Document:

Exhibit 4.6

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRAN3SFER IS IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS IS AVAILABLE WITH RESPECT THERETO.

 

PREFERRED SHARE PURCHASE WARRANT

 

Number of Shares: a maximum of 11,648
 Series 1 Class B Preferred Shares
 Subject to determination as set forth below

 

ENERKEM INC.

 

Effective as of July 1, 2011

 

Void after June 30, 2019

 

1.                                      Issuance. This Preferred Share Purchase Warrant (the “Warrant”) is issued to LIGHTHOUSE CAPITAL PARTNERS, L.P. by ENERKEM INC., a corporation incorporated under the federal laws of Canada (hereinafter with its successors called the “Company”).

 

2.                                      Purchase Price; Number of Shares.

 

(a)                                  The registered holder of this Warrant (the “Holder”), is entitled upon surrender of this Warrant with the subscription form annexed hereto duly executed, at the principal office of the Company, to purchase from the Company, at a price per share of CAN$124.17, subject to adjustment in accordance with the terms hereof (the “Purchase Price”), up to a maximum of 11,648 fully paid and nonassessable Series 1 Class B Preferred Shares of the Company (the “Preferred Shares”) up to the Expiration Date. Commencing on the date hereof, 5,824 (the “Exercise Quantity”) Preferred Shares are immediately available for purchase hereunder until the Expiration Date (which amount represents the Commitment (as defined in the Loan Agreement) of US $15,000,000). Unless otherwise indicated, all dollar amounts and dollar values referenced in this Warrant shall mean Canadian Dollars. The Purchase Price shall at all times be payable in US Dollars upon the currency exchange conditions set forth in Section 4, below.

 

(b)                                  On the Commitment Termination Date (as defined in the Loan Agreement) or such earlier termination of this Warrant in accordance with the terms hereof, the Exercise Quantity shall automatically be increased by such additional number of Preferred Shares as is equal to (A) 5% of the amount of the Aggregate Advances funded under the Loan Agreement, if any, divided by (B) the Purchase Price.

 

In addition to other terms which may be defined herein, the following terms, as used in this Warrant, shall have the following meanings:

 

(i)                                    “Aggregate Advances” means the Canadian dollar equivalent of the aggregate original principal dollar amount of Advances made under the Loan Agreement (calculated using the Bank of Canada noon spot exchange rate on the date of the applicable Advance), whether such Advances are outstanding or prepaid, at the time of any scheduled adjustment to the Exercise Quantity.

 

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(ii)                                “Loan Agreement” means that certain Loan Agreement No. 2061 dated July 1, 2011 between the Company and Lighthouse Capital Partners VI, L.P.

 

Any term not defined herein shall have the meaning as set forth in the Loan Agreement.

 

Until such time as this Warrant is exercised in full or expires, the Purchase Price and the securities issuable upon exercise of this Warrant are subject to adjustment as hereinafter provided. The person or persons in whose name or names any certificate representing the Preferred Shares is issued hereunder shall be deemed to have become the holder of record of the Preferred Shares represented thereby as at the close of business on the date this Warrant is exercised with respect to such shares, whether or not the transfer books of the Company shall be closed.

 

3.                                      Payment of Purchase Price; Conversion of Purchase Price to US Dollars. The Purchase Price may be paid (i) by cheque or wire transfer, (ii) by the surrender by the Holder to the Company of any promissory notes or other obligations issued by the Company, with all such notes and obligations so surrendered being credited against the Purchase Price in an amount equal to the principal amount thereof plus accrued interest to the date of surrender, or (iii) by any combination of the foregoing. The Purchase Price will be paid in US Dollars based upon the Bank of Canada noon spot exchange rate on the date of exercise of this Warrant.

 

4.                                      Net Issue Election. The Holder may elect to receive, without the payment by the Holder of any additional consideration, Preferred Shares equal to the value of this Warrant or any portion hereof by the surrender of this Warrant or such portion to the Company, with the net issue election notice annexed hereto duly executed, at the principal office of the Company. Thereupon, the Company shall issue to the Holder such number of fully paid and nonassessable Preferred Shares as is computed using the following formula:

 

X=Y(A-B)
      A

 

	
where:
    	
X=
    	
the number of Preferred Shares to be issued to the Holder pursuant to   this Section 4.
    
