Exhibit 10.1
 
 

 

 
REGISTRATION RIGHTS AGREEMENT
 

 
 
 
 
 
 

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Table of Contents
 

 
Page
REGISTRATION RIGHTS AGREEMENT
1
   
ARTICLE 1 DEFINITIONS
1
                
1.1
Defined Terms
1
 
1.2
General Interpretive Principles
4
   
ARTICLE 2 REGISTRATION RIGHTS
5
 
2.1
Registration Rights
5
 
2.2
Number of Demand Qualifications
6
 
2.3
Exceptions
6
   
ARTICLE 3 PIGGY-BACK RIGHTS
8
 
3.1
Piggyback Registrations
8
   
ARTICLE 4 OBLIGATIONS OF THE COMPANY
10
 
4.1
Registration Procedures
10
 
4.2
Information Regarding the Purchasers
15
 
4.3
Discontinuance of Distribution
15
   
ARTICLE 5 EXPENSES
15
 
5.1
Registration Expenses
15
   
ARTICLE 6 INDEMNIFICATION
16
 
6.1
Indemnification by the Company
16
 
6.2
Indemnification by the Purchasers
17
 
6.3
Conduct of Indemnification Proceedings
18
 
6.4
Contribution
19
   
ARTICLE 7 MISCELLANEOUS
20
 
7.1
Rules 144 and 144A
20
 
7.2
Free Writing Prospectuses
20
 
7.3
No Inconsistent Agreements; Additional Rights
20
 
7.4
Term and Termination
20
 
7.5
Fees and Expenses
20
 
7.6
Entire Agreement
20
 
7.7
Notices
20
 
7.8
Amendments; Waivers
21
 
7.9
Successors and Assigns
21
 
7.10
No Third-Party Beneficiaries
21
 
7.11
Governing Law
21
 
7.12
Execution
21
 
7.13
Severability
22
 
7.14      
Construction
22

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REGISTRATION RIGHTS AGREEMENT
 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) dated as of July ___, 2010
among NeuLion, Inc., a Canadian corporation (the “Company”) JK&B Capital V,
L.P., JK&B Capital V Special Opportunity Fund, L.P. and Gabriel A.
Battista (each, a “Purchaser” and collectively, the “Purchasers”).
 
WHEREAS, the Company and each Purchaser has entered into a Subscription
Agreement (as defined below) pursuant to and subject to the terms and conditions
of which, each Purchaser has agreed to purchase from the Company, and the
Company has agreed to issue and sell to the Purchasers Class 3 Preference Shares
(“Preferred Shares”).
 
WHEREAS, in connection with the purchase and sale of the Preferred Shares the
Company has agreed to provide the rights set forth in this Agreement.
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers agree
as follows:
 
ARTICLE 1
DEFINITIONS
 
1.1          Defined Terms.  Except as otherwise expressly provided herein or,
unless the context otherwise requires, the terms defined in this Section 1.1
will have the meanings herein specified for all purposes of this Agreement.
 
“Canadian Prospectus” means a short form prospectus prepared and filed in
accordance with NI 44-101 in the English and/or French language, as applicable,
including all amendments and supplements thereto and all documents and
information incorporated therein by reference.
 
“Canadian Securities Regulatory Authorities” has the meaning attributed to such
term in NI 14-101.
 
“Canadian Securities Legislation” has the meaning attributed to such term in NI
14-101 and includes the TSX Company Manual.
 
“Company Public Sale” has the meaning set forth in Section 3.1(a).
 
“Canadian Securities Administrators” means the CSA as defined in NI 14-101.
 
“Closing Date” means the date upon which the transactions contemplated by the
Subscription Agreement are consummated.
 
“Common Shares” means the common shares of the Company.
 
 
 

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“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and
any successor thereto, and any rules and regulations promulgated thereunder, all
as the same shall be in effect from time to time.
 
“FINRA” means the Financial Industry Regulatory Association, Inc.
 
“Lock-Up Period” has the meaning set forth in Section 2.3.
 
“NI 14-101” means National Instrument 14-101 – Definitions.
 
“NI 44-101” means National Instrument 44-101 – Short-Form Prospectus
Distributions, as such instrument may be amended, supplemented or replaced from
time to time.
 
“NI 45-102” means National Instrument 45-102 – Resale of Securities, as such
instrument may be amended, supplemented or replaced from time to time.
 
“Piggyback Registration” has the meaning set forth in Section 3.1(a).
 
“Person” means all natural persons, corporations, business trusts, associations,
companies, partnerships, limited liability companies, joint ventures and other
entities, governments, agencies and political subdivisions.
 
“Preliminary Canadian Prospectus” means a preliminary short form prospectus
prepared and filed in accordance with NI 44-101 in the English and/or French
language, as applicable, including all amendments and supplements thereto and
all documents and information incorporated therein by reference.
 
“Qualifying Provinces” means, collectively, each of the provinces of Canada.
 
“Register” means:
 
 
(a)
in the case of a registration under the Securities Act of the Company’s
securities for offer and sale, or resale, to the public in the United States
under a Registration Statement, preparing and filing a registration statement in
compliance with the Securities Act and the automatic effectiveness thereof or
the use of commercially reasonable efforts to cause such Registration Statement
to become effective under the Securities Act; and

 
 
(b)
in the case of the qualification with the applicable Canadian Securities
Administrators of the Company’s securities for distribution in any Qualifying
Province, preparing and filing a Canadian Preliminary Prospectus, if any, and as
soon as practicable thereafter, a Canadian Prospectus under Canadian Securities
Legislation and in respect of each of which a receipt is issued.

 
The term “Registration” shall have a correlative meaning.
 
 
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“Registrable Securities” means the Common Shares issuable upon conversion of the
Preferred Shares issued to the Purchasers pursuant to the Subscription
Agreements or upon the conversion of or as a dividend with respect to such
shares and any securities that may be issued or distributed or be issuable in
respect of such Preferred Shares by way of conversion, dividend, stock split or
other distribution, merger, consolidation, exchange, recapitalization or
reclassification or similar transaction; provided that any such Registrable
Securities shall cease to be Registrable Securities upon the earliest to occur
of:
 
 
(a)
the first day that the Purchasers no longer own 25% or more of the Registrable
Securities;

 
 
(b)
in respect of a Registration pursuant to the Securities Act, the first day on
which the Purchasers may sell all of the Registrable Securities owned by the
Purchasers without registration or volume limitations under the Securities Act;

 
 
(c)
July 30, 2015.

