Document:

Exhibit 4.3

 

Form of Underwriter’s Warrant Agreement

 

THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER THAN (I) A.G.P./ALLIANCE GLOBAL PARTNERS OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF A.G.P./ALLIANCE GLOBAL PARTNERS OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

 

THIS PURCHASE WARRANT IS EXERCISABLE ON [________], 2021. VOID AFTER 5:00 P.M., EASTERN TIME, [________], 2026 [DATE THAT IS FIVE (5) YEARS FROM THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT].

  

COMMON SHARE PURCHASE WARRANT

 

For the Purchase of [_____] Common Shares

 

of

 

XORTX THERAPEUTICS, INC.

 

1. Purchase
Warrant. THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of A.G.P./Alliance Global Partners (“Holder”),
as registered owner of this Purchase Warrant, to Xortx Therapeutics, Inc., a company organized under the laws of British Columbia
(the “Company”), Holder is entitled, at any time or from time to time from [__], 2021 (the “Commencement
Date”), and at or before 5:00 p.m., Eastern time, [__], 2026 (the date that is five (5) years following the Effective
Date, the “Expiration Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part,
up to [__] common shares (the “Shares”) of the Company, no par value per share (the “Common Shares”),
subject to adjustment as provided in Section 6 hereof. If the Expiration Date is a day on which banking institutions are authorized
by law to close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in accordance
with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate
this Purchase Warrant. This Purchase Warrant is initially exercisable at $[___] per Share1; provided, however,
that upon the occurrence of any of the events specified in Section 6 hereof, the rights granted by this Purchase Warrant, including
the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified.
The term “Exercise Price” shall mean the initial exercise price or the adjusted exercise price, depending on
the context. For the avoidance of doubt, this Purchase Warrant will be exercisable at any time, and from time to time, in whole
or in part, from the Commencement Date (as defined in the Underwriting Agreement (as defined below)), which period shall not extend
further than five (5) years from the Effective Date in compliance with FINRA Rule 5110(f)(2)(G)(i).

 

2. Exercise.

 

2.1 Exercise Form. In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and completed and delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased payable in cash by wire transfer of immediately available funds to an account designated by the Company or by certified check or official bank check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented hereby shall cease and expire.

 

 

1
[           ]% of the public offering price.

 

     

     

    

 

2.2 Cashless Exercise. If at any time after the Commencement Date there is no effective registration statement registering, or no current prospectus available for, the resale of the Shares by the Holder, then in lieu of exercising this Purchase Warrant at such time, by payment of cash or check payable to the order of the Company pursuant to Section 2.1 above, Holder may elect to receive the number of Shares equal to the value of this Purchase Warrant (or the portion thereof being exercised), by surrender of this Purchase Warrant to the Company, together with the exercise form attached hereto, in which event the Company shall issue Shares to Holder in accordance with the following formula:

 

X = Y(A-B)/A

 

Where,

 

	
 

	
X

	
=

	
The number of Shares to be issued to Holder;

	
 

	
Y

	
=

	
The number of Shares for which the Purchase Warrant is being exercised;

	
 

	
A

	
=

	
The fair market value of one Share; and

	
 

	
B

	
=

	
The Exercise Price.

 

For purposes of this Section 2.2, the fair market value of a Share is defined as follows:

 

	
 

	
(i)

	
if the Company’s common shares are traded on a securities exchange, the value shall be deemed to be the closing price on such exchange prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant; or

	
 

	
(ii)

	
if the Company’s common shares are actively traded over-the-counter, the value shall be deemed to be the closing bid prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant; if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Company’s Board of Directors.

 

If Warrant Shares are issued in such a “cashless exercise,” the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position contrary to this Section 2.2.

 

2.3 Legend. Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities have been registered under the Securities Act:

 

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from registration under the Securities Act and applicable state law which, in the opinion of counsel to the Company, is available.”

 

2.4 Cash Payment. For the avoidance of doubt, the Company shall not be required to make any cash payments or net cash settlement to any registered holder in lieu of issuance of Shares.

 

3. Transfer.

 

3.1 General
Restrictions. The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that this Purchase
Warrant and the securities issuable hereunder shall not be sold during the Offering, or sold, transferred, assigned, pledged,
or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective
economic disposition of this Purchase Warrant or the securities issuable hereunder by any person for a period of one hundred eighty
(180) days immediately following the Effective Date (as defined in the Underwriting Agreement (as defined below)), except as provided
for in FINRA Rule 5110(g)(2). On and after 180 days after the Effective Date, transfers to others may be made subject to compliance
with or exemptions from applicable securities laws. In order to make any permitted assignment, the Holder must deliver to the
Company the assignment form attached hereto duly executed and completed, together with the Purchase Warrant and payment of all
transfer taxes, if any, payable in connection therewith. The Company shall within five (5) Business Days transfer this Purchase
Warrant on the books of the Company and shall execute and deliver a new Purchase Warrant or Purchase Warrants of like tenor to
the appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of Shares purchasable hereunder or
such portion of such number as shall be contemplated by any such assignment.

 

     

     

    

 

3.2 Restrictions Imposed by the Securities Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and until: (i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration under the Securities Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of the Company (the Company hereby agreeing that the opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. shall be deemed satisfactory evidence of the availability of an exemption), or (ii) a registration statement or a post-effective amendment to the registration statement relating to the offer and sale of such securities has been filed by the Company and declared effective by the U.S. Securities and Exchange Commission (the “Commission”) and compliance with applicable state securities law has been established.

