Document:

coya-ex1014_162.htm

 

Exhibit 10.14

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE 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. 

COMMON STOCK PURCHASE WARRANT

 COYA THERAPEUTICS, INC.

	
Warrant Shares: ____
	
Issue Date: ______, 2022

 

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, ____ or its registered assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the closing of a Qualified Equity Financing (as defined below)(the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on fifth anniversary of Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Coya Therapeutics, Inc., a Delaware corporation (the “Company”), at the Exercise Price (as defined in Section 2(b) below) then in effect, upon exercise of this Warrant such number of fully paid and non-assessable Warrant Shares (as defined blow), subject to adjustment as herein provided.

Section 1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

“Bid Price” 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 bid price of the Common Stock for the time in question (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. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, 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 Company and reasonably acceptable to the Holder, the fees and expenses of which shall be paid by the Company.

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. 

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed. 

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“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock. 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 

“Note(s)” means the Series 1 Unsecured Convertible Promissory Note(s) of the Company issued pursuant to the Offering.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Qualified Equity Financing” means the offer and sale for cash by the Company of any of its equity securities with the principal purpose of raising capital and that results in aggregate gross proceeds to the Company of at least Twenty Million Dollars ($20,000,000) (excluding any portion of the indebtedness under the Notes that shall be automatically converted into the Company’s equity securities pursuant to the terms of the Note, or any other convertible debt issued by the Company that are exchanged for equity securities of the Company in such financing).

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 

“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 Common Stock is traded on a Trading Market. 

“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 NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing.

“Transfer Agent” means the then current transfer agent of the Company.

“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. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, 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 Company and reasonably acceptable to the Holder, the fees and expenses of which shall be paid by the Company.

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“Warrant Shares” means  the product of (i) [_____ (__%)];1 and (ii) the aggregate number of shares of stock issued upon conversion of the Notes (as defined above) issued pursuant to that certain Confidential Offering Memorandum dated [__] (the “Offering”).

Section 2. Exercise.

a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

Without limiting the rights of a Holder to receive Warrant Shares on a “cashless exercise” and without limiting the liquidated damages provision in Section 2(d)(i) and the buy-in provision in Section 2(d)(iv), in no event will the Company be required to net cash settle a Warrant exercise.

b) Exercise Price. The exercise price per share of Common Stock under this Warrant shall be an amount equal to 120% of the per share price in the Qualified Equity Financing, subject to adjustment hereunder (the “Exercise Price”). 

	
	 

	
1 
	
 Drafting Note: Individual percentage allocations to be provided by Placement Agent, which in the aggregate will total 7%.

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c) Cashless Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to  the quotient obtained by dividing [(A-B) (X)] by (A), where 

	
 
	
(A)
	
as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

	
 
	
(B) 
	
the Exercise Price of this Warrant, as adjusted hereunder; and 

	
 
	
(X) 
	
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

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, the Warrant Shares shall take on the characteristics of this Warrant, and the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).

Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

d) Mechanics of Exercise.

i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise; provided that no Warrant Shares shall be required to be delivered by the Company if the Exercise Price is not delivered to the Company (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that the Notice of Exercise contains no material deficiencies and payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) 

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Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.

ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. 

iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise. 

iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if, at any time that the Warrant Shares are registered under the Exchange Act, the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (i) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (ii) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. 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 exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, 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 the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

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v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company 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 Exercise Price or round up to the next whole share. 

vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares. 

vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

e) Holder’s Exercise Limitations. If, at any time that the Warrant Shares are registered under the Exchange Act, the Company shall not affect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), 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 and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company 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 Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report 

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filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two 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 the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 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 exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), 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 exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained 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 Warrant.

Section 3. Certain Adjustments.

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) 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 3(a) above, if at any time the Company 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 exercise of this Warrant (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). 

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c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or 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, other than cash (including, without limitation, any distribution of 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 Warrant, 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 Warrant (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).

d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, 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 the Company 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) the Company, 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, or (v) the Company, 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 or group of Persons whereby such other Person or group 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 exercise of this Warrant, the Holder shall receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, without regard to any limitation in Section 2(e) on the exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, 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 Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise 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 exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form 

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and substance to this Warrant which is exercisable 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 exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise 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 exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to 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 Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.

e) Calculations. All calculations under this Section 3 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 3, 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 treasury shares, if any) issued and outstanding.

f) Notice to Holder.

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment. 

ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock 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 the Company shall be required in connection with any reclassification of the Common Stock other than a stock dividend or stock split, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least four (4) 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. The Company may satisfy this notice requirement by filing such information in a Current Report on Form 8-K. If the Company is a reporting company under the Exchange Act, to the extent that any notice provided in 

-9-

 

this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Section 4. Transfer of Warrant.

a) Transferability. This Warrant is not transferable without the written consent of the Company, except to permissible assigns of the Holder, which shall include, and is not limited to, officers, directors, employees, partners and contractors of Allele Capital Partners, LLC and Tribal Capital Markets, LLC. Pursuant to FINRA Rule 5110(g)(1), neither this Warrant nor any Warrant Shares issued upon exercise of this Warrant shall be 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 the securities by any person for a period of 180 days immediately following the date of effectiveness or commencement of sales of the offering pursuant to which this Warrant is being issued, except the transfer of any security:

(i) by operation of law or by reason of reorganization of the Company;

(ii)to any FINRA member firm participating in the offering and the officers and partners thereof, if all securities so transferred remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period;

(iii)if the aggregate amount of securities of the Company held by the Holder or related person do not exceed 1% of the securities being offered;

(iv)that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or 

(v)the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period.

Subject to the foregoing restriction, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges 

-10-

 

shall be dated the Issue Date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, provides to the Company an opinion of counsel, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that the transfer of this Warrant does not require registration under the Securities Act.

e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act. 

Section 5. Miscellaneous.

a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

d) Authorized Shares.