 

“Registration Expenses” has the meaning set forth in Section 5.1.
 
“Registration Period” means:
 
in respect of a Registration in the United States, the period commencing on the
Closing Date and ending on the earliest to occur of:
 
 
(i)
the first day that the Purchasers no longer own 25% or more of the Registrable
Securities;

 
 
(ii)
the first day on which the Purchasers may sell all of the Registrable Securities
owned by the Purchasers without registration or volume limitations under the
Securities Act; and

 
 
(iii)
July 30, 2015; and

 
 
(d)
in respect of a Registration in Canada, the period commencing on the Closing
Date and ending on the earliest to occur of:

 
 
(i)
the first day that the Purchasers no longer own  25% or more of the Registrable
Securities;

 
 
(ii)
July 30, 2015.

 
“Registration Statement” means any registration statement of the Company filed
with, or to be filed with, the SEC pursuant to the Securities Act, including the
related U.S. Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, and all exhibits and all
material incorporated by reference in such registration statement.
 
 
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“SEC” means the U.S. Securities and Exchange Commission, or any other federal
agency at the time administering the Securities Act or the Exchange Act.
 
“Securities Act” means the U.S. Securities Act of 1933, as amended, and any
successor thereto, and any rules and regulations promulgated thereunder, all as
the same shall be in effect from time to time.
 
“Securities Regulators” means the SEC and the Canadian Securities Regulatory
Authorities.
 
“Subscription Agreement” means the Subscription Agreement dated June 18, 2010,
between the Company and each Purchaser.
 
“Shelf Supplement” means, in respect of a Registration in the United States, a
supplement to the U.S. Prospectus contained in the Shelf Registration Statement
for purposes of including pricing and other necessary information in connection
with any resale of Registrable Securities.
 
“Shelf Registration Statement” means a Registration Statement of the Company
filed with the SEC for an offering to be made on a continuous or delayed basis
pursuant to Rule 415 under the Securities Act (or any similar rule that may be
adopted by the SEC) covering the resale of Registrable Securities.
 
“Specified Province(s)” has the meaning set forth in Section 2.1.
 
“Trading Day” means any day the Toronto Stock Exchange is open for the trading
of securities or any exchange on which the Company’s Common Shares are listed
and posted for trading.
 
“Underwritten Offering” means a Registration in which securities of the Company
are sold to an underwriter or underwriters on a firm commitment basis for
distribution to the public.
 
“U.S. Prospectus” means the prospectus included in any Registration Statement,
all amendments and supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference in such prospectus.
 
1.2          General Interpretive Principles.  Whenever used in this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
any noun or pronoun shall be deemed to include the plural as well as the
singular and to cover all genders. The name assigned to this Agreement and the
section captions used herein are for convenience of reference only and shall not
be construed to affect the meaning, construction or effect hereof.  Unless
otherwise specified, the terms “hereof,” “herein” and similar terms refer to
this Agreement as a whole (including any exhibit, annex, agreement or disclosure
statements hereto), and references herein to Sections refer to Sections of this
Agreement. Words of inclusion shall not be construed as terms of limitation
herein, so that references to “include”, “includes” and “including” shall not be
limiting and shall be regarded as references to non-exclusive and
non-characterizing illustrations.
 
 
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ARTICLE 2
REGISTRATION RIGHTS
 
2.1          Registration Rights.  If the Company receives a written request
from a majority of holders of the Preferred Shares that the Company file a
Canadian Prospectus under Canadian Securities Legislation or a Registration
Statement under the Securities Act to Register the resale of all or part of the
Registrable Securities held by the Purchasers, the Company shall, subject to the
limitations of Sections 2.2 and 2.3:
 
 
(a)
as soon as practicable and in any event within 90 days after the Company’s
receipt of such written request, prepare and file in those Qualifying Provinces
specified by the Purchasers (the “Specified Province(s)”) or in the United
States, as the case may be, a Canadian Prospectus or Registration Statement, as
applicable, in order to Register that number of Registrable Securities specified
by the Purchasers in the notice;

 
 
(b)
use its reasonable commercial efforts to resolve any regulatory comments and
satisfy any regulatory deficiencies in respect of the Preliminary Canadian
Prospectus or Registration Statement, as applicable, and, as soon as reasonably
practicable after such comments or deficiencies have been resolved or satisfied,
prepare and file, and use its reasonable commercial efforts to (i) in Canada,
obtain a receipt (or an equivalent document) for the Specified Province(s) for
the (final) Canadian Prospectus or (ii) in the United States, cause the
Registration Statement to become effective under the Securities Act, and will,
subject to the provisions of Article 3, take all other steps and proceedings
necessary in order to Register the resale of the Registrable Securities in the
Specified Province(s) or the United States, as the case may be, as soon as
practicable;

 
 
(c)
ensure that (i) in the case of the Canadian Prospectus, the Canadian Prospectus
contains the disclosure required by, and conforms in all material respects to
the requirements of, the applicable provisions of Canadian Securities
Legislation; and (ii) in the case of the Registration Statement, the
Registration Statement contains the disclosure required by, and conforms in all
material respects, to the requirements of, the applicable provisions of the
Securities Act;

 
 
(d)
prepare and file as soon as practicable with the securities regulatory
authorities in the Specified Province(s) or the United States, as the case may
be, any amendments and supplements to the Canadian Prospectus or the
Registration Statement that may be necessary to comply with applicable Canadian
Securities Legislation or the Securities Act, as the case may be; and

 
 
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(e)
in the case of an Underwritten Offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the
underwriters of such offering.

 
Subject to the provisions of Section 5.1, a request pursuant to Section 2.1 may
be withdrawn by written notice to the Company by the holders of a majority of
the Preferred Shares.
 
2.2          Number of Demand Qualifications.  The Company is only obligated to
file an aggregate of three Canadian Prospectuses and Registration Statements
under Section 2.1, but no filing pursuant to Section 2.1 is deemed to be a
filing for purposes of this Article 2 until the Company has:
 
 
(a)
in Canada secured a receipt (or an equivalent document) for the Specified
Province(s) for the Canadian Prospectus; or

 
 
(b)
in the United States, had the Registration Statement become effective,

 
unless such receipt has not been secured or the Registration Statement has not
become effective due solely to the fault of, or (except as a result of any
postponement of any filing pursuant to Section 2.3) because the filing is
withdrawn at the written request of, the holders of a majority of the Preferred
Shares.
 
