EXHIBIT
10.1


 


REGISTRATION
RIGHTS AGREEMENT 


 


THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of April 17, 2022, to be effective as of the
Closing (as defined in the Merger Agreement (as defined below)), by and among Flexible Solutions International Inc., an Alberta, Canada
corporation (including any of its successors or assigns, the “Company”), and the other parties hereto identified as
an “Investor” on the signature pages and Schedule A hereto (together with any person or entity who hereafter becomes
a party to this Agreement pursuant to Section 6.2 of this Agreement, an “Investor” and collectively the “Investors”).


 


WHEREAS,
the Company, Lygos, Inc., (“Lygos”) a Delaware corporation, FSI Merger Sub I, Inc., a Delaware corporation (“Merger
Sub I”), and FSI Merger Sub II, Inc., a Delaware corporation (“Merger Sub II”), have entered into that certain
Agreement and Plan of Merger and Reorganization dated as of [ ], 2022 (the “Merger Agreement”), pursuant to which
(i) Merger Sub I will merge with and into Lygos, and Lygos shall continue as the surviving entity and wholly owned subsidiary of the
Company (the “First Merger”) and (ii) immediately thereafter as part of the same overall transaction, Lygos will merge
with and into Merger Sub II, and Merger Sub II will continue as the surviving entity and wholly owned subsidiary of the Company (the
“Second Merger” and, collectively or in seriatim with the First Merger, the “Merger”);


 


NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


 


1.
DEFINITIONS. The following capitalized terms used herein have the following meanings:


 


“Actions”
means actions, suits, litigations, arbitrations, mediations, claims, charges, complaints, inquiries, proceedings, hearings, audits, investigations
or reviews by or before any Governmental Entity.


 


“Adverse
Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment
of the Board, after consultation with counsel to the Company, (i) would be required to be made in any Registration Statement or prospectus
in order for the applicable Registration Statement or prospectus not to contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in
the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the
Registration Statement were not being filed, and (iii) the Company has a bona fide business purpose for not making such information public.


 


“Agreement”
is defined in the preamble to this Agreement.


 


“Block
Trade” means any non-marketed underwritten offering taking the form of a block trade to a financial institution, QIB or Institutional
Accredited Investor, bought deal, over-night deal or similar transaction effected pursuant to a Registration Statement without substantial
marketing efforts prior to pricing.


 


“Board”
means the Board of Directors of the Company.


 


“Business
Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized
or required by law to close.


 


“Closing
Date” is defined in the Merger Agreement.


 


“Commission”
means the Securities and Exchange Commission, or any other Federal agency then administering the Securities Act or the Exchange Act.


 


“Company”
is defined in the preamble to this Agreement.


 


“Effectiveness
Period” is defined in Section 3.1.2.


 




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“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder,
all as the same shall be in effect at the time.


 


“Form
S-1” means a Registration Statement on Form S-1.


 


“Form
S-3” means a Registration Statement on Form S-3 or any similar short-form registration that may be available at such time.


 


“Founder
Shares” means all shares of capital stock of the Company held or hereafter acquired by Daniel O’Brien.


 


“Governmental
Entity” means any federal, state or local government, any political subdivision thereof or any court, administrative or regulatory
agency, department, court, instrumentality, tribunal, arbitrator, legislative body, authority, body, program, plan, office, board, rate
setting agency, bureau, division, official or instrumentality, or commission or other governmental authority or agency, or arbitral body
(public or private), in the United States or in a foreign jurisdiction and including any contractors of a Governmental Entity, department
or agency as authorized by law, and acting pursuant to the terms and conditions of any such contract.


 


“Indemnified
Party” is defined in Section 4.3.


 


“Indemnifying
Party” is defined in Section 4.3.


 


“Institutional
Accredited Investor” means an institutional “accredited” investor as defined in Rule 501(a) of Regulation D under
the Securities Act.


 


“Investor”
is defined in the preamble to this Agreement.


 


“Investor
Indemnified Party” is defined in Section 4.1.


 


“Joinder”
is defined in Section 6.2.


 


“Legal
Dispute” means any Action among the parties, whether arising in contract, tort or otherwise, arising in connection with any
disagreement, dispute, controversy or claim arising out of or relating to this Agreement or any related document or any of the transaction
contemplated hereby or thereby.


 


“Maximum
Number of Shares” is defined in Section 2.2.2.


 


“Merger”
is defined in the preamble to this Agreement.


 


“Merger
Agreement” is defined in the preamble to this Agreement.


 


“Merger
Shares” is defined in the preamble to this Agreement.


 


“Merger
Sub I” is defined in the preamble to this Agreement.


 


“Merger
Sub II” is defined in the preamble to this Agreement.


 


“Misstatement”
shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement
or prospectus, or necessary to make the statements in a Registration Statement or prospectus (in the case of a prospectus, in the light
of the circumstances under which they were made) not misleading.