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, 

-11-

 

liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

e) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, 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 any such court, that such suit, action or proceeding is improper or is an 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 Warrant 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 law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws, unless exercised utilizing cashless exercise six months or more after the date hereof and permitted under state and federal securities laws. 

g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

-12-

 

h) Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at 5850 San Felipe St., Suite 500, Houston, Texas 77057 Attention: Chief Operating Officer, email address: [__], or such other facsimile number, email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any subsidiaries, the Company shall promptly file such notice with the Commission pursuant to a Current Report on Form 8-K.

i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares. 

l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holders of a majority in interest of the Warrants issued on this date then outstanding, on the other hand.

m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

o) Registration Rights.  The Warrant Shares shall have registration rights substantially similar to those set forth in that certain First Amended and Restated Investors’ Rights Agreement, to be dated on or about _____, 2022, by and between the Company and the other parties thereto.

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

(Signature Page Follows)

-13-

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	
 
	
COYA THERAPEUTICS, INC.

	
 
	
 

	
 
	
By:
	
 

	
 
	
Name:
	
 

	
 
	
Title:
	
 

 

	
 

	
 

 

-14-

 

 

NOTICE OF EXERCISE

 

		
	
To:
	
COYA THERAPEUTICS, INC.

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2) Payment shall take the form of (check applicable box):

[  ] in lawful money of the United States; or

[  ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

	
 

	
 

 

-15-

 

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	
Name:
	
 

	
 
	
(Please Print)

	
 
	
 

	
Address:
	
 

	
 
	
(Please Print)

	
 
	
 

	
Phone Number:
	
 

	
 
	
 

	
Email Address: 
	
 

	
 
	
 

	
Dated: ________________ __, _______
	
 

	
 
	
 

	
Holder’s Signature: ____________________________
	
 

	
 
	
 

	
Holder’s Address: _____________________________
	
 

 

	
 

	
 

 

 

 

-16-EX-10.1

 UNITED STATES 

Exhibit 10.1 

SUBSCRIPTION AGREEMENT FOR COMMON SHARES 

TO:    DIRTT Environmental Solutions Ltd. (the “Corporation”) 

The undersigned (hereinafter referred to as the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase such number of common
shares (“Shares”) in the capital of the Corporation that is equal to the aggregate subscription amount set forth below, as may be adjusted in accordance with this Subscription Agreement (the “Aggregate Subscription
Amount”), divided by the Subscription Price (as defined herein), upon and subject to the terms and conditions set forth in “Terms and Conditions of Subscription for Shares of DIRTT Environmental Solutions Ltd.” attached hereto
(together with this page and the attached Exhibits, the “Subscription Agreement”). In addition to this face page, the Subscriber must also complete Exhibit 1 attached hereto. 

 

									
	 22NW Fund,
LP
	 	 	 	        	  	  
 Aggregate Subscription
Amount (subject to adjustment as set forth in this Subscription Agreement):
	  	 
	(Name of Subscriber - please print)	 	    	 		  		  	 
	 	 		 	 
	 By: /s/ Aron
English                                        
                                
	 	 	 		  		  	    
	      (Authorized Signature)	 	 	 		  	 US$500,000
	  	 
	 	 		 	 
	 Manager of 22NW Fund GP, LLC, its general
partner
	 	 	 		  	 	  	 
	(Official Capacity or Title - please print)	 	 	 		  	 	  	 
	 Aron English
	 	 	 		  	Number of Shares Subscribed (to be filled in by the Corporation after calculation):	  	 
	(Please print name of individual whose signature appears above if different than the name of the Subscriber printed above.)	 	 	 		  		  	 
	 	 		 	 
	 [***]
	 	 	 		  		  	 
	 (Subscriber’s Address)

 
  
	 	 	 		  	Aggregate Subscription Amount (subject to adjustment as set forth in this Subscription Agreement) / Subscription Price	  	 
	 	 		 	 
	 [***]
	 	 	 		  		  	 
	(Telephone Number)	 	 	 		  	 	  	 
	 	 			
	 [***]
	 	 	 		  		  	
	 (E-Mail
Address)
  
	 	 	 		  		  	
		 		 		  		  	
	Register the Shares as set forth below (if different from above):	 	 	 		  	Deliver the Shares as set forth below:	  	 
	 	 		 	 
	  
	 	 	 		  	  
	  	 
	(Name)	 	 	 		  	(Name)	  	 
	 	 		 	 
	  
	 	 	 		  	  
	  	 
	(Account reference, if applicable)	 	 	 		  	(Account reference, if applicable)	  	 
	 	 		 	 
	  
	 	 	 		  	  
	  	 
	(Address)	 	 	 		  	(Contact Name)	  	 
	 	 		 	 
	  
	 	 	 		  	  
	  	 
	 	 	 	 		  	(Address)	  	 
	 	 		 	 
	 	 	 	 		  	  

 
	  	 

 ACCEPTANCE: The Corporation hereby accepts the subscription as set forth above on the terms and conditions contained in
this Subscription Agreement. 
 November 14, 2022. 
  

			
	    DIRTT Environmental Solutions Ltd.
		
	    By:	 	 /s/ Brad Little

		 	 Brad Little
 Chief Financial
Officer

  
 1 

 UNITED STATES 

 

 TERMS AND CONDITIONS OF SUBSCRIPTION FOR 

SHARES OF DIRTT ENVIRONMENTAL SOLUTIONS LTD. 

Terms of the Offering 
 1.    The
Subscriber acknowledges that this subscription is subject to rejection, acceptance or allotment by the Corporation in its sole discretion in whole or in part at any time. 

2.    The Subscriber acknowledges that the Shares subscribed for by it hereunder form part of a larger issuance and sale by the
Corporation of Shares having aggregate proceeds of approximately US$3,000,000 (the “Offering”) at a subscription price (the “Subscription Price”) equal to the greater of (i) the consolidated closing bid price
of the Shares on the Nasdaq Global Select Market (“Nasdaq”) immediately preceding the entering into of this Subscription Agreement; and (ii) the volume weighted average trading price on the Toronto Stock Exchange
(“TSX”) for the five trading days immediately following the announcement of the Offering; but that completion of the Offering is not subject to the Corporation receiving any minimum amount of subscriptions, and therefore, any funds
invested are available to the Corporation and will be paid to the Corporation on the Closing Date and need not be refunded to the Subscriber unless the Closing does not occur. 

