Exhibit 10.2

 

PROMISSORY NOTE CONVERSION AGREEMENTFOR CANADIAN NOTEHOLDERS

 

THIS PROMISSORY NOTE CONVERSION AGREEMENT (this “Agreement”) is entered into as
of June 17, 2016 by and between Quest Solution, Inc., a Delaware corporation
(the “Company”), and ___________, a Canadian corporation (“Noteholder”).

 

W I T N E S S E T H:

 

WHEREAS, the Company has executed a Subordinated Promissory Note in favor of
Noteholder in the original aggregate principal amount of $_________, a copy of
which is attached hereto as Exhibit A (the “Company Note”); and

 

WHEREAS, the current outstanding principal and interest amount due under the
Company Note (including principal and accrued but unpaid interest) is
$_________, which the Company and Noteholder desire to convert into shares of
Series C Preferred Stock, $1.00 par value of the Company (the “Preferred
Stock”).

 

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt, sufficiency and adequacy of which is hereby acknowledged, the parties
hereby agree as follows:

 

  1. Conversion to Preferred Stock. Notwithstanding any term or provision of the
Notes to the contrary, this Agreement shall be effective when it is accepted and
countersigned by the Company (the “Effective Date”) and the entire amount
outstanding under the Notes (including principal and accrued but unpaid
interest) shall be converted into shares of Preferred Stock (each, a “Share” and
collectively, the “Shares”), at a conversion rate of one Share for each $1.00 of
principal and accrued but unpaid interest due under the Notes through the
Effective Date, which, for purposes of this Agreement, Noteholder and the
Company agree shall be equal to an aggregate of __________ Shares of Preferred
Stock. Upon the Effective Date and return of the original Notes as described
below, the Company shall instruct its transfer agent to issue such shares of
Preferred Stock to Noteholder at the address on the signature page hereto.      
  2. Return of Notes; Release. Upon the Effective Date, the Notes shall be
deemed to be cancelled, paid in full and of no further force or effect and
Noteholder shall have no rights thereunder. Upon the execution of this
Agreement, Noteholder shall return the original Notes to the Company marked
“CANCELLED: PAID IN FULL”, to be held by the Company until the Effective Date.
As of the Effective Date, Noteholder and Company hereby forever releases,
discharges, acquits and forever forgives the other party and respective its
shareholders, directors, officers, employees and agents from any and all claims,
suits, actions, demands, liabilities and proceedings of every nature and
description, known and unknown, arising out of or pursuant to the Notes.        
3. Restricted Stock. The Preferred Stock to be issued hereunder has not been
registered with the Securities and Exchange Commission or with the securities
regulatory authority of any state. Preferred Stock is subject to restrictions
imposed by federal and state securities laws and regulations on transferability
and resale, and may not be transferred assigned or resold except as permitted
under the Securities Act of 1933, as amended (the “1933 Act”), and the
applicable state securities laws, pursuant to registration thereunder or
exemption therefrom.         4. Company Representations and Warranties. As of
the date hereof, the Company hereby represents and warrants to Noteholder that:

 

 

 

 

  (f) Organization. The Company is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware.        
(g) Authority and Validity. The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery
and performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action required on the part of the Company, and no other proceedings
on the part of the Company are necessary to authorize this Agreement or for the
Company to perform its obligations under this Agreement. This Agreement
constitutes the lawful, valid and legally binding obligation of the Company,
enforceable in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity.         (h) Valid Issuance of Preferred Stock.
The Shares, when issued and delivered in accordance with the terms hereof, will
be duly and validly authorized and issued, fully paid and nonassessable.        
(i) No Violation or Conflict. The execution, delivery and performance of this
Agreement and the transactions contemplated hereby do not (i) violate, conflict
with or result in the breach of any provision of the Company’s Certificate of
Incorporation or the Company’s Amended and Restated Bylaws, adopted September
29, 2003 (the “Bylaws”), (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable the Company or any of its
assets, properties or businesses, or (iii) conflict with, result in any breach
of, constitute a default (or event that with the giving of notice or lapse of
time, or both, would become a default) under, require any consent under, or give
to others any rights of termination, amendment, acceleration, suspension,
revocation or cancellation of, or result in the creation of any encumbrance on
any of the assets or properties of the Company, pursuant to any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which the Company is a party
except, in the case of clauses (ii) and (iii), to the extent that such
conflicts, breaches, defaults or other matters would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
Company.         (j) Governmental/Regulatory Consents and Approvals. Except for
filings under federal and foreign securities laws and, if required, FINRA rules
and regulations, the execution, delivery and performance of this Agreement by
the Company does not, and the consummation of the transactions contemplated
hereby do not and will not, require any permits, consents, approvals, orders,
authorizations of, or declarations to or filings with any federal, state, local
or foreign government or regulatory authority, which has not already been
obtained, effected or provided.

