Common use of Unit Offering Clause in Contracts

Unit Offering. The Borrower proposes to issue units (each, a “Unit”), with each Unit being comprised of one common share in the capital of the Borrower (each, a “Common Share”) and one half of one Common Share purchase warrant (each, a “Warrant”), pursuant to a unit offering (the “Offering”). In the event that the Offering is not fully subscribed for, the Lender will, at the request of the Borrower, subscribe under the Offering for Units having a total subscription price of the lesser of the deficiency in the gross proceeds of the Offering and $1,000,000 (the “Base Standby Commitment Amount”) subject to an increase to up to $1,500,000 pursuant to the Facility Top-Up (as defined and described below) to the extent used by the Lender to subscribe for Units (the “Total Standby Commitment Amount”). It is acknowledged and agreed that the foregoing subscription may be subordinate to another party’s standby subscription under the Offering. In the event that the Borrower is not able to raise a minimum of $2,400,000 under the Offering (inclusive of the Base Standby Commitment Amount), the Lender will, at its option, (i) increase the Total Standby Commitment Amount from $1,000,000 to the lesser of the deficiency in the gross proceeds of the Offering and $1,500,000 or (ii) subject to the terms and conditions of this Agreement, make available to the Borrower a further advance under the Facility, or a combination thereof (the “Facility Top-Up”). The amount of the Facility Top-Up will be equal to the lesser of (i) $500,000 and (ii) the difference between $2,400,000 and the gross proceeds of the Offering (inclusive of the Base Standby Commitment Amount). The Lender’s subscription price for Units hereunder shall be satisfied by: (a) a cash payment; (b) a set off of a corresponding amount outstanding, if any, under the Facility (i.e. as a repayment of the amount owing by the Borrower to Lender pursuant to the Facility); or (c) a combination thereof. The method by which the Lender shall subscribe for Units shall be at the option of the Lender. The availability of funds under the Facility will be permanently reduced by any amounts utilized by the Lender to subscribe for Units pursuant to the Offering.