If the aggregate number of Shares issuable pursuant to the Offering exceeds 8,871,494 Shares, being the maximum number of Shares that may be
issued without shareholder approval under the rules of the Nasdaq or the TSX (the “Maximum Share Amount”), then the Subscriber agrees that (i) the size of the Offering shall be reduced to at least the Maximum Share Amount;
(ii) if the Subscriber is a director or executive officer of the Corporation (an “Individual Subscriber”), such Individual Subscriber agrees that its Aggregate Subscription Amount as set forth on the cover page of this
Subscription Agreement shall not be reduced, notwithstanding any reductions made pursuant to this Section 2 to the number of Shares issued pursuant to the Offering; and (iii) if the Subscriber is either of 22NW Fund, LP
(“22NW”), or 726 BC LLC or 726 BF LLC (together, “726”) (each of 22NW and 726 is a “Fund Subscriber”), such Fund Subscriber agrees that it will be allocated such number of Shares that is equal to
the aggregate amount of Shares issued pursuant to the Offering less the aggregate number of Shares issuable to the Individual Subscribers, allocated on a pro rata basis among the Fund Subscribers based on each Fund Subscriber’s Aggregate
Subscription Amount as set forth on the cover page of this Subscription Agreement. The Subscriber acknowledges that the Corporation may also issue Shares at the Subscription Price in settlement of an outstanding debt of the Corporation. 

Representations, Warranties and Covenants of the Subscriber 

3.    The Subscriber represents, warrants and covenants to the Corporation and its counsel (and acknowledges that the Corporation and its
counsel are relying thereon) that both at the date hereof and at the Closing Time (as defined herein): 
  

	(a)	 it understands that an investment in the Shares is speculative and that such investment should be made only by
those who have sufficient financial resources to afford a total loss of their investment; and 

  

	(b)	 it has been independently advised as to restrictions with respect to trading in the Shares imposed by
applicable securities laws in the jurisdiction in which it resides, confirms that no representation (written or oral) has been made to it by or on behalf of the Corporation with respect thereto other than as set forth herein; and

  

	(c)	 it acknowledges that it is aware of the characteristics of the Shares, the risks relating to an investment
therein and of the fact that it may not be able to resell the Shares except in accordance with limited exemptions under applicable securities laws and regulatory policy (including applicable federal, state, provincial and local laws and regulations
of the United States and Canada) until expiry of the applicable restricted period and compliance with the other requirements of applicable law; and 

  

	(d)	 it has been advised to consult its own legal counsel for full particulars of the resale or other transfer
restrictions applicable to it and that it is the Subscriber’s responsibility to comply with all resale or transfer restrictions before selling or transferring the Shares; and 

  
 2 

 UNITED STATES 

 

	(e)	 it acknowledges that the certificates, if any, representing the Shares shall have endorsed thereon the
following legends (in addition to any legend set forth in Exhibit 1) setting out resale and transfer restrictions under applicable securities laws and the rules of the TSX in substantially the following form and with all necessary information
inserted. In circumstances where the Shares are entered into a direct registration or other electronic book-entry system or certificates representing the Shares are not received directly by the Subscriber, the Shares will bear the following legends
and the legend set forth in Exhibit 1 and notice is hereby given that the Shares shall be subject to resale and transfer restrictions under applicable securities laws and the rules of the TSX as described in the following legends:

 “Unless permitted under securities legislation, the holder of this security must not trade the security before
date that is 4 months and a day after the distribution date.” 
 “The securities represented by this certificate are listed
on the Toronto Stock Exchange “TSX”); however, the said securities cannot be traded through the facilities of TSX since they are not freely transferable, and consequently any certificate representing such securities is not
“good delivery” in settlement of transactions on TSX.” 
  

	(f)	 it has not received or been provided with, nor has it requested, nor does it have any need to receive, any
offering memorandum, any prospectus, sales or advertising literature, or any other document (other than required by law) describing or purporting to describe the business and affairs of the Corporation which has been prepared for delivery to, and
review by, prospective purchasers in order to assist them in making an investment decision in respect of the Shares; and 

  

	(g)	 it has had access to the Corporation’s filings on EDGAR and SEDAR, to substantially final drafts of the
Corporation’s report to be filed for the three and nine months ended September 30, 2022, and to certain financial and other information to inform its decision to purchase the Shares, and has read and understands the risk factors relating
to the Corporation set forth in the Corporation’s filings on EDGAR and SEDAR and such drafts; and 

  

	(h)	 it has not become aware of nor has it purchased the Shares as a result of: (i) a general solicitation;
(ii) any advertisement in printed media of general and regular paid circulation (or other printed public media), radio, television or telecommunications or other form of advertisement (including electronic display and the internet) with respect
to the Offering; or (iii) any seminar or meeting whose attendees have been invited by general solicitation or general advertising; and 

  

	(i)	 it understands that the Shares are being offered for sale only on a “private placement” basis and
that the sale and delivery of the Shares is conditional upon such sale being exempt from the requirements as to the filing of a prospectus or registration statement or delivery of an offering memorandum or upon the issuance of such orders, consents
or approvals as may be required to permit such sale without the requirement of filing a prospectus or delivering an offering memorandum and, as a consequence, under applicable securities laws in Canada: (i) the Subscriber is restricted from
using most of the civil remedies available under securities legislation, (ii) the Subscriber may not receive information that would otherwise be required to be provided to it under securities legislation, and (iii) the Corporation is
relieved from certain obligations that would otherwise apply under applicable securities legislation; and 

  

	(j)	 it is purchasing the Shares as principal for its own account, not for the benefit of any other person, for
investment only and not with a view to the resale or distribution of all or any of the Shares, it is resident in, was offered the Shares in and executed this Subscription Agreement in the jurisdiction set out as the “Subscriber’s
Address” on the face page hereof, and it is an “accredited investor” that satisfies the requirements set forth in Rule 501(a) of Regulation D under the United States Securities Act of 1933 (the “U.S. Securities
Act”), and has concurrently and duly executed and delivered a Representation Letter attached as Exhibit 1 to this Subscription Agreement; and 

  
 3 

 UNITED STATES 

 

	(k)	 it certifies that it is not resident in or otherwise subject to applicable securities laws of any province or
territory of Canada and it acknowledges that: 

  

	 	(i)	 no securities commission or similar regulatory authority has reviewed or passed on the merits of the Shares;
and 

