1.

Background.

a.

Prior Verbal Understanding. Firefly Neuroscience, Inc. (the “Company”) and BPY Limited (“Investor”) previously reached a verbal agreement that, as an inducement for Investor’s exercise of that certain Common Stock Purchase Warrant (the “Warrant”), the Company would issue to Investor an aggregate of 122,407 shares of the Company’s common stock (the “Shares”).

b.

Board Approval. On or about January 9, 2025, the Company’s Board of Directors (the “Board”) approved the issuance of 122,407 total shares of the Company’s common stock to Investor and the other investor similarly situated in connection with the exercise of their respective warrants, as reflected in the Company’s board minutes from that date.

c.

Reliance on Understanding. Investor has already exercised the Warrant (the “Prior Exercise”), in part, in reliance on the above-referenced verbal agreement. Both parties now wish to enter into this agreement (this “Agreement”) to memorialize the agreement and confirm that the issuance of the Shares is effective as of the Effective Date (defined below), notwithstanding that Investor has already completed the Prior Exercise.

2.

Issuance of Shares.

a.

Issuance. In exchange for, and in reliance on, the Prior Exercise of the Warrant by Investor, and for other good and valuable consideration, the Company hereby agrees to issue and deliver to Investor the Shares within 2 business days from the date hereof and registered in the manner specified by the Investor.

b.

No Additional Payment. Except as specifically set forth herein, no further payment or consideration is required from Investor. The parties acknowledge and agree that the Shares are being issued in connection with the Prior Exercise, and as an incentive duly authorized by the Board.

3.

Effective Date; No Further Obligations.

a.

Effective Date. This Letter Agreement is dated as of the date hereof and shall be effective as of the date hereof.

b.

Satisfaction of Incentive. The parties agree that, upon issuance and delivery of the Shares, all obligations of the Company to issue any incentive shares to Investor in connection with the Prior Exercise are satisfied in full.

4.

Representations.

a.

Company Representations. 

i.

The Company has obtained all necessary corporate approvals for issuing the Shares to Investor as contemplated herein. Upon issuance of the Shares to the Investor in accordance with this Agreement, the Shares will be validly issued, fully paid for, and non-assessable.

ii.

The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board or the Company’s stockholders in connection herewith. This Agreement has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

iii.

The execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby do not and will not (i) conflict with or violate any provision of the Company’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien or encumbrance upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected.

iv.

The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other person in connection with the execution, delivery and performance by the Company of this Agreement other than: (i) the notice and/or application(s) to each applicable stock exchange for the issuance and sale of the Shares and the listing of the Shares for trading thereon in the time and manner required thereby.

b.

Investor Representations. The Shares are being acquired by the Investor for its account, for investment purposes and not with a view to the sale or distribution of all or any part of the Shares, nor with any present intention to sell or in any way distribute the same, as those terms are used in the Securities Act of 1933, as amended (the “Act”), and the rules and regulations promulgated thereunder. The Investor has sufficient knowledge and experience in financial matters so as to be capable of evaluating the merits and risks of purchasing the Shares. The Investor has reviewed copies of such documents and other information as the Investor has deemed necessary to make an informed investment decision with respect to its acquisition of the Shares. The Investor understands that the Shares may not be sold, transferred or otherwise disposed of without registration under the Act or the availability of an exemption therefrom, and that in the absence of an effective registration statement covering the Shares or an available exemption from registration under the Act, the Shares must be held indefinitely. Further, the Investor understands and has the financial capability of assuming the economic risk of an investment in the Shares for an indefinite period of time. The Investor has been advised by the Company that the Investor will not be able to dispose of the Shares, or any interest therein, without first complying with the relevant provisions of the Act and any applicable state securities laws. The Investor understands that the provisions of Rule 144 promulgated under the Act, permitting the routine sales of the securities of certain issuers subject to the terms and conditions thereof, are not currently, and may not hereafter be, available with respect to the Shares. The Investor acknowledges that the Company is under no obligation to register the Shares or to furnish any information or take any other action to assist the undersigned in complying with the terms and conditions of any exemption which might be available under the Act or any state securities laws with respect to sales of the Shares in the future. The Investor is an “Accredited Investor” as defined in rule 501 (a) of Regulation D of the Act.

5.

Release. In consideration of the mutual promises and the issuance of the Shares as set forth herein, and for other good and valuable consideration, BPY Limited (the “Releasing Party”) hereby irrevocably releases and forever discharges the Company, together with its past, present, and future affiliates, officers, directors, employees, agents, advisors, and assigns (the “Released Parties”), from any and all claims, demands, causes of action, damages, liabilities, or obligations of any kind, whether known or unknown, suspected or unsuspected, which the Releasing Party has or may have against the Released Parties relating directly to the prior exercise of the Warrant. This release does not waive or release any rights or claims that may arise for breach of this Letter Agreement or that cannot be waived by law.

6.

Miscellaneous.

a.

Entire Agreement. This Letter Agreement constitutes the entire understanding among the parties regarding the subject matter hereof and supersedes any prior oral or written agreements, understandings, or arrangements.

b.

Counterparts. This Letter Agreement may be executed in counterparts (including by electronic means), each of which shall be deemed an original and all of which together shall constitute one instrument.

c.

Governing Law. This Letter Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict-of-law principles.

1.

Background.

a.

Prior Verbal Understanding. Firefly Neuroscience, Inc. (the “Company”) and Nomis Bay Ltd. (“Investor”) previously reached a verbal agreement that, as an inducement for Investor’s exercise of that certain Common Stock Purchase Warrant (the “Warrant”), the Company would issue to Investor an aggregate of 217,593 shares of the Company’s common stock (the “Shares”).

b.

Board Approval. On or about January 9, 2025, the Company’s Board of Directors (the “Board”) approved the issuance of 217,593 total shares of the Company’s common stock to Investor and the other investor similarly situated in connection with the exercise of their respective warrants, as reflected in the Company’s board minutes from that date.

c.

Reliance on Understanding. Investor has already exercised the Warrant (the “Prior Exercise”), in part, in reliance on the above-referenced verbal agreement. Both parties now wish to enter into this agreement (this “Agreement”) to memorialize the agreement and confirm that the issuance of the Shares is effective as of the Effective Date (defined below), notwithstanding that Investor has already completed the Prior Exercise.

2.

Issuance of Shares.

a.

Issuance. In exchange for, and in reliance on, the Prior Exercise of the Warrant by Investor, and for other good and valuable consideration, the Company hereby agrees to issue and deliver to Investor the Shares within 2 business days from the date hereof and registered in the manner specified by the Investor.

b.

No Additional Payment. Except as specifically set forth herein, no further payment or consideration is required from Investor. The parties acknowledge and agree that the Shares are being issued in connection with the Prior Exercise, and as an incentive duly authorized by the Board.

3.

Effective Date; No Further Obligations.

a.

Effective Date. This Letter Agreement is dated as of the date hereof and shall be effective as of the date hereof.

b.

Satisfaction of Incentive. The parties agree that, upon issuance and delivery of the Shares, all obligations of the Company to issue any incentive shares to Investor in connection with the Prior Exercise are satisfied in full.

4.

Representations.

a.

Company Representations. 

i.

The Company has obtained all necessary corporate approvals for issuing the Shares to Investor as contemplated herein. Upon issuance of the Shares to the Investor in accordance with this Agreement, the Shares will be validly issued, fully paid for, and non-assessable.

ii.

The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board or the Company’s stockholders in connection herewith. This Agreement has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

iii.

The execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby do not and will not (i) conflict with or violate any provision of the Company’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien or encumbrance upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected.

iv.

The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other person in connection with the execution, delivery and performance by the Company of this Agreement other than: (i) the notice and/or application(s) to each applicable stock exchange for the issuance and sale of the Shares and the listing of the Shares for trading thereon in the time and manner required thereby.

b.

