Dirtt Environmental Solutions (DRTTF) 8-K DIRTT Agrees to Reimburse 22NW for Expenses Related to Contested Director Election

Exhibit 10.2

SHARE ISSUANCE AGREEMENT

THIS SHARE ISSUANCE AGREEMENT (this “Agreement”) is made as of the 15^th day of March, 2023 (the “Effective Date”).

AMONG:

DIRTT ENVIRONMENTAL SOLUTIONS LTD., a corporation existing under the laws of Alberta

(“the Company”)

- and -

22NW FUND, LP, a limited partnership existing under the laws of Delaware

(“22NW”)

- and -

ARON ENGLISH, an individual residing in City of Seattle in the State of Washington

(“English” and together with 22NW, the “22NW Group”)

WHEREAS:

A. The Company and the 22NW Group entered into a debt settlement agreement dated effective March 13, 2023 (the “Debt Settlement Agreement”), pursuant to which the Company agreed to reimburse the 22NW Group collectively in the amount of US$1,559,898 (the “Debt”) for legal fees and other expenses incurred by the 22NW Group in connection with the contested director election at the annual and special meeting of shareholders of the Company held on April 26, 2022 (the “2022 Meeting”);

B. Pursuant to the Debt Settlement Agreement, the Company and 22NW Group agreed to work in good faith and use commercially reasonable efforts to, as soon as practicable, settle the terms of the repayment of the Debt by either, or a combination of: (i) a payment in cash by the Company to the 22NW Group; and/or (ii) the issuance of equity securities of the Company to the 22NW Group; and

C. The Company and the 22NW Group wish to settle the Debt by way of the issuance of equity securities of the Company to the 22NW Group as set forth in this Agreement;

NOW THEREFORE, this Agreement witnesses that, for good and valuable consideration, the receipt and sufficiency of which is acknowledged by the Company, 22NW and English (each, a “Party” and, together, the “Parties”), the Parties agree as follows:

1. PAYMENT OF INDEBTEDNESS, ETC.

1.1 Subject to section 1.3, the Debt will be repaid by the issuance to the 22NW Group of 3,899,745 common shares in the capital of the Company (“Common Shares”) at a deemed price US$0.40 per Common Share (the “Share Issuance”).

1.2 Upon the execution and delivery of this Agreement, the Company will make disclosure as required under applicable laws with respect to the Share Issuance.

1.3 The Share Issuance is subject to the holders of Common Shares approving, by a simple majority of votes cast (excluding those Common Shares held by the 22NW Group, as required to be excluded under the rules of the Toronto Stock Exchange (the “TSX”) and the Nasdaq Capital Market (“Nasdaq”), the proposal relating to the Share Issuance (“Shareholder Approval”) as required by the TSX and Nasdaq at the 2023 annual and special meeting of the holders of Shares (the “2023 Meeting”).

1.4 If Shareholder Approval is not obtained at the 2023 Meeting, the Company and the 22NW Group will work in good faith and use commercially reasonable efforts to, as soon as practicable, settle the terms of the repayment of the Debt by either, or a combination of: (i) a payment in cash by the Company to the 22NW Group (the “Cash Payment”); and/or (ii) the issuance of equity securities of the Company to the 22NW Group (the “Security Issuance”), provided that in any case:

(a) the Company shall not make any Cash Payment unless it is in compliance with the Restricted Payments test set forth in the Loan Agreement dated as of February 12, 2021 (as amended, restated, modified or supplemented from time to time) (the “Loan Agreement”) on a pro forma basis; and

(b) if the Company is prohibited from making a Cash Payment pursuant to clause (a), the Company shall repay the Debt by way of Security Issuance.

2. REPRESENTATIONS AND WARRANTIES

2.1 The Company represents and warrants to the 22NW Group that:

(a) the Company has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder;

(b) the Company has taken all requisite corporate action to authorize the execution and delivery of this Agreement and, subject to the receipt of Shareholder Approval, the performance of the Company’s obligations hereunder, and none of the foregoing will constitute a breach of, or default under, the articles of incorporation or by-laws of the Company, or any of its subsidiaries, or of any agreement to which it, or any of its subsidiaries, is a party or by which it is bound;

(c) this Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms (except in any case as enforcement hereof may be limited by bankruptcy, insolvency, reorganization, and other laws relating to or affecting the rights of creditors generally and except as limited by equitable principles);

(d) the Company’s information circular for the 2023 Meeting will contain a recommendation that holders of Common Shares vote to approve the Share Issuance; and

(e) the Common Shares issued pursuant to the Share Issuance will be duly and validly issued as fully paid and non-assessable Common Shares.

