Document:

Exhibit
10.4

 

SECURITY
AGREEMENT

 

This
Security Agreement dated as of February 21, 2020 made by Permex Petroleum Corporation (“Grantor”) in favour of __________________________________________
(“Investor”).

 

Capitalized
terms used herein but not otherwise defined herein shall have the meanings ascribed to them in the Secured Debenture Purchase Agreement
between Grantor and Investor dated February 21, 2020.

 

WHEREAS

 

	A.	Pursuant
    to the Agreement, by and among the Grantor and the Investor and the related Debenture, Investor has agreed to make an advance of
    $100,000.00 and to extend certain financial accommodations to the Grantor in the amount and in the manner set forth in the Agreement
    and the Debenture (collectively, the “Investment”).
	 	 
	B.	The
    Investor is willing to make the Investment to the Grantor only upon the condition, among others, that Grantor shall have executed
    and delivered to the Investor this Security Agreement.

 

NOW
THEREFORE in order to induce the Investor to make the Investment and for the other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and intending to be legally bound, the Grantor hereby represents, warrants, covenants and
agrees as follows:

 

	1.	Secured
    Obligations. The Grantor agrees to pay the Investor all of the unpaid principal amount of, and accrued interest on, the Debenture,
    in accordance with the terms thereof, and all other indebtedness, liabilities and obligations of the Grantor to the Investor, whether
    now existing or hereafter incurred, arising out of or in connection with the Agreement, the Debenture or this Security Agreement
    (“Secured Obligations”).
	 	 
	2.	Grant
    of Security Interest. As collateral security for the prompt and complete payment and performance when due (whether at stated
    maturity, by acceleration or otherwise) of all Secured Obligations and in order to induce the Investor to cause the investment to
    be made, the Grantor hereby, assigns, conveys, mortgages, pledges, hypothecates and transfers to the Investor, for the benefit of
    the Investor, and hereby grants to the Investor, a security interest in all of Grantor’s right, title and interest in the Properties
    (as defined in the Agreement) together with all engineering reports and intellectual property related to, or generated by the Corporation
    in connection with, the Properties (collectively called the “Collateral”). The Properties include all of the oil and
    gas assets, Working Interest and Royalty Interest that the company owns as of the date of this agreement.
	 	 
	3.	Representations
    and Warranties. The Grantor hereby represents and warrants to the Investor that except for the security interest granted under
    this Security Agreement, the Grantor will be, upon purchase of the Property, the sole legal and equitable owner of the Collateral
    in which it purports to grant a security interest hereunder, having good, marketable title thereto and that the investor shall have
    a valid, binding and enforceable lien and/or security interest in and to the Collateral.

 

    	-1-

    	 

    

 

	4.	Covenants.
    The Grantor covenants and agrees with the Investor that from and after the date of this Security Agreement and until the Secured
    Obligations have been performed and paid in full:

 

4.1
Further Assurances. At any time and from time to time, upon the written request of the Investor, and at the sole expense of the
Grantor, the Grantor shall promptly and duly execute and deliver any and all such further instruments and documents and take such further
actions as the Investor may reasonably deem desirable to obtain the full benefit of this Security Agreement. At the request of the Investor,
the Grantor shall execute all necessary documentation to perfect the registration in Canada or the US, of the Secured Obligations and
the Collateral by giving 20 days written notice.

 

4.2
Maintenance of Records. The Grantor shall keep and maintain at its own cost and expense satisfactory and complete record of the
Collateral. The Grantor shall allow reasonable access to such records upon reasonable notice from Investor.

 

4.3
Collateral. The Grantor agree that they will not, without the prior written consent of the Investor, consent to, permit or suffer
or occur any sale, transfer, hypothecation, lien, or use of any of the Collateral adversely affecting the interest of the Investor therein.

 

	5.	Rights
    and Remedies Upon Default. If any Event of Default shall occur and be continuing, the Investor shall have the right to take title
    to, seize, assign, sell and otherwise dispose of the Collateral, either at public or private sale, for cash, credit or otherwise,
    with or without representations and warranties, and upon such terms as shall be reasonable unless they were precluded in doing so
    by another investor involved in the Financing, and the Investor may bid or become the purchaser at such sale, and such Investor shall
    have the right at its option to apply or credit the amount of all or any part of the Secured Obligations owing to it against the
    purchase price bid by it at any such sale. If Notification to the Grantor of any intended disposition by the Investor of any of the
    Collateral is required by applicable law, such notification will be deemed to have been reasonable and proper if given at least thirty
    (30) days prior to such disposition.
	 	 
	6.	Reinstatement.
    This Security Agreement shall remain in full force and effect and continue to be effective should any petition by filed by or against
    the Grantor for liquidation or reorganization, should the Grantor become insolvent or make an assignment for the benefit of investors
    or should a receiver or trustee be appointed for all or any significant part of the Grantor’s property and assets, and shall
    continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations,
    or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by
    any oblige of the Secured Obligations, whether as a “voidable preference”, “fraudulent conveyance”, or otherwise,
    all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced,
    restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded,
    reduced, restored or returned.

 

    	-2-

    	 

    

 

	7.	Miscellaneous.

 

	 	7.1	No
    Waiver; Cumulative Remedies.

 

(a)
The Investor shall not by any act, delay, omission or otherwise be deemed to have waived any of their respective rights or remedies hereunder,
nor shall any single partial exercise of any right or remedy hereunder on any one occasion preclude the further exercise thereof of the
exercise of any other right or remedy.

 

(b)
The rights and remedies hereunder provided are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights
and remedies provided by law.

 

(c)
None of the terms or provisions of this Security Agreement may be waived, altered, modified or amended except by an instrument in writing,
duly executed by Grantor and Investor.

 

7.2
Termination of This Security Agreement. This Security Agreement shall terminate upon the payment and performance in full of the
Secured Obligations.

 

7.3
Successor and Assigns. This Security Agreement shall be binding upon the successors of Grantor and Investor and may not be assigned
by any party.

 

7.4
Counterparts. This Security Agreement may be executed in two or more counterparts each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

 

7.5
Titles and Subtitles. The titles of the sections and subsections of this Security Agreement are not to be considered in construing
this Security Agreement.

 

7.6
Severability. In case any provision of this Security Agreement shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

7.7
Agreement is Entire Contract. This Security Agreement, together with the Debenture, the Agreement, and the Investor Questionnaire
constitutes the final, complete and exclusive contract between the parties hereto with respect to the subject matter hereof and no party
shall be liable or bound to the other in any manner by any warranties, representations, guarantees or covenants except as specifically
set forth herein and in such other documents referred to above. Nothing in the Security Agreement, express or implied, is intended to
confer upon any party, other than the parties hereto, and their respective successors and assigns, any right, remedies, obligations or
liabilities under or by reason of this Security Agreement, except as expressly provided herein.