Investor Representations. The Shares are being acquired by the Investor for its account, for investment purposes and not with a view to the sale or distribution of all or any part of the Shares, nor with any present intention to sell or in any way distribute the same, as those terms are used in the Securities Act of 1933, as amended (the “Act”), and the rules and regulations promulgated thereunder. The Investor has sufficient knowledge and experience in financial matters so as to be capable of evaluating the merits and risks of purchasing the Shares. The Investor has reviewed copies of such documents and other information as the Investor has deemed necessary to make an informed investment decision with respect to its acquisition of the Shares. The Investor understands that the Shares may not be sold, transferred or otherwise disposed of without registration under the Act or the availability of an exemption therefrom, and that in the absence of an effective registration statement covering the Shares or an available exemption from registration under the Act, the Shares must be held indefinitely. Further, the Investor understands and has the financial capability of assuming the economic risk of an investment in the Shares for an indefinite period of time. The Investor has been advised by the Company that the Investor will not be able to dispose of the Shares, or any interest therein, without first complying with the relevant provisions of the Act and any applicable state securities laws. The Investor understands that the provisions of Rule 144 promulgated under the Act, permitting the routine sales of the securities of certain issuers subject to the terms and conditions thereof, are not currently, and may not hereafter be, available with respect to the Shares. The Investor acknowledges that the Company is under no obligation to register the Shares or to furnish any information or take any other action to assist the undersigned in complying with the terms and conditions of any exemption which might be available under the Act or any state securities laws with respect to sales of the Shares in the future. The Investor is an “Accredited Investor” as defined in rule 501 (a) of Regulation D of the Act.

5.

Release. In consideration of the mutual promises and the issuance of the Shares as set forth herein, and for other good and valuable consideration, Nomis Bay Ltd. (the “Releasing Party”) hereby irrevocably releases and forever discharges the Company, together with its past, present, and future affiliates, officers, directors, employees, agents, advisors, and assigns (the “Released Parties”), from any and all claims, demands, causes of action, damages, liabilities, or obligations of any kind, whether known or unknown, suspected or unsuspected, which the Releasing Party has or may have against the Released Parties relating directly to the prior exercise of the Warrant. This release does not waive or release any rights or claims that may arise for breach of this Letter Agreement or that cannot be waived by law.

6.

Miscellaneous.

a.

Entire Agreement. This Letter Agreement constitutes the entire understanding among the parties regarding the subject matter hereof and supersedes any prior oral or written agreements, understandings, or arrangements.

b.

Counterparts. This Letter Agreement may be executed in counterparts (including by electronic means), each of which shall be deemed an original and all of which together shall constitute one instrument.

c.

Governing Law. This Letter Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict-of-law principles.

1.

McLean does for himself and on behalf of his heirs, executors, administrators and assigns and 1128526 does and on behalf of any of their respective parents, subsidiaries, related and/or affiliated entities, predecessors, successors, assignees, partners, partners, shareholders, and all of their respective past, present and future officers, directors, partners, employees, servants, agents, consultants, contractors and assigns, as the case may be (collectively hereinafter referred to as the “McLean Releasors”) hereby remise, release and forever discharge the Firefly Parties, together with any if their respective assigns, parents, subsidiaries, related and/or affiliated entities, predecessors, successors, assignees, partners, shareholders, and all of their respective past, present and future officers, directors, partners, employees, servants, agents, consultants, contractors and assigns, as the case may be (collectively hereinafter referred to as the “Firefly Releasors”) of and from any and all actions, causes of action, contracts (whether express or implied), claims, complaints and demands for damages, loss or injury, suits, debts, sums of money, indemnities, expenses, interest, costs and claims of any and every kind and nature whatsoever, at law or in equity, which against the Firefly Releasors that the McLean Releasors ever had, now have, or can hereafter have by reason of or arising out of any cause or causes whatsoever existing up to and inclusive of the date of this Agreement including, but without limiting the generality of the foregoing:

(a)

the Dispute and/or the Claim;

(b)

McLean’s employment with the Firefly Parties;

(c)

the termination of McLean’s employment with the Firefly Parties;

(d)

any claims or complaints which McLean ever had, now has, or can hereafter have arising under or relating to any matter referred to in the Ontario Employment Standards Act, the Ontario Human Rights Code, the Personal Information Protection Act, the Workers’ Compensation Act and any other legislation governing or related to McLean’s employment with the Firefly Parties;

(e)

any and all claims for damages, salary, wages, termination pay, severance pay, vacation pay, overtime pay, bonuses, expenses, allowances, stock options, shares, incentive payments, compensation, entitlements, employment benefits, insurance or any other benefits or consideration arising out of McLean’s employment with the Firefly Parties; and

(f)

loss of position, status, future job opportunities, or reputation.

2.

The Firefly Parties do and on behalf of any of their respective parents, subsidiaries, related and/or affiliated entities, predecessors, successors, assignees, partners, partners, shareholders, and all of their respective past, present and future officers, directors, partners, employees, servants, agents, consultants, contractors and assigns, as the case may be (collectively hereinafter referred to as the “Firefly Releasors”) hereby remise, release and forever discharge the McLean Releasors of and from any and all actions, causes of action, contracts (whether express or implied), claims, complaints and demands for damages, loss or injury, suits, debts, sums of money, indemnities, expenses, interest, costs and claims of any and every kind and nature whatsoever, at law or in equity, which against the McLean Releasors that the Firefly Releasors ever had, now have, or can hereafter have by reason of or arising out of any cause or causes whatsoever existing up to and inclusive of the date of this Agreement (including, but not limited to, pursuant to McLean’s employment with the Firefly Parties).

3.

McLean shall not disclose to any person including, without limitation, any customer, contact, consultant or employee of the Firefly Parties, any confidential information of the Firefly Parties, or any information concerning McLean’s departure from the Firefly Parties, or the terms of this Agreement, except to appropriate legal and financial advisors, on the condition that they maintain the confidence thereof, or as required by law, and that McLean shall not make any negative or unfavorable comments about the Firefly Parties or any of the Firefly Parties’ directors, staff, management or employees/contractors.

4.

McLean hereby releases the Firefly Parties of any liability for any past acts of discrimination and acknowledges that the execution of this Settlement Agreement and Release precludes the consideration of any complaint to the British Columbia Human Rights Commission pursuant to the Ontario Human Rights Code, or any other complaint to any other adjudicator or commission pursuant to any applicable human rights legislation. McLean agrees that he will not file any human rights complaint against the Firefly Parties in the future, and that he will withdraw any outstanding human rights complaint against the Firefly Parties. In consideration of the payment of the Settlement Amount, McLean hereby settles and fully resolves any outstanding human rights issues and releases the Firefly Parties of any liability for any potential or existing human rights violation(s).

5.

McLean acknowledges receipt of all wages, overtime pay, vacation pay, general holiday pay and termination pay, or any other entitlements that she is entitled to by virtue of the Employment Standards Code or pursuant to any other labour or employment standards legislation. McLean further confirms that there are no entitlements, overtime pay or wages due and owing to him by the Firefly Parties. In consideration of the payment of the Settlement Amount and other good and valuable consideration, McLean agrees not to file any complaint or make any other claim against the Firefly Parties, pursuant to the Employment Standards Code.

6.

McLean acknowledges and agrees that the payment of the Settlement Amount includes full compensation and consideration for loss of employment benefits, and that all of his employment benefits ceased on the date of termination of his employment with the Firefly Parties.

7.

McLean undertakes to repay any outstanding obligations, whether now owing, or to become owing by McLean, in respect of benefits received under the Employment Insurance Act as relates to his employment with the Firefly Parties or the payment referred to herein. McLean further confirms and warrants that in the time period since his employment with the Firefly Parties concluded, he has neither applied for nor received Employment Insurance.

8.

McLean and the Firefly Parties shall forthwith exchange and agree to a form of Discontinuance of Action on a without costs basis, which wholly discontinues the Claim as against the Firefly Parties on a without costs basis. The Firefly Parties shall endorse its consent onto the without costs discontinuance. McLean shall, as soon as practicable thereafter, obtain the filing of the Discontinuance of Action and provide a filed copy of it to the Firefly Parties.

9.

Firefly Inc. shall issue or cause to be issued to 1128526 Alberta Ltd., on a fully diluted basis, an aggregate of twenty-one thousand (21,000) common shares of Firefly Inc. restricted stock (“Equity”). McLean and 1128526 Alberta Ltd. understand and agree that any and all Equity shall be subject to applicable securities laws in Canada and the United States and shall be issued subject to customary investment representations and certain limitations, restrictions, terms, and conditions restricting 1128526 Alberta Ltd.’s ability to sell, transfer, or otherwise dispose of any or all Equity, including without limitation the terms and conditions set forth in “Terms and Conditions of Subscription for Common Shares of Firefly Neuroscience, Inc.” a copy of which shall be provided to McLean and 1128526 Alberta Ltd. with this Agreement.

10.

McLean understands that upon the issuance any Equity, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable U.S. state securities laws and regulations, the certificates representing the Equity, and all securities issued in exchange therefor or in substitution thereof, will bear a legend in substantially the following form:

11.

The Settlement Amount paid to McLean is inclusive of any amounts (including applicable vacation pay or similar) required to be paid to McLean under any applicable employment laws. No other amounts shall be required to be paid to McLean.

12.