 

  5. Noteholder Representations and Warranties. As of the date hereof,
Noteholder hereby represents and warrants to the Company that:

 

  (a) Noteholder is the beneficial owner of the Notes free and clear of any
liens, security interests, encumbrances or other like items and is conveying
good title to the Notes to the Company. Excluding an additional promissory note
in the original aggregate principal amount of __________ dated _____________,
the Notes are the only Promissory Notes that Noteholder holds in relation to
Company and that there is no further indebtedness owed by the Company to
Noteholder.

 

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  (b) Noteholder, either alone or with the assistance of the appropriate
professional advisors, is a sophisticated investor, is able to fend for
himself/herself/itself in the transactions contemplated by this Agreement and
has sufficient knowledge and experience in financial and business matters to be
capable of evaluating the merits and risks of this investment. Noteholder has
the ability to accept the high risk and lack of liquidity inherent in this type
of investment. Noteholder’s financial condition is such that Noteholder can
afford to bear the economic risk of holding Preferred Stock, and to suffer a
complete loss of Noteholder’s investment in the Company represented by Preferred
Stock.         (c) Noteholder:

 

  (i) has had, and continues to have, access to detailed information with
respect to the business, financial condition, results of operations and
prospects of the Company;         (ii) has received or has been provided access
to all material information concerning an investment in the Company; and        
(iii) has been given the opportunity to obtain any additional information or
documents from, and to ask questions and receive answers of, the officers,
directors and representatives of the Company to the extent necessary to evaluate
the merits and risks related to an investment in the Company represented by
Preferred Stock.

 

  (d) As a result of Noteholder’s study of the aforementioned information and
Noteholder’s prior overall experience in financial matters, and Noteholder’s
familiarity with the nature of businesses such as the Company, Noteholder is
properly able to evaluate the capital structure of the Company, the business of
the Company and the risks inherent therein.         (e) Noteholder is an
“accredited investor” (as said term is defined in Rule 501(a) (17 C.F.R. §
230.501) promulgated under the 1933 Act. Noteholder has accurately completed the
Investor Questionnaire attached hereto as Exhibit B. Noteholder is an
“accredited investor” as that term is defined in National Instrument 45-106 and
Noteholder has accurately completed the Canadian Accredited Investor Certificate
attached hereto as Exhibit C. The undersigned agrees to provide any additional
documents and information that the Board of Directors of the Company shall
reasonably request for purposes of determining whether the undersigned is an
accredited investor.         (f) Noteholder understands that nothing in this
Agreement or any materials presented to Noteholder in connection with the
issuance of the Shares constitutes legal, tax or investment advice. Noteholder
has consulted such legal, tax and investment advisors and made such
investigations as it, it its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Shares.         (g) No person
or entity acting on behalf of, or under the authority of, Noteholder is or will
be entitled to any broker’s, finder’s or similar fees or commission payable by
the Company.         (h) Noteholder has all necessary power and authority to
execute and deliver this Agreement and become an owner of the Shares. All action
on Noteholder’s part required for the lawful execution and delivery of this
Agreement has been taken. Upon its execution and delivery, this Agreement will
be a valid and binding obligation of Noteholder, enforceable in accordance with
its terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights, and (b) as limited by general principles of
equity that restrict the availability of equitable remedies.