 

7.8
Relationship of Certain Rights and Obligations. The repayment of the Investment does not diminish, curtail, amend, alter, or otherwise
change Grantor’s obligations to repay the investment.

 

    	-3-

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be executed as of the date first set out above.

 

	 	 	)	Date:
    February 21, 2020
	WITNESSED
    	BY:	)	 
	 	 	)	Permex
    Petroleum Corporation
	 	 	)	 
	 	 	)	 
	 	 	)	 
	 	 	)	Mehran
    Ehsan , CEO
	 	 	)	 
	 	 		 
	 	 	)	 
	WITNESSED
    	BY:	)	 
	 	 	)	Date:
    February 21, 2020
	 	 	)	 
	 	 	)	 
	 	 	)	Mehran
    Ehsan
	 	 	)	Full
    Legal Name of Investor (Please Print)
	 	 	)	 
	 	 	)	 
	 	 	)	 
	 	 	)	Signature
    of Investor or Authorized Representative
	 	 	)	 

 

    	-4-Exhibit
10.5

 

SECURED
DEBENTURE PURCHASE AGREEMENT

 

This
secured convertible debenture purchase agreement (this “Agreement”) is entered into effective February 21, 2020

 

BETWEEN

 

Permex
Petroleum Corporation, a British Columbia corporation with its offices at 1290-625 Howe Street, Vancouver, BC V6C 2T6, Canada (the “Corporation”)
and Permex Petroleum US Corporation (the “Subsidiary).

 

AND

 

Mehran
Ehsan

 

(the
“Investor”)

 

WHEREAS

 

	1.	The
                                            Corporation requires up to $500,000.00 CAD for general working capital purposes.
	 	 
	2.	The
                                            Investor wishes to loan $100,000.00 CAD
	 	 
	3.	(the
                                            “Loan”) to the Corporation on the terms and subject to the terms and conditions
                                            described in this Agreement and the debenture (the “Debenture”) set forth in
                                            Exhibit “A” to this Agreement.

 

THEREFORE,
in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency
of which are hereby acknowledged), the parties covenant and agree as follows:

 

	1.	Purchase
                                            and Sale of the Debenture

 

		1.1.	Authorization.
                                            Pursuant to this Agreement and in consideration for the Loan, the Corporation has authorized
                                            the issuance to the Investor of one Debenture in the principal amount of $100,000.00 having
                                            the terms set forth in the form attached hereto as Exhibit “A”.
	 	 	 
		1.2.	Issuance
                                            and Sale of Securities. Subject to the terms and conditions hereof, the Corporation hereby
                                            agrees to issue and sell to the Investor, and the Investor hereby agrees to accept delivery
                                            from the Corporation of, the Debenture in the principal amount of $100,000.00.
	 	 	 
		1.3.	Advance
                                            of Funds. The delivery of the Debenture shall take place within 10 business day of the
                                            investor having deposited the principal amount of the Loan into the bank account of the Corporation.

 

    	-1-

     

    

 

		1.4.	Repayment
                                            Terms. Outstanding principal and accrued interest on the Debenture shall be fully due
                                            and payable in accordance with the terms set forth in the Debenture as set out in Exhibit
                                            “A”.
	 	 	 
		1.5.	Use
                                            of Proceeds. The Corporation will use proceeds of the debenture agreement for general
                                            working capital purposes

 

	2.	Security.
                                            As security for the due payment of the Loan in accordance with the terms of the Debenture,
                                            the Corporation will execute the Security Agreement attached hereto as Exhibit “B”,
                                            pursuant to which it will assign, convey, mortgage, pledge, hypothecate and transfer to the
                                            Investor, for the benefit of the Investor, and grant to the Investor, a security interest
                                            in all of the Corporation’s right, title and interest in all of its Properties. Furthermore
                                            the Properties include all of the oil and gas assets, Working Interest and Royalty Interest
                                            that the company owns as of the date of this agreement.
	 	 
	3.	Representations
                                            and Warranties of the Corporation. The Corporation hereby represents and warrants to
                                            the Investor the following, as of the date hereof, and as of the date of closing:

 

		3.1.	Organization
                                            and Standing. The Corporation is a corporation duly organized, validly existing and in
                                            good standing under the laws of the Province of British Columbia and has all requisite corporate
                                            power and authority to carry on its business as now conducted and as proposed to be conducted.
                                            The Corporation is duly qualified to transact business and is in good standing in each jurisdiction
                                            in which the failure to so qualify is reasonably likely to have a material adverse effect
                                            on its business or its properties.
	 	 	 
		3.2.	Authorization.
                                            All corporate action on the part of the Corporation, its officers and directors necessary
                                            for the authorization, execution and delivery of this Agreement and the Debenture and performance
                                            of all obligations of the Corporation hereunder and thereunder, has been or shall be taken
                                            prior to the closing, and this Agreement, the Debenture when executed and delivered, shall
                                            constitute the valid and legally binding obligations of the Corporation, enforceable in accordance
                                            with their terms.
	 	 	 
		3.3.	Consents.
                                            No consent, approval, order or authorization of, or registration, qualification, designation,
                                            declaration or filing with any third party or any federal, state or provincial governmental
                                            authority on the part of the Corporation is required in connection with the consummation
                                            of the transactions contemplated herein.
	 	 	 
		3.4.	No
                                            Conflicts. Neither the execution and delivery of this Agreement, the Debenture, or the
                                            Security Agreement by the Corporation nor the consummation by the Corporation of the transactions
                                            contemplated herein will (a) conflict with or result in any breach of any provision of the
                                            Corporation, (b) violate in any material respect any statute, rule, regulation, order, writ,
                                            Page 3 of 8 of the Secured Debenture Agreement Permex Petroleum Corporation injunction, decree
                                            or arbitration award applicable to the Corporation or its assets, or (c) breach in any material
                                            respect any other material agreement, undertaking, contract, or security agreement to which
                                            the Corporation is subject.
	 	 	 
		3.5.	No
                                            Defaults. No Event of Default, as defined in Section 5.1 of this Agreement, shall have
                                            occurred and be continuing prior to the closing.

 

    	-2-

     

    

 

	4.	Representations
                                            and Warranties of the Investor. The Investor represents and warrants to the Corporation
                                            the following, as of the date hereof, and as of the date of closing:

 

		4.1.	Organization
                                            and Standing. If the Investor is a body corporate, the Investor is duly incorporated
                                            and validly subsisting under the laws of its jurisdiction of incorporation. This Agreement
                                            has been duly and validly authorized, executed and delivered by, and constitutes a legal,
                                            valid, binding and enforceable obligation of, the Investor. If the Investor is acting as
                                            agent or trustee for a principal, the Investor is duly authorized to execute and deliver
                                            this Agreement and all other necessary documents in connection with such subscription on
                                            behalf of such principal, and this Agreement has been duly authorized, executed and delivered
                                            by or on behalf of, and constitutes a legal, valid, binding and enforceable obligation of,
                                            such principal.
	 	 	 
