Document:

Document

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT 
This Registration Rights Agreement (this “Agreement”) is made and entered into as of December 13, 2021, between Energy Focus, Inc., a Delaware corporation (the “Company”), and each of the several purchasers signatory hereto (each such purchaser, a “Purchaser” and, collectively, the “Purchasers”).
This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser (the “Purchase Agreement”).
The Company and each Purchaser hereby agrees as follows:
1.         Definitions.
Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
“Advice” shall have the meaning set forth in Section 6(c).
“Effectiveness Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the 30th calendar day following the date hereof (or, in the event of a “full review” by the Commission, the 60th calendar day following the date hereof) and with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the 30th calendar day following the date on which an additional Registration Statement is required to be filed hereunder (or, in the event of a “full review” by the Commission, the 60th calendar day following the date such additional Registration Statement is required to be filed hereunder); provided, however, that in the event the Company is notified by the Commission that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the fifth Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.
“Effectiveness Period” shall have the meaning set forth in Section 2(a).
“Event” shall have the meaning set forth in Section 2(d).
“Event Date” shall have the meaning set forth in Section 2(d).
“Filing Date” means, with respect to the Initial Registration Statement required hereunder, the 15th calendar day following the date hereof and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.

“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.
“Indemnified Party” shall have the meaning set forth in Section 5(c).
“Indemnifying Party” shall have the meaning set forth in Section 5(c).
“Initial Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.
“Losses” shall have the meaning set forth in Section 5(a).
“Plan of Distribution” shall have the meaning set forth in Section 2(a).
“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
“Registrable Securities” means, as of any date of determination, (a) all Shares, (b) all Warrant Shares then issued or issuable upon exercise of the Warrants (assuming on such date the Warrants are exercised in full without regard to any exercise limitations therein), and (c) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate of the Company, as reasonably determined by the Company, upon the advice of counsel to the Company).
“Registration Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration statements 
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contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.
 “Rule 415” means Rule 415 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.
“Rule 424” means Rule 424 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.
“Selling Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).
“SEC Guidance” means (i) any publicly available written or oral guidance of the Commission staff, or any comments, requirements or requests of the Commission staff and (ii) the Securities Act.
2.          Shelf Registration.
(a)On or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415.  Each Registration Statement filed hereunder shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith, subject to the provisions of Section 2(e)) and shall contain (unless otherwise directed by at least a majority in interest of the Holders) substantially the “Plan of Distribution” attached hereto as Annex A and substantially the “Selling Stockholder” section attached hereto as Annex B; provided, however, that no Holder shall be required to be named as an “underwriter” without such Holder’s express prior written consent.  Subject to the terms of this Agreement, the Company shall use its commercially reasonable best efforts to cause a Registration Statement filed under this Agreement (including, without limitation, under Section 3(c)) to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its commercially reasonable best efforts to keep such Registration Statement continuously effective under the Securities Act until the date that all Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144 or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such 
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effect, addressed and acceptable to the Transfer Agent and the affected Holders (the “Effectiveness Period”).  The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. (New York City time) on a Trading Day.   The Company shall immediately notify the Holders via facsimile or by e-mail of the effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the Commission, which shall be the date requested for effectiveness of such Registration Statement.  The Company shall, by 9:30 a.m. (New York City time) on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with the Commission as required by Rule 424.  Failure to so notify the Holder within one (1) Trading Day of such notification of effectiveness or failure to file a final Prospectus as foresaid shall be deemed an Event under Section 2(d), unless the Holder has not provided the Company with a facsimile number or e-mail address.
(b)Notwithstanding the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable efforts to file an amendment or amendments to the Initial Registration Statement as required by the Commission, covering the maximum number of Registrable Securities permitted to be registered by the Commission, on Form S-3 or such other form available to register for resale the Registrable Securities as a secondary offering, subject to the provisions of Section 2(e), with respect to filing on Form S-3 or other appropriate form, and subject to the provisions of Section 2(d) with respect to the payment of liquidated damages; provided, however, that prior to filing any such amendment, the Company shall be obligated to use diligent efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09.
(c)Notwithstanding any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2(d), if the Commission or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the Commission for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced as follows:
a.First, the Company shall reduce or eliminate any securities to be included other than Registrable Securities;
b.Second, the Company shall reduce Registrable Securities represented by Common Warrant Shares (applied, in the case that some Common Warrant Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Common Warrant Shares held by such Holders); and
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c.Third, the Company shall reduce Registrable Securities represented by Shares and Pre-Funded Warrant Shares (applied, in the case that some Shares and Pre-Funded Warrant Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Shares and Pre-Funded Warrant Shares held by such Holders).
In the event of a cutback hereunder, the Company shall give the Holder at least five (5) Trading Days prior written notice along with the calculations as to such Holder’s allotment.  In the event the Company amends the Initial Registration Statement in accordance with the foregoing, the Company will use its commercially reasonable best efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended.
(d)If: (i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files the Initial Registration Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) herein, the Company shall be deemed to have not satisfied this clause (i)), or (ii) the Company fails to file with the Commission a request for acceleration of a Registration Statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities Act, within five (5) Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review, or (iii) prior to the effective date of a Registration Statement, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement within ten (10) calendar days after the receipt of comments by or notice from the Commission that such amendment is required in order for such Registration Statement to be declared effective, or (iv) a Registration Statement registering for resale all of the Registrable Securities is not declared effective by the Commission by the Effectiveness Date of the Initial Registration Statement, or (v) after the effective date of a Registration Statement, such Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities included in such Registration Statement, or the Holders are otherwise not permitted to utilize the Prospectus therein to resell such Registrable Securities, for more than ten (10) consecutive calendar days or more than an aggregate of fifteen (15) calendar days (which need not be consecutive calendar days) during any 12-month period (any such failure or breach being referred to as an “Event”, and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of clause (ii) the date on which such five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such ten (10) calendar day period is exceeded, and for purpose of clause (v) the date on which such ten (10) or fifteen (15) calendar day period, as applicable, is exceeded being referred to as “Event Date”), then, in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of 
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each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 2.0% multiplied by the aggregate Subscription Amount paid by such Holder pursuant to the Purchase Agreement. If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of an Event.
(e)If Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the Commission.
(f)Notwithstanding anything to the contrary contained herein, in no event shall the Company be permitted to name any Holder or affiliate of a Holder as any Underwriter without the prior written consent of such Holder.
3.         Registration Procedures.
In connection with the Company’s registration obligations hereunder, the Company shall:
(a)Not less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to each Holder copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably object in good faith, provided that, the Company is notified of such objection in writing no later than five (5) Trading Days after the Holders have been so furnished copies of a Registration Statement or one (1) Trading Day after the Holders have been so furnished copies of any related Prospectus or amendments or supplements thereto. Each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex B (a “Selling Stockholder Questionnaire”) on a date that is not less 
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than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following the date on which such Holder receives draft materials in accordance with this Section.
(b)(i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement (provided that, the Company shall excise any information contained therein which would constitute material non-public information regarding the Company or any of its Subsidiaries), and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.
(c)If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the number of such Registrable Securities.
(d)Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the Commission or any other federal or state 
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governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided, however, that in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company or any of its Subsidiaries.
(e)Use its commercially reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, as promptly as possible.
(f)Furnish to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission, provided that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.
(g)Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).
(h) Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities for the resale by the Holder 
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under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement, provided that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.
(i)If requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities or Registrable Securities in book-entry form to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may request.
(j)Upon the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.  If the Company notifies the Holders in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus.  The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.  The Company shall be entitled to exercise its right under this Section 3(j) to suspend the availability of a Registration Statement and Prospectus, subject to the payment of partial liquidated damages otherwise required pursuant to Section 2(d), for a period not to exceed 60 calendar days (which need not be consecutive days) in any 12-month period.
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(k)Otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities Act and the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the Holders in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.
(l)The Company shall use its commercially reasonable best efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration of the resale of Registrable Securities.
(m)The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the Registrable Securities solely because any Holder fails to furnish such information within two (2) Trading Days of the Company’s request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.
        4.        Registration Expenses. All fees and expenses incident to the performance of, or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement.  In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on 
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any securities exchange as required hereunder.  In no event shall the Company be responsible for any broker, underwriting or similar discounts or commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.
        5.       Indemnification.
(a)Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section 6(c).  The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the 
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transfer of any Registrable Securities by any of the Holders in accordance with Section 6(f).
(b)Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent, but only to the extent, that such information relates to such Holder’s information provided in the Selling Stockholder Questionnaire or the proposed method of distribution of Registrable Securities and was reviewed and approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or in any amendment or supplement thereto.  In no event shall the liability of a selling Holder be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission) received by such Holder upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.
(c)Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof, provided that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless:  (1) the 
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Indemnifying Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably determine that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party).  The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.
Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within 20 Trading Days of written notice thereof to the Indemnifying Party, provided that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.
(d)Contribution. If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission.  The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for 
13

such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.  In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.
The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.
 6.             Miscellaneous.
(a)Remedies. In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement.  Each of the Company and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.
(b)No Piggyback on Registrations; Prohibition on Filing Other Registration Statements.  Except as set forth on Schedule 6(b) attached hereto, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements other than the Registrable Securities.  The Company shall not file any other registration statements until all Registrable Securities are registered pursuant to a Registration Statement that is declared effective by the Commission, provided that this Section 6(b) shall not prohibit the Company from filing (i) a shelf registration statement on Form S-3, registering the offer and sale of Common Stock for the account of the Company or (ii) amendments to registration statements filed prior to the date of this Agreement so long as no new securities are registered on any such existing registration statements.
(c)Discontinued Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed.  The Company will use its commercially 
14

reasonable best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.  The Company agrees and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be subject to the provisions of Section 2(d).
(d)Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of at least a majority or more of the then outstanding Registrable Securities (for purposes of clarification, this includes any Registrable Securities issuable upon exercise or conversion of any Security), provided that, if any amendment, modification or waiver disproportionately and adversely impacts a Holder (or group of Holders), the consent of such disproportionately impacted Holder (or group of Holders) shall be required.  If a Registration Statement does not register all of the Registrable Securities pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders and each Holder shall have the right to designate which of its Registrable Securities shall be omitted from such Registration Statement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder or some Holders and that does not directly or indirectly affect the rights of other Holders may be given only by such Holder or Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the first  sentence of this Section 6(d). No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.
(e)Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement.
(f)Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities.  Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under Section 5.7 of the Purchase Agreement.
(g)No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.  Except as set forth on Schedule 6(g), neither the Company nor any of its Subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full.
15

(h)Execution and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
(i)Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Purchase Agreement.
(j)Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
(k)Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
(l)Headings. The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit or affect any of the provisions hereof.
(m)Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges that the Holders are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or transactions. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company contained was solely in the control of the Company, not the action or decision of any Holder, and was done solely for the convenience of the Company and not because it was required or requested to do so by any Holder.  It is 
16

expressly understood and agreed that each provision contained in this Agreement is between the Company and a Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.
********************
(Signature Pages Follow)
17

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
						
		ENERGY FOCUS, INC.
		
		
		
		
		By: ____________________________________
		     Name:
		     Title:

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

[SIGNATURE PAGE OF HOLDERS TO EFOI RRA]

			
	Name of Holder: ________________________________________________

	
	Signature of Authorized Signatory of Holder: _____________________________________

	
	Name of Authorized Signatory: ________________________________________________

	
	Title of Authorized Signatory: ________________________________________________

[SIGNATURE PAGES CONTINUE]

Annex A
Plan of Distribution
Each Selling Stockholder (the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the Nasdaq Capital Market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions.  These sales may be at fixed or negotiated prices.  A Selling Stockholder may use any one or more of the following methods when selling securities:
•ordinary brokerage transactions and transactions in which the broker‐dealer solicits purchasers;
•block trades in which the broker‐dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
•purchases by a broker‐dealer as principal and resale by the broker‐dealer for its account;
•an exchange distribution in accordance with the rules of the applicable exchange;
•privately negotiated transactions;
•settlement of short sales;
•in transactions through broker‐dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;
•through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
•a combination of any such methods of sale; or
•any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus.
Broker‐dealers engaged by the Selling Stockholders may arrange for other brokers‐dealers to participate in sales.  Broker‐dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker‐dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.
In connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume.  The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities.  The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales.  In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.  Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities. 
The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities.  The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.  
We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect.  The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution.  In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the Selling Stockholders or any other person.  We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

2

SELLING SHAREHOLDERS
The common stock being offered by the selling shareholders are those previously issued to the selling shareholders, and those issuable to the selling shareholders, upon exercise of the warrants.  For additional information regarding the issuances of those shares of common stock and warrants, see “Private Placement of Shares of Common Stock and Warrants” above.  We are registering the shares of common stock in order to permit the selling shareholders to offer the shares for resale from time to time.  Except for the ownership of the shares of common stock and the warrants, the selling shareholders have not had any material relationship with us within the past three years.
The table below lists the selling shareholders and other information regarding the beneficial ownership of the shares of common stock by each of the selling shareholders.  The second column lists the number of shares of common stock beneficially owned by each selling shareholder, based on its ownership of the shares of common stock and warrants, as of ________, 2021, assuming exercise of the warrants held by the selling shareholders on that date, without regard to any limitations on exercises.
The third column lists the shares of common stock being offered by this prospectus by the selling shareholders.
In accordance with the terms of a registration rights agreement with the selling shareholders, this prospectus generally covers the resale of the sum of (i) the number of shares of common stock issued to the selling shareholders in the “Private Placement of Shares of Common Stock and Warrants” described above and (ii) the maximum number of shares of common stock issuable upon exercise of the related warrants, determined as if the outstanding warrants were exercised in full as of the trading day immediately preceding the date this registration statement was initially filed with the SEC, each as of the trading day immediately preceding the applicable date of determination and all subject to adjustment as provided in the registration right agreement, without regard to any limitations on the exercise of the warrants.  The fourth column assumes the sale of all of the shares offered by the selling shareholders pursuant to this prospectus.
Under the terms of the warrants, a selling shareholder may not exercise the warrants to the extent such exercise would cause such selling shareholder, together with its affiliates and attribution parties, to beneficially own a number of shares of common stock which would exceed 4.99% or 9.99%, as applicable, of our then outstanding common stock following such exercise, excluding for purposes of such determination shares of common stock issuable upon exercise of such warrants which have not been exercised. The number of shares in the second and fourth columns do not reflect this limitation.  The selling shareholders may sell all, some or none of their shares in this offering.  See "Plan of Distribution."
															
