Natcore Technology Inc. and Dutchess Opportunity Fund, II, LP

September 30, 2016

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Securities Act, s. 48 – exemption from registration requirement – A lender under an equity line of credit wants relief from the requirement to register as an underwriter – The lender will not solicit any offers to purchase the securities it acquires from the issuer and will resell any securities through an exchange, using a registered dealer unaffiliated with the issuer or the lender.

Securities Act, s. 71(1) – exemption from prospectus delivery requirement – A lender under an equity line of credit wants relief from the requirement to deliver a prospectus – The issuer will file a supplement to its base shelf prospectus describing the terms of the equity purchase agreement; the issuer will issue a news release upon entering into the equity purchase agreement and file the agreement on SEDAR; the news release will indicate that the shelf prospectus and supplement have been filed and will specify where and how purchasers may obtain a copy.

National Instrument 44-101, s. 8.1 – exemption from short form prospectus form requirements – Disclosure – An issuer wants relief from the requirement to include in the prospectus a statement of purchasers’ statutory rights in the prescribed form – The issuer is distributing securities to purchasers on the TSX-V through a lender under an equity line of credit; the purchasers will have all statutory rights except those rights triggered by delivery of the prospectus; the issuer will provide an amended statement of rights in the prospectus so that the prospectus properly describes applicable rights and purchasers are not misled.

National Instrument 44-102, s. 11.1 – exemption from shelf prospectus form requirements – An issuer wants relief from the requirement to include certain disclosure in the base shelf prospectus – The issuer is distributing securities to purchasers on the TSX-V through a lender under an equity line of credit; the purchasers will have all statutory rights except those rights triggered by delivery of the prospectus; the issuer will include in its base shelf prospectus all disclosure required under s. 5.5 but will eliminate or modify statements that specifically refer to delivery of the prospectus.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25, 71(1), 74(1).

National Instrument 44-101 Short Form Prospectus Distributions, s. 8.1.

Form 44-101F1 Short Form Prospectus.

National Instrument 44-102 Shelf Distributions, ss. 5.5, 11.1.

September 30, 2016

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA AND ONTARIO

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

NATCORE TECHNOLOGY INC.

(the Issuer)

AND

DUTCHESS OPPORTUNITY FUND, II, LP

(the Purchaser and, together with the Issuer and the Purchaser, the Filers)

DECISION

Background

1 The securities regulatory authority or regulator in each the Jurisdictions (the Decision Makers) have received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that:

(a) the following disclosure requirements under the Legislation (the Prospectus Disclosure Requirements) do not fully apply to the Issuer in connection with the Distribution (as defined below);

(i) the statement in the Prospectus Supplement (as defined below) respecting statutory rights of withdrawal and rescission in the form prescribed by Item 20 of Form 44-101F1 of National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101); and

(ii) the statements in the Base Shelf Prospectus (as defined below) required by subsections 5.5(2) and (3) of National Instrument 44-102 Shelf Distributions (NI 44-102);

(b) the prohibition from acting as a dealer or underwriter unless the person or company is registered as such (the Registration Requirement) does not apply to the Purchaser in connection with the Distribution (as defined below); and

(c) the requirement under the Legislation that a dealer send a copy of the Prospectus (as defined below) to a subscriber or purchaser in the context of a distribution (the Prospectus Delivery Requirement), and a purchaser’s right to withdrawal, revocation or rescission within two days of receipt of the Prospectus, do not apply to the Issuer, the Purchaser or the dealer(s) through whom the Purchaser distributes the Shares (as defined below) and that, as a result, rights of withdrawal or rights of rescission, price revision or damages for non-delivery of the Prospectus do not apply in connection with the Distribution (as defined below) (the relief contemplated in paragraph (a), (b) and (c) being together referred to as the Exemptive Relief Sought).