 

4. Registration Rights.

 

4.1 Demand Registration.

 

4.1.1 Grant of Right. The Company, upon written demand (a “Demand Notice”) of the Holder(s) of at least 51% of the Purchase Warrants and/or the underlying Shares (“Majority Holders”), agrees to register, on one occasion, all or any portion of the Shares underlying the Purchase Warrants (collectively, the “Registrable Securities”). On such occasion, the Company will file a registration statement with the Commission covering the Registrable Securities within thirty (30) days after receipt of a Demand Notice and use its commercially reasonable efforts to have the registration statement declared effective as promptly as practicable thereafter, subject to compliance with review by the Commission; provided, however, that if the Demand Notice is issued within 50 days prior to the beginning of the Company’s fiscal year, the 30 day period shall be extended until 80 days after the last day of the prior fiscal year; and provided further that the Company shall not be required to comply with a Demand Notice if the Company has filed a registration statement with respect to which the Holder is entitled to piggyback registration rights pursuant to Section 4.2 hereof and the Holder has elected to participate in the offering covered by such registration statement. The demand for registration may be made at any time during a period of five (5) years beginning on the Commencement Date. The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holder(s) to all other registered Holders of the Purchase Warrants and/or the Registrable Securities within ten (10) days after the date of the receipt of any such Demand Notice.

 

4.1.2 Terms.
The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 4.1.1,
but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to
represent them in connection with the sale of the Registrable Securities. The Company agrees to use its commercially reasonable
efforts to cause the filing required herein to become effective as promptly as practicable and to qualify or register the Registrable
Securities in such States as are reasonably requested by the Holder(s); provided, however, that in no
event shall the Company be required to register the Registrable Securities in a State in which such registration would cause:
(i) the Company to be obligated to register or license to do business in such State or submit to general service of process in
such State, or (ii) the principal shareholders of the Company to be obligated to escrow their shares of the Company. The Company
shall use its commercially reasonable efforts to cause any registration statement filed pursuant to the demand right granted under
Section 4.1.1 to remain effective for a period of at least twelve (12) consecutive months after the date that the Holders of the
Registrable Securities covered by such registration statement are first given the opportunity to sell all of such securities.
The Holders shall only use the prospectuses provided by the Company to sell the shares covered by such registration statement,
and will immediately cease to use any prospectus furnished by the Company if the Company advises the Holder that such prospectus
may no longer be used due to a material misstatement or omission, or if the Company determines in good faith that such suspension
of use is necessary to delay the disclosure of material non-public information concerning the Company, the disclosure of which
at the time is not, in the good faith opinion of the Company, in the best interests of the Company. Notwithstanding the provisions
of this Section 4.1.2, the Holder shall be entitled to a demand registration under this Section 4.1.2 on only one (1) occasion
and such demand registration right shall terminate on the fifth anniversary of the effectiveness of the registration statement
in accordance with FINRA Rule 5110(f)(2)(H)(iv).

 

     

     

    

 

4.2 “Piggy-Back” Registration.

 

4.2.1 Grant of Right. In addition to the demand right of registration described in Section 4.1 hereof, the Holder shall have the right, for a period of no more than seven (7) years from the date of effectiveness of the registration statement in accordance with FINRA Rule 5110(f)(2)(G)(v), to include the Shares underlying the Purchase Warrant (collectively, the “Registrable Securities”) as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or any equivalent form); provided, however, that if, solely in connection with any primary underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of Common Shares which may be included in the registration statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such registration statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by such Holders; provided, however, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such registration statement or are not entitled to pro rata inclusion with the Registrable Securities.

 

4.2.2 Terms. The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 4.2.1 hereof, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration statement filed by the Company until such time as all of the Registrable Securities have been sold by the Holder. The holders of the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written notice within ten (10) days of the receipt of the Company’s notice of its intention to file a registration statement. Except as otherwise provided in this Purchase Warrant, there shall be no limit on the number of times the Holder may request registration under this Section 4.2.2; provided, however, that such registration rights shall terminate on the sixth anniversary of the Commencement Date.

 

4.3 General Terms.

 

4.3.1 Indemnification.
The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder
and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20 (a) of
the Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage, expense
or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing
or defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act
or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions
pursuant to which the Company has agreed to indemnify the Underwriters contained in Section 9(a) of the Underwriting Agreement
between the Underwriters and the Company, dated as of [_____], 2021 (the “Underwriting Agreement”). The Holder(s)
of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally,
and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable attorneys’
fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they
may become subject under the Securities Act, the Exchange Act or otherwise, arising from information furnished by or on behalf
of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement to the same
extent and with the same effect as the provisions contained in Section 9(b) of the Underwriting Agreement pursuant to which the
Underwriters have agreed to indemnify the Company.

 

     

     

    

 

4.3.2 Exercise of Purchase Warrants. Nothing contained in this Purchase Warrant shall be construed as requiring the Holder(s) to exercise their Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.

 

4.3.3 Documents Delivered to Holders. The Company shall furnish upon written request to each Holder participating in any of the foregoing offerings and to each underwriter of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort” letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting firm which has issued a report on the Company’s financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times as any such Holder shall reasonably request.

 

4.3.4 Underwriting Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any Holders whose Registrable Securities are being registered pursuant to this Section 4, which managing underwriter shall be reasonably satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate to such Holders, their Shares and their intended methods of distribution.

 

4.3.5 Documents to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.

 

4.3.6 Damages. Should the registration or the effectiveness thereof required by Sections 4.1 and 4.2 hereof be delayed by the Company or the Company otherwise fails to comply in any material respect with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of posting bond or other security.

 

5. New Purchase Warrants to be Issued.

 

5.1 Partial
Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned
in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for
cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or
transfer tax if exercised pursuant to Section 2.1 hereto, the Company shall cause to be delivered to the Holder without charge
a new Purchase Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to
purchase the number of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised or assigned.