		Name of Selling Shareholder	Number of shares of Common Stock Owned Prior to Offering	Maximum Number of shares of Common Stock to be Sold Pursuant to this Prospectus	Number of shares of Common Stock Owned After Offering

•
3

Annex C
ENERGY FOCUS, INC.
Selling Stockholder Notice and Questionnaire
The undersigned beneficial owner of common stock (the “Registrable Securities”) of Energy Focus, Inc., a Delaware corporation (the “Company”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document is annexed.  A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.  All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus.  Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.
The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
1.         Name.
(a) Full Legal Name of Selling Stockholder
			
	
	

(b) Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:
			
	
	

(c) Full Legal Name of Natural Control Person(which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire):
			
	
	

2.  Address for Notices to Selling Stockholder:						
		
		
		
		Telephone:
		Fax:
		Contact Person:

3.  Broker-Dealer Status:
(a) Are you a broker-dealer?
                                                Yes                                                    No    
(b) If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?
                                                Yes                                                    No    
Note:   If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
(c) Are you an affiliate of a broker-dealer?
                                                Yes                                                    No    
(d) If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?
                                                Yes                                                    No    
Note:   If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
4.  Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.
Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Purchase Agreement.
(a) Type and Amount of other securities beneficially owned by the Selling Stockholder:			
	
	
	

2

5.  Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.
State any exceptions here:			
	
	
	

The undersigned agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective; provided, that the undersigned shall not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto.  The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
Date:                                                                           Beneficial Owner:                                                

By:                                                             
       Name:
       Title:
PLEASE FAX A COPY (OR EMAIL A .PDF COPY) OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:

3Exhibit 4.9

 

 

 

SANGOMA
TECHNOLOGIES CORPORATION

 

 

Management
Information Circular

 

and

 

Notice
of Annual Meeting of Shareholders

 

To
be held on 

December 29, 2021

 

via
live audio webcast at 10:30 a.m. (Toronto time)

 

     

     

    

 

SANGOMA
TECHNOLOGIES CORPORATION

 

Suite 100 

100
Renfrew Drive 

Markham,
Ontario 

L3R
9R6

 

NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS

 

NOTICE IS HEREBY
GIVEN that an annual meeting (the “Meeting”) of holders (the “Shareholders”) of common shares (the
 “ Common Shares”) of Sangoma Technologies Corporation (the “Corporation”) will be held virtually
on Wednesday, December 29, 2021 at 10:30 a.m. (Toronto time) for the following purposes:

 

		a.	to
                                            receive the consolidated audited financial statements of the Corporation for the financial
                                            year ended June 30, 2021, and the auditor’s report thereon;

 

		b.	to
                                            elect the directors of the Corporation;

 

		c.	to
                                            appoint MNP LLP, Chartered Accountants, as auditors of the Corporation for the ensuing year
                                            and to authorize the directors of the Corporation to fix their remuneration; and

 

		d.	to
                                            transact such other business as may properly be brought before the Meeting or any postponement
                                            or adjournment thereof.

 

Accompanying this
Notice of Meeting is a management information circular dated November 25, 2021 (the “Information Circular”) and
a form of proxy.

 

The record date
for the determination of Shareholders entitled to receive notice of and to vote at the Meeting is November 24, 2021 (the “Record
Date”). Only Shareholders whose names have been entered in the registers of Shareholders on the close of business on the Record
Date will be entitled to receive notice of and to vote at the Meeting. To the extent a Shareholder transfers the ownership of any Common
Shares after the Record Date and the transferee of those Common Shares establishes ownership of such Common Shares and demands, not later
than ten (10) days before the Meeting, to be included in the list of Shareholders eligible to vote at the Meeting, such transferee
will be entitled to vote those Common Shares at the Meeting.

 

To proactively
deal with the unprecedented public health impact of the novel coronavirus outbreak, also known as COVID-19, and in an effort to mitigate
potential risks to the health and safety of our communities, Shareholders, employees and stakeholders, and consistent with the latest
guidance from public health and government authorities, the Corporation is holding the Meeting in a virtual only format which will be
conducted via live audio webcast. All Shareholders, regardless of their geographic location or equity ownership, will have an equal opportunity
to participate in the Meeting and engage with directors and management of the Corporation as well as with other shareholders. Shareholders
will not be able to attend the Meeting in person. At the Meeting, you will have the opportunity to ask questions and vote on the aforementioned
matters.

 

We
encourage you to participate in the Meeting. Registered Shareholders and duly appointed proxyholders will be able to attend, participate,
vote and ask questions at the Meeting online at https://meetnow.global/MR6VG9T. Non-registered
Shareholders (being Shareholders who hold their shares through a securities dealer or broker, bank, trust company or trustee, custodian,
nominee or other intermediary) who have not duly appointed themselves as their proxy will be able to attend the Meeting only as guests.
Guests will be able to listen to the Meeting but will not be able to vote or ask questions. You will find important information and detailed
instructions about how to participate in the Meeting in the Information Circular.

 

A
Shareholder may attend the Meeting via live audio webcast or may be represented by proxy. Shareholders who are unable to attend the Meeting
via live audio webcast or any adjournment or postponement thereof are requested to date, sign and return the accompanying form of applicable
proxy for use at the Meeting or any adjournment or postponement thereof. To be valid, the enclosed form of applicable proxy must be received
by the Corporation’s transfer agent and registrar, Computershare Investor Services Inc. (the “Transfer Agent”
or “Computershare”) at 100 University Avenue, 8th Floor, Toronto,
Ontario M5J 2Y1 or online at www.investorvote.com or by telephone at 1- 866-732-VOTE (8683) (for Shareholders within North America)
or 1-312- 588-4290 (for Shareholders outside North America), prior to 10:30 a.m. (Toronto time) on December 23, 2021 or any
postponement or adjournment thereof, or with the approval of the Chairman of the Meeting on the day of the Meeting or any adjournment
or postponement thereof prior to the time of voting.

 

     

     

    

 

Registered Shareholders
are those persons who are named as owners of Common Shares on the register of Shareholders maintained by the Transfer Agent. A significant
number of persons who beneficially own Common Shares hold those Common Shares in a brokerage account or through some other intermediary.
In almost all cases, a person whose Common Shares are held through a broker (or other intermediary) will not appear as the registered
holder of such Common Shares on the register of Shareholders. Non-registered Shareholders (i.e., persons whose Common Shares are not
held in their own name) do not have the same legal rights as registered Shareholders in respect of shareholder meetings (including the
right to vote directly at shareholder meetings and to appoint a proxyholder), and non-registered Shareholders will be required to act
through the Transfer Agent, or their broker (or other intermediary) in order to have their Common Shares voted at the Meeting.

 

DATED
at Markham, Ontario this 25th day of November, 2021.

 

	 	BY ORDER OF THE BOARD OF DIRECTORS
	 	 
	 	/s/ “Bill
    Wignall”
	 	William Wignall
	 	President and Chief Executive Officer

 

     

     

    

 

SANGOMA
TECHNOLOGIES CORPORATION

 

MANAGEMENT
INFORMATION CIRCULAR

 

Dated:
November 25, 2021

 

     

     

    

 

GENERAL
PROXY INFORMATION

 

Solicitation of Proxies

 

This management
information circular (the “Circular”) is furnished in connection with the solicitation of proxies by the management of Sangoma
Technologies Corporation (the “Corporation” or “Sangoma”) for use at the annual meeting (the “Meeting”)
of holders (the “Shareholders”) of common shares of the Corporation (the “Common Shares”) to be held at the time
and place and for the purposes set forth in the attached Notice of Meeting (the “Notice”) or at any adjournment thereof.

 

The solicitation
will be primarily by mail, but proxies may also be solicited personally or by telephone or electronic means by directors, officers or
regular employees of the Corporation. None of these individuals will receive extra compensation for such efforts. The cost of solicitation
will be borne by the Corporation. The Corporation has distributed, or made available for distribution, copies of the Notice, Circular
and form of proxy to clearing agencies, securities dealers, banks and trust companies or their nominees (“Intermediaries”)
for distribution to holders of Common Shares (“Non-Registered Shareholders”) whose shares are held by or in custody
of such Intermediaries. Such Intermediaries are required to forward such documents to Non-Registered Shareholders. The solicitation of
proxies from Non-Registered Shareholders will be carried out by the Intermediaries or by the Corporation if the names and addresses of
the Non-Registered Shareholders are provided by the Intermediaries. The Corporation will reimburse reasonable expenses incurred by the
Intermediaries in connection with the distribution of these materials.

 

The information
contained in this Circular is given as of November 25, 2021, except where otherwise indicated. Unless otherwise specified in this
Circular, numbers and price of the Common Shares and any other information on securities convertible into Common Shares are stated prior
to giving effect to the consolidation of the Common Shares (the “Consolidation”), effective as of November 2,
2021, on the basis of one new Common Share for every seven outstanding Common Shares (the “ Consolidation Ratio”).
No person is authorized to give any information or make any representation other than those contained in this Circular and, if given
or made, such information or representation should not be relied upon as having been authorized by the Corporation. The delivery of this
Circular shall not, under any circumstances, create an implication that there has not been any change in the information set forth herein
since the date of this Circular.

 

Virtual Only Meeting

 

Out of an abundance
of caution, in light of the current COVID-19 public health emergency and to protect the Corporation’s employees, Shareholders and
other stakeholders, and consistent with the latest guidance from public health and government authorities, the Corporation is holding
the Meeting in a virtual only format which will be conducted via live audio webcast. All Shareholders, regardless of their geographic
location or equity ownership, will have an equal opportunity to participate in the Meeting and engage with directors and management of
the Corporation as well as with other Shareholders.

 

Participation at the Meeting

 

Registered Shareholders
and duly appointed proxyholders who participate in the Meeting online will be able to listen to the Meeting, ask questions and vote,
all in real time, provided they are connected to the internet and comply with all of the requirements set out in the sections below entitled
 “How to Vote” and “Attendance and Participation in the Meeting”. Non-Registered Shareholders who have not duly
appointed themselves as their proxies may still attend the Meeting as guests. Guests will be able to listen to the Meeting but will not
be able to vote or ask questions at the Meeting. See the sections below entitled “How to Vote” and “Attendance and
Participation in the Meeting” below.

 

     

    - 2 -

    

 

Appointment, Time for Deposit and
Revocation of Proxies

 

Each
of the persons named in the enclosed form of proxy is an officer of the Corporation. A Shareholder desiring to appoint some other
person (who need not be a Shareholder) to attend and act for him, her or it at the Meeting may do so either by inserting such person’s
name in the blank space provided in the form of proxy or by completing another proper form of proxy. Such Shareholder must also register
such proxyholder once he, she or it has submitted a form of proxy. Failure to register the proxyholder will result in the proxyholder
not receiving an Invitation Code to participate in the Meeting. To register a proxyholder, Shareholders MUST visit https://www.computershare.com/Sangoma
by December 23, 2021, at 10:30 a.m. (Toronto time) and provide Computershare with their proxyholder’s contact
information, so that Computershare may provide the proxyholder with an Invitation Code via email. If a Shareholder wishes to vote
by proxy, the proxy to be used at the Meeting must be delivered to Computershare Investor Services Inc., 100 University Avenue, 8th Floor,
Toronto, Ontario M5J 2Y1 (fax: +1-866-249-7775 within North America or +1-416-263-9524 from all other countries). A proxy should be executed
by the Shareholder or his or her attorney in writing or, if the Shareholder is a corporation, under its corporate seal or by an officer
or attorney thereof duly authorized. Proxies to be used at the Meeting must be delivered to Computershare Investor Services Inc. so as
to be received no later than 10:30 a.m. (Toronto time) on Thursday, December 23, 2021 (or at least 48 hours, excluding Saturdays,
Sundays and holidays before any adjournment or postponement of the Meeting) or delivered to the Chairman of the Meeting via email at
investorrelations@sangoma.com at least 24 hours prior to the commencement of the Meeting, or any adjournment thereof, in order
for the proxy to be voted. As an alternative to completing and submitting a proxy for use at the Meeting, a Shareholder may vote electronically
on the internet at www.investorvote.com or by telephone by contacting Computershare Investor Services Inc. at +1-866-732-8683.
Votes cast electronically or by telephone are in all respects equivalent to, and will be treated in the same manner as, votes cast via
a paper form of proxy. Shareholders who wish to vote using internet or by telephone should follow the instructions provided in the enclosed
form of proxy. Votes cast electronically or by telephone must be submitted no later than 10:30 a.m. (Toronto time) on Thursday,
December 23, 2021 or at least 48 hours, excluding Saturdays, Sundays and holidays, before any adjournment or postponement of the
Meeting.