		4.2.	Authorization.
                                            If the Investor is an individual, the Investor is of the full age of majority in the jurisdiction
                                            in which this Agreement is executed and is legally competent to execute and deliver this
                                            Agreement, to perform all of its obligations hereunder, and to undertake all actions required
                                            of the Investor hereunder. If the Investor is not an individual, the Investor has the requisite
                                            power, authority, legal capacity and competence to execute and deliver this Agreement, to
                                            perform all of its obligations hereunder, and to undertake all actions required of the Investor
                                            hereunder, and all necessary approvals of its directors, partners, shareholders, trustees
                                            or otherwise with respect to such matters have been given or obtained.
	 	 	 
		4.3.	No
                                            Conflicts. The execution, delivery and performance by the Investor of this Agreement
                                            and the completion of the transactions contemplated hereby do not and will not result in
                                            a violation of any law, regulation, order or ruling applicable to the Investor, and do not
                                            and will not constitute a breach of or default under any of the Investor’s constating
                                            documents (if the Investor is not an individual) or any agreement to which the Investor is
                                            a party or by which it is bound.
	 	 	 
		4.4.	Investment.
                                            The Investor confirms that the Investor is purchasing the Debenture as an “accredited
                                            investor” (as such term is defined in National Instrument 45-106 - “Prospectus
                                            and Registration Exemptions” (“NI 45-106”), it is purchasing the Debenture
                                            as principal for its own account and not for the benefit of any other person and has concurrently
                                            executed and delivered the Accredited Investor Representation Letter in the form attached
                                            as Exhibit C to this Agreement along with a completed copy of Appendix A to Exhibit C, Page
                                            4 of 8 of the Secured Debenture Agreement Permex Petroleum Corporation and has such knowledge
                                            in financial and business affairs as to be capable of evaluating the merits and risks of
                                            its investment in the Debenture.

 

    	-3-

     

    

 

		4.5.	International
                                            Investors. If the Investor is resident outside of Canada and the United States, the Investor:

 

		a)	is
                                            knowledgeable of, or has been independently advised as to the applicable securities laws
                                            of the securities regulatory authorities (the “Authorities”) having application
                                            in the jurisdiction in which the Investor is resident (the “International Jurisdiction”)
                                            which would apply to the acquisition of the Debenture, if any;
	 	 	 
		b)	is
                                            purchasing the Debenture pursuant to exemptions from the prospectus and registration or equivalent
                                            requirements under the applicable securities laws of the Authorities in the International
                                            Jurisdiction or, if such is not applicable, the Investor is permitted to purchase the Debenture
                                            under the applicable securities laws of the Authorities in the International Jurisdiction
                                            without the need to rely on any exemption;
	 	 	 
		c)	confirms
                                            that the applicable securities laws of the Authorities in the International Jurisdiction
                                            do not require the Issuer to make any filings or seek any approvals of any nature whatsoever
                                            from any Authority of any kind whatsoever in the International Jurisdiction in connection
                                            with the issue and sale or resale of the Debenture; and
	 	 	 
		d)	confirms
                                            that the purchase of the Debenture by the Investor does not trigger:

 

		(i)	an
                                            obligation to prepare and file a registration statement, offering memorandum, prospectus,
                                            offering circular or similar document, or any other report with respect to such purchase
                                            in the International Jurisdiction; or
	 	 	 
		(ii)	continuous
                                            disclosure reporting obligations of the Corporation in the International Jurisdiction; and

 

		e)	the
                                            Investor will, if requested by the Corporation, comply with such other requirements as the
                                            Corporation may reasonably require.

 

		4.6.	Sophistication.
                                            The Investor is capable of assessing the proposed investment in the Debenture as a result
                                            of the Investor’s own experience or as a result of advice received from a person registered
                                            under applicable securities legislation.
	 	 	 
		4.7.	No
                                            Regulatory Review. The Investor understands that no securities commission, stock exchange,
                                            governmental agency, regulatory body or similar authority has made any finding or determination
                                            or expressed any opinion with respect to the merits of investing in the Debenture. The Investor
                                            acknowledges that no prospectus has been filed by the Corporation with any securities commission
                                            or similar regulatory authority in any jurisdiction in connection with the issuance of the
                                            Debenture and the issuance is exempted from the prospectus requirements available under the
                                            provisions of applicable securities laws and as a result:

 

		4.7.1.	the
                                            Investor may be restricted from using some of the civil remedies otherwise available under
                                            applicable securities laws;

 

    	-4-

     

    

 

		4.7.2.	the
                                            Investor may not receive information that would otherwise be required to be provided to it
                                            under applicable securities laws; and
	 	 	 
		4.7.3.	the
                                            Corporation is relieved from certain obligations that would otherwise apply under applicable
                                            securities laws.

 

		4.8.	Residence.
                                            The Investor is resident in the jurisdiction indicated on the execution page of this Agreement
                                            as the “Investor’s Address” and the purchase by and sale to the Investor
                                            of the Debenture, and any act, solicitation, conduct or negotiation directly or indirectly
                                            in furtherance of such purchase and sale (whether with or with respect to the Investor or
                                            any beneficial purchaser) has occurred only in such jurisdiction.
	 	 	 
		4.9.	Disclosure
                                            of Personal Information. The Investor acknowledges that it and/or the Corporation may
                                            be required to provide applicable securities regulatory authorities or stock exchanges with
                                            information concerning the identities of the beneficial purchasers of the Debenture and the
                                            Investor agrees that, notwithstanding that the Investor may be purchasing the Debenture as
                                            agent for an undisclosed principal, the Investor will provide to the Corporation, on request,
                                            particulars as to the identity of such undisclosed principal as may be required by the Corporation
                                            in order to comply with the foregoing.
	 	 	 
		4.10.	Not
                                            a U.S. Person. The Investor is not a “U.S. Person” (as that term is defined
                                            by Regulation S under the U.S. Securities Act, which definition includes, but is not limited
                                            to, an individual resident in the United States, an estate or trust of which any executor
                                            or administrator or trustee, respectively, is a U.S. Person and any partnership or corporation
                                            organized or incorporated under the laws of the United States) and is not acquiring the Debenture
                                            for the account or benefit of a U.S. Person or a person in the United States. The Debenture
                                            has not been offered to the Investor in the United States, and any individuals executing
                                            and delivering this Agreement on behalf of the Investor were not in the United States when
                                            the order was placed and this Agreement was executed and delivered.
	 	 	 
