Exhibit
4.1


 


UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE AUGUST 15, 2022.


 


WITHOUT
PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED
BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE
OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL AUGUST 15, 2022.


 


NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO BORROWER. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY
SUCH SECURITIES.


 


Original
Issue Date: April 14, 2022


 


Principal
Amount: $[__]


 


Original
Conversion Price (subject to adjustment herein): $0.30


 


FORM
OF


CONVERTIBLE
DEBENTURE


DUE
OCTOBER 14, 2023


 


THIS
CONVERTIBLE DEBENTURE (this “Debenture”) is one of a series of convertible debentures (such other convertible debentures
the “Other Debentures” and the holders of the Other Debentures the “Other Holders”) issued Debenture by WESTERN
MAGNESIUM CORPORATION, a corporation incorporated under the laws of the State of Delaware, (the “Borrower”), having
its principal place of business at 580 Hornby Street, Suite 900, British Columbia, V6C 3B6, Canada (the “Debenture”)
pursuant to the Purchase Agreement.


 


FOR
VALUE RECEIVED, Borrower promises to pay to [__], or its registered assigns (the “Holder”), with an address
at: [__] email: [__], or shall have paid pursuant to the terms hereunder, the principal sum of $[__] on October
14, 2023, (the “Maturity Date”) or such earlier date as this Debenture is required or permitted to be repaid or
such later date if extended by the Holder as provided hereunder, and to pay interest, if any, to the Holder on the aggregate unconverted
and then outstanding principal amount of this Debenture in accordance with the provisions hereof.


 




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This
Debenture is subject to the following additional provisions:


 


Section
1.Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Debenture, (a) capitalized
terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have
the following meanings:


 


“Applicable
Law” shall mean any law, rule or regulation of any governmental authority or jurisdiction applicable to any party to this Agreement,
as the case may be.


 


“Bankruptcy
Event” means any of the following events: (a) Borrower or any Subsidiary thereof commences a case or other proceeding under
any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction relating to Borrower or any Subsidiary thereof, (b) there is commenced against Borrower or any Subsidiary thereof
any such case or proceeding that is not dismissed within 60 days after commencement, (c) Borrower or any Subsidiary thereof is adjudicated
insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) Borrower or any Subsidiary
thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or
stayed within 60 calendar days after such appointment, (e) Borrower or any Subsidiary thereof makes a general assignment for the benefit
of creditors, (f) Borrower or any Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment
or restructuring of its debts or (g) Borrower or any Subsidiary thereof, by any act or failure to act, expressly indicates its consent
to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the
foregoing.


 


“Change
of Control Transaction” means, other than by means of conversion or exercise of this Debenture and the Securities issued together
with this Debenture, the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal
entity or “group” (as described in NI 45-106) of effective control (whether through legal or beneficial ownership of capital
stock of Borrower, by contract or otherwise) of in excess of 50% of the voting securities of Borrower, (b) Borrower merges into or consolidates
with any other Person, or any Person merges into or consolidates with Borrower and, after giving effect to such transaction, the stockholders
of Borrower immediately prior to such transaction own less than 50% of the aggregate voting power of Borrower or the successor entity
of such transaction, (c) Borrower sells or transfers all or substantially all of its assets to another Person and the stockholders of
Borrower immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after
the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board of Directors
which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by
those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved
by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution by Borrower of an agreement
to which Borrower is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.


 


“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of the Principal Amount and accrued interest
on this Debenture in accordance with the terms hereof.


 


“GAAP”
means United States generally accepted accounting principles.


 




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“IFRS”
means international reporting financial standards.


 


“Indebtedness”
means (x) any liabilities for borrowed money, (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Borrower’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of
business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance
with IFRS and GAAP.


 


“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Debenture divided by the Conversion
Price on the date the Mandatory Default Amount is either (A) demanded (if demand or notice is required to create an Event of Default)
or otherwise due or (B) paid in full, whichever has a lower Conversion Price, multiplied by the VWAP on the date the Mandatory Default
Amount is either (x) demanded, (y) due, or (z) paid in full, whichever is highest, or (ii) 125% of the outstanding principal amount of
this Debenture plus (b) all other amounts, costs, expenses and liquidated damages due in respect of this Debenture.


 


“Original
Issue Date” means the date of the first issuance of this Debenture, regardless of any transfers of any Debenture and regardless
of the number of instruments which may be issued to evidence such Debenture.