McLean is required to return to Firefly any Firefly Parties’ property in his possession.

13.

Firefly acknowledges that in the event of Firefly being dissolved or put into bankruptcy, any debt owed to McLean will have the same priority as the debt of other unsecured creditors in Firefly.

14.

The Parties agree that nothing contained in paragraphs 1 and 2 above shall release any claim or entitlement any Party may have to enforce the terms of this Agreement.

15.

Other than as provided in this Agreement, none of the McLean Releasors or the Firefly Releasors, nor any of them, shall make any claim or take any proceeding against the other in relation to any matters contemplated by this Agreement and further agree not to make any claim or take any proceeding against any other person, corporation or entity that might give rise to a claim for contribution or indemnity against any of the Parties in relation to any matters contemplated by this Agreement, all such claims being fully and finally released by this Agreement.

16.

Firefly agrees to postpone any limitation defence as to the matters described herein while this Settlement Agreement remains in force.

17.

The Parties confirm and ratify the contents of the recitals to this Agreement and acknowledge and agree that the same are incorporated into and form part of this Agreement.

18.

Nothing in this Agreement shall be, nor shall any of the steps or actions taken by any of the Parties pursuant to the terms of this Agreement be, construed or asserted as an admission of any liability by any of the Parties.

19.

If any of the provisions of this Agreement or portions thereof should be determined to be invalid, illegal, or unenforceable in any respect, the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

20.

The terms of this Agreement are fully understood and voluntarily accepted by the Parties for the purpose of making a full and final settlement of all matters between them and as set forth in this Agreement.

21.

Before executing this Agreement, the Parties have fully informed themselves of the terms and conditions hereof and confirm that they fully understand its contents, and that they have had the opportunity to be represented by legal counsel of their own choosing and receive legal advice in relation to this Agreement.

22.

The Parties covenant and agree that each will, from time to time and at all times hereafter upon request, without further consideration, do such further acts and deliver all such further assurances, deeds and documents as shall be reasonably required in order to fully perform and carry out the terms of this Agreement.

23.

This Agreement contains the entire agreement among the Parties with respect to the subject matter hereof and supersedes all negotiations and prior discussions, agreements, and understandings, whether oral or written.

24.

This Agreement shall be binding upon and shall enure to the benefit of the Parties and their respective successors and permitted assigns.

25.

This Agreement shall be interpreted in accordance with and governed in all respects by the laws of the Province of Ontario. The Courts of Ontario shall have exclusive jurisdiction to entertain any action or proceeding brought by or against any of the parties hereto in connection with this Agreement or any alleged breach thereof and the parties hereby expressly agree to attorn to the jurisdiction of such Courts for that purpose.

26.

This Agreement may be executed in counterparts executed and circulated by facsimile, by other electronic means, or by original document, each of which counterparts so executed and circulated shall be deemed to be an original, and such counterparts together shall constitute one and the same Agreement.

Section 1

Closing

Section 2

Conditions of Closing

(a)

The Subscriber delivering to the Corporation not later than the Closing Time at the Corporation's legal counsel's office at 1250, 639 – 5^th Ave. SW, Calgary, Alberta T2P 0M9:

(i)

One fully completed and duly executed copy of this Agreement, including the Schedules and all other documentation contemplated by this Agreement;

(ii)

A certified cheque, bank draft or evidence of completed wire transfer to “TingleMerrett LLP, in trust.” or such other method of payment acceptable to the Corporation, representing the aggregate Subscription Price payable for the Common Shares subscribed for by the Subscriber;

(iii)

A fully completed and duly executed copy of the Settlement Agreement, including any schedules and all other documentation contemplated by the Settlement Agreement;

(b)

The Corporation accepting the Subscriber’s subscription, in whole or in part;

(c)

The offer, sale and issuance of the Securities being exempt from the prospectus requirements or registration requirements of Applicable Securities Laws. As used in this Agreement, “Applicable Securities Laws” means any and all securities laws including, statutes, rules, regulations, by-laws, policies, guidelines, orders, decisions, rulings and awards, applicable in the jurisdictions in which the Securities will be offered, sold and issued;

(d)

The Subscriber executing and delivering to the Corporation, as applicable, all reports, undertakings or other documents required under Applicable Securities Laws in connection with the offer, sale and issuance of the Securities to the Subscriber;

(e)

The Corporation obtaining all orders, permits, approvals, waivers, consents, licenses or similar authorizations of Regulators necessary to complete the offer, sale and issuance of the Securities. As used in this Agreement, “Regulator” means (i) any governmental or public entity department, court, commission, board, bureau, agency or instrumentality, (ii) any quasi-governmental, self-regulatory or private body exercising any regulatory authority and (iii) any stock exchange;

(f)

The representations and warranties of the Subscriber having been true and correct as of the date of this Agreement and being true and correct at the Time of Closing); and

(g)

All documentation relating to the offer, sale and issuance of the Securities being in form and substance satisfactory to the Corporation.

Section 3

Acknowledgments of the Subscriber

(a)

AN INVESTMENT IN THE SECURITIES IS NOT WITHOUT RISK AND THE SUBSCRIBER (AND ANY DISCLOSED BENEFICIAL SUBSCRIBER) MAY LOSE HIS, HER OR ITS ENTIRE INVESTMENT;

(b)

The Subscriber has reviewed and considered the risk factors relating to the business of the Corporation and its securities as set out in the Corporation’s annual and quarterly reports and other documents filed by the Corporation with the U.S. Securities and Exchange Commission at www.sec.gov  before deciding whether to purchase the Securities;

(c)

The Corporation may complete additional financings in the future in order to develop the business of the Corporation and fund its ongoing development, and such future financings may have a dilutive effect on current securityholders of the Corporation, including the Subscriber but there is no assurance that such financing will be available, on reasonable terms or at all, and if not available, the Corporation may be unable to fund its ongoing development;

(d)

The Corporation has the right to accept or reject the Subscriber’s subscription in whole or in part. If the subscription is rejected in whole or in part all or a portion of the purchase price, as the case may be, will be promptly delivered to the Subscriber, without interest;

(e)

The offer, sale and issuance of the Securities is exempt from the prospectus and registration requirements of Applicable Securities Laws and, as a result: (i) the Subscriber may not receive information that would otherwise be required under Applicable Securities Laws or be contained in a prospectus or registration statement prepared in accordance with Applicable Securities Laws, (ii) the Subscriber is restricted from using most of the protections, rights and remedies available under Applicable Securities Laws, including statutory rights of rescission or damages, and (iii) the Corporation is relieved from certain obligations that would otherwise apply under Applicable Securities Laws;

(f)

The Securities have not been and will not be qualified for distribution to the public under applicable Canadian securities laws. The Securities are being offered in each of the provinces of Canada on a private placement basis in accordance with National Instrument 45- 106 – Prospectus Exemptions (“NI 45-106”), without the filing of a prospectus. The transfer or resale of the Securities in Canada to, from or for the benefit or account of any person resident in Canada will be subject to restrictions under Applicable Securities Laws and any resale of the Securities must be made in accordance with Applicable Securities Laws. Unless permitted under securities legislation, a holder of Securities must not trade such Securities before the date that is four months and a day after the distribution date of the Securities. In addition, the Subscriber understands and acknowledges that the Securities will be “restricted securities” within the meaning of Rule 144(a)(3) under the U.S. Securities Act and that if in the future it decides to offer, sell, pledge or otherwise transfer any of the Securities it will not offer, sell, pledge or otherwise transfer any of such securities directly or indirectly, unless the transfer is: (i) to the Corporation; (ii) made pursuant to the exemption from the registration requirements under the U.S. Securities Act provided by (A) Rule 144 thereunder, if available, or (B) Rule 144A thereunder, if available, and in accordance with any applicable state securities or “blue sky” laws; or (iii) the Securities are sold in another transaction that does not require registration under the U.S. Securities Act or any applicable state laws and regulations governing the offer and sale of the securities (iv) pursuant to an effective registration statement with respect to the U.S. Securities Act and applicable state securities laws; and, in the case of clauses (ii)(A) or (iii), it has prior to such sale furnished to the Corporation an opinion of counsel in form and substance reasonably satisfactory to the Corporation.

