Series 2 Preference Share may be converted at the option of the holder into 58.82353
Common Shares at any time. The Company has the right to require the shareholders
of the Series 2 Preference Shares to convert each such share into 58.82353 Common
Shares if (i) at any time after 12 months following the issuance of the Series 2
Preference Share, the closing trade price of the Company’s Common Shares exceeds
$2.13 for at least 20 consecutive trading days;, or (ii) at any time, the Company
completes a firm public underwritten offering of its Common Shares for more than
$40,000,000 CAD at a price per Common Share greater than $1.70. The holders of
the Series 2 Preference Shares shall be entitled to receive in each calendar year
when, as and if declared by the Board of Directors, in its discretion, cumulative
dividends at a rate of 7% per annum, out of the net profits and surplus of the
Company properly applicable to the payment of dividends, in priority to the payment of
any dividend on any shares of any other class. The Series 2 Preference Shares are
redeemable at the option of the Company at any time after the third anniversary of the
issuance date for an amount equal to the original issuance price plus a premium of
20% and payment of all accrued but unpaid dividends on such shares. The Series 2
Preference Shares are not subject to any right of redemption at the option of the
holder. In the event of the liquidation, dissolution, or winding-up of the Company, or
any distribution of its assets for the purpose of winding up its affairs, the holders of the
Series 2 Preference Shares shall be entitled to be paid the amount of paid-up capital
plus all accrued but unpaid dividends on such shares, out of the assets of the
Company in preference to and in priority over any payment or distribution of any
capital asset or monies to the holders of any other class. After such payment, the
holders of the Series 2 Preference Shares shall not be entitled to share in any other
distribution of the property or assets of the Company. There are no sinking fund
provisions for any further capital calls on such shares. All issued and outstanding
Series 2 Preference Shares are fully paid; and