 


“Permitted
Indebtedness” means (a) any liabilities for borrowed money not in excess of $250,000 in the aggregate, (b) all guaranties,
endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected
in the Company’s consolidated balance sheet (or the notes thereto) not affecting more than $250,000 in the aggregate, except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; (c) the
present value of any lease payments not in excess of $250,000 due under leases required to be capitalized in accordance with IFRS; (d)
any industrial equipment leases up to an aggregate $500,000 and (e) indebtedness for the direct purposes of building a plant to produce
magnesium metal.


 


“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith
and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of Borrower) have been established
in accordance with IFRS, (b) Liens imposed by law which were incurred in the ordinary course of Borrower’s business, such as carriers’,
warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course
of Borrower’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property
or assets or materially impair the use thereof in the operation of the business of Borrower and its consolidated Subsidiaries or (y)
are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future
the forfeiture or sale of the property or asset subject to such Lien, and (c) Liens in connection with Permitted Indebtedness under clauses
(a), (b) and (e) thereunder, and Liens incurred in connection with Permitted Indebtedness under clauses (c) or (d) thereunder, provided
that such Liens are not secured by assets of Borrower or its Subsidiaries other than the assets so acquired or leased.


 




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“Purchase
Agreement” means the Securities Purchase Agreement, dated as of April 14, 2022 among Borrower and the original Holder, as amended,
modified or supplemented from time to time in accordance with its terms.


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the TSX Venture Exchange, the NYSE MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market,
the New York Stock Exchange, the OTC Bulletin Board, the OTCQB, or the OTCQX (or any successors to any of the foregoing).


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (Toronto time) to 4:02 p.m. (Toronto time)), (b) if any of the NASDAQ markets or exchanges is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is
not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported on the OTCQX, OTCQB
or OTC Pink Marketplace maintained by the OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of
reporting prices), the volume weighted average price of the Common Stock on the first such facility (or a similar organization or agency
succeeding to its functions of reporting prices), or (d) in all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and
reasonably acceptable to Borrower, the fees and expenses of which shall be paid by Borrower.


 


“Warrant
Certificate” means a certificate for Warrants to be issued upon conversion of this Debenture.


 


Section
2. General.


 


a) Interest
in Cash or in Kind. Holder shall be entitled to receive, and Borrower shall pay, cumulative interest on the outstanding principal
amount of this Debenture at the annual rate of fifteen percent (15%) (as subject to increase as set forth in this Debenture) from the
Original Issue Date through the Maturity Date. Unless deferred by the Holder, interest shall be payable in cash quarterly in arrears,
on the Maturity Date or when all amounts outstanding in connection with this Debenture shall be paid or shall otherwise be due and payable.


 


b) Payment
Grace Period. Other than as set forth herein, the Borrower shall not have any grace period to pay any monetary amounts due under
this Debenture.


 


c) Conversion
Privileges. The Conversion Rights set forth in Section 4 shall remain in full force and effect immediately from the date hereof and
until the Debenture is paid in full regardless of the occurrence of an Event of Default. This Debenture shall be payable in full on the
Maturity Date, unless previously converted into Common Stock in accordance with Section 4 hereof.


 


d) Application
of Payments. Interest, if any, on this Debenture shall be calculated on the basis of a 360-day year and the actual number of days
elapsed. Payments made in connection with this Debenture shall be applied first to amounts due hereunder other than principal and interest,
thereafter to interest and finally to principal.


 




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e) Manner
and Place of Payment. Principal and interest, if any, on this Debenture and other payments in connection with this Debenture shall
be payable at the Holder’s offices as designated above in lawful money of the United States of America in immediately available
funds without set-off, deduction or counterclaim. Upon assignment of the interest of Holder in this Debenture, Borrower shall instead
make its payment pursuant to the assignee’s instructions upon receipt of written notice thereof. Except as set forth herein, this
Debenture may not be prepaid or mandatorily converted without the consent of the Holder.


 


f) Maturity
Date Extension. The Holder may, in its sole and absolute discretion, extend the Maturity Date, one or more time through the third
anniversary of the Issue Date this Debenture.


 


Section
3. Registration of Transfers and Exchanges.


 


a) Different
Denominations. This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different authorized denominations
(with a minimum denomination of $1,000 and in multiples of $1,000), as requested by the Holder surrendering the same. No service charge
will be payable for such registration of transfer or exchange.