(g)

The Subscriber (and any Disclosed Beneficial Subscriber) has reviewed and acknowledges the terms referred to herein and acknowledges and agrees that Securities purchased hereunder are subject to resale restrictions under Applicable Securities Laws; it is responsible to be familiar with such restrictions and to comply with them before any resale of the Securities it purchases and that the purchase of the Common Shares has certain consequences under Canadian federal income tax legislation and United States federal tax laws; and it has been advised to consult its own legal counsel and advisers in its jurisdiction of residence for full particulars of the resale restrictions and tax laws applicable to it;

(h)

The Subscriber (and any Disclosed Beneficial Subscriber) understands that there are restrictions on trading the Securities pursuant to Applicable Securities Laws in the province in which such purchaser resides and that the Securities may only be resold in accordance with the registration and prospectus requirements (or exemptions therefrom) of Applicable Securities Laws, which requirements will vary depending on the relevant jurisdiction and acknowledges the risks related therein, and it further acknowledges that if it resells the Securities, it will do so in compliance with the Applicable Securities Laws and it will give notice to the subsequent transferee during the applicable restricted period;

(i)

No prospectus or registration statement has been filed with any Regulator in connection with the Offering; no Regulator has reviewed, passed upon, or made any finding or determination as to the merit for investment in, or made any recommendation or endorsement with respect to, the Securities; and there is no government or other insurance covering the Securities;

(j)

The Securities have not been registered under the U.S. Securities Act, or any state securities laws and the Securities may not be offered or sold in the United States or to, or for the account or benefit of, a “U.S. person” (as that term is defined in Rule 902(k) of Regulation S under the U.S. Securities Act (“U.S. Person”)) except in compliance with the requirements of an exemption from registration under the U.S. Securities Act and any applicable state securities laws;

(k)

Material information concerning the Corporation is available in its public record (meaning information which has been publicly filed at www.sedarplus.ca and www.sec.gov/edgar by the Corporation pursuant to a requirement under Applicable Securities Laws (the “Public Record”));

(l)

The Corporation is required to file a report of trade with all applicable securities regulatory authorities or regulators containing personal information about Subscribers and, if applicable, any Disclosed Beneficial Subscribers of the Securities. This report of trade will include the full legal name, residential address, telephone number and email address of each Subscriber or Disclosed Beneficial Subscriber, the number and type of Securities purchased, the total purchase price paid for such Securities, the date of the Closing, specific details of the prospectus exemption relied upon under Applicable Securities Laws to complete such purchase, including how the Subscriber or Disclosed Beneficial Subscriber qualifies for such exemption and whether the Subscriber is an insider of the Corporation or a registrant. This information is collected indirectly by the securities regulatory authority or regulator in the applicable jurisdiction under the authority granted to it under, and for the purposes of the administration and enforcement of, the securities legislation of such jurisdiction. The Subscriber on its own behalf and, if applicable, on behalf of each Disclosed Beneficial Subscriber, authorizes such indirect collection of the information by such applicable securities regulatory authority or regulator. Should the Subscriber have any questions or concerns with respect to the foregoing, the contact information of the public official in the local jurisdiction who can answer such questions or address such concerns about the indirect collection of personal information is provided in Schedule "A" attached hereto;

(m)

The Securities are being offered on a “private placement” basis and the Common Shares are not and, subject to the terms of this Agreement, (i) have not been listed on any stock exchange and (ii) will be subject to resale restrictions under Applicable Securities Laws;

(n)

The Common Shares cannot be traded through the facilities of the Nasdaq Exchange (the “Exchange”) until the expiration of the applicable hold period since the certificates or direct registration statements representing the Common Shares are not freely transferable and consequently are not “good delivery” in settlement of transactions on the Exchange; and

(o)

The Subscriber acknowledges and agrees that the Corporation and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and warranties of the Subscriber and the Subscriber agrees that if any of the acknowledgements, representations or warranties above are no longer accurate, it shall promptly notify the Corporation.

Section 4

Representations and Warranties of the Subscriber

(a)

THE SUBSCRIBER (AND ANY DISCLOSED BENEFICIAL SUBSCRIBER) HAS KNOWLEDGE IN FINANCIAL AND BUSINESS AFFAIRS, IS CAPABLE OF EVALUATING THE MERITS AND RISKS OF AN INVESTMENT IN THE SECURITIES, AND IS ABLE TO BEAR THE ECONOMIC RISK OF SUCH INVESTMENT EVEN IF THE ENTIRE INVESTMENT IS LOST;

(b)

The Subscriber acknowledges and agrees that it has had access to such financial and other information and has been afforded an opportunity to ask such questions of the Corporation’s representatives and to receive answers thereto as it has deemed necessary in connection with its decision to purchase the Securities;

(c)

The Subscriber is purchasing the Securities for investment purposes only and not with a view to the resale or distribution thereof in a transaction that would violate the securities laws of any applicable jurisdiction, in whole or in part, and the Subscriber does not have any agreement or arrangement, formal or informal, written or oral, with any person or entity to sell or transfer or otherwise dispose of all or any part of the Securities, and has no present plans to enter into any such agreement or arrangement;

(d)

The distribution of the Securities has not been made through, or as a result of, and is not being accompanied by, (i) a general solicitation, (ii) any advertisement including articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or (iii) any seminar or meeting whose attendees have been invited by general solicitation or general advertising. The Subscriber's decision to subscribe for the Commmon Shares was based upon this Agreement and information about the Corporation which is on the Public Record;

(e)

The Subscriber (and any Disclosed Beneficial Subscriber) is eligible to purchase the Securities pursuant to an exemption from the prospectus requirements of Applicable Securities Laws. The Subscriber has completed and delivered to the Corporation the applicable certificate in Schedule “B” including the applicable Risk Acknowledgement Form evidencing the Subscriber’s (and any Disclosed Beneficial Subscriber’s) status and criteria for reliance on the relevant prospectus exemption under Applicable Securities Laws and;

(i)

confirms that it complies with the criteria for reliance on the prospectus exemption and the truth and accuracy of all statements made in such certificate as of the date of this Agreement and as of the Time of Closing;

(ii)

understands that the Corporation is required to verify that the Subscriber (and any Disclosed Beneficial Subscriber) satisfies the relevant criteria to qualify for the prospectus exemption; and

(iii)

may be required to provide additional information or documentation to evidence compliance with the prospectus exemption;

(f)

The Subscriber is not a person created or used solely to purchase or hold the Securities as an “accredited investor” as described in paragraph (m) of the definition of “accredited investor” in section 1.1 of NI 45- 106;

(g)

The Subscriber is either purchasing the Securities as principal for its own account, or is deemed to be purchasing Securities as principal by Applicable Securities Laws and not as agent for the benefit of another person;

(h)

The Subscriber (and any Disclosed Beneficial Subscriber) was offered the Securities in, and is resident in, the jurisdiction set out as the “Subscriber’s Address” on the second page of this Agreement and intends the Applicable Securities Laws of that jurisdiction to govern the offer, sale and issuance of the Securities to the Subscriber;

(i)

The Subscriber acknowledges and agrees that:

(i)

it understands that the purchase and sale contemplated by this Agreement are being made in reliance on an exemption from registration contained in Rule 506(b) of Regulation D under the U.S. Securities Act and/or Section 4(a)(2) of the U.S. Securities Act and similar exemptions under applicable state securities laws based in part upon the Subscriber’s representations contained herein and accordingly, the Securities are or will be when issued, as applicable, “restricted securities” within the meaning of Rule 144(a)(3) of the U.S. Securities Act; and

(ii)

it is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the U.S. Securities Act (a “U.S. Accredited Investor”) and has completed and agrees to the terms included in the Accredited Investor Certificate attached hereto as Schedule “D” and it has identified in such certificate the appropriate category of Accredited Investor status that correctly and in all respects describes the Subscriber.

