Chairman of the Board, President or, in the absence of the aforesaid officers, a VicePresident who is a director. If there is no such officer or if at a meeting none of them is present within fifteen (15) minutes after the time appointed for the holding of the meeting the shareholders present shall choose a person from their number to be the chairman.
(b) The Secretary shall be the secretary of any meeting of shareholders, but if the Secretary is absent, the chairman shall appoint some person who need not be a shareholder to act as secretary of the meeting.

12.19 Scrutineers

The chairman of any meeting of shareholders may appoint one or more persons to act as scrutineer or scrutineers at such meeting and in that capacity to report to the chairman such information as to attendance, representation, voting and other matters at the meeting as the chairman shall direct.

12.20 Votes to Govern

At all meetings of shareholders every question shall, unless otherwise required by law, the articles or the by-laws, be determined by the majority of the votes duly cast on the question. In case of an equality of votes, the chairman presiding at the meeting shall not have a second or casting vote in addition to the vote or votes to which he may be entitled as a shareholder.

12.21 Show of Hands

At all meetings of shareholders, every question submitted to the meeting shall be decided by a show of hands unless a ballot thereon is required by the chairman or is demanded by a shareholder or proxyholder present and entitled to vote. Upon a show of hands every person present who is either a shareholder entitled to vote or the duly appointed proxyholder of such a shareholder shall have one vote. Before or after a vote by a show of hands has been taken upon

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any question, the chairman may require, or any shareholder or proxyholder present and entitled to vote may demand, a ballot thereon. Unless a ballot is demanded, an entry in the minutes of a meeting of shareholders to the effect that the chairman declared a motion to be carried is admissible in evidence as prima facie proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the motion.

12.22 Ballots

If a ballot is required by the chairman of the meeting or is duly demanded by any shareholder or proxyholder and the demand is not withdrawn, a ballot upon the question shall be taken in such manner and at such time as the chairman of the meeting shall direct.

12.23 Votes on Ballots

Unless the articles otherwise provide, upon a ballot each shareholder who is present in person or represented by proxy shall be entitled to one vote for each share in respect of which he is entitled to vote at the meeting and the result of the ballot shall be the decision of the meeting.

12.24 Adjournment

The chairman presiding at a meeting of shareholders may, with the consent of the meeting and subject to such conditions as the meeting decides, adjourn the meeting from time to time and from place to place and, subject to the provisions of the Act and subsection 12.8(b) of this by-law no notice of such adjournment or of the adjourned meeting need be given to the shareholders. Subject to the provisions of the Act, any business may be brought before or dealt with at any adjourned meeting which might have been brought before or dealt with at the original meeting in accordance with the notice calling such meeting.

12.25 Quorum

At any meeting of shareholders, two (2) individuals present in person, each of whom is either a shareholder entitled to attend and vote at such meeting or the proxyholder of such a shareholder appointed by means of a valid proxy, shall be a quorum for the choice of a chairman (if required) and for the adjournment of the meeting. For all other purposes a quorum for any meeting of shareholders (unless a greater number of shareholders and/or a greater number of shares are required by the Act or by the articles or the by-laws) shall be two (2) individuals present in person, each of whom is either a shareholder entitled to attend and vote at such meeting or the proxyholder of such a shareholder appointed by means of a valid proxy, holding or representing by proxy not less than 5% of the total number of the issued shares of the Corporation for the time being enjoying voting rights at such meeting. No business shall be transacted at any meeting of shareholders while the requisite quorum is not present.

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12.26 Only One Shareholder

Where the Corporation has only one shareholder, or only one holder of any class or series of shares, that shareholder present in person or by proxy constitutes a meeting.

ARTICLE 13 - SHARES AND TRANSFERS

13.1 Issuance

Subject to the provisions of the Act and the articles, shares of the Corporation may be issued at such time and to such persons and for such consideration as the directors may by resolution determine, but no share shall be issued until it is fully paid in money or in property or past service that is not less in value than the fair equivalent of the money that the Corporation would have received if the share had been issued for money.

13.2 Commissions

The directors may from time to time authorize the Corporation to pay a reasonable commission to any person in consideration of his or her purchasing or agreeing to purchase shares of the Corporation from the Corporation or from any other person, or procuring or agreeing to procure purchasers for any such shares.

13.3 Register of Transfers

Subject to the Ontario Securities Transfer Act, 2006 (the “ STA ”), no transfer of a share shall be registered in a securities register except upon presentation of the certificate, if any, issued by the Corporation, representing the share with an endorsement which complies with the STA made on or delivered with it, duly executed by an appropriate person as provided by the STA, together with such reasonable assurance that the endorsement is genuine and effective as the Board may from time to time prescribe, on payment of all applicable taxes and any reasonable fees prescribed by the Board, on compliance with the restrictions on issue, transfer or ownership authorized by the Articles or any Unanimous Shareholder Agreement and on satisfaction of any lien referred to in Section 13.4 of these by-laws.

13.4 Lien on Shares

Except where it has shares listed on a stock exchange recognized by the Ontario Securities Commission, subject to the provisions of the Act, the Corporation has a lien on a share registered in the name of a shareholder or his or her legal representative for a debt of that shareholder to the Corporation. Such lien may be enforced by the Corporation in any manner permitted by law.

13.5 Share Certificates

(a) Unless otherwise provided in the Articles, the Board may provide by resolution that all or any classes and series of shares or other securities shall be uncertificated

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securities, provided that such resolution shall not apply to securities represented by a certificate until such certificate is surrendered to the Corporation.

(b) Subject to subsection 13.5(a) of these by-laws, every holder of one or more securities of the Corporation is entitled at his or her option to a security certificate or to a non-transferable written acknowledgement of his or her right to obtain a security certificate from the Corporation, stating the number, class or series of securities held by him or her as shown in the securities register. The certificates shall be in such form as the Board may from time to time approve and need not be under corporate seal. Unless otherwise ordered by the Board, any such certificate shall be signed manually.
(c) Share certificates and acknowledgements of a shareholder’s right to a share certificate, respectively, shall (subject to compliance with the provisions of the Act) be in such form as the directors may from time to time by resolution approve and, unless otherwise provided by resolution of the board, such certificates and acknowledgements may be signed by any two of the following officers: the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, the Secretary or a Vice-President holding office at the time of the signing, and notwithstanding any change in the persons holding such offices between the time of actual signing and the issuance of any certificate or acknowledgement and notwithstanding that the signing officer may not have held office at the date of the issuance of such certificate or acknowledgment, any such certificate or acknowledgement so signed shall be valid and binding upon the Corporation.
(d) Notwithstanding the provisions of section 2.4 of this by-law, the signature of the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President or a Vice-President may be printed, engraved, lithographed or otherwise mechanically reproduced upon certificates and acknowledgements for shares of the Corporation, and certificates and acknowledgements so signed shall be deemed to have been manually signed by the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President or a Vice-President whose signature is so printed, engraved, lithographed or otherwise mechanically reproduced thereon and shall be as valid as if they had been signed manually. Where the Corporation has appointed a transfer agent pursuant to subsection 13.6(a) of this by-law the signature of the Secretary or Assistant Secretary may also be printed, engraved, lithographed or otherwise mechanically reproduced, and when countersigned by or on behalf of a transfer agent, share certificates and acknowledgements so signed shall be as valid as if they had been signed manually.

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13.6 Transfer Agent

(a) For each class of securities and warrants issued by it, the Corporation may, from time to time, appoint or remove
(i) a trustee, transfer agent or other agent to keep the securities register and the register of transfers and one or more persons or agents to keep branch registers; and
(ii) a registrar, trustee or agent to maintain a record of issued security certificates and warrants;

and the person or persons appointed pursuant to this subsection shall be referred to in this by-law as a “transfer agent”.

(b) Subject to compliance with the provisions of the Act, the directors may by resolution provide for the transfer and the registration of transfers of shares of the Corporation in one or more places. A transfer agent shall keep all necessary books and registers of the Corporation for the registration and transfer of such shares of the Corporation. All share certificates issued by the Corporation for shares for which a transfer agent has been appointed as aforesaid shall be countersigned by or on behalf of the said transfer agent.

13.7 Transfer of Shares

Subject to the restrictions on transfer set forth in the articles, shares of the Corporation shall be transferable on the books of the Corporation in accordance with the applicable provisions of the Act.

13.8 Defaced, Destroyed, Stolen or Lost Certificates

Where the owner of a share or shares of the Corporation claims that the certificate for such share or shares has been lost, apparently destroyed or wrongfully taken, the Corporation shall issue a new share certificate in place of the original share certificate if such owner

(i) so requests before the Corporation has notice that shares represented by the original certificate have been acquired by a bona fide purchaser;
(ii) files with the Corporation an indemnity bond sufficient in the Corporation’s opinion to protect the Corporation and any transfer agent from any loss that it or any of them may suffer by complying with the request to issue a new share certificate; and
(iii) satisfies any other reasonable requirements imposed by the Corporation.

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13.9 Joint Shareholders

If two (2) or more persons are registered as joint holders of any share or shares, the Corporation is not bound to issue more than one share certificate in respect thereof and delivery of a share certificate to one of such persons is sufficient delivery to all of them.

13.10 Deceased Shareholders

In the event of the death of a holder, or of one of the joint holders, of any share, the Corporation shall not be required to make any entry in the securities register or register of transfers in respect thereof or to make payment of any dividends thereon except upon production of all such documents as may be required by law and upon compliance with the reasonable requirements of the Corporation or any of its transfer agents.

ARTICLE 14 - DIVIDENDS

14.1 Declaration of Dividends

Subject to the provisions of the Act and the articles, the directors may from time to time declare and the Corporation may pay dividends to the shareholders according to their respective rights and interests in the Corporation. Dividends may be paid in money or property or by issuing fully paid shares of the Corporation or options or rights to acquire fully paid shares of the Corporation.

14.2 Joint Shareholders

(a) In case several persons are registered as joint holders of any share or shares of the Corporation, the cheque for any dividend payable to such joint holders shall, unless such joint holders otherwise direct, be made payable to the order of all such joint holders and if more than one address appears on the books of the Corporation in respect of such joint holding the cheque shall be mailed to the first address so appearing.
(b) In case several persons are registered as the joint holders of any share or shares of the Corporation, any one of such persons may give effectual receipts for all dividends and payments on account of dividends on such shares and/or payments in respect of the redemption of such shares.

ARTICLE 15 - RECORD DATES

15.1 Fixing Record Dates

For the purpose of determining shareholders:

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(i) entitled to receive payment of a dividend;
(ii) entitled to participate in a liquidation or distribution; or
(iii) for any other purpose except the right to receive notice of or to vote at a meeting,

the directors may fix in advance a date as the record date for such determination of shareholders, but such record date shall not precede by more than fifty (50) days the particular action to be taken.

15.2 No Record Date Fixed

If no record date is fixed pursuant to section 15.1 hereof, the record date for the determination of shareholders for any purpose other than to establish a shareholder’s right to receive notice of a meeting or to vote shall be at the close of business on the day on which the directors pass the resolution relating thereto.

15.3 Notice of Record Date

If a record date is fixed, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice thereof shall be given, not less than seven days before the date so fixed:

(i) by advertisement in a newspaper published or distributed in the place where the Corporation has its registered office and in each place in Canada where it has a transfer agent or where a transfer of its shares may be recorded; and
(ii) by written notice to each stock exchange in Canada on which the shares of the Corporation are listed for trading.

15.4 Effect of Record Date

In every case where a record date is fixed pursuant to section 15.1 hereof in respect of the payment of a dividend, the making of a liquidation distribution or the issue of warrants or other rights to subscribe for shares or other securities, only shareholders of record at the record date shall be entitled to receive such dividend, liquidation distribution, warrants or other rights.