 

-3-

 

 

  (i) The Shares are being acquired for Noteholder’s own account without the
participation of any other person, with the intent of holding the Shares for
investment and without the intent of participating, directly or indirectly, in a
distribution of the Shares and not with a view to, or for resale in connection
with, any distribution of the Shares or any portion thereof, nor is Noteholder
aware of the existence of any distribution of the Company’s securities, and
Noteholder does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participations to such person or to
any third person with respect to any of the Shares.         (j) The Shares were
not offered to Noteholder by means of any form of general solicitation, general
advertising or publicly disseminated advertisements or sales literature, nor is
Noteholder aware of any offers made to other persons by such means.         (k)
For purposes of the application of state securities laws, if Noteholder is an
individual, then Noteholder resides in the state or province identified in the
address of Noteholder set forth on the signature page hereto; if Noteholder is a
partnership, corporation, limited liability company or other entity, then the
office or offices of Noteholder in which its investment decision was made is
located at the address or addresses of Noteholder set forth on the signature
page hereto.         (l) Noteholder acknowledges (a) that the undersigned’s
purchase of the Shares will be a highly speculative investment, (b) the tax
implication of his/her/its purchase, and (c) the undersigned must continue to
bear the economic risk of the investment in the Shares for an indefinite period
and recognizes that the Shares will be:

 

  (i) issued without registration under any state or federal law relating to the
registration of securities for sale;         (ii) issued in reliance on one or
more exemptions from registration under the 1933 Act, including, without
limitation, those contained in Sections 3(b)(1), 4(a)(2) or 4(a)(5) thereof and
Rules 505 and 506 under Regulation D; and         (iii) issued in reliance on
one or more exemptions from the prospectus requirements under applicable
Canadian securities laws.

 

  (m) Noteholder agrees:

 

  (i) The Shares will not be offered for sale, sold, or transferred other than
pursuant to (i) an exemption from the prospectus requirements under applicable
Canadian securities laws; (ii) an effective registration under the 1933 Act or
in a transaction otherwise in compliance with the 1933 Act; and (iii) evidence
satisfactory to the Company of compliance with the applicable securities laws of
other jurisdictions. The Company shall be entitled to rely upon an opinion of
counsel satisfactory to it with respect to compliance with the above laws.

 

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  (ii) Noteholder realizes that (a) the Shares have not been registered under
the 1933 Act, each Share is characterized under the 1933 Act as a “restricted
security” and, therefore, the Shares cannot be sold or transferred unless the
Shares are subsequently registered under the 1933 Act or an exemption from
registration is available and (b) the Company will be under no obligation to
register the Shares or to comply with any exemption available for sale of the
Shares without registration, and the information or conditions necessary to
permit routine sales of securities of the Company under Rule 144 of the 1933 Act
are not now available, and no assurance has been given that they will become
available. The Company is under no obligation to act in any manner so as to make
Rule 144 available with respect to the Shares. The Company is not being
registered as an “investment company” as defined in Section 3(a) of the
Investment Company Act of 1940, as amended 15 U.S.C. § 80a-51, et. seq. There is
presently no public market for the Shares and Noteholder would most likely not
be able to liquidate Noteholder’s investment in the event of an emergency or to
pledge the Shares as collateral security for loans. Noteholder’s financial
condition is such that it is unlikely that Noteholder would need to dispose of
any of the Shares in the foreseeable future. Consistent with the foregoing,
Noteholder represents that Noteholder is familiar with Rule 144 and understands
the resale limitations imposed by Rule 144 and by the 1933 Act.