(j)

If the Subscriber (or any Disclosed Beneficial Subscriber) is a resident of or otherwise subject to Applicable Securities Laws of a jurisdiction other than Canada or the United States (an “International Jurisdiction”), the Subscriber complies with the requirements of all Applicable Securities Laws and other laws and regulatory policies in the jurisdiction of its residence and will provide such evidence of compliance with all such matters as the Corporation may request, and

(i)

the Subscriber 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 International Jurisdiction(s) of its residence or by which it is otherwise governed that would apply to this Subscription Agreement, if there are any;

(ii)

the Subscriber is purchasing the Common Shares pursuant to exemptions that relieve the Corporation from any substantive or procedural requirements under the Applicable Securities Laws and policies of the Authorities in the International Jurisdiction(s) or, if such is not applicable, the Subscriber is permitted to purchase the Common Shares under the Applicable Securities Laws and policies of the Authorities in the International Jurisdiction(s) without the need for the Corporation to rely on any exemption from the Applicable Securities Laws and policies of the Authorities in the International Jurisdiction(s); and

(iii)

the applicable laws and policies of the Authorities in the International Jurisdiction do not require the Corporation to make any filings with, seek any approvals of any nature whatsoever from, or do any act or thing for any Authority of any kind whatsoever in the International Jurisdiction in connection with the issue and sale or resale of the Securities;

(k)

The Subscriber (and any Disclosed Beneficial Subscriber) is at arm’s-length, within the meaning of the policies of the Exchange, with the Corporation;

(l)

None of the funds that the Subscriber is using to purchase the Securities are to the knowledge of the Subscriber, proceeds obtained or derived, directly or indirectly, as a result of illegal activities;

(m)

The Subscriber (and any Disclosed Beneficial Subscriber) has not received, nor does it expect to receive any financial assistance from the Corporation, directly or indirectly, in respect of the Subscribers’ purchase of Securities;

(n)

Except as expressly provided for in this Agreement, no person has made any oral or written representations to the Subscriber: (i) that any person will resell or repurchase the Securities; (ii) that any person will refund the purchase price of the Securities; (iii) that the Securities will be listed on any exchange or quoted on any quotation and trade reporting system, (iv) that an application has been or will be made to list the Securities on any exchange or quote the Securities on any quotation and trade reporting system, or (v) as to the future value or price of any of the Securities;

(o)

If the Subscriber is an individual, he or she is of legal age and is legally competent to execute, deliver and perform his or her obligations under this Agreement. If the Subscriber is not an individual, (i) it has the legal capacity and competence to execute, deliver and perform its obligations under this Agreement; and (ii) the execution and delivery of and performance by the Subscriber of this Agreement have been authorized by all necessary corporate or other action on the part of the Subscriber;

(p)

If the Subscriber is subscribing on its own behalf, this Agreement has been duly executed and delivered by the Subscriber, and constitutes a legal, valid and binding agreement of the Subscriber enforceable against him, her or it in accordance with its terms;

(q)

If the Subscriber is acting for a Disclosed Beneficial Subscriber, the Subscriber is duly authorized to execute and deliver this Agreement and all other documentation in connection with the subscription on behalf of the Disclosed Beneficial Subscriber. This Agreement has been duly authorized, executed and delivered by or on behalf of such Disclosed Beneficial Subscriber and constitutes a legal, valid and binding agreement of such Disclosed Beneficial Subscriber enforceable against him, her or it in accordance with its terms;

(r)

The execution and delivery of and performance by the Subscriber (and any Disclosed Beneficial Subscriber) of this Agreement do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other event of condition) result in a breach or violation of or a conflict with, or allow any other person to exercise any rights under any of the terms or provisions of the Subscriber’s (and any such Disclosed Beneficial Subscriber’s) constating documents or by-laws, if applicable, or any other contract, agreement, instrument, undertaking or covenant to which the Subscriber (and any Disclosed Beneficial Subscriber) is a party or by which it is bound;

(s)

The Subscriber (and the Disclosed Beneficial Subscriber) has obtained such legal and tax advice as it considers appropriate in connection with the offer, sale and issuance of the Securities and the execution, delivery and performance by it of this Agreement and the transactions contemplated by this Agreement. The Subscriber (and the Disclosed Beneficial Subscriber), its legal counsel, other advisors and such other persons with whom the Subscriber has found it necessary to consult, have sufficient knowledge and experience in business and financial matters to evaluate the information set forth in this Agreement and in the Corporation's public securities filings, the Public Record and the risks of Subscriber's investment in the Securities, and to make an informed decision with respect thereto. The Subscriber acknowledges that neither the Corporation, nor any person acting on its behalf, has made any representations to the Subscriber or any advisor of the Subscriber regarding the tax consequences of an investment in the Securities. The Subscriber (and any Disclosed Beneficial Subscriber) (i) has such knowledge of financial and business affairs as to be capable of evaluating the merits and risks of an investment in the Securities; (ii) is capable of assessing its proposed investment in the Securities as a result of its own experience or as a result of advice received from a person duly registered under Applicable Securities Laws; and (iii) is able to bear the economic risk of the full loss of its investment in the Securities. The Subscriber (and any Disclosed Beneficial Subscriber) is not relying on the Corporation (including its affiliates) or its legal counsel in respect to any matter discussed in this Section 5(s);

(t)

The Subscriber understands the meaning and legal consequences of each of the foregoing representations, warranties and acknowledgements. The Subscriber understands that the Corporation and its legal counsel are relying upon the truth and accuracy of each of the foregoing representations, warranties and acknowledgements in issuing the Securities and establishing compliance with Applicable Securities Laws. The Subscriber's representations, warranties and acknowledgements are true and correct in all respects as of the date hereof and will be true and correct in all respects as of the date of Closing;

(u)

If the Subscriber is not subscribing as principal, the Subscriber acknowledges that the Corporation may be required by law to disclose to applicable securities regulatory authorities or stock exchanges information concerning the identities of each beneficial purchaser for whom the Subscriber is acting hereunder;

(v)

Except for the Subscriber's knowledge regarding its subscription for the Common Shares hereunder, the Subscriber has no knowledge of a "material fact" or a "material change" (as those terms are defined in Applicable Securities Laws, and which generally means a fact or change which would reasonably be expected to have a significant effect on the market price of the Common Shares) in the affairs of the Corporation that has not been generally disclosed; and

(w)

The funds representing the aggregate Subscription Price advanced by the Subscriber are not proceeds of crime as defined in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the “PCMLTFA”). None of the subscription funds to be provided by the Subscriber (i) have been or will be derived from or related to any activity that is deemed criminal under the laws of Canada or any other applicable jurisdiction, or (ii) are being tendered on behalf of a person or entity (A) with whom the Corporation would be prohibited from dealing with under applicable money laundering, terrorist financing, economic sanctions, criminal or other similar laws or regulations or (B) who has not been identified to the Subscriber. The Subscriber acknowledges that the Corporation may in the future be required by law to disclose the Subscriber’s name and other information relating to this Agreement and the Subscriber’s subscription hereunder, on a confidential basis pursuant to the PCMLTFA or other laws or regulations and shall promptly notify the Corporation if the Subscriber discovers that any of the foregoing representations ceases to be true, and to provide the Corporation with appropriate information in connection therewith.

Section 5

Covenants of the Subscriber

(1)

The Subscriber (and any Disclosed Beneficial Subscriber) will comply with Applicable Securities Laws concerning the subscription, purchase, holding and resale of the Securities and will consult with its legal advisers with respect to complying with resale restrictions under Applicable Securities Laws with respect to the Securities.

(2)

The Subscriber (and any Disclosed Beneficial Subscriber) will execute, deliver, file and otherwise assist the Corporation in filing any reports, undertakings and other documents as may be required from time to time under Applicable Securities Laws or applicable tax laws in connection with the offer, sale, issuance, ownership or holding of the Securities.

Section 6

Representations and Warranties of the Corporation

(a)

The Corporation and its subsidiaries are companies incorporated or formed, as applicable, and existing under the laws of the jurisdictions in which they are incorporated, formed, continued or amalgamated, as applicable;

(b)

The execution and delivery of, and performance by the Corporation of this Agreement have been authorized by all necessary corporate action on the part of the Corporation;

(c)

This Agreement has been duly executed and delivered by the Corporation and constitutes a legal, valid and binding agreement of the Corporation enforceable against it in accordance with its terms; and

(d)

The Corporation has complied with Applicable Securities Laws in connection with the offer, sale and issuance of the Securities;

Section 7

Covenants of the Corporation

(1)

The Corporation will, within the required time, file, in accordance with all Applicable Securities Laws, any documents, reports and information, in the required form, required to be filed in connection with the Offering, together with any applicable filing fees and other materials.

(2)

Following the expiration of any applicable holder period listed on the certificates or direct registration statements representing the Common Shares, the Corporation will apply to have the Common Shares listed on the Exchange.