  

	 	(ii)	 there is no government or other insurance covering the Shares; and 

 

	 	(iii)	 an investment in the Shares is speculative and involves a high degree of risk and the Subscriber may lose his,
her or its entire investment; and 

  

	 	(iv)	 there are restrictions on the Subscriber’s ability to resell the Shares and it is the responsibility of
the Subscriber to find out what those restrictions are and to comply with them before selling the Shares; and 

  

	 	(v)	 the Corporation has advised the Subscriber that the Corporation is relying on an exemption from the
requirements to provide the Subscriber with a prospectus and to sell securities through a person or company registered to sell securities under applicable Canadian securities laws and, as a consequence of acquiring securities pursuant to this
exemption: (i) certain protections, rights and remedies provided by applicable Canadian securities laws, including statutory protections, rights and remedies available under applicable securities laws will not be available to the Subscriber,
(ii) the Subscriber will not receive a prospectus or continuous disclosure information that would otherwise be required to be provided under applicable securities laws; and (iii) the Corporation is relieved from certain obligations that
would otherwise apply under prospectus requirements of applicable securities laws; and 

  

	 	(vi)	 the Shares will not be qualified for distribution under a prospectus in any jurisdiction; and

  

	 	(vii)	 the certificate(s) or other evidence of ownership representing the Shares will be endorsed with a legend
stating that the Shares will be subject to restrictions on resale and transfer in accordance with applicable securities legislation and the rules of any applicable stock exchange; and 

 

	 	(viii)	 the Corporation may complete additional financings in the future in order to achieve the business plan of the
Corporation and to fund its ongoing capital requirements. There is no assurance that such financings will be available and if available, on reasonable terms. Any such future financings may have a dilutive effect on existing shareholders, including
the Subscriber. If such future financings are not available, the Corporation may be unable to fund its ongoing development and the lack of capital resources may result in adverse consequences; and 

 

	(l)	 if the Subscriber is a Fund Subscriber, such Fund Subscriber agrees and irrevocably commits that it or one or
more principals of such Fund Subscriber will purchase such number of Shares having an aggregate subscription amount of US$1,000,000 (subject to any adjustment made in accordance with this Section) pursuant to a standby purchase agreement to be
entered into by such Fund Subscriber and any one or more principals of such Fund Subscriber and the Corporation in connection with one or more rights offerings by the Corporation to the holders of Shares at any time within one year of the Closing
Date (a “Rights Offering”). The subscription price for the Shares purchased by such Fund Subscriber or any one or more principals of such Fund Subscriber pursuant to a Rights Offering shall be the same as the subscription price
under the basic subscription privilege (as such term is defined under National Instrument 45-106 – Prospectus Exemptions (“NI 45-106”)). Each Fund
Subscriber agrees that such Fund Subscriber’s standby purchase commitment of US$1,000,000 in this paragraph will be increased by the dollar amount, if any, by which such Fund Subscriber’s Aggregate Subscription Amount is reduced under this
Offering pursuant to Section 2 of this Subscription Agreement; and 

  

	(m)	 if it is not a natural person, it pre-existed the Offering and has a
bona fide business purpose other than the investment in the Shares and was not created, formed or established solely or primarily to acquire securities, or to permit purchases of securities without a prospectus, in reliance on an exemption
from the prospectus requirements of applicable securities legislation; and 

  
 4 

 UNITED STATES 

 

	(n)	 if it is not a natural person, it has the legal capacity to enter into and be bound by this Subscription
Agreement and further certifies that all necessary approvals of directors, trustees, fiduciaries, shareholders, partners, stakeholders, holders of voting securities or otherwise have been given and obtained; and 

 

	(o)	 if it is a natural person, it is of the full age of majority and is legally competent to execute this
Subscription Agreement and take all action pursuant hereto; and 

  

	(p)	 the entering into of this Subscription Agreement and the transactions contemplated hereby will not result in a
violation of any of the terms or provisions of any law applicable to the Subscriber, or if the Subscriber is not a natural person, any of the Subscriber’s constating documents, or any agreement to which the Subscriber is a party or by which it
is bound; and 

  

	(q)	 this Subscription Agreement has been duly and validly authorized, executed and delivered by and constitutes a
legal, valid, binding and enforceable obligation of the Subscriber; and 

  

	(r)	 it has such knowledge and experience in financial and business affairs as to be capable of evaluating the
merits and risks of its investment in the Shares and is able to, and agrees to, bear the economic risk of loss of its investment; and further acknowledges that the business and operations of the Corporation are subject to a number of risk factors
and an investment in the Shares involves a high degree of risk and should be considered speculative; and 

  

	(s)	 the Subscriber does not act jointly or in concert with any other person or company for the purpose of acquiring
securities of the Corporation; and 

  

	(t)	 acknowledges that the Corporation’s counsel is acting as counsel to the Corporation, and not as counsel to
the Subscriber; and 

  

	(u)	 if required by applicable securities legislation, regulations, rules, policies or orders or by any securities
commission, stock exchange or other regulatory authority, the Subscriber will execute, deliver, file and otherwise assist the Corporation in filing, such reports, undertakings and other documents with respect to the issue of the Shares; and

  

	(v)	 no person has made to the Subscriber any written or oral representations: (i) that any person will resell
or repurchase the Shares, (ii) that any person will refund the purchase price of the Shares, or (iii) as to the future price or value of the Shares, and 

 

	(w)	 the Aggregate Subscription Amount which will be advanced by the Subscriber to the Corporation hereunder will
not represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the “PCMLA”) and the Subscriber acknowledges that the Corporation may in the future be
required by law to disclose the Subscriber’s name and other information relating to this Subscription Agreement and the Subscriber’s subscription hereunder, on a confidential basis, pursuant to the PCMLA; and to the best of its knowledge:
(i) no portion of the Aggregate Subscription Amount to be provided by the Subscriber (A) has been or will be derived from or related to any activity that is deemed criminal under the laws of Canada, the United States of America, or any
other jurisdiction, or (B) is being tendered on behalf of a person or entity who has not been identified to the Subscriber, and (ii) it shall promptly notify the Corporation if the Subscriber discovers that any of such representations
ceases to be true, and to provide the Corporation with appropriate information in connection therewith; and 