 

  (n) The Company may, if it so desires, refuse to permit the transfer of the
Shares unless the request for transfer is accompanied by an opinion of counsel
reasonably acceptable to the Company to the effect that neither the sale nor the
proposed transfer will result in any violation of the 1933 Act or the applicable
securities laws of any other jurisdiction.         (o) A legend substantially
stating the following and indicating that the Shares have not been registered
under such securities laws and referring to the restrictions on transferability
and sale of the Shares may be placed on any certificate(s) delivered to
Noteholder or any substitutes therefor and any transfer agent of the Company may
be instructed to require compliance therewith:

 

“THE SECURITIES ISSUED IN ACCORDANCE HEREWITH HAVE NOT BEEN REGISTERED UNDER THE
FEDERAL SECURITIES ACT OF 1933, AS AMENDED (THE “FEDERAL ACT”) , AND WERE ISSUED
IN RELIANCE UPON ONE OR MORE OF THE EXEMPTIONS CONTAINED IN SECTIONS 3(b)(1),
4(a)(2) OR 4(a)(5) THEREOF. THESE SECURITIES CANNOT BE SOLD, ASSIGNED, PLEDGED
OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE FEDERAL ACT, OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR IN A TRANSACTION WHICH IS
OTHERWISE IN COMPLIANCE WITH THE FEDERAL ACT.”

 

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE
LATER OF (I) JUNE 30, 2016, AND (II) THE DATE THE ISSUER BECAME A REPORTING
ISSUER IN ANY PROVINCE OR TERRITORY.”

 

  6. Miscellaneous.

 

  (a) This Agreement shall be construed and enforced in accordance with the laws
of the State of Delaware.         (b) This Agreement constitutes the entire
agreement between the parties and supersedes all prior oral or written
negotiations and agreements between the parties with respect to the subject
matter hereof. No modification, variation or amendment of this Agreement
(including any exhibit hereto) shall be effective unless made in writing and
signed by both parties. To the extent any terms of the Company Note are
inconsistent with the provisions of this Agreement, Noteholder waives the
application of such inconsistent provision and covenants and agrees that the
terms of this Agreement shall control.

 

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  (c) Each party to this Agreement hereby represents and warrants to the other
party that it has had an opportunity to seek the advice of its own independent
legal counsel with respect to the provisions of this Agreement and that its
decision to execute this Agreement is not based on any reliance upon the advice
of any other party or its legal counsel. Each party represents and warrants to
the other party that in executing this Agreement such party has completely read
this Agreement and that such party understands the terms of this Agreement and
its significance. This Agreement shall be construed neutrally, without regard to
the party responsible for its preparation.         (d) Each party to this
Agreement hereby represents and warrants to the other party that

 

  (i) the representative executing this Agreement on behalf of such party has
been granted all necessary power and authority to act on behalf of such party
with respect to the execution, performance and delivery of this Agreement; and  
      (ii) the representative executing this Agreement on behalf of such party
is of legal age and capacity to enter into agreements which are fully binding
and enforceable against such party.

 

  (e) This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute a single instrument.

 

[SIGNATURES CONTAINED ON FOLLOWING PAGE.]

 

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IN WITNESS WHEREOF, the parties have executed this Promissory Note Conversion
Agreement as of the date set forth above.

 

COMPANY:   NOTEHOLDER:            QUEST SOLUTION, INC.               By:     By:
            Name: Tom Miller   Name:             Title: President   Title:      
      Address: 860 Conger Street   Address:                             Eugene,
OR 97402                 Telephone: (541) 284-1476   Telephone:            
Facsimile: (____) ___________   Facsimile:             E-Mail:
tmiller@questsolution.com   E-Mail:  

 

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EXHIBIT A

 

COPY OF COMPANY NOTE

 

-8-

 

 

EXHIBIT B

 

INVESTOR QUESTIONNAIRE

 

 

  8. The exact name that your Shares are to be registered in. You may use a
nominee name if appropriate:

 

     

 

  9. The relationship between Noteholder and the registered holder listed in
response to item 1 above:

 

     

 

  10. The mailing address of the registered holder listed in response to item 1
above:

 

                                                                  Fax:    

 

  11. The Social Security Number or Tax Identification Number of the registered
holder listed in the response to item 1 above:

 

     

 

  12. Occupation/Business:_____________________________________________________

 

  13. Place and date of formation if an entity:

 

     