Section 8

Survival

Section 9

Beneficial Subscribers

Section 10

Schedules

Schedule “A”

Securities Commission Contact Information

Section 11

Interpretation

Section 12

Assignment

Section 13

Entire Agreement

Section 14

Time of Essence

Section 15

Governing Law

Section 16

Language of Documents

Section 17

Execution by Facsimile and Counterparts

Section 18

Currency

Section 19

Severability

Section 20

Enurement

Alberta Securities Commission

Suite 600, 250 – 5th Street SW

Calgary, Alberta T2P 0R4

Telephone: (403) 297 6454

Toll free in Canada: 1-877-355-0585

Facsimile: (403) 297-2082

British Columbia Securities Commission

P.O. Box 10142, Pacific Centre

701 West Georgia Street

Vancouver, British Columbia V7Y 1L2

Inquiries: (604) 899-6854

Toll free in Canada: 1-800-373-6393

Facsimile: (604) 899-6581

Email: [email protected]

The Manitoba Securities Commission

500 – 400 St. Mary Avenue

Winnipeg, Manitoba R3C 4K5

Telephone: (204) 945-2548

Toll free in Manitoba 1-800-655-5244

Facsimile: (204) 945-0330

Financial and Consumer Services Commission (New Brunswick)

85 Charlotte Street, Suite 300

Saint John, New Brunswick E2L 2J2

Telephone: (506) 658-3060

Toll free in Canada: 1-866-933-2222

Facsimile: (506) 658-3059

Email: [email protected]

Government of Newfoundland and Labrador

Financial Services Regulation Division

P.O. Box 8700

Confederation Building

2nd Floor, West Block

Prince Philip Drive

St. John’s, Newfoundland and Labrador A1B 4J6

Attention: Director of Securities

Telephone: (709) 729-4189

Facsimile: (709) 729-6187

Government of the Northwest Territories 

Office of the Superintendent of Securities P.O. Box 1320

Yellowknife, Northwest Territories X1A 2L9

Attention: Deputy Superintendent, Legal & Enforcement

Telephone: (867) 920-8984

Facsimile: (867) 873-0243

Nova Scotia Securities Commission

Suite 400, 5251 Duke Street

Duke Tower

P.O. Box 458

Halifax, Nova Scotia B3J 2P8

Telephone: (902) 424-7768

Facsimile: (902) 424-4625

Government of Nunavut Department of Justice Legal 

Registries Division P.O. Box 1000, Station 570

1st Floor, Brown Building

Iqaluit, Nunavut X0A 0H0

Telephone: (867) 975-6590

Facsimile: (867) 975-6594

Ontario Securities Commission

20 Queen Street West, 22nd Floor

Toronto, Ontario M5H 3S8

Telephone: (416) 593- 8314

Toll free in Canada: 1-877-785-1555

Facsimile: (416) 593-8122

Email: [email protected]

Public official contact regarding indirect collection of information:

Inquiries Officer

Prince Edward Island Securities Office

95 Rochford Street, 4th Floor Shaw Building

P.O. Box 2000

Charlottetown, Prince Edward Island C1A 7N8

Telephone: (902) 368-4569

Facsimile: (902) 368-5283

Autorité des marchés financiers

800, Square Victoria, 22e étage C.P. 246, Tour de la Bourse Montréal, Québec H4Z 1G3

Telephone: (514) 395-0337 or 1-877-525-0337

Facsimile: (514) 873-6155 (For filing purposes only) Facsimile: (514) 864-6381 (For privacy requests only)

Email: [email protected] (For corporate finance issuers); [email protected] (For investment fund issuers)

Financial and Consumer Affairs Authority of Saskatchewan

Suite 601 - 1919 Saskatchewan Drive

Regina, Saskatchewan S4P 4H2

Telephone: (306) 787-5879

Facsimile: (306) 787-5899

Government of Yukon

Department of Community Services

Law Centre, 3rd Floor

2130 Second Avenue

Whitehorse, Yukon Y1A 5H6

Telephone: (867) 667-5314

Facsimile: (867) 393-6251

(a)

Annual Base Salary. Upon the Effective Date and thereafter, the Company shall pay to Executive a base salary for all services rendered by Executive under this Agreement at the rate of two hundred fifty thousand dollars ($250,000) per year (the “Annual Base Salary”). The Annual Base Salary shall be paid in approximately equal installments (less applicable payroll deductions and taxes) in accordance with the Company’s normal payroll schedule, procedures and policies (which schedules, procedures and policies may be modified from time to time in the Company’s sole discretion), but not less frequently than monthly. Except as otherwise provided in Schedule 2 hereto, the Company shall have no obligation to pay Executive’s Annual Base Salary following the date of the expiration or termination of this Agreement, whichever is earlier.

(b)

Signing Bonus. As soon as administratively practicable following the Effective Date hereof (and in all events no later than 120 days after the Effective Date), the Company shall grant Executive an award of restricted stock units (the “RSUs Award”) that represents, in the aggregate, two percent (2.0%) of the Company’s issued and outstanding Common Stock, determined on a fully diluted basis, as of March 27, 2025. The RSUs Award will be subject to the terms and conditions applicable to the respective restricted stock units granted under the Firefly Neuroscience, Inc. 2024 Long-Term Incentive Plan (the “Plan”), as described in the Plan, and the applicable Restricted Stock Units Agreement (the “RSUs Award Agreement”) and in accordance with applicable law. Commencing on the date of grant, 131,976 shares, representing one percent (1.0%) of the RSUs Award, shall vest quarterly in twelve(12) equal quarterly installments, subject to satisfaction of Executive’s Continuous Service (as defined in the RSUs Award Agreement); and the remaining one percent (1.0%) of the RSUs Award shall vest at a rate of zero point thirty four percent (0.34%) in the first year and zero point thirty three percent (0.33%) per year over remaining two years, contingent upon the achievement of annual performance targets. These annual performance targets will be mutually reviewed and determined by the Company and Executive and approved by the Board of Directors (the “Board”) or its Compensation Committee at the beginning of each fiscal year.

(c)

Annual Bonus. For each fiscal year of the Company ending during the Term, Executive shall be eligible to receive an annual cash bonus (the “Annual Bonus”) up to fifty percent (50%) of the Annual Base Salary as of December 31 of the applicable fiscal year (the “Target Bonus”). The Board or its Compensation Committee thereof shall determine the amount of the Annual Bonus, if any, in accordance with this Section 4(c), and shall notify Executive of such determination within sixty (60) days following the end of the fiscal year to which the Annual Bonus relates. Except for fiscal years 2025 and 2026, any Annual Bonus shall be paid in a manner reasonably determined by the Company and Executive, consistent with best practices and, in any event, prior to ninety (90) days following the end of the fiscal year to which the Annual Bonus relates. Except as otherwise provided in Section 5 hereto, Executive must be employed by the Company at least eight (8) months of the fiscal year to be eligible to receive the Annual Bonus. For fiscal year 2025, Executive shall receive a cash signing bonus of twelve thousand five hundred dollars ($12,500), payable within thirty (30) days of the Effective Date. Subject to Executive’s Continuous Service, the Company guarantees Executive a minimum Annual Bonus of thirty-seven thousand five hundred dollars ($37,500) for fiscal year 2025 (the “Minimum 2025 Annual Bonus”) and fifty thousand dollars ($50,000) for fiscal year 2026 (the “Minimum 2026 Annual Bonus”). The Minimum 2025 Annual Bonus is payable in three (3) equal payments towards the end of each calendar quarter. The Minimum 2026 Annual Bonus ispayable in four (4) equal quarterly installments. The first installment of the 2025 Minimum Annual Bonus will be paid by June 30, 2025, and the last installment of the 2025 Minimum Annual Bonus will be paid no later than December 31, 2025. The first quarterly installment of the 2026 Minium Annual Bonus will be paid no later than the end of first quarter 2026 and the last installment will be paid no later than the fourth quarter 2026; in no event will any quarterly installment of the 2026 Minium Annual Bonus be paid later than December 31, 2026.

(d)

Performance Bonus. In addition to the foregoing, the Board or its Compensation Committee may grant to Executive a performance bonus in addition to the Annual Bonus if deemed warranted.

(e)

Modification of Executive’s Annual Base Salary. The Board or its Compensation Committee may, from time to time, or upon favorable consideration of a reasonable request from Executive, modify Executive’s Annual Base Salary by executing an amendment or addendum to this Agreement, by and between Executive and the Company. An initial review will occur in August 2025 with annual reviews to occur in January of each subsequent year.

(f)

Expenses. The Company shall pay or reimburse Executive for all reasonable and necessary expenses actually incurred or paid by Executive during the employment in the performance of Executive’s duties under this Agreement, upon submission and approval of expense statements, vouchers, or other supporting information in accordance with the then customary practices of the Company and tax law, regulations or rules.

(g)

Paid Vacation and Sick Leave; Paid Holidays. Executive shall be entitled to: (i) ten (10) paid holidays observed by the United States federal government, as set forth in the company holiday schedule, per year and (ii) ten (10) paid vacation days and five (5) paid sick days per year, subject to the Company’s leave policies (which the Company may amend from time to time in its sole discretion). Paid vacation days become available for use in the pay period following the completion of 30 days of employment of Executive.

(h)

Benefits. Whether and to what extent Executive is entitled to receive benefits, if any, from the Company is set forth on Schedule 1 hereto.

(i)

Severance. Whether and to what extent Executive is entitled to receive a severance payment, if any, from the Company upon Executive’s termination of employment with the Company, whether by Executive or the Company, is set forth on Schedule 2 hereto.