  

	(x)	 the Aggregate Subscription Amount which will be advanced by the Subscriber to the Corporation hereunder will
not represent proceeds of crime for the purposes of the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2021 (the “PATRIOT Act”), and
it acknowledges that the Corporation may in the future be required by law to 

  
 5 

 UNITED STATES 

 

	 	
disclose its name and other information relating to the Offering and its subscription hereunder, on a confidential basis, pursuant to the PATRIOT Act, and (i) no portion of the Aggregate
Subscription Amount to be provided by it (A) has been or will be derived from or related to any activity that is deemed criminal under the laws of the United States of America or any other jurisdiction, or (B) is being tendered on behalf
of a person or entity that has not been identified to or by it, and (ii) it shall promptly notify the Corporation if it discovers that any of such representations ceases to be true and provide the Corporation with appropriate information in
connection therewith; and 

  

	(y)	 it is aware that its ability to enforce civil liabilities under the United States federal securities laws may
be affected adversely by, among other things: (i) the fact that the Corporation is organized under the laws of Canada; (ii) some or all of the directors and officers of the Corporation may be residents of countries other than the United
States; and (iii) all or a substantial portion of the assets of the Corporation and such persons may be located outside the United States; and 

  

	(z)	 it has been encouraged to obtain independent legal, income tax and investment advice with respect to this
Subscription Agreement and accordingly, has had the opportunity to acquire an understanding of the meanings of all terms contained herein relevant to the Subscriber for purposes of giving representations, warranties and covenants under this
Subscription Agreement; and 

  

	(aa)	 it will notify the Corporation if any representation or warranty contained in this Subscription Agreement
becomes untrue. 

 Representations and Warranties of the Corporation 

4.    The Corporation hereby represents and warrants to, and covenants with, the Subscriber as follows and acknowledges that the Subscriber
is relying on such representations and warranties in connection with the transactions contemplated herein: 
  

	(a)	 the Corporation is duly incorporated and is validly subsisting under the laws of its jurisdiction of
incorporation and has all requisite legal and corporate power and authority to execute and deliver this Subscription Agreement and to observe and perform its obligations under this Subscription Agreement, and this Subscription Agreement constitutes
a legal, valid and binding agreement of the Corporation, enforceable in accordance with its terms (subject to bankruptcy, insolvency or other laws affecting the rights of creditors generally and to the general principles of equity, including the
availability of equitable remedies); and 

  

	(b)	 at the Closing Time, the Shares will be validly issued, as fully-paid and
non-assessable; and 

  

	(c)	 the execution and delivery of this Subscription Agreement and the performance by the Corporation of its
obligations hereunder will not result in any breach of, or be in conflict with or constitute a default under, or create a state of facts which, after notice or lapse of time, or both, would constitute a default under any term or provision of the
constating documents or by-laws of the Corporation. 

 Closing Conditions 

5.    The Subscriber acknowledges and agrees that the obligations of the Corporation hereunder are conditional on the accuracy of the
representations and warranties of the Subscriber contained in this Subscription Agreement as of the date of this Subscription Agreement, and as of the Closing Time as if made at and as of the Closing Time, and the fulfilment of the following
additional conditions as soon as possible and in any event, with respect to (a) of this Section 5, not later than 5:00 p.m. (Calgary time) on November 22, 2022 or such other date or dates as may be agreed by the Corporation in its
sole discretion and, with respect to (b) – (d) of this Section 5, at or before the Closing Time: 
  

	(a)	 payment by the Subscriber of the Aggregate Subscription Amount by wire transfer to the Corporation, in
accordance with the wire instructions set out in Exhibit 2 or by way of certified cheque to DIRTT Environmental Solutions Ltd. The Corporation shall hold the Aggregate Subscription Amount in trust pending completion of Closing;

  
 6 

 UNITED STATES 

 

	(b)	 the Corporation having obtained all required regulatory approvals for the completion of the Offering, including
approval of the TSX and Nasdaq; 

  

	(c)	 no proceeding having been commenced to restrain, restrict or prevent the completion of the Offering; and

  

	(d)	 no applicable law, order or other decree having come into effect that would make illegal, or otherwise prevent
or preclude, the completion of the Offering. 

 Closing 

6.    If this Subscription Agreement is rejected in whole or in part, the Subscriber acknowledges that the unused portion of the Aggregate
Subscription Amount will be promptly returned to it without interest or deduction. For the purposes hereof, “business day” means a day other than a Saturday, Sunday or any other day on which the principal chartered banks in Calgary,
Alberta are not open for business. 
 7.    The sale of the Shares pursuant to this Subscription Agreement (the
“Closing”) will be completed at the offices of Bennett Jones LLP, the Corporation’s counsel, in Calgary, Alberta at 8:00 a.m. (Calgary time) or such other time as is established by the Corporation (the “Closing
Time”) on November 23, 2022 or such other date as is established by the Corporation (the “Closing Date”). The Subscriber shall have delivered the Aggregate Subscription Amount by wire transfer to the Corporation, in
accordance with the wire instructions set out in Exhibit 2 or by way of certified cheque to the Corporation at DIRTT Environmental Solutions Ltd. at 7303 – 30th Street S.E., Calgary, Alberta
T2C 1N6, Attention: Nandini Somayaji not later than 5 p.m. (Calgary time) on November 22, 2022. At the Closing Time (or as soon as practicable afterwards), the Corporation shall deliver to the Subscriber the certificate(s) or other evidence of
ownership representing the Shares and the payment by the Subscriber of the Aggregate Subscription Amount shall be deemed to be released from trust without any further action by any party. 