 

  14. If Noteholder is an individual subscriber, please CHECK whichever of the
following statements, (a) - (e) below, is applicable to you:

 

______ (a) Noteholder has had an individual income in excess of $200,000 in each
of the two most recent calendar years and reasonably expects to have an
individual income in excess of $200,000 in the current calendar year;

 

______ (b) Noteholder has had joint income with his or her spouse in excess of
$300,000 in each of the two most recent calendar years and reasonably expects to
have joint income with his or her spouse in excess of $300,000 in the current
calendar year;

 

______ (c) Noteholder has an individual net worth, or joint net worth with his
or her spouse, in excess of $1,000,000, excluding the value of Noteholder’s
primary residence;

 

______ (d) Noteholder is a director or executive officer of the Company;

 

______ (e) None of the above.

 

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For purposes of this Questionnaire, the following definitions apply:

 

“Individual income” means “adjusted gross income” as reported for federal income
tax purposes, less any income attributable to a spouse or to property owned by a
spouse, increased by the following amounts (but not including any amounts
attributable to a spouse or to property owned by a spouse): (i) the amount of
any interest income received which is tax-exempt under Section 103 of the
Internal Revenue Code of 1986, as amended (the “Code”), (ii) the amount of any
losses claimed as a limited partner in a limited liability company (as reported
on Schedule E of Form 1040) and (iii) any deduction claimed for depletion under
Section 611 et seq. of the Code.

 

“Joint income” means “adjusted gross income” of you and your spouse as reported
for federal income tax purposes, increased by the following amounts: (i) the
amount of any interest income received which is tax-exempt under Section 103 of
the Code, (ii) the amount of losses claimed as a limited partner in a limited
liability company (as reported on Schedule E of Form 1040) and (iii) any
deduction claimed for depletion under Section 611 et seq. of the Code.

 

“Net worth” means the excess of total assets at fair market value, including
personal property but excluding the value of Noteholder’s primary residence,
over total liabilities, including mortgages and income taxes on unrealized
appreciation of assets.

 

8. If Noteholder is a corporation, partnership, employee benefit plan,
individual retirement account or trust, please CHECK whichever of the following
statements, (a) - (n) below, is applicable to it:

 

______ (a) Noteholder is a self-directed individual retirement account or 401(k)
Plan (if this statement is checked, the participant must also check whichever of
statements 7(a) - (e) above are applicable);

 

______ (b) Noteholder is a bank as defined in Section 3(a)(2) of the 1933 Act,
or a savings and loan association or other institution as defined in Section
3(a)(5)(A) of the 1933 Act, whether acting in an individual or fiduciary
capacity;

 

______ (c) Noteholder is a broker or dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934, as amended;

 

______ (d) Noteholder is an insurance company as defined in Section 2(13) of the
1933 Act;

 

______ (e) Noteholder is an investment company registered under the Investment
Company Act of 1940, as amended (the “Company Act”);

 

______ (f) Noteholder is a business development company as defined in Section
2(a)(48) of the Company Act;

 

______ (g) Noteholder is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958, as amended ;

 

______ (h) Noteholder is a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees if such plan has total
assets in excess of $5,000,000;

 

______ (i) Noteholder is an employee benefit plan within the meaning of Title I
of the Employee Retirement Income Security Act of 1974, as amended, provided
that the investment decision is made by a plan fiduciary, as defined in Section
3(21) of such Act, and the plan fiduciary is either a bank, savings and loan
association, insurance company or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000, or, if a
self-directed plan, the investment decisions are made solely by persons that are
accredited investors.