ARTICLE 16 - CORPORATE RECORDS AND INFORMATION

16.1 Keeping of Corporate Records

(a) The Corporation shall prepare and maintain, at its registered office or at such other place in Ontario designated by the directors:
(i) the articles and the by-laws and all amendments thereto:

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(ii) minutes of meetings and resolutions of shareholders;
(iii) a register of directors in which are set out the names and residence addresses, while directors, including the street and number, if any, of all persons who are or have been directors with the several dates on which each became or ceased to be a director;
(iv) a securities register in which are recorded the securities issued by the Corporation in registered form, showing with respect to each class or series of securities
(A) the names, alphabetically arranged, of persons who,
- (1) are or have been within six years registered as shareholders and the address including the street and number, if any, of every such person while a holder, and the number and class of shares registered in the name of such holder,
- (2) are or have been within six years registered as holders of debt obligations of the Corporation and the address including the street and number, if any, of every such person while a holder, and the class or series and principal amount of the debt obligations registered in the name of such holder, or
- (3) are or have been within six years registered as holders of warrants of the Corporation, other than warrants exercisable within one year from the date of issue and the address including the street and number, if any, of every such person while a registered holder, and the class or series and number of warrants registered in the name of such holder; and

(B) the date and particulars of the issue of each security and warrant.

(b) In addition to the records described in subsection (a) of this section, the Corporation shall prepare and maintain adequate accounting records and records containing minutes of meetings and resolutions of the directors and any committee. The records described in this subsection shall be kept at the registered office of the Corporation or at such other place in Ontario as is designated by the directors and shall be open to examination by any director during normal business hours of the Corporation.
(c) The Corporation shall also cause to be kept a register of transfers in which all transfers of securities issued by the Corporation in registered form and the date and other particulars of each transfer shall be set out.

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16.2 Access to Corporate Records

Shareholders and creditors of the Corporation and their agents and legal representatives may examine the records referred to in subsection 16.1(a) of this by-law during the usual business hours of the Corporation and may take extracts therefrom, free of charge. If the Corporation is an offering corporation, any other person may examine such records during the usual business hours of the Corporation and may take extracts therefrom upon payment of a reasonable fee.

16.3 Copies of Certain Corporate Records

A shareholder is entitled upon request and without charge to one copy of the articles and by-laws.

16.4 Report to Shareholders

A copy of the financial statements of the Corporation, a copy of the auditor’s report, if any, to the shareholders and a copy of any further information respecting the financial position of the Corporation and the results of its operations required by the articles and the by-laws which are to be placed before an annual meeting of shareholders pursuant to the Act shall be sent to each shareholder not less than ten (10) days before such annual meeting of shareholders (or, if the Corporation is an offering Corporation, not less than twenty-one (21) days) or before the signing of a resolution in accordance with the Act in lieu of such annual meeting, except to a shareholder who has informed the Corporation in writing that he does not wish to receive a copy of those documents.

16.5 No Discovery of Information

Except as specifically provided for in this Article, and subject to all applicable law, no shareholder shall be entitled to or to require discovery of any information respecting any details or conduct of the Corporation’s business which in the opinion of the directors would be inexpedient or inadvisable in the interests of the Corporation to communicate to the public.

16.6 Conditions for Inspection

The board may from time to time by resolution determine whether and to what extent and at what times and place and under what conditions or regulations the accounts and books of the Corporation or any of them shall be open to the inspection of shareholders, and no shareholder shall have any right to inspect any account or book or document of the Corporation, except as specifically provided for in this Article or as otherwise provided for by statute or as authorized by resolution of the board.

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ARTICLE 17 - NOTICES

17.1 Method of Giving

Any notice, communication or other document to be sent or given by the Corporation to a shareholder, director, officer, or auditor of the Corporation under any provision of the Act, the articles or by-laws shall be sufficiently sent and given if delivered personally to the person to whom it is to be given or if delivered to his or her last address as shown in the records of the Corporation or its transfer agent or if mailed by prepaid ordinary mail or air mail in a sealed envelope addressed to him or her at his or her last address as shown on the records of the Corporation or its transfer agent or if sent by any means of wire or wireless or any other form of transmitted or recorded communication. The Secretary may change the address on the records of the Corporation of any shareholder in accordance with any information believed by him or her to be reliable. A notice, communication or document so delivered shall be deemed to have been sent and given when it is delivered personally or delivered at the address aforesaid. A notice, communication or document so mailed shall be deemed to have been sent and given on the day it is deposited in a post office or public letter box and shall be deemed to be received by the addressee on the fifth day after such mailing. A notice sent by any means of wire or wireless or any other form of transmitted or recorded communication shall be deemed to have been given when delivered to the appropriate communication corporation or agency or its representative for dispatch.

17.2 Shares Registered in More Than One Name

All notices or other documents with respect to any shares of the Corporation registered in the names of two or more persons as joint shareholders shall be addressed to all of such persons and sent to the address or addresses for such persons as shown in the records of the Corporation or its transfer agent but notice to one of such persons shall be sufficient notice to all of them.

17.3 Persons Becoming Entitled by Operation of Law

Subject to the provisions of the Act, every person who by operation of law, transfer or by any other means whatsoever shall become entitled to any share or shares of the Corporation shall be bound by every notice or other document in respect of such share or shares which previous to his or her name and address being entered on the records of the Corporation shall be duly given to the person or persons from whom he derives his or her title to such share or shares.

17.4 Deceased Shareholder

Any notice or document delivered or sent by mail or left at the address of any shareholder as such address appears on the records of the Corporation shall, notwithstanding that such shareholder is then deceased and whether or not the Corporation has notice of his or her death, be deemed to have been duly given or served in respect of the shares whether held solely or jointly with other persons by such shareholder until some other person is entered in his or her stead on the records of the Corporation as the holder or one of the joint holders thereof and such service of such

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notice shall for all purposes be deemed a sufficient service of such notice or document on his or her heirs, executors or administrators and on all persons, if any, interested with him or her in such shares.

17.5 Signature to Notice

The signature, if any, to any notice to be given by the Corporation may be written, stamped, typewritten, printed or otherwise mechanically reproduced in whole or in part.

17.6 Proof of Service

A certificate of the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, a Vice-President, the Secretary or the Treasurer or of any other officer in office at the time of the making of the certificate or of a transfer officer of any transfer agent or branch transfer agent of shares of any class of the Corporation as to facts in relation to the delivery or mailing or service of any notice or other document to any shareholder, director, officer or auditor or publication of any notice or other document shall, in the absence of evidence to the contrary, be proof thereof.

17.7 Computation of Time

Where a given number of days’ notice or notice extending over any period is required to be given, the number of days or period shall be computed in accordance with the definition of “day” contained in section 1.1 of this by-law.

17.8 Waiver of Notice

Any shareholder (or his or her duly appointed proxyholder), director, officer, auditor or member of a committee may at any time waive any notice, or waive or abridge the time for any notice, required to be given to him or her under any provisions of the Act, the articles, the by-laws or otherwise and such waiver or abridgement shall cure any default in the giving or in the time of such notice, as the case may be. Any such waiver or abridgement shall be in writing except a waiver of notice of a meeting of shareholders or of the board which may be given in any manner.

ARTICLE 18 - REPEAL OF FORMER BY-LAWS

18.1 Repeal of By-laws No. 1 and 1A

By-laws No. 1 and No. 1A of the Corporation are repealed as of the coming into force of this By-law No. 2. The repeal shall not affect the previous operation of any by-law so repealed or affect the validity of any act done or right, privilege, obligation or liability acquired or incurred under, or the validity of any contract or agreement made pursuant to, or the validity of any articles (as defined in the Act) or predecessor charter documents of the Corporation obtained pursuant to, any such by-law before its repeal. All officers and persons acting under any by-law so repealed

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shall continue to act as if appointed under the provisions of this by-law and all resolutions of the shareholders or the board or a committee of the board with continuing effect passed under any repealed by-law shall continue to be good and valid except to the extent inconsistent with this bylaw and until amended or repealed.

PASSED AND MADE this ____ day of

, 2021.

G- 1

SCHEDULE "G" BCBCA CONTINUANCE APPLICATION AND NOTICE OF ARTICLES

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DO NOT MAIL THIS FORM to BC Registry Services unless you are instructed to do so by registry staff. The Regulation under the Business Corporations Act requires the electronic version of this form to be filed on the Internet at www.corporateonline.gov.bc.ca

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If you are continuing a company into BC and want the BC incorporation number as its name, you will need to file this form on paper. Complete this form and mail to the Corporate Registry, along with a letter from the corporation’s home jurisdiction authorizing the continuation in. For information on the content of the authorization letter, see the Corporate Online Help Centre at www.corporateonline.gov.bc.ca for “Continuation Application” and “Authorization for Continuation In.”

A NAME OF COMPANY – Choose one of the following:

SPECTRA7 MICROSYSTEMS INC.

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Federal

C CONTINUATION EFFECTIVE DATE – Choose one of the following:

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D AUTHORIZATION FOR CONTINUATION

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CONTINUATION APPLICATION

BUSINESS CORPORATIONS ACT, RFDSJNM )&(

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E REGISTRATION AS AN EXTRAPROVINCIAL COMPANY

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NOTICE OF ARTICLES

A NAME OF COMPANY

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SPECTRA7 MICROSYSTEMS INC.

B TRANSLATION OF COMPANY NAME

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C DIRECTOR NAME(S) AND ADDRESS(ES)

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D REGISTERED OFFICE ADDRESSES

BC 25th Floor, 700 West Georgia Street, Vancouver V7Y 1K8	BC 25th Floor, 700 West Georgia Street, Vancouver V7Y 1K8	BC 25th Floor, 700 West Georgia Street, Vancouver V7Y 1K8	BC 25th Floor, 700 West Georgia Street, Vancouver V7Y 1K8	BC 25th Floor, 700 West Georgia Street, Vancouver V7Y 1K8	BC 25th Floor, 700 West Georgia Street, Vancouver V7Y 1K8	BC 25th Floor, 700 West Georgia Street, Vancouver V7Y 1K8	BC 25th Floor, 700 West Georgia Street, Vancouver V7Y 1K8	BC 25th Floor, 700 West Georgia Street, Vancouver V7Y 1K8	BC 25th Floor, 700 West Georgia Street, Vancouver V7Y 1K8
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F	AUTHORIZED SHARE STRUCTURE

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BUSINESS NUMBER REQUEST

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BUSINESS NUMBERS ACT , section 7

Telephone: 1 877 526-1526 www.bcreg.ca

Mailing Address:

PO Box 9431 Stn Prov Govt Courier Address: 200 – 940 Blanshard Street Victoria BC V8W 9V3 Victoria BC V8W 3E6

INSTRUCTIONS:

Please type or print clearly in block letters.

The Province of British Columbia has entered into a partnership with the Canada Revenue Agency (CRA) to use the national Business Number (BN) as a convenient way for corporations to identify themselves when communicating with federal and provincial governments.

The Corporate Registry, under the authority of the Business Number Act , is therefore collecting the BN from both corporations applying for registration in British Columbia and corporations currently registered in British Columbia. This will allow corporations to use their BN as an identifier the next time they communicate with the Corporate Registry.

You will already have a BN if you have been incorporated federally or if you are incorporated in another Canadian jurisdiction.

You may have also received a BN from CRA if you:

collect GST/HST;
have employees;
import or export goods to or from Canada;
operate a taxi or limo service;
are registered with WorkSafeBC, and/or;
are registered to do business in another Canadian jurisdiction

Freedom of Information and Protection of Privacy Act (FOIPPA): Personal information provided on this form is collected, used and disclosed under the authority of the FOIPPA and the Business Number Act for the purposes of assessment. Questions regarding the collection, use and disclosure of personal information can be directed to the Manager of Registries Operations at 1 877 526-1526, PO Box 9431 Stn Prov Govt, Victoria BC V8W 9V3.

COMPLETE ITEM A OR B

A BUSINESS NUMBER

Your Business Number (e.g., GST/HST account) would be displayed as a 15 character identi er, for example: 82123 5679 RT 0001 . The first nine numbers uniquely identify your business – it’s those numbers we need.

Please enter the first 9 digits here:

842048803

B

DIRECTOR NAME

If you do not have a Business Number please enter the name of a director of your corporation (as per CRA requirements) so that we can request one for you. The director’s name is confidential information and is collected under the authority of the Business Number Act .

LAST NAME

FIRST NAME

FORM 01 BNA (AUG 2017)

H- 1

SCHEDULE "H" BCBCA CONTINUANCE ARTICLES

See following page.

SPECTRA7 MICROSYSTEMS INC.

(the “Company”)

The Company has as its articles the following articles.

Full name and signature of a director	Date of signing
___________

Incorporation number:

SPECTRA7 MICROSYSTEMS INC.