2.3          Exceptions.  If the Company is requested to file a Canadian
Prospectus or Registration Statement pursuant to Section 2.1:
 
 
(a)
the Company is not obligated to effect the filing of such Canadian Prospectus or
Registration Statement if the number of Registrable Securities to be Registered
comprises less than 5% of the issued and outstanding Common Shares at the time
of delivery of the notice;

 
 
(b)
the Company is not obligated to effect the filing of such Canadian Prospectus or
Registration Statement:

 
 
(i)
for a period of up to 90 days after the date of a request for Registration
pursuant to Section 2.1 if:

 
(A)           at the time of such request, the Company is engaged, or has fixed
plans to engage within 60 days after the date of such request, in an
Underwritten Offering in which the Purchasers are entitled to include
Registrable Securities pursuant to Section 3.1; or
 
(B)           at the time of such request, the Company is currently engaged in
an offer or exchange offer and the filing of a Canadian Prospectus or
Registration Statement would cause a violation of applicable Canadian Securities
Legislation or the Securities Act;
 
 
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(ii)
during the 90-day period following the closing by the Company of an Underwritten
Offering in which the Purchasers were entitled (subject to underwriter cutbacks)
to include Registrable Securities pursuant to Section 3.1 (or for such shorter
period as the lead underwriter(s) of such public offering may have requested)
(the “Lock-Up Period”), if the lead underwriter(s) of such public offering has
advised the Company that the stand-off pursuant to this clause (ii), including
the length thereof, is reasonable and customary under the circumstances and has
requested such stand-off;

 
 
(iii)
if the Company has already effected the filing of a Canadian Prospectus or
Registration Statement pursuant to Section 2.1 within the previous 90 days and
such Canadian Prospectus or Registration Statement has not been withdrawn or
such prior offering otherwise terminated; or

 
 
(iv)
if the Company has a Shelf Registration Statement that has been declared
effective under the Securities Act at the time it receives a written notice from
the holder(s) of a majority of the Preferred Shares exercising demand rights
pursuant to Section 2.1;

 
 
(c)
the Company may defer such filing for up to 180 days after the delivery by the
Company to the Purchasers of a certificate signed by the Chief Executive Officer
of the Company stating that in the good faith judgment of the board of directors
of the Company it would be detrimental to the Company and its shareholders for a
Canadian Prospectus or Registration Statement to be filed and it is essential to
defer the filing of such Canadian Prospectus or Registration Statement; provided
that the Company may not use this right more than once in any 12-month period,

 
provided that (1) the Company shall give prompt written notice to the Purchasers
at such time as the reason for any postponement of the filing of a Canadian
Prospectus or Registration Statement pursuant to clause (i) of this Section
2.3(b), or Section 2.3(c), no longer exists, or any Lock-Up Period has been
terminated, at which point the relevant postponement shall terminate, (2) any
stand-off period pursuant to Section 2.3(b)(ii) may be terminated by the
relevant lead underwriter(s), such consent to termination not to be unreasonably
withheld, and upon any such termination the postponement of the filing of a
Canadian Prospectus or Registration Statement pursuant to Section 2.3(b)(ii)
shall terminate, and (3) if the Company postpones the filing of any Canadian
Prospectus or Registration Statement pursuant to Section 2.3(b) or (c) and the
Purchasers withdraws its related request pursuant to Section 2.1, the Purchasers
will not have any obligation pursuant to Section 5.1 in connection with such
aborted filing.
 
 
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ARTICLE 3
PIGGY-BACK RIGHTS
 
3.1          Piggyback Registrations.
 
 
(a)
Participation. If the Company at any time proposes to Register any offering of
its securities under the Securities Act or Canadian Securities Legislation, for
its own account or for the account of any other Persons, on a form or in a
manner that would permit the inclusion of the Registrable Securities for offer
and sale in an Underwritten Offering to the public under the Securities Act or
Canadian Securities Legislation (other than (i) a Registration with the SEC on
Form S-4 or S-8 or any successor form to such Forms or (ii) a Registration of
securities solely relating to an offering and sale to employees or directors of
the Company pursuant to any employee stock plan or other employee benefit plan
arrangement) (a “Company Public Sale”), then, as soon as practicable (but in no
event less than 15 days prior to the proposed date of filing the Registration
Statement or Preliminary Canadian Prospectus (as the case may be)), the Company
shall give written notice of such proposed filing to the Purchasers, and such
notice shall offer the Purchasers the opportunity to include in such Company
Public Sale under a Registration Statement or Canadian Prospectus (as the case
may be) such number of Registrable Securities as the Purchasers may request in
writing (a “Piggyback Registration”).  The Company is under no obligation to
complete any offering of its securities it proposes to make pursuant to this
Section 3.1 and will incur no liability to the Purchasers for its failure to do
so.

 
 
(b)
Inclusion of Registrable Securities in Company Public Sale. Subject to Section
3.1(c), the Company shall include in such Company Public Sale all such
Registrable Securities which are requested to be included therein within 15 days
after the receipt by the Purchasers of any such notice; provided that if at any
time after giving written notice of its intention to Register any securities and
prior to:

 
 
(i)
the effective date of the applicable Registration Statement (in the case of a
Registration under the Securities Act); or

 
 
(ii)
a receipt being issued for the Canadian Prospectus (in the case of a
Registration pursuant to Canadian Securities Legislation) filed in connection
with such Registration, the Company shall determine for any reason not to
Register or to delay Registration of such securities, the Company may, at its
election, give written notice of such determination to the Purchasers and,
thereupon:

 
 
(iii)
in the case of a determination not to Register, shall be relieved of its
obligation to include any Registrable Securities in such Underwritten Offering
(but not from its obligation to pay the Registration Expenses in connection
therewith); and

 
 
(iv)
in the case of a determination to delay Registering, shall be permitted to delay
including any Registrable Securities in such Underwritten Offering, for the same
period as the delay in Registering such other securities.

 
 
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If the Purchasers request a Piggyback Registration pursuant to Section 3.1(a),
then the Purchasers must, and the Company shall make such arrangements with the
managing underwriter or underwriters so that the Purchasers may, participate in
such Underwritten Offering. The Purchasers shall not be permitted to withdraw
all or part of their Registrable Securities from a Piggyback Registration at any
time prior to the effective date thereof.
 