2.2 Each of English and 22NW represents and warrants to the Company, jointly and severally, that:

(a) it has the legal capacity to enter into and execute this Agreement and perform its obligations hereunder and under any other instruments delivered pursuant hereto;

(b) they have taken all requisite corporate action to authorize the execution and delivery of this Agreement and the performance of their obligations hereunder, and none of the foregoing will constitute a breach of, or default under, the articles of incorporation or by-laws, as applicable, of a member of the 22NW Group or of any agreement to which any of them is a party or by which any of them are bound; and

(c) this Agreement has been duly executed and delivered by the 22NW Group and constitutes a legal, valid and binding obligation of the 22NW Group enforceable against the 22NW Group in accordance with its terms (except in any case as enforcement hereof may be limited by bankruptcy, insolvency, reorganization, and other laws relating to or affecting the rights of creditors generally and except as limited by equitable principles).

3. GENERAL

3.1 In addition to the terms set out in this Agreement, the repayment of the Debt shall be subject to the terms and conditions of the Debt Settlement Agreement. In the event of any conflict or inconsistency between the Debt Settlement Agreement and this Agreement, the terms of this Agreement shall prevail.

3.2 In this Agreement, words importing the singular number only shall include the plural and vice versa, words importing gender shall include all genders and words importing persons shall include individuals, corporations, partnerships, associations, trusts, unincorporated organizations, governmental bodies and other legal or business entities of any kind.

3.3 Any reference to currency is to the lawful currency of the United States unless otherwise indicated.

3.4 The 22NW Group acknowledges and agrees that all costs and expenses incurred by the 22NW Group (including any fees and disbursements of any legal counsel retained by the 22NW Group) relating to this Agreement shall be borne by the 22NW Group.

3.5 This Agreement and all matters related to or arising from this Agreement are governed by the laws of the Province of Alberta and the federal laws of Canada applicable therein.

3.6 This Agreement is not transferable or assignable.

3.7 Time shall be of the essence of this Agreement.

3.8 If any provision of this Agreement is held to be invalid or unenforceable in any jurisdiction, then:

(a) such provision shall be deemed amended to conform to applicable laws so as to be valid and enforceable to the fullest possible extent in such jurisdiction, (b) the invalidity or unenforceability of such provision in such jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction, and (c) such invalidity or unenforceability of such provision shall not affect the validity or enforceability of any other provision of this Agreement.

3.9 Except as expressly provided in this Agreement and in the agreements, instruments and other documents contemplated or provided for in this Agreement, this Agreement contains the entire agreement between the Parties with respect to the settlement of the Debt, and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral or written, by statute or common law, by the Company or by anyone else with respect thereto.

3.10 This Agreement may only be amended by mutual written agreement of the Parties.

3.11 Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered by personal delivery, prepaid courier, or email, addressed as follows:

(a) if to the Company:

7303 - 30th Street S.E.

Calgary, Alberta

T2C 1N6

Attention:    Legal Department

Telephone:  403-723-5000

Email:          legal@dirtt.com

(b) if to the 22NW Group:

22NW Fund, LP

1455 NW Leary Way, Ste 400

Seattle, WA 98107

Attention:    Aron English

Telephone:  (206) 227-307

Email:          english@englishcap.com

3.12 This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall constitute an original and all of which together shall constitute one instrument.

3.13 Delivery of an executed copy of this Agreement by electronic means, including by DocuSign or electronic transmission in portable document format (“.pdf”), shall be equally effective as delivery of a manually executed copy of this Agreement.

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IN WITNESS WHEREOF the Parties have executed this Agreement as of the date first stated above.

DIRTT ENVIRONMENTAL SOLUTIONS LTD.
Per:	/s/ Ken Sanders
	Name: Ken Sanders Title: Board Chair
22NW FUND, LP
Per:	/s/ Aron English
	Name: Aron English Title: Manager of General Partner, 22NW Fund GP, LLC
/s/ Aron English
ARON ENGLISH