 




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“Permitted
Transferee” means (i) the members of an Investor’s immediate family (for purposes of this Agreement, “immediate
family” shall mean with respect to any natural person, any of the following: such person’s spouse, the siblings of such
person and his or her spouse, and the direct descendants and ascendants (including adopted and step children and parents) of such person
and his or her spouses and siblings); (ii) any trust for the direct or indirect benefit of an Investor or the immediate family of an
Investor; (iii) if an Investor is a trust, to the trustor or beneficiary of such trust or to the estate of a beneficiary of such trust;
(iv) any officer, director, general partner, limited partner, shareholder, member, or owner of similar equity interests in an Investor;
(v) any affiliate of an Investor or the immediate family of such affiliate or (vi) any affiliate of an immediate family of the Investor.


 


“Piggy-Back
Registration” is defined in Section 2.4.1.


 


“Pro
Rata” is defined in Section 2.2.2.


 


“QIB”
means “qualified institutional buyer” as defined in Rule 144A under the Securities Act.


 


“Registration”
mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements
of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.


 


“Registrable
Securities” means the Founder Shares; provided that any Founder Shares which are hereafter acquired shall only be deemed
to be “Registrable Securities” if at the time of the acquisition of such shares, the recipient of such Founder Shares executes
a Joinder acknowledging the terms and conditions of this Agreement. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when: (a) a Registration Statement with respect to the sale of such securities shall have become effective
under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration
Statement; (b) such securities shall have been otherwise transferred, new certificates or book entry provisions for them not bearing
a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require
registration under the Securities Act; (c) such securities shall have ceased to be outstanding; (d) such securities may be sold without
registration pursuant to Rule 144 or any successor rule promulgated under the Securities Act (but with no limitation as to volume); and
(e) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities
transaction.


 


“Registration
Statement” means a registration statement filed by the Company or its successor with the Commission in compliance with the
Securities Act and the rules and regulations promulgated thereunder for a public offering and sale of equity securities, or securities
or other obligations exercisable or exchangeable for, or convertible into, equity securities (other than a registration statement on
Form S-4 or Form S-8, or their successors, or any registration statement covering only securities proposed to be issued in exchange for
securities or assets of another entity).


 


“Resale
Shelf Registration Statement” is defined in Section 2.1.1.


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder,
all as the same shall be in effect at the time.


 


“Underwriter”
means a securities dealer who purchases any Registrable Securities as principal in an underwritten offering and not as part of such dealer’s
market-making activities.


 




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2.
REGISTRATION RIGHTS.


 


2.1
Resale Shelf Registration Rights.


 


2.1.1
Registration Statement Covering Resale of Registrable Securities. Subject to compliance by the Investors with Section 3.4,
the Company shall prepare and file or cause to be prepared and filed with the Commission, no later than sixty (60) calendar days following
the Closing Date, a Registration Statement on Form S-3 or its successor form, or, if the Company is ineligible to use Form S-3, a Registration
Statement on Form S-1, for an offering to be made on a continuous basis pursuant to Rule 415 of the Securities Act registering the resale
from time to time pursuant to any method or combination of methods legally available to, and requested by, the Investors of all of the
Registrable Securities then held by such Investors that are not covered by an effective resale registration statement (the “Resale
Shelf Registration Statement”). The Company shall use commercially reasonable efforts to cause the Resale Shelf Registration
Statement to be declared effective as soon as practicable after filing, but in any event no later than the earlier of (i) ninety (90)
calendar days (or one hundred twenty (120) calendar days if the Commission notifies the Company that it will “review” the
Registration Statement) after the date of this Agreement and (ii) the tenth (10th) Business Day after the date the Company is notified
(orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or
will not be subject to further review, and, once effective, to keep the Resale Shelf Registration Statement continuously effective under
the Securities Act at all times until the expiration of the Effectiveness Period. In the event that the Company files a Form S-1 pursuant
to this Section 2.1, the Company shall use commercially reasonable efforts to convert the Form S-1 to a Form S-3 as soon as practicable
after the Company is eligible to use Form S-3. When effective, a Registration Statement filed pursuant to this Section 2.1 (including
any documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of
the Securities Act and the Exchange Act.


 


2.1.2
Notification and Distribution of Materials. The Company shall notify the Investors in writing of the effectiveness of the Resale
Shelf Registration Statement and shall furnish to them, without charge, such number of copies of the Resale Shelf Registration Statement
(including any amendments, supplements and exhibits), the prospectus contained therein (including each preliminary prospectus and all
related amendments and supplements) and any documents incorporated by reference in the Resale Shelf Registration Statement or such other
documents as the Investors may reasonably request in order to facilitate the sale of the Registrable Securities in the manner described
in the Resale Shelf Registration Statement.


 


2.1.3
Amendments and Supplements. Subject to the provisions of Section 2.1.1, the Company shall promptly prepare and file with
the Commission from time to time such amendments and supplements to the Resale Shelf Registration Statement and prospectus used in connection
therewith as may be necessary to keep the Resale Shelf Registration Statement effective and to comply with the provisions of the Securities
Act with respect to the disposition of all the Registrable Securities during the Effectiveness Period.