 


b) Investment
Representations. This Debenture has been issued subject to certain investment representations of the original Holder set forth in
the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and Applicable Law.


 


c) Reliance
on Debenture Register. Prior to due presentment for transfer to Borrower of this Debenture, Borrower and any agent of Borrower may
treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Debenture is overdue, and neither Borrower nor any such agent
shall be affected by notice to the contrary.


 


Section
4. Conversion.


 


a) Voluntary
Conversion. At any time after the Original Issue Date until this Debenture is no longer outstanding, this Debenture and, upon receipt
of TSX Venture Exchange approval, accrued interest, shall be convertible, in whole or in part, into shares of Common Stock issued at
the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 4(d) hereof).
The Holder shall effect conversions by delivering to Borrower a Notice of Conversion, the form of which is attached hereto as Annex
A (each, a “Notice of Conversion”), specifying therein the principal amount of this Debenture to be converted
and the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date
is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder.
If TSX Venture Exchange approval is required in order to convert accrued interest into shares of Common Stock, then the Conversion Date
shall be the date which is 3 Business Days from the date such TSX Venture Exchange approval has been provided. For clarity, the Holder
may not specify a Conversion Date prior to the date that such Notice of Conversion would be deemed to have been delivered hereunder.
To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to Borrower unless the entire
principal amount of this Debenture has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal
amount of this Debenture in an amount equal to the applicable conversion. The Holder and Borrower shall maintain records showing the
principal amount(s) converted and the date of such conversion(s). Borrower may deliver an objection to any Notice of Conversion within
two (2) Trading Days of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder
shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Debenture,
acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid
and unconverted principal amount of this Debenture may be less than the amount stated on the face hereof.


 




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b) Conversion
Price. The conversion price for the principal in connection with voluntary conversions by the Holder shall be $0.30, subject
to adjustment herein (the “Conversion Price”). The conversion price for accrued interest (the “Conversion
Price for Accrued Interest”) shall be the greater of (i) $0.30 and (ii) the minimum conversion price permitted by the TSX Venture
Exchange at the time of conversion (should the Borrower’s Common Stock then be listed on such exchange).


 


c) Mechanics
of Conversion.


 


i. Conversion
Shares Issuable Upon Conversion of Principal Amount and Accrued Interest. The number of Conversion Shares issuable upon a conversion
of all or part of the outstanding principal amount hereunder shall be determined by the quotient obtained by dividing (x) the outstanding
principal amount as of the Conversion Date to be converted by (y) the Conversion Price. The number of Conversion Shares issuable upon
a conversion of all or part of the accrued interest hereunder shall be determined by the quotient obtained by dividing (x) the outstanding
accrued interest as of the Conversion Date to be converted by (y) the Conversion Price for Accrued Interest.


 


ii. Delivery
of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share Delivery Date”),
Borrower shall deliver, or cause to be delivered, to the Holder (i) a certificate or certificates representing the Conversion Shares
which, on or after the one year anniversary of the Original Issue Date, shall be free of restrictive legends and trading restrictions
(other than those which may then be required by the Purchase Agreement and under any Applicable Law) and which shall represent the number
of Conversion Shares being acquired upon the conversion of this Debenture; and (ii) a Warrant Certificate for one hundred percent (100%)
of the conversion shares being issued on such conversion. On or after the one-year anniversary of the Original Issue Date, Borrower shall
use its best efforts to deliver any certificate or certificates required to be delivered by Borrower under this Section 4(c) electronically
through the Depository Trust Company or another established clearing corporation performing similar functions. In the event the Borrower
registers its common stock with the United States Securities and Exchange Commission (the “SEC”), the one-year period in
this Section 4(c)(ii) shall be reduced to six months.


 


iii. Failure
to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to or as
directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to Borrower at
any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event Borrower shall promptly
return to the Holder any original Debenture delivered to Borrower and the Holder shall promptly return to Borrower the Common Stock certificates
issued to such Holder pursuant to the rescinded Conversion Notice.