(c)
Priority of Piggyback Registration. If the managing underwriter or underwriters
of any proposed Underwritten Offering of Registrable Securities included in a
Piggyback Registration inform(s) the Company and the Purchasers in writing that,
in its or their opinion, the number of securities which the Purchasers and any
other Persons intend to include in such offering exceeds the number which can be
sold in such offering without being likely to have a significant adverse effect
on the price, timing or distribution of the securities offered or the market for
the securities offered, then the Registrable Securities shall not be included in
such Registration.

 
 
(d)
Obligation to Register Registrable Securities. To the extent that any
Registrable Securities are included and sold in a Company Public Sale, the
Company’s continuing obligations to Register that number of securities included
in the Company Public Sale shall forthwith cease upon the closing of the Company
Public Sale; provided that all of the Company’s obligations under Article 2 and
Section 3.1 in respect of the Registrable Shares that were not included and sold
in such Company Public Sale shall remain in full force and effect and shall not
be deemed to have been satisfied or to have ceased as a result of such Company
Public Sale.

 
 
(e)
Underwriting Agreement. The Purchasers shall be party to the underwriting
agreement between the Company and such underwriters, which underwriting
agreement shall (i) contain such representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of the
Purchasers as are customarily made by issuers to selling stockholders in
secondary underwritten public offerings and (ii) provide that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement also shall be conditions precedent to the obligations of
the Purchasers. The Purchasers shall not be required to make any representations
or warranties to or agreements with the Company or the underwriters, except that
such Purchasers shall be required, upon request, to provide representations,
warranties or agreements regarding the Purchasers, the Purchasers’ Registrable
Securities and the Purchasers’ intended method of distribution of the
Registrable Securities or any other representations or information required by
law or required to be included in a Registration Statement.

 
 
(f)
Participation in Underwritten Registrations.  The Purchasers may not participate
in any Underwritten Offering hereunder unless the Purchasers (i) agree to sell
their Registrable Securities on the basis provided in any underwriting
arrangements approved by the Company and (ii) complete and execute all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.

 
 
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ARTICLE 4
OBLIGATIONS OF THE COMPANY
 
4.1          Registration Procedures.  In connection with the Company’s
Registration obligations under Article 2 and Article 3, the Company will use
commercially reasonable efforts to effect such Registration to permit the sale
of such Registrable Securities in accordance with the intended method or methods
of distribution thereof as expeditiously as reasonably practicable, and in
connection therewith the Company will:
 
 
(a)
prepare the required Registration Statement or Canadian Prospectus (as the case
may be) including all exhibits and financial statements required under the
Securities Act or Canadian Securities Legislation to be filed therewith, and
before filing a Registration Statement, U.S. Prospectus or Canadian Prospectus
(as the case may be), or any amendments or supplements thereto, and (x) furnish
to the Purchasers copies of all documents prepared to be filed, which documents
will be subject to the review of the Purchasers and their counsel, acting
reasonably and (y) except in the case of a Registration under Section 3.1, not
file any Registration Statement, U.S. Prospectus, or Canadian Prospectus or
amendments or supplements thereto to which the Purchasers or the underwriters,
if any, shall reasonably object; provided that notwithstanding any other term of
this Agreement, if the Purchasers or the underwriters, if any, do so reasonably
object, the Company shall not be deemed to be in breach of any of its
obligations hereunder;

 
 
(b)
as soon as reasonably practicable file with the SEC or the Canadian Securities
Administrators in each applicable Qualifying Province (as the case may be) a
Registration Statement or Canadian Prospectus, respectively, relating to the
Registrable Securities including all exhibits and financial statements required
by the SEC or such Canadian Securities Administrators (as the case may be) to be
filed therewith, and use commercially reasonable efforts to cause such
Registration Statement to become effective under the Securities Act or a receipt
to be issued for such Canadian Prospectus;

 
 
(c)
prepare and file with the SEC or the Canadian Securities Administrators in each
applicable Qualifying Province such amendments and post-effective amendments to
any Registration Statement or Canadian Prospectus (as the case may be) and
supplements (including Shelf Supplements) to the U.S. Prospectus or Canadian
Prospectus (as the case may be) as may be reasonably requested by the Purchasers
or necessary to keep such Registration effective for the period of time required
by this Agreement and, if applicable, to include the Registrable Securities in
an Underwritten Offering pursuant to Section 3.1, and comply with provisions of
applicable securities laws with respect to the sale or other disposition of all
securities covered by such Registration Statement or Canadian Prospectus (as the
case may be) during such period in accordance with the intended method or
methods of disposition by the Purchasers set forth in such Registration
Statement or Canadian Prospectus (as the case may be);

 
 
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(d)
notify the Purchasers and (if requested) confirm such advice in writing and
provide copies of the relevant documents to the Purchasers, as soon as
reasonably practicable after notice thereof is received by or on behalf of the
Company (A) when (I) the applicable Registration Statement or any amendment
thereto has been filed, becomes effective, and when the applicable U.S.
Prospectus or any amendment or supplement to such U.S. Prospectus has been
filed, and/or (II) the applicable Canadian Preliminary Prospectus or Canadian
Prospectus or any amendment or supplement thereto has been filed or a receipt
issued therefor, (B) of any written comments by the Securities Regulators or any
request by the Securities Regulators or any other federal, state or provincial
governmental authority for amendments or supplements to any Registration
Statement (or the related U.S. Prospectus), any Canadian Preliminary Prospectus
or any Canadian Prospectus or for additional information, (C) of the issuance by
the Securities Regulators of any stop order or cease trade order suspending the
effectiveness of any Registration Statement or Canadian Prospectus or any order
by the Securities Regulators or any other regulatory authority preventing or
suspending the use of any preliminary or final U.S. Prospectus, Preliminary
Canadian Prospectus or Canadian Prospectus or the initiation or threatening of
any proceedings for such purposes, and (D) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;

 
 