(j)

Withholding of Taxes. The Company may withhold from any Annual Base Salary, bonuses, benefits and equity grants payable or deliverable under this Agreement all federal, state, city and other taxes as shall be required pursuant to any law or governmental regulation or ruling.

(a)

Notices. Any notice or other communication required or which may be given hereunder shall be in writing and shall be sent by email, nationally recognized overnight courier, or certified or registered mail (return receipt requested, postage prepaid), to the Parties at the addresses specified on the signature page hereto, or at such other addresses as shall be specified by the Parties by like notice.. Any notice to be given under this Agreement will be deemed given (a) upon personal delivery to the Party to be notified (b) on the day when delivered by electronic mail to the proper email address, (c) the first business day after deposit with a nationally recognized overnight courier, specifying next day delivery, or (d) the third business day after the day on which such notice was mailed in accordance with this Section.

(b)

Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter contained herein and supersedes all prior contracts and other agreements, written or oral, with respect to such subject matter.

(c)

Waivers and Amendments. This Agreement may be amended, modified, superseded, cancelled, and the terms and conditions hereof may be waived, only by a written instrument signed by the Parties or, in the case of a waiver, by the Party waiving compliance. No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any Party of any right, power, or privilege hereunder, nor any single or par‐tial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power, or privilege hereunder.

(d)

Governing Law. This Agreement shall be governed by and construed under the laws of the State of Delaware without regard to the choice of law principles thereof.

(e)

Dispute Resolution.

i.

Unless otherwise provided in this Agreement, the Parties agree that the exclusive forum and venue for the resolution of any controversy or claim between them arising out of or relating to this Agreement, or breach thereof (a “Dispute”), shall be the state and federal courts whose jurisdictional territory includes the county in which Company’s principal place of business is located. Each Party consents to personal jurisdiction and venue in those courts for litigation of a Dispute, and each Party waives any forum non conveniens objection to litigating a Dispute in those courts. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY IRREVOCABLY WAIVES ITS RIGHT TO HAVE A TRIAL BY JURY FOR ANY LEGAL OR OTHER COURT PROCEEDING ADDRESSING A DISPUTE.

ii.

As a condition precedent to a Party’s ability to commence litigation for a Dispute, the Party shall first give written notice to the other Party of the Dispute, and, no later than twenty-one (21) days after such notice is delivered, each Party (or a representative of each Party with authority to settle the Dispute for each Party) shall confer in good faith in an effort to resolve the Dispute. The notice of the Dispute shall include a reasonable description of the basis of the Dispute. Only after the Parties have conferred, or made a good faith effort to confer, in accord with this Section 6(e)(ii) may a Party commence litigation for the Dispute.

(f)

Binding Effect; Benefit. This Agreement shall inure to the benefit of and be binding upon the Parties hereto and any successors and assigns permitted or required by Section 6(g) hereof. Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the Parties hereto or such successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement.

(g)

Assignment. This Agreement, and Executive’s rights and obligations hereunder, may not be assigned by Executive. The Company may assign this Agreement and its rights, together with its obligations, hereunder in connection with any sale, transfer, or other disposition of all or substantially all of its assets or business, whether by merger, consolidation or otherwise.

(h)

Counterparts. This 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. This Agreement may be executed manually or by facsimile, scan, or other electronic means (e.g., DocuSign).

(i)

Severability. If a court or other tribunal of competent jurisdiction or any foreign, federal, state, county, or local government or other governmental, regulatory, or administrative agency or authority holds that any term or provision of this Agreement is invalid, illegal, or unenforceable, such term or provision shall be considered severed from this Agreement and not affect the validity, legality, or enforceability of the remaining terms or provisions of this Agreement. Upon a holding that any term or provision is invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify, or the court, tribunal, or regulatory or administrative agency or authority may modify, this Agreement to give effect to the original intent of the Parties as closely as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

(j)

Drafting. Should any provision of this Agreement require interpretation or construction, it is agreed by Executive and the Company that the person interpreting or construing this Agreement shall not apply a presumption against one Party by reason of the rule of construction that a document is to be construed more strictly against the party who prepared the document.

(k)

Headings. The headings and subheadings in this Agreement (e.g., “Drafting”) are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

(A)

Termination for Cause by Company. 

(B)

Termination Without Cause by Company or Resignation for Good Reason by Executive.

(C)

Change in Control.

(D)

Other Provisions.

1.    Confidential Information Protections.

1.1    Nondisclosure; Recognition of Company’s Rights. At all times during and after my employment, I will hold in confidence and will not disclose, use, lecture upon, or publish any of Company’s Confidential Information (defined below), except (i) as may be required in connection with my work for Company, (ii) as expressly authorized by an authorized officer of Company at the direction of the Board of Directors of Company; or (iii) as required or permitted to be disclosed pursuant to Rule 21F-17(a) under the Securities Exchange Act of 1934, as amended, or other applicable law, legal process or government regulation, provided, however, that prior to any disclosure of confidential information as required by such applicable law, I shall, to the extent such applicable law so permits, use my best efforts to advise Company in advance of my making any such permitted or required disclosure and cooperate with Company in order to afford Company a reasonable opportunity to take any legally-permissible actions to contest, limit, remove the basis for, or otherwise address such disclosure in connection with my work for Company. Except as provided above, I will obtain the written approval of an authorized officer of Company before publishing or submitting for publication any material (written, oral, or otherwise) that relates to my work at Company and/or incorporates any Confidential Information. Except as otherwise provided by applicable law I hereby assign to Company any rights I may have or acquire in any and all Confidential Information and recognize that all Confidential Information shall be the sole and exclusive property of Company and its assigns.

1.2    Confidential Information. The term “Confidential Information” shall mean any and all confidential knowledge, data or information related to Company’s business or its actual or demonstrably anticipated research or development, including without limitation (a) trade secrets, inventions, ideas, processes, computer source and object code, data, formulae, programs, other works of authorship, know-how, improvements, discoveries, developments, designs, and techniques; (b) information regarding products, services, plans for research and development, marketing and business plans, budgets, financial statements, contracts, prices, suppliers, and customers; (c) information regarding the skills and compensation of Company’s employees, contractors, and any other service providers of Company; and (d) the existence of any business discussions, negotiations, or agreements between Company and any third party.

1.3    Third Party Information. I understand that Company has received and in the future will receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. During and after the term of my employment, I will hold Third Party Information in strict confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection with their work for Company) or use, Third Party Information, except in connection with my work for Company or unless expressly authorized by an officer of Company in writing.

1.4    No Improper Use of Information of Prior Employers and Others. I represent that my employment by Company does not and will not breach any agreement with any former employer, including any noncompete agreement or any agreement to keep in confidence or refrain from using information acquired by me prior to my employment by Company. I further represent that I have not entered into, and will not enter into, any agreement, either written or oral, in conflict with my obligations under this Agreement. During my employment by Company, I will not improperly make use of, or disclose, any information or trade secrets of any former employer or other third party, nor will I bring onto the premises of Company or use any unpublished documents or any property belonging to any former employer or other third party, in violation of any lawful agreements with that former employer or third party. I will use in the performance of my duties only information that is generally known and used by persons with training and experience comparable to my own, is common knowledge in the industry or otherwise legally in the public domain, or is otherwise provided or developed by Company.

2.    Inventions.

2.1    Definitions. As used in this Agreement, the term “Invention” means any ideas, concepts, information, materials, processes, data, programs, know-how, improvements, discoveries, developments, designs, artwork, formulae, other copyrightable works, and techniques and all Intellectual Property Rights in any of the items listed above. The term “Intellectual Property Rights” means all trade secrets, copyrights, trademarks, mask work rights, patents and other intellectual property rights recognized by the laws of any jurisdiction or country. The term “Moral Rights” means all paternity, integrity, disclosure, withdrawal, special and any other similar rights recognized by the laws of any jurisdiction or country.

2.2    Prior Inventions. I have disclosed on Exhibit A a complete list of all Inventions that (a) I have, or I have caused to be, alone or jointly with others, conceived, developed, or reduced to practice prior to the commencement of my employment by Company; (b) in which I have an ownership interest or which I have a license to use; (c) and that I wish to have excluded from the scope of this Agreement (collectively referred to as “Prior Inventions”). If no Prior Inventions are listed in Exhibit A or if I have not completed Exhibit A, I warrant that there are no Prior Inventions. I agree that I will not incorporate, or permit to be incorporated, Prior Inventions in any Company Inventions (defined below) without Company’s prior written consent. If, in the course of my employment with Company, I incorporate a Prior Invention into a Company process, machine or other work, I hereby grant Company a non-exclusive, perpetual, fully-paid and royalty-free, irrevocable and worldwide license, with rights to sublicense through multiple levels of sublicensees, to reproduce, make derivative works of, distribute, publicly perform, and publicly display in any form or medium, whether now known or later developed, make, have made, use, sell, import, offer for sale, and exercise any and all present or future rights in, such Prior Invention.