 


2.1.4
Notice of Certain Events. The Company shall promptly notify the Investors in writing of any request by the Commission for any
amendment or supplement to, or additional information in connection with, the Resale Shelf Registration Statement required to be prepared
and filed hereunder (or prospectus relating thereto). The Company shall promptly notify each Investor in writing of the filing of the
Resale Shelf Registration Statement or any prospectus, amendment or supplement related thereto or any post-effective amendment to the
Resale Shelf Registration Statement and the effectiveness of any post-effective amendment.


 


2.1.5
Block Trade. If the Company shall receive a request from the holders of Registrable Securities with an estimated market value
of at least $10,000,000 that such holders wish to effect the sale of all or any portion of the Registrable Securities in a Block Trade,
then the Company shall, as expeditiously as possible, use commercially reasonable efforts to facilitate the offering of such Registrable
Securities for which such requesting holder has requested in such Block Trade, and in any event, within 72 hours of receipt of such request.


 




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2.2
Piggy-Back Registration.


 


2.2.1
Piggy-Back Rights. If at any time, subject to compliance by the Investors with Section 3.4, the Company proposes to file
a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for equityholders of the
Company for their account, other than a Registration Statement (i) filed in connection with any employee share option or other benefit
plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing shareholders, (iii) for an offering
of debt that is convertible into equity securities of the Company, (iv) for a dividend reinvestment plan, or (v) for a corporate reorganization
or transaction under Rule 145 of the Securities Act, then the Company shall (x) give written notice of such proposed filing to the holders
of Registrable Securities as soon as practicable but in no event less than five (5) calendar days before the anticipated filing date,
which notice shall describe the amount and type of securities to be included in such offering, the intended method(s) of distribution,
and the name of the proposed managing Underwriter or Underwriters, if any, of the offering, and (y) offer to the holders of Registrable
Securities in such notice the opportunity to register the sale of such number of shares of Registrable Securities as such holders may
request in writing within three (3) calendar days following receipt of such notice (a “Piggy-Back Registration”).
The Company shall cause such Registrable Securities to be included in such registration and shall use its best efforts to cause the managing
Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back
Registration on the same terms and conditions as any similar securities of the Company and to permit the sale or other disposition of
such Registrable Securities in accordance with the intended method(s) of distribution thereof. All holders of Registrable Securities
proposing to distribute their securities through a Piggy-Back Registration that involves an Underwriter or Underwriters shall enter into
an underwriting agreement in customary form with the Underwriter or Underwriters selected for such Piggy-Back Registration.


 


2.2.2
Reduction of Piggy-Back Offering. If the managing Underwriter or Underwriters for a Piggy-Back Registration that is to be an underwritten
offering advises the Company and the holders of Registrable Securities that have requested to participate in such Piggy-Back Registration
in writing that the dollar amount or number of securities of the Company which the Company desires to sell for its own account, taken
together with securities of the Company, if any, as to which registration has been demanded pursuant to written contractual arrangements
with persons other than the holders of Registrable Securities hereunder and the Registrable Securities as to which registration has been
requested under this Section 2.2, exceeds the maximum dollar amount or maximum number of securities that can be sold in such offering
without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering
(such maximum dollar amount or maximum number of shares, as applicable, the “Maximum Number of Shares”), then the
Company shall include in any such registration:


 


(i)
If the registration is undertaken for the Company’s account: (A) first, the securities of the Company that the Company desires
to sell that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (A), the Registrable Securities, as to which registration has been requested pursuant
to the terms of this Agreement that can be sold without exceeding the Maximum Number of Shares, pro rata in accordance with the number
of shares that each such person has requested be included in such registration, regardless of the number of shares held by each such
person (such proportion is referred to herein as “Pro Rata”; and (C) third, to the extent that the Maximum Number
of Shares has not been reached under the foregoing clauses (A) and (B), the securities of the Company for the account of other persons
that the Company is obligated to register pursuant to written contractual piggy-back registration rights with such persons, other than
pursuant to this Agreement, and that can be sold without exceeding the Maximum Number of Shares;


 


(ii)
If the registration is undertaken as a demand pursuant to contractual rights with the Company, other than this Agreement, (A) first,
the securities of the Company for the account of the persons entitled to such contractual rights making such demand that can be sold
without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under
the foregoing clause (A), the Registrable Securities, as to which registration has been requested pursuant to the terms of this Agreement,
that can be sold without exceeding the Maximum Number of Shares, Pro Rata; (C) third, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clauses (A) and (B), the securities of the Company that the Company desires to sell that can
be sold without exceeding the Maximum Number of Shares; and (D) fourth, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clauses (A), (B) and (C), the securities of the Company for the account of any other persons that the Company
is obligated to register pursuant to written contractual arrangements with such persons, other than this Agreement, that can be sold
without exceeding the Maximum Number of Shares.