	
 
    	
 
    	
 
    
	
 
    	
Y =
    	
the number of Preferred Shares covered by this Warrant in respect of   which the net issue election is made pursuant to this Section 4.
    
	
 
    	
 
    	
 
    
	
 
    	
A =
    	
the Fair Market Value (defined below) of one Preferred Share, as determined at the time the   net issue election is made pursuant to this Section 4.
    
	
 
    	
 
    	
 
    
	
 
    	
B =
    	
the Purchase Price in effect under this Warrant at the time the net   issue election is made pursuant to this Section 4.
    

 

“Fair Market Value” of a Preferred Share (or fully paid and nonassessable shares of the Company’s Class A Common Shares (the “Common Shares”) if the Preferred Shares have been automatically converted into Common Shares) as of the date that the net issue election is made (the “Determination Date”) shall mean:

 

(i)                                    If the net issue election is made in connection with and contingent upon the closing of the sale of the Common Shares to the public in a public offering pursuant to a prospectus filed with Canadian securities regulators or an equivalent United States registration (a “Public Offering”), and if the Company’s prospectus relating to such Public Offering (“Prospectus”) has been receipted by the applicable securities regulators, then the initial “Price to Public” specified in the Prospectus or equivalent document with respect to such Public Offering multiplied by the number of Common Shares into which each Preferred Share is then convertible.

 

(ii)                                If the net issue election is not made in connection with and contingent upon a Public Offering, then as follows:

 

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(a)                                  If traded on the Toronto Stock Exchange or the TSX Venture Exchange or an equivalent United States securities exchange, the fair market value of the Common Shares shall be deemed to be the volume weighted average price of the Common Shares on such exchange or market over the five trading day period ending five trading days prior to the Determination Date, and the fair market value of the Preferred Shares shall be deemed to be such fair market value of the Common Shares multiplied by the number of Common Shares into which each Preferred Share is then convertible;

 

(b)                                  If otherwise traded in an over-the-counter market or equivalent market in Canada or the United States, the fair market value of the Common Shares shall be deemed to be the volume weighted average price of the Common Shares over the five trading day period ending five trading days prior to the Determination Date, and the fair market value of the Preferred Shares shall be deemed to be such fair market value of the Common Shares multiplied by the number Common Shares into which each Preferred Share is then convertible; and

 

(c)                                  If there is no public market for the Common Shares, then fair market value shall be determined in good faith by the Company’s Board of Directors.

 

5.                                      Partial Exercise.  This Warrant may be exercised in part, and the Holder shall be entitled to receive a new warrant, which shall be dated as of the date of this Warrant, covering the number of shares in respect of which this Warrant shall not have been exercised.

 

6.                                      Fractional Shares. In no event shall any fractional Preferred Share be issued upon any exercise of this Warrant. If, upon exercise of this Warrant in its entirety, the Holder would, except as provided in this Section 6, be entitled to receive a fractional Preferred Share, then the number of Preferred Shares to be issued by the Company shall be rounded up or down (a fraction of 0.5 or higher being rounded up) the next higher or lower number of full Preferred Shares, as applicable, issuing a full Preferred Share with respect to such fractional share.

 

7.                                      Expiration Date; Automatic Exercise. This Warrant shall expire at the earliest to occur of (the “Expiration Date”) (i) at the close of business on June 30, 2019; (ii) two years after the closing of the initial Public Offering or other listing of the Company on the Toronto Stock Exchange, the TSX Venture Exchange or any other stock exchange in Canada or the United States, and shall be void thereafter.

 