Under the National Policy 11-203 – Process for Exemptive Relief Applications in Multiple Jurisdictions (NP 11-203) (for a dual application):

(a) the British Columbia Securities Commission is the principal regulator for this application,

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta and Nova Scotia; and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

2 Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

3 This decision is based on the following facts represented by the Filers:

The Issuer

1. the Issuer is a corporation incorporated under the Business Corporations Act (British Columbia) with its head office located in Rochester, New York, USA;

2. the Issuer is a reporting issuer in the provinces of British Columbia, Alberta, Nova Scotia and Ontario (the Jurisdictions) and is not in default of securities legislation in any jurisdiction of Canada; the Issuer is also a reporting company in the United States;

3. the Issuer’s authorized share capital currently consists of an unlimited number of common shares (the Shares) of which 60,289,302 Shares were outstanding as at July 13, 2016; as of the same date, an aggregate of 5,501,500 Shares are issuable on exercise of outstanding stock options and an aggregate of 21,892,070 Shares are issuable on the exercise of outstanding common share purchase warrants;

4. the Shares are listed for trading on the TSX Venture Exchange (the TSXV) under the symbol “NXT”; based on the closing price of $0.315 of the Shares on the TSXV on September 16, 2016, the current market capitalization of the Issuer is approximately $19,306,130;

5. on May 26, 2016, the Issuer filed a notice of intention to be qualified to file a short form prospectus pursuant to Section 2.6 of NI 44-101 and is eligible to file a short form prospectus under Section 2.2 of NI 44-101 and a base shelf prospectus under Section 2.2 of NI 44-102;

6. the Issuer has filed a registration statement with the United States Securities and Exchange Commission in relation to the Offering which became effective on October 6, 2015;

7. the Issuer intends to file with the securities regulators in each of the Jurisdictions a base shelf prospectus pertaining to various securities of the Issuer, including the Shares (such base shelf prospectus and any amendment thereto and renewal thereof, being referred to herein as the Base Shelf Prospectus);

8. the statements required by subsections 5.5(2) and (3) of NI 44-102 to be included in the (final) Base Shelf Prospectus will be qualified by adding “except in cases where an exemption from such delivery requirements has been obtained” to the end of the required disclosure;

The Purchaser

9. the Purchaser is a Delaware limited partnership and its head office is located at 50 Commonwealth Avenue, Suite 2, Boston, Massachusetts, 02116, USA;

10. the Purchaser has been established to purchase and sell, as principal, securities of publicly traded entities, using various investment structures, including without limitation, equity securities pursuant to equity lines of credit;

11. the Purchaser is not a reporting issuer or registered as a registered firm as that term is defined National Instrument 31-103 Registration Requirements and Exemptions in any jurisdiction of Canada;

12. the Purchaser is not in default of securities legislation in any jurisdiction of Canada;

13. the Purchaser is an “accredited investor” as defined in National Instrument 45-106 – Prospectus and Registration Exemptions;

The Distribution Agreement and Proposed Distribution Arrangement

14. the Issuer has entered into an investment agreement (the Investment Agreement) pursuant to which the Purchaser has agreed to purchase, and the Issuer has the right, but not the obligation, exercisable from time to time for a period of 36 months (the Commitment Period), to issue and sell, up to US$5,000,000 of Shares (the Aggregate Commitment Amount);

15. the Issuer proposes to enter into an amended and restated investment agreement (the Distribution Agreement) in order to amend certain items relating to the transactions contemplated thereby;

16. the Distribution Agreement will provide the Issuer with the ability to raise capital as needed from time to time; the Purchaser regularly engages in such transactions; the Purchaser may, in some cases, finance its commitment to subscribe for Shares on a draw down through resales from existing holdings of the Issuer’s securities;

17. under the Distribution Agreement, the Issuer will, subject to paragraph 18, be entitled to deliver to the Purchaser, at any time during the Commitment Period, a draw down notice (a Draw Down Notice), which notice shall (i) notify the Purchaser of its intention to draw down funds under the facility, (ii) specify the amount of the proposed draw down, (iii) specify the pricing period which will establish the price per share at which the Issuer will issue Shares in connection with such Draw Down Notice, which price, may not be below the greater of (a) US$0.30 per Share or (b) the last closing price of the Shares on the TSXV on the trading day immediately prior to the Draw Dawn Notice less the permitted discount set by the TSXV (the Minimum Price);