 

     

     

    

 

5.2 Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.

 

6. Adjustments.

 

6.1 Adjustments to Exercise Price and Number of Securities. The Exercise Price and the number of Shares underlying the Purchase Warrant shall be subject to adjustment from time to time as hereinafter set forth:

 

6.1.1 Share Dividends; Split Ups. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Common Shares is increased by a share dividend payable in Shares or by a split up of Common Shares or other similar event, then, on the effective day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding Common Shares, and the Exercise Price shall be proportionately decreased.

 

6.1.2 Aggregation of Shares. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Common Shares is decreased by a consolidation, combination or reclassification of Common Shares or other similar event, then, on the effective date thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding Common Shares, and the Exercise Price shall be proportionately increased.

 

6.1.3 Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Common Shares other than a change covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such Common Shares, or in the case of any share reconstruction or amalgamation or consolidation of the Company with or into another corporation (other than a consolidation or share reconstruction or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding Common Shares), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of Common Shares or other securities or property (including cash) receivable upon such reclassification, reorganization, share reconstruction or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if any reclassification also results in a change in Shares covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections 6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly apply to successive reclassifications, reorganizations, share reconstructions or amalgamations, or consolidations, sales or other transfers.

 

6.1.4 Changes in Form of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section 6.1, and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Purchase Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the Commencement Date or the computation thereof.

 

6.2 Substitute
Purchase Warrant. In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company
with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in
any reclassification or change of the outstanding Common Shares), the corporation formed by such consolidation or share reconstruction
or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase
Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant)
to receive, upon exercise of such Purchase Warrant, the kind and amount of shares and other securities and property receivable
upon such consolidation or share reconstruction or amalgamation, by a holder of the number of Shares of the Company for which
such Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation,
sale or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to the adjustments
provided for in this Section 6. The above provision of this Section shall similarly apply to successive consolidations or share
reconstructions or amalgamations.

 

     

     

    

 

6.3 Elimination of Fractional Interests. The Company shall not be required to issue certificates representing fractions of Shares upon the exercise of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may be, to the nearest whole number of Shares or other securities, properties or rights.

 

7. Reservation and Listing. The Company shall at all times reserve and keep available out of its authorized Common Shares, solely for the purpose of issuance upon exercise of the Purchase Warrants, such number of Shares or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non- assessable and not subject to preemptive rights of any shareholder. The Company further covenants and agrees that upon exercise of the Purchase Warrants and payment of the exercise price therefor, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. As long as the Purchase Warrants shall be outstanding, the Company shall use its commercially reasonable efforts to cause all Shares issuable upon exercise of the Purchase Warrants to be listed (subject to official notice of issuance) on all national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Shares issued to the public in the Offering may then be listed and/or quoted.

 

8. Certain Notice Requirements.

 

8.1 Holder’s Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice is given to the shareholders.

 

8.2 Events Requiring Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of the following events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company, (ii) the Company shall offer to all the holders of its Shares any additional shares of the Company or securities convertible into or exchangeable for shares of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale of all or substantially all of its property, assets and business shall be proposed.

 

8.3 Notice
of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant
to Section 6 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice
shall describe the event causing the change and the method of calculating same and shall be certified as being true and accurate
by the Company’s Chief Financial Officer.

 

     

     

    

 

8.4 Transmittal of Notices. All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall be deemed to have been duly made when hand delivered, or mailed by express mail or private courier service: (i) if to the registered Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to following address or to such other address as the Company may designate by notice to the Holders:

 

If to the Holder:

 

A.G.P./Alliance Global Partners (“A.G.P.”)

590 Madison Avenue, 36th Floor

New York, New York 10022

Attn: Chris Pravecek

Fax No.: (203) 662-9771

 

with a copy (which shall not constitute notice) to:

 

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.

666 Third Avenue

New York, New York 10017

Attention: Ivan K. Blumenthal

E-mail: IKBlumenthal@mintz.com

 

If to the Company:

 

XORTX Therapeutics, Inc.

Suite 2400 – 745 Thurlow Street

Vancouver, British Columbia

Canada V6E 0C5

Attention: Allen Davidoff, Ph.D., Chief Executive Officer

Telephone number: (403) 607-2621

Email address: adavidoff@xortx.com 

 

with a copy (which shall not constitute notice) to:

 

Dorsey & Whitney LLP

[              ]

Attention: [          ]

Email: [       ]

 

9. Miscellaneous.

 

9.1 Amendments. The Company and A.G.P. may from time to time supplement or amend this Purchase Warrant without the approval of any of the Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company and A.G.P. may deem necessary or desirable and that the Company and A.G.P. deem shall not adversely affect the interest of the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom enforcement of the modification or amendment is sought.

 

9.2 Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Purchase Warrant.

 

9.3 Entire
Agreement. This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection
with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof,
and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.

 

     

     

    

 

9.4 Binding Effect. This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein contained.

 

9.5 Governing Law; Submission to Jurisdiction; Trial by Jury. This Purchase Warrant shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its shareholders and affiliates) and the Holder hereby irrevocably waive, 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 Agreement or the transactions contemplated hereby.

 

9.6 Waiver, etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non- fulfillment.

 

9.7 Execution in Counterparts. This Purchase Warrant may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission.

 

9.8 Exchange Agreement. As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees that, at any time prior to the complete exercise of this Purchase Warrant by Holder, if the Company and A.G.P. enter into an agreement (“Exchange Agreement”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged for securities or cash or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.

 

[Signature Page
Follows]

 

     

     

    

 

IN WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the ________ day of _______, 2021.

 

	
XORTX THERAPEUTICS, INC.