(the “Company”)

ARTICLES

1.	INTERPRETATION ....................................................................................................................................... 2
2.	SHARES AND SHARE CERTIFICATES ..................................................................................................... 3
3.	ISSUE OF SHARES ....................................................................................................................................... 5
4.	SHARE REGISTERS ..................................................................................................................................... 5
5.	SHARE TRANSFERS .................................................................................................................................... 6
6.	TRANSMISSION OF SHARES ..................................................................................................................... 7
7.	PURCHASE OF SHARES .............................................................................................................................. 7
8.	BORROWING POWERS ............................................................................................................................... 8
9.	ALTERATIONS ............................................................................................................................................. 8
10.	MEETINGS OF SHAREHOLDERS ............................................................................................................ 10
11.	PROCEEDINGS AT MEETINGS OF SHAREHOLDERS .......................................................................... 11
12.	VOTES OF SHAREHOLDERS.................................................................................................................... 15
13.	DIRECTORS ................................................................................................................................................. 17
14.	ELECTION AND REMOVAL OF DIRECTORS ........................................................................................ 18
15.	POWERS AND DUTIES OF DIRECTORS ................................................................................................. 23
16.	INTERESTS OF DIRECTORS AND OFFICERS ....................................................................................... 23
17.	PROCEEDINGS OF DIRECTORS .............................................................................................................. 24
18.	EXECUTIVE AND OTHER COMMITTEES .............................................................................................. 26
19.	OFFICERS .................................................................................................................................................... 27
20.	INDEMNIFICATION ................................................................................................................................... 28
21.	DIVIDENDS ................................................................................................................................................. 28
22.	ACCOUNTING RECORDS AND AUDITOR ............................................................................................. 30
23.	NOTICES ...................................................................................................................................................... 30
24.	SEAL AND EXECUTION OF DOCUMENTS ............................................................................................ 32

1. INTERPRETATION

1.1 Definitions

In these Articles, unless the context otherwise requires:

(1) “ Acknowledgement ” means a non-transferable written acknowledgement of the shareholder’s right to obtain a certificate for shares of any class or series, including a direct registration system advice or the equivalent in any non-certificated inventory system administered by the Company or any transfer agent or depository of the Company;
(2) “ Applicable Securities Laws ” means the applicable securities legislation of Canada (if any), each relevant province and territory of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins, blanket orders and rulings and notices of the securities commission and similar regulatory authority of each province and territory of Canada;
(3) “ appropriate person ” has the meaning assigned thereto in the Securities Transfer Act ;
(4) “ board of directors ”, “ directors ” and “ board ” mean the directors or sole director of the Company for the time being;
(5) “ Business Corporations Act ” means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;
(6) “ business day ” means any day other than a Saturday, Sunday or any statutory holiday in the province of British Columbia;
(7) “ Interpretation Act ” means the Interpretation Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;
(8) “ legal personal representative ” means the personal or other legal representative of a shareholder;
(9) “ protected purchaser ” has the meaning assigned thereto in the Securities Transfer Act ;
(10) “ registered address ” of a shareholder means the shareholder’s address as recorded in the central securities register of the Company;
(11) “ Representatives ” of a person means the affiliates and associates of such person, all persons acting jointly or in concert with any of the foregoing, and the affiliates and associates of any of such persons acting jointly or in concert, and “ Representative ” means any one of them;
(12) “ seal ” means the seal of the Company, if any;
(13) “ Securities Transfer Act ” means the Securities Transfer Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act; and
3 -

1.2 General

In these Articles:

(1) expressions referring to writing include printing, lithography, typewriting, photography, facsimile, Internet, e-mail, CD-ROM, diskette, electronic and other modes of representing or reproducing words;
(2) expressions referring to signing include facsimile, e-mail and other electronic signatures; and
(3) the words “including”, “includes” and “include” means including (or includes or include) without limitation.

1.3 Business Corporations Act and Interpretation Act Definitions Applicable

The definitions in the Business Corporations Act and the definitions and rules of construction in the Interpretation Act , with the necessary changes, so far as applicable, and unless the context requires otherwise, apply to these Articles as if the Articles were an enactment. If there is a conflict or inconsistency between a definition in the Business Corporations Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles.

1.4 Conflicts Between Articles and the Business Corporations Act

If there is a conflict or inconsistency between these Articles and the Business Corporations Act , the Business Corporations Act will prevail.

2. SHARES AND SHARE CERTIFICATES

2.1 Authorized Share Structure

The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Company.

2.2 Form of Share Certificate

Each share certificate issued by the Company must comply with, and be signed as required by, the Business Corporations Act .

2.3 Shareholder Entitled to Certificate or Acknowledgement

Unless the shares of which the shareholder is the registered owner are uncertificated shares within the meaning of the Business Corporations Act , each shareholder is entitled upon request and without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder’s name or (b) an Acknowledgement, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate or Acknowledgement and delivery of a share certificate or Acknowledgement to one of several joint shareholders or to a duly authorized agent of one of the joint shareholders will be sufficient delivery to all.

2.4 Delivery by Mail

Any share certificate or Acknowledgement may be sent to the shareholder by mail at the shareholder’s registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate or Acknowledgement is lost in the mail or stolen.

2.5 Replacement of Worn Out or Defaced Certificate or Acknowledgement

If the directors are satisfied that a share certificate or Acknowledgement is worn out or defaced, the directors must, on production to them of the share certificate or Acknowledgement, as the case may be, and on such other terms, if any, as the directors determine:

(1) order the share certificate or Acknowledgement, as the case may be, to be cancelled; and
(2) issue a replacement share certificate or Acknowledgement, as the case may be.

2.6 Replacement of Lost, Destroyed or Wrongfully Taken Share Certificate

If a person entitled to a share certificate claims that the share certificate has been lost, destroyed or wrongfully taken, the Company must issue a new share certificate, if that person:

(1) so requests before the Company has notice that the share certificate has been acquired by a protected purchaser;
(2) provides the Company with an indemnity bond sufficient in the Company’s judgment to protect the Company from any loss that the Company may suffer by issuing a new certificate; and
(3) satisfies any other reasonable requirements imposed by the directors.

A person entitled to a share certificate may not assert against the Company a claim for a new share certificate where a share certificate has been lost, apparently destroyed or wrongfully taken if that person fails to notify the Company of that fact within a reasonable time after that person has notice of it and the Company registers a transfer of the shares represented by the certificate before receiving a notice of the loss, apparent destruction or wrongful taking of the share certificate.

2.7 Recovery of New Share Certificate

If, after the issue of a new share certificate, a protected purchaser of the original share certificate presents the original share certificate for the registration of a transfer, then in addition to any rights on the indemnity bond, the Company may recover the new share certificate from a person to whom it was issued or any person taking under that person other than a protected purchaser.

2.8 Splitting Share Certificates

If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder’s name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as represented by the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share certificates in accordance with that request.

2.9 Share Certificate or Acknowledgement Fee

There must be paid to the Company, in relation to the issue of any share certificate or Acknowledgement under Articles 2.5, 2.6 or 2.8, the amount, if any and which must not exceed the amount prescribed under the Business Corporations Act , determined by the directors or the Company’s transfer agent.

2.10 Recognition of Trusts

Except as required by law or statute or these Articles, no person will be recognized by the Company as holding any share upon any trust, and the Company is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as

required by law or statute or these Articles or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.

3. ISSUE OF SHARES

3.1 Directors Authorized

Subject to the Business Corporations Act and the rights, if any, of the holders of issued shares of the Company, the Company may issue, allot, sell or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of the share.

3.2 Commissions and Discounts

The Company may at any time pay a reasonable commission or allow a reasonable discount to any person in consideration of that person purchasing or agreeing to purchase shares of the Company from the Company or any other person or procuring or agreeing to procure purchasers for shares of the Company.

3.3 Brokerage

The Company may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities.

3.4 Conditions of Issue

Except as provided for by the Business Corporations Act , no share may be issued until it is fully paid. A share is fully paid when:

(1) consideration is provided to the Company for the issue of the share by one or more of the following:

(i) past services performed for the Company; (ii) property; (iii) money; and

(2) the value of the consideration received by the Company equals or exceeds the issue price set for the share under Article 3.1.

3.5 Share Purchase Warrants, Rights and Subscription Receipts

Subject to the Business Corporations Act , the Company may issue share purchase warrants, options, rights and subscription receipts upon such terms and conditions as the directors determine, which share purchase warrants, options, rights and subscription receipts may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by the Company from time to time.

4. SHARE REGISTERS

4.1 Central Securities Register

As required by and subject to the Business Corporations Act , the Company must maintain a central securities register, which may be kept in electronic form and may be made available for inspection in accordance with the Business Corporations Act by means of computer terminal or other electronic technology.

4.2 Appointment of Agent

The directors may, subject to the Business Corporations Act , appoint an agent to maintain the central securities register. The directors may also appoint one or more agents, including the agent which keeps the central securities register, as transfer agent for its shares or any class or series of its shares, as the case may be, and the same or another agent as registrar for its shares or such class or series of its shares, as the case may be. The directors may terminate such appointment of any agent at any time and may appoint another agent in its place.

5. SHARE TRANSFERS

5.1 Registering Transfers

Subject to the Business Corporations Act and the Securities Transfer Act , a transfer of a share of the Company must not be registered unless the Company or the transfer agent or registrar for the class or series of share to be transferred has received:

(1) in the case of a share certificate that has been issued by the Company in respect of the share to be transferred, that share certificate and a written instrument of transfer (which may be on a separate document or endorsed on the share certificate) made by the shareholder or other appropriate person or by an agent who has actual authority to act on behalf of that person;
(2) in the case of an Acknowledgement, in respect of the share to be transferred, a written instrument of transfer that directs that the transfer of the share be registered, made by the shareholder or other appropriate person or by an agent who has actual authority to act on behalf of that person;
(3) in the case of a share that is an uncertificated share within the meaning of the Business Corporations Act , a written instrument of transfer that directs that the transfer of the share be registered, made by the shareholder or other appropriate person or by an agent who has actual authority to act on behalf of that person; and
(4) such other evidence, if any, as the Company or the transfer agent or registrar for the class or series of share to be transferred may require to prove the title of the transferor or the transferor’s right to transfer the share, that the written instrument of transfer is genuine and authorized and that the transfer is rightful or to a protected purchaser.

5.2 Form of Instrument of Transfer

The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company’s share certificates or in any other form that may be approved from time to time by the directors or the Company’s transfer agent for the class or series of shares to be transferred.

5.3 Transferor Remains Shareholder

Except to the extent that the Business Corporations Act otherwise provides, the transferor of shares is deemed to remain the holder of the shares until the name of the transferee is entered in a securities register of the Company in respect of the transfer.

5.4 Signing of Instrument of Transfer

An instrument of transfer signed by a person contemplated in Article 5.1 constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the Acknowledgement deposited with the instrument of transfer:

(1) in the name of the person named as transferee in that instrument of transfer; or
7 -
(2) if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.

5.5 Enquiry as to Title Not Required

Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or any Acknowledgement in respect of a right to obtain a share certificate for such shares.

5.6 Transfer Fee

There must be paid to the Company or its transfer agent, in relation to the registration of any transfer, the amount, if any, determined by the directors or the Company’s transfer agent.

6. TRANSMISSION OF SHARES

6.1 Legal Personal Representative Recognized on Death

In the case of the death of a shareholder, the legal personal representative of the shareholder, or in the case of shares registered in the shareholder’s name and the name of another person in joint tenancy, the surviving joint tenant, will be the only person recognized by the Company as having any title to the shareholder’s interest in the shares. Before recognizing a person as a legal personal representative of a shareholder, the directors may require the original grant of probate or letters of administration or a court certified copy of them or the original or a court certified or authenticated copy of the grant of representation, will, order or other instrument or other evidence of the death under which title to the shares or securities is claimed to vest.

6.2 Rights of Legal Personal Representative

The legal personal representative of a shareholder has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided appropriate evidence of appointment or incumbency, within the meaning of the Securities Transfer Act , and the documents required by the Business Corporations Act and the directors have been deposited with the Company. This Article 6.2 does not apply in the case of the death of a shareholder with respect to shares registered in the shareholder’s name and the name of another person in joint tenancy.

7. PURCHASE OF SHARES

7.1 Company Authorized to Purchase Shares

Subject to Article 7.2, the special rights or restrictions attached to the shares of any class or series and the Business Corporations Act , the Company may, if authorized by the directors, purchase or otherwise acquire any of its shares at the price and upon the terms determined by the directors.