 




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iv. Obligation
Absolute. Borrower’s obligations to issue and deliver the Conversion Shares upon conversion of this Debenture in accordance
with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver
or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or
any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of
any obligation to Borrower or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of Borrower to the Holder in connection with the issuance of such Conversion
Shares; provided, however, that such delivery shall not operate as a waiver by Borrower of any such action Borrower may
have against the Holder. In the event the Holder of this Debenture shall elect to convert any or all of the outstanding principal amount
hereof, Borrower may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has
been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining
and or enjoining conversion of all or part of this Debenture shall have been sought and obtained, and Borrower posts a surety bond for
the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Debenture, which is subject to the injunction,
which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which
shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, Borrower shall issue Conversion
Shares or, if applicable, cash, upon a properly noticed conversion. If Borrower fails for any reason to deliver to the Holder such certificate
or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date, Borrower shall pay to the Holder, in cash, as liquidated damages
and not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day on
the fifth (5th) Trading Day after such liquidated damages being to accrue) for each Trading Day after such Share Delivery
Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue
actual damages or declare an Event of Default pursuant to Section 7 hereof for Borrower’s failure to deliver Conversion Shares
within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall
not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.


 




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v. Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder, if
Borrower fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant to Section
4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market transaction
or otherwise), or the Holder or Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction
of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share
Delivery Date (a “Buy-In”), then Borrower shall (A) pay in cash to the Holder (in addition to any other remedies available
to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions)
for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled
to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase
obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this
Debenture in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed
rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if Borrower had timely complied
with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted conversion of this Debenture with respect to which the actual sale price of
the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause
(A) of the immediately preceding sentence, Borrower shall be required to pay the Holder $1,000. The Holder shall provide Borrower written
notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of Borrower, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief with respect to Borrower’s failure to
timely deliver certificates representing shares of Common Stock upon conversion of this Debenture as required pursuant to the terms hereof.


 


vi. Reservation
of Shares Issuable Upon Conversion. Borrower covenants that it will at all times reserve and keep available out of its authorized
and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Debenture as herein provided, free from
preemptive rights or any other actual contingent purchase rights of Persons other than the Holder, not less than such aggregate number
of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking
into account the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Debenture
on such principal amount. Borrower covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized,
validly issued, fully paid and nonassessable.


 


vii. Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Debenture. As to
any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, Borrower shall at its election,
either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price
or Conversion Price for Accrued Interest, as applicable, or round up to the next whole share.


 




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viii. Transfer
Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Debenture shall be made without
charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such
certificates, provided that, Borrower shall not be required to pay any tax that may be payable in respect of any transfer involved in
the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Debenture so converted
and Borrower shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance
thereof shall have paid to Borrower the amount of such tax or shall have established to the satisfaction of Borrower that such tax has
been paid. Borrower shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion.


 


d) Holder’s
Conversion Limitations. Borrower shall not effect any conversion of this Debenture, and a Holder shall not have the right to convert
any portion of this Debenture, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion,
the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the Holder or any of the Holder’s
Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares
of Common Stock issuable upon conversion of this Debenture with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this Debenture
beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of
any other securities of Borrower subject to a limitation on conversion or exercise analogous to the limitation contained herein (including,
without limitation, any other Debentures or the Warrants) beneficially owned by the Holder or any of its Affiliates. Except as set forth
in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated in accordance with the rules and
policies of the TSX Venture Exchange. To the extent that the limitation contained in this Section 4(d) applies, the determination of
whether this Debenture is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which
principal amount of this Debenture is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion
shall be deemed to be the Holder’s determination of whether this Debenture may be converted (in relation to other securities owned
by the Holder together with any Affiliates) and which principal amount of this Debenture is convertible, in each case subject to the
Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to Borrower each
time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph
and Borrower shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any
group status as contemplated above shall be determined in accordance with the rules of the TSX Venture Exchange. For purposes of this
Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares
of Common Stock as stated in the most recent of the following: (i) Borrower’s most recent periodic or annual report filed with
the TSX Venture Exchange, as the case may be, (ii) a more recent public announcement by Borrower, or (iii) a more recent written notice
by Borrower or Borrower’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral
request of a Holder, Borrower shall within three Trading Days confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the
conversion or exercise of securities of Borrower, including this Debenture, by the Holder or its Affiliates since the date as of which
such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99%
of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable
upon conversion of this Debenture held by the Holder. The Holder may decrease the Beneficial Ownership Limitation at any time and the
Holder, upon not less than 61 days’ prior notice to Borrower, may increase the Beneficial Ownership Limitation provisions of this
Section 4(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Debenture held by the Holder
and the Beneficial Ownership Limitation provisions of this Section 4(d) shall continue to apply. Any such increase will not be effective
until the 61st day after such notice is delivered to Borrower. The Beneficial Ownership Limitation provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained
herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained
in this paragraph shall apply to a successor holder of this Debenture.