 

Advice to Beneficial Holders of Common
Shares

 

The
information set forth in this section is of significant importance to many Shareholders as a substantial number of Shareholders do not
hold Common Shares in their own name and thus are considered non-registered beneficial Shareholders. Only
registered holders of Common Shares or the persons they appoint as their proxyholder are permitted to vote at the Meeting. However, in
many cases, Common Shares beneficially owned by a person (a “Beneficial Holder ”) are registered either: (i) in
the name of an Intermediary that the Beneficial Holder deals with in respect of the Common Shares, or (ii) in the name of a clearing
agency (such as the Canadian Depository for Securities Limited) of which the Intermediary is a participant. Beneficial Holders should
note that only proxies deposited by Shareholders whose names appear on the records of the Corporation as the registered holders of Common
Shares can be recognized and acted upon at the Meeting. In accordance with the requirements of the Canadian Securities Administrators,
the Corporation will have distributed copies of the Notice of Meeting, this Information Circular and the enclosed form of proxy to the
clearing agencies and Intermediaries for onward distribution to Beneficial Holders. If you are a Beneficial Holder, your Intermediary
will be the entity legally entitled to vote your Common Shares at the Meeting. Common Shares held by an Intermediary can only be voted
upon the instructions of the Beneficial Holder. Without specific instructions, Intermediaries are prohibited from voting Common
Shares. Applicable regulatory policy requires Intermediaries to seek voting instructions from Beneficial Holders in advance of the Meeting.
Often, the form of proxy supplied to a Beneficial Holder by its Intermediary is identical to the form of proxy provided to registered
Shareholders; however, its purpose is limited to instructing the registered Shareholder how to vote on behalf of the Beneficial Holder.
The majority of Intermediaries now delegate responsibility for obtaining instructions from clients to Broadridge Financial Solutions, Inc.
(“Broadridge”). Broadridge typically mails a scannable voting instruction form in lieu of the form of proxy. The Beneficial
Holder is requested to complete and return the voting instruction form to Broadridge by mail or facsimile. Alternatively, the Beneficial
Holder may call a toll-free telephone number or access the internet to provide instructions regarding the voting of Common Shares held
by such Beneficial Holder. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting
the voting of Common Shares to be represented at the Meeting. A Beneficial Holder receiving a voting instruction form cannot use that
voting instruction form to vote Common Shares directly at the Meeting, as the voting instruction form must be returned as directed by
Broadridge well in advance of the Meeting in order to have such Common Shares voted.

 

     

    - 3 -

    

 

Beneficial Holders
should ensure that instructions respecting the voting of their Common Shares are communicated in a timely manner and in accordance with
the instructions provided by their Intermediary or Broadridge, as applicable. Every Intermediary has its own mailing procedures and provides
its own return instructions to clients, which should be carefully followed by Beneficial Holders in order to ensure that their Common
Shares are voted at the Meeting.

 

Although
a Beneficial Holder may not be recognized directly at the Meeting for the purpose of voting Common Shares registered in the name of their
Intermediary, a Beneficial Holder may attend the Meeting as proxyholder for the Intermediary and vote the Common Shares in that capacity.
Beneficial Holders who wish to attend the Meeting and indirectly vote their Common Shares as a proxyholder, should enter their own
names in the blank space on the form of proxy or voting instruction form provided to them by their Intermediary and/or Broadridge, as
applicable, and return the same in accordance with the instructions provided by their Intermediary and/or Broadridge, as applicable,
well in advance of the Meeting. In addition, such Beneficial Holders must register himself, herself or itself as a proxyholder once he,
she or it has submitted a proxy or voting instruction form. Failure to register the proxyholder will result in the proxyholder not receiving
an Invitation Code to participate in the meeting. To register a proxyholder, the Beneficial Holder MUST visit https://www.computershare.com/Sangoma
by 10:30 a.m. (Toronto time) on Thursday, December 23,

 

2021 and provide
Computershare with their proxyholder’s contact information, so that Computershare may provide the proxyholder with an Invitation
Code via email.

 

In any case, the
purpose of the above noted procedures is to permit Beneficial Holders to direct the voting of the Common Shares which they beneficially
own. Beneficial Holders should carefully follow the instructions and procedures of their Intermediary or Broadridge, as applicable, including
those regarding when and where the form of proxy or voting instruction form is to be delivered.

 

Pursuant to National
Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer (“NI 54-101”),
the Corporation is distributing copies of proxy-related materials in connection with the Meeting directly to non-objecting beneficial
owners of Common Shares and the Corporation intends to pay for delivery to objecting beneficial owners. The Corporation is not relying
on the notice-and-access delivery procedures set out in NI 54-101 to distribute copies of proxy-related materials in connection with
the Meeting.

 

How to Vote

 

Shareholders may vote by proxy before
the Meeting or vote at the Meeting, as described below:

 

Voting by proxy before the Meeting

 

You may vote
before the Meeting by completing your form of proxy or voting instruction form in accordance with the instructions provided therein.
Beneficial Holders should also carefully follow all instructions provided by their Intermediaries or Broadridge to ensure that their
Common Shares are voted at the Meeting. Voting by proxy is the easiest way to vote. It means you are giving someone else the
authority to attend the Meeting and vote on your behalf.

 

     

    - 4 -

    

 

The Corporation’s
proxyholders named in the enclosed form of proxy will vote the Common Shares in respect of which they are appointed as proxies in accordance
with your instructions, including on any ballot at the Meeting. If there are changes to the items of business or new items properly come
before the Meeting, a proxyholder can vote as he or she sees fit.

 

You can appoint
someone else to be your proxy. This person does not need to be a Shareholder. See the section below entitled “Appointment of a
Third Party as Proxy”.

 

There are three ways for registered
Shareholders to vote by proxy before the Meeting:

 

(a) Telephone
voting - You may vote by calling the toll-free telephone number 1-866-732-VOTE (8683). You will be prompted to provide your control number
printed on the form of proxy. If you vote by telephone, you may not appoint a person as your proxy other than the Sangoma proxyholders
named in the form of proxy or voting instruction form. Please follow the voice prompts that allow you to vote your Common Shares and
confirm that your instructions have been properly recorded.

 

(b) Internet
voting - You may vote by logging on to the website indicated on the form of proxy (www.investorvote.com).
Please follow the website prompts that allow you to vote your Common Shares and confirm that your instructions have been properly recorded.

 

(c) Return
your form of proxy by mail - You may vote by completing, signing and returning the form of proxy in the postage-paid envelope provided.

 

Proxies, whether
submitted through the Internet or by telephone or mail as described above, must be received by Computershare (100 University Avenue,
8th Floor, Toronto, Ontario M5J 2Y1, fax: +1-866-249-7775 within North America or +1- 416-263-9524 from all other countries) no later
than 10:30 a.m. (Toronto time) on Thursday, December 23, 2021 or at least 48 hours, excluding Saturdays, Sundays and holidays
before any adjournment or postponement of the Meeting. Your Common Shares will be voted in accordance with your instructions as indicated
on the proxy.

 

The time limit
for the deposit of proxies may be waived or extended by the chair of the Meeting at his or her discretion without notice.

 

Beneficial Holders
will receive a Notice of Meeting and notice of availability of proxy materials and voting instruction form indirectly through their Intermediary
or Broadridge. The Notice of Meeting and notice of availability of proxy materials contains instructions on how to access our proxy materials
and return your voting instructions. You should follow the voting instructions of your Intermediary or Broadridge. Intermediaries or
Broadridge may set deadlines for voting that are further in advance of the Meeting than those set out in this Information Circular. You
should contact your Intermediary or Broadridge for further details.

 

Voting at the Meeting

 

A registered
Shareholder or a Beneficial Holder who has appointed themselves or a third-party proxyholder to represent them at the Meeting, will
appear on a list of Shareholders prepared by Computershare, the transfer agent and registrar for the meeting. To have their Common
Shares voted at the Meeting, each registered Shareholder or proxyholder will be required to enter their control number or Invitation
Code, as applicable, provided by Computershare at https://meetnow.global/MR6VG9T prior to the start of the meeting. In order to
vote, Beneficial Holders who appoint themselves as a proxyholder MUST register with Computershare at
https://www.computershare.com/Sangoma after submitting their voting instruction form in order to receive an Invitation Code
(please see the information under the heading below entitled “Appointment of a Third Party as Proxy” and
 “Attendance and Participation at the Meeting”).

 

     

    - 5 -

    

 

It is important
that you are connected to the internet at all times during the Meeting in order to vote when balloting commences. It is your responsibility
to ensure connectivity for the duration of the Meeting.

 

Appointment of a Third Party as Proxy

 

The following applies
to Shareholders who wish to appoint someone as their proxy other than the Sangoma proxyholders named in the form of proxy or voting instruction
form. This includes Beneficial Holders who wish to appoint themselves as their proxy to attend, participate, vote or ask questions at
the Meeting. Shareholders who wish to appoint someone other than the Sangoma proxyholders as their proxy to attend the Meeting as their
proxy and vote their Common Shares MUST submit their form of proxy or voting instruction form, as applicable, appointing that person
as their proxy AND register that proxyholder online, as described below. Registering your proxyholder is an additional step to be completed
AFTER you have submitted your form of proxy or voting instruction form. Failure to register the proxyholder will result in the proxyholder
not receiving a Control Number that is required to vote at the Meeting.

 

		·	Step
                                            1: Submit your proxy or voting instruction form: To appoint someone other than the Sangoma
                                            proxyholders as your proxy, insert that person’s name in the blank space provided in
                                            the form of proxy or voting instruction form (if permitted) and follow the instructions for
                                            submitting such form of proxy or voting instruction form. This must be completed before registering
                                            such proxyholder, which is an additional step to be completed once you have submitted your
                                            form of proxy or voting instruction form. If you are a Beneficial Holder and wish to vote
                                            at the Meeting, you have to insert your own name in the space provided on the voting instruction
                                            form sent to you by your Intermediary or Broadridge, follow all of the applicable instructions
                                            provided by your Intermediary or Broadridge AND register yourself as your proxy, as described
                                            below. By doing so, you are instructing your Intermediary or Broadridge to appoint you as
                                            your proxy. It is important that you comply with the signature and return instructions provided
                                            to you by your Intermediary or Broadridge. See the section below entitled “Attendance
                                            and Participation in the Meeting”.

 

If you
are Beneficial Holder located in the United States and wish to vote at the Meeting or, if permitted, appoint a third party as your proxy,
in addition to the steps described below in the section entitled “Attendance and Participation in the Meeting”, you must
obtain a valid legal proxy from your broker, bank or other agent. Follow the instructions from your broker, bank or other agent included
with the legal proxy form and the voting information form sent to you, or contact your Intermediary to request a legal proxy form or
a legal proxy if you have not received one. After obtaining a valid legal proxy from your broker, bank or other agent, you must then
submit such legal proxy to Computershare. Requests for registration from Beneficial Holders located in the United States that wish to
vote at the Meeting or, if permitted, appoint a third party as their proxy must be sent by e-mail to uslegalproxy@computershare.com or
by courier to: Computershare Investor Services Inc., 100 University Avenue, 8th Floor, North Tower, Toronto, Ontario, Canada M5J 2Y1,
and in both cases, must be labelled “Legal Proxy” and received no later than 10:30 a.m. (Toronto time) on Thursday,
December 23, 2021 or at least 48 hours, excluding Saturdays, Sundays and holidays before any adjournment or postponement of the
Meeting. You will receive a confirmation of your registration by email after we receive your registration materials.

 

Step
2: Register your proxyholder: To register a third party proxyholder, Shareholders must visit
https://www.computershare.com/Sangoma by 10:30 a.m. (Toronto time) on Thursday, December 23, 2021 and provide Computershare
with their proxyholder’s contact information, so that Computershare may provide the proxyholder with an Invitation Code via email.
Without an Invitation Code, proxyholders will not be able to vote or ask questions at the Meeting but will be able to attend as a guest.

 

     

    - 6 -

    

 

Attendance and Participation in the
Meeting

 

The Corporation
is holding the Meeting in a virtual only format, which will be conducted via live audio webcast. Shareholders will not be able to attend
the Meeting in person. Attending the Meeting online enables registered Shareholders and duly appointed proxyholders, including Beneficial
Holders who have duly appointed themselves as their proxy, to participate in the Meeting and ask questions, all in real time. Registered
Shareholders and duly appointed proxyholders can vote at the appropriate times during the Meeting. Guests, including Beneficial Holders
who have not duly appointed themselves as their proxy, can log in to the Meeting as set out below. Guests can listen to the Meeting but
are not able to vote or ask questions.

 

 • Log in online at https://meetnow.global/MR6VG9T. We recommend that you log in at least one hour before the Meeting starts.

 

 • Click “Shareholder” and then enter your control number or an Invitation Code.

 

OR

 

• Click “Guest”
and then complete the online form.

 

Registered
Shareholders: The 15-digit control number located on the form of proxy or in the email notification
you received is your control number. If you are using a 15-digit control number to login to the online meeting and you accept the terms
and conditions, you will be revoking any and all previously submitted proxies. However, in such a case, you will be provided the opportunity
to vote by ballot on the matters put forth at the Meeting. If you DO NOT wish to revoke all previously submitted proxies, do not accept
the terms and conditions, in which case you can only enter the meeting as a guest.

 

Duly
appointed proxyholders: Computershare will provide the proxyholder with an Invitation Code by
e-mail after the proxy voting deadline has passed and the proxyholder has been duly appointed AND registered as described in “Appointment
of a Third Party as Proxy” above.

 

If you attend
the Meeting online, it is important that you are connected to the internet at all times during the Meeting in order to vote when balloting
commences. It is your responsibility to ensure connectivity for the duration of the Meeting. You should allow ample time to check into
the Meeting online and complete the related procedure.

 

Revocation of Proxy

 

If you are a registered
Shareholder, you may change a vote you made by proxy by voting again by any of the means, and by the deadlines, described in the section
above entitled “Voting by proxy before the Meeting”. Your new instructions will revoke your earlier instructions.

 

If you are a registered
Shareholder and you voted by proxy, you can revoke your voting instructions at any time up to and including the last business day preceding
the day of the Meeting or any adjournment by (i) sending a notice in writing (from you or a person authorized to sign on your behalf)
to Computershare Investor Services Inc., 100 University Avenue, 8th Floor, North Tower, Toronto, Ontario, Canada M5J 2Y1; or (ii) any
other manner permitted by law.

 

If you have followed
the process for attending and voting at the Meeting online, voting at the Meeting online will revoke your previous proxy.

 

     

    - 7 -

    

 

If you are a Beneficial Holder,
contact your Intermediary or Broadridge to find out how to change or revoke your voting instructions and the timing
requirements, or for other voting questions. Intermediaries may set deadlines for the receipt of revocation notices that are farther
in advance of the Meeting than those set out above and, accordingly, any such revocation should be completed well in advance of the
deadline prescribed in the proxy card or voting instruction form to ensure it is given effect at the Meeting.

 

Voting Deadline

 

If voting by proxy,
your proxy must be received by Computershare (Computershare Investor Services Inc., 100 University Avenue, 8th Floor, North Tower, Toronto,
Ontario, Canada M5J 2Y1) no later than 10:30 a.m. (Toronto time) on Thursday, December 23, 2021 or at least 48 hours, excluding
Saturdays, Sundays and holidays before any adjournment or postponement of the Meeting.