7.2 No Purchase, Redemption or Other Acquisition When Insolvent

The Company must not make a payment or provide any other consideration to purchase, redeem or otherwise acquire any of its shares if there are reasonable grounds for believing that:

(1) the Company is insolvent; or
(2) making the payment or providing the consideration would render the Company insolvent.
8 -

7.3 Sale and Voting of Purchased Shares

If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such share is held by the Company, it:

(1) is not entitled to vote the share at a meeting of its shareholders;
(2) must not pay a dividend in respect of the share; and
(3) must not make any other distribution in respect of the share.

8. BORROWING POWERS

8.1 Borrowing Powers

The Company, if authorized by the directors, may:

(1) borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that the directors consider appropriate;
(2) issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as the directors consider appropriate;
(3) guarantee the repayment of money by any other person or the performance of any obligation of any other person; and
(4) mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

8.2 Delegation

The directors may from time to time delegate to such one or more of the directors or officers of the Company as may be designated by the board all or any of the powers conferred on the board by Article 8.1 or by the Business Corporations Act to such extent and in such manner as the directors shall determine at the time of each such delegation.

9. ALTERATIONS

9.1 Alteration of Authorized Share Structure

Subject to Article 9.2 and the Business Corporations Act , the Company may:

(1) by directors’ resolution:
(i) subdivide or consolidate all or any of its unissued, or fully paid issued, shares; or
(ii) increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;

and, if applicable, alter its Articles and Notice of Articles accordingly; or

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(2) by ordinary resolution:
(i) create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;
(ii) if the Company is authorized to issue shares of a class of shares with par value:
- (A) decrease the par value of those shares; or
- (B) if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;
(iii) change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;
(iv) alter the identifying name of any of its shares; or
(v) otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act ;

and, if applicable, alter its Articles and Notice of Articles accordingly.

9.2 Special Rights or Restrictions

(1) Subject to the Business Corporations Act and to the special rights and restrictions attached to any class or series of shares, the Company may by special resolution:
(i) create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, which have been issued; or
(ii) vary or delete any special rights or restrictions attached to the shares of any class or series of shares, which have been issued;

and, if applicable, alter its Articles and Notice of Articles accordingly.

(2) Subject to the Business Corporations Act and to the special rights and restrictions attached to any class or series of shares, the Company may by ordinary resolution:
(i) create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares for any shares which have not been issued; or
(ii) vary or delete any special rights or restrictions attached to the shares of any class or series of shares which have not been issued;

and, if applicable, alter its Articles and Notice of Articles accordingly.

9.3 Change of Name

The Company may by resolution of the directors or ordinary resolution authorize an alteration to its Notice of Articles in order to change its name and may adopt or change any translation of that name.

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9.4 Other Alterations

Unless the Business Corporations Act or these Articles otherwise require, any action that must or may be taken or authorized by the shareholders, including any amendment or alteration to these Articles, may be taken or authorized by an ordinary resolution.

10. MEETINGS OF SHAREHOLDERS

10.1 Annual General Meetings

Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act , the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized under the Business Corporations Act , and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.

10.2 Calling and Location of Meetings of Shareholders

The directors may, at any time, call a meeting of shareholders to be held at such time and at such place, either in or outside British Columbia, subject to Article 10.8, as may be determined by the directors.

10.3 Notice for Meetings of Shareholders

The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least 21 days before the meeting.

10.4 Record Date for Notice and Voting

The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of, and to vote at, any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act , by more than four months. The record date must not precede the date on which the meeting is held by fewer than 21 days. If no record date is set, the record date is 5:00 p.m. (Vancouver time) on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.5 Failure to Give Notice and Waiver of Notice

The accidental omission to send notice of any meeting of shareholders to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders, and any duly appointed proxy of a shareholder entitled to such notice, may, in writing or otherwise, waive that entitlement or may agree to reduce the period of that notice. Attendance of a person (or duly appointed proxy) at a meeting of shareholders is a waiver of entitlement to notice of the meeting unless that person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

10.6 Notice of Special Business at Meetings of Shareholders

If a meeting of shareholders is to consider special business within the meaning of Article 11.1, the notice of meeting must:

(1) state the general nature of the special business; and
(2) the text or any resolution to be submitted to the meeting in respect of such special business.
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10.7 Class Meetings and Series Meetings of Shareholders

Unless otherwise specified in these Articles, the provisions of these Articles relating to a meeting of shareholders will apply, with the necessary changes and so far as they are applicable, to a class meeting or series meeting of shareholders holding a particular class or series of shares.

10.8 Electronic Meetings

The directors may determine that a meeting of shareholders shall be held entirely by means of telephonic, electronic or other communication facilities that permit all participants to communicate with each other during the meeting. A meeting of shareholders may also be held at which some, but not necessarily all, persons entitled to attend may participate by means of such communication facilities, if the directors determine to make them available. A person participating in a meeting of shareholders by such means is deemed to be present at the meeting for all purposes of the Business Corporations Act and these Articles.

10.9 Electronic Voting

Any vote at a meeting of shareholders may be held entirely or partially by means of telephonic, electronic or other communication facilities, if the directors determine to make them available, whether or not persons entitled to attend the meeting otherwise participate in the meeting by means of communication facilities.

11. PROCEEDINGS AT MEETINGS OF SHAREHOLDERS

11.1 Special Business

At a meeting of shareholders, the following business is special business:

(1) at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;
(2) at an annual general meeting, all business is special business except for the following:
(i) business relating to the conduct of or voting at the meeting;
(ii) consideration of any financial statements of the Company presented to the meeting; (iii) consideration of any reports of the directors or auditor;
(iv) the setting or changing of the number of directors;
(v) the election or appointment of directors;
(vi) the appointment of an auditor;
(vii) the setting of the remunceration of an auditor;
(viii) business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;
(ix) any other business which, under these Articles or the Business Corporations Act , may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.
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11.2 Business to be Discussed

No business may be transacted at an annual general or special meeting of shareholders other than business that is either (i) specified in the Company’s notice of meeting (or any supplement thereto) given by or at the direction of the board of directors, (ii) otherwise properly brought before the meeting by or at the direction of the board of directors, or (iii) otherwise properly brought before the meeting by any shareholder of the Company who complies with the proposal procedures set forth in Article 11.3.

11.3 New Business

For business to be properly brought by a shareholder of the Company before an annual general or special meeting of shareholders, such shareholder must submit a proposal to the Company for inclusion in the Company’s management information circular in accordance with the requirements of the Business Corporations Act ; provided that any proposal that includes nominations for the election of directors shall also comply with the requirements of Article 14.2.

11.4 Special Majority

(1) For the purposes of the Articles and the Business Corporations Act , the majority of votes required for the Company to pass a special resolution at a general meeting is two-thirds of the votes cast on the resolution.
(2) For the purposes of the Business Corporations Act , and unless otherwise provided in the Articles, the majority of votes required for shareholders holding shares of a class or series of shares to pass a special separate resolution is two-thirds of the votes cast on the resolution.

11.5 Quorum

Subject to the special rights or restrictions attached to the shares of any class or series of shares and to Article 11.6, the quorum for the transaction of business at a meeting of shareholders is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting.

11.6 One Shareholder May Constitute Quorum

If there is only one shareholder entitled to vote at a meeting of shareholders:

(1) the quorum is one person who is, or who represents by proxy, that shareholder, and
(2) that shareholder, present in person or by proxy, may constitute the meeting.

11.7 Persons Entitled to Attend Meeting

In addition to those persons who are entitled to vote at a meeting of shareholders, the only other persons entitled to be present at the meeting are the directors, the president (if any), the chief executive officer (if any), the secretary (if any), the assistant secretary (if any), any other officers of the Company, any lawyer for the Company, the auditor of the Company, any persons invited to be present at the meeting by the directors or by the chair of the meeting and any persons entitled or required under the Business Corporations Act or these Articles to be present at the meeting; but if any of those persons does attend the meeting, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

11.8 Requirement of Quorum

No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting.

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11.9 Lack of Quorum

If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present:

(1) in the case of a general meeting requisitioned by shareholders, the meeting is dissolved, and
(2) in the case of any other meeting of shareholders, the meeting stands adjourned to a fixed time and place as determined by the chair of the board or by the directors.

11.10 Lack of Quorum at Succeeding Meeting

If, at the meeting to which the meeting referred to in Article 11.9(2) was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting constitute a quorum.

11.11 Chair, Secretary and Scrutineer

The following individual is entitled to preside as chair at a meeting of shareholders:

(1) the chair of the board, if any; or
(2) if the chair of the board is absent or unwilling to act as chair of the meeting, the president or chief executive officer, if any; or
(3) if neither the chair of the board nor the president or chief executive officer is present, or willing to act, any director.

The secretary of the Company, if any, shall serve as secretary of any meeting of shareholders, and if absent, the chair of the meeting shall appoint a person, who need not be a shareholder, to serve as secretary of the meeting. The chair of the meeting may also appoint one or more persons, who need not be shareholders, to serve as scrutineer(s) of the meeting.

11.12 Adjournments

The chair of a meeting of shareholders may, and if so directed by ordinary resolution must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

11.13 Notice of Adjourned Meeting

It is not necessary to give any notice of an adjourned meeting of shareholders or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 45 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.

11.14 Decisions by Show of Hands or Poll

Subject to the Business Corporations Act , every motion put to a vote at a meeting of shareholders will be decided on a show of hands or the functional equivalent of a show of hands by means of telephonic, electronic or other communication facility, unless a poll, before or on the declaration of the result of the vote by show of hands (or its functional equivalent), is directed by the chair or demanded by any shareholder entitled to vote who is present in person or by proxy.

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11.15 Declaration of Result

The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands (or its functional equivalent) or the poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under Article 11.14, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

11.16 Motion Need Not be Seconded

No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

11.17 Casting Vote

In the case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands (or its functional equivalent) or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as a shareholder or proxy holder.

11.18 Manner of Taking Poll

Subject to Article 11.19, if a poll is duly demanded at a meeting of shareholders:

(1) the poll must be taken:
(i) at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and
(ii) in the manner, at the time and at the place that the chair of the meeting directs;
(2) the result of the poll is deemed to be the decision of the meeting at which the poll is demanded; and
(3) the demand for the poll may be withdrawn by the person who demanded it.

11.19 Demand for Poll on Adjournment

A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.

11.20 Chair Must Resolve Dispute

In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the dispute, and his or her determination made in good faith is final and conclusive.

11.21 Casting of Votes

On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.

11.22 Demand for Poll Not to Prevent Continuance of Meeting

The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

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11.23 Retention of Ballots and Proxies

The Company must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during statutory business hours by any shareholder or proxyholder entitled to vote at the meeting. At the end of such three-month period, the Company may destroy such ballots and proxies.

11.24 Ordinary Resolution

Unless the Business Corporations Act or these Articles otherwise provide, any action that must or may be taken or authorized by the shareholders may be taken or authorized by an ordinary resolution.

12. VOTES OF SHAREHOLDERS

12.1 Number of Votes by Shareholder or by Shares

Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article 12.3:

(1) on a vote by show of hands (or its functional equivalent), every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote; and
(2) on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.

12.2 Votes of Persons in Representative Capacity

A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands (or its functional equivalent) or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

12.3 Votes by Joint Holders

If there are joint shareholders registered in respect of any share:

(1) any one of the joint shareholders may vote at any meeting of shareholders, personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or
(2) if more than one of the joint shareholders is present at any meeting of shareholders, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.

12.4 Legal Personal Representatives as Joint Shareholders

Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be joint shareholders registered in respect of that share.

12.5 Representative of a Corporate Shareholder

Any shareholder that is a corporation may authorize by resolution of its directors or governing body an individual to represent it at a meeting of shareholders and such individual may exercise on the shareholder’s behalf all the powers it could exercise if it were an individual shareholder. The authority of such an individual shall be established by

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depositing with the Company a certified copy of such resolution, or in such other manner as may be satisfactory to the secretary of the Company or the chair of the meeting. Any such representative need not be a shareholder.

12.6 Appointment of Proxy Holders

Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled to vote at a meeting of shareholders may, by proxy, appoint one or more proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy. The instructing of proxy holders may be carried out by means of telephonic, electronic or other communication facility in addition to or in substitution for instructing proxy holders by mail.