Notwithstanding the term of this Warrant fixed pursuant to this Section 7, and provided Holder has received advance written notice of at least five (5) business days and has not earlier exercised this Warrant, conditional upon but effective immediately prior to the consummation of a Merger (as defined below), this Warrant shall automatically be exercised pursuant to Section 4 hereof, without any action by Holder. “Merger” means: (i) a sale of all or substantially all of the Company’s assets to an Unaffiliated Entity (as defined below), or (ii) the merger, consolidation or acquisition of the Company with, into or by an Unaffiliated Entity (other than a merger or consolidation for the principal purpose of changing the domicile of the Company), that results in the transfer of fifty percent (50%) or more of the outstanding voting power of the Company (provided that, for greater certainty, no bona fide round of preferred stock equity financing shall be considered a “Merger”). “Unaffiliated Entity” means any entity that is owned or controlled by parties who own less than twenty percent (20%) of the combined voting power of the voting securities of the Company immediately prior to such merger, consolidation or acquisition. Notwithstanding the foregoing, in the event that any outstanding warrants to purchase equity securities of the Company are assumed by the successor entity of a Merger (or parent thereof), this Warrant shall also be similarly assumed. The Company agrees, subject to any applicable confidentiality restrictions, to promptly give the Holder written notice of any proposed Merger and written notice of termination of any proposed Merger. Notwithstanding anything to the contrary in this Warrant, the Holder may rescind any exercise of its purchase rights after a notice of termination of the proposed Merger if the exercise of this Warrant occurred after the Company notified the Holder that the Merger was proposed or if the exercise was otherwise precipitated by such proposed Merger, provided, however that such rescission right must be exercised within five (5) business days of receipt of such written notice of termination of the proposed Merger. In the event of such rescission, this Warrant will continue to be exercisable on the same terms and conditions.

 

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8.                                      Reserved Shares; Valid Issuance. The Company covenants that it will at all times from and after the date hereof reserve and keep available such number of its authorized Preferred Shares and Common Shares free from all preemptive or similar rights therein, as will be sufficient to permit, respectively, the exercise of this Warrant in full and the conversion into Common Shares of all Preferred Shares receivable upon such exercise. The Company further covenants that such shares as may be issued pursuant to such exercise and/or conversion will, upon issuance and subject to payment in full of the Purchase Price therefor, be duly and validly issued, fully paid and nonassessable and free from all Canadian taxes, liens and charges with respect to the issuance thereof.

 

9.                                                              (a)                                  Share Reorganization. If at any time after the date hereof and prior to the Expiration Date the Company shall (i) subdivide or re-divide its then outstanding Preferred Shares into a greater number of Preferred Shares, (ii) reduce, combine or consolidate its then outstanding Preferred Shares into a lesser number of Preferred Shares or (iii) issue Preferred Shares (or securities exchangeable for or convertible into Preferred Shares) at no additional cost to the holders of all or substantially all of its then outstanding Preferred Shares by way of a stock dividend or other distribution, other than a dividend paid in the ordinary course or a distribution of Preferred Shares upon the exercise of any outstanding warrants or options (any of such events herein called a “Share Reorganization”), then the Purchase Price shall be adjusted effective immediately after the effective date of any such event in (i) or (ii) above or the record date at which the holders of Preferred Shares are determined for the purpose of any such dividend or distribution in (iii) above, as the case may be, by multiplying the Purchase Price in effect on such effective date or record date, as the case may be, by a fraction, the numerator of which shall be the number of Preferred Shares outstanding on such effective date or record date, as the case may be, before giving effect to such Share Reorganization and the denominator of which shall be the number of Preferred Shares outstanding immediately after giving effect to such Share Reorganization including, in the case where securities exchangeable for or convertible into Preferred Shares are distributed, the number of Preferred Shares that would be outstanding if such securities were exchanged for or converted into Preferred Shares. Upon any such adjustment to the Purchase Price, then the number of Preferred Shares purchasable pursuant to this Warrant shall be adjusted contemporaneously by multiplying the number of Preferred Shares then otherwise purchasable on the exercise thereof by a fraction, the numerator of which shall be the Purchase Price in effect immediately prior to the adjustment and the denominator of which shall be the Purchase Price resulting from such adjustment.

 