		4.11.	Additional
                                            Disclosure. If required by applicable securities legislation, regulations, rules, policies
                                            or orders or by any securities commission, stock exchange or other regulatory authority,
                                            the Investor will execute, deliver, file and otherwise assist the Corporation in filing,
                                            such reports, undertakings and other documents with respect to the issue of the Debenture.
	 	 	 
		4.12.	No
                                            Other Representations. The Investor has not relied upon any verbal or written representation
                                            as to fact or otherwise made by or on behalf of the Corporation except as expressly set forth
                                            herein.

 

    	-5-

     

    

 

		4.13.	Anti
                                            Money Laundering. The funds representing the Loan which will be advanced by the Investor
                                            to the Corporation hereunder will not represent proceeds of crime for the purposes of the
                                            Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the
                                            “PCMLA”) and the Page 6 of 8 of the Secured Debenture Agreement Permex
                                            Petroleum Corporation Investor acknowledges that the Corporation may in the future be required
                                            by law to disclose the Investor’s name and other information relating to this Agreement
                                            and the Investor’s subscription hereunder, on a confidential basis, pursuant to the
                                            PCMLA. To the best of its knowledge none of the subscription funds to be provided by the
                                            Investor: (a) have been or will be derived from or related to any activity that is deemed
                                            criminal under the laws of Canada, the United States of America, or any other jurisdiction;
                                            or (b) are being tendered on behalf of a person or entity who has not been identified to
                                            the Investor. The Investor shall promptly notify the Corporation if the Investor discovers
                                            that any of such representations ceases to be true and shall provide the Corporation with
                                            appropriate information in connection therewith.

 

	5.	Default.

 

		5.1.	Events
                                            of Default. With respect to the Debenture, the Security Agreement, and this Agreement,
                                            the following events are “Events of Default” thereunder and hereunder:

 

		5.1.1.	The
                                            Corporation shall default in the payment of principal of or any interest on the Debenture
                                            after fifteen (15) days’ written notice from the Investor following the date when the
                                            same is due and payable; or
	 	 	 
		5.1.2.	The
                                            Corporation shall default in the due performance or observance of any other material covenant,
                                            agreement or provision herein, or in the Debenture, or the Security Agreement, to be performed
                                            or observed by the Corporation, or a material breach shall exist in any representation or
                                            warranty herein contained, or in any Debenture, or the Security Agreement, as of the date
                                            when made, and such default or breach shall have continued for a period of thirty (30) days
                                            after written notice thereof to the Corporation from the Investor; or
	 	 	 
		5.1.3.	The
                                            Corporation shall be involved in financial difficulties as evidenced:

 

		(i)	by
                                            the Corporation filing a petition in bankruptcy or for reorganization or for the adoption
                                            of an arrangement under the United States Bankruptcy Code or the Bankruptcy and Insolvency
                                            Act of Canada (as now or in the future amended, the “Bankruptcy Codes”) or an
                                            admission seeking the relief therein provided;
	 	 	 
		(ii)	by
                                            the Corporation making a general assignment for the benefit of its creditors;
	 	 	 
		(iii)	by
                                            the Corporation consenting to the appointment of a receiver or trustee for all or a substantial
                                            part of the property of the Corporation or approving as filed in good faith a petition filed
                                            against the Corporation under said Bankruptcy Codes (in both cases without the consent of
                                            the Corporation);

 

    	-6-

     

    

 

		(iv)	by
                                            the commencement of a proceeding or case, without the application or consent of the Corporation,
                                            in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution
                                            or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a
                                            trustee, receiver, custodian, liquidator or the like of the Corporation or of all or any
                                            substantial part of its assets, or (iii) similar relief in respect of the Corporation under
                                            any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or
                                            adjustment of debts, and such proceeding or case set forth in (i), (ii), or (iii) above continues
                                            undismissed or uncontroverted, or an order, judgment or decree approving or ordering any
                                            of the foregoing being entered and continuing unstayed and in effect, for a period of sixty
                                            (60) days; or
	 	 	 
		(v)	by
                                            the Corporation admitting in writing its inability to pay its debts as such debts become
                                            due.

 

		5.1.4.	Corporation
                                            shall be terminated, dissolved or liquidated (as a matter of law or otherwise) or proceedings
                                            shall be commenced by the Corporation or by any person seeking the termination, dissolution
                                            or liquidation of the Corporation.

 

		5.2.	Acceleration.
                                            If any one or more Events of Default described in Section 5.1 shall occur and be continuing,
                                            then the Investor may, at the Investor’s option and by written notice to the Corporation,
                                            declare the unpaid balance of the Debenture owing to the Investor to be forthwith due and
                                            payable and thereupon such balance shall become so due and payable without presentation,
                                            protest or further demand or notice of intent to accelerate or other notice of any kind,
                                            all of which are hereby expressly waived by the Corporation.

 

	6.	Miscellaneous.

 

		6.1.	Notices.
                                            All notices, requests, demands and other communications under this Agreement, the Debenture,
                                            and the Security Agreement shall be in writing and shall be deemed to have been duly “given”
                                            on the date of delivery, if delivery is made personally or by fax or email to the party to
                                            whom notice is to be given, or upon receipt if mailed by first class mail, either registered
                                            or certified, postage prepaid and properly addressed as follows:

 

If
to the Corporation, at the address specified at the beginning of this Agreement.

 

If
to the Investor, at the address specified on the execution page of this Agreement.

 

Each
party may change its address for purposes of this Section by giving the other party written notice of the new address in the manner set
forth above.

 

    	-7-

     

    

 

		6.2.	Remedies.
                                            No failure on the part of the Investor to exercise, and no delay on the part of the Investor
                                            in exercising, any right hereunder or under the Debenture, or the Security Agreement shall
                                            operate as a waiver thereof; nor shall any single or partial exercise of any right owned
                                            by it preclude any other or further exercise thereof or the exercise of any other right.
                                            The remedies herein provided are cumulative and not exclusive of any remedies provided by
                                            law.
	 	 	 
		6.3.	Counterparts.
                                            This Agreement may be executed in several counterparts, each of which shall constitute an
                                            original and all of which, when taken together, shall constitute one agreement. Facsimile
                                            or electronic email copies of the signatures are acceptable.
	 	 	 
		6.4.	Term.
                                            This Agreement shall terminate upon repayment or conversion of the Debenture, with the exception
                                            of set working interest payments to the investor for the duration of ownership of the property
                                            by the company.
	 	 	 
		6.5.	Defined
                                            Terms. Any term defined in this Agreement shall extend, with the same meaning, to any
                                            Exhibits attached to this Agreement.
	 	 	 