 

The time limit
for the deposit of proxies may be waived or extended by the chair of the Meeting at his or her discretion without notice. The Corporation
reminds Shareholders that only the most recently dated voting instructions will be counted and any prior dated instructions will be disregarded.

 

Voting Questions

 

Registered Shareholders
may contact the Transfer Agent, at 1-800 564 6253 (toll free in North America) or +1 (514) 982 7555 (outside North America), for any
voting questions.

 

Exercise of Discretion by Proxies

 

All properly executed
forms of proxy, not previously revoked, will be voted or withheld from voting on any poll taken at the Meeting in accordance with the
instructions of the Shareholder contained therein. A properly executed form of proxy containing no instructions regarding the matters
to be acted upon will be voted in favour of such matters. The form of proxy also confers discretionary authority in respect of amendments
to, or variations in, all matters that may properly come before the Meeting or any postponement or adjournment thereof. At the time of
the printing of this Circular, management of the Corporation knows of no such amendments, variations or other matters to come before
the Meeting other than the matters referred to in the Notice. However, if any such amendments, variations or other matters which are
not now known to management, should properly come before the Meeting, the Common Shares represented by the proxies hereby solicited will
be voted thereon in such manner as such persons then consider proper.

 

VOTING SECURITIES AND PRINCIPAL
HOLDERS OF VOTING SECURITIES

 

The Corporation
has fixed the close of business on November 24, 2021 as the record date (the “Record Date”) for the purposes
of determining Shareholders entitled to receive the Notice and vote at the Meeting. The Corporation is authorized to issue an unlimited
number of Common Shares, of which 19,027,967 Common Shares (on a post-Consolidation basis) were issued and outstanding as at the date
of this Circular. Each Common Share entitles the holder thereof to one vote for each matter voted at the Meeting.

 

Two shareholders
constitute a quorum for the Meeting Each Common Share is entitled to one vote on each matter to be voted upon at the Meeting. A simple
majority of votes cast at the Meeting, whether in person or by proxy, will constitute approval of any matter submitted to a vote.

 

In accordance
with the provisions of the Business Corporations Act (Ontario), the Corporation will prepare a list of the Shareholders on
the Record Date. Each Shareholder named in the list will be entitled to vote the Common Shares shown opposite his, her or its name
on the list. To the knowledge of the directors and senior officers of the Corporation, and based upon the Corporation’s review
of the records maintained by the Transfer Agent and insider reports filed with the System for Electronic Disclosure by Insiders, as
at the Record Date, the only person who beneficially owns, directly or indirectly, or exercises control or direction over
voting securities of the Corporation carrying more than 10% of the voting rights of the total issued and outstanding Common Shares
is Star2Star Holdings, LLC (which is controlled by Norman A. Worthington, III, the Chairman and Chief Executive Officer of
Star2Star Holdings, LLC) which beneficially owns directly 2,163,254 Common Shares (on a post-Consolidation basis), representing
approximately 11.37% of the total number of Common Shares outstanding as at November 25, 2021.

 

     

    - 8 -

    

 

EXECUTIVE COMPENSATION

 

Compensation and Nominating Committee

 

The Compensation
and Nominating Committee is composed of Allan Brett, Al Guarino and Marc Lederman, directors of the Corporation, all of whom, are considered
 “independent”, as that term is defined in National Instrument 52-110 – Audit Committees of the Canadian Securities
Administrators. Policy 3.1 of the TSX Venture Exchange Corporate Finance Manual sets out a requirement that all employment, consulting
or other compensation arrangements between the issuer and any director or senior officer of the issuer are to be considered and approved
by independent directors. Mr. Brett acts as Chair of the Compensation and Nominating Committee.

 

Executive Compensation Discussion
and Analysis

 

The duties of the
Compensation and Nominating Committee as they relate to compensation include developing and monitoring the Corporation’s overall
approach to compensation issues and, subject to approval by the Corporation’s board of directors (“Board” or
 “Board of Directors”), implementing and administering a system of compensation which reflects superior standards of
compensation practices. Periodically, the Compensation and Nominating Committee will review the adequacy and form of the compensation
of the directors of the Corporation with a view to ensuring that such compensation realistically reflects the responsibilities and risks
of being a director.

 

Subject to any
contractual arrangements, the Compensation and Nominating Committee is responsible for setting the annual salary, bonus and other benefits,
direct and indirect, of the Chief Executive Officer (CEO). The committee reviews and approves corporate goals and objectives relevant
to the compensation of the Chief Executive Officer and evaluates the Chief Executive Officer’s performance considering these goals
and objectives. The Compensation and Nominating Committee determines the incentive compensation of the Chief Executive Officer after
the end of each financial year and makes a recommendation to the Board of Directors. The Compensation and Nominating Committee also reviews
recommendations to the Board of Directors from the CEO regarding incentive compensation for other executives. During its deliberations
the Compensation and Nominating Committee considers the implications of the risks associated with the Corporation’s compensation
policies and practices.

 

The Charter of the Compensation and
Nominating Committee includes the following duties:

 

		(a)	to
                                            develop and monitor the Corporation’s overall approach to compensation issues and,
                                            subject to approval by the Board of Directors, to implement and administer a system of compensation
                                            which reflects superior standards of compensation practices and to continue to develop the
                                            Corporation’s approach to compensation issues;

 

		(b)	to
                                            undertake an annual review of compensation issues and practices as they affect the Corporation
                                            and make a comprehensive set of recommendations to the Board of Directors during each calendar year;

 

		(c)	to advise the Board of Directors
or any committees of the Board of Directors of compensation issues which the Committee determines ought to be considered by the Board
of Directors or any such committee;

 

     

    - 9 -

    

 

		(d)	to
                                            recommend to the Board of Directors human resources and compensation policies and guidelines;

 

		(e)	to
                                            ensure that the Corporation has in place programs to attract and develop management of the
                                            highest calibre and a process to provide for the orderly succession of management, including
                                            receipt on an annual basis of any recommendations of the Chief Executive Officer in this
                                            regard;

 

		(f)	to
                                            develop a position description for the Chief Executive Officer and to ensure that policy
                                            guidelines and systems are in place to provide for a comprehensive annual review of the performance
                                            of the Chief Executive Officer;

 

		(g)	to
                                            review and approve corporate goals and objectives relevant to the compensation of the Chief
                                            Executive Officer and to evaluate the Chief Executive Officer’s performance considering
                                            these goals and objectives;

 

		(h)	subject
                                            to any contractual arrangements, to set the annual salary, bonus and other benefits, direct
                                            and indirect, of the Chief Executive Officer and to approve compensation for all other designated
                                            officers after considering the recommendations of the Chief Executive Officer, all within
                                            any human resources and compensation policies and guidelines approved by the directors;

 

		(i)	to
                                            review periodically the adequacy and form of the compensation of the directors of the Corporation
                                            with a view to ensuring that such compensation realistically reflects the responsibilities
                                            and risks of being a director;

 

		(j)	to
                                            implement and administer human resources and compensation policies approved by the directors
                                            concerning the following:

 

		i.	executive
                                            compensation, employment and related contracts, stock option plans, deferred share plans
                                            and other incentive and equity-based plans; and

 

		ii.	proposed
                                            personnel changes involving officers reporting to the Chief Executive Officer;

 

		(k)	from
                                            time to time to review with the Chief Executive Officer, the Corporation’s broad policies
                                            on compensation for all employees and overall labour relations strategies;

 

		(l)	to
                                            consider any other questions or matters of compensation referred to it by the directors;

 

		(m)	to
                                            develop and implement a process for assessing the effectiveness of the compensation policies
                                            and practices of the Corporation and to report and make recommendations to the Board of Directors
                                            thereon;

 

		(n)	to
                                            adopt a process to determine what competencies and skills the Board, as a whole, should possess
                                            given the nature of the business of the Corporation;

 

		(o)	to
                                            assess the competencies and skills of each existing director, with a view to assessing the
                                            Board of Directors collectively for the purpose of, in part, facilitating effective decision
                                            making by the Board of Directors;

 

     

    - 10 -

    

 

		(p)	to
                                            identify and recommend qualified individuals to become new members of the Board, giving due
                                            consideration to:

 

		i.	the
                                            competencies and skills that the board considers to be necessary for the board, as a whole,
                                            to possess;

 

		ii.	the
                                            competencies and skills that the board considers each existing director to possess; and

 

		iii.	the
                                            competencies and skills each new nominee will bring to the boardroom.

 

		(q)	to
                                            report annually to the Corporation’s shareholders, through the Corporation’s
                                            annual management information circular to shareholders, on the Corporation’s approach
                                            to compensation and to review executive compensation disclosure before the Corporation publicly
                                            discloses such information; and

 

		(r)	to
                                            recommend the slate of directors to be nominated for election at the annual meeting of shareholders.

 

The Compensation
and Nominating Committee also reviewed and approved the Compensation Discussion and Analysis included in this Circular.

 

For the purposes
of this Circular, the Named Executive Officers (NEO, as that term is defined in Form 51-102F6V — Statement of Executive
Compensation) are Messrs. Wignall, Moore and Tobia (each, an “NEO” and together, the “NEOs”).

 

Objectives of Compensation Strategy

 

The specific objectives of the Corporation’s
compensation program for executive officers are as follows:

 

		·	to
                                            attract and retain talented executive officers;

 

		·	to
                                            align the interests of executive officers with those of the Corporation’s shareholders;
                                            and

 

		·	to
                                            link individual executive compensation to the performance of both the Corporation and the
                                            individual executive officer.

 

The Corporation’s compensation
program is currently designed to reward executive officers for:

 

		·	superior
                                            corporate performance relative to pre-set internal objectives; and

 

		·	exceptional
                                            levels of individual performance consistent with, and contributing to, the achievement of
                                            the Corporation’s strategic goals.

 

The Compensation
and Nominating Committee is directly involved in the negotiation and settlement of the terms of the senior management executive employment
contracts. In determining the appropriate terms of the executive employment contracts, the Compensation and Nominating Committee considers,
among other matters, the following objectives: (i) retaining executives who are critical to the success of the Corporation and the
enhancement of shareholder value; (ii) providing fair and competitive compensation; and (iii) balancing the interests of management
and shareholders of the Corporation.

 

The executive compensation
programs in the totality are intended to provide executives with an appropriate and competitively balanced mix of guaranteed cash (base
salary) and performance-based (short-term – annual cash bonus; long-term – stock option awards) incentive compensation.
Short and long-term incentive awards are discretionary and are determined by the achievement of annual performance objectives
and the performance of the Corporation. These incentive awards are paid in cash or, if the NEO is eligible and elects to participate
in the long-term equity incentive compensation plan of the Corporation, a combination of both. The Corporation’s executive
compensation mix (the proportion of base salary, short and long-term incentive awards) is designed to reflect the relative impact of
the executive’s role on the Corporation’s performance and considers how the compensation mix aligns with long-term
shareholder value creation.

 

     

    - 11 -

    

 

An NEO or director
of the Corporation is not excluded from purchasing financial instruments, including prepaid variable contracts, equity swaps, collars
or units of exchange that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or
held directly or indirectly by the NEO or director. Currently there are no such financial instruments available in respect of the Corporation.

 

Structure of Compensation Strategy

 

For the fiscal
year ended June 30, 2021, payouts to NEOs were based on the Compensation and Nominating Committee’s assessment of performance
based on expected revenues, adjusted EBITDA, adjusted EBITDA as a percentage of revenue, identification and completion of acquisitions,
stock price and various other measures of individual performance throughout the year.

 

		1.	Base Salary

 

The CEO, CFO and
Executive Vice President received base annual salaries of $400,000, $300,000, and $250,000 for the period January 1, 2021 to June 30,
2021 respectively, and $360,000, $250,000, and $250,000 respectively for the period July 1, 2020 to December 31, 2020. Each
NEO’s base salary is determined by assessment of the executive’s performance and is intended to reward the skill, knowledge
and experience of the NEO and reflect the level of responsibility and the expected contribution to the Corporation from that executive.

 

		2.	Bonuses

 

The Corporation
has a discretionary annual cash bonus plan for the executive officers of the Corporation which may vary, based on the individual’s
position and contribution to the performance of the Corporation and the annual performance of the Corporation. The Chief Executive Officer
of the Corporation presents recommendations to the Compensation and Nominating Committee with respect to the award of any such cash bonuses
(other than bonuses paid to the Chief Executive Officer).

 

During the fiscal
year ended June 30, 2021, the Corporation recorded an aggregate of $1,100,000 in annual cash bonuses for payment to NEOs of the
Corporation in respect of the fiscal year ended June 30, 2021. The cash bonus to be paid to the President and Chief Executive Officer
for the year-ended June 30, 2021, was determined by the Compensation and Nominating Committee based on an assessment of the performance
of the Corporation and the individual performance of the President and Chief Executive Officer. The Compensation and Nominating Committee
also approved the CEO’s recommendation for awards of bonuses to the balance of the executive team.

 

		3.	Long Term Incentive Plan

 

The Corporation does not have any long-term
incentive plans other than the Option Plan described below.

 

		4.	Equity Compensation Plans –
Stock Option Plan

 

The
Corporation has a stock option plan (the “Option Plan”) for directors, officers, employees and consultants of the
Corporation and the number of Common Shares which are set aside for issuance under the Option Plan (and under all other management
options and employee stock option plans) is currently equal to 10% of the outstanding Common Shares on the date of grant of any
option. As a result, should the Corporation issue additional Common Shares in the future, the number of Common Shares issuable under
the Option Plan will increase accordingly. Given that the Corporation has 19,027,967 Common Shares (on a post-Consolidation basis)
issued and outstanding as at the date of this Circular, the Corporation currently has 1,902,796 Common Shares (on a
post-Consolidation basis) that have been set aside for the grant of options on this date. There are 1,782,574 options (on a
post-Consolidation basis) currently outstanding under the Option Plan, representing a dilution of approximately 9.4% to the
outstanding Common Shares of the Corporation as at the date of this Circular. As at the date of this Circular, another 120,222
options (on a post -Consolidation basis) may be granted under the Option Plan, representing a total potential dilution of 10.0%
assuming all such options are granted. The Option Plan is considered an “evergreen” plan, since the Common Shares
covered by options which have been exercised, terminated, cancelled or surrendered for cancellation shall be available for
subsequent grants under the Option Plan and the number of options available to grant increases as the number of issued and
outstanding Common Shares increases.