 




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2.2.3
Withdrawal. Any holder of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable
Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness
of the Registration Statement. The Company (whether on its own determination or as the result of a withdrawal by persons making a demand
pursuant to written contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness of such Registration
Statement. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities
in connection with such Piggy-Back Registration as provided in Section 3.3. If the Registration Statement has been withdrawn,
or if any Registrable Securities have been withdrawn without the consent of the Investor, the Company will promptly file a new Registration
Statement to register the Registrable Securities.


 


3.
REGISTRATION PROCEDURES.


 


3.1
Filings; Information. Whenever the Company is required to effect the registration of any Registrable Securities pursuant to Section
2, the Company shall use commercially reasonable efforts to effect the registration and sale of such Registrable Securities in accordance
with the intended method(s) of distribution thereof as expeditiously as practicable, and in connection with any such request:


 


3.1.1
Copies. The Company shall, prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish
without charge to the holders of Registrable Securities included in such registration, and such holders’ legal counsel, copies
of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case, including
all exhibits thereto and documents incorporated by reference therein), the prospectus included in such Registration Statement (including
each preliminary prospectus), and such other documents as the holders of Registrable Securities included in such registration or legal
counsel for any such holders may request in order to facilitate the disposition of the Registrable Securities owned by such holders.


 


3.1.2
Amendments and Supplements. The Company shall prepare and file with the Commission such amendments, including post-effective amendments,
and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration
Statement effective and in compliance with the provisions of the Securities Act until all Registrable Securities and other securities
covered by such Registration Statement have been disposed of in accordance with the intended method(s) of distribution set forth in such
Registration Statement (the “Effectiveness Period”).


 


3.1.3
Notification. After the filing of a Registration Statement, the Company shall promptly, and in no event more than three (3) Business
Days after such filing, notify the holders of Registrable Securities included in such Registration Statement of such filing, and shall
further notify such holders promptly and confirm such advice in writing in all events within three (3) Business Days of the occurrence
of any of the following: (i) when such Registration Statement becomes effective; (ii) when any post-effective amendment to such Registration
Statement becomes effective; (iii) the issuance or threatened issuance by the Commission of any stop order (and the Company shall take
all actions required to prevent the entry of such stop order or to remove it if entered); and (iv) any request by the Commission for
any amendment or supplement to such Registration Statement or any prospectus relating thereto or for additional information or of the
occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of the securities covered by such Registration Statement, such prospectus will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and
promptly make available to the holders of Registrable Securities included in such Registration Statement any such supplement or amendment;
except that before filing with the Commission a Registration Statement or prospectus or any amendment or supplement thereto, excluding
documents incorporated by reference, the Company shall furnish to the holders of Registrable Securities included in such Registration
Statement and to the legal counsel for any such holders, copies of all such documents proposed to be filed sufficiently in advance of
filing to provide such holders and legal counsel with a reasonable opportunity to review such documents and comment thereon.


 




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3.1.4
Securities Laws Compliance. The Company shall use commercially reasonable efforts to (i) register or qualify the Registrable Securities
covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States
as the holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may
reasonably request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to
be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of
the Company and do any and all other acts and things that may be necessary or advisable to enable the holders of Registrable Securities
included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided,
however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise
be required to qualify but for this paragraph or subject itself to taxation in any such jurisdiction.


 


3.1.5
Agreements for Disposition. The Company shall enter into customary agreements (including, if applicable, an underwriting agreement
in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities.


 


3.1.6
Cooperation. The principal executive officer of the Company, the principal financial officer of the Company, the principal accounting
officer of the Company (if different from the principal financial officer) and all other officers and members of the management of the
Company shall reasonably cooperate fully in any offering of Registrable Securities hereunder, which cooperation shall include, without
limitation, the preparation of the Registration Statement with respect to such offering and all other offering materials and related
documents, and participation in meetings with Underwriters, attorneys, accountants and potential investors.


 


3.1.7
Transfer Agent. The Company shall provide and maintain a transfer agent and registrar for the Registrable Securities.


 


3.1.8
Records. Upon execution of confidentiality agreements, the Company shall make available for inspection by the holders of Registrable
Securities included in such Registration Statement, any Underwriter participating in any disposition pursuant to such registration statement
and any attorney, accountant or other professional retained by any holder of Registrable Securities included in such Registration Statement
or any Underwriter, all financial and other records, pertinent corporate documents and properties of the Company, as shall be reasonably
necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees
to supply all information requested by any of them in connection with such Registration Statement.


 


3.1.9
Earnings Statement. The Company shall comply with all applicable rules and regulations of the Commission and the Securities Act,
and make available to its shareholders, as soon as practicable, an earnings statement covering a period of twelve (12) months, which
earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.


 


3.1.10
Listing. The Company shall use commercially reasonable efforts to cause all Registrable Securities included in any Registration
Statement to be listed on such exchanges or otherwise designated for trading in the same manner as similar securities issued by the Company
are then listed or designated.