(e)
promptly notify the Purchasers when the Company becomes aware of the happening
of any event as a result of which the applicable Registration Statement or the
U.S. Prospectus included in such Registration Statement (as then in effect), any
Preliminary Canadian Prospectus or Canadian Prospectus contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements therein (in the case of such U.S. Prospectus, Preliminary
Canadian Prospectus or Canadian Prospectus in light of the circumstances under
which they were made) not misleading, or fails to constitute full, true and
plain disclosure of all material facts regarding the Registrable Securities or,
if for any other reason it shall be necessary during such time period to amend
or supplement such Registration Statement, U.S. Prospectus, Preliminary Canadian
Prospectus or Canadian Prospectus in order to comply with the Securities Act or
Canadian Securities Legislation, as applicable, and, in each case as promptly as
reasonably practicable thereafter, prepare and file with the Securities
Regulators, and furnish without charge to the selling Purchasers an amendment or
supplement to such Registration Statement, U.S. Prospectus, Preliminary Canadian
Prospectus or Canadian Prospectus which will correct such misstatement or
omission or effect such compliance;

 
 
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(f)
use commercially reasonable efforts to prevent or obtain the withdrawal of any
stop order, cease trade order or other order suspending the use of any
preliminary or final U.S. Prospectus, Preliminary Canadian Prospectus or
Canadian Prospectus or suspending the qualification of Registrable Securities
covered by a Registration Statement, Preliminary Canadian Prospectus or Canadian
Prospectus;

 
 
(g)
promptly incorporate in a U.S. Prospectus supplement or post-effective amendment
to a Registration Statement, or in an amendment or supplement to a Preliminary
Canadian Prospectus or Canadian Prospectus, such information as the managing
underwriter or underwriters, if any, and the Purchasers agree should be included
therein relating to the plan of distribution with respect to such Registrable
Securities; and make all required filings of such U.S. Prospectus supplement or
post-effective amendment, or amendment or supplement to such Preliminary
Canadian Prospectus or Canadian Prospectus, as soon as reasonably practicable
after being notified of the matters to be incorporated in such U.S. Prospectus
supplement or post-effective amendment or amendment or supplement to such
Preliminary Canadian Prospectus or Canadian Prospectus;

 
 
(h)
furnish to the Purchasers without charge, as many copies as the Purchasers may
reasonably request of the applicable Registration Statement, Preliminary
Canadian Prospectus or Canadian Prospectus (as the case may be) and any
supplement, amendment or post-effective amendment thereto, including financial
statements, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);

 
 
(i)
deliver to the Purchasers without charge, as many copies of the applicable U.S.
Prospectus (including each preliminary prospectus), Preliminary Canadian
Prospectus and Canadian Prospectus (as the case may be) and any amendment or
supplement thereto as the Purchasers may reasonably request (it being understood
that the Company consents to the use of such U.S. Prospectus, Preliminary
Canadian Prospectus and Canadian Prospectus (as the case may be) or any
amendment or supplement thereto by the Purchasers in connection with the
offering and sale of the Registrable Securities covered by such U.S. Prospectus,
Preliminary Canadian Prospectus and Canadian Prospectus (as the case may be) or
any amendment or supplement thereto) and such other documents as the Purchasers
may reasonably request in order to facilitate the disposition of the Registrable
Securities by the Purchasers;

 
 
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(j)
on or prior to the date on which the applicable Registration Statement becomes
effective under the Securities Act, use commercially reasonable efforts to
register or qualify, and cooperate with the Purchasers and their counsel(s), in
connection with the registration or qualification of such Registrable Securities
for offer and sale under the securities or “Blue Sky” laws of each state and
other jurisdiction of the United States as the Purchasers or their counsel
reasonably request in writing and do any and all other acts or things reasonably
necessary or advisable to keep such Registration in effect, provided that the
Company will not be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) become subject to the
securities laws of any jurisdiction other than the United States, the various
states of the United States, Canada or the Qualifying Provinces, or (C) take any
action which would subject it to taxation or general service of process in any
such jurisdiction where it is not then so subject;

 
 
(k)
use commercially reasonable efforts to cause the Registrable Securities covered
by any Registration Statement, Preliminary Canadian Prospectus or Canadian
Prospectus, as applicable to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
Purchasers to consummate the disposition of such Registrable Securities;

 
 
(l)
enter into such customary agreements (including, without limitation,
indemnification agreements, and in the case of Underwritten Offerings,
underwriting agreements) and take all such other actions as the Purchasers or
the underwriters, if any, reasonably request in order to expedite or facilitate
the registration and disposition of such Registrable Securities;

 
 
(m)
obtain for delivery to the Purchasers and to the underwriters, if any, an
opinion or opinions from counsel for the Company dated the effective date of the
Registration Statement or, in the event of an Underwritten Offering, the date of
the closing under the underwriting agreement, addressed or confirmed to the
Purchasers and underwriters, in customary form, scope and substance, which
opinions shall be reasonably satisfactory to the Purchasers or underwriters, as
the case may be, and their respective counsel; and

 
 
(n)
in the case of an Underwritten Offering, provide copies to the Purchasers
included in such Underwritten Offering, of the “comfort letter” from, and
delivered to the Company and the underwriters, if any, by the Company’s
independent certified public accountants, in customary form and covering such
matters of the type customarily covered by “comfort letters” as the Company and
the underwriters, if any, reasonably request, dated the date of execution of the
underwriting agreement and brought down to the closing under the underwriting
agreement;

 
 
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(o)
cooperate with each seller of Registrable Securities and each underwriter, if
any, participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with FINRA
or other regulatory body;

 
 
(p)
use commercially reasonable efforts to comply with all applicable securities
laws and make available to its security holders, as soon as reasonably
practicable, an earnings statement satisfying the provisions of Section 11(a) of
the Securities Act and the rules and regulations promulgated thereunder;

 
 
(q)
provide and cause to be maintained a transfer agent and registrar for all
Registrable Securities covered by the applicable Registration Statement,
Preliminary Canadian Prospectus or Canadian Prospectus, as the case may be, from
and after a date not later than the effective date of such Registration
Statement, or the date a receipt is issued for the Canadian Prospectus, as the
case may be;

 
 
(r)
cause all Registrable Securities covered by the Registration Statement,
Preliminary Canadian Prospectus or Canadian Prospectus, as the case may be, to
be listed on each securities exchange on which any of the Company’s securities
are then listed or quoted and on each inter-dealer quotation system on which any
of the Company’s securities are then quoted; and

 
 