18. the Issuer may not deliver a Draw Down Notice during the period beginning 10 trading days before the Issuer’s next subsequent annual financial statements or quarterly financial statements are to be public released and ending two trading days after such report is released, or during any other period in which the Issuer is in possession of material non-public information;

19. the maximum amount that the Issuer shall be entitled to drawn down pursuant to any Draw Down Notice shall not exceed the greater of (i) USD$200,000 or (ii) 200% of the product of the average daily trading volume of Shares on the TSXV during the three days immediately preceding the date of such Draw Down Notice and the average of the closing price of the Shares on the TSXV during such three-day period;

20. the subscription price of the Shares to be issued pursuant to a Draw Down Notice (the Purchase Price) will equal 95% of the lowest daily volume-weighted average price of the Shares traded on the TSXV over a period of five trading days commencing immediately after the date of the Draw Down Notice (the Draw Down Pricing Period), provided, however, that the subscription price shall not be less than the Minimum Price;

21. on the day following the expiry of the Draw Down Pricing Period, the Purchaser shall deliver to the Issuer a settlement document setting forth, among other things, the number of Shares to be purchased and the Purchase Price. On the date which is no later than three (3) trading days following the last day of the Draw Down Pricing Period (a Settlement Date), the amount of the drawdown will be paid by the Purchaser against delivery of the relevant number of Shares to be issued by the Issuer;

22. the Distribution Agreement will provide that, at the time of each Draw Down Notice and at each Settlement Date, the Issuer will make a representation to the Purchaser that the Base Shelf Prospectus, as supplemented (the Prospectus) contains full, true and plain disclosure of all material facts relating to the Issuer and does not omit to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made. The Issuer would therefore be unable to issue Shares under the Distribution Agreement when it is in possession of undisclosed information that would constitute a material fact or a material change;

23. on or after the Settlement Date for any drawdown, the Purchaser may seek to sell all or a portion of the Shares issued to it pursuant to the applicable Draw Down Notice;

24. during the term of the Distribution Agreement, the Purchaser, its affiliates, associates, partners or insiders (together the Purchaser Group), agree not to own at any time, directly or indirectly, Shares representing more than 9.99% of all issued and outstanding Shares at such time;

25. the Purchaser Group will not sell the Issuer’s shares short during the term of the Distribution Agreement and for a period of 40 days thereafter. Specifically, each of the Purchaser Group will not:

(a) borrow Shares to be sold;

(b) borrow Shares to cover a short position; or

26. disclosure of the activities of the Purchaser Group, as well as the restrictions thereon, will be included in the Prospectus Supplement (as defined below); in addition, the Issuer will include in the Prospectus Supplement, the following risk factors: (a) that the Purchaser may engage in resales or other hedging strategies to reduce or eliminate investment risks associated with a draw down and that such risk factor will disclose the possibility that such transactions could have a significant effect on the price of the Shares; (b) that the transactions contemplated by the Distribution Agreement may result in significant dilution to existing shareholders of the Issuer; and (c) that the Purchaser Group may sell Shares issued to them pursuant to the Distribution Agreement during its term and that such sales may have a significant effect on the price of the Shares;

27. no extraordinary commission or consideration will be paid by the Purchaser to a person or company in respect of the dispositions of Shares by the Purchaser to purchasers who acquire them from the Purchaser;

28. in effecting any re-sales of the Shares, the Purchaser will not to engage in any sales, marketing or solicitation activities of the type undertaken by dealers or underwriters in the context of a public offering; specifically, the Purchaser will not (a) advertise or otherwise hold itself out as a dealer, (b) purchase or sell securities as principal from or to customers, (c) carry a dealer inventory in securities, (d) quote a market in securities, (e) extend or arrange for the extension of credit in connection with securities transactions, (f) run a book of repurchase and reverse repurchase agreements, (g) use a carrying broker for securities transactions, (h) lend securities for customers, (i) guarantee contract performance or indemnify the Issuer for any loss or liability from the failure of the transaction to be successfully consummated, (j) participate in a selling group (k) effect any disposition of Shares which would not be in compliance with the Legislation of the securities laws of the United States, (l) provide investment advice or (m) issue or originate securities;