	
 

	
 

	
 

	
 

	
By:

	
              

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

 

     

     

    

 

[Form to be used to exercise Purchase Warrant]

 

Date: _________, 20__

 

The undersigned hereby elects irrevocably to exercise the Purchase Warrant for_____ common shares, no par value per share (the “Shares”), of Xortx Therapeutics, Inc., a company organized under the laws of British Columbia (the “Company”), and hereby makes payment of $____ (at the rate of $____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.

 

or

 

The undersigned hereby elects irrevocably to convert its right to purchase Shares of the Company under the Purchase Warrant for ___ Shares, as determined in accordance with the following formula:

 

	
X =

	
Y (A-B)

	
     A

Where,

 

	
X

	
=

	
The number of Shares to be issued to Holder;

	
Y

	
=

	
The number of Shares for which the Purchase Warrant is being exercised;

	
A

	
=

	
The fair market value of one Share which is equal to $___; and

	
B

	
=

	
The Exercise Price which is equal to $___ per share

 

The undersigned agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with respect to the calculation shall be resolved by the Company in its sole discretion.

 

Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been converted.

 

Signature____________________________

 

Signature Guaranteed___________________

 

INSTRUCTIONS FOR REGISTRATION OF SECURITIES

 

	
Name

	
 

	
 

	
 

	
 

	
(Print in Block Letters)

	
 

	
 

	
 

	
Address

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

NOTICE:
The signature to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or
enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by
a firm having membership on a registered national securities exchange.

 

     

     

    

 

[Form to be used to assign Purchase Warrant]

 

ASSIGNMENT

 

(To be executed by the registered Holder to effect a transfer of the within Purchase Warrant):

 

FOR VALUE RECEIVED, ___________________ does hereby sell, assign and transfer unto the right to purchase common shares, no par value per share, of Xortx Therapeutics, Inc., a company organized under the laws of British Columbia (the “Company”), evidenced by the Purchase Warrant and does hereby authorize the Company to transfer such right on the books of the Company.

 

Dated: ____________, 20__

 

Signature____________________________

 

Signature Guaranteed ___________________

 

NOTICE: The signature
to this form must correspond with the name as written upon the face of the within Purchase Warrant without alteration or enlargement
or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.-1-

 

Exhibit
4.4

 

IN
WITNESS WHEREOF, the Corporation has caused this Warrant to be executed by a duly authorized officer.

 

DATED
for reference this ●th day of February, 2021.

 

	 	XORTX THERAPEUTICS INC.
	 	 	 
	 	Per:	 
	 	 	Authorized Signatory

 

(See
terms and conditions attached hereto)

 

     

    -2- 

    

 

SCHEDULE
"A" 

TERMS
AND CONDITIONS

 

Terms
and Conditions attached to the Warrant issued by XORTX Therapeutics Inc. and dated for reference February
●, 2021.

 

ARTICLE
1

INTERPRETATION

 

		1.1	Definitions

 

In
these Terms and Conditions, unless there is something in the subject matter or context inconsistent therewith:

 

		(a)	"Common
                                         Shares" means the common shares in the capital of the Corporation to be issued
                                         pursuant to the exercise of Warrants;

 

		(b)	"Corporation"
                                         means XORTX Therapeutics Inc. unless and until a successor corporation shall occur
                                         in the manner prescribed in Article 6, and thereafter "Corporation" shall mean
                                         such successor corporation;

 

		(c)	"Corporation's
                                         Auditors" means an independent firm of accountants duly appointed as auditors
                                         of the Corporation;

 

		(d)	"Exchange"
                                         means the Canadian Securities Exchange or such other stock exchange on which the
                                         Corporation's Common Shares are listed and posted for trading;

 

		(e)	"Exercise
                                         Price" means the price of $0.40 per common share;

 

		(f)	"Expiry
                                         Time" means 4:30 p.m. (Calgary time) on February
                                         ●, 2024, unless this Warrant is earlier terminated under the provisions
                                         of Section 3.5 below;

 

		(g)	"herein",
                                         "hereby" and similar expressions refer to these Terms and Conditions as
                                         the same may be amended or modified from time to time; and the expression "Article"
                                         and "Section" followed by a number refer to the specified Article or Section
                                         of these Terms and Conditions;

 

		(h)	"Issue
                                         Date" means the issue date of the Warrant shown on the face page of the Warrant
                                         Certificate;

 

		(i)	"person"
                                         means an individual, corporation, partnership, trustee or any unincorporated organization
                                         and words importing persons have a similar meaning;

 

		(j)	“Up-listing”
                                         means the listing (or co-listing) for trading of the Common Shares on a national securities
                                         exchange in the United States of America;

 

		(k)	"Warrant"
                                         means the warrant to acquire Common Shares evidenced by the Warrant Certificate;
                                         and

 

     

    -3- 

    

 

		(l)	"Warrant
                                         Certificate" means the certificate to which these Terms and Conditions are attached.

 

		1.2	Interpretation
                                         Not Affected by Headings

 

		(a)	The
                                         division of these Terms and Conditions into Articles and Sections, and the insertion
                                         of headings are for convenience of reference only and shall not affect the construction
                                         or interpretation thereof.

 

		(b)	Words
                                         importing the singular number include the plural and vice versa and words importing the
                                         masculine gender include the feminine and neuter genders.

 

		1.3	Applicable
                                         Law

 

The
terms hereof and of the Warrant shall be construed in accordance with the laws of the Province of Alberta and the laws of Canada
applicable thereto.

 

ARTICLE
2 

ISSUE
OF WARRANT

 

		2.1	Issue
                                         of Warrants

 

That
number of Warrants set out on the Warrant Certificate are hereby created and authorized to be issued.