		6.6.	Legal
                                            Advice. The parties each acknowledge that they have had the opportunity to obtain independent
                                            legal advice with respect to the terms of this Agreement prior to its execution, and the
                                            parties have either done so or have declined to so. In any event, the parties understand
                                            their respective terms, rights and obligations under this Agreement.
	 	 	 
		6.7.	Entire
                                            Agreement. This Agreement, together with the Debenture (Exhibit “A”), and
                                            the Investor Questionnaire (Exhibit “C”) constitutes the final, complete and
                                            exclusive contract between the parties hereto with respect to the subject matter hereof and
                                            no party shall be liable or bound to the other in any manner by any warranties, representations,
                                            guarantees or covenants except as specifically set forth herein and in such other documents
                                            referred to above. Nothing in this Agreement, express or implied, is intended to confer upon
                                            any party, other than the parties hereto, and their respective successors and assigns, any
                                            right, remedies, obligations or liabilities under or by reason of this Agreement, except
                                            as expressly provided herein.

 

    	-8-

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the last date of signature.

 

	

    WITNESSED
	 

    BY:
	)

    )

    )

    )	Date:
                                            February 21, 2020

     

    Permex
    Petroleum Corporation

	 	)

    )

    )

    )	 

    _________________________

    Mehran
    Ehsan , CEO

     

	 	 	 
	 

    WITNESSED
	 

    BY:
	)

    )	 
	 	)

    )	Date:
    February 21, 2020
	 	)

    )	 

    Mehran
    Ehsan

	 	)	Full
    Legal Name of Investor (Please Print)
	 	)

    )

    )	 

     

     

	 	)

    )	Signature
    of Investor or Authorized Representative
	 	 	 

    610
    Granville Street

	 	 	Investor’s
    Address (including postal code)
	 	 	 

    Vancouver,
    BC      V7Y 1K8

	 	 	 

     

    6043408737

	 	 	Telephone
                                            Number (including area code)

     

    mehsan@permexpetroleum.com

	 	 	Email
    Address

 

    	-9-

     

    

 

EXHIBIT
A

 

Unless
permitted under securities legislation, the holder of this security must not trade the security before the date that is 4 months and
a day after February 21, 2020.

 

CONVERTIBLE
SECURED DEBENTURE

 

CDN
$100,000.00

 

For
Value Received, the undersigned Corporation, under the terms of this Debenture hereby unconditionally promises to pay, on or prior to
the Maturity Date (as defined below), to the order of the Investor, by wire transfer to such account as Investor shall provide notice
to Corporation or by check, in lawful money of Canada and in immediately available funds, the principal amount borrowed and outstanding
hereunder at any time not to exceed the amount of the Debenture (the “Principal”) and interest on the Principal at
a rate of 12% per year compounded annually (the “Interest”), both payable in the manner set forth below. The Principal
has been advanced by the Investor to Corporation pursuant to the Debenture Purchase Agreement dated effective February 21, 2020 (the
“Agreement”).

 

Capitalized
terms used herein but not otherwise defined herein shall have the meanings given to them in the Agreement.

 

	1.	Repayment
                                            and Prepayment. The outstanding Principal shall be payable in full no later than February
                                            20, 2022 (the “Maturity Date”), subject to the right of the Corporation
                                            to accelerate at any time after (a) January 1, 2021, on not less than 30 days’ prior
                                            written notice to the Investor.
	 	 
	2.	Interest.
                                            Interest on the Principal is calculated from the Issue Date (defined below) and is calculated
                                            on the portion of the Principal that remains unpaid, both before and after maturity, default
                                            or judgment, until fully paid, on the basis of the actual number of days for which the Principal
                                            is outstanding computed on the basis of a year of 365 days, or 366 days in the case of a
                                            leap year. Notwithstanding any provisions of this Debenture, in no event shall the aggregate
                                            “interest” (as defined in section 347 of the Criminal Code (Canada)) payable
                                            by the Corporation under this Debenture exceed the effective annual rate of interest on the
                                            “credit advanced” (as defined in section 347 of the Criminal Code (Canada))
                                            under this Debenture lawfully permitted by that section and, if any payment, collection or
                                            demand pursuant to this Debenture in respect of “interest” (as defined in section
                                            347 of the Criminal Code (Canada)) is determined to be contrary to the provisions
                                            of that section, the amount of such payment or collection shall be reduced to the highest
                                            amount permitted under the Criminal Code (Canada).
	 	 
	4.	Conversion.
                                            The Debentures will be convertible at the holder’s option into units (“Units”)
                                            of the Company at a conversion price of CDN$0.15 per Unit. Each Unit will be comprised of
                                            one (1) common share (a “Common Share”) in the Company and one (1) Common
                                            Share purchase warrant (each while Common Share purchase warrant, a “Warrant”).
                                            Each Warrant will be exercisable to purchase a Page 2 of 2 of the Secured Debenture Agreement
                                            Common Share at a price of CDN$0.20 for a period of three (3) years from the date of issuance.

 

    	EXHIBIT A 

	Page 1

    	 

    

 

	5.	Secured
                                            Debenture. The full amount of this Debenture is secured by the collateral identified
                                            and described as security therefor in the Security Agreement attached to the Agreement as
                                            Exhibit “B”
	 	 
	6.	Default.
                                            Corporation’s failure to pay timely any of the Principal and Interest due under this
                                            Debenture pursuant to the terms hereof shall constitute an Event of Default as defined in
                                            the Agreement.
	 	 
	7.	Waiver.
                                            Except as provided for herein, Corporation waives presentment, notice of dishonor, protest
                                            or notice of protest and nonpayment, notice of costs, expenses or losses and interest thereon
                                            and diligence in taking any action to collect any sums owing under this Debenture or in any
                                            proceeding against any of the rights or interests in or to the properties or assets securing
                                            payment of this Debenture.
	 	 
	8.	Successors.
                                            The provisions of this Debenture shall inure to the benefit of and be binding on any successor
                                            or Investor. This Debenture cannot be assigned by any party hereto.

 

ISSUE
DATE: February 21, 2020 (“Issue Date”).

 

	Permex Petroleum Corporation	 
	 	 	 
	By:	 	 
	 	 	 
	Name:	Mehran Ehsan	 
	 	 	 
	Title:	Chief Executive Officer	 

 

    	EXHIBIT A 

	Page 2

    	 

    

 

EXHIBIT
B

 

SECURITY
AGREEMENT

 

This
Security Agreement dated as of February 21, 2020 made by Permex Petroleum Corporation (“Grantor”) in favour of __________________________________________
(“Investor”).

 

Capitalized
terms used herein but not otherwise defined herein shall have the meanings ascribed to them in the Secured Debenture Purchase Agreement
between Grantor and Investor dated February 21, 2020.