12.7 Alternate Proxy Holders

A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.

12.8 Deposit of Proxy

The board of directors may specify in the notice calling a meeting of shareholders a time, not exceeding 48 hours (excluding non-business days), preceding the meeting, or an adjournment thereof, before which proxies must be deposited with the Company or its agent specified in such notice. Subject to Articles 12.11, 12.12 and 12.13, a proxy shall be acted upon only if, prior to the time so specified, it shall have been deposited with the Company or an agent thereof specified in such notice or, where no such time is specified in such notice, if it has been so deposited or received by the secretary of the Company or by the chair of the meeting or any adjournment thereof prior to the time of voting. A proxy may be sent to the Company or its agent by written instrument, fax or any other method of transmitting legibly recorded messages and by using available telephone, electronic (including Internet) or other voting services as may be approved by the directors.

12.9 Validity of Proxy Vote

A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

(1) at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting or any adjourned meeting at which the proxy is to be used; or
(2) at the meeting or any adjourned meeting, by the chair of the meeting or adjourned meeting, before any vote in respect of which the proxy has been given has been taken.

12.10 Form of Proxy

A proxy, whether for a specified meeting or otherwise shall be in such form as approved by the directors or the chair of the meeting.

12.11 Revocation of Proxy

Subject to Article 12.12 and Article 12.13, every proxy may be revoked by an instrument in writing that is received:

(1) at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting or any adjourned meeting at which the proxy is to be used; or
(2) at the meeting or any adjourned meeting by the chair of the meeting or adjourned meeting, before any vote in respect of which the proxy has been given has been taken.
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12.12 Waiver of Proxy Time Limits

Notwithstanding Articles 12.8 and 12.11, the chair of any meeting or the directors may, but need not, at his, her or their sole discretion waive the time limits for the deposit or revocation of proxies by shareholders, including any deadline set out in the notice calling the meeting of shareholders, any proxy circular or specified in a proxy for the meeting.

12.13 Revocation of Proxy Must Be Signed

An instrument referred to in Article 12.11 must be signed as follows:

(1) if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her legal personal representative or trustee in bankruptcy;
(2) if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article 12.5.

12.14 Chair May Determine Validity of Proxy

The chair of any meeting of shareholders may, but need not, at his or her sole discretion, make determinations as to the acceptability of proxies deposited for use at the meeting, including the acceptability of proxies which may not strictly comply with the requirements of this Part 12 as to form, execution, accompanying documentation or otherwise, and any such determination made in good faith shall be final and conclusive.

12.15 Production of Evidence of Authority to Vote

The board or chair of any meeting of shareholders may, but need not, at any time (including prior to, at or subsequent to the meeting), ask questions of, and request the production of evidence from, a shareholder (including a beneficial owner), the transfer agent or such other person as they, he or she considers appropriate for the purposes of determining a person’s share ownership position as at the relevant record date and authority to vote. For greater certainty, the board or the chair of any meeting of shareholders may, but need not, at any time, inquire into the legal or beneficial share ownership of any person as at the relevant record date and the authority of any person to vote at the meeting and may, but need not, at any time, request from that person production of evidence as to such share ownership position and the existence of the authority to vote. Such request by the directors or the chair of any meeting shall be responded to as soon as reasonably possible.

13. DIRECTORS

13.1 First Directors; Number of Directors

The first directors are the persons designated as directors in the Notice of Articles that applies to the Company when it is recognized under the Business Corporations Act . The number of directors, excluding additional directors appointed under Article 13.2, is set at the greater of three and the number of directors most recently set by directors’ resolution (whether or not previous notice of the resolution was given).

13.2 Additional Directors

Notwithstanding Article 13.1, between annual general meetings, the directors may appoint one or more additional directors, but the number of additional directors appointed under this Article 13.2 must not at any time exceed:

(1) one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or
(2) in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this Article 13.2.
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13.3 Directors’ Acts Valid Despite Vacancy

An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in office.

13.4 Qualifications of Directors

A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the Business Corporations Act to become, act or continue to act as a director.

13.5 Remuneration of Directors and Reimbursement of Expenses

The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. The Company must reimburse each director for the reasonable expenses that he or she may incur on behalf of the business of the Company.

14. ELECTION AND REMOVAL OF DIRECTORS

14.1 Election at Annual General Meeting

At every annual general meeting:

(1) the shareholders entitled to vote at the annual general meeting for the election of directors must elect a board of directors consisting of the number of directors not more than the number of directors set by the directors pursuant to Article 13.1; and
(2) all the directors cease to hold office immediately before the election or appointment of directors under paragraph (1), but are eligible for re-election or re-appointment.

14.2 Nominations of Directors

(1) Only persons who are nominated in accordance with the procedures set out in this Article 14.2 shall be eligible for election as directors of the Company. Nominations of persons for election to the board of directors may be made at any annual general meeting of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors:
(i) by or at the direction of the board, including pursuant to a notice of meeting;
(ii) by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the Business Corporations Act or pursuant to a requisition of the shareholders made in accordance with the Business Corporations Act ; or
(iii) by any shareholder:
- (A) who, at the close of business on the date of the giving of the notice provided for below in this Article 14.2 and at the close of business on the record date for notice of such meeting, is entered in the central securities register of the Company as a holder of one or more shares carrying the right to vote at such meeting on the election of directors (a “ Nominating Shareholder ”); and
- (B) who complies with the notice procedures set forth in this Article 14.2.
(2) In addition to any other requirements under applicable laws, for a nomination to be made by a Nominating Shareholder, the Nominating Shareholder must have given timely notice thereof (in
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accordance with this Article 14.2) and in proper written form (in accordance with this Article 14.2) to the secretary of the Company at the principal executive offices of the Company.

(3) To be timely, a Nominating Shareholder’s notice to the Company must be made:
(i) in the case of an annual general meeting of shareholders, not less than 30 days prior to the date of the annual general meeting of shareholders; provided, however, that in the event that the annual general meeting of shareholders is to be held on a date that is less than 50 days after the date (the “ Notice Date ”) on which the first public announcement of the date of the annual general meeting was made, notice by the Nominating Shareholder may be made not later than the close of business on the 10[th] day following the Notice Date;
(ii) in the case of a special meeting (which is not also an annual general meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the close of business on the 15[th] day following the day on which the first public announcement of the date of the special meeting of shareholders was made. In no event shall any adjournment or postponement of a special meeting of shareholders or the announcement thereof commence a new time period for the giving of a Nominating Shareholder's notice as described above; and
(iii) if notice-and-access (as defined in National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer ) is used for delivery of proxy related materials in respect of a meeting described above, and the notice date in respect of the meeting is not fewer than 50 days prior to the date of the applicable meeting, the notice must be received not later than the close of business on the 40th day before the applicable meeting.
(4) To be in proper written form, a Nominating Shareholder’s notice to the Company must set forth:
(i) as to each person whom the Nominating Shareholder proposes to nominate for election as a director (each a “ Proposed Nominee ”):
- (A) the name, age and address of the Proposed Nominee;
- (B) the principal occupation or employment of the Proposed Nominee for the past five years;
- (C) the class or series and number of shares in the capital of the Company which are, directly or indirectly, under the control or direction of, or which are owned beneficially or of record by, the Proposed Nominee and his or her Representatives as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice;
- (D) full particulars regarding any contract, agreement, arrangement, understanding or relationship (collectively, “ Arrangements ”), including without limitation financial, compensation and indemnity related Arrangements, between the Proposed Nominee or any of his or her Representatives and any Nominating Shareholder or any of its Representatives; and
- (E) any other information relating to the Proposed Nominee or his or her associates or affiliates that would be required to be disclosed in a dissident’s proxy circular or other filings to be made in connection with solicitations of proxies for election of directors pursuant to the Business Corporations Act and Applicable Securities Laws; and
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(ii) as to the Nominating Shareholder giving the notice and each beneficial owner, if any, on whose behalf the nomination is made:
(A) the name, age and address of such person;
(B) the class or series and number of shares in the capital of the Company which are, directly or indirectly, under the control or direction of, or which are owned beneficially or of record by, such person as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice;
(C) full particulars regarding (i) any proxy or other Arrangement pursuant to which such person or any of its Representatives has a right to vote or direct the voting of any shares of the Company, and (ii) any other Arrangement of such person or any of its Representatives relating to the voting of any shares of the Company or the nomination of any person(s) to the board;
(D) full particulars regarding any Arrangement of such person or any of its Representatives, the purpose or effect of which is to alter, directly or indirectly, the economic interest of such person or any of its Representatives in a security of the Company or the economic exposure of any such person or any of its Representatives to the Company;
(E) full particulars of any direct or indirect interest of such person or any of its Representatives in any contract with the Company or with any of the Company’s affiliates, competitors or material suppliers;
(F) full particulars regarding any Arrangement, including without limitation financial, compensation and indemnity related Arrangements, between the Proposed Nominee or any associate or affiliate of the Proposed Nominee and such person or any of its Representatives;
(G) a representation that the Nominating Shareholder is a holder of record of securities of the Company, or a beneficial owner, entitled to vote at such meeting;
(H) a representation as to whether such person or any of its Representatives intends to deliver a proxy circular and/or form of proxy to any shareholder of the Company in connection with such nomination or otherwise solicit proxies or votes from shareholders of the Company in support of such nomination; and
(I) any other information relating to such person or any of its Representatives that would be required to be disclosed in a dissident’s proxy circular or other filings to be made in connection with solicitations of proxies for election of directors pursuant to the Business Corporations Act and Applicable Securities Laws.

The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent director of the Company in accordance with Applicable Securities Laws and the rules of any stock exchange on which the securities of the Company are then listed for trading, or that could be material to a reasonable shareholder's understanding of the independence, or lack thereof, of such proposed nominee.

(5) All information to be provided in a timely notice pursuant to Article 14.2(4) shall be provided as of the date of such notice. If requested by the Company, the Nominating Shareholder shall update
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such information forthwith so that it is true and correct in all material respects as of the date that is 10 business days prior to the date of the meeting, or any adjournment or postponement thereof.

(6) Except as otherwise provided by the special rights or restrictions attached to the shares of any class or series of the Company, no person shall be eligible for election as a director of the Company unless nominated in accordance with the provisions of this Article 14.2. The chair of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the foregoing provisions and, if any proposed nomination is not in compliance with such foregoing provisions, to declare that such defective nomination shall be disregarded.
(7) For the purposes of this Article 14.2, “public announcement” shall mean disclosure in a news release reported by a national news service in Canada, or in a document publicly filed by the Company under its issuer profile on the System for Electronic Document Analysis and Retrieval at www.sedar.com or any successor system thereof.
(8) Notwithstanding any other provision of these Articles, any notice or other document or information required to be given to the secretary of the Company pursuant to this Article 14.2 may only be given by personal delivery or facsimile transmission (at such contact information as set out on the Company’s issuer profile on the System for Electronic Document Analysis and Retrieval), and shall be deemed to have been given and made only at the time it is served by personal delivery to the secretary of the Company at the principal executive offices of the Company or sent by facsimile transmission (provided that receipt of confirmation of such transmission has been received); provided that if such delivery or transmission is made on a day which is a not a business day or later than 5:00 p.m. (Vancouver time) on a day which is a business day, then such delivery or transmission shall be deemed to have been made on the next following day that is a business day.
(9) Notwithstanding the foregoing, the board may, in its sole discretion, waive any requirement in this Article 14.2.

14.3 Consent to be a Director

No election, appointment or designation of an individual as a director is valid unless:

(1) that individual consents to be a director in the manner provided for in the Business Corporations Act ;
(2) that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or
(3) with respect to first directors, the designation is otherwise valid under the Business Corporations Act .

14.4 Failure to Elect or Appoint Directors

If:

(1) the Company fails to hold an annual general meeting on or before the date by which the annual general meeting is required to be held under the Business Corporations Act ; or
(2) the shareholders fail, at the annual general meeting to elect or appoint any directors;

then each director then in office continues to hold office until the earlier of:

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(3) the date on which his or her successor is elected or appointed; and
(4) the date on which he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.