29. the Purchaser will not solicit offers to purchase Shares in any jurisdiction in Canada and will complete all sales of Shares to TSXV Purchasers (as defined below) via the facilities of a Recognized Exchange (as defined below), through registered dealer(s) unaffiliated with the Purchaser or the Issuer;

The Prospectus Supplements

30. the Issuer intends to file with the securities regulatory authority in each of the Jurisdictions: (a) a prospectus supplement to the Base Shelf Prospectus (the Prospectus Supplement) as soon as commercially reasonable following the date on which the Base Shelf Prospectus is receipted by the applicable securities regulatory authorities; and (b) a pricing supplement (each, a Pricing Supplement) within two business days after the Settlement Date for each drawdown under the Distribution Agreement.

31. the Prospectus Supplement will disclose (i) the Aggregate Commitment Amount, (ii) the formula to calculate the Purchase Price, (iii) in addition to the information otherwise required by NI 44-102, the disclosure required by subsection 9.1(3) of NI 44-102, (iv) certain other information required by NI 44-101 omitted from the Base Shelf Prospectus in accordance with NI 44-102 and (v) the following statement:

Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment. In several of the provinces, the securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, revisions of the price or damages if the prospectus and any amendment are not delivered to the purchaser, provided that the remedies for rescission, revisions of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province. However, such rights and remedies will not be available to purchasers of common shares distributed under this Prospectus Supplement because the Prospectus, the Prospectus Supplement and the relevant Pricing Supplement, will not be delivered to purchasers, as permitted under a decision document issued by the British Columbia Securities Commission on l, 2016.

The securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, revisions of the price or damages if the prospectus and any amendment contain a misrepresentation, provided that the remedies for rescission, revisions of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province. Such remedies remain unaffected by the non-delivery of the prospectus, as permitted under the decision document referred to above.

The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province for the particulars of these rights or consult with a legal adviser.

(the Amended Statement of Rights).

32. each Pricing Supplement will disclose (i) the number of Shares issued to the Purchaser on the applicable Settlement Date, (ii) the applicable Purchase Price, (iii) the aggregate Purchase Price;

33. the Base Shelf Prospectus, as supplemented by the Prospectus Supplement and the relevant Pricing Supplement, will: (a) qualify the distribution of Shares to the Purchaser on the Settlement Date of the drawdown disclosed in the relevant Pricing Supplement; and (b) qualify the distribution of Shares to purchasers who purchase them from the Purchaser through the TSXV or another exchange recognized or exempted from recognition by the securities regulator in the Jurisdiction (each a Recognized Exchange) through registered dealer(s) engaged by the Purchaser (the TSXV Purchasers) during the period that commences on the first day of the relevant Drawdown Pricing Period and ends on the earlier of (i) the date on which the distribution of such Shares has ended or (ii) the 40th day following the relevant Settlement Date (collectively, a Distribution);

34. the Prospectus Delivery Requirements are not workable in the context of a Distribution because the TSXV Purchasers will not be readily identifiable as the dealer(s) acting on behalf of the Purchaser may combine the sell orders made under the Prospectus with other sell orders and the dealer(s) acting on behalf of the TSXV Purchasers may combine a number of purchase orders;

35. the Prospectus Supplement will contain an underwriter’s certificate in the form set out in section 2.2 of Appendix B to NI 44-102 signed by the Purchaser;

36. at least three business days prior to the filing of the Prospectus Supplement to be filed as described in paragraph 30, the Issuer will provide for comment to the Decision Makers a draft of such Prospectus Supplement;