 

WHEREAS

 

	A.	Pursuant
                                            to the Agreement, by and among the Grantor and the Investor and the related Debenture, Investor
                                            has agreed to make an advance of $100,000.00 and to extend certain financial accommodations
                                            to the Grantor in the amount and in the manner set forth in the Agreement and the Debenture
                                            (collectively, the “Investment”).
	 	 
	B.	The
                                            Investor is willing to make the Investment to the Grantor only upon the condition, among
                                            others, that Grantor shall have executed and delivered to the Investor this Security Agreement.

 

NOW
THEREFORE in order to induce the Investor to make the Investment and for the other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and intending to be legally bound, the Grantor hereby represents, warrants, covenants and
agrees as follows:

 

	1.	Secured
                                            Obligations. The Grantor agrees to pay the Investor all of the unpaid principal amount
                                            of, and accrued interest on, the Debenture, in accordance with the terms thereof, and all
                                            other indebtedness, liabilities and obligations of the Grantor to the Investor, whether now
                                            existing or hereafter incurred, arising out of or in connection with the Agreement, the Debenture
                                            or this Security Agreement (“Secured Obligations”).
	 	 
	2.	Grant
                                            of Security Interest. As collateral security for the prompt and complete payment and
                                            performance when due (whether at stated maturity, by acceleration or otherwise) of all Secured
                                            Obligations and in order to induce the Investor to cause the investment to be made, the Grantor
                                            hereby, assigns, conveys, mortgages, pledges, hypothecates and transfers to the Investor,
                                            for the benefit of the Investor, and hereby grants to the Investor, a security interest in
                                            all of Grantor’s right, title and interest in the Properties (as defined in the Agreement)
                                            together with all engineering reports and intellectual property related to, or generated
                                            by the Corporation in connection with, the Properties (collectively called the “Collateral”).
                                            The Properties include all of the oil and gas assets, Working Interest and Royalty Interest
                                            that the company owns as of the date of this agreement.
	 	 
	3.	Representations
                                            and Warranties. The Grantor hereby represents and warrants to the Investor that except
                                            for the security interest granted under this Security Agreement, the Grantor will be, upon
                                            purchase of the Property, the sole legal and equitable owner of the Collateral in which it
                                            purports to grant a security interest hereunder, having good, marketable title thereto and
                                            that the investor shall have a valid, binding and enforceable lien and/or security interest
                                            in and to the Collateral.

 

    	EXHIBIT B
	Page 1

    	 

    

 

	4.	Covenants.
                                            The Grantor covenants and agrees with the Investor that from and after the date of this Security
                                            Agreement and until the Secured Obligations have been performed and paid in full:

 

4.1
Further Assurances. At any time and from time to time, upon the written request of the Investor, and at the sole expense of the
Grantor, the Grantor shall promptly and duly execute and deliver any and all such further instruments and documents and take such
further actions as the Investor may reasonably deem desirable to obtain the full benefit of this Security Agreement. At the request
of the Investor, the Grantor shall execute all necessary documentation to perfect the registration in Canada or the US, of the
Secured Obligations and the Collateral by giving 20 days written notice.

 

4.2 Maintenance
of Records. The Grantor shall keep and maintain at its own cost and expense satisfactory and complete record of the Collateral. The
Grantor shall allow reasonable access to such records upon reasonable notice from Investor.

 

4.3 Collateral.
The Grantor agree that they will not, without the prior written consent of the Investor, consent to, permit or suffer or occur any sale,
transfer, hypothecation, lien, or use of any of the Collateral adversely affecting the interest of the Investor therein.

 

	5.	Rights
                                            and Remedies Upon Default. If any Event of Default shall occur and be continuing, the
                                            Investor shall have the right to take title to, seize, assign, sell and otherwise dispose
                                            of the Collateral, either at public or private sale, for cash, credit or otherwise, with
                                            or without representations and warranties, and upon such terms as shall be reasonable unless
                                            they were precluded in doing so by another investor involved in the Financing, and the Investor
                                            may bid or become the purchaser at such sale, and such Investor shall have the right at its
                                            option to apply or credit the amount of all or any part of the Secured Obligations owing
                                            to it against the purchase price bid by it at any such sale. If Notification to the Grantor
                                            of any intended disposition by the Investor of any of the Collateral is required by applicable
                                            law, such notification will be deemed to have been reasonable and proper if given at least
                                            thirty (30) days prior to such disposition.
	 	 
	6.	Reinstatement.
                                            This Security Agreement shall remain in full force and effect and continue to be effective
                                            should any petition by filed by or against the Grantor for liquidation or reorganization,
                                            should the Grantor become insolvent or make an assignment for the benefit of investors or
                                            should a receiver or trustee be appointed for all or any significant part of the Grantor’s
                                            property and assets, and shall continue to be effective or be reinstated, as the case may
                                            be, if at any time payment and performance of the Secured Obligations, or any part thereof,
                                            is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored
                                            or returned by any oblige of the Secured Obligations, whether as a “voidable preference”,
                                            “fraudulent conveyance”, or otherwise, all as though such payment or performance
                                            had not been made. In the event that any payment, or any part thereof, is rescinded, reduced,
                                            restored or returned, the Secured Obligations shall be reinstated and deemed reduced only
                                            by such amount paid and not so rescinded, reduced, restored or returned.

 

    	EXHIBIT B
	Page 2

    	 

    

 

	7.	Miscellaneous.

 

7.1 No
Waiver; Cumulative Remedies.

 

(a) The
Investor shall not by any act, delay, omission or otherwise be deemed to have waived any of their respective rights or remedies hereunder,
nor shall any single partial exercise of any right or remedy hereunder on any one occasion preclude the further exercise thereof of the
exercise of any other right or remedy.

 

(b) The
rights and remedies hereunder provided are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights
and remedies provided by law.

 

(c) None
of the terms or provisions of this Security Agreement may be waived, altered, modified or amended except by an instrument in writing,
duly executed by Grantor and Investor.

 

7.2 Termination
of This Security Agreement. This Security Agreement shall terminate upon the payment and performance in full of the Secured Obligations.

 

7.3 Successor
and Assigns. This Security Agreement shall be binding upon the successors of Grantor and Investor and may not be assigned by any
party.

 

7.4 Counterparts.
This Security Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.

 

7.5 Titles
and Subtitles. The titles of the sections and subsections of this Security Agreement are not to be considered in construing this
Security Agreement.

 

7.6 Severability.
In case any provision of this Security Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired thereby.