14.5 Directors May Appoint to Fill Vacancies

The directors may appoint a qualified person to fill any vacancy occurring in the board of directors except a vacancy:

(1) resulting from an increase in the number of directors pursuant to 13.1; or
(2) resulting from a failure by the shareholders to elect the number of directors set or otherwise required under these Articles;

and a director elected or appointed to fill a vacancy on the board of directors shall hold office for the unexpired term of his or her predecessor. For greater certainty, the ability of the directors to add additional directors as provided in Article 13.2 is not filling a vacancy as contemplated hereunder.

14.6 Remaining Directors’ Power to Act

The directors may act notwithstanding any vacancy in the board of directors, but if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of calling a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Business Corporations Act , for any other purpose.

14.7 Shareholders May Fill Vacancies

If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.

14.8 Ceasing to be a Director

A director ceases to be a director when:

(1) the term of office of the director expires;
(2) the director dies;
(3) the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or
(4) the director is removed from office pursuant to Articles 14.9 or 14.10.

14.9 Removal of Director by Shareholders

The shareholders may remove any director before the expiration of his or her term of office by ordinary resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint a director to fill that vacancy.

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14.10 Removal of Director by Directors

The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.

15. POWERS AND DUTIES OF DIRECTORS

15.1 Powers of Management

The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Company.

15.2 Appointment of Attorney of Company

The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit. Any such attorney may be authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her.

16. INTERESTS OF DIRECTORS AND OFFICERS

16.1 Director Holding Other Office in the Company

A director may hold any office or place of profit with the Company, other than the office of auditor of the Company, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.

16.2 No Disqualification

No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for that reason.

16.3 Professional Services by Director or Officer

Subject to the Business Corporations Act , a director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.

16.4 Director or Officer in Other Corporations

A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Company may be interested as a shareholder or otherwise, and, subject to the Business Corporations Act , the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other person.

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17. PROCEEDINGS OF DIRECTORS

17.1 Meetings of Directors

The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine.

17.2 Voting at Meetings

Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.

17.3 Chair of Meetings

The following individual is entitled to preside as chair at a meeting of directors:

(1) the chair of the board, if any;
(2) any other director chosen by the directors present if:
(i) the chair of the board is not present at the meeting within 15 minutes after the time set for holding the meeting;
(ii) the chair of the board is not willing to chair the meeting; or
(iii) the chair of the board has advised the secretary, if any, or any other director, that they will not be present at the meeting.

17.4 Meetings by Telephone or Other Communications Medium

A director who is entitled to participate in, including vote at, a meeting of the directors or of any committee of the directors may participate:

(1) in person;
(2) by telephone; or
(3) with the consent of the directors who wish to participate in the meeting, by other communications medium;

if all directors participating in the meeting, whether in person, by telephone or other communications medium, are able to communicate with each other. A director who participates in a meeting in a manner contemplated by this Article 17.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner.

17.5 Calling of Meetings

The chair of the board, the president or chief executive officer or any director may, and the secretary or an assistant secretary of the Company, if any, on the request of any of the forgoing must, call a meeting of the directors at any time.

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17.6 Notice of Meetings

Other than for meetings held at regular intervals as determined by the directors pursuant to Article 17.1 or as provided in Article 17.7, reasonable notice of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors by any method set out in Article 23.1 or orally or by telephone conversation with that director.

17.7 When Notice Not Required

It is not necessary to give notice of a meeting of the directors to a director if:

(1) the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or
(2) the director has waived notice of the meeting.

17.8 Meeting Valid Despite Failure to Give Notice

The accidental omission to give notice of any meeting of directors to, or the non-receipt of any notice by, any director does not invalidate any proceedings at that meeting.

17.9 Waiver of Notice of Meetings

Any director may by way of a written instrument, fax, e-mail or any other method of transmitting legibly recorded messages in which the waiver of the director is evidenced, whether or not the signature of the director is included in the record, waive notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that director and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director. Attendance of a director at a meeting of the directors is a waiver of notice of the meeting unless that director attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

17.10 Quorum

The quorum necessary for the transaction of the business of the directors may be set by the directors to a number not less than 50% of the directors in office, and, if not so set, is deemed to be 50% of the directors then in office.

17.11 Validity of Acts Where Appointment Defective

Subject to the Business Corporations Act , an act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director or officer.

17.12 Consent Resolutions in Writing

A resolution of the directors or of any committee of the directors may be passed without a meeting:

(1) in all cases, if each of the directors entitled to vote on the resolution consents to it in writing; or
(2) in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed that he or she has or may have a disclosable interest, if each of the other directors who are entitled to vote on the resolution who have not made such a disclosure consents in writing to the resolution.
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A consent in writing under this Article 17.12 may be by any written instrument, fax, e-mail or any other method of transmitting legibly recorded messages in which the consent of the director is evidenced, whether or not the signature of the director is included in the record. A consent in writing may be in two or more counterparts, which together are deemed to constitute one consent in writing. A resolution of the directors or of any committee of the directors passed in accordance with this Article 17.12 is effective on the date stated in the consent in writing or on the latest date stated on any counterpart and is deemed to be a proceeding at a meeting of the directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Business Corporations Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.

18. EXECUTIVE AND OTHER COMMITTEES

18.1 Appointment and Powers of Other Committees

The directors may, by resolution:

(1) appoint one or more committees consisting of a director or directors that they consider appropriate;
(2) delegate to a committee appointed under paragraph (1) or to any officer or officers of the Company any of the directors’ powers, except:
(i) the power to fill vacancies in the board of directors;
(ii) the power to remove a director;
(iii) the power to create a committee of the directors or to change the membership of, or fill vacancies in, any committee of the directors; and
(iv) the power to appoint or remove the president or chief executive officer of the Company; and
(3) make any delegation referred to in paragraph (2) subject to the conditions set out in the resolution or any subsequent directors’ resolution.

18.2 Audit Committee

The directors shall appoint from among its number an audit committee to be composed of not fewer than three directors in compliance with all regulatory requirements and to provide to the audit committee the powers and duties as determined by the directors.

18.3 Powers of Board

The directors may, at any time, with respect to a committee appointed under Articles 18.1 or 18.2:

(1) revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration or overriding;
(2) terminate the appointment of, or change the membership of, the committee; and
(3) fill vacancies in the committee.
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18.4 Transaction of Business

The power of a committee of directors may be exercised by a meeting at which a quorum is present or by resolution consented to in writing by all members of such committee who would have been entitled to vote on that resolution at a meeting of the committee. Meetings of such committee may be held at any place in or outside of Canada, by telephone or by other communications facilities.

18.5 Procedure

Subject to the Business Corporations Act :

(1) each committee of directors shall have power to fix its quorum at not less than 50% of its members, to elect its chair and to regulate its procedure; and
(2) questions arising at any meeting of a committee at which quorum is present shall be determined by a majority of votes of the members present.

19. OFFICERS

19.1 Directors May Appoint Officers

The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any such appointment.

19.2 Functions, Duties and Powers of Officers

The directors may, for each officer:

(1) determine the title of the officer;
(2) determine the functions and duties of the officer or permit the president or chief executive officer to make that determination;
(3) delegate to the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and
(4) revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer or permit the president or chief executive officer to make such determination.

19.3 Qualifications

No officer may be appointed unless that officer is qualified in accordance with the Business Corporations Act . One person may hold more than one position as an officer of the Company. Any person appointed as the chair of the board must be a director. Any officer need not be a director.

19.4 Terms of Appointment

All appointments of officers are to be made on the terms and conditions determined by the directors, or if directed by the directors, by the chief executive officer or such other officer designated by the directors, and are subject to termination at the pleasure of the directors.

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20. INDEMNIFICATION

20.1 Mandatory Indemnification of Eligible Parties

Subject to the Business Corporations Act , the Company must indemnify an eligible party and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must indemnify, and pay expenses in advance of the final disposition of an eligible proceeding in accordance with, and to the fullest extent permitted by, the Business Corporations Act .

20.2 Indemnification of Other Persons

Subject to any restrictions in the Business Corporations Act , the Company may indemnify any person.

20.3 Non-Compliance with Business Corporations Act

The failure of an eligible party or any other person to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under this Part 20.

20.4 Company May Purchase Insurance

The Company may purchase and maintain insurance for the benefit of any person (or his or her heirs or legal personal representatives) referred to in this Part 20.

20.5 Indemnity Agreements

The Company is authorized to execute agreements evidencing its indemnity in favour of the persons contemplated by Articles 20.1 and 20.2 to the fullest extent permitted by law.

21. DIVIDENDS

21.1 Payment of Dividends Subject to Special Rights

The provisions of this Part 21 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

21.2 Declaration of Dividends

Subject to the Business Corporations Act , the directors may from time to time declare and authorize payment of such dividends as the directors may deem advisable.

21.3 No Notice Required

The directors need not give notice to any shareholder of any declaration under Article 21.2.

21.4 Record Date

The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5:00 p.m. (Vancouver time) on the date on which the directors pass the resolution declaring the dividend.

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21.5 Manner of Paying Dividend

A resolution declaring a dividend may direct payment of the dividend wholly or partly in money or by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Company or any other corporation, or in any one or more of those ways.

21.6 Settlement of Difficulties

If any difficulty arises in regard to a distribution under Article 21.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:

(1) set the value for distribution of specific assets;
(2) determine that money in substitution for all or any part of the specific assets to which any shareholders are entitled may be paid to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and
(3) vest any such specific assets in trustees for the persons entitled to the dividend.

21.7 Dividends to be Paid in Accordance with Number of Shares

All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

21.8 When Dividend Payable

Any dividend may be made payable on such date as is fixed by the directors.

21.9 Receipt by Joint Shareholders

If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

21.10 Dividend Bears No Interest

No dividend bears interest against the Company.

21.11 Fractional Dividends

If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

21.12 Payment of Dividends

Any dividend, bonuses or other moneys payable in cash in respect of shares may be paid by cheque sent through the post or by electronic transfer, so authorized by the shareholder, directed to the registered address of the holder, or in the case of joint holders, to the registered address of that one of the joint holders who is first named on the central securities register, or to such person and to such address as the holder or joint holders may direct in writing. Every such cheque shall be made payable to the order of the person whom it is sent. The mailing of such cheque or the forwarding by electronic transfer shall, to the extent of the sum represented thereby (plus the amount of any tax required by law to be deducted) discharge all liability for the dividend, unless such cheque shall not be paid on presentation or the amount of tax so deducted shall not be paid to the appropriate taxing authority.

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21.13 Capitalization of Retained Earnings or Surplus

Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any retained earnings or surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the retained earnings or surplus so capitalized or any part thereof.

21.14 Unclaimed Dividends

Any dividend unclaimed after a period of three years from the date on which the same has been declared to be payable shall be forfeited and shall revert to the Company. The Company shall not be liable to any person in respect of any dividend that is forfeited to the Company or delivered to any public official pursuant to any applicable abandoned property, escheat or similar law.

22. ACCOUNTING RECORDS AND AUDITOR

22.1 Recording of Financial Affairs

The directors must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the Business Corporations Act .

22.2 Inspection of Accounting Records

Unless the directors determine otherwise, no shareholder of the Company is entitled to inspect or obtain a copy of any accounting records of the Company.

22.3 Remuneration of Auditor

The directors may set the remuneration of the auditor of the Company.

23. NOTICES

23.1 Method of Giving Notice

Unless the Business Corporations Act or these Articles provide otherwise, a notice, statement, report or other record required or permitted by the Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods:

(1) mail addressed to the person at the applicable address for that person as follows:
(i) for a record mailed to a shareholder, the shareholder’s registered address;
(ii) for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class; or
(iii) in any other case, the mailing address of the intended recipient;
(2) delivery at the applicable address for that person as follows, addressed to the person:
(i) for a record delivered to a shareholder, the shareholder’s registered address;
(ii) for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class; or
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(iii) in any other case, the delivery address of the intended recipient;
(3) sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;
(4) sending the record by e-mail to the e-mail address provided by the intended recipient for the sending of that record or records of that class;
(5) physical delivery to the intended recipient; or
(6) creating and providing the record that is posted on or made available through a generally accessible electronic source and providing the person notice in writing, including by mail, courier, delivery, fax or e-mail, of the availability and location of the record.