8.    The Corporation shall be entitled to rely on an executed copy of this Subscription Agreement delivered via facsimile or
electronically (including e-mail), and acceptance by the Corporation of such executed copy of this Subscription Agreement shall be legally effective to create a valid and binding agreement between the
Subscriber and the Corporation in accordance with the terms hereof. In addition, this Subscription Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same
document. If less than a complete copy of this Subscription Agreement is delivered to the Corporation at the Closing Time, the Corporation shall be entitled to assume that the Subscriber accepts and agrees with all of the terms and conditions of
this Subscription Agreement on the pages not delivered at the Closing Time unaltered. 
 General 

9.    The Subscriber agrees that the representations, warranties and covenants of the Subscriber herein and in Exhibit 1 attached hereto
will be true and correct both as of the Subscriber’s execution of this Subscription Agreement and as of the Closing Time and will survive the completion of the issuance of the Shares. The representations, warranties and covenants of the
Subscriber herein and in Exhibit 1 attached hereto are made with the intent that they be relied upon by the Corporation and its counsel in determining the eligibility of a purchaser of Shares and the Subscriber agrees to indemnify and save harmless
the Corporation and its affiliates, shareholders, directors, officers, employees, counsel and agents against all losses, claims, costs, expenses and damages or liabilities which any of them may suffer or incur which are caused or arise from a breach
thereof. The Subscriber undertakes to immediately notify the Corporation (by contacting Nandini Somayaji, telephone: (403) 267-0666 or e-mail: nsomayaji@DIRTT.com) of
any change in any statement or other information relating to the Subscriber set forth herein which takes place prior to the Closing Time. 

10.    The Subscriber acknowledges that this Subscription Agreement and Exhibit 1 hereto require the Subscriber to provide certain
personal information to the Corporation. Such information is being collected by the Corporation for the purposes of completing the Offering, which includes, without limitation, determining the Subscriber’s eligibility to purchase the Shares
under applicable securities laws, preparing and registering certificates or the equivalent representing the Shares to be issued to the Subscriber and completing filings required by any stock exchange or securities regulatory authority. The
Subscriber’s personal information may be disclosed by the Corporation to (i) stock 

  
 7 

 UNITED STATES 

 

 
exchanges or securities regulatory authorities, (ii) the Corporation’s registrar and transfer agent, (iii) Canadian and U.S. tax authorities, and (iv) any of the other parties
involved in the Offering, including legal counsel, and may be included in closing books in connection with the Offering. By executing this Subscription Agreement, the Subscriber consents to the foregoing collection, use and disclosure of the
Subscriber’s personal information. The Subscriber also consents to the filing of copies or originals of any of the Subscriber’s documents delivered in connection with this Subscription Agreement as may be required to be filed with any
securities regulatory authority in connection with the transactions contemplated hereby. The Subscriber further acknowledges that it has been notified by the Corporation that: (i) the Corporation is required to provide personal information
pertaining to the purchasers of Shares required to be disclosed in Schedule 1 of Form 45-106F1 pursuant to National Instrument 45-106 Prospectus
Exemptions (“NI 45-106”) (including name, address, email address, telephone number, the number and value of securities purchased, the details of the exemption relied on and if applicable, the
status of the purchaser as a registrant and/or an insider of the Corporation), which Form 45-106F1 the Corporation is required to file under NI 45-106;
(ii) the personal information will be delivered to the applicable securities regulatory authority or regulator in accordance with NI 45-106; (iii) such personal information is being collected by
the securities regulatory authority or regulator under the authority granted to it in securities legislation; (iv) such personal information is being collected for the purposes of the administration and enforcement of the securities legislation
of the local jurisdiction; and (v) the public official Alberta who can answer questions about the indirect collection of the personal information is as follows: 

Alberta Securities Commission 
 Suite 600, 250 - 5th Street SW

 Calgary, Alberta T2P 0R4 
 Telephone: (403) 297-6454 
 Facsimile: (403) 297-2082 

The Subscriber hereby authorizes the indirect collection of the information by the applicable securities regulatory authority or regulator. 

11.    The Subscriber acknowledges and agrees that all costs incurred by the Subscriber (including any fees and disbursements of any
counsel retained by the Subscriber) relating to the sale of the Shares to the Subscriber shall be borne by the Subscriber. 
 12.    The
Subscriber acknowledges that it has consented to and requested that all documents evidencing or relating in any way to the sale of the Shares be drawn up in the English language only. Le soussigné reconnaît par les présentes
avoir consenti et exigé que tous les documents faisant foi ou se repportant de quelque manière à la vente de ces actions soient rédigés en anglais seulement. 

13.    The contract arising out of this Subscription Agreement and all documents relating thereto are governed by and construed in
accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein. The parties irrevocably attorn to the exclusive jurisdiction of the courts of the Province of Alberta. 

14.    Time is of the essence hereof. 

15.    This Subscription Agreement (including the Exhibits hereto) represents the entire agreement of the parties hereto relating to the
subject matter hereof, superseding all prior oral and written agreements, understandings, representations and warranties of courses of conduct and dealing between the parties, and there are no representations, covenants or other agreements relating
to the subject matter hereof except as stated or referred to herein. 
 16.    The terms and provisions of this Subscription Agreement
are binding upon and enure to the benefit of the Subscriber and the Corporation and their respective heirs, executors, administrators, successors and assigns; provided that, except for as otherwise herein provided, this Subscription Agreement is not
assignable by any party hereto without the prior written consent of the other parties. 
 17.    The Subscriber agrees that this
subscription is made for valuable consideration and may not be withdrawn, cancelled, terminated or revoked by the Subscriber. 

  
 8 

 UNITED STATES 

 

 18.    Neither this Subscription Agreement nor any provision hereof shall be modified,
changed, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought. 

19.    The invalidity, illegality or unenforceability of any provision of this Subscription Agreement does not affect the validity,
legality or enforceability of any other provision hereof. 
 20.    The headings used in this Subscription Agreement have been inserted
for convenience of reference only and shall not affect the meaning or interpretation of this Subscription Agreement or any provision hereof. 

21.    The covenants, representations and warranties contained herein shall survive the closing of the transactions contemplated hereby.

 22.    In this Subscription Agreement (including the Exhibits hereto), references to “$” or US$ are to United States
dollars, unless otherwise indicated. 
 23.    The Subscriber shall complete, sign and return to the Corporation any additional
documents, questionnaires, notices and undertakings as may be required by regulatory authorities, stock exchanges and applicable law. 

  
 9 

 UNITED STATES 

 

 EXHIBIT 1 

REPRESENTATION LETTER 

(FOR ALL SUBSCRIBERS) 

TO:    DIRTT Environmental Solutions Ltd. (the “Corporation”) 

(Capitalized terms not specifically defined in this Exhibit have the meaning ascribed to them in the Subscription Agreement to which this Exhibit is
attached) 
 In connection with the execution by the undersigned Subscriber of the Subscription Agreement which this Representation Letter forms a part
of, the undersigned Subscriber hereby represents, warrants, covenants and certifies to the Corporation that: 
 1.    It has such
knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares and it is able to bear the economic risk of loss of its entire investment. 