 

		2.2	Additional
                                         Warrants

 

Subject
to any other written agreement between the Corporation and the Warrantholder, the Corporation may at any time and from time to
time undertake further equity or debt financing and may issue additional Common Shares, warrants or grant options or similar rights
to purchase Common Shares to any person.

 

		2.3	Issue
                                         in Substitution for Lost Warrants

 

If
the Warrant Certificate becomes mutilated, lost, destroyed or stolen:

 

		(a)	the
                                         Corporation shall issue and deliver a new Warrant Certificate of like date and tenor
                                         as the one mutilated, lost, destroyed or stolen, in exchange for and in place of and
                                         upon cancellation of such mutilated, lost, destroyed or stolen Warrant Certificate; and

 

		(b)	the
                                         holder shall bear the cost of the issue of a new Warrant Certificate hereunder and in
                                         the case of the loss, destruction or theft of the Warrant Certificate, shall furnish
                                         to the Corporation such evidence of Joss, destruction, or theft as shall be satisfactory
                                         to the Corporation in its discretion and the Corporation may also require the holder
                                         to furnish indemnity in an amount and form satisfactory to the Corporation in its discretion,
                                         and shall pay the reasonable charges of the Corporation in connection therewith.

 

		2.4	Warrantholder
                                         Not a Shareholder

 

The
Warrant shall not constitute the holder a shareholder of the Corporation, nor entitle it to any right or interest in respect thereof
except as may be expressly provided in the Warrant.

 

     

    -4- 

    

 

ARTICLE
3 

EXERCISE
OF THE WARRANT

 

		3.1	Method
                                         of Exercise of the Warrant

 

The
right to purchase Common Shares conferred by this Warrant Certificate may be exercised, prior to the Expiry Time, by the holder
surrendering it, with a duly completed and executed exercise form substantially in the form attached hereto as Schedule "B"
and cash or a certified cheque payable to or to the order of the Corporation, at par in Calgary, Alberta, for the Exercise
Price applicable at the time of surrender in respect of the Common Shares subscribed for in lawful money of Canada, to the Corporation.

 

		3.2	Effect
                                         of Exercise of the Warrant

 

		(a)	Upon
                                         due surrender and payment pursuant to Section 3.1 hereof, the Common Shares so subscribed
                                         for shall be issued as fully paid and non-assessable shares and the holder shall become
                                         the holder of record of such Common Shares on the date of such surrender and payment;
                                         and

 

		(b)	Within
                                         five business days of such exercise of any Warrants hereunder, the Corporation shall
                                         forthwith cause the issuance to the holder a certificate for the Common Shares purchased
                                         as aforesaid.

 

		3.3	Subscription
                                         for Less than Entitlement

 

The
holder may subscribe for and purchase a number of Common Shares less than the number which it is entitled to purchase pursuant
to the surrendered Warrant Certificate. In such event, the holder shall receive a Warrant Certificate for the balance of the Common
Shares which it is entitled to purchase pursuant to the Warrant Certificate which were not then purchased.

 

		3.4	Expiration
                                         of the Warrant

 

After
the Expiry Time all rights hereunder shall wholly cease and terminate and the Warrant shall be void and of no effect.

 

		3.5	Forced
                                         Conversion Right

 

If
the volume weighted average price for the Corporation's common shares on the Exchange is greater than $1.20 per share for a period
often (10) consecutive trading days, then the Corporation may give notice to the holders by way of a news release (the "Notice")
notifying such Holder that the Warrants must be exercised within thirty (30) calendar days from the date of delivery of such Notice,
otherwise the Warrants will expire at 4:30 p.m. (Calgary time) on the 30th day after the date of delivery of the Notice.

 

     

    -5- 

    

 

		3.6	Hold
                                         Periods and Legending of Share Certificate

 

If
any of the Warrants are exercised prior to June ●, 2021, the certificates
representing the Common Shares to be issued pursuant to such exercise shall bear the following legend:

 

"UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES MUST NOT TRADE THE SECURITIES BEFORE JUNE
●, 2021."

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “U.S. SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES
FOR THE BENEFIT OF XORTX THERAPEUTICS INC. (THE “CORPORATION”) THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY: (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION
S UNDER THE U.S. SECURITIES ACT (“REGULATION S”), (C) IN ACCORDANCE WITH (1) RULE 144A UNDER THE U.S. SECURITIES ACT
OR (2) RULE 144 UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, OR (D) PURSUANT TO ANOTHER EXEMPTION OR EXCLUSION FROM REGISTRATION
UNDER THE U.S. SECURITIES ACT, AND IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS, AFTER, IN THE CASE OF
TRANSFERS PURSUANT TO CLAUSE (C)(2) OR (D) (OR IF REQUIRED BY THE CORPORATION, OR ITS TRANSFER AGENT, CLAUSE (B)) ABOVE, THE HOLDER
HAS PROVIDED TO THE CORPORATION A LEGAL OPINION OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO
THE CORPORATION, TO THE EFFECT THAT THE SALE OF SUCH SECURITIES IS NOT REQUIRED TO BE REGISTERED UNDER THE U.S. SECURITIES ACT
OR APPLICABLE STATE SECURITIES LAWS.”; and

 

THESE
SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES.”

 

		3.7	Warrants
                                         for Fractions of Shares

 

To
the extent that the holder is entitled to receive on the exercise or partial exercise of any Warrants, a fraction of a Common
Share, such right may be exercised in respect of such fraction only in combination with another Warrant which in the aggregate
entitle the holder to receive a whole number of Common Shares.