(s)
make available upon reasonable notice at reasonable times and for reasonable
periods for inspection by (A) a representative appointed by the Purchasers
covered by the applicable Registration Statement, Preliminary Canadian
Prospectus or Canadian Prospectus, as the case may be, (B) any underwriter or
agent participating in any disposition to be effected pursuant to such
Registration Statement, Preliminary Canadian Prospectus or Canadian Prospectus,
as the case may be, and (C) any attorney, lawyer, accountant or other agent
retained by the Purchasers or any such underwriter or agent, all pertinent
financial and other records, pertinent corporate documents of the Company, and
cause all of the Company’s officers, directors and employees and the independent
public accountants who have certified its financial statements to make
themselves available to discuss the business of the Company and to supply all
information reasonably requested by any such Person in connection with such
Registration Statement, Preliminary Canadian Prospectus or Canadian Prospectus
(as the case may be) as shall be necessary to enable them to exercise their due
diligence responsibility; provided that any such Person gaining access to
information regarding the Company pursuant to this Section 4.1 shall agree to
hold in strict confidence and shall not make any disclosure or use any
information regarding the Company which the Company determines in good faith to
be confidential, and of which determination such Person is notified, unless (w)
the release of such information is requested or required (by deposition,
interrogatory, requests for information or documents by a governmental entity,
subpoena or similar process), (x) such information is or becomes publicly known
without a breach of this or any other agreement of which such Person has
knowledge, (y) such information is or becomes available to such Person on a
non-confidential basis from a source other than the Company or (z) such
information is independently developed by such Person.

 
 
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4.2          Information Regarding the Purchasers.  The Company may require the
Purchasers to furnish to the Company such information regarding the distribution
of the Registrable Securities and such other information relating to the
Purchasers and their ownership of Registrable Securities as the Company may from
time to time reasonably request in writing to enable the Company to comply with
its obligations hereunder or under applicable law.  The Purchasers agree to
furnish such information to the Company and to cooperate with the Company as
reasonably necessary to enable the Company to comply with the provisions of this
Agreement and applicable law.  The Company shall not assume and shall not be
deemed to assume any liability for any information provided to it by the
Purchasers.
 
4.3          Discontinuance of Distribution.  The Purchasers agree that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 4.1(e), the Purchasers will forthwith discontinue
disposition of Registrable Securities pursuant to such Registration Statement,
Preliminary Canadian Prospectus or Canadian Prospectus, as the case may be,
until the Purchasers’ receipt of the copies of the supplemented or amended U.S.
Prospectus, Preliminary Canadian Prospectus or Canadian Prospectus, as the case
may be, contemplated by Section 4.1(e), or until the Purchasers are advised in
writing by the Company that the use of the U.S. Prospectus, Preliminary Canadian
Prospectus or Canadian Prospectus, as the case may be, may be resumed, and if so
directed by the Company, the Purchasers will deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies then in the
Purchasers’ possession, of the U.S. Prospectus, Preliminary Canadian Prospectus
or Canadian Prospectus, as the case may be, covering such Registrable Securities
current at the time of receipt of such notice.
 
ARTICLE 5
EXPENSES
 
5.1          Registration Expenses.
 
 
(a)
All expenses incident to the Company’s performance of or compliance with this
Agreement will be paid by the Company, including (i) all registration and filing
fees, and any other fees and expenses associated with filings required to be
made with the Securities Regulators or FINRA, (ii) all fees and expenses in
connection with compliance with state securities or “Blue Sky” laws, (iii) all
printing, duplicating, word processing, messenger, telephone, facsimile and
delivery expenses (including expenses of printing prospectuses or similar
documents), (iv) all fees and disbursements of counsel for the Company and of
all independent certified public accountants of the Company (including the
expenses of any opinions, audit and cold comfort letters required by or incident
to such performance), (v) Securities Act liability insurance or similar
insurance if the underwriters, if any, so require in accordance with
then-customary underwriting practice, (vi) all fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange or quotation of the Registrable Securities on any inter-dealer
quotation system, (vii) all applicable rating agency fees with respect to the
Registrable Securities, (viii) any reasonable fees and disbursements of
underwriters, if any, customarily paid by issuers of securities, (ix) all fees
and expenses of any special experts or other Persons retained by the Company in
connection with any Registration, and (x) all of the Company’s internal expenses
(including all salaries and expenses of its officers and employees performing
legal or accounting duties). All such expenses are referred to herein as
“Registration Expenses.” The Company shall not be required to pay any fees and
disbursements to underwriters not customarily paid by the issuers of securities
in a secondary offering, including underwriting discounts and commissions and
transfer taxes, if any, attributable solely to the sale of Registrable
Securities.

 
 
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(b)
Notwithstanding the foregoing provisions of this Section 5.1, the Registration
Expenses, if any, incurred by the Company where such obligation arises in
respect of a demand registration pursuant to Article 2 which the Purchasers have
subsequently withdrawn, the Purchasers shall immediately reimburse the Company
for all of such Registration Expenses upon receipt of evidence thereof,
provided, however, that if at the time of such withdrawal, the Purchasers have
learned of a material adverse change in the condition, business or prospects of
the Company from that known to the Purchasers at the time of their request and
have withdrawn the request with reasonable promptness following disclosure by
the Company of such material adverse change, then the Purchasers shall not be
required to pay any of such expenses.

 
 
ARTICLE 6
INDEMNIFICATION
 
6.1          Indemnification by the Company.  The Company agrees to indemnify
and hold harmless, to the full extent permitted by law, the Purchasers, and, as
applicable, the Purchasers’ directors, officers and employees, heirs successors
and assigns and each Person who controls (within the meaning of the Securities
Act or the Exchange Act) such Persons from and against any and all losses,
penalties, judgments, suits, costs, claims, damages, liabilities (or actions or
proceedings in respect thereof, whether or not such indemnified party is a party
thereto) and expenses, joint or several (including reasonable costs of
investigation and legal expenses) (each, a “Loss” and collectively “Losses”)
arising out of or based upon (i) any untrue or alleged untrue statement of a
material fact contained or incorporated by reference in (A) any Registration
Statement under which such Registrable Securities were Registered under the
Securities Act (including any U.S. Prospectus contained therein or any amendment
thereof or supplement thereto or any documents incorporated by reference
therein), or (B) any Preliminary Canadian Prospectus, Canadian Prospectus or any
amendment or supplement thereto or any material incorporated by reference
therein, or (ii) any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
in light of the circumstances under which they were made not misleading or to
provide full, true and plain disclosure of all material facts; provided that the
Company shall not be liable to any particular indemnified party (x) to the
extent that any such Loss arises solely as a result of an untrue statement or
alleged untrue statement or omission or alleged omission made in any such
Registration Statement, Preliminary Canadian Prospectus or Canadian Prospectus
in reliance upon and in conformity with written information furnished to the
Company by such indemnified party expressly for use in the preparation thereof
or (y) to the extent that any such Loss arises solely as a result of an untrue
statement or omission in a preliminary U.S. Prospectus or Preliminary Canadian
Prospectus relating to Registrable Securities, if a U.S. Prospectus or Canadian
Prospectus, respectively (as then amended or supplemented), that would have
cured the defect was furnished to the indemnified party from whom the Person
asserting the claim giving rise to such Loss purchased Registrable Securities
prior to the sale (which may include a contract of sale) of the Registrable
Securities to such Person and a copy of such U.S. Prospectus or Canadian
Prospectus, as applicable (as amended and supplemented), was not sent or given
by or on behalf of such indemnified party to such Person at or prior to the sale
(which may include a contract of sale) of the Registrable Securities to such
Person.
 