2.    It is aware of the characteristics of the Shares and of their speculative nature. 

3.    The Corporation has provided to it the opportunity to ask questions and receive answers concerning the terms and conditions of the
Offering and it has had access to such information concerning the Corporation as it has considered necessary or appropriate in connection with its investment decision to acquire the Shares. It has had access to the Corporation’s filings on
EDGAR and SEDAR, to substantially final drafts of the Corporation’s report to be filed for the nine months ended September 30, 2022, and to certain financial and other information to inform its decision to purchase the Shares, and it has
read and understands the risk factors relating to the Corporation set forth in the Corporation’s filings on EDGAR and SEDAR and such drafts. 

4.    It is acquiring the Shares as principal for its own account, for investment purposes only and not with a view to any resale,
distribution or other disposition of the Shares. It has no present intention of selling, granting any participation in, or otherwise distributing the Shares, nor has it entered into any agreement to do so. 

5.    It understands the Shares have not been and will not be registered under the United States Securities Act of 1933 (the
“U.S. Securities Act”), or the securities laws of any state of the United States, and that the sale contemplated hereby is being made in reliance on a private placement exemption to “accredited
investors” as defined in Rule 501(a) of Regulation D (“Regulation D”) under the U.S. Securities Act in reliance on the exemption from such registration under Section 4(a)(2) of the U.S. Securities Act and Rule 506(b) of
Regulation D and similar exemptions under applicable state securities laws. The Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the U.S. Securities Act, and therefore cannot be offered, sold, pledged or
otherwise transferred, directly or indirectly, unless they are registered under the U.S. Securities Act or unless an exemption or exclusion from registration thereunder is available. 

6.    It satisfies one or more of the categories indicated below (please place an “X” on the appropriate lines): 

 

			
	                	  	An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust, limited liability company or partnership, not formed for the specific purpose
of acquiring the Shares, with total assets in excess of US$5,000,000;
		
	                	  	A trust that (a) has total assets in excess of US$5,000,000, (b) was not formed for the specific purpose of acquiring the Shares and (c) is directed in its purchases of securities by a person who has such knowledge and
experience in financial and business matters that he/she is capable of evaluating the merits and risks of an investment in the Shares;
		
	                	  	A bank as defined in Section 3(a)(2) of the U.S. Securities Act or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the U.S. Securities Act, whether acting in its individual capacity
or fiduciary capacity;

  
 10 

 UNITED STATES 

 

			
	                	  	A broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934;
		
	                	  	An investment adviser registered pursuant to section 203 of the United States Investment Advisers Act of 1940 (“Advisers Act”) or registered pursuant to the laws of a state;
		
	                	  	An investment adviser relying on the exemption from registering with the U.S. Securities and Exchange Commission (“SEC”) under section 203(l) or (m) of the Advisers Act;
		
	                	  	An insurance company as defined in Section 2(a)(13) of the U.S. Securities Act;
		
	                	  	A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees that has total assets in excess of
US$5,000,000;
		
	                	  	An employee benefit plan within the meaning of the United States Employee Retirement Income Security Act of 1974, as amended, for which the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such
Act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or that has total assets in excess of US$5,000,000, or, if a self-directed plan, with investment decisions made solely by persons that
are “accredited investors” (as such term is defined in Regulation D under the U.S. Securities Act);
		
	                	  	An investment company registered under the United States Investment Company Act of 1940, as amended, or a business development company as defined in Section 2(a)(48) of that Act;
		
	                	  	A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the United States Small Business Investment Act of 1958, as amended;
		
	                	  	A private business development company as defined in Section 202(a)(22) of the Advisers Act;
		
	                	  	A director, executive officer or general partner of the Corporation;
		
	                	  	A natural person whose individual net worth1, or joint net worth with that person’s spouse, at the time of his or her purchase exceeds US$1,000,000;
		
	                	  	A natural person who had an individual income in excess of US$200,000 in each of the two most recent years or joint income with that person’s spouse or spousal equivalent in excess of US$300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current year;
		
	       X      	  	An entity in which all of the equity owners meet one or more of the categories set forth above;
		
	                	  	A natural person holding in good standing one or more professional certifications or designations or credentials from an accredited educational institution that the SEC has designated as qualifying an individual for accredited
investor status; or
		
	                	  	A “family office,” as defined in Rule 202(a)(11)(G)-1 under the Advisers Act (i) with assets under management in excess of US$5,000,000, (ii) that was not formed for the
specific purpose of acquiring the Shares, and (iii) whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and
risks of the prospective investment.

  

	1 	 In determining “net worth,” “net worth” means the excess of total assets at fair market
value (including personal and real property, but excluding the estimated fair market value of a person’s primary home) over total liabilities. Total liabilities excludes any mortgage on the primary home in an amount of up to the home’s
estimated fair market value as long as the mortgage was incurred more than 60 days before the Shares are purchased, but includes (i) any mortgage amount in excess of the home’s fair market value and (ii) any mortgage amount that was
borrowed during the 60-day period before the Closing. 

  
 2 

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 7.    It has not purchased the Shares as a result of any form of general solicitation or
general advertising (as such terms are used in Regulation D under the U.S. Securities Act), including, without limitation, advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or
broadcast over radio, internet, television or other form of telecommunications, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising. 

8.    If it decides to offer, sell, pledge or otherwise transfer any of the Shares, it will not offer, sell, pledge or otherwise transfer
any of such Shares, directly or indirectly, unless: 
  

	(a)	 the transfer is made pursuant to registration of the Shares under the U.S. Securities Act;

  

	(b)	 the transfer is to the Corporation; 

 

	(c)	 the transfer is made outside the United States in a transaction meeting the requirements of Rule 904 of
Regulation S under the U.S. Securities Act and in compliance with applicable local laws and regulations, taking into account the nature of the securities as restricted securities of a U.S. domestic issuer under Rule 144; 

 

	(d)	 the transfer is made pursuant to the exemption from the registration requirements of the U.S. Securities Act
provided by (i) Rule 144 or (ii) Rule 144A thereunder, if available, and, in either case, in accordance with any applicable U.S. state securities or “blue sky” laws; or 

 

	(e)	 the Shares are transferred in any other transaction that does not require registration under the U.S.
Securities Act; and 

 it has prior to any transfer pursuant to subsection (d)(i) or (e) (and if required by the Corporation or
the registrar and transfer agent for the Shares, subsection (b)) furnished to the Corporation an opinion of counsel of recognized standing or other evidence in form and substance reasonably satisfactory to the Corporation to such effect. 