 

     

    - 12 -

    

 

The exercise price
(which is payable in full upon exercise) shall be set by the Board in accordance with the applicable rules of the stock exchange
upon which the Common Shares are listed at the date the option is granted and the term of any option shall not exceed five (5) years.
The Board also approves the vesting period or periods of options granted under the Option Plan. Under the rules of the Toronto Stock
Exchange (“TSX”), unallocated option entitlements under a stock option plan that does not provide for a fixed number
of shares for issuance, such as the Corporation’s Option Plan, must be specifically approved every three years by Shareholders.
Such approval was last obtained at the Corporation’s annual and special meeting of Shareholders held on December 17, 2020.
At such meeting, the Shareholders also approved an amendment to the Corporation’s then existing stock option plan to delete the
reference to “David Mandelstam, Yves Laliberté, Al Guarino and Allan Brett (the current non-management or external directors
of the Company)” as excluded persons in the definition of Eligible Persons (as defined in the plan). On June 9, 2021,
the Board amended the then existing stock option plan to reflect the following changes to ensure compliance with the policies of the
TSX Venture Exchange: (i) state that any options granted to an insider pursuant the plan or any other Share Compensation Arrangement
(as defined in the plan) shall be included for the purposes of the limits set out in Sections 6(a) and 6(b) of the plan; and
(ii) state that the exercise price for any options granted for a future date shall not be less than the greater of the “market
price”, as defined in the plan, and the Discounted Market Price as determined under the policies of the TSX Venture Exchange. Shareholder
approval was not sought with respect to the June 2021 amendments as the TSX Venture Exchange advised that given such amendments
were made to ensure the Option Plan met the minimum requirements of the policies of the TSX Venture Exchange, Shareholder approval was
not required.

 

The Corporation
does not provide financial assistance to participants under the Option Plan to facilitate payment of the exercise price of options.

 

The annual burn
rate of options granted under the Option Plan in respect of: (i) fiscal 2021 was 6.8%; (ii) fiscal 2020 was 3.3%; and (iii) fiscal
2019 was 3.3%. “Annual burn rate” is the number of options granted under the Option Plan during the applicable fiscal
year divided by the weighted average number of common shares of the Corporation outstanding for the applicable fiscal year, as required
to be calculated and disclosed pursuant to Sections 613(p) and 613(d)(iii) of the TSX Company Manual.

 

The Option Plan also has the following
terms, among others:

 

		(a)	the
                                            number of common shares of the Corporation reserved for issuance to any one person within
                                            a one-year period shall not exceed 5% of the outstanding Common Shares at the time of the
                                            grant (on a non-diluted basis);

 

		(b)	the
                                            exercise price for each option shall be fixed by the Board but cannot be less than the “market
                                            price” on the date the option is granted. The “market price” is equal to
                                            the closing price of the Common Shares as reported by the stock exchange upon which the Common
                                            Shares are listed or other published market upon which the Common Shares are quoted or traded,
                                            on the day immediately preceding the day upon which the option is granted, or if not so traded,
                                            the average between the closing bid and ask prices thereof as reported for the day immediately
                                            preceding the day upon which the option is granted. If the Board determines that an option
                                            is to be granted at a future date “market price” shall be deemed to be the greater
                                            of the weighted average trading price of the Common Shares as reported for the five (5) trading
days preceding the date of the grant and the Discounted Market Price (as defined under the policies of the TSX Venture Exchange) on the
date of the grant;

 

     

    - 13 -

    

 

		(c)	options
                                            shall expire not more than five years from the grant date;

 

		(d)	options
                                            terminate within a period of time following an optionholder ceasing to be a director,
officer, employee or consultant of the Corporation or of a subsidiary of the Corporation. However, in the event of death, options will
expire at the earlier of the end of the original option period or 180 days after the date of death;

 

		(e)	the
                                            number of Common Shares issuable to insiders of the Corporation at any time pursuant to all
                                            of the Corporation’s share compensation arrangements shall not exceed 10% of the outstanding
                                            Common Shares at the time of grant, on a non-diluted basis, and the number of Common Shares
                                            issued to insiders of the Corporation, within any one year period, pursuant to all of the
                                            Corporation’s share compensation arrangements, shall not exceed 10% of the outstanding
                                            Common Shares at the time of grant, on a non-diluted basis;

 

		(f)	the
                                            number of Common Shares issuable to any one insider of the Corporation within a one-year
                                            period pursuant to all of the Corporation’s share compensation arrangements shall not
                                            exceed 5% of the outstanding Common Shares at the time of grant, on a non-diluted basis;

 

		(g)	the
                                            number of options which may be issued to a consultant within a one-year period pursuant to
                                            all of the Corporation’s share compensation arrangements shall not exceed 2% of the
                                            outstanding Common Shares at the time of grant, on a non-diluted basis;

 

		(h)	the
                                            number of options issued to an employee of the Corporation or a subsidiary that conducts
                                            investor relation activities under the Plan within a one-year period pursuant to all of the
                                            Corporation’s share compensation arrangements shall not exceed 2% of the Common Shares
                                            outstanding at the time of grant, on a non-diluted basis;

 

		(i)	options
                                            are not transferable otherwise than by will or by the laws of descent and distribution, and
                                            options are exercisable, during the holder’s lifetime, only by the holder; and 

 

		(j)	provisions
                                            for adjustment in the number of Common Shares issuable thereunder in the event of the subdivision,
                                            consolidation, reclassification or change of the shares, a merger or other relevant changes
                                            in the Corporation’s capitalization.

 

The Board may,
with the approval of all stock exchanges and regulatory authorities having jurisdiction over the affairs of the Corporation, at any time
amend, revise or terminate the Option Plan if and when it is advisable in the discretion of the Board, except that the consent of an
optionholder is required if such amendment, revision or termination would adversely affect the rights of such optionholder under any
option granted to him, her or it.

 

Awards made under
the Option Plan are intended to reward contribution to the long-term performance of the Corporation. Option Awards serve to align participants’
interests with shareholders of the Corporation and provides additional incentive for participants to increase shareholder value by increasing
long-term equity participation. Awards of options under the Option Plan are based on performance of the Corporation and the respective
participant and determined in the discretion of the Board of Directors upon recommendation of the Compensation and Nominating Committee.
Previous awards are taken into account when the Compensation and Nominating Committee considers new option awards. There were an aggregate
of 1,102,571 options and 340,142 options (each on a post-Consolidation basis) issued to employees in the fiscal year ended June 2021
and in the fiscal year ended June 2020, respectively.

 

     

    - 14 -

    

 

Please see the tables that follow for
additional information on the option awards under the Option Plan.

 

		5.	Value of Perquisites; All Other
Compensation

 

“Value of
Perquisites” includes an automobile allowance payable to the CEO and “All other compensation” includes RRSP matching
from the Corporation for CEO and CFO. The matching is the amount that the Corporation is required to match the CEO’s and CFO’s
RRSP or IRA contribution in each year. The RRSP contribution is paid 50% in the same year and 50% two years later provided the NEO is
still employed at that time and is capped at $10,000 per year.

 

Table of compensation excluding compensation
securities for NEOs

 

The following table
sets forth all compensation for services in all capacities to the Corporation for the fiscal years ended June 30, 2021, and 2020
in respect of the NEOs.

  

	 	 	 	 	 	 	 	 	 	 	 	 	 	Value of	 	 	All other	 	 	Total	 
	Name and principal	 	 	 	Salary	 	 	Bonus	 	 	Director Fees	 	 	perquisites 3	 	 	compensation
    4	 	 	compensation	 
	position	 	Year	 	($)	 	 	($)	 	 	($)	 	 	($)	 	 	($)	 	 	($)	 
	William
    Wignall,	 	2021	 	$	425,635	 	 	$	600,000	 	 	 	     -	 	 	$	12,000	 	 	$	10,000	 	 	$	1,047,635	 
	President &
    Chief	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Executive
    Officer1 2	 	2020	 	$	360,000	 	 	$	370,000	 	 	 	-	 	 	$	12,000	 	 	$	10,000	 	 	$	752,000	 
	David
    Moore,	 	2021	 	$	296,751	 	 	$	300,000	 	 	 	-	 	 	 	-	 	 	$	10,000	 	 	$	606,751	 
	Chief
    Financial Officer2	 	2020	 	$	250,000	 	 	$	175,000	 	 	 	-	 	 	 	-	 	 	$	10,000	 	 	$	435,000	 
	John Tobia,	 	2021	 	$	259,616	 	 	$	200,000	 	 	 	-	 	 	 	-	 	 	 	-	 	 	$	459,616	 
	Executive
    Vice President,	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Corporate
    Development	 	2020	 	$	250,000	 	 	$	200,000	 	 	 	-	 	 	 	-	 	 	 	-	 	 	$	450,000	 

 

		1	Mr. Wignall
                                            is also a director of the Corporation but does not receive compensation for his services
                                            as a director.

 

		2	Salary
                                            includes any unused vacation payout

 

		3	Perquisites
                                            are a monthly automobile allowance in the amount of $12,000 per year

 

		4	Other
                                            compensation includes RRSP matching from the Corporation.

 

Table of compensation securities
for NEOs

 

The following table
sets forth the compensation securities of the Corporation issued to each NEO for the fiscal year ended June 30, 2021. Effective
as of November 2, 2021, the Corporation implemented the Consolidation on the basis of the Consolidation Ratio. The numbers and prices
of Common Shares and other information on securities convertible into Common Shares provided in this section are stated prior to giving
effect to the Consolidation.

 

     

    - 15 -

    

 

	Compensation securities
for NEOs
	Name
    and position	 	Type
    of compensation

 security	 	Number
    of securities

 underlying

 unexercised options

 (#)	 	 	Date
    of issue or

 grant	 	Option
    exercise 

price 1 

($)	 	 	Closing
    price of

 security on date of

 grant ($)	 	 	Closing
    price

 of security at year end 

($)	 	 	Option
    expiration

 date
	William
    Wignall, President 
& Chief Executive Officer	 	Options	 	 	2,425,000	 	 	February 9,
    2021	 	$	4.90	 	 	$	5.20	 	 	$	3.19	 	 	February 9,
    2026
	David Moore,
    
Chief Financial Officer	 	Options	 	 	1,112,500	 	 	February 9, 2021	 	$	4.90	 	 	$	5.20	 	 	$	3.19	 	 	February 9, 2026

 

1            Option
exercise price is the closing Common Share price on the day prior to the grant on a pre-Consolidation basis.

 

Table of exercise of compensation
securities by NEOs

 

The following table
sets forth the exercise by each NEO of compensation securities during the fiscal year ended June 30, 2021. Effective as of November 2,
2021, the Corporation implemented the Consolidation on the basis of the Consolidation Ratio. The numbers and prices of Common Shares
and other information on securities convertible into Common Shares provided in this section are stated prior to giving effect to the
Consolidation.

 

	Exercise of Compensation
securities by NEOs	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Difference	 	 	 	 
	 	 		 	Number
    of

    securities	 	 		 	 	 	 		 	 	between
    exercise

    price and closing	 	 		 
	Name
    and position	 	Type
    of

    compensation

    security	 	underlying

    securities

    exercised (#)	 	 	Exercise
    Price

    per security ($)	 	 	Date
    of Exercise	 	Closing
    price of

    security on date

    of exercise ($)	 	 	price
    of security

    on date of
 exercise ($)	 	 	Total
    value on

    exercise date 1 ($)	 
	William Wignall,
    
 President & Chief
 Executive Officer	 	Options  	 	 	185,985	 	 	$	0.28	 	 	November 20
    2020	 	$	2.86	 	 	$	2.58	 	 	$	479,841	 
	David Moore, 
 Chief Financial
    Officer	 	Options	 	 	62,817	 	 	$	0.28	 	 	November 23 2020	 	$	2.82	 	 	$	2.54	 	 	$	159,555	 

  

		1	Total
                                            value on exercise date equals the number of underlying securities multiplied by the difference
                                            exercise price and closing price of security on date of exercise (all on a pre-Consolidation
                                            basis).

 

RRSP Matching Plan

 

In Canada, the
Corporation matches RRSP contributions up to $10,000 per year for Messrs. Wignall and Moore. One half of the Corporation’s
matching obligation is paid into Messrs. Wignall’s and Moore’s RRSP plans in the calendar year in which Messrs. Wignall
and Moore make their contribution and the remaining one half of the Corporation’s matching obligation is paid into their RRSP plans
in the second fiscal year after the contribution by them, provided that they are still employed by the Corporation.

 

Termination of Employment, Change
in Responsibilities and Employment Contracts

 

The Corporation
has entered into executive employment contracts, as amended, with Messrs. Wignall, Moore and Tobia (the “Executive Contracts”).
Except as set out below, the Executive Contracts are for an indefinite term but may be terminated by the Corporation or the executive
in certain circumstances and subject to certain conditions, some of which are described below.