 

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______ (j) Noteholder is a private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940, as amended;

 

______ (k) Noteholder is an organization described in Section 501(c)(3) of the
Code, a corporation, a Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the Shares, with total assets
in excess of $5,000,000;

 

______ (l) Noteholder is a trust with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Shares, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the
1933 Act;

 

______ (m) Noteholder is an entity, each of whose stockholders, partners or
beneficiaries meets at least one of the conditions set forth under 7(a) - (d)
above with respect to individuals or 8(b)-(l) above with respect to
corporations, partnerships, trusts or other entities; or

 

______ (n) None of the above.

 

IF YOU CHECK STATEMENT 8(m) ABOVE AND DO NOT CHECK ANY OTHER STATEMENT, A
COMPLETED QUESTIONNAIRE AND AGREEMENT FOR EACH STOCKHOLDER OF THE CORPORATION,
EACH PARTNER OF THE PARTNERSHIP OR EACH BENEFICIARY OF THE EMPLOYEE BENEFIT PLAN
MUST ACCOMPANY THIS QUESTIONNAIRE AND AGREEMENT.

 

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EXHIBIT C

 

CANADIAN ACCREDITED INVESTOR CERTIFICATE

 

In connection with the issuance of the shares of Series C Preferred Stock (the
“Shares”) of Quest Solution, Inc. (the “Company”) to _____________. (the
“Investor”) pursuant to a Promissory Note Conversion Agreement dated ●, 2016
between the Company and the Investor (the “Agreement”), the Investor hereby
represents, warrants, acknowledges and agrees, as an integral part of the
Agreement, that, as at the date of the issuance of the Shares:

 

1. it is not a U.S. Person (as such term is defined in Regulation S (“Regulation
S”) promulgated under the United States Securities Act of 1933 (the “Securities
Act”);     2. it is an Accredited Investor (YOU MUST PLACE A CHECK-MARK IN THE
APPROPRIATE BOX BELOW):

 

(capitalized terms used in this Section 2 but not otherwise defined herein shall
have the meanings ascribed thereto in Appendix A to this Certificate)

 

[  ] (a) an entity, other than an investment fund, that has net assets of at
least CDN$5,000,000 as shown on its most recently prepared financial statements,
or       [  ] (b) a person in respect of which all of the owners of interests,
direct, indirect or beneficial, except the voting securities required by law to
be owned by directors, are persons that are Accredited Investors,

 

3. the Shares to be issued to the Investor will have such hold periods as are
required under applicable securities laws, and, as a result, may not be sold,
transferred or otherwise disposed of by the Investor, except pursuant to an
effective registration statement, or pursuant to an exemption from, or in a
transaction not subject to, the registration or prospectus requirements of
applicable securities laws and in each case only in accordance with all
applicable securities laws;     4. the Company has advised the Investor that it
is issuing the Shares to the Investor under exemptions from the prospectus and
registration requirements of applicable securities laws and, as a consequence,
certain protections, rights and remedies provided by applicable securities laws,
including statutory rights of rescission or damages, will not be available to
the Investor;     5. the Company is entitled to rely on the acknowledgements,
agreements, representations and warranties and the statements and answers of the
Investor contained in this Certificate, and the Investor will hold harmless the
Company from any loss or damage either one may suffer as a result of any such
acknowledgements, agreements, representations and/or warranties made by the
Investor not being true and correct;     6. certificates representing the Shares
to be issued to the Investor will bear the following legends:

 

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE
LATER OF (I) [INSERT THE DISTRIBUTION DATE], AND (II) THE DATE THE ISSUER BECAME
A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY.”

 

7. the address of the Investor set out below is the sole address of the Investor
as of the date of this Certificate.

 

___________________.

 

By:     Name:     Title:    

 

Address:                

 

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APPENDIX A

 

Definition of Accredit Investor

 

“accredited investor” means:

 