9.    Upon the original issuance of the Shares, until such time as it is no longer required under applicable requirements of the
U.S. Securities Act or applicable U.S. state securities laws, the certificates representing the Shares (and any certificates issued in exchange or substitution for the Shares) will bear a legend (in addition to any additional legends prescribed
in this Subscription Agreement) in substantially the form as follows: 
 “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “U.S. SECURITIES ACT”), OR ANY U.S. STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING OR OTHERWISE HOLDING THESE SECURITIES, AGREES FOR THE BENEFIT OF
DIRTT ENVIRONMENTAL SOLUTIONS LTD. (THE “CORPORATION”) THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, ONLY: (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN
ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) IN ACCORDANCE WITH (1) RULE 144A UNDER THE U.S. SECURITIES ACT, IF AVAILABLE,
OR (2) RULE 144 UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, AND, IN THE CASE OF (1) AND (2) ABOVE, IN COMPLIANCE WITH ANY APPLICABLE U.S. STATE SECURITIES LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE U.S. SECURITIES ACT, OR (E) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT, AND IN EACH CASE IN ACCORDANCE WITH APPLICABLE U.S. STATE SECURITIES LAWS; PROVIDED THAT, IN THE CASE OF
TRANSFERS PURSUANT TO (C)(2) OR (E) ABOVE, A LEGAL OPINION IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE CORPORATION MUST BE FIRST PROVIDED THAT THE SALE OF SUCH SECURITIES IS NOT REQUIRED TO BE REGISTERED UNDER THE
U.S. SECURITIES ACT.” 

  
 3 

 UNITED STATES 

 

 In the case of a transfer outside the United States in accordance with Rule 904 of Regulation S, a
new certificate, which will constitute “good delivery” in settlement of transactions on Canadian stock exchanges, will be made available to the Subscriber upon provision by the Subscriber of a declaration in a customary form that is
acceptable to the Corporation, together with any other evidence, which may include a legal opinion reasonably satisfactory in form and substance to the Corporation, required by the Corporation or the registrar and transfer agent for the Shares. 

If any of the Shares are being sold pursuant to Rule 144 under the U.S. Securities Act, the legend may be removed by delivery to the registrar and
transfer agent of an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Corporation, to the effect that the transfer is exempt from the registration requirements of the U.S. Securities Act and that the
legend is no longer required under applicable requirements of the U.S. Securities Act. 
 10.    It understands and acknowledges
that the Corporation is not obligated to file or to qualify and has no present intention of filing with the SEC or with any state securities administrator any registration statement in respect of resales of the Shares in the United States. 

11.    It understands and agrees that there may be material tax consequences to the Subscriber of an acquisition, holding or disposition
of the Shares. The Corporation gives no opinion and makes no representation with respect to the tax consequences to the Subscriber under any federal, state, provincial, local or foreign tax law of the undersigned’s acquisition, holding or
disposition of such Shares and the Subscriber acknowledges that it is solely responsible for determining the tax consequences of its investment. In particular, no determination has been made whether the Corporation is, or will be, a “passive
foreign investment company” within the meaning of Section 1297 of the United States Internal Revenue Code of 1986, as amended. 

12.    It consents to the Corporation making a notation on its records or giving instructions to any transfer agent for the Shares in
order to implement the restrictions on transfer set forth and described in this Exhibit 1. 
 13.    It understands that the Shares
are “restricted securities” within the meaning of Rule 144 under the U.S. Securities Act and that the U.S. Securities Act and the rules of the SEC provide that the Subscriber may dispose of the Shares only pursuant to an
effective registration statement under the U.S. Securities Act or an exemption or exclusion from registration under the U.S. Securities Act, and the Subscriber understands that the Corporation has no obligation to register any of the
Shares or to take action so as to permit sales pursuant to the U.S. Securities Act (including Rule 144 thereunder) or U.S. state securities laws. It is familiar with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby (including any limitations imposed upon “affiliates” of a company). Accordingly, the Subscriber understands that absent registration, under the rules of the SEC, the Subscriber may be required to hold the Shares
indefinitely or to transfer the Shares in “private placements” that are exempt from registration under the U.S. Securities Act, in which event the transferee will acquire “restricted securities” subject to the same
limitations as in the hands of the Subscriber. As a consequence, the Subscriber understands that it must bear the economic risks of the investment in the Shares for an indefinite period of time. 

14.    Upon execution of this Exhibit 1 by the undersigned Subscriber, this Exhibit 1 shall be incorporated into and form a part
of the Subscription Agreement to which this Exhibit is attached. 
 [Signature follows on next page] 

  
 4 

 UNITED STATES 

 

 Dated: November         , 2022. 

 

			
	  

	Print name of Subscriber
		
	By:	 	  

	    	 	Signature
	
	  

	Print name of Signatory (if different from the Subscriber)
	
	  

	Title

  
 5 

 Schedule 

10.1 
  

					
	 Shareholder, Director or Executive Officer
	  	Subscription Amount (US$)	 
	 Jeff Dopheide
	  	$	100,000	 
	 Aron English
	  	$	500,000	 
	 Douglas Edwards
	  	$	50,000	 
	 Rich Hunter
	  	$	200,000	 
	 Brad Little
	  	$	50,000	 
	 Cory Mitchell
	  	$	100,000	 
	 Scott Robinson
	  	$	80,000	 
	 Scott Ryan
	  	$	75,000	 
	 Ken Sanders
	  	$	50,000	 
	 Benjamin Urban
	  	$	100,000	 
	 726 BC LLC
	  	$	250,000	 
	 726 BF LLC
	  	$	500,000

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