 

     

    - 16 -

    

 

The
Corporation may terminate the Executive Contracts at any time for cause, which includes disability or death of the executive,
without notice or pay in lieu of notice and without obligation to pay any further salary, bonus or benefits following the
termination date. In addition, the Corporation may terminate Mr. Wignall at any time without cause upon payment of fifteen
months salary, bonus, and continuation of benefits. Mr. Moore may be terminated without cause upon payment of twelve months
compensation, all accrued and unpaid vacation and continuation of benefits in accordance with the Ontario Employment Standards
Act, 2000, as amended. Mr. Tobia’s contract provides that his active duties will terminate on December 31, 2021
and he will be entitled to his salary and continuation of benefits thereafter up to and including June 30, 2022, and a six
month bonus for the period ended December 31, 2021. Pursuant to the terms of the Executive Contracts, Mr. Wignall and
Mr. Moore may terminate their Executive Contracts at any time upon not less than two months written notice to the Corporation.
Mr. Wignall and Mr. Moore are also entitled to terminate their Executive Contracts for “good reason”, in which
event Mr. Wignall shall be entitled to eighteen months and Mr. Moore will be entitled to fifteen months of severance, the
full bonus due over that period and benefits continuance. “Good reason” means (a) a material change in the
aggregate in their position, responsibility, compensation program, reporting or material benefits, (b) a “change of
control” (in which case they shall each have twelve months following such change of control to terminate their Executive
Contract for good reason and (c) in Mr. Wignall’s case only a requirement for him to be based anywhere other than
within 25 km of the Corporation’s current offices in Markham, Ontario. A “change of control” means any of the
following: (i) the acquisition by an arm’s-length third party, directly or indirectly, by way of take-over bid,
amalgamation, plan of arrangement or other process, of outstanding shares of the Corporation representing more than fifty percent
(50%) of the votes attaching to all outstanding voting shares of the Corporation, or (ii) the acquisition by an
arm’s-length third party, directly or indirectly, of all or substantially all of the assets of the Corporation or
(iii) the liquidation of the Corporation, whether through the declaration of a liquidating dividend or through an amalgamation
or restructuring that leads to liquidation or otherwise.

 

The following table
sets out the estimated termination costs for each of the NEOs assuming that the termination event took place on the last business day
of the fiscal year ended June 30, 2021.

 

	Name	 	Termination Event	 	Base Salary	 	 	Bonus	 	 	Stock Options	 	 	Benefits	 	 	RRSP Matching	 	 	TOTAL	 
	William Wignall, President & Chief	 	Without Cause	 	$	500,000	 	 	$	500,000	 	 	 	-	 	 	$	5,121	 	 	$	12,500	 	 	$	1,017,621	 
	Executive Officer	 	Good Reason	 	$	600,000	 	 	$	600,000	 	 	 	-	 	 	$	6,146	 	 	$	15,000	 	 	$	1,221,146	 
	David Moore,	 	Without Cause	 	$	300,000	 	 	$	300,000	 	 	 	-	 	 	$	4,097	 	 	$	10,000	 	 	$	614,097	 
	Chief Financial Officer	 	Good Reason	 	$	375,000	 	 	$	375,000	 	 	 	-	 	 	$	5,121	 	 	$	12,500	 	 	$	767,621	 
	John Tobia, Executive Vice President,

    Corporate Development	 	Without Cause	 	$	125,000	 	 	$	100,000	 	 	 	-	 	 	$	2,049	 	 	 	-	 	 	 	227,049	 

 

The Executive Contracts
provide for annual review of base salaries and increase at the discretion of the board. For the financial year ended June 30, 2021,
the impact of COVID-19 delayed decisions on compensation and, on January 1, 2021, Mr. Wignall’s base salary was increased
from $360,000 to $400,000, Mr. Moore’s base salary was increased from $250,000 to $300,000 and Mr. Tobia received a base
salary of $250,000.

 

Pursuant to the
terms of the Executive Contracts, the executives may earn a discretionary annual cash bonus. For the financial year ended June 30,
2021, Mr. Wignall was awarded a discretionary bonus of $600,000, Mr. Moore was awarded a discretionary bonus of $300,000 and
Mr. Tobia was awarded a discretionary bonus of $200,000.

 

The long-term
incentive options of Messrs. Wignall, Moore and Tobia have a term of five years from the date of the grant. All unvested
options terminate on the date of termination of employment with the Corporation, except in the event of a change of control
(as defined above) in which case all unvested options for Mr. Wignall and Mr. Moore immediately vest.

 

     

    - 17 -

    

 

On February 9,
2021, Mr. Wignall was granted 2,425,000 options at an exercise price of $4.90 per share (each on a pre-Consolidation basis) with
vesting of 25% on February 9, 2022, and thereafter in equal installments every three months until fully vested on February 9,
2026.

 

On February 9,
2021, Mr. Moore was granted 1,112,500 options at an exercise price of $4.90 per share (each on a pre-Consolidation basis) with vesting
of 25% on February 9, 2022, and thereafter in equal installments every three months until fully vested on February 9, 2026.

 

Each of the Executive
Contracts contains certain customary provisions dealing with assignment of intellectual property and non-competition, non-solicitation,
and confidentiality provisions in favor of the Corporation.

 

Except as otherwise
disclosed herein, there are no compensatory plans, contracts or arrangements in place with the NEOs resulting from the resignation, retirement
or any other termination of employment of the NEOs with the Corporation or from a change in control of the Corporation, or a change in
the NEOs’ responsibilities following a change in control, where in respect of the NEOs the value of such compensation exceeds $150,000.

 

Compensation of Non-NEO Directors

 

During the financial
year ended June 30, 2021, an aggregate of $268,244 in cash compensation was paid to non-NEO directors of the Corporation in their
capacity as directors. Each non-NEO director, other than Mr. Mandelstam, was paid a retainer of $7,500 per quarter for the period
up to December 31, 2020 and $12,500 per quarter from January 1, 2021. During the time that Mr. Mandelstam was Chairman,
he was paid an additional $1,250 per quarter. Mr. Wignall, the President and CEO of the Corporation, does not receive compensation
for serving as a director of the Corporation. The following table sets forth all compensation provided to the Corporation’s directors
for the years ended June 30, 2021 and 2020:

 

	Name and principal

 position	 	Year	 	Salary   

($)	 	 	Bonus   

($)	 	 	Director Fees 

   ($)	 	 	Value of

 perquisites

 3  ($)	 	 	All other

 compensation 4 

($)	 	 	Total

 compensation   

($)	 
	Norm Worthington,	 	2021	 	$	94,494	 	 	 	-	 	 	$	12,500	 	 	 	-	 	 	 	-	 	 	$	106,994	 
	Chairman1 2	 	2020	 	 	-	 	 	 	-	 	 	 	 	 	 	 	-	 	 	 	-	 	 	$	0	 
	Al Guarino,	 	2021	 	 	-	 	 	 	-	 	 	$	40,000	 	 	 	-	 	 	 	-	 	 	$	40,000	 
	Director 	 	2020	 	 	-	 	 	 	-	 	 	$	30,000	 	 	 	-	 	 	 	-	 	 	$	30,000	 
	Allan Brett,	 	2021	 	 	-	 	 	 	-	 	 	$	40,000	 	 	 	-	 	 	 	-	 	 	$	40,000	 
	Director 	 	2020	 	 	-	 	 	 	-	 	 	$	30,000	 	 	 	-	 	 	 	-	 	 	$	30,000	 
	Marc Lederman,	 	2021	 	 	-	 	 	 	-	 	 	$	12,500	 	 	 	-	 	 	 	-	 	 	$	12,500	 
	Director2	 	2020	 	 	-	 	 	 	-	 	 	 	 	 	 	 	-	 	 	 	-	 	 	$	0	 
	David Mandelstam,	 	2021	 	 	-	 	 	 	-	 	 	$	31,250	 	 	 	-	 	 	$	10,000	 	 	$	41,250	 
	Ex-Chairman2 3	 	2020	 	 	-	 	 	 	-	 	 	$	35,000	 	 	 	-	 	 	$	10,000	 	 	$	45,000	 
	Yves Laliberte,	 	2021	 	 	-	 	 	 	-	 	 	$	27,500	 	 	 	-	 	 	 	-	 	 	$	27,500	 
	Director2	 	2020	 	 	-	 	 	 	-	 	 	$	30,000	 	 	 	-	 	 	 	-	 	 	$	30,000	 

  

		1	In
                                            addition to becoming Chairman on March 31, 2021, Norman A. Worthington, III held
                                            a management position to assist with the integration of Star2Star following the acquisition.

 

		2	Norman
                                            A. Worthington, III and Marc Lederman replaced David Mandelstam and Yves Laliberte as
                                            directors on March 31, 2021 in connection with the Corporation’s acquisition of
                                            StarBlue Inc. on that date.

 

		3	Mr. Mandelstam
                                            controls Entropy Control Ltd., a company that provides certain services to the Corporation,
                                            including the preparation and filing of the Corporation’s SRED tax claims. The annual
                                            fee payable to Entropy Control Ltd. was $10,000.

 

The following table
sets forth the exercise by each non-NEO director of compensation securities during the year ended June 30, 2021. Effective as of
November 2, 2021, the Corporation implemented the Consolidation on the basis of the Consolidation Ratio. The numbers and prices
of Common Shares and other information on securities convertible into Common Shares provided in this table are stated prior to giving
effect to the Consolidation.

 

	Exercise
    of Compensation securities by non-executive Directors	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Difference	 	 	 	 
	 	 		 	Number
    of

    securities	 	 		 	 	 	 		 	 	between
    exercise

    price and closing	 	 		 
	Name
    and position	 	Type
    of

    compensation

    security	 	underlying

    securities

    exercised (#)	 	 	Exercise
    Price

    per security ($)	 	 	Date
    of Exercise	 	Closing
    price of

    security on date

    of exercise ($)	 	 	price
    of security

    on date of
 exercise ($)	 	 	Total
    value on

    exercise date 1 ($)	 
	Al Guarino	 	Options	 	 	2,340	 	 	$	0.30	 	 	June 22
    2021	 	$	3.18	 	 	$	2.88	 	 	$	6,739	 
	 	 	Options	 	 	47,660	 	 	$	0.30	 	 	June 10 2021	 	$	3.60	 	 	$	3.30	 	 	$	157,278	 
	Allan Brett	 	Options	 	 	9,368	 	 	$	0.30	 	 	June 22 2021	 	$	3.18	 	 	$	2.88	 	 	$	26,980	 
	 	 	Options	 	 	60,944	 	 	$	0.30	 	 	March 17 2021	 	$	3.68	 	 	$	3.38	 	 	$	205,991	 

 

The following
table sets forth the compensation securities of the Corporation issued to each non-NEO director for the fiscal year ended
June 30, 2021. Effective as of November 2, 2021, the Corporation implemented the Consolidation on the basis of the
Consolidation Ratio. The numbers and prices of Common Shares and other information on securities convertible into Common
Shares provided in this table are stated prior to giving effect to the Consolidation.

 

     

    - 18 -

    

 

	Compensation
    securities for NEOs
	Name
    and position	 	Type
    of compensation

    security	 	Number
    of securities

    underlying

    unexercised options

    (#)	 	 	Date
    of issue or

    grant	 	Option
    exercise 

    price 1 

    ($)	 	 	Closing
    price of

    security on date of

    grant ($)	 	 	Closing
    price

    of security at year end 

    ($)	 	 	Option
    expiration

    date
	Al Guarino,
 Director	 	Options	 	 	50,000	 	 	February 9,
    2021	 	$	4.90	 	 	$	5.20	 	 	$	3.19	 	 	February 9,
    2026
	Allan Brett,
 Director	 	Options	 	 	50,000	 	 	February 9, 2021	 	$	4.90	 	 	$	5.20	 	 	$	3.19	 	 	February 9, 2026
	David Mandelstam,
 Director	 	Options	 	 	50,000	 	 	February 9, 2021	 	$	4.90	 	 	$	5.20	 	 	$	3.19	 	 	February 9, 2026
	Yves Laliberte,
 Director	 	Options	 	 	50,000	 	 	February 9, 2021	 	$	4.90	 	 	$	5.20	 	 	$	3.19	 	 	February 9, 2026

 

1            Option
exercise price is the closing Common Share price on the day prior to the grant on a pre-Consolidation basis.

 

SECURITIES AUTHORIZED FOR ISSUANCE
UNDER EQUITY COMPENSATION PLANS

 

The following table
provides information as of the date of the end of the most recently completed year end, June 30, 2021, regarding the number of Common
Shares to be issued upon the exercise of outstanding options and the weighted-average exercise price of the outstanding options in connection
with the Option Plan. The Corporation does not have any equity compensation plans that have not been approved by Shareholders. Effective
as of November 2, 2021, the Corporation implemented the Consolidation on the basis of the Consolidation Ratio. The numbers and prices
of Common Shares and other information on securities convertible into Common Shares provided in the table below are stated prior to giving
effect to the Consolidation.

 

	 	 	As at June 30, 2021 pre consolidation	 
	 	 	 	 	 	 	 	 	Number of Common	 
	 	 	 	 	 	 	 	 	Shares remaining	 
	 	 	Number of Common	 	 	 	 	 	available for future	 
	 	 	Shares to be issued	 	 	Weighted-average	 	 	issuance under	 
	 	 	upon exercise of	 	 	exercise price of	 	 	equity compensation	 
	Plan Category	 	outstanding options	 	 	outstanding options	 	 	plans	 
	Stock Option Plan	 	 	11,111,170	 	 	$	3.62	 	 	 	2,203,980	 
	Total	 	 	11,111,170	 	 	$	3.62	 	 	 	2,203,980	 

 

The numbers and prices of Common Shares
and other information on securities convertible into Common Shares provided in the table below are stated after giving effect to the
Consolidation.

 

     

    - 19 -

    

 

	 	 	As at June 30, 2021 post consolidation	 	 	As at the date of this Circular	 
	Plan Category	 	Number of Common Shares to 

be issued upon

 exercise of

 outstanding options	 	 	Weighted-average

 exercise price of

 outstanding options	 	 	Number of Common 

Shares remaining

 available for future

 issuance under

 equity compensation

 plans	 	 	Number of

 Common Shares to

 be issued upon

 exercise of

 outstanding options	 	 	Weighted-average

 exercise price of

 outstanding options	 	 	Number of

 Common Shares

 remaining available

 for future issuance

 under equity

 compensation plans	 
	Stock Option Plan	 	 	1,587,310	 	 	$	25.34	 	 	 	314,854	 	 	 	1,782,574	 	 	$	19.76	 	 	 	120,222	 
	Total	 	 	1,587,310	 	 	$	25.34	 	 	 	314,854	 	 	 	1,782,574	 	 	$	19.76	 	 	 	120,222	 

 

REPORT ON CORPORATE GOVERNANCE

 

Maintaining a high
standard of corporate governance is a top priority for the Board of Directors and the Corporation’s management as it believes that
this will help create and maintain shareholder value in the long term. The Board of Directors has carefully considered its corporate
governance practices against the corporate governance guidelines set out in National Policy 58-201 – Corporate Governance Guidelines
and believes that the Corporation is well aligned with such guidelines. The Corporation has formally adopted a set of charters and
corporate governance policies which are referred to throughout this Circular. The Chairman of the Board of Directors is Mr. Norm
Worthington.