 

7.7 Agreement
is Entire Contract. This Security Agreement, together with the Debenture, the Agreement, and the Investor Questionnaire constitutes
the final, complete and exclusive contract between the parties hereto with respect to the subject matter hereof and no party shall be
liable or bound to the other in any manner by any warranties, representations, guarantees or covenants except as specifically set forth
herein and in such other documents referred to above. Nothing in the Security Agreement, express or implied, is intended to confer upon
any party, other than the parties hereto, and their respective successors and assigns, any right, remedies, obligations or liabilities
under or by reason of this Security Agreement, except as expressly provided herein.

 

7.8 Relationship
of Certain Rights and Obligations. The repayment of the Investment does not diminish, curtail, amend, alter, or otherwise change
Grantor’s obligations to repay the investment.

 

    	EXHIBIT B
	Page 3

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be executed as of the date first set out above.

 

	 

    WITNESSED
	 

    BY:
	)

    )

    )

    )	Date:
                                            February 21, 2020

     

    Permex
    Petroleum Corporation

	 	)

    )

    )

    )	 

    _________________________

    Mehran
    Ehsan , CEO

     

	 	 	 
	 

    WITNESSED
	 

    BY:
	)

    )	 
	 	)

    )	Date:
    February 21, 2020
	 	)

    )	 

    Mehran
    Ehsan

	 	)	Full
    Legal Name of Investor (Please Print)
	 	)

    )

    )	 

     

     

	 	)

    )	Signature
    of Investor or Authorized Representative

 

    	EXHIBIT B
	Page 4

    	 

    

 

EXHIBIT
C

 

ACCREDITED
INVESTOR REPRESENTATION LETTER

 

	TO:	Permex
                                            Petroleum Corporation (the “Corporation”)

 

In
connection with the purchase of a Debenture of the Corporation by the undersigned investor or, if applicable, the principal on whose
behalf the undersigned is purchasing as agent (the “Investor” for the purposes of this Exhibit C), the Investor hereby represents,
warrants, covenants and certifies to the Corporation that:

 

	1.	The
                                            Investor is resident in the jurisdiction as set forth on the execution page of this Agreement
                                            or is subject to the securities laws of such jurisdiction;
	 	 
	2.	The
                                            Investor is purchasing the Debenture as principal for its own account;
	 	 
	3.	The
                                            Investor is an “accredited investor” within the meaning of National Instrument
                                            45-106 entitled “Prospectus and Registration Exemptions” by virtue of satisfying
                                            the indicated criterion as set out in Appendix A to this Representation Letter;
	 	 
	4.	The
                                            Investor was not created or used solely to purchase or hold securities as an “accredited
                                            investor” as described in paragraph (XIII) of the attached Appendix A of this Exhibit
                                            C; and
	 	 
	5.	Upon
                                            execution of this Exhibit C by the Investor, this Exhibit C shall be incorporated into and
                                            form a part of the Agreement.

 

	Dated
    February 21, 2020.	 
	 	 

    Mehran
    Ehsan

	 	Print
    Name of Investor
	 	 

     

     

	 	Signature
	 	 

     

     

	 	Print
    name of Signatory (if different from Subscriber)
	 	 

     

     

	 	Title

 

IMPORTANT:
PLEASE MARK THE CATEGORY OR CATEGORIES IN APPENDIX A ON THE NEXT PAGE THAT DESCRIBES HOW YOU QUALIFY AS AN ACCREDITED INVESTOR

 

    	EXHIBIT C

    	 

    

 

	APPENDIX
    A

 

TO
EXHIBIT C

 

Accredited
Investor (defined in National Instrument 45-106) means [please initial beside the applicable portion of the definition
below]:

 

	 	I	a Canadian financial institution, or an authorized foreign bank named in Schedule III of the Bank Act (Canada); or
	 	II	the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); or 
	 	III	a subsidiary of any person referred to in paragraphs (I) or (II), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary; or
	 	IV	a person registered under the securities legislation of a jurisdiction of Canada, as an adviser or dealer, other than a person registered solely as a limited market dealer under one or both of the Securities Act (Ontario); or
	 	V	an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (IV); or
	 	VI	the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly-owned entity of the Government of Canada or a jurisdiction of Canada; or
	 	VII	a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l‟île de Montréal or an intermunicipal management board in Québec; or
	 	VIII	any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government; or
	 	IX	a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a pension commission or similar regulatory authority of a jurisdiction of Canada; or
	 	X	an individual who, either alone or with a spouse, beneficially owns, directly or indirectly, financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000; or
	 	XI	
    an individual whose net income before taxes exceeded
    $200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000
    in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current
    calendar year; or

     

    (Note: if individual accredited investors wish to purchase
    through wholly-owned holding companies or similar entities, such purchasing entities must qualify under paragraph (XX) below, which must
    be initialed.)

 

    	APPENDIX A TO EXHIBIT C
	Page 1

    	 

    

 

	 	XII	an individual who, either alone or with a spouse, has net assets of at least $5,000,000; or
	 	XIII	a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements; or
	 	XIV	
    an investment fund that distributes
    or has distributed its securities only to

    

	 	 	(a)	
    a person that is or was an accredited
    investor at the time of the distribution, or

    

	 	 	(b)	
    a person that acquires or acquired
    securities in the circumstances referred to in sections 2.10 and 2.19 of National Instrument 45-106, or

    

	 	 	(c)	a person described in paragraph (a) or (b) that acquires or acquired securities under section 2.18 of National Instrument 45-106; or

	 	XV	an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Quebec, the securities regulatory authority, has issued a receipt; or
	 	XVI	a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be; or
	 	XVII	
    a person acting on behalf of a fully
    managed account managed by that person, if that person

    

 

	 	 	(a)	
    is
    registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada
    or a foreign jurisdiction, and

    

	 	 	(b)	
    in
    Ontario, is purchasing a security that is not a security of an investment fund; or

    

 

	 	XVIII	a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded; or
	 	XIX	an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (I) to (IV) or paragraph (IX) in form and function; or
	 	XX	
    a person in respect of which all of the owners of interests,
    direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited
    investors (as defined in National Instrument 45-106); or

    (Note: if you are purchasing as an individual accredited
    investor, paragraph (XI) above must be initialed rather than paragraph (XX)

	 	XXI	an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser; or
	 	XXII	
    a person that is recognized or designated
    by the securities regulatory authority or, except in Ontario and Quebec, the regulator as

    

 

	 	 	(a)	
    an
    accredited investor, or

    

	 	 	(b)	
    an
    exempt purchaser in Alberta or British Columbia after September 14, 2005

    

 

    	APPENDIX A TO EXHIBIT C
	Page 2

    	 

    

 

For
the purposes hereof:

 

	(a)	“Canadian
                                            financial institution” means

 

		(i)	an
                                            association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative
                                            credit society for which an order has been made under section 473(1) of that Act, or
	 	 	 