 




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Section
5. Certain Adjustments.


 


a) Stock
Dividends and Stock Splits. If Borrower, at any time while this Debenture is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which,
for avoidance of doubt, shall not include any shares of Common Stock issued by Borrower upon conversion of the Debenture), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding
shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock,
any shares of capital stock of Borrower, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding any treasury shares of Borrower) outstanding immediately before such event, and of which
the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant
to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or
re-classification.


 


b) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time Borrower grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any
class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number
of shares of Common Stock acquirable upon complete conversion of this Debenture (without regard to any limitations on exercise hereof,
including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common
Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder
shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as
a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until
such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 


c) Pro
Rata Distributions. During such time as this Debenture is outstanding, if Borrower shall declare or make any dividend whether or
not permitted, or makes any other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock,
by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property
or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”), at any time after the issuance of this Debenture, then, in each such case, the Holder shall be
entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held
the number of shares of Common Stock acquirable upon complete exercise of this Debenture (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for
such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined
for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate
in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled
to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such
Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such
time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 




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d) Fundamental
Transaction. If, at any time while this Debenture is outstanding, (i) Borrower, directly or indirectly, in one or more related transactions
effects any merger or consolidation of Borrower with or into another Person, (ii) Borrower, directly or indirectly, effects any sale,
lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of
related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by Borrower or another Person)
is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash
or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) Borrower, directly or indirectly,
in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property,
(v) Borrower, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person
whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon
any subsequent conversion of this Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been
issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in
Section 4(d) on the conversion of this Debenture), the number of shares of Common Stock of the successor or acquiring corporation or
of Borrower, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Debenture is
convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of
this Debenture). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in
such Fundamental Transaction, and Borrower shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice
as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as
to the Alternate Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction. Borrower shall
cause any successor entity in a Fundamental Transaction in which Borrower is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of Borrower under this Debenture and the other Transaction Documents (as defined in the Purchase
Agreement) in accordance with the provisions of this Section 5(d) pursuant to written agreements in form and substance reasonably satisfactory
to the Holder and approved by the Holder (without unreasonable delay) prior to or contemporaneously with such Fundamental Transaction
and shall, at the option of the holder of this Debenture, deliver to the Holder in exchange for this Debenture a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Debenture which is convertible for a corresponding
number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon conversion of this Debenture (without regard to any limitations on the conversion of this Debenture) prior to such
Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but
taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares
of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value
of this Debenture immediately prior to or contemporaneously with the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Debenture
and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of Borrower and shall assume all of the obligations of Borrower under this Debenture and the other Transaction
Documents with the same effect as if such Successor Entity had been named as Borrower herein. Alternatively, the Holder may demand the
Company to redeem its Debenture at a rate equal to 125% of the principal and interest due thereon, to be paid in full contemporaneously
with consummation of the Fundamental Transaction.


 




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e) Calculations.
All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding any treasury shares of Borrower) issued and outstanding.


 


f) Notice
to Allow Conversion by Holder. If (A) Borrower shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) Borrower shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) Borrower shall authorize
the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights, (D) the approval of any stockholders of Borrower shall be required in connection with any reclassification of
the Common Stock, any consolidation or merger to which Borrower is a party, any sale or transfer of all or substantially all of the assets
of Borrower, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) Borrower
shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of Borrower, then, in each case, Borrower
shall cause to be filed at each office or agency maintained for the purpose of conversion of this Debenture, and shall cause to be delivered
to the Holder at its last address as it shall appear upon the Debenture Register, at least twenty (20) calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on
which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock
for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange,
provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains,
material, non-public information regarding Borrower or any of the Subsidiaries, Borrower shall simultaneously make public disclosure
of such notice in accordance with applicable securities laws. The Holder shall remain entitled to convert this Debenture during the 20-day
period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be
expressly set forth herein.