 

Independence of Directors

 

Upon the election
of the directors put forth for nomination at the Meeting, the Board of Directors will consist of a total of five directors of which Marc
Lederman, Al Guarino and Allan Brett are considered “independent” as such term is defined in National Instrument 58-101 –
Disclosure of Corporate Governance Practices. William Wignall is not considered independent as he is an executive officer of the
Corporation and Norm Worthington is not considered independent as he is or will be the direct or indirect holder of approximately 25%
of the Company’s Common Shares.

 

The independent
board members meet independently with the auditors annually and otherwise as necessary throughout the year.

 

None of the proposed
directors serve on the board of directors of a reporting issuer or the equivalent in a foreign jurisdiction.

 

Orientation and Continuing Education

 

The Corporation
has developed a directors’ handbook, which includes Board and Committee mandates, the Code of Business Conduct for employees, insider
trading policies and other relevant information. All new directors are given this briefing upon their appointment. The material is reviewed
and updated as required. As part of the continuing education of directors, management has periodic meetings with the directors at which
executive management update the directors on key business issues.

 

Code of Business Conduct

 

The
Board has adopted a written Code of Business Conduct for its employees, officers, and directors. A copy of the Code of Business Conduct
may be found on www.sedar.com The Board will monitor compliance, including through receipt
by the Audit Committee of reports of unethical behavior.

 

     

    - 20 -

    

 

Nomination of Directors

 

The
Compensation and Nominating Committee co-ordinates and manages the process of recruiting, interviewing, and recommending candidates
to the Board of Directors. This committee has a formal written charter which outlines the committee’s responsibilities,
requisite qualifications for new directors, the appointment and removal of directors and the reporting obligations to the Board of
Directors. In addition, the Compensation and Nominating Committee is given authority to engage and compensate any outside advisor
that it determines to be necessary to carry out its duties.

 

Compensation of Directors and the
Chief Executive Officer

 

For details on
the compensation of Directors and the CEO, please see the section above entitled “Executive Compensation Discussion and Analysis.”

 

Corporate Governance Committee

 

The role of the
Corporate Governance Committee is to develop and monitor the Corporation’s approach to matters of governance. The committee has
a formal written charter which outlines the committee’s responsibilities. The duties of the Corporate Governance Committee include
developing a position description for the chairman of the Board (the “Chairman”) and assessing the performance of
the Chairman. In addition, the Corporate Governance Committee is responsible for developing and implementing the orientation and educational
program for new recruits to the Board.

 

Assessments

 

The Board of Directors,
through its Corporate Governance Committee and Compensation and Nominating Committee, will regularly assess the overall performance of
the Board of Directors, the committees, and the individual directors through a combination of formal and informal means, including the
distribution of a Board Effectiveness Survey.

 

INDEBTEDNESS
OF DIRECTORS, EXECUTIVE OFFICERS 

AND SENIOR OFFICERS

 

No director, executive
officer or senior officer of the Corporation or proposed management nominee for election as a director of the Corporation, nor each associate
of any such director, officer, or proposed management nominee, is or has been indebted to the Corporation at any time during the last
completed financial year.

 

INTEREST OF INFORMED PERSONS
IN MATERIAL TRANSACTIONS

 

Except as set out
herein, no informed person (as such term is defined in the National Instrument 52-110 – Audit Committees) or proposed nominee
for election as a director of the Corporation nor any associate or affiliate of the foregoing has any interest, direct or indirect, in
any material transactions in which the Corporation has participated since July 1, 2020 or in any proposed transaction which has
materially affected or will materially affect the Corporation or any of its associates.

 

AUDIT COMMITTEE

 

Audit Committee’s Charter

 

As a TSX listed
company (since November 1, 2021 and a TSX Venture listed company prior thereto), the Corporation is required to have an audit committee
for the purpose of monitoring and enhancing the quality of the financial information disclosed by the Corporation. The Audit Committee
charter (the “Charter”) is reproduced as Schedule “A”.

     

    - 21 -

    

 

 

Composition of Audit Committee

 

The Audit Committee
is comprised of Al Guarino (Chair), Allan Brett and Marc Lederman. None of the members of the Audit Committee are employees, Control
Persons (as defined by the rules and policies of the TSXV) or officers of the Corporation. Each of the members of the Audit Committee
is “financially literate” (within the meaning given to such term in National Instrument 51-102 Continuous Disclosure Obligations).
Al Guarino, Allan Brett, and Marc Lederman are considered “independent”.

 

Relevant Education and Experience

 

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

 

Al Guarino is Chair
of the Audit Committee and is currently CEO of Seta Enterprises Inc. and CFO of Physiomed Health in Toronto. He has previously been CFO
of Health Holdings Company and was the Managing Partner of Arthur Andersen Enterprise Practice. He is a CPA and holds a Bachelor of Commerce
from the University of Toronto.

 

Allan Brett is
a CPA, CA and CBV, and is currently the CFO at The Descartes Systems Group Inc., a public company listed on the TSX and NASDAQ. From
June 1996 until January 2014, Mr. Brett was the CFO at Aastra Technologies Limited, a TSX listed company.

 

Marc Lederman is
a co-founder of NewSpring Capital and a General Partner of the Firm’s dedicated growth equity funds. He serves as a member of the
investment committee of all NewSpring Growth and NewSpring Mezzanine funds.

 

Audit Committee Oversight

 

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

 

Reliance on Certain Exemptions

 

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

 

Pre-Approval Policies and Procedures

 

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

 

External Auditor Service Fees (By
Category)

 

		a.	Audit
                                            Fees - The Corporation’s external auditors billed the Corporation $671,537 for fees
                                            associated with the audit work for the financial year ended June 30, 2021, and $454,740
                                            for the audit work related to the financial year ended June 30, 2020.

 

     

    - 22 -

    

 

		b.	Audit
                                            Related Fees - The Corporation’s external auditors billed the Corporation $285,450
                                            for assurance and related services that are reasonably related to the performance of the
                                            audit or reviewing the Corporation’s financial statements and are not included under
                                            “Audit Fees” (above) for the financial year ended June 30, 2021, and $189,390
                                            for the financial year ended June 30, 2020.

 

		c.	Tax
                                            Fees – The Corporation’s external auditors billed the Corporation $267,340 during
                                            the financial year ended June 30, 2021, for services related to tax compliance, tax
                                            advice and tax planning and $170,499 for the financial year ended June 30, 2020.

 

		d.	All
                                            Other Fees – The Corporation’s external auditors billed the Corporation $216,140
                                            for other services during the year ended June 30, 2021, and $182,275 for the financial
                                            year ended June 30, 2020.

 

Exemption

 

The Corporation
is relying upon the exemption in section 6.1 of National Instrument 52-110– Audit Committee.

 

PARTICULARS OF MATTERS
TO BE ACTED UPON AT THE MEETING

 

		1.	Receipt of Financial Statements

 

The consolidated
audited financial statements of the Corporation for the financial year ended June 30, 2021, and the auditor’s report thereon,
copies of which accompany this Circular, will be presented to the Shareholders at the Meeting.

 

		2.	Election of Directors

 

Shareholders have
authorized the board of directors by special resolution to fix the number of directors by resolution and the number of directors is currently
fixed at five.

 

It is proposed
that each of the persons whose name appears below be elected as a director of the Corporation to serve until the close of the next annual
meeting of shareholders or until his successor is elected or appointed. An affirmative vote of a majority of the votes cast at the Meeting
is sufficient for the election of directors and shareholders will vote for the election of each individual director separately.

 

In the event a
nominee is unable or unwilling to serve, an event that management of the Corporation has no reason to believe will occur, the persons
named in the accompanying form of proxy reserve the right to vote for another person at their discretion, unless a Shareholder has specified
in the form of proxy that the Common Shares subject to such proxy are to be withheld from voting for the election of directors.

 

     

    - 23 -

    

 

The following
table sets forth the name and residence of each person to be nominated by management of the Corporation for election as a director,
such person’s principal occupation, including his or her present position with the Corporation, the period or periods of his
or her service as a director of the Corporation, whether each nominee is an “independent” director (as that term is
defined in National Instrument 52-110 — Audit Committees, and the approximate number of Common Shares (on a
post-Consolidation basis) beneficially owned, directly or indirectly, or subject to control or direction, by such person as at the
date of this Circular:

 

	 Name and Place of Residence	 	  Principal Occupation	 	  Director Since	 	Independent Director Yes/No	 	Number of Common Shares Beneficially Owned or Controlled1
	William Wignall

4 Ontario, Canada	 	President and Chief Executive Officer of the Corporation	 	September 2010	 	No	 	277,8775
	Al Guarino2,3 

Ontario, Canada  	 	Chief Executive Officer of Seta Enterprise Inc, and Chief Financial Officer of Physiomed Health	 	 May 2014   	 	 Yes   	 	18,000
	Allan Brett2,3 

Ontario, Canada	 	Chief Financial Officer of The Descartes Systems Group Inc.	 	January, 2017 	 	Yes 	 	17,857
	Norman A. Worthington, III4

 Florida,
USA        	 	Chairman of Sangoma Technologies April 2021 to present; Executive Chairman of StarBlue from January 2018 to March 2021; Executive Chairman of the StarBlue Subsidiary from May 2018 to March 2021; CEO of StarBlue Subsidiary from 2006 to 2018 and from January 2020 until March 31, 2021	 	March, 2021	 	No	 	2,163,2546 
	Marc Lederman 2. 3, 4

 Pennsylvania, USA	 	Co-founder and General Partner, NewSpring Capital	 	March, 2021 	 	Yes 	 	Nil7  

 

		1	Individual directors have furnished
information as to Common Shares beneficially owned, controlled or directed, directly or indirectly, by such director. The Corporation
has relied on this information for purposes of this disclosure.

 

		2	Member
                                            of the Compensation and Nominating Committee.

 

		3	Member
                                            of the Audit Committee.

 

		4	Member
                                            of the Corporate Governance Committee.

 

		5	1,044
                                            of these Common Shares (on a post-Consolidation basis) are held by Olivia Wignall, the daughter
                                            of Bill Wignall.

 

		6	Old
                                            Town Gelato, LLC (controlled by Mr. Worthington), holds approximately 59% of the membership
                                            interests of Star2Star Holdings, LLC and, as such, Mr. Worthington will beneficially
                                            hold, upon distribution of the share consideration and the deferred consideration payable
                                            by the Corporation under the stock purchase agreement entered into in connection with the
                                            acquisition of StarBlue
Inc., directly or indirectly, approximately 24.6% of the issued and outstanding Common Shares (on a pro forma basic basis) and currently
indirectly controls, prior to the distribution of the deferred consideration, 11.4% of the issued and outstanding Common Shares as of
the date hereof.

 

		7	Mr. Lederman is also the
Chief Operating Officer of the General Partner of NewSpring Growth Capital III, L.P., which has a membership interest in Star2Star Holdings,
LLC. Upon distribution of the share consideration and the deferred consideration payable by the Corporation under the stock purchase
agreement entered into in connection with the acquisition of StarBlue Inc., NewSpring Growth Capital III-A2, L.P. will hold, directly
or indirectly, approximately 6.2% of the issued and outstanding Common Shares (on a pro forma basic basis) and currently indirectly holds,
prior to the distribution of the deferred consideration, 1.5% of the issued and outstanding Common Shares as of the date hereof.

 

To the knowledge of the Corporation,
no proposed director:

 

		(a)	is,
                                            as at the date of this, or has been, within 10 years before the date of this Circular, a
                                            director, chief executive officer or chief financial officer of any company (including the
                                            Corporation) that, (i) was
subject to an order that was issued while the proposed director was acting in the capacity as director,
chief executive officer or chief financial officer; or (ii) was subject to an order that was issued after the proposed director
ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that
person was acting in the capacity as director, chief executive officer or chief financial officer;

 

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

 

     

    - 24 -

    

 

		(c)	has,
                                            within the 10 years before the date of this Circular, become bankrupt, made a proposal under
                                            any legislation relating to bankruptcy or insolvency, or become subject to or instituted
                                            any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager
                                            or trustee appointed to hold the assets of the proposed director;

 

		(d)	has
                                            been subject to any penalties or sanctions imposed by a court relating to securities legislation
                                            or by a securities regulatory authority or has entered into a settlement agreement with a
                                            securities regulatory authority; or

 

		(e)	has
                                            been subject to any other penalties or sanctions imposed by a court or regulatory body that
                                            would likely be considered important to a reasonable security holder in deciding whether
                                            to vote for a proposed director.

 

The persons
named in the form of proxy which accompanies this Circular intend to vote FOR the election of the nominees listed above as directors
of the Corporation unless the Shareholder of the Corporation has specified in the form of proxy that the Common Shares represented by
such form of proxy are to be withheld from voting in respect thereof.

 

Majority Voting for Election of Directors

 

The Board has adopted
a “majority voting” policy, pursuant to which if a nominee for election as director does not receive a greater number of
votes “for” than votes “withheld” at a meeting of shareholders, such nominee shall offer his or her resignation
as a director to the Board promptly following the meeting of shareholders at which the director was elected. Upon receiving such offer
of resignation, the Nominating and Corporate Governance Committee will consider such offer and make a recommendation to the Board as
to whether or not to accept it. Notwithstanding the foregoing, the Board shall accept the offer of resignation absent exceptional circumstances.
The Board will determine whether or not to accept the resignation within 90 days following the meeting of shareholders. The Corporation
will announce the decision of the Board in a press release with respect to whether the Board has decided to accept such director’s
resignation. If the Board determines not to accept the resignation, the press release will state the reasons for that decision. The director
who tendered such resignation will not be part of any deliberations of any Board committee (including the Nominating and Corporate Governance
Committee if such director is a member thereof) or the Board pertaining to the resignation offer. The “majority voting” policy
only applies in circumstances involving an uncontested election of directors. For the purposes of the policy, an “uncontested election
of directors” means that the number of nominees for election as a director is not more than the number of directors proposed to
be elected to the Board.