		(ii)	a
                                            bank, loan corporation, trust company, trust corporation, insurance company, treasury branch,
                                            credit union, caisse populaire, financial services cooperative, or league that, in each case,
                                            is authorized by an enactment of Canada or a jurisdiction of Canada to carry on business
                                            in Canada or a jurisdiction of Canada;

 

	(b)	“control
                                            person” has the same meaning as in securities legislation except in Manitoba, Newfoundland
                                            and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island
                                            and Québec where control person means any person that holds or is one of a combination
                                            of persons that holds:

 

		(i)	a
                                            sufficient number of any of the securities of an issuer so as to affect materially the control
                                            of the issuer, or
	 	 	 
		(ii)	more
                                            than 20% of the outstanding voting securities of an issuer except where there is evidence
                                            showing that the holding of those securities does not affect materially the control of the
                                            issuer;

 

	(c)	“Director”
                                            means:

 

		(i)	a
                                            member of the board of directors of a company or an individual who performs similar functions
                                            for a company, and
	 	 	 
		(ii)	with
                                            respect to a person that is not a company, an individual who performs functions similar to
                                            those of a Director of a company;

 

    	APPENDIX A TO EXHIBIT C
	Page 3

    	 

    

  

	(d)	“eligibility
                                            adviser” means:

 

		(i)	a
                                            person that is registered as an investment dealer or in an equivalent category of registration
                                            under the securities legislation of the jurisdiction of a purchaser and authorized to give
                                            advice with respect to the type of security being distributed, and
	 	 	 
		(ii)	in
                                            Saskatchewan or Manitoba, also means a lawyer who is a practicing member in good standing
                                            with a law society of a jurisdiction of Canada or a public accountant who is a member in
                                            good standing of an institute or association of chartered accountants, certified general
                                            accountants or certified management accountants in a jurisdiction of Canada provided that
                                            the lawyer or public accountant must not:

 

		1.	have
                                            a professional, business or personal relationship with the issuer, or any of its directors,
                                            executive Officers, founders, or control persons, and
	 	 	 
		2.	have
                                            acted for or been retained personally or otherwise as an employee, executive Officer, Director,
                                            associate or partner of a person that has acted for or been retained by the issuer or any
                                            of its directors, executive Officers, founders or control persons within the previous 12
                                            months;

 

	(e)	“executive
                                            officer” means, for an issuer, an individual who is:

 

		(i)	a
                                            chair, vice-chair or president,
	 	 	 
		(ii)	a
                                            vice-president in charge of a principal business unit, division or function including sales,
                                            finance or production,
	 	 	 
		(iii)	an
                                            Officer of the issuer or any of its subsidiaries and who performs a policy-making function
                                            in respect of the issuer, or
	 	 	 
		(iv)	performing
                                            a policy-making function in respect of the issuer;

 

	(f)	“financial
                                            assets” means:

 

		(i)	cash,
	 	 	 
		(ii)	securities,
                                            or
	 	 	 
		(iii)	a
                                            contract of insurance, a deposit or an evidence of a deposit that is not a security for the
                                            purposes of securities legislation;

 

	(g)	“foreign
                                            jurisdiction” means a country other than Canada or a political subdivision of a
                                            country other than Canada;
	 	 
	(h)	“founder”
                                            means, in respect of an issuer, a person who,

 

		(i)	acting
                                            alone, in conjunction, or in concert with one or more persons, directly or indirectly, takes
                                            the initiative in founding, organizing or substantially reorganizing the business of the
                                            issuer, and
	 	 	 
		(ii)	at
                                            the time of the trade is actively involved in the business of the issuer;

 

    	APPENDIX A TO EXHIBIT C
	Page 4

    	 

    

  

	(i)	“fully
                                            managed account” means an account of a client for which a person makes the investment
                                            decisions if that person has full discretion to trade in securities for the account without
                                            requiring the client’s express consent to a transaction;
	 	 
	(j)	“investment
                                            fund” has the same meaning as in National Instrument 81-106 Investment Fund Continuous
                                            Disclosure;
	 	 
	(k)	“jurisdiction”
                                            means a province or territory of Canada except when used in the term foreign jurisdiction;
	 	 
	(l)	“local
                                            jurisdiction” means the jurisdiction in which the Canadian securities regulatory
                                            authority is situate;
	 	 
	(m)	“non-redeemable
                                            investment fund” means an issuer,

 

		(i)	whose
                                            primary purpose is to invest money provided by its security holders;
	 	 	 
		(ii)	that
                                            does not invest;

 

		1.	for
                                            the purpose of exercising or seeking to exercise control of an issuer, other than an issuer
                                            that is a mutual fund or a non-redeemable investment fund; or
	 	 	 
		2.	for
                                            the purpose of being actively involved in the management of any issuer in which it invests,
                                            other than an issuer that is a mutual fund or a nonredeemable investment fund; and

 

		(iii)	that
                                            is not a mutual fund; (n)

 

	(n)	“person”
                                            includes:

 

		(i)	an
                                            individual,
	 	 	 
		(ii)	a
                                            corporation,
	 	 	 
		(iii)	a
                                            partnership, trust, fund and an association, syndicate, organization or other organized group
                                            of persons, whether incorporated or not, and
	 	 	 
		(iv)	an
                                            individual or other person in that person’s capacity as a trustee, executor, administrator
                                            or personal or other legal representative;

 

	(o)	“regulator”
                                            means, for the local jurisdiction, the Executive Director as defined under securities legislation
                                            of the local jurisdiction;
	 	 
	(p)	“related
                                            liabilities” means

 

		(i)	liabilities
                                            incurred or assumed for the purpose of financing the acquisition or ownership of financial
                                            assets, or
	 	 	 
		(ii)	liabilities
                                            that are secured by financial assets;

 

	(q)	“Schedule
                                            III bank” means an authorized foreign bank named in Schedule III of the Bank Act
                                            (Canada);
	 	 
	(r)	“spouse”
                                            means, an individual who,

 

		(i)	is
                                            married to another individual and is not living separate and apart within the meaning of
                                            the Divorce Act (Canada), from the other individual,
	 	 	 
		(ii)	is
                                            living with another individual in a marriage-like relationship, including a marriage-like
                                            relationship between individuals of the same gender, or
	 	 	 
		(iii)	in
                                            Alberta, is an individual referred to in paragraph (i) or (ii) above, or is an adult interdependent
                                            partner within the meaning of the Adult Interdependent Relationships Act (Alberta); and

 

	(s)	“subsidiary”
                                            means an issuer that is controlled directly or indirectly by another issuer and includes
                                            a subsidiary of that subsidiary. All monetary references are in Canadian Dollars

 

    	APPENDIX A TO EXHIBIT C
	Page 5

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