(b)                                  Capital Reorganization. If at any time after the date hereof and prior to the Expiration Date there is a capital reorganization of the Company or a reclassification or other change in the Preferred Shares (other than a Share Reorganization, a Merger or a capital reorganization otherwise dealt with in Section 21) or a consolidation or merger or amalgamation of the Company with or into any other corporation or other entity (other than a consolidation, merger or amalgamation which does not result in any reclassification of the outstanding Preferred Shares or a change of the Preferred Shares into other securities), or a transfer of all or substantially all of the Company’s undertaking and assets to another corporation or other entity (other than one or more subsidiaries of the Company) in which the holders of Preferred Shares are entitled to receive shares, other securities or other property (any of such events being called a “Capital Reorganization”), after the effective date of the Capital Reorganization the Holder shall be entitled to receive, and shall accept, for the same aggregate consideration, upon exercise of the Warrants, in lieu of the number of Preferred Shares to which the Holder was theretofore entitled upon the exercise of the Wan-ants, the kind and aggregate number of shares, other securities or property resulting from the Capital Reorganization which the Holder would have been entitled to receive as a result of the Capital Reorganization if, on the effective date thereof, the Holder has been the registered holder of the number of Preferred Shares to which the Holder was theretofore entitled to purchase or receive upon the exercise of the Warrants. If determined appropriate by the Board of Directors, acting in good faith, as a result of any Capital Reorganization, appropriate adjustments shall be made in the application of the provisions of this Warrant with respect to the rights and interest thereafter of the Holder to the end that the provisions of this Warrant shall thereafter correspondingly be made applicable as nearly as may reasonably be possible in relation to any shares or other securities or property thereafter deliverable upon the exercise of this Warrant.

 

10.                               Adjustments Generally. The following rules and procedures shall be applicable to the adjustments made pursuant to Section 9 herein:

 

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(a)                                  any Preferred Shares owned or held by or for the account of the Company shall be deemed not be to outstanding except that, for the purposes of Section 9 herein, any Preferred Shares owned by a pension plan or profit sharing plan for employees of the Company or any of its subsidiaries shall not be considered to be owned or held by or for the account of the Company;

 

(b)                                  no adjustment in the Purchase Price or the number of Preferred Shares purchasable pursuant to this Warrant shall be required (i) in respect of an event described in Section 9 (other than Sections 9(a)(i) and 9(a)(ii)) if, subject to any required regulatory approvals, the Holder was entitled to participate in such event on the same terms, mutatis mutandis, as if it had exercised the Warrant prior to the effective date or record date of such event or (ii) in any event, unless a change of at least 1% of the prevailing Purchase Price or the number of Preferred Shares purchasable pursuant to this Warrant would result, provided, however, that any adjustment which, except for the provisions of this Section 10(b)(ii), would otherwise have been required to be made, shall be carried forward and taken into account in any subsequent adjustment;

 

(c)                                  the adjustments provided for in Section 9 herein are cumulative and shall apply to successive subdivisions, consolidations, dividends, distributions and other events resulting in any adjustment under the provisions of such item;

 

(d)                                  in the absence of a resolution of the Board of Directors of the Company fixing a record date for any dividend or distribution referred to in Section 9(iii) herein, the Company shall be deemed to have fixed as the record date therefor the date on which such dividend or distribution is effected;

 

(e)                                  if the Company sets a record date to take any action and thereafter and before the taking of such action abandons its plan to take such action, then no adjustment to the Purchase Price or of the number of Preferred Shares issuable upon exercise of the Warrant will be required by reason of the setting of such record date;

 

(f)                                    as a condition precedent to the taking of any action which would require any adjustment to the Warrants evidenced hereby, including the Purchase Price, the Company must take any corporate action which, in the opinion of counsel to the Company, may be necessary in order that the Company shall have unissued and reserved in its authorized capital and may validly and legally issue as fully paid and non-assessable all of the shares or other securities which the Holder is entitled to receive on the full exercise thereof in accordance with the provisions hereof;

 

(g)                                 forthwith, but no later than fourteen (14) days, after any adjustment to the Purchase Price or the number of Preferred Shares purchasable pursuant to the Warrants, the Company shall provide to the Holder a certificate of the chief financial officer of the Company certifying as to the amount of such adjustment and, in reasonable detail, describing the event requiring and the manner of computing or determining such adjustment;

 

(h)                                 any question or dispute that at any time or from time to time arises with respect to the amount of any adjustment to the Purchase Price or other adjustment pursuant to Section 9 herein shall be conclusively determined by a firm of independent chartered accountants (who may be the Company’s auditors) and shall be binding upon the Company and the Holder; and

 