 


Section
6. Negative Covenants. As long as any principal amount of this Debenture remains outstanding, unless the Holder shall have
otherwise given prior written consent, Borrower shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:


 


a) other
than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any
kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired
or any interest therein or any income or profits therefrom;


 


b) other
than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of its property
or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;


 


c) amend
its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially adversely
affects any rights of the Holder (notwithstanding the foregoing, the Holder acknowledges and agrees that the Borrower shall be entitled
to proceed with the amendments to the charter documents as shall be set out in the Borrower’s proxy materials for its shareholder
meeting to be held in 2022 as publicly disclosed no less than five Trading Days before the issue date of this Debenture);


 




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d) repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock or Common
Stock Equivalents other than as to the Conversion Shares or Warrant Shares as permitted or required under the Transaction Documents;


 


e) redeem,
defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether
by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (other than
the Debentures if on a pro-rata basis), whether by way of payment in respect of principal of (or premium, if any) or interest on, such
Indebtedness, in any case unless such Indebtedness or interest is due and payable in accordance with the initial terms of such debt prior
to any default thereunder;


 


f) declare
or make any dividend or other distribution of its assets or rights to acquire its assets to holders of shares of Common Stock, preferred
stock, or any other equity security by way of return of capital or otherwise including, without limitation, any distribution of cash,
stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement
or other similar transaction;


 


g) sell
or offer to sell any securities with non-fixed or floating price features, issue any Common Stock or Common Stock Equivalents at a price
lower than the conversion price herein then in effect, or issue any equity or debt instruments with anti-dilution provisions;


 


h) shall
no delist from any exchange or market its common stock is traded upon at the time this Debenture was issued (except or unless the common
stock subsequently becomes traded on NASDAQ, in which case the common stock may be delisted from the TSX Venture Exchange); or


 


i) enter
into any agreement with respect to any of the foregoing.


 


Section
7. Events of Default.


 


a) “Event
of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event
shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order,
rule or regulation of any administrative or governmental body):


 


i. any
default in the payment of (A) the principal or interest, if any, amount of this Debenture or (B) liquidated damages and other amounts
owing to a Holder on any Debenture, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date
or by acceleration or otherwise) which default, solely in the case of a default under clause (B) above, is not cured within five Trading
Days after Borrower has become or should have become aware of such default;


 


ii. Borrower
shall fail to observe or perform any other covenant or agreement contained in this Debenture (other than a breach by Borrower of its
obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (viii) below) which
failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice of such failure sent by the
Holder to Borrower and (B) 10 Trading Days after Borrower has become or should have become aware of such failure;


 


iii. a
default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall
occur under (A) any of the Transaction Documents, or (B) any other material agreement, lease, document or instrument to which Borrower
or any Subsidiary is obligated (and not covered by clause (vi) below);


 




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iv. any
representation or warranty made in this Debenture, any other Transaction Documents, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder shall be untrue or incorrect in any material
respect as of the date when made or deemed made;


 


v. Borrower
or any Subsidiary shall be subject to a Bankruptcy Event;


 


vi. Borrower
or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement,
factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness
for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $50,000,
whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise become due and payable;


 


vii. Borrower
shall have completed any Change of Control Transaction or Fundamental Transaction without giving Holder at least ten Trading Days prior
written notice;


 


viii. Upon
the earlier of the Borrower registering its common stock with the SEC or one year from the Issue Date, the Borrower does not meet the
current public information requirements under Rule 144;


 


ix. Borrower
shall fail for any reason to deliver certificates to a Holder prior to the third Trading Day after a Conversion Date pursuant to Section
4(c) or Borrower shall provide at any time notice to the Holder, including by way of public announcement, of Borrower’s intention
to not honor requests for conversions of any Debentures in accordance with the terms hereof;


 


x. any
judgment or order is rendered against Borrower, any subsidiary or any of their respective property or other assets for the payment of
money in excess of $150,000, and such judgment or order shall remain unvacated, unbonded or unstayed for a period of 60 calendar days;


 


xi. other
than as a result of a Fundamental Transaction, any dissolution, liquidation or winding up by Borrower or a material Subsidiary of a substantial
portion of their business;


 


xii. other
than as a result of a Fundamental Transaction, cessation of operations by Borrower or a material Subsidiary;


 


xiii. an
event resulting in the Common Stock no longer being listed or quoted on a Trading Market, or notification from a Trading Market that
the Borrower is not in compliance with the conditions for such continued quotation and such non-compliance continues for twenty (20)
days following such notification;


 