 

ARTICLE
4 

ADJUSTMENTS

 

		4.1	Adjustments

 

The
number of Common Shares purchasable upon the exercise of each Warrant and the Exercise Price shall be subject to adjustment as
follows:

 

		(a)	in
                                         the event the Corporation shall:

 

		(i)	pay
                                         a dividend in Common Shares or make a distribution in Common Shares;

 

     

    -6- 

    

 

		(ii)	subdivide
                                         its outstanding Common Shares;

 

		(iii)	combine
                                         its outstanding Common Shares into a smaller number of Common Shares; or

 

		(iv)	issue
                                         by reclassification of its Common Shares other securities of the Corporation (including
                                         any such reclassification in connection with a consolidation, merger, amalgamation or
                                         other combination in which the Corporation is the surviving corporation), 

 

the
number of Common Shares (or other securities) purchasable upon exercise of each Warrant immediately prior thereto shall be adjusted
so that the Warrantholder shall be entitled to receive the kind and number of Common Shares or other securities of the Corporation
which it would have owned or have been entitled to receive after the happening of any of the events described above, had such
Warrant been exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment
made pursuant to this subsection (a) shall become effective immediately after the effective date of such event retroactive to
the record date, if any, for such event.

 

[In
addition, at any time prior to or concurrently with an Up-listing, if the Corporation issues or sells any Common Shares at a price
less than the Exercise Price, then as of the close of business on the day of such issuance or sale, the Exercise Price shall be
adjusted to be equal to the price of such issuance or sale (the “Ratchet Protection”).]1
The Warrantholder acknowledges and agrees that the Ratchet Protection shall expire upon completion of any Up-listing.

 

		(b)	In
                                         case the Corporation shall issue rights, options or warrants to all or substantially
                                         all holders of its outstanding Common Shares, without any charge to such holders, entitling
                                         them (for a period within 45 days after the record date mentioned below) to subscribe
                                         for or purchase Common Shares at a price per share which is lower than 95% of the current
                                         market price at the record date mentioned below than the then current market price per
                                         Common Share (as determined in accordance with subsection (d) below), the number of Common
                                         Shares thereafter purchasable upon the exercise of each Warrant shall be determined by
                                         multiplying the number of Common Shares theretofore purchasable upon exercise of each
                                         Warrant by a fraction, of which the numerator shall be the number of Common Shares outstanding
                                         on the date of issuance of such rights, options or warrants plus the number of additional
                                         Common Shares offered for subscription or purchase, and of which the denominator shall
                                         be the number of Common Shares outstanding on the date of issuance of such rights, options
                                         or warrants plus the number of shares which the aggregate offering price of the total
                                         number of Common Shares so offered would purchase at the current market price per Common
                                         Share at such record date. Such adjustment shall be made whenever such rights, options
                                         or warrants are issued, and shall become effective immediately after the record date
                                         for the determination of shareholders entitled to receive such rights, options or warrants.

 

 

1
My understanding was that the warrant exercise price would not ratchet all the way down to the price at which the shares
are issued, since the Exercise Price is CDN $0.40, as opposed to CDN $0.25. It would ratchet down to the same proportion that
CDN $0.40 is to CDN $0.25. Is that no longer the case? 

 

     

    -7- 

    

 

		(c)	In
                                         case the Corporation shall distribute to all or substantially all holders of its Common
                                         Shares evidences of its indebtedness or assets (excluding cash dividends or distributions
                                         payable out of consolidated earnings or earned surplus and dividends or distributions
                                         referred to in subsection (a) above or in subsection (d) below or rights, options or
                                         warrants, or convertible or exchangeable securities containing the right to subscribe
                                         for or purchase Common Shares (excluding those referred to in subsection (b) above)),
                                         then in each case the number of Common Shares thereafter purchasable upon the exercise
                                         of each Warrant shall be determined by multiplying the number of Common Shares theretofore
                                         purchasable upon the exercise of each Warrant by a fraction, of which the numerator shall
                                         be the then current market price per Common Share (as determined in accordance with subsection
                                         (d) below) on the date of such distribution, and of which the denominator shall be the
                                         then current market price per Common Share less the then fair value (as determined by
                                         the board of directors of the Corporation, acting reasonably) of the portion of the assets
                                         or evidences of indebtedness so distributed or of such subscription rights, options or
                                         warrants, or of such convertible or exchangeable securities applicable to one Common
                                         Share. Such adjustment shall be made whenever any such distribution is made, and shall
                                         become effective on the date of distribution retroactive to the record date for the determination
                                         of shareholders entitled to receive such distribution.

 

In
the event of the distribution by the Corporation to all or substantially all of the holders of its Common Shares of shares of
a subsidiary or securities convertible or exercisable for such shares, then in lieu of an adjustment in the number of Common Shares
purchasable upon the exercise of each Warrant, the Warrantholder of each Warrant, upon the exercise thereof, shall receive from
the Corporation, such subsidiary or both, as the Corporation shall reasonably determine, the shares or other securities to which
such Warrantholder would have been entitled if such Warrantholder had exercised such Warrant immediately prior thereto, all subject
to further adjustment as provided in this section 4.1 provided, however, that no adjustment in respect of dividends or interest
on such shares or other securities shall be made during the term of a Warrant or upon the exercise of a Warrant.

 

		(d)	For
                                         the purpose of any computation under subsections (b) and (c) of this section 4.1, the
                                         current market price per Common Share at any date shall be the weighted average price
                                         per Common Share for twenty-five (25) consecutive trading days, commencing not more than
                                         45 trading days before such date on the stock exchange on which the Common Shares are
                                         then traded; provided if the Common Shares are then traded on more than one stock exchange,
                                         then on the stock exchange on which the largest volume of Common Shares were traded during
                                         such twenty-five (25) consecutive trading day period. The weighted average price per
                                         Common Share shall be determined by dividing the aggregate sale price of all Common Shares
                                         sold on such exchange or market, as the case may be, during the said twenty-five (25)
                                         consecutive trading days by the total number of shares so sold. For purposes of this
                                         subsection (d), trading day means, with respect to a stock exchange, a day on which such
                                         exchange is open for the transaction of business. Should the Common Shares not be listed
                                         on any stock exchange the current market price per Common Share at any date shall be
                                         determined by the board of directors of the Corporation, acting reasonably.