(i)                                    in case the Company, after the date of issue of this Warrant, takes any action affecting the Preferred Shares, other than an action described in Section 9 herein, which in the opinion of the Board of Directors of the Company would materially affect the rights of the Holder, the Purchase Price will be adjusted in such manner, if any, and at such time, by action by the Board of Directors of the Company but subject in all cases to any necessary regulatory approval (including any stock exchange or quotation system on which the Preferred Shares are then listed and posted (or quoted) for trading, as applicable). Failure of the taking of action by the Board of Directors of the Company so as to provide for an adjustment on or prior to the effective date of any action by the

 

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Company affecting the Preferred Shares will be conclusive evidence that the Board of Directors of the Company has determined that it is equitable to make no adjustment in the circumstances. For greater certainty, neither the creation of a new series of Class B preferred shares of the Company, nor the creation of a new class of preferred shares that ranks ahead of the Class B preferred shares of the Company and whose creation is approved by the shareholders of the Company in accordance with the terms of the Articles and the Shareholders Agreement of the Company, shall be deemed to materially adversely affect the rights of the Holder hereunder.

 

11.                               Adjustments for Diluting Issuances. The other antidilution rights applicable to the Preferred Shares of the Company are set forth in the Company’s Articles of Amendment, as amended from time to time (the “Articles”), a true and complete copy in its current form which is attached hereto as Exhibit A. Such rights shall not be restated, amended or modified in any manner which affects the Holder differently than the holders of Preferred Shares without such Holder’s prior written consent. The Company shall promptly provide the Holder hereof with any proposed restatement, amendment or modification to the rights attaching to the Preferred Shares, as set forth in the Articles, and in any event no later than five (5) business days prior to such proposed restatement, amendment or modification being made.

 

12.                               Notices of Record Date, Etc.  In the event of:

 

(a)                                  any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase, sell or otherwise acquire or dispose of any shares of stock of any class or any other securities or property, or to receive any other right;

 

(b)                                  any reclassification of the capital of the Company, capital reorganization of the Company, consolidation or merger involving the Company, or sale or conveyance of all or substantially all of its assets; or

 

(c)                                  any voluntary or involuntary dissolution, liquidation or winding-up of the Company;

 

then in each such event the Company will provide or cause to be provided to the Holder a written notice thereof. Such notice shall be provided at least five (5) business days prior to the date specified in such notice on which any such action is to be taken.

 

13.                               Representations, Warranties and Covenants.  This Warrant is issued and delivered by the Company and accepted by each Holder on the basis of the following representations, warranties and covenants made by the Company:

 

(a)                                  The Company has all necessary authority to issue, execute and deliver this Warrant and to perform its obligations hereunder. This Warrant has been duly authorized issued, executed and delivered by the Company and is the valid and binding obligation of the Company, enforceable in accordance with its terms subject only to applicable bankruptcy, reorganization, insolvency, moratorium, and similar laws affecting creditors’ rights generally and to general principles of equity,

 

(b)                                  The Preferred Shares issuable upon the exercise of this Warrant have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof and subject to payment in full of the Purchase Price therefor, will be validly issued, fully paid and nonassessable.

 

(c)                                  The issuance, execution and delivery of this Warrant do not, and the issuance of the Preferred Shares upon the exercise of this Warrant in accordance with the terms hereof will not, (i) violate or contravene the Company’s Articles or by-laws, or any law, statute, regulation, rule, judgment or order applicable to the Company, (ii) violate, contravene or result in a breach or default under any contract, agreement or instrument to

 

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which the Company is a party or by which the Company or any of its assets are bound or (iii) require the consent or approval of or the filing of any notice or registration with any person or entity (other than any such consents that shall have been obtained prior to the date hereof and such notices or approvals as may be required upon issuance of the Preferred Shares if the shares of the Company are at such time listed and posted (or quoted) for trading on a stock exchange or quotation system).

 

(d)                                  As long as this Warrant is issued and outstanding and the Company has not effected a Public Offering, the Company will provide to the Holder the following financial and other information:

 

(i)                                     as long as the Loan Agreement remains in force and Lighthouse Capital Partners VI, L.P., remains the Holder, the information described in the Loan Agreement; or

 

(ii)                                  if the Loan Agreement has been terminated in accordance with its terms, or if Lighthouse Capital Partners VI, L.P. is no longer the Holder, (A) unaudited quarterly balance sheets of the Company (including unaudited statements of income, retained earnings and changes in cash flows of the Company for such quarter and the fiscal year to date) and (B) audited annual balance sheets of the Company (including statements of income, retained earnings and changes in cash flows of the Company, if any, for such year).