23.2 Deemed Receipt

A notice, statement, report or other record that is:

(1) mailed to a person by ordinary mail to the applicable address for that person referred to in Article 23.1 is deemed to be received by the person to whom it was mailed on the day (Saturdays, Sundays and holidays excepted) following the date of mailing;
(2) faxed to a person to the fax number provided by that person referred to in Article 23.1 is deemed to be received by the person to whom it was faxed on the day it was faxed;
(3) e-mailed to a person to the e-mail address provided by that person referred to in Article 23.1 is deemed to be received by the person to whom it was e-mailed on the day it was e-mailed; and
(4) delivered by posting it on or making it available through a generally accessible electronic source referred to in Article 23.1 is deemed to be received by the person on the day such person is sent notice in writing, including by mail, courier, delivery, fax or e-mail, of the availability and location of such notice, statement, report, document or other record.

23.3 Certificate of Sending

A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that capacity on behalf of the Company stating that a notice, statement, report or other record was sent in accordance with Article 23.1 is conclusive evidence of that fact.

23.4 Notice to Joint Shareholders

A notice, statement, report or other record may be provided by the Company to the joint shareholders of a share by providing such record to the joint shareholder first named in the central securities register in respect of the share.

23.5 Notice to Legal Personal Representatives and Trustees

A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by:

(1) mailing the record, addressed to them:
(i) by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description; and
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(ii) at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or
(2) if an address referred to in paragraph (1)(i) has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.

23.6 Undelivered Notices

If on two consecutive occasions, a notice, statement, report or other record is sent to a shareholder pursuant to Article 23.1 and on each of those occasions any such record is returned because the shareholder cannot be located, the Company shall not be required to send any further records to the shareholder until the shareholder informs the Company in writing of his or her new address.

23.7 Omissions and Errors

The accidental omission to give any notice to any shareholder, director, officer, auditor or member of a committee of the directors or the non-receipt of any notice by any such person or any error in any notice not affecting the substance thereof shall not invalidate any action taken at any meeting held pursuant to such notice or otherwise founded thereon.

23.8 Unregistered Shareholders

Every person who becomes entitled to any share by any means whatsoever shall be bound by every notice in respect of such share which shall have been duly given to the shareholder from whom he, she or it derives his, her or its title to such share prior to his, her or its name and address being entered on the central securities register (whether such notice was given before or after the happening of the event upon which he, she or it became so entitled) and prior to his furnishing to the Company the proof of authority of his entitlement prescribed by the Business Corporations Act .

24. SEAL AND EXECUTION OF DOCUMENTS

24.1 Who May Attest Seal

Except as provided in Articles 24.2 and 24.3, the Company’s seal, if any, must not be impressed on any record except when that impression is attested by the signatures of:

(1) any two directors;
(2) any officer, together with any director;
(3) if the Company only has one director, that director; or
(4) any one or more directors or officers or persons as may be determined by the directors.

24.2 Sealing Copies

For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other document, despite Article 24.1, the impression of the seal may be attested by the signature of any director or officer or the signature of any other person as may be determined by the directors.

24.3 Mechanical Reproduction of Seal

The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Company as they may determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or

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interim form, on which facsimiles of any of the signatures of the directors or officers of the Company are, in accordance with the Business Corporations Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and such persons as are authorized under Article 24.1 to attest the Company’s seal may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them.

24.4 Cheques, Drafts, Notes, Etc.

All cheques, drafts or orders for the payment of money and all notes, acceptances and bills of exchange shall be signed by such director or directors, officer or officers or other person or persons, whether or not officers of the Company, and in such manner as the directors, or such officer or officers as may be delegated authority by the directors to determine such matters, may from time to time designate.

24.5 Execution of Documents Generally

The directors may from time to time by resolution appoint any one or more persons, officers or directors for the purpose of executing any instrument, document or agreement in the name of and on behalf of the Company for which the seal need not be affixed and, if no such person, officer or director is appointed, then any one officer or director of the Company may execute such instrument, document or agreement.

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SCHEDULE "I"

SUMMARY OF KEY PROVISIONS OF THE CBCA, OBCA AND BCBCA

Provision	CBCA	OBCA	BCBCA
*Constating* *Documents*	Constating documents consist of articles and by-laws any amendments thereto.	Constating documents consist of articles and by-laws any amendments thereto.	Constating documents consist of notice of articles and articles and anyamendments thereto.
*Director Residency*	At least 25% of the directors of the Corporation must be resident Canadians unless there are fewer than four directors, in which case, at least one director must be a resident Canadian.	Unless and until the Amendment comes into force, at least 25% of the directors of the Corporation must be resident Canadians unless there are fewer than four directors, in which case, at least one director must be a resident Canadian.	No director residency requirements.
*Sale of the* *Corporation’s* *Undertaking*	The CBCA requires approval of the holders of two-thirds of the shares of a corporation represented at a duly called meeting to approve a sale, lease or exchange of all or substantially all of the property of a corporation, other than in the ordinary course of business. If a sale, lease or exchange of all or substantially all of the property of a corporation would affect a particular class or series of shares in a manner that is different than the shares of another class or series entitled to vote, then such class or series of shares are entitled to a separate class or series vote, regardless of whether or not such shares otherwise carry the right to vote.	Substantially similar to the provisions of the CBCA.	Under the BCBCA, the directors of a company may sell, lease or otherwise dispose of all or substantially all of the undertaking of the company only if: (i) if it does so in the ordinary course of the company’s business; or (ii) it has been authorized to do so by special resolution. Under the BCBCA a special resolution requires the approval of a "special majority", which means the majority specified in a company’s Articles, which must be at least two-thirds and not more than three-quarters of the votes cast by those shareholders voting in person or by proxy at a general meeting of the corporation. If the articles do not contain a provision stipulating the special majority, then a special resolution is passed by at least two-thirds of the votes cast on a resolution.
*Amendments to the* *Articles of the* *Corporation*	Under the CBCA, amendments to the articles of a corporation require a resolution passed by not less than two thirds of the votes cast by the shareholders voting on the resolution authorizing the amendments and, where certain specified rights of the holders of a class or series of shares are affected differently by the amendments than the rights of the holders of other classes or series of shares, such holders are entitled to vote separately as a class or series, whether or not such class or series of shares otherwise carry the right to vote. A resolution to amalgamate a CBCA corporation requires a special resolution passed by the holders of each class or series of	Substantially similar to the provisions of the CBCA.	The requirements for alterations to the Articles of a company under the BCBCA depend upon the type of resolution specified as necessary in the company’s Articles, which, for many alterations, including a change of name, can be by a resolution of the directors. In the absence of a lesser requirement in the Articles, most corporate alterations will require a special resolution, which is a resolution passed by a majority of at least 2/3 and not more than 3/4 of the votes cast, depending on the majority specified in the Articles. Alteration of the special rights and restrictions attached to issued shares requires, subject to the type of resolution specified in the company’s Articles,

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Provision	CBCA	OBCA	BCBCA
	shares, whether or not such shares otherwise carry the right to vote, if such class or series of shares are affected differently.		consent by a special resolution of the holders of the class or series of shares affected. A proposed amalgamation or continuation of a company out of British Columbia requires a special resolution.
*Rights of Dissent* *and Appraisal*	The CBCA provides that shareholders who dissent to certain actions being taken by a corporation may exercise a right of dissent and require the corporation to purchase the shares held by such shareholders at the fair value of such shares. This dissent right is available when a corporation proposes to: (a) amend its articles to add, change or remove any provisions restricting or constraining the issue or transfer of shares of that class; (b) amend its articles to add, change or remove any restrictions on the business or businesses that the corporation may carry on; (c) amend its articles to add or remove an express statement establishing the unlimited liability of shareholders; (d) amalgamate with another corporation pursuant to certain statutory provisions; (e) be continued under the laws of another jurisdiction; or (f) sell, lease or exchange all or substantially all its property. In addition to the foregoing, the CBCA expressly provides for dissent rights with respect to a going-private transaction or a squeeze-out transaction.	Substantially similar to the provisions of the CBCA, with the exception of the dissent rights with respect to a going-private transaction or a squeeze-out transaction which are contained in the CBCA but not the OBCA.	The BCBCA contains a similar dissent remedy, although the procedure for exercising this remedy is different from that contained in the CBCA and OBCA. Similarly, the BCBCA provides shareholders of a BC company with a dissent remedy, regardless of whether the shareholders’ shares carry the right to vote, where a company proposes to: (a) alter its articles to alter restrictions on the powers of the company or on the business it is permitted to carry on; (b) adopt an amalgamation agreement; (c) approve an amalgamation with a foreign corporation; (d) approve an arrangement, the terms of which arrangement permit dissent; (e) authorize or ratify the sale, lease or other disposition of all or substantially all of the company’s’ undertaking; and (f) authorize the continuation of the company into a jurisdiction other than British Columbia. Under the BCBCA, the dissent right is also applicable to any other resolution, if dissent is authorized by the resolution, or under any court order that permits dissent.
*Shareholder* *Derivative Actions*	A broad right to bring a derivative action is contained in the CBCA and this right extends to officers, former shareholders, directors or officers of a corporation or its affiliates, and any person who, in the discretion of the court, is a proper person to make an application to court to bring a derivative action. In addition, both statutes permit derivative actions to be commenced in the name and on behalf of a corporation or any of its subsidiaries. Under the CBCA, a condition precedent to a complainant bringing a derivative action is that the complainant hasgiven at least	Substantially similar to the provisions of the CBCA, however, under the OBCA, a complainant is not required to give notice to the directors of the corporation of the complainant's intention to make an application to the court to bring a derivative action if all of the directors of the corporation are defendants in the action	Under the BCBCA, a shareholder, defined as including a beneficial shareholder and any other person whom the court considers to be an appropriate person to make an application under the BCBCA, or a director of a company, may, with leave of the court, prosecute a civil, criminal, quasi-criminal, administrative or regulatory action or proceeding in the name and on behalf of the company to enforce a right, duty or obligation owed to the company that could be enforced by the company itself, or to obtain damages for any breach of such a right, duty or obligation. An applicant may also, with leave of the court,defend a legalproceeding

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Provision	CBCA	OBCA	BCBCA
	14 days' notice to the directors of the corporation of the complainant's intention to make an application to the court to bring such a derivative action. Under the CBCA, the director appointed under Section 260 of CBCA may also commence a derivative action.		brought against a company, in the name of and on behalf of the company. The OBCA and CBCA contain similar provisions for derivative actions but the right to bring a derivative action is available to a broader group. In addition to shareholders and directors, the right under the OBCA and CBCA is available to former shareholders, former directors, officers, former officers, any affiliate of the foregoing, and any person who, in the discretion of the court, is a proper person to make an application to the court to bring a derivative action.
*Oppression* *Remedies*	Under the CBCA,, a shareholder, beneficial shareholder, former shareholder or beneficial shareholder, director, former director, officer or former officer of a corporation or any of its affiliates, or any other person who, in the discretion of a court, is a proper person to seek an oppression remedy, The OBCA allows a court to grant relief where a prejudicial effect to the shareholder is merely threatened, whereas the CBCA only allows a court to grant relief if the effect actually exists (that is, it must be more than merely threatened). Under the CBCA, such remedy is also available to the director appointed under Section 260 of CBCA.	Substantially similar to the provisions under the CBCA, however, in the case of an offering corporation under the OBCA, the Ontario Securities Commission may apply to a court for an order to rectify the matters complained of where, in respect of a corporation or any of its affiliates, any act or omission of a corporation or its affiliates effects a result, the business or affairs of a corporation or its affiliates are or have been exercised in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the interest of, any security holder, creditor, director or officer.	The CBCA and OBCA contain rights that are substantially broader than the BCBCA in that they are available to a larger class of complainants. The oppression remedy under the BCBCA is similar to the remedy found in the OBCA and CBCA, with a few differences. Under the OBCA and CBCA, the applicant can complain not only about acts of the corporation and its directors but also acts of an affiliate of the corporation and the affiliate’s directors, whereas under the BCBCA, registered and beneficial shareholders, and any other person whom the court considers appropriate, can only complain that the affairs of the company are or have been conducted, or that the powers of the directors are being or have been exercised, in a manner that is oppressive to one or more of the shareholders. In addition, under the BCBCA the applicant must bring the application in a timely manner, which is not required under the OBCA or CBCA.
*Requisitions for* *Shareholder* *Meetings*	The CBCA permits the holders of not less than 5% of the issued shares that carry the right to vote at a meeting sought to be held to require the directors to call and hold a meeting of the shareholders of the corporation for the purposes stated in the requisition. If the directors do not call a meeting within 21 days of receiving the requisition, any	Substantially similar to the provisions of the CBCA.	The BCBCA provides that one or more shareholders of a company holding not less than 5% of the issued shares of the company that carry the right to vote at a general meeting may give notice to the directors requiring them to call and hold a general meeting of shareholders to transact the business stated in the notice within