2.3    Assignment of Company Inventions. Inventions assigned to Company or to a third party as directed by Company pursuant to the subsection titled Government or Third Party are referred to in this Agreement as “Company Inventions.” Subject to the subsection titled Government or Third Party and except for Inventions that I can prove qualify fully under the provisions of California Labor Code section 2870 and I have set forth in Exhibit A, I hereby assign and agree to assign in the future (when any such Inventions or Intellectual Property Rights are first reduced to practice or first fixed in a tangible medium, as applicable) to Company all my right, title, and interest in and to any and all Inventions (and all Intellectual Property Rights with respect thereto) made, conceived, reduced to practice, or learned by me, either alone or with others, during the period of my employment by Company. Any assignment of Inventions (and all Intellectual Property Rights with respect thereto) hereunder includes an assignment of all Moral Rights. To the extent such Moral Rights cannot be assigned to Company and to the extent the following is allowed by the laws in any country where Moral Rights exist, I hereby unconditionally and irrevocably waive the enforcement of such Moral Rights, and all claims and causes of action of any kind against Company or related to Company’s customers, with respect to such rights. I further acknowledge and agree that neither my successors-in-interest nor legal heirs retain any Moral Rights in any Inventions (and any Intellectual Property Rights with respect thereto).

2.4    Obligation to Keep Company Informed. During the period of my employment and for one (1) year after my employment ends, I will promptly and fully disclose to Company in writing (a) all Inventions authored, conceived, or reduced to practice by me, either alone or with others, including any that might be covered under California Labor Code section 2870, and (b) all patent applications filed by me or in which I am named as an inventor or co-inventor.

2.5    Government or Third Party. I agree that, as directed by Company, I will assign to a third party, including without limitation the United States, all my right, title, and interest in and to any particular Company Invention.

2.6    Enforcement of Intellectual Property Rights and Assistance. During and after the period of my employment and at Company’s request and expense, I will assist Company in every proper way, including consenting to and joining in any action, to obtain and enforce United States and foreign Intellectual Property Rights and Moral Rights relating to Company Inventions in all countries. I will execute any documents that Company may reasonably request for use in obtaining or enforcing such Intellectual Property Rights and Moral Rights. My obligations under this paragraph will continue beyond the termination of my employment with Company, provided that Company will compensate me at a reasonable rate after such termination for time or expenses actually spent by me at Company’s request on such assistance.

2.7    Incorporation of Software Code. I agree that I will not incorporate into any Company software or otherwise deliver to Company any software code licensed under the GNU General Public License or Lesser General Public License or any other license that, by its terms, requires or conditions the use or distribution of such code on the disclosure, licensing, or distribution of any source code owned or licensed by Company except as expressly authorized by Company or in strict compliance with Company’s policies regarding the use of such software.

3.    Records. I agree to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that is required by Company) of all Inventions made by me during the period of my employment by Company, which records shall be available to, and remain the sole property of, Company at all times.

4.    Additional Activities. I agree that I will not (a) during the term of my employment by Company, without Company’s express written consent, engage in any employment or business activity that is competitive with, or would otherwise conflict with my employment by, Company; and (b) during the term of my employment by Company and for one (1) year thereafter, I will not either directly or indirectly, solicit or attempt to solicit any employee, independent contractor, or consultant of Company to terminate his, her or its relationship with Company in order to become an employee, consultant, or independent contractor to or for any other person or entity. Furthermore, I agree that during the term of my employment by Company and thereafter, I shall not disparage Company, any officer or director of Company or any affiliate or agent of Company.

5.    Return Of Company Property. Upon termination of my employment or upon Company’s request at any other time, I will deliver to Company all of Company’s property, equipment, and documents, together with all copies thereof, and any other material containing or disclosing any Inventions, Third Party Information or Confidential Information and certify in writing that I have fully complied with the foregoing obligation. I agree that I will not copy, delete, or alter any information contained upon my Company computer or Company equipment before I return it to Company. In addition, if I have used any personal computer, server, or e-mail system to receive, store, review, prepare or transmit any Company information, including but not limited to, Confidential Information, I agree to provide Company with a computer-useable copy of all such Confidential Information and then permanently delete and expunge such Confidential Information from those systems; and I agree to provide Company access to my system as reasonably requested to verify that the necessary copying and/or deletion is completed. I further agree that any property situated on Company’s premises and owned by Company is subject to inspection by Company’s personnel at any time with or without notice. Prior to the termination of my employment or promptly after termination of my employment, I will cooperate with Company in attending an exit interview and certify in writing that I have complied with the requirements of this section.

6.    Notification Of New Employer. If I leave the employ of Company, I consent to the notification of my new employer of my rights and obligations under this Agreement, by Company providing a copy of this Agreement or otherwise.

7.    General Provisions.

7.1    Governing Law and Venue. This Agreement and any action related thereto will be governed and interpreted by and under the laws of the State of Delaware, without giving effect to any conflicts of laws principles that require the application of the law of a different state. I expressly consent to personal jurisdiction and venue in the state and federal courts for the county in which Company’s principal place of business is located for any lawsuit filed there against me by Company arising from or related to this Agreement.

7.2    Severability. If any provision of this Agreement is, for any reason, held to be invalid or unenforceable, the other provisions of this Agreement will remain enforceable and the invalid or unenforceable provision will be deemed modified so that it is valid and enforceable to the maximum extent permitted by law.

7.3    Survival. This Agreement shall survive the termination of my employment and the assignment of this Agreement by Company to any successor or other assignee and shall be binding upon my heirs and legal representatives.

7.4    Employment. I agree and understand that nothing in this Agreement shall give me any right to continued employment by Company, and it will not interfere in any way with my right or Company’s right to terminate my employment at any time, with or without cause and with or without advance notice.

7.5    Notices. Each party must deliver all notices or other communications required or permitted under this Agreement in writing to the other party at the address listed on the signature page, by courier, by certified or registered mail (postage prepaid and return receipt requested), or by a nationally-recognized express mail service. Notice will be effective upon receipt or refusal of delivery. If delivered by certified or registered mail, notice will be considered to have been given five (5) business days after it was mailed, as evidenced by the postmark. If delivered by courier or express mail service, notice will be considered to have been given on the delivery date reflected by the courier or express mail service receipt. Each party may change its address for receipt of notice by giving notice of the change to the other party.

7.6    Injunctive Relief. I acknowledge that, because my services are personal and unique and because I will have access to the Confidential Information of Company, any breach of this Agreement by me would cause irreparable injury to Company for which monetary damages would not be an adequate remedy and, therefore, will entitle Company to injunctive relief (including specific performance). The rights and remedies provided to each party in this Agreement are cumulative and in addition to any other rights and remedies available to such party at law or in equity.

7.7    Waiver. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of that provision or any other provision on any other occasion.

7.8    Export. I agree not to export, reexport, or transfer, directly or indirectly, any U.S. technical data acquired from Company or any products utilizing such data, in violation of the United States export laws or regulations.

7.9    Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be taken together and deemed to be one instrument.

7.10    Entire Agreement. If no other agreement governs nondisclosure and assignment of inventions during any period in which I was previously employed or am in the future employed by Company as an independent contractor, the obligations pursuant to sections of this Agreement titled Confidential Information Protections and Inventions shall apply. This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior communications between us with respect to such matters. No modification of or amendment to this Agreement, or any waiver of any rights under this Agreement, will be effective unless in writing and signed by me and an authorized officer of Company. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

COMPANY:

Firefly Neuroscience, Inc.

By:

/s/ Greg Lipschitz

Name:

Greg Lipschitz

  Title:

Chief Executive Officer

        Address:

1100 Military Road, Kenmore, NY

US Patent #US-20160365121-A1 Game Video Processing Systems and Methods

US Patent # US-10269390-B2 Game Video Processing Systems and Methods

US Patent # US-11176471-B1 Explainable Machine Learning Models

SnapDraft: https://github.com/DaveDeCaprio/snapdraft

Voice Stream: https://github.com/DaveDeCaprio/voice-stream

Conrad Conditional Random Fields: https://github.com/DaveDeCaprio/ConradCRF

Covid-19 Vulnerability Index: https://github.com/closedloop-ai/cv19index