 




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3.2
Obligation to Suspend Distribution. Upon receipt of written notice from the Company that a Registration Statement or prospectus
contains a Misstatement, each of the Investors shall forthwith discontinue disposition of Registrable Securities until he, she or it
has received copies of a supplemented or amended prospectus correcting the Misstatement (it being understood that the Company hereby
covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until he, she or
it is advised in writing by the Company that the use of the prospectus may be resumed. If the filing, initial effectiveness or continued
use of a Registration Statement in respect of any Registration at any time would require the Company to make an Adverse Disclosure or
would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond
the Company’s control, the Company may, upon giving prompt written notice of such action to the Investors, delay the filing or
initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time, but in no event more than one
hundred and twenty (120) calendar days in any consecutive 12-month period, determined in good faith by the Company to be necessary for
such purpose. In the event the Company exercises its rights under the preceding sentence, the Investors agree to suspend, immediately
upon their receipt of the notice referred to above, their use of the prospectus relating to any Registration in connection with any sale
or offer to sell Registrable Securities. The Company shall immediately notify the Investors of the expiration of any period during which
it exercised its rights under this Section 3.2.


 


3.3
Registration Expenses. Subject to Section 2.1.7, the Company shall bear all costs and expenses incurred in connection with
the Resale Shelf Registration Statement pursuant to Section 2.1, any Piggy-Back Registration pursuant to Section 2.2.1,
and all expenses incurred in performing or complying with its other obligations under this Agreement, whether or not the Registration
Statement becomes effective, including, without limitation: (i) all registration and filing fees; (ii) fees and expenses of compliance
with securities or “blue sky” laws (including fees and disbursements of counsel in connection with blue sky qualifications
of the Registrable Securities); (iii) printing expenses; (iv) the Company’s internal expenses (including, without limitation, all
salaries and expenses of its officers and employees); (v) the fees and expenses incurred in connection with the listing of the Registrable
Securities as required by Section 3.1.10; (vii) Financial Industry Regulatory Authority, Inc. fees; (vii) fees and disbursements
of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company; (viii) the reasonable
fees and expenses of any special experts retained by the Company in connection with such registration; and (ix) the reasonable fees and
expenses of one legal counsel selected by the holders of a majority-in-interest of the Registrable Securities included in such registration
not to exceed $75,000. The Company shall have no obligation to pay any underwriting discounts or selling commissions attributable to
the Registrable Securities being sold by the holders thereof, which underwriting discounts or selling commissions shall be borne by such
holders, but the Company shall pay any underwriting discounts or selling commissions attributable to the securities it sells for its
own account. Additionally, in an underwritten offering, all selling shareholders and the Company shall bear the expenses of the Underwriter
pro rata in proportion to the respective amount of shares each is selling in such offering.


 


3.4
Information. The holders of Registrable Securities shall promptly provide such information and affidavits as may reasonably be
requested by the Company, or the managing Underwriter, if any, in connection with the preparation of any Registration Statement, including
amendments and supplements thereto, in order to effect the registration of any Registrable Securities under the Securities Act and in
connection with the Company’s obligation to comply with Federal and applicable state securities laws.


 


3.5
Other Obligations. At any time and from time to time in connection with a sale or transfer of Registrable Securities exempt from
registration under the Securities Act or through any broker-dealer transactions described in the plan of distribution set forth within
any prospectus and pursuant to the Registration Statement of which such prospectus forms a part, the Company shall, subject to the receipt
of customary documentation required from the applicable holders in connection therewith and compliance with applicable laws, (i) promptly
instruct its transfer agent to remove any restrictive legends applicable to the Registrable Securities being sold or transferred and
(ii) cause its legal counsel to deliver the necessary legal opinions, if any, to the transfer agent in connection with the instruction
under subclause clause (i). In addition, the Company shall cooperate reasonably with, and take such customary actions as may reasonably
be requested by such holders in connection with the aforementioned sales or transfers.


 




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4.
INDEMNIFICATION AND CONTRIBUTION.


 


4.1
Indemnification by the Company. The Company agrees to indemnify and hold harmless each Investor and each other holder of Registrable
Securities, and each of their respective affiliates and each of their respective officers, employees, directors, partners, members, attorneys
and agents, and each person, if any, who controls an Investor and each other holder of Registrable Securities (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, an “Investor Indemnified Party”), from
and against any expenses, losses, judgments, claims, damages or liabilities, whether joint or several, arising out of or based upon any
untrue statement (or allegedly untrue statement) of a material fact contained in any Registration Statement filed pursuant to this Agreement
under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus
or summary prospectus contained in the Registration Statement, or any amendment or supplement to such Registration Statement, or arising
out of or based upon any omission (or alleged omission) to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation promulgated thereunder
applicable to the Company and relating to action or inaction required of the Company in connection with any such registration; and the
Company shall promptly reimburse the Investor Indemnified Party for any legal and any other expenses reasonably incurred by such Investor
Indemnified Party in connection with investigating and defending any such expense, loss, judgment, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the extent that any such expense, loss, claim,
damage or liability arises out of or is based upon any untrue statement or allegedly untrue statement or omission or alleged omission
made in such Registration Statement, preliminary prospectus, final prospectus, or summary prospectus, or any such amendment or supplement,
in reliance upon and in conformity with information furnished to the Company, in writing, by such selling holder expressly for use therein,
or is based on any selling holder’s violation of the federal securities laws (including Regulation M) or failure to sell the Registrable
Securities in accordance with the plan of distribution contained in the prospectus.


