Nouveau Monde Graphite Inc.

Convertible Notes

2022** Private Placement**

The Convertible Notes issued in connection with the 2022 Private Placement, as amended and restated, are three-years instruments in the principal amounts of US$12.5 million for IQ and Pallinghurst Bond and US$25 million for Mitsui, which bears interest at a rate to the greater of (i) the 90-day average term SOFR (secured overnight financing rate) plus 5% or (ii) 7% per annum, compounded daily. The Corporation has the option to pay the interest in (i) cash on the last business day of each quarter commencing on December 31, 2022 or (ii) by Common Shares, subject to TSXV approval, by delivering share certificates to the holders upon maturity, conversion or redemption at a U.S. Dollar equivalent of the Corporation’s Market Price as defined in TSXV policies, determined at the quarter end on which such interest became payable. All or a portion of the principal amount of the Convertible Notes will be convertible at the election of the holders thereof into units of the Corporation at a price of US$5.00 per Convertible Note Unit (the “Convertible Note Unit”) at any time until the maturity date. Each Convertible Note Unit will be comprised of one (1) Common Share and one (1) CN Warrant. Each CN Warrant will entitle the holder thereof to acquire one Common Share at a price of US$5.70 per Common Share for a period of 24 months from the date of issuance thereof. At any time, the holders of the Convertible Notes have the right to convert all or a portion (provided that such portion to be converted amounts to US$500,000 or more) of the Convertible Notes, subject to the NYSE and TSXV approvals, and the Convertible Notes shall automatically be converted prior to the maturity date if the holder makes an affirmative decision with respect to FID (as defined in the Convertible Notes) and subject to certain conditions provided in the Convertible Notes. The Convertible Notes are subject to a hold period of 4 months and one day from the date of their issuance in accordance with relevant regulatory and stock exchange policies.

Assuming the conversion in whole of the Convertible Notes, 10,000,000** **Common Shares and 10,000,000 CN Warrants, entitling its holders to acquire 10,000,000 additional Common Shares, would be issued to the holders of the Convertible Notes, representing 17.8% of the issued and outstanding Common Shares, as of the date of this Annual Information Form. In addition, the Corporation has reserved for issuance the accrued interests on the Convertible Notes, resulting in 1,795,803 Common Shares to be issued at the maturity, conversion or redemption of the Convertible Notes. After giving effect to the Related Party Transactions and assuming the conversion in whole of IQ’s Convertible Note, 2,500,000 Common Shares and 2,500,000 CN Warrants, entitling its holder to acquire 2,500,000 additional Common Shares, would be issued to the holder of the Convertible Note, representing 9.54% of the issued and outstanding Common Shares.

Investment Agreements

On November 8, 2022, upon closing of the 2022 Private Placement, a second amended and restated investment agreement was entered into by the Corporation, Pallinghurst Bond and Pallinghurst International (together, the “Pallinghurst Parties”) to amend the existing amended and restated investment agreement dated August 28, 2020 (the “Second Amended and Restated Investment Agreement”). The Second Amended and Restated Investment Agreement provides that the Pallinghurst Parties are entitled to nominate (i) three (3) nominees to the Board of Directors if the Pallinghurst Parties’ Pro Rata Interest is at least equal to 20% and (ii) two (2) nominees to the Board of Directors if the Pallinghurst Parties’ Pro Rata Interest is less than 20% but greater than 10%, and provided further that the number of directors of the Corporation shall not exceed ten (10). “Pro Rata Interest” means, on any date, the aggregate security ownership interest of the holder of a Convertible Note (together with their affiliates, as applicable) in the Corporation, expressed as a percentage, equal to (i) the aggregate number of outstanding Common Shares and other voting or equity shares of the Corporation beneficially owned, directly or indirectly, or over which control or direction is exercised by the holder of the Convertible Notes and its affiliates (as applicable); divided by (ii) the aggregate number of outstanding Common Shares and other voting or equity shares of the Corporation. The Pallinghurst Parties were also granted a pre-emptive right over subsequent offerings by the Corporation. The Pallinghurst Parties shall have the right (the “Pre-emptive Right”) to subscribe for and acquire, on the same terms and conditions of such subsequent offering such number of Common Shares or convertible securities (as applicable) as would result in the Pro Rata Interest immediately following completion of the subsequent offering being equal to the Pallinghurst Parties’ Pro Rata Interest immediately prior to the subsequent offering. In addition, the Pallinghurst Parties have additional top-up rights in the case of certain dilution events in order to maintain their Pro Rata Interest immediately following completion of such dilution event equal to their Pro Rata Interest immediately prior to such dilution event.

On November 8, 2022, upon closing of the 2022 Private Placement, the side letter agreement entered into by the Corporation and Mitsui on October 19, 2022 became effective (the “Letter Agreement”). The Letter Agreement provides that Mitsui is entitled, provided that it makes an affirmative decision in favor of FID (at which time the Convertible Note will be converted into Convertible Note Units to the extent contemplated in the Convertible Note) and for so long as Mitsui’s Pro Rata Interest is 10% or more, at its own discretion, to designate either (i) one (1) nominee to the Board of Directions or (ii) one representative to the Board of Directors. In addition, during the period (a) prior to the FID, for so long as Mitsui holds its Convertible Note and/or all of the Common Shares converted from its Convertible Note and (b) on or after the date that Mitsui makes an affirmative decision in favor of FID (at which time the Convertible Note will be converted into Convertible Note Units to the extent contemplated in the Convertible Note), for so long as Mitsui holds all of the Common Shares converted from its Convertible Note and Mitsui’s Pro Rata Interest is between 5% and less than 10%, have the right to appoint one observer to attend all meetings of the Board of Directors. Mitsui was also granted a pre-emptive right over subsequent offerings by the Corporation. Mitsui shall have the right the Pre-emptive Right to subscribe for and acquire, on the same terms and conditions of such subsequent offering such number of Common Shares or convertible securities (as applicable) as would result in the Pro Rata Interest immediately following completion of the subsequent offering being equal to the Pro Rata Interest immediately prior to the subsequent offering. In addition, Mitsui has additional top-up rights in the case of certain dilution events in order to prevent its Pro Rata Interest from falling below the 20% and 10% thresholds enumerated above. Certain marketing rights for future sales of the Corporation’s active anode material were also granted to Mitsui.

On November 8, 2022, upon closing of the 2022 Private Placement, an investment agreement was also entered into by the Corporation and IQ (the “IQ Investment Agreement”). The IQ Investment Agreement provides that IQ is entitled to nominate one (1) nominee to the Board of Directors for so long as IQ’s Pro Rata Interest is 10% or more and provided further that the number of directors of the Corporation shall not exceed ten (10). IQ was also granted a Pre-Emptive Right over subsequent offerings by the Corporation. IQ shall have the Pre-Emptive Right to subscribe for and acquire, on the same terms and conditions of such subsequent offering such number of Common Shares or convertible securities (as applicable) as would result in the Pro Rata Interest immediately following completion of the subsequent offering to be equal to the Pro Rata Interest immediately prior to the subsequent offering. In addition, IQ has additional top-up rights in the case of certain dilution events in order to maintain its Pro Rata Interest immediately following completion of such dilution event equal to its Pro Rata Interest immediately prior to such dilution event.