 

		3.	Appointment of Auditor

 

Shareholders are
being asked to re-appoint MNP LLP as auditor of the Corporation to hold office until the next annual meeting of shareholders. Unless
authority to do so is withheld, proxies given pursuant to this solicitation by the management of the Corporation will be voted “FOR”
the appointment of MNP LLP as auditor of the Corporation to hold office until the close of the next annual meeting of Shareholders, at
a remuneration to be fixed by the Board.

 

Additional information
on the Corporation’s audit committee, and on the Corporation’s relationship with its independent auditor, is set out in the
section “Audit Committee”, above.

 

INTEREST OF CERTAIN PERSONS
IN MATTERS TO BE ACTED UPON

 

Except in so
far as they may be Shareholders and unless otherwise disclosed in this Circular, no person who has been a director or executive
officer of the Corporation at any time since July 1, 2020 or proposed nominee for election as a director of the Corporation,
nor any associate or affiliate of the foregoing persons has any material interest, direct or indirect, by way of beneficial
ownership of securities or otherwise, in any matters to be acted upon at the Meeting other than the election of directors.

 

     

    - 25 -

    

 

GENERAL

 

The consolidated
financial statements of the Corporation for the financial year ended June 30, 2021, together with the report of the auditors thereon,
will be presented to Shareholders at the Meeting for their consideration.

 

ADDITIONAL INFORMATION

 

Additional information
relating to the Corporation is available on SEDAR at www.sedar.com. Financial information is provided in the Corporation’s comparative
consolidated annual financial statements and Management’s Discussion and Analysis for the year ended June 30, 2021. Shareholders
may contact the Chief Financial Officer of the Corporation at (905) 474 1990 extension 4107, or in writing at the registered address
of the Corporation, to request copies of the Corporation’s consolidated financial statements and Management’s Discussion
and Analysis.

 

APPROVAL OF BOARD OF DIRECTORS

 

The contents of
this Circular and the sending of it to each director of the Corporation, to the auditor of the Corporation, to the Shareholders and to
the applicable regulatory authorities, have been approved by the directors of the Corporation.

 

	DATED at Markham, Ontario	 	 /s/ “Bill
    Wignall ”
	this 25th day of November, 2021.	 	 William Wignall
	 	 	President and Chief Executive Officer

 

     

     

    

 

SCHEDULE “A”

 

AUDIT
COMMITTEE CHARTER 

SANGOMA TECHNOLOGIES CORPORATION.

 

(the “Corporation”)

 

(Implemented pursuant to National
Instrument 52-110)

 

National Instrument
52-110 – Audit Committees (the “Instrument”) relating to the composition and function of audit committees,
effective March 30, 2004, as amended, applies to the Corporation. The Instrument requires all affected issuers to have a written
audit committee Charter which must be disclosed, as stipulated by Form 52-110F1 - Audit Committee Information Required in an
AIF, in its annual information form.

 

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

 

PART 1

 

Purpose:

 

The purpose of the Committee is to:

 

		(a)	improve
                                            the quality of the Corporation’s financial reporting;

 

		(b)	assist
                                            the board of directors to properly and fully discharge its responsibilities;

 

		(c)	provide
                                            an avenue of enhanced communication between the directors and external auditors;

 

		(d)	enhance
                                            the external auditor’s independence;

 

		(e)	increase
                                            the credibility and objectivity of financial reports;

 

		(f)	strengthen
                                            the role of the directors by facilitating in depth discussions between directors, management
                                            and external auditors; and

 

		(g)	overseeing
                                            the accounting and financial reporting processes of the Corporation and audits of the financial
                                            statements of the Corporation.

 

		1.1	Definitions

 

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

 

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

 

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

 

“Charter” means this audit
committee charter;

 

     

     

    

 

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

 

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

 

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

 

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

 

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

 

“MD&A” has the meaning
ascribed to it in National Instrument 51-102; “Member” means a member of the Committee;

 

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

 

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

 

		1.2	Meaning of Financially Literate

 

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

 

PART 2

 

		2.1	Audit Committee

 

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

 

		2.2	Relationship with External
Auditors

 

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

 

		2.3	Committee Responsibilities

 

		1.	The
                                            Committee shall review and, if advisable, select and recommend for the board of directors
                                            and shareholder approval the appointment of the external auditors for the purpose of preparing
                                            or issuing an auditor’s report or performing other audit, review or attest services
                                            for the Corporation.

 

		2.	The
                                            Committee shall recommend to the board of directors and have ultimate authority to approve
                                            all audit engagement terms and fees, including the auditors’ audit plan.

 

     

     

    

 

		3.	The
                                            Committee shall be directly responsible for overseeing the work of the external auditor engaged for the
purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Corporation, including
the resolution of disagreements between management and the external auditor regarding financial reporting. This responsibility shall
include:

 

		(a)	reviewing
                                            the audit plan with management and the external auditor;

 

		(b)	reviewing
                                            with management and the external auditor any proposed changes in major accounting policies,
                                            the presentation and impact of significant risks and uncertainties, and key estimates and
                                            judgements of management that may be material to financial reporting;

 

		(c)	questioning
                                            management and the external auditor regarding significant financial reporting issues discussed
                                            during the fiscal period and the method of resolution;

 

		(d)	reviewing
                                            any problems experienced by the external auditor in performing the audit, including any restrictions
                                            imposed by management or significant accounting issues on which there was a disagreement
                                            with management;

 

		(e)	reviewing
                                            audited annual financial statements, in conjunction with the report of the external auditor,
                                            and obtaining an explanation from management of all significant variances between comparative
                                            reporting periods;

 

		(f)	reviewing
                                            the post-audit or management letter, containing the recommendations of the external auditor,
                                            and management’s response and subsequent follow up to any identified weakness;

 

		(g)	reviewing
                                            interim unaudited financial statements before release to the public;

 

		(h)	reviewing
                                            all public disclosure documents containing audited or unaudited financial information before
                                            release, including any prospectus, the annual report, and management’s discussion and
                                            analysis;

 

		(i)	reviewing
                                            the evaluation of internal controls by the external auditor, together with management’s
                                            response;

 

		(j)	reviewing
                                            the terms of reference of the internal auditor, if any;

 

		(k)	reviewing
                                            the reports issued by the internal auditor, if any, and management’s response and subsequent
                                            follow up to any identified weaknesses;

 

		(l)	reviewing
                                            the appointments of the chief financial officer and any key financial executives involved
                                            in the financial reporting process, as applicable;

 

		(m)	reviewing
                                            and assessing the Committee’s performance, effectiveness and contribution, including
                                            an evaluation of whether this Charter appropriately addresses the matters that are and should
                                            be within its scope. The Committee will conduct such review and assessment in such manner
                                            as it deems appropriate and report the results thereof to the board of directors, including
                                            any recommended changes to this Charter and to the Corporation’s policies and procedures;
                                            and

 

		(n)	ensuring
                                            the Committee’s receipt from the external auditor of a formal written statement delineating
                                            all relationships between the auditor and the Corporation, actively engaging in a dialogue
                                            with the external auditor with respect to any disclosed relationships or services that may
                                            impact the objectivity and independence of the external auditor and taking, or recommending
                                            that the full board of directors take, appropriate action to oversee the independence of
                                            the outside auditor.

 

		4.	The
                                            Committee shall pre-approve all non-audit services to be provided to the Corporation or its
                                            subsidiary entities by the issuer’s external auditor.

 

		5.	The
                                            Committee shall review the Corporation’s financial statements, MD&A, and annual
                                            and interim earnings press releases before the Corporation publicly discloses this information.

 

     

     

    

 

		6.	The
                                            Committee shall ensure that adequate procedures are in place for the review of the Corporation’s
                                            public disclosure of financial information extracted or derived from the Corporation’s
                                            financial statements, and shall periodically assess the adequacy of those procedures.

 

		7.	When
                                            there is to be a change of auditor, the Committee shall review all issues related to the
                                            change, including the information to be included in the notice of change of auditor called
                                            for under National Instrument 51-102, and the planned steps for an orderly transition.

 

		8.	The
                                            Committee shall review all reportable events, including disagreements, unresolved issues
                                            and consultations, as defined in National Instrument 51-102, on a routine basis, whether
                                            or not there is to be a change of auditor.

 

		9.	The
                                            Committee shall, as applicable, establish procedures for:

 

		(a)	the
                                            receipt, retention and treatment of complaints received by the Corporation regarding accounting,
                                            internal accounting controls, or auditing matters; and

 

		(b)	the
                                            confidential, anonymous submission by employees of the Corporation of concerns regarding
                                            questionable accounting or auditing matters.

 

		10.	As
                                            applicable, the Committee shall establish, periodically review and approve the Corporation’s
                                            hiring policies regarding partners, employees and former partners and employees of the present
                                            and former external auditor of the issuer, as applicable.

 

		11.	The
                                            responsibilities outlined in this Charter are not intended to be exhaustive. Members should
                                            consider any additional areas which may require oversight when discharging their responsibilities.

 

		2.4	De
                                            Minimus Non-Audit Services

 

The Committee shall satisfy the pre-approval
requirement in subsection 2.3(3) if:

 

		(a)	the
                                            aggregate amount of all the non-audit services that were not pre-approved is reasonably expected
                                            to constitute no more than five per cent of the total amount of fees paid by the Corporation
                                            and its subsidiary entities to the corporation’s external auditor during the financial
                                            year in which the services are provided;

 

		(b)	the
                                            Corporation or the subsidiary of the Corporation, as the case may be, did not recognize the
                                            services as non-audit services at the time of the engagement; and

 

		(c)	the
                                            services are promptly brought to the attention of the Committee and approved by the Committee
                                            or by one or more of its members to whom authority to grant such approvals has been delegated
                                            by the Committee, prior to the completion of the audit.

 

		2.5	Delegation of Pre-Approval
Function

 

		1.	The
                                            Committee may delegate to one or more independent Members the authority to pre-approve non-audit
                                            services in satisfaction of the requirement in subsection 2.3(3).

 

		2.	The
                                            pre-approval of non-audit services by any Member to whom authority has been delegated pursuant
                                            to subsection 2.5(1) must be presented to the Committee at its first scheduled meeting
                                            following such pre-approval.

 

PART 3

 

		3.1	Composition

 

		1.	The
                                            Committee shall be appointed annually by the board of directors and consist of at least three
                                            (3) members from among the directors of the Corporation, each of whom shall be independent
                                            as required by applicable securities legislation and stock exchange regulations and free
                                            from any direct or indirect relationship that, in the opinion of the board of directors,
                                            could reasonably interfere with the exercise of his or her independent judgment as a member
                                            of the Committee. Officers of the Corporation, including the Chairman of
the board of directors, may not serve as members of the Audit Committee.

 

     

     

    

 

		2.	The
                                            board of directors, at its organizational meeting held in conjunction with each annual meeting
                                            of shareholders, shall appoint the Members for the ensuing year. The board of directors may
                                            at any time remove or replace any Member and may fill any vacancy in the Committee. Any Member
                                            ceasing to be a director shall cease to be a Member. Where a vacancy occurs at any time in
                                            the membership of the Committee, it may be filled by the board of directors on the recommendation
                                            of the Committee and will be filled by the board of directors if the membership of the Committee
                                            falls below three directors.

 

		3.	The
                                            board of directors shall appoint the Chairman of the Committee.

 

		4.	Unless
                                            an exemption is provided for under the Instrument and applicable securities laws and stock
                                            exchange requirements, each audit committee member shall be financially literate.

 

PART 4

 

		4.1	Authority

 

The Committee shall have the authority
to:

 

		(a)	engage
                                            independent counsel and other advisors as it determines necessary to carry out its duties;

 

		(b)	set
                                            and pay the compensation for any advisors employed by the Committee;

 

		(c)	communicate
                                            directly with the internal and external auditors; and

 

		(d)	recommend
                                            the amendment or approval of audited and interim financial statements to the board of directors.

 

		4.2	The
                                            Corporation shall provide for appropriate funding, as determined by the Committee, in its
                                            capacity as a committee of the board of directors, for payment of (a) compensation to
                                            its external auditor engaged for the purpose of preparing or issuing an audit report or performing
                                            other audit, review or attest services for the Corporation, (b) compensation to any
                                            advisors employed by the Committee pursuant to Section 4.1(a) and (c) ordinary
                                            administrative expenses of the Committee that are necessary or appropriate in carrying out
                                            its duties.

 

PART 5

 

		5.1	Disclosure in Information Circular

 

If management of
the Corporation solicits proxies from the security holders of the Corporation for the purpose of electing directors to the board of directors,
the Corporation shall include in its management information circular a cross-reference to the sections in the Corporation’s annual
information form that contain the information required by Form 52-110F1 - Audit Committee Information Required in an AIF.

 

PART 6

 

		6.1	Meetings

 

		1.	Meetings
                                            of the Committee shall be scheduled to take place at regular intervals and, in any event,
                                            not less frequently than quarterly.

 

		2.	Opportunities
                                            shall be afforded periodically to the external auditor, the internal auditor and to members of senior management
to meet separately with the Members.

 

     

     

    

 

		3.	Notice
                                            of the time and place of every Committee meeting will be given verbally or in writing to
                                            each Member and to the Chief Executive Officer and the Chief Financial Officer at least 24
                                            hours prior to the time fixed for such meeting. The external auditor of the Corporation will
                                            be given notice of every Committee meeting and, at the expense of the Corporation, will be
                                            entitled to attend and be heard thereat.

 

		4.	If
                                            requested by a Committee member, the external auditor will attend every Committee meeting
                                            held during such external auditor’s term of office.

 

		5.	A
                                            majority of the Committee constitutes a quorum. No business may be transacted by the Committee
                                            except by resolution in writing signed by all the Members or at a Committee meeting at which
                                            a quorum of the Committee is present in person or by means of such telephonic, electronic
                                            or other communication facilities as permit all persons participating in the meeting to communicate
                                            with each other simultaneously and instantaneously. At Committee meetings, Committee actions
                                            shall require approval of a majority of the Members.

 

		6.	Minutes
                                            shall be kept of all meetings of the Committee.

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