 


4.2
Indemnification by Holders of Registrable Securities. Each selling holder of Registrable Securities will, in the event that any
Registration is being effected under the Securities Act pursuant to this Agreement of any Registrable Securities held by such selling
holder, indemnify and hold harmless the Company, each of its directors and officers, and each other selling holder and each other person,
if any, who controls another selling holder within the meaning of the Securities Act, against any losses, claims, judgments, damages
or liabilities, whether joint or several, insofar as such losses, claims, judgments, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or allegedly untrue statement of a material fact contained in any Registration Statement
filed pursuant to this Agreement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or the alleged omission to state a material fact required to be stated therein
or necessary to make the statement therein not misleading, if the statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by such selling holder expressly for use therein, or is based on any selling holder’s
violation of the federal securities laws (including Regulation M) or failure to sell the Registrable Securities in accordance with the
plan of distribution contained in the prospectus, and shall reimburse the Company, its directors and officers, and each other selling
holder or controlling person for any legal or other expenses reasonably incurred by any of them in connection with investigation or defending
any such loss, claim, damage, liability or action. Each selling holder’s indemnification obligations hereunder shall be several
and not joint and shall be limited to the amount of any net proceeds actually received by such selling holder.


 


4.3
Conduct of Indemnification Proceedings. Promptly after receipt by any person of any notice of any loss, claim, damage or liability
or any action in respect of which indemnity may be sought pursuant to Sections 4.1 or 4.2, such person (the “Indemnified
Party”) shall, if a claim in respect thereof is to be made against any other person for indemnification hereunder, notify such
other person (the “Indemnifying Party”) in writing of the loss, claim, judgment, damage, liability or action; provided,
however, that the failure by the Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from
any liability which the Indemnifying Party may have to such Indemnified Party hereunder, except and solely to the extent the Indemnifying
Party is actually prejudiced by such failure. If the Indemnified Party is seeking indemnification with respect to any claim or action
brought against the Indemnified Party, then the Indemnifying Party shall be entitled to participate in such claim or action, and, to
the extent that it wishes, jointly with all other Indemnifying Parties, to assume control of the defense thereof with counsel satisfactory
to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume control of the
defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided,
however, that in any action in which both the Indemnified Party and the Indemnifying Party are named as defendants, the Indemnified
Party shall have the right to employ separate counsel (but no more than one such separate counsel, which counsel is reasonably acceptable
to the Indemnifying Party) to represent the Indemnified Party and its controlling persons who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, with the fees and expenses
of such counsel to be paid by such Indemnifying Party if, based upon the written opinion of counsel of such Indemnified Party, representation
of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, consent to entry of judgment or effect any settlement of any
claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such judgment or settlement includes an unconditional release of such Indemnified
Party from all liability arising out of such claim or proceeding.


 




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4.4
Contribution.


 


4.4.1
If the indemnification provided for in the foregoing Sections 4.1, 4.2 and/or 4.3 is unavailable to any Indemnified
Party in respect of any loss, claim, damage, liability or action referred to herein, then each such Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage,
liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnified Parties and the Indemnifying
Parties in connection with the actions or omissions which resulted in such loss, claim, damage, liability or action, as well as any other
relevant equitable considerations. The relative fault of any Indemnified Party and any Indemnifying Party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such Indemnified Party or such Indemnifying Party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.


 


4.4.2
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined
by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in
Section 4.4.1.


 


4.4.3
The amount paid or payable by an Indemnified Party as a result of any loss, claim, damage, liability or action referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set forth above in Section 4.4.1, any legal or other
expenses incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 4.4, no holder of Registrable Securities shall be required to contribute any amount in excess of the
dollar amount of the net proceeds (after payment of any underwriting fees, discounts, commissions or taxes) actually received by such
holder from the sale of Registrable Securities which gave rise to such contribution obligation. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.


 


5.
UNDERWRITING AND DISTRIBUTION. 


 


5.1
Rule 144. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company
under the Exchange Act, covenants that it shall (i) file (or obtain extensions in respect thereof and file within the applicable grace
period) any reports required to be filed by it after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act and to promptly
furnish such Holders with true and complete copies of all such filings (which shall include providing notice that such filings are available
on the SEC’s website at www.sec.gov or the Company’s website within two days of such filing), and (ii) take such further
action as the holders of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holders
to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule
144 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any Holder, the Company will deliver to such Holder a written statement of a duly authorized officer
as to whether the Company has complied with such information requirements, and, if not, the specific reasons for non-compliance.


 


6.
MISCELLANEOUS. 


 


6.1
Other Registration Rights and Arrangements. The Company represents and warrants that no person, other than a holder of the Registrable
Securities has any right to require the Company to register any of the Company’s share capital or capital shares for sale or to
include the Company’s share capital or capital shares in any registration filed by the Company for the sale of shares for its own
account or for the account of any other person. The Company shall not hereafter enter into any agreement with respect to its securities
which is inconsistent with or violates the rights granted to the holders of Registrable Securities in this Agreement and in the event
of any conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.