 
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6.2          Indemnification by the Purchasers.  The Purchasers agree to
indemnify and hold harmless, to the fullest extent permitted by law, the
Company, its directors, officers and employees and each Person who controls the
Company (within the meaning of the Securities Act or the Exchange Act) from and
against any Losses resulting from (i) any untrue statement of a material fact in
(A) any Registration Statement under which such Registrable Securities were
Registered under the Securities Act (including any U.S. Prospectus contained
therein or any amendment thereof or supplement thereto or any material
incorporated by reference therein), or (B) any Preliminary Canadian Prospectus,
Canadian Prospectus or any amendment or supplement thereto or any
document  incorporated by reference therein, or (ii) any omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made not
misleading or to provide full, true and plain disclosure of all material facts,
to the extent, but only to the extent, that such untrue statement or omission is
contained in any information furnished in writing by the Purchasers to the
Company specifically for inclusion in such Registration Statement, U.S.
Prospectus, Preliminary Canadian Prospectus or Canadian Prospectus (as the case
may be) and relates solely to the Purchasers and has not been corrected in a
subsequent writing prior to or concurrently with the making of the purchase
order for the Registrable Securities delivered to the Person asserting the
claim.  The Company shall be entitled to receive indemnities from underwriters,
selling brokers, dealer managers and similar securities industry professionals
participating in the distribution, to the same extent as provided above (with
appropriate modification) with respect to information furnished in writing by
such Persons specifically for inclusion in any U.S. Prospectus, Registration
Statement, Preliminary Canadian Prospectus or Canadian Prospectus.  The
Purchasers shall also indemnify any underwriters of the Registrable Securities,
their officers and directors and each person who controls such underwriters
(within the meaning of the Securities Act or the Exchange Act) to the same
extent as provided with respect to indemnification of the Company, provided that
in no event shall any indemnity under this subsection 6.2, when taken together
with any contribution by such Purchaser under subsection 6.4, exceed the net
proceeds from the offering received by such Purchaser.
 
 
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6.3          Conduct of Indemnification Proceedings.  Any Person entitled to
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided that any delay or failure to so notify the indemnifying party shall
relieve the indemnifying party of its obligations hereunder only to the extent,
if at all, that it is actually and materially prejudiced by reason of such delay
or failure) and (ii) permit such indemnifying party to assume the defence of
such claim with counsel reasonably satisfactory to the indemnified party;
provided that any Person entitled to indemnification hereunder shall have the
right to select and employ separate counsel and to participate in the defence of
such claim, but the fees and expenses of such counsel shall be at the expense of
such Person unless (i) the indemnifying party has agreed in writing to pay such
fees or expenses, (ii) the indemnifying party shall have failed to assume the
defence of such claim within a reasonable time after receipt of notice of such
claim from the Person entitled to indemnification hereunder and employ counsel
reasonably satisfactory to such Person, (iii) the indemnified party has
reasonably concluded (based upon advice of its counsel) that there may be legal
defences available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, or (iv) in the
reasonable judgment of any such Person (based upon advice of its counsel) a
conflict of interest may exist between such Person and the indemnifying party
with respect to such claims (in which case, if the Person notifies the
indemnifying party in writing that such Person elects to employ separate counsel
at the expense of the indemnifying party, the indemnifying party shall not have
the right to assume the defence of such claim on behalf of such Person). If the
indemnifying party assumes the defence, the indemnifying party shall not have
the right to settle such action without the consent of the indemnified party. No
indemnifying party shall consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of an unconditional release
from all liability in respect to such claim or litigation. If such defence is
not assumed by the indemnifying party, the indemnifying party will not be
subject to any liability for any settlement made without its prior written
consent, but such consent may not be unreasonably withheld. It is understood
that the indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees, disbursements or other charges of more than one separate firm
admitted to practice in such jurisdiction at any one time from such indemnified
party or parties unless (x) the employment of more than one counsel has been
authorized in writing by the indemnifying party or parties, (y) an indemnified
party has reasonably concluded (based on the advice of counsel) that there may
be legal defences available to it that are different from or in addition to
those available to the other indemnified parties or (z) a conflict or potential
conflict exists or may exist (based upon advice of counsel to an indemnified
party) between such indemnified party and the other indemnified parties, in each
of which cases the indemnifying party shall be obligated to pay the reasonable
fees and expenses of such additional counsel or counsels.
 
 
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6.4          Contribution.  If for any reason the indemnification provided for
in paragraphs (a) and (b) of this Section 6.4 is unavailable to an indemnified
party or insufficient in respect of any Losses referred to therein, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such Loss (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the indemnified party or parties on the other hand; or (ii)
if the allocation provided by clause (i) of this Section 6.4 is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) of this Section 6.4 but also the
relative fault of the indemnifying party on the one hand and the indemnified
party or parties on the other hand in connection with the acts, statements or
omissions that resulted in such losses, as well as any other relevant equitable
considerations. In connection with any Registration Statement, Preliminary
Canadian Prospectus or Canadian Prospectus (as the case may be) filed with the
applicable Securities Regulators by the Company, (x) the relative benefits
received by the indemnifying on the one hand and the indemnified party on the
other hand shall be deemed to be in the same respective proportions as the net
proceeds from the offering of any securities registered thereunder (before
deducting expenses) received by the indemnifying party and the net proceeds from
the offering of any Registrable Securities (before deducting expenses) received
by the indemnified party, bear to the aggregate public offering price of the
securities registered thereunder; and (y) the relative fault of the indemnifying
party on the one hand and the indemnified party on the other hand shall be
determined by reference to, among other things, whether any untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just or equitable if contribution
pursuant to this Section 6.4 were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph, provided,
however, that no contribution by any Purchaser, when combined with any amounts
paid by such Purchaser pursuant to Section 6.2, shall exceed the net proceeds
from the offering received by such Purchaser. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The amount paid or payable by an indemnified party
as a result of the Losses referred to in Sections 6.1 and 6.2 shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. If indemnification is available under
this Section 6.4, the indemnifying parties shall indemnify each indemnified
party to the full extent provided in Sections 6.1 and 6.2 hereof without regard
to the relative fault of said indemnifying parties or indemnified party. The
remedies provided for in this Section 6.4 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified party
at law or in equity.
 