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xiv. the
SEC, TSX Venture Exchange, Canadian Securities Commission or judicial stop trade order or suspension from the Borrower’s Principal
Trading Market or the OTCQB, which remains in effect for no more than five (5) consecutive Trading Days or twenty (20) days in any calendar
year;


 


xv. the
Borrower effectuates a reverse split of its Common Stock without ten (10) days prior written notice to the Holder;


 


xvi. a
failure by Borrower to notify Holder of any material event of which Borrower is obligated to notify Holder pursuant to the terms of this
Debenture or any other Transaction Document;


 


xvii. a
default by the Borrower of a term, covenant, warranty or undertaking of any other agreement to which the Borrower and Holder are parties,
or the occurrence of an event of default under any such other agreement to which Borrower and Holder are parties which is not cured after
any required notice and/or cure period;


 


xviii. any
material provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof) cease
to be valid and binding on or enforceable against the Borrower, or the validity or enforceability thereof shall be contested by Borrower,
or a proceeding shall be commenced by Borrower or any governmental authority having jurisdiction over Borrower or Holder, seeking to
establish the invalidity or unenforceability thereof, or Borrower shall deny in writing that it has any liability or obligation purported
to be created under any Transaction Document;


 


xix. the
failure by Borrower or any material Subsidiary to maintain any material intellectual property rights, personal, real property, equipment,
leases or other assets which are necessary to conduct its business (whether now or in the future) and such breach is not cured with twenty
(20) days after written notice to the Borrower from the Holder;


 


xx. the
restatement after the date hereof of any financial statements filed by the Borrower under any Applicable Law for any date or period from
two years prior to the Original Issue Date and until this Debenture is no longer outstanding, if the result of such restatement would,
by comparison to the unrestated financial statements, have constituted a Material Adverse Effect. For the avoidance of doubt, any restatement
related to new accounting pronouncements shall not constitute a default under this Section;


 


xxi. a
default under any Other Debenture;


 


xxii. the
occurrence of an Event of Default as defined in and under any other debt instrument issued by Borrower to Holder or any Other Holder;
or


 


xxiii. a
default by the Borrower of any term, covenant, warranty or undertaking in the Registration Rights Agreement.


 




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b) Remedies
Upon Event of Default, Fundamental Transaction and Change of Control Transaction. If any Event of Default or a Fundamental Transaction
or a Change of Control Transaction occurs, the outstanding principal amount of this Debenture, liquidated damages and other amounts owing
in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash
at the Mandatory Default Amount. Additionally, upon an Event of Default, the Borrower shall not file any registration statement unless
all the Holder’s Underlying Shares have been previously registered for resale with the SEC. Commencing on the Maturity Date and
also five (5) Trading Days after the occurrence of any Event of Default interest on this Debenture shall accrue at an interest rate equal
to the lesser of 20% per annum or the maximum rate permitted under Applicable Law until paid. Upon the payment in full of the Mandatory
Default Amount, the Holder shall promptly surrender this Debenture to or as directed by Borrower. In connection with such acceleration
described herein, the Holder need not provide, and Borrower hereby waives, any presentment, demand, protest or other notice of any kind,
and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and
all other remedies available to it under Applicable Law. Such acceleration may be rescinded and annulled by Holder at any time prior
to payment hereunder and the Holder shall have all rights as a holder of the Debenture until such time, if any, as the Holder receives
full payment pursuant to this Section 7(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any
right consequent thereon.


 


Section
8. Reserved.


 


Section
9. Miscellaneous.


 


a) Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt
requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery,
telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written
notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated
below (if delivered on a Trading Day during normal business hours where such notice is to be received), or the first Trading Day following
such delivery (if delivered other than on a Trading Day during normal business hours where such notice is to be received) or (b) on the
second Trading Day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to Borrower, to: Western
Magnesium Corporation, 580 Hornby Street, Suite 900, British Columbia, V6C 3B6, Canada, Attn: Sam Ataya, Chief Executive Officer, email:
sataya@westmagcorp.com, with a copy by email only to: Gowling WLG (Canada) LLP, Attention: Brett Kagetsu, email: brett.kagetsu@gowlingwlg.com,
and (ii) if to the Holder, to: the address and email address indicated on the front page of this Debenture, with an additional copy by
email only to (which shall not constitute notice): Grushko & Mittman, P.C., 1800 Rockaway Avenue, Suite 206, Hewlett, New York 11557,
email: counslers@grushkomittman.com.