 

(e)                                  As of the date hereof, the authorized capital of the Company consists of (i) an unlimited number of Class A Common Shares, of which 284,237 shares are issued and outstanding and a sufficient number will be available for issuance in the event of any conversion into Class A Common Shares of the Preferred Shares issuable upon exercise of this Warrant, (ii) 15,678 Class B Common Shares, all of which are issued and outstanding; (iii) an unlimited number of Class C Common Shares, none of which are issued and outstanding; (iv) an unlimited number of Class D Common Shares issuable in series, none of which are issued and outstanding; (v) an unlimited number of Class A Preferred shares, issuable in series, of which (a) 175,024 Series 1 Class A Preferred shares are issued and outstanding; (b) 173,913 Series 2 Class A Preferred shares are issued and outstanding; (c) no Series 3 Class A Preferred shares are issued and outstanding; (d) 1,194,471 Series 4 Class A Preferred shares are issued and outstanding; and (vi) and unlimited number of Class B Preferred Shares issuable in series, of which 475,559 Series 1 Class B Preferred Shares are issued and outstanding. Attached hereto as Exhibit B is a capitalization table summarizing the capitalization of the Company as of the date hereof. At the request of Holder, not more than once per calendar quarter, the Company will provide Holder with a current capitalization table indicating changes, if any, to the number of outstanding Common Shares and Preferred Shares.

 

(g)                                 The Company covenants and agrees that while any of the Warrants shall be outstanding, the Company shall (a) comply with the securities legislation applicable to it in order that the Company not be in default of any requirements of such legislation; and (b) use its commercially reasonable best efforts to do or cause to be done all things necessary to preserve and maintain its corporate existence. All Preferred Shares which shall be issued upon the exercise of the right to purchase herein provided for, subject to payment therefor of the amount at which such Preferred Shares may at the time be purchased pursuant to the provisions hereof, shall be issued as fully paid and non-assessable shares of the Company.

 

14.                               Registration Rights.  Concurrently herewith, the Company is granting to the Holder, effective upon exercise of the Warrants, all the rights of an “Investor” under the Company’s Amended and Restated Registration Rights Agreement dated as of January 27, 2010, as amended.

 

15.                               Amendment. The terms of this Warrant may be amended, modified or waived only with the written consent of the Holder and the Company, subject in all cases to any necessary regulatory approval (including any stock exchange or quotation system on which the Preferred Shares are then listed and posted (or quoted) for trading, as applicable).

 

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16.          Representations and Covenants of the Holder. This Warrant has been entered into by the Company in reliance upon the following representations and covenants of the Holder, which by its execution hereof the Holder hereby confirms:

 

(a)           Investment Purpose. The right to acquire Preferred Shares or the Preferred Shares issuable upon exercise of the Holder’s rights contained herein will be acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.

 

(b)           Accredited Investor. Holder is an “accredited investor” within the meaning of the Securities and Exchange Rule 501 of Regulation D, and Regulation 45-106 (Prospectus and Registration Exemptions), in each case as presently in effect.

 

(c)           Private Issue. The Holder understands (i) that the Preferred Shares issuable upon exercise of the Holder’s rights contained herein are not registered under the 1933 Act or qualified under applicable state securities laws on the ground that the issuance contemplated by this Warrant will be exempt from the registration and qualifications requirements thereof, and (ii) that the Company’s reliance on such exemption is predicated on the representations set forth in this Section 16.

 

(d)           Financial Risk. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment and has the ability to bear the economic risks of its investment.

 

(e)           No Listing. The Holder acknowledges the fact that neither the Preferred Shares nor any other securities of the Company are listed on any stock exchange or quoted on any securities quotation service, that they may never become listed or quoted thereon, that a market therefore may never develop, that the Company is not a “reporting issuer” (or the equivalent thereof) in any jurisdiction, that the Preferred Shares are subject to an indefinite “hold period” under applicable Canadian and United States securities legislation and that it will not be able to resell the Preferred Shares until the expiration of the applicable “hold period” (which period, in most Canadian jurisdictions, will not commence until after the Company has become a “reporting issuer”) except in accordance with limited exemptions under applicable securities legislation and regulatory policy and in compliance with the other requirements of applicable laws.