  (a) except in Ontario, a Canadian financial institution, or a Schedule III
bank,         (b) except in Ontario, the Business Development Bank of Canada
incorporated under the Business Development Bank of Canada Act (Canada),        
(c) except in Ontario, a subsidiary of any person referred to in paragraphs (a)
or (b), if the person owns all of the voting securities of the subsidiary,
except the voting securities required by law to be owned by directors of that
subsidiary,         (d) except in Ontario, a person registered under the
securities legislation of a jurisdiction of Canada as an adviser or dealer,    
    (e) an individual registered under the securities legislation of a
jurisdiction of Canada as a representative of a person referred to in paragraph
(d),         (e.1) an individual formerly registered under the securities
legislation of a jurisdiction of Canada, other than an individual formerly
registered solely as a representative of a limited market dealer under one or
both of the Securities Act (Ontario) or the Securities Act (Newfoundland and
Labrador),         (f) except in Ontario, the Government of Canada or a
jurisdiction of Canada, or any crown corporation, agency or wholly owned entity
of the Government of Canada or a jurisdiction of Canada,         (g) except in
Ontario, a municipality, public board or commission in Canada and a metropolitan
community, school board, the Comité de gestion de la taxe scolaire de l’île de
Montréal or an intermunicipal management board in Québec,         (h) except in
Ontario, any national, federal, state, provincial, territorial or municipal
government of or in any foreign jurisdiction, or any agency of that government,
        (i) except in Ontario, a pension fund that is regulated by the Office of
the Superintendent of Financial Institutions (Canada), a pension commission or
similar regulatory authority of a jurisdiction of Canada,         (j) an
individual who, either alone or with a spouse, beneficially owns financial
assets having an aggregate realizable value that, before taxes but net of any
related liabilities, exceeds $1 000 000, 2 (j.1) an individual who beneficially
owns financial assets having an aggregate realizable value that, before taxes
but net of any related liabilities, exceeds $5 000 000,         (k) an
individual whose net income before taxes exceeded $200 000 in each of the 2 most
recent calendar years or whose net income before taxes combined with that of a
spouse exceeded $300 000 in each of the 2 most recent calendar years and who, in
either case, reasonably expects to exceed that net income level in the current
calendar year,         (l) an individual who, either alone or with a spouse, has
net assets of at least $5 000 000,         (m) a person, other than an
individual or investment fund, that has net assets of at least $5 000 000 as
shown on its most recently prepared financial statements,

 

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  (n) an investment fund that distributes or has distributed its securities only
to (i) a person that is or was an accredited investor at the time of the
distribution, (ii) a person that acquires or acquired securities in the
circumstances referred to in sections 2.10 [Minimum amount investment], or 2.19
[Additional investment in investment funds], or (iii) a person described in
paragraph (i) or (ii) that acquires or acquired securities under section 2.18
[Investment fund reinvestment],         (o) an investment fund that distributes
or has distributed securities under a prospectus in a jurisdiction of Canada for
which the regulator or, in Québec, the securities regulatory authority, has
issued a receipt,         (p) a trust company or trust corporation registered or
authorized to carry on business under the Trust and Loan Companies Act (Canada)
or under comparable legislation in a jurisdiction of Canada or a foreign
jurisdiction, acting on behalf of a fully managed account managed by the trust
company or trust corporation, as the case may be,         (q) a person acting on
behalf of a fully managed account managed by that person, if that person is
registered or authorized to carry on business as an adviser or the equivalent
under the securities legislation of a jurisdiction of Canada or a foreign
jurisdiction,         (r) a registered charity under the Income Tax Act (Canada)
that, in regard to the trade, has obtained advice from an eligibility adviser or
an adviser registered under the securities legislation of the jurisdiction of
the registered charity to give advice on the securities being traded,        
(s) an entity organized in a foreign jurisdiction that is analogous to any of
the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and
function,         (t) a person in respect of which all of the owners of
interests, direct, indirect or beneficial, except the voting securities required
by law to be owned by directors, are persons that are accredited investors,    
    (u) an investment fund that is advised by a person registered as an adviser
or a person that is exempt from registration as an adviser,         (v) a person
that is recognized or designated by the securities regulatory authority or,
except in Ontario and Québec, the regulator as an accredited investor, or      
  (w) a trust established by an accredited investor for the benefit of the
accredited investor’s family members of which a majority of the trustees are
accredited investors and all of the beneficiaries are the accredited investor’s
spouse, a former spouse of the accredited investor or a parent, grandparent,
brother, sister, child or grandchild of that accredited investor, of that
accredited investor’s spouse or of that accredited investor’s former spouse.

 

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