 

     

    -8- 

    

 

		(e)	In
                                         any case in which this Article 4 shall require that any adjustment in the Exercise Price
                                         be made effective immediately after a record date for a specified event, the Corporation
                                         may elect to defer until the occurrence of the event the issuance, to the holder of any
                                         Warrant exercised after that record date, of the Common Shares and other shares of the
                                         Corporation, if any, issuable upon the exercise of the Warrant over and above the Common
                                         Shares and other shares of the Corporation; provided, however, that the Corporation shall
                                         deliver to the holder an appropriate instrument evidencing the holder's right to receive
                                         such additional shares upon the occurrence of the event requiring such adjustment.

 

		(f)	No
                                         adjustment in the number of Common Shares purchasable hereunder shall be required unless
                                         such adjustment would require an increase or decrease of at least one percent (1%) in
                                         the number of Common Shares purchasable upon the exercise of each Warrant; provided,
                                         however, that any adjustments which by reason of this subsection (f) are not required
                                         to be made shall be carried forward and taken into account in any subsequent adjustment.
                                         All calculations shall be made to the nearest one-hundredth of a share.

 

		(g)	Wherever
                                         the number of Common Shares purchasable upon the exercise of each Warrant is adjusted,
                                         as herein provided, the Exercise Price payable upon exercise of each Warrant shall be
                                         adjusted by multiplying such Exercise Price immediately prior to such adjustment by a
                                         fraction, of which the numerator shall be the number of Common Shares purchasable upon
                                         the exercise of such Warrant immediately prior to such adjustment, and of which the denominator
                                         shall be the number of Common Shares purchasable immediately thereafter.

 

		(h)	No
                                         adjustment in the number of Common Shares purchasable upon the exercise of each Warrant
                                         need by made under subsections (b) and (c) if, the Corporation issues or distributes
                                         to the Warrantholder the rights, options, warrants, or convertible or exchangeable securities,
                                         or evidences of indebtedness or assets referred to in those subsections which the Warrantholder
                                         would have been entitled to receive had the Warrants been exercised prior to the happening
                                         of such event or the record date with respect thereto.

 

		(i)	In
                                         the event that at any time, as a result of an adjustment made pursuant to subsection
                                         (a) above, the Warrantholder shall become entitled to purchase any securities of the
                                         Corporation other than Common Shares, thereafter the number of such other shares so purchasable
                                         upon exercise of each Warrant and the Exercise Price of such shares shall be subject
                                         to adjustment from time to time in a manner and on terms as nearly equivalent as practicable
                                         to the provisions with respect to the Common Shares contained in subsections (a) through
                                         (h), inclusive, above, and the provisions of sections 4.2 through 4.4, inclusive, of
                                         this Article 4 with respect to the Common Shares, shall apply on like terms to any such
                                         other securities.

 

     

    -9- 

    

 

		(j)	Upon
                                         the expiration of any rights, options, warrants or conversion or exchange privileges
                                         granted to all or substantially all of the holders of the Corporation's outstanding Common
                                         Shares, if any thereof shall not have been exercised, the Exercise Price and the number
                                         of Common Shares purchasable upon the exercise of each Warrant shall, upon such expiration,
                                         be readjusted and shall thereafter be such as it would have been had it been originally
                                         adjusted (or had the original adjustment not been required, as the case may be) as if:

 

		(i)	the
                                         only Common Shares so issued were the Common Shares, if any, actually issued or sold
                                         upon the exercise of such rights, options, warrants or conversion or exchange rights;
                                         and

 

		(ii)	such
                                         Common Shares, if any, were issued or sold for the consideration actually received by
                                         the Corporation upon such exercise plus the aggregate consideration, if any, actually
                                         received by the Corporation for the issuance, sale or grant of all such rights, options,
                                         warrants or conversion or exchange rights whether or not exercised;

 

provided
further, that no such readjustment shall have the effect of increasing the Exercise Price or decreasing the number of Common Shares
purchasable upon the exercise of each Warrant by an amount in excess of the amount of the adjustment initially made with respect
to the issuance, sale or grant of such rights, options, warrants or conversion or exchange rights.

 

		4.2	Voluntary
                                         Adjustment by the Corporation

 

Subject
to requisite Exchange approval, the Corporation may, at its option, at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount deemed appropriate by the Board of Directors of the Corporation.

 

		4.3	Notice
                                         of Adjustment

 

Whenever
the number of Common Shares purchasable upon the exercise of each Warrant or the Exercise Price of such Common Shares is adjusted,
as herein provided, the Corporation shall promptly send to the Warrantholder by first class mail, postage prepaid, notice of such
adjustment or adjustments.

 

		4.4	No
                                         Adjustment for Dividends

 

Except
as provided in section 4.1 of this Article 4, no adjustment in respect of any dividends shall be made during the term of a Warrant
or upon the exercise of a Warrant.