 
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ARTICLE 7
MISCELLANEOUS
 
7.1          Rules 144 and 144A.  The Company covenants that it will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder. If the Company is
not required to file such reports, it will, upon the request of the Purchasers,
make publicly available information for so long as necessary to permit sales
pursuant to Rules 144, 144A or Regulation S under the Securities Act, and it
will take such further action as the Purchasers may reasonably request, all to
the extent required from time to time to enable the Purchasers to sell
Registrable Securities without Registration under the Securities Act within the
limitation of the exemptions provided by (i) Rules 144, 144A or Regulation S
under the Securities Act, as such Rules may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of the Purchasers, the Company will deliver to the Purchasers a written
statement as to whether it has complied with such requirements and, if not, the
specifics thereof.
 
 
7.2          Free Writing Prospectuses.  The Purchasers agree that they will not
use any “free writing prospectuses” (as such term is defined in Rule 405 of the
Securities Act) in connection with the offer or sale by them of Registrable
Securities pursuant to a Registration Statement.
 
 
7.3          No Inconsistent Agreements; Additional Rights.  The Company will
not hereafter enter into, and is not currently a party to, any agreement with
respect to its securities which is inconsistent with the rights granted to the
Purchasers by this Agreement.
 
 
7.4          Term and Termination. This Agreement shall take effect from and
after the Closing Date and shall terminate upon the earlier of (i) the
expiration of the Registration Period in Canada and the United States or (ii)
the Company ceases trading on the Toronto Stock Exchange or any other exchange
on which the Company’s Common Shares are listed and posted for trading, except
for the provisions of Article 6, which shall survive any such termination.
 
 
7.5           Fees and Expenses.  The Company shall pay the fees and expenses of
its advisers, counsel, accountants and other experts, if any, and of the
Purchasers’ counsel incident to the negotiation, preparation, execution and
delivery of this Agreement. The fees and expenses that the Company is obligated
to pay pursuant to this Section 7.5 shall be in addition to all such fees and
expenses the Company is obligated to pay pursuant to the terms of Article 5 and
Article 6.
 
 
7.6          Entire Agreement.  This Agreement, together with the schedules
hereto, contains the entire understanding of the parties with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral or written, with respect to such matters.
 
 
7.7          Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of:
 
 
(a)
the date of transmission, if such notice or communication is delivered via
facsimile or email at the facsimile number or email address respectively set out
on the signature pages attached hereto prior to 5:30 p.m. (Toronto time) on a
Trading Day;

 
 
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(b)
the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile or email at the facsimile number or
email address respectively set out on the signature pages attached hereto on a
day that is not a Trading Day or later than 5:30 p.m. (Toronto time) on any
Trading Day;

 
 
(c)
the 2nd Trading Day following the date of mailing, if sent by an internationally
recognized overnight courier service; or

 
 
(d)
upon actual receipt by the party to whom such notice is required to be given.

 
The address for such notices and communications shall be as set out on the
signature pages attached hereto.
 
 
7.8          Amendments; Waivers.  No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Company and the holder(s) of a majority of the Preferred Shares or, in
the case of a waiver, by the party against whom enforcement of any such waiver
is sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either party
to exercise any right hereunder in any manner impair the exercise of any such
right.
 
 
7.9          Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the Company, the Purchasers and their successors and
permitted assigns. Neither the Company nor the Purchasers may assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other party.
 
 
7.10        No Third-Party Beneficiaries.  This Agreement is intended for the
benefit of the parties and their respective successors and permitted assigns and
is not for the benefit of, nor may any provision hereof be enforced by, any
other Person.
 
 
7.11        Governing Law.  This Agreement shall be governed by, and construed
in accordance with, the laws of the Province of Ontario and the laws of Canada
applicable therein.
 
 
7.12        Execution.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
 
 
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7.13        Severability.  If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the invalidity and enforceability of
the remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties shall attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
 
 
7.14        Construction.  The Company and the Purchasers confirm that each of
them together with their respective counsel has reviewed and had an opportunity
to revise the Agreement and, therefore, the provisions of this Agreement express
their mutual intent and the rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments hereto and no rule of
strict construction shall be applied against either party.
 

(Signature Pages Follow)
 
 
 
 
 
 
 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their respective authorized signatories as of the date first indicated on the
first page hereof.
 

 
NEULION, INC.
               
By:
/s/ Roy E. Reichbach
   
Name:
Roy E. Reichbach
   
Title:
General Counsel & Corporate Secretary
               
Address:
   
NeuLion, Inc.
   
1600 Old Country Road
   
Plainveiw, NY 11803
               
JK&B CAPITAL V, L.P.
         
By:
JK&B Management V, L.P., its General Partner
   
By:
JK&B Capital V, L.L.C., its General Partner
           
By:
/s/ Marc Sokol
     
Marc Sokol, its Managing Director
                   
Address:
    180 N. Stetson Pl     Chicago, IL 60601 USA                
JK&B CAPITAL V SPECIAL OPPORTUNITY FUND, L.P.
         
By:
JK&B Management V, L.P., its General Partner
   
By:
JK&B Capital V, L.L.C., its General Partner
           
By:
/s/ Marc Sokol
     
Marc Sokol, its Managing Director
                           
Address:
                180 N. Stetson Pl     Chicago, IL 60601 USA        

 
 
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The Gabriel A. Battista Revocable Trust
   
Under a Trust Declaration Dated August 22, 2006
         
/s/ Gabriel A. Battista, Trustee
         
Address:
               
5900 Kirby Road
   
Bethesda, MD 20817
 

 

 
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