 




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6.2
Assignment; No Third-Party Beneficiaries. This Agreement and the rights, duties and obligations of the Company hereunder may not
be assigned or delegated by the Company in whole or in part. This Agreement and any of the rights, duties and obligations of the holders
of Registrable Securities hereunder may be freely assigned or delegated, in whole or in part, by such holder of Registrable Securities
in conjunction with and to the extent of any transfer of any Registrable Security by any such holder to a Permitted Transferee(s). This
Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties hereto and their respective
successors and assigns and the holders of Registrable Securities and their respective successors and permitted assigns. This Agreement
is not intended to confer any rights or benefits on any persons that are not party hereto other than as expressly set forth in Section
4 and this Section 6.2. The rights of a holder of Registrable Securities under this Agreement may be transferred, in whole
or in part, by such a holder to a Permitted Transferee who acquires or holds any Registrable Security; provided, however,
that such transferee has executed and delivered to the Company a properly completed agreement to be bound by the terms of this Agreement
substantially in form attached hereto as Exhibit A (a “Joinder”), and the transferor shall have delivered to
the Company no later than five (5) Business Days following the date of the transfer, written notification of such transfer setting forth
the name of the transferor, the name and address of the Permitted Transferee, and the number of Registrable Securities so transferred.
The execution of a Joinder shall constitute a permitted amendment of this Agreement.


 


6.3
Amendments and Modifications. Upon the written consent of the Company and the holders of at least a majority in interest of the
Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement
may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding
the foregoing, any amendment hereto or waiver hereof that adversely affects an Investor, solely in his, her or its capacity as a holder
of the securities of the Company, in a manner that is materially different from other Investors (in such capacity) shall require the
consent of such Investor so affected. No course of dealing between any Investor or the Company and any other party hereto or any failure
or delay on the part of an Investor or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver
of any rights or remedies of any Investor or the Company. No single or partial exercise of any rights or remedies under this Agreement
by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.


 


6.4
Term. This Agreement shall terminate upon the earlier of (i) the fifth anniversary of the date of this Agreement or (ii) the date
as of which there shall be no Registrable Securities outstanding; provided that with respect to any Investor, such Investor will have
no rights under this Agreement and all obligations of the Company to such Investor under this Agreement shall terminate upon the date
that such Investor no longer holds Registrable Securities.


 


6.5
Notices. All notices, requests, demands, waivers and other communications hereunder shall be in writing and shall be deemed to
have been duly given (a) when delivered in person or by e-mail, (b) on the next Business Day when sent by overnight courier or (c) on
the second (2nd) succeeding Business Day when sent by registered or certified mail (postage prepaid, return receipt requested) to the
respective Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):


 


If
to the Company:


 


Flexible
Solutions International Inc.


6001
54th Ave.


Taber,
Alberta, Canada T1G 1X4


Attn:
Chief Executive Officer


 


with
a copy to:


 


Orrick,
Herrington & Sutcliffe LLP


 




    	11



    	 



    

 


The
Orrick Building


405
Howard Street


San
Francisco, CA 94105


Attention:
Richard Smith


Albert
Vanderlaan


E-mail:
rsmith@orrick.com


avanderlaan@orrick.com


 


If
to an Investor, to the address set forth under such Investor’s signature to this Agreement or to such Investor’s address
as found in the Company’s books and records.


 


All
such notices, requests, demands, waivers and other communications shall be deemed received upon (i) actual receipt thereof by the addressee,
or (ii) actual delivery thereof to the appropriate address.


 


6.6
Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule
of Law or public policy, all other terms, conditions and provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible
in a mutually acceptable manner in order that the transactions contemplated by this Agreement be consummated as originally contemplated
to the fullest extent possible.


 


6.7
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement
by facsimile or e-mail shall be as effective as delivery of a manually executed counterpart of the Agreement. Minor variations in the
form of the signature page, including footers from earlier versions of this Agreement or any such other document, will be disregarded
in determining a Party’s intent or the effectiveness of such signature.


 


6.8
Entire Agreement. This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments delivered
pursuant hereto and thereto) constitute the entire agreement among the parties with respect to the subject matter of this Agreement and
supersede all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter
of this Agreement, including without limitation, the Prior Agreement. Each party acknowledges and agrees that, in entering into this
Agreement, such party has not relied on any promises or assurances, written or oral, that are not reflected in this Agreement (including
the Schedules and Exhibits attached hereto).


 


6.9
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (regardless
of the laws that might otherwise govern under applicable principles of conflicts of laws thereof) as to all matters (including Actions
related hereto), including matters of validity, construction, effect, performance and remedies.