Continuous Disclosure

37. after execution of the Distribution Agreement the Issuer will:

(a) promptly issue and file a news release disclosing the amendment of the Investment Agreement to become the Distribution Agreement and disclosing the material terms thereof, including reiterating the Aggregate Commitment Amount, the maximum amount of any draw down, the Minimum Price, the restrictions on short sales described in paragraph 25 and the formula to calculate the Purchase Price; and

(b) within ten days:

(i) file a material change report disclosing, at a minimum, the information required in paragraph (a); and

(ii) file a copy of the Distribution Agreement on SEDAR. The Investment Agreement has been previously filed on SEDAR by the Issuer;

38. in the event of: (i) the termination of the Distribution Agreement; or (ii) a change in (A) the Aggregate Commitment Amount; (B) the restrictions on short sales described in paragraph 25 above, or (C) the formula to calculate the Purchase Price, the Issuer will:

(a) promptly issue and file on SEDAR a news release disclosing such information and:

(i) that the Base Shelf Prospectus, the Prospectus Supplement and each Pricing Supplement will be available on SEDAR and specifying how a copy of these documents can be obtained; and

(ii) the Amended Statement of Rights; and

(b) within ten days file a material change report with respect to such event if it constitutes a material change under applicable securities legislation;

39. promptly after delivery of each Draw Down Notice to the Purchaser, the Issuer will issue and file a news release disclosing in each case, the amount of that drawdown, the maximum number of Shares to be issued and the applicable Minimum Price, as well as the fact that the Base Shelf Prospectus and the Prospectus Supplement are available on SEDAR and specifying how a copy of those documents can be obtained;

40. in respect of each Settlement Date the Issuer will:

(a) promptly issue and file on SEDAR a news release disclosing:

(i) the number of Shares issued to the Purchaser and the Purchase Price in the relevant drawdown;

(ii) that the Base Shelf Prospectus, the Prospectus Supplement and the relevant Pricing Supplement are available on SEDAR and specifying how a copy of these documents can be obtained; and

(iii) the Amended Statement of Rights; and

(b) within ten days file a material change report if the Distribution constitutes a material change disclosing, at a minimum, the information required in paragraph (a);

41. the Issuer will disclose in its financial statements and management’s discussion and analysis filed on SEDAR pursuant to National Instrument 51-102 Continuous Disclosure Obligations, for each financial period, (a) the number and price of Shares issued to the Purchaser pursuant to the Distribution Agreement, and (b) that the Base Shelf Prospectus, the Prospectus Supplement and the relevant Pricing Supplements are available on SEDAR and specifying where and how a copy of these documents can be obtained;

Deliveries upon Request

42. the Issuer will deliver to the Decision Makers and to the TSXV, upon request, a copy of each Draw Down Notice delivered by the Issuer to the Purchaser under the Distribution Agreement; and

43. the Purchaser will provide to the Decision Makers, upon request, full particulars of trading and hedging activities by the Purchaser (and, if required, trading and hedging activities by its affiliates, associates, partners or insiders) in relation to securities of the Issuer during the term of the Distribution Agreement.

Decision

4 Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Makers to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemptive Relief Sought is granted, provided that:

(a) the number of Shares distributed by the Issuer under the Distribution Agreement does not exceed, in any 12-month period, 19.9% of the aggregate number of Shares outstanding calculated at the beginning of such period;

(b) as it relates to the Prospectus Disclosure Requirements, the Issuer complies with the representations in paragraphs 8, 22, 26, 30, 31, 32, 33, 36, 37, 38, 39, 40, 41, 42 and 43 and the Purchaser complies with the representations in paragraph 35;

(c) as it relates to the Registration Requirements and the Prospectus Delivery Requirements, the Purchaser complies with the representations in paragraphs 24, 25, 27, 28, 29, 35 and 43; and

(d) this decision will terminate 25 months after date of the receipt for the final Base Shelf Prospectus.

“Robert Kirwin”

Director, Corporate Finance

British Columbia Securities Commission