 


b) Absolute
Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation of Borrower,
which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Debenture
at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt obligation of Borrower.
This Debenture ranks pari passu with all other Debentures now or hereafter issued under the terms set forth herein pursuant to
the Purchase Agreement.


 




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c) Lost
or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or destroyed, Borrower shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen or destroyed
Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen or destroyed, but only upon receipt
of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, reasonably satisfactory to Borrower, including
an indemnity and surety in amount and form satisfactory to the Borrower in its sole discretion.


 


d) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be governed by and
construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflict of
laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the state of Delaware (the “Delaware
Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Delaware Courts for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of such Delaware Courts, or such Delaware Courts are improper
or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Debenture and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any other manner permitted by Applicable Law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by Applicable Law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Debenture
or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Debenture,
then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other
costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.


 


e) Waiver.
Any waiver by Borrower or the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of Borrower or the Holder
to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture on any other occasion.
Any waiver by Borrower or the Holder must be in writing.


 


f) Severability.
If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if
any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.


 




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g) Usury.
If it shall be found that any interest or other amount deemed interest due hereunder violates the Applicable Law governing usury, the
applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under Applicable
Law. Borrower covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive Borrower
from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the performance of this Debenture, and Borrower (to the extent it may
lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every
such as though no such law has been enacted.


 


h) Next
Trading Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Trading Day, such payment shall
be made on the next succeeding Trading Day.


 


i) Headings;
Dollar Amounts. The headings contained herein are for convenience only, do not constitute a part of this Debenture and shall not
be deemed to limit or affect any of the provisions hereof. Unless otherwise specified herein, all dollar amounts are in US$.


 


j) Amendment.
Unless otherwise provided for hereunder, this Debenture may not be modified or amended or the provisions hereof waived without the written
consent of Borrower and the Holder.


 


k) Facsimile
Signature. In the event that the Borrower’s signature is delivered by facsimile transmission, PDF, electronic signature or
other similar electronic means, such signature shall create a valid and binding obligation of the Borrower with the same force and effect
as if such signature page were an original thereof.


 


*********************


 


(Signature
Pages Follow)


 




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IN
WITNESS WHEREOF, Borrower has caused this Debenture to be signed in its name by an authorized officer as of the April 14, 2022.


 


	 	WESTERN
    MAGNESIUM CORPORATION
	 	 	 
	 	By:	 
	 	Name:
    	Sam
    Ataya
	 	Title:
    	President
    and CEO
	 	 	 
	WITNESS:	 	 
	 	 	 
	 	 	 


 




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ANNEX
A


 


NOTICE
OF CONVERSION


 


The
undersigned hereby elects to convert principal under the Convertible Debenture Due October 14, 2023 of Western Magnesium Corporation,
a Delaware corporation (the “Company”), into shares of common stock (the “Common Stock”), of Borrower
according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as reasonably requested by Borrower in accordance therewith. No fee will be charged to the holder for any conversion,
except for such transfer taxes, if any.


 


By
the delivery of this Notice of Conversion the undersigned represents and warrants to Borrower that its ownership of the Common Stock
does not exceed the amounts specified under Section 4 of this Debenture, as determined in accordance with Section 13(d) of the Exchange
Act.


 


The
undersigned agrees to comply with the prospectus delivery requirements under the Applicable Law in connection with any transfer of the
aforesaid shares of Common Stock.


 


	Conversion
    calculations:	 
	 	Date
    to Effect Conversion: ____________________________
	 	 
	 	Principal
    Amount of Debenture to be Converted: $__________________
	 	 
	 	Applicable
    Conversion Price: $__________________
	 	 
	 	Interest
    Amount to be Converted: $_________________________
	 	 
	 	Applicable
    Conversion Price for Accrued Interest: $___________________________
	 	 
	 	Number
    of shares of Common Stock to be issued: ______________
	 	 
	 	Signature:
    _________________________________________
	 	 
	 	Name:
    ____________________________________________
	 	 
	 	Address
    for Delivery of Common Stock Certificates: __________
	 	_____________________________________________________
    
	 	_____________________________________________________
	 	 
	 	Or
	 	 
	 	DWAC
    Instructions: _________________________________
	 	 
	 	Broker
    No:_____________
	 	Account
    No: _____________


 




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