 




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6.10
Consent to Jurisdiction; Etc.. Each party hereby agrees, and any Person asserting rights as a third party beneficiary may do so
only if he, she or it irrevocably agrees, that any Legal Dispute shall be brought only to the exclusive jurisdiction of the courts of
the State of Delaware or the federal courts located in the State of Delaware, and each party hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such Action and irrevocably waives, to the fullest extent permitted
by law, any objection that it may now or hereafter have to the laying of the venue of any such Action in any such court or that any such
Action that is brought in any such court has been brought in an inconvenient forum. During the period a Legal Dispute that is filed in
accordance with this Section 6.10 is pending before a court, all Actions with respect to such Legal Dispute or any other Legal Dispute,
including any counterclaim, cross-claim or interpleader, shall be subject to the exclusive jurisdiction of such court. Each party hereby
waives, and any person asserting rights as a third party beneficiary may do so only if he, she or it hereby waives, and shall not assert
as a defense in any Legal Dispute, that (a) such party is not personally subject to the jurisdiction of the above named courts for any
reason, (b) such Action may not be brought or is not maintainable in such court, (c) such party’s property is exempt or immune
from execution, (d) such Action is brought in an inconvenient forum, or (e) the venue of such Action is improper. A final judgment in
any Action described in this Section 6.10 following the expiration of any period permitted for appeal and subject to any stay
during appeal shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided
by applicable laws.


 


6.11
WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY UNCONDITIONALLY WAIVES, AND ANY PERSON ASSERTING RIGHTS AS A THIRD PARTY BENEFICIARY
MAY DO SO ONLY IF HE, SHE OR IT IRREVOCABLY AND UNCONDITIONALLY WAIVES, ANY RIGHT TO TRIAL BY JURY ON ANY CLAIMS OR COUNTERCLAIMS ASSERTED
IN ANY LEGAL DISPUTE RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM RELATING THERETO. IF
THE SUBJECT MATTER OF ANY SUCH LEGAL DISPUTE IS ONE IN WHICH THE WAIVER OF JURY TRIAL IS PROHIBITED, NO PARTY NOR ANY PERSON ASSERTING
RIGHTS AS A THIRD PARTY BENEFICIARY SHALL ASSERT IN SUCH LEGAL DISPUTE A NONCOMPULSORY COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. FURTHERMORE, NO PARTY NOR ANY PERSON ASSERTING RIGHTS AS A THIRD PARTY BENEFICIARY
SHALL SEEK TO CONSOLIDATE ANY SUCH LEGAL DISPUTE WITH A SEPARATE ACTION OR OTHER LEGAL PROCEEDING IN WHICH A JURY TRIAL CANNOT BE WAIVED.


 


[Signature
pages follow]


 




    	13



    	 



    

 


IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their duly authorized representatives as
of the date first written above.


 


	 	COMPANY:
    FLEXIBLE SOLUTIONS INTERNATIONAL INC.
	 	 	 
	 	By:	/s/
    John Bientjes
	 	Name:	John Bientjes
	 	Title:	Director,
    Audit Committee Chair and Compensation Committee Member


 




    	14



    	 



    

 


IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their duly authorized representatives as
of the date first written above.


 


	 	INVESTOR:
	 	 	 
	 	By:	/s/
    Daniel B. O’Brien
	 	 	 
	 	Name:	Daniel
    B. O’Brien


 




    	15



    	 



    

 


EXHIBIT
A


 


Joinder



 


This
Joinder (“Joinder”) is executed on ________, 20__, by the undersigned (the “New Holder”) pursuant
to the terms of that certain Registration Rights Agreement dated as of [•], 2022 (the “Agreement”), by and among
Flexible Solutions International Inc., an Alberta, Canada corporation (including any of its successors or assigns, the “Company”),
and the Investors identified therein, as such Agreement may be amended, supplemented or otherwise modified from time to time. Capitalized
terms used but not defined in this Joinder shall have the respective meanings ascribed to such terms in the Agreement. By the execution
of this Joinder, the New Holder agrees as follows:


 


1.
Acknowledgment. New Holder acknowledges that New Holder is acquiring certain equity securities of the Company (the “Shares”)
as a transferee of such Shares from a party in such party’s capacity as a holder of Registrable Securities under the Agreement,
and after such transfer, New Holder shall be considered an “Investor” and a holder of Registrable Securities for all purposes
under the Agreement.


 


2.
Agreement. New Holder hereby (a) agrees that the Shares shall be bound by and subject to the terms of the Agreement and (b) adopts
the Agreement with the same force and effect as if the New Holder were originally a party thereto.


 


3.
Notice. Any notice required or permitted by the Agreement shall be given to New Holder at the address or facsimile number listed
below New Holder’s signature below.


 


	NEW
    HOLDER:	 	 	 	ACCEPTED
    AND AGREED:
	 	 	 	 	 
	Print
    Name:	 	 	 	 	 	COMPANY	 	 
	 	 	 	 	 
	By:	 	 	 	 	 	By:	 	 
	 	 	 	 	 
	Address:	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 


 




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SCHEDULE
A


 


INVESTORS:



 


Daniel
B. O’Brien


 




    	17