 

     

    -10- 

    

 

		4.5	Preservation
                                         of Purchase Rights Upon Merger, Consolidation, etc.

 

In
connection with any consolidation of the Corporation with, or amalgamation or merger of the Corporation with or into, another
corporation (including, without limitation, pursuant to a "takeover bid", "tender offer" or other acquisition
of all or substantially all of the outstanding Common Shares) or in case of any sale, transfer or lease to another corporation
of all or substantially all the property of the Corporation, the Corporation or such successor or purchasing corporation, as the
case may be, shall execute with the Warrantholder an agreement that the Warrantholder shall have the right thereafter, upon payment
of the Exercise Price in effect immediately prior to such action, to purchase upon exercise of each Warrant the kind and amount
of shares and other securities and property which it would have owned or have been entitled to receive after the happening of
such consolidation, amalgamation, merger, sale, transfer or lease had such Warrant been exercised immediately prior to such action,
and the Warrantholder shall be bound to accept such shares and other securities and property in lieu of the Common Shares to which
it was previously entitled; provided, however, that no adjustment in respect of dividends, interest or other income on or from
such shares or other securities and property shall be made during the term of a Warrant or upon the exercise of a Warrant. Any
such agreement shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Schedule "A". The provisions of this Article 4 shall similarly apply to successive consolidations, mergers,
amalgamation, sales, transfers or leases.

 

		4.6	Determination
                                         of Adjustments

 

If
any questions shall at any time arise with respect to the Exercise Price, such question shall be conclusively determined by the
Corporation's Auditors, or, if they decline to so act, any other firm of Chartered Accountants, in Calgary, Alberta or Vancouver,
British Columbia, that the Corporation may designate and the Warrantholder, acting reasonably, may approve, and who shall have
access to all appropriate records and such determination shall be binding upon the Corporation and the holder.

 

ARTICLE
5 

COVENANTS
BY THE COMPANY

 

5.1       Reservation
of Common Shares

 

The
Corporation will reserve and there will remain unissued out of its authorized capital a sufficient number of Common Shares to
satisfy the rights of acquisition provided for in the Warrant Certificate.

 

ARTICLE
6 

MERGER
AND SUCCESSORS

 

		6.1	Corporation
                                         May Consolidate, etc. on Certain Terms

 

Nothing
herein contained shall prevent any consolidation, amalgamation or merger of the Corporation with or into any other corporation
or corporations, or a conveyance or transfer of all or substantially all the properties and estates of the Corporation as an entirety
to any corporation lawfully entitled to acquire and operate same, provided, however, that the corporation formed by such consolidation,
amalgamation or merger or which acquires by conveyance or transfer all or substantially all the properties and estates of the
Corporation as an entirety shall, simultaneously with such amalgamation, merger, conveyance or transfer, assume the due and punctual
performance and observance of all the covenants and conditions hereof to be performed or observed by the Corporation.

 

     

    -11- 

    

 

		6.2	Successor
                                         Corporation Substituted

 

In
case the Corporation, pursuant to section 6.1 shall be consolidated, amalgamated or merged with or into any other corporation
or corporations or shall convey or transfer all or substantially all of its properties and estates as an entirety to any other
corporation, the successor corporation formed by such consolidation or amalgamation, or into which the Corporation shall have
been consolidated, amalgamated or merged or which shall have received a conveyance or transfer as aforesaid, shall succeed to
and be substituted for the Corporation hereunder and such changes in phraseology and form (but not in substance) may be made in
the Warrant Certificate and herein as may be appropriate in view of such amalgamation, merger or transfer.

 

ARTICLE
7 

AMENDMENTS

 

		7.1	Amendment,
etc

 

This
Warrant Certificate may only be amended by a written instrument signed by the parties hereto.

 

ARTICLE
8 

MISCELLANEOUS

 

		8.1	Time

 

Time
is of the essence of the terms of this certificate.

 

		8.2	Notice

 

Any
notice given under or pursuant to this Warrant Certificate will be given in writing and must be delivered, or mailed by prepaid
post, and addressed to the party to which notice is to be given at the address of the party set out on page one, or at another
address designated by the party in writing. If notice is delivered, it will be deemed to have been given at the time of delivery.
If notice is mailed, it will be deemed to have been received on the fourth business day after and excluding the date of mailing.

 

		8.3	Transfer
                                         of Warrants

 

The
Warrants represented by this certificate are not transferable.

 

     

     

    

 

SCHEDULE
"B" 

EXERCISE
FORM

 

TO:
 XORTX Therapeutics Inc.

 

Terms
which are not otherwise defined herein shall have the meanings ascribed to such terms in the Warrant Certificate held by the undersigned
and issued by XORTX Therapeutics Inc. (the "Corporation").

 

The
undersigned hereby exercises the right to acquire  _______  Common Shares of the Corporation in accordance with and
subject to the provisions of such Warrant Certificate and herewith makes payment of the purchase price in full for the said number
of Common Shares.

 

The
Common Shares are to be issued as follows:

 

	Name:	 
	 	 
	Address in full:	 
	 	 
	 	 

 

DATED
this________ day of ______________,  _______________ .

  

 

	Signature Guaranteed	 	(Signature
    of Warrantholder)
	 	 	 
	

         
	 	 
	 	 	Print full name
	 	 	 
	 	 	Print full address

 

Instructions:

 

		1.	The
                                         registered holder may exercise its right to receive Common Shares by completing this
                                         form and surrendering this form and the Warrant Certificate representing the Warrants
                                         being exercised to the Corporation.

 

		2.	If
                                         the Exercise Form indicates that Common Shares are to be issued to a person or persons
                                         other than the registered holder of the Warrant Certificate, the signature of such holder
                                         of the Exercise Form must be guaranteed by an authorized officer of a chartered bank,
                                         trust company or an investment dealer who is a member of a recognized stock exchange.

 

		3.	If
                                         the Exercise Form is signed by a trustee, exercise, administrator, curator, guardian,
                                         attorney, officer of a corporation or any person acting in a judiciary or representative
                                         capacity, the certificate must be accompanied by evidence of authority to sign satisfactory
                                         to the Corporation.

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