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Provision	CBCA	OBCA	BCBCA
	shareholder who signed the requisition may call the meeting.		4 months of the date of receipt of the notice. Subject to certain exceptions, if the directors fail to provide notice of a meeting within 21 days of receiving the requisition, the requisitioning shareholders, or any one or more of them holding in the aggregate, more than 2.5% of the issued shares of the corporation that carry the right to vote at general meetings, may send notice of a general meeting to be held to transact the business stated in the requisition.
*Place of* *Shareholders’* *Meetings*	Under the CBCA, a shareholders' meeting may be held any place in Canada provided in the by-laws or, in the absence of such by-law, at a place in Canada determined by the directors, or it may be held at a place outside Canada if such place is specified in the articles of the company or all the shareholders entitled to vote at the meeting agree that the meeting is to be held at that place.	Under the OBCA, subject to the articles of the corporation, and any unanimous shareholders' agreement, a shareholders' meeting may be held in or outside Ontario (including outside Canada) as determined by the directors, or in the absence of such a determination, at the place where the registered office of the corporation is located.	The BCBCA requires all meetings of shareholders to be held in British Columbia unless: (i) a location outside the province of British Columbia is provided for in the articles; (ii) the articles do not restrict the corporation from approving a location outside of the province of British Columbia for holding of the general meeting and the location of the meeting is approved by the resolution required by the articles for that purpose, or approved by ordinary resolution if no resolution is required for that purpose by the articles; or (iii) if the location for the meeting is approved in writing by the registrar before the meetingis held.
*Requisite* *Approvals*	The CBCA does not provide flexibility with respect to the level of shareholder approval required for ordinary resolutions and special resolutions. Under the CBCA, an ordinary resolution must be passed by no less than a majority of the votes cast by shareholders entitled to vote with respect to the resolution and a special resolution must be passed by not less than two-thirds of the votes cast by the shareholders entitled to vote with respect to the resolution.	Substantially similar to the provisions of the CBCA.	Under the BCBCA, a company can establish in its articles the levels for various shareholder approvals, other than those levels that are prescribed by the BCBCA. The majority of votes required for a special resolution can be specified in the articles of a company, and may be no less than two-thirds and no more than three-quarters of the votes cast.

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SCHEDULE "J" SECTION 190 OF THE CBCA

Right to dissent

190 (1) Subject to sections 191 and 241, a holder of shares of any class of a corporation may dissent if the corporation is subject to an order under paragraph 192(4)(d) that affects the holder or if the corporation resolves to

(a) amend its articles under section 173 or 174 to add, change or remove any provisions restricting or constraining the issue, transfer or ownership of shares of that class;
(b) amend its articles under section 173 to add, change or remove any restriction on the business or businesses that the corporation may carry on;
(c) amalgamate otherwise than under section 184;
(d) be continued under section 188;
(e) sell, lease or exchange all or substantially all its property under subsection 189(3); or
(f) carry out a going-private transaction or a squeeze-out transaction.

Further right

(2) A holder of shares of any class or series of shares entitled to vote under section 176 may dissent if the corporation resolves to amend its articles in a manner described in that section.

If one class of shares

(2.1) The right to dissent described in subsection (2) applies even if there is only one class of shares.

Payment for shares

(3) In addition to any other right the shareholder may have, but subject to subsection (26), a shareholder who complies with this section is entitled, when the action approved by the resolution from which the shareholder dissents or an order made under subsection 192(4) becomes effective, to be paid by the corporation the fair value of the shares in respect of which the shareholder dissents, determined as of the close of business on the day before the resolution was adopted or the order was made.

No partial dissent

(4) A dissenting shareholder may only claim under this section with respect to all the shares of a class held on behalf of any one beneficial owner and registered in the name of the dissenting shareholder.

Objection

(5) A dissenting shareholder shall send to the corporation, at or before any meeting of shareholders at which a resolution referred to in subsection (1) or (2) is to be voted on, a written objection to the resolution, unless the corporation did not give notice to the shareholder of the purpose of the meeting and of their right to dissent.

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Notice of resolution

(6) The corporation shall, within ten days after the shareholders adopt the resolution, send to each shareholder who has filed the objection referred to in subsection (5) notice that the resolution has been adopted, but such notice is not required to be sent to any shareholder who voted for the resolution or who has withdrawn their objection.

Demand for payment

(7) A dissenting shareholder shall, within twenty days after receiving a notice under subsection (6) or, if the shareholder does not receive such notice, within twenty days after learning that the resolution has been adopted, send to the corporation a written notice containing

(a) the shareholder’s name and address;

(b) the number and class of shares in respect of which the shareholder dissents; and

(c) a demand for payment of the fair value of such shares.

Share certificate

(8) A dissenting shareholder shall, within thirty days after sending a notice under subsection (7), send the certificates representing the shares in respect of which the shareholder dissents to the corporation or its transfer agent.

Forfeiture

(9) A dissenting shareholder who fails to comply with subsection (8) has no right to make a claim under this section.

Endorsing certificate

(10) A corporation or its transfer agent shall endorse on any share certificate received under subsection (8) a notice that the holder is a dissenting shareholder under this section and shall forthwith return the share certificates to the dissenting shareholder.

Suspension of rights

(11) On sending a notice under subsection (7), a dissenting shareholder ceases to have any rights as a shareholder other than to be paid the fair value of their shares as determined under this section except where

(a) the shareholder withdraws that notice before the corporation makes an offer under subsection (12),
(b) the corporation fails to make an offer in accordance with subsection (12) and the shareholder withdraws the notice, or
(c) the directors revoke a resolution to amend the articles under subsection 173(2) or 174(5), terminate an amalgamation agreement under subsection 183(6) or an application for continuance under subsection 188(6), or abandon a sale, lease or exchange under subsection 189(9),

in which case the shareholder’s rights are reinstated as of the date the notice was sent.

Offer to pay

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(12) A corporation shall, not later than seven days after the later of the day on which the action approved by the resolution is effective or the day the corporation received the notice referred to in subsection (7), send to each dissenting shareholder who has sent such notice

(a) a written offer to pay for their shares in an amount considered by the directors of the corporation to be the fair value, accompanied by a statement showing how the fair value was determined; or

(b) if subsection (26) applies, a notification that it is unable lawfully to pay dissenting shareholders for their shares.

Same terms

(13) Every offer made under subsection (12) for shares of the same class or series shall be on the same terms.

Payment

(14) Subject to subsection (26), a corporation shall pay for the shares of a dissenting shareholder within ten days after an offer made under subsection (12) has been accepted, but any such offer lapses if the corporation does not receive an acceptance thereof within thirty days after the offer has been made.

Corporation may apply to court

(15) Where a corporation fails to make an offer under subsection (12), or if a dissenting shareholder fails to accept an offer, the corporation may, within fifty days after the action approved by the resolution is effective or within such further period as a court may allow, apply to a court to fix a fair value for the shares of any dissenting shareholder.

Shareholder application to court

(16) If a corporation fails to apply to a court under subsection (15), a dissenting shareholder may apply to a court for the same purpose within a further period of twenty days or within such further period as a court may allow.

Venue

(17) An application under subsection (15) or (16) shall be made to a court having jurisdiction in the place where the corporation has its registered office or in the province where the dissenting shareholder resides if the corporation carries on business in that province.

No security for costs

(18) A dissenting shareholder is not required to give security for costs in an application made under subsection (15) or (16).

Parties

(19) On an application to a court under subsection (15) or (16),

(a) all dissenting shareholders whose shares have not been purchased by the corporation shall be joined as parties and are bound by the decision of the court; and

(b) the corporation shall notify each affected dissenting shareholder of the date, place and consequences of the application and of their right to appear and be heard in person or by counsel.

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Powers of court

(20) On an application to a court under subsection (15) or (16), the court may determine whether any other person is a dissenting shareholder who should be joined as a party, and the court shall then fix a fair value for the shares of all dissenting shareholders.

Appraisers

(21) A court may in its discretion appoint one or more appraisers to assist the court to fix a fair value for the shares of the dissenting shareholders.

Final order

(22) The final order of a court shall be rendered against the corporation in favour of each dissenting shareholder and for the amount of the shares as fixed by the court.

Interest

(23) A court may in its discretion allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution is effective until the date of payment.

Notice that subsection (26) applies

(24) If subsection (26) applies, the corporation shall, within ten days after the pronouncement of an order under subsection (22), notify each dissenting shareholder that it is unable lawfully to pay dissenting shareholders for their shares.

Effect where subsection (26) applies

(25) If subsection (26) applies, a dissenting shareholder, by written notice delivered to the corporation within thirty days after receiving a notice under subsection (24), may

(a) withdraw their notice of dissent, in which case the corporation is deemed to consent to the withdrawal and the shareholder is reinstated to their full rights as a shareholder; or
(b) retain a status as a claimant against the corporation, to be paid as soon as the corporation is lawfully able to do so or, in a liquidation, to be ranked subordinate to the rights of creditors of the corporation but in priority to its shareholders.

Limitation

(26) A corporation shall not make a payment to a dissenting shareholder under this section if there are reasonable grounds for believing that

(a) the corporation is or would after the payment be unable to pay its liabilities as they become due; or
(b) the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities.

AI assistant

Spectra7 Microsystems Inc. — Proxy Solicitation & Information Statement 2021

46740_rns_2021-05-26_1ad13297-4e13-4047-8054-c7d7eec1c2ed.pdf

SPECTRA7 MICROSYSTEMS INC.

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

AND

MANAGEMENT INFORMATION CIRCULAR

TABLE OF CONTENTS

SPECTRA7 MICROSYSTEMS INC.

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

SPECTRA7 MICROSYSTEMS INC.

MANAGEMENT INFORMATION CIRCULAR

SOLICITATION OF PROXIES

APPOINTMENT AND REVOCATION OF PROXIES

EXERCISE OF DISCRETION BY PROXIES

ADVICE TO BENEFICIAL SHAREHOLDERS

NOTE TO NON-OBJECTING BENEFICIAL OWNERS

INSTRUCTIONS FOR ATTENDING THE MEETING ONLINE

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

COMPENSATION DISCUSSION AND ANALYSIS

Overview

Management Contracts

Raouf Halim

“ Change in Control ” means:

David Mier

Darren Ma

Elements of Compensation

1. Base Salary

2. Incentive Plans

(a) Stock Option Plan

(b) RSU Plan

Compensation of Directors

Compensation Risk

Financial Instruments

Compensation Governance

Summary Compensation Table – Named Executive Officers

Notes:

Incentive Plan Awards – Named Executive Officers

Notes:

Incentive Plan Awards – Value Vested or Earned During the Year

Note:

Director Compensation

Director Compensation Table

Notes:

Incentive Plan Awards - Outstanding Share-Based Awards and Option-Based Awards

Notes:

Incentive Plan Awards – Value Vested or Earned During the Year

Note:

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

Notes:

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

REPORT ON CORPORATE GOVERNANCE

AUDIT COMMITTEE DISCLOSURE

Audit Committee’s Charter

Composition of Audit Committee

Relevant Education and Experience

Audit Committee Oversight

Reliance on Certain Exemptions

Pre-Approval Policies and Procedures

External Auditor Service Fees (By Category)

INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

PARTICULARS OF MATTERS TO BE ACTED UPON

1. Election of Directors

Advance Notice Requirement

Note:

Note:

Corporate Cease Trade Orders

Bankruptcies, or Penalties or Sanctions

2. Appointment of Auditor

3. Amendments to RSU Plan and Stock Option Plan

Summary of Stock Option Plan

Summary of RSU Plan

Shareholder Approval

“RESOLVED THAT:

4. Continuance Resolution

Shareholders’ Right to Dissent with Respect to the Continuance Resolution

Procedure for Dissent under the CBCA

Effect of Dissent

Special Resolution

5. Consolidation of Common Shares

Spectra7 Microsystems Inc. Proxy Solicitation & Information Statement 2021