 

(f)            Legend. The Holder it acknowledges that the certificates representing the Preferred Shares will bear, as of the date of issue, the following legend in substantially the following form:

 

“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 [INSERT CLOSING DATE[ AND THE DATE THE COMPANY BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY.”

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF ENERKEM INC. THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO ENERKEM INC., (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAW AND REGULATIONS, (C) IN THE UNITED

 

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STATES IN ACCORDANCE WITH RULE 144 UNDER THE 1933 ACT OR (D) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, AND IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AFTER, IN THE CASE OF TRANSFERS UNDER CLAUSE (D), THE HOLDER HAS FURNISHED TO ENERKEM INC. AN OPINION OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE REASONABLY SATISFACTORY TO ENERKEM INC.. THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE 1933 ACT AND APPLICABLE SECURITIES LAWS.

 

DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.”

 

(g)           Lock-up. If requested by the lead underwriter or agent of a Public Offering, the Holder shall enter into an agreement in form and substance satisfactory to such lead underwriter and the Company, acting reasonably, substantially to the effect that such Holder shall not be entitled, directly or indirectly, to sell, transfer or otherwise dispose of, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic value as a sale of, any shares, warrants or convertible securities of the Company for such period of time (not to exceed 180 days) as the lead underwriter may require following completion of such Public Offering or secondary public offering of securities of the Company, plus a period of up to 34 days thereafter to comply with applicable FINRA rules.

 

17.          Notices, Transfers, Etc.

 

(a)           Any notice or written communication required or permitted to be given to the Holder may be given by certified mail or delivered to the Holder at the address most recently provided by the Holder to the Company.

 

(b)           This Warrant may not be transferred or assigned, in whole or in part, without the prior written consent of the Company, which consent may not be unreasonably withheld. Notwithstanding the foregoing, and subject to compliance with applicable federal, provincial and state securities laws and upon reasonable prior notice by the Holder to the Company, this Warrant may be transferred by the Holder with respect to all but not less than all of the shares purchasable hereunder (i) to any affiliate of Holder, or (ii) to any acquirer of all or any significant portion of Holder’s assets or the indebtedness of the Company owing to the Holder pursuant to the Loan Agreement. In no circumstance may the Warrant be transferred to a competitor of the Company without the Company’s prior written consent. In the case of any permitted transfer, upon surrender of this Warrant to the Company, together with the assignment notice annexed hereto duly executed, the Company shall issue a new warrant of the same denomination to the transferee and, upon such reissuance, the warrant will not be further transferable or assignable by the transferee without the prior written consent of the Company.

 

(c)           Nothing herein contained shall be construed as conferring upon the Holder any right or interest as a holder of shares of the Company or any other right or interest except as specifically herein provided. Upon exercise of the Warrant, in whole or in part, the Holder hereby agrees to execute an agreement to be bound by the terms of any Shareholder Agreement in effect at such time among the Company and its shareholders.

 

(d)           In case this Warrant shall be mutilated, lost, stolen or destroyed, the Company shall issue a new warrant of like tenor and denomination and deliver the same (i) in exchange and substitution for and upon surrender and cancellation of any mutilated Warrant, or (ii) in lieu of any Warrant lost, stolen or destroyed, upon receipt of an affidavit of the Holder or other evidence reasonably satisfactory to the Company of the loss, theft or destruction of such Warrant, together with such indemnity as may be reasonably required by the Company in connection therewith.

 

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18.          Governing Law. The provisions and terms of this Warrant shall be governed by and construed in accordance with the internal laws of the Province of Quebec and federal laws applicable therein without giving effect to its principles regarding conflicts of laws.

 

19.          Successors and Assigns. This Warrant shall be binding upon the Company’s successors and assigns and shall inure to the benefit of the Holder’s successors, legal representatives and permitted assigns.

 

20.          Business Days. If the last or appointed day for the taking of any action required or the expiration of any rights granted herein shall be a Saturday or Sunday or a legal holiday in Montreal, Quebec or Toronto, Ontario, then such action may be taken or right may be exercised on the next succeeding business day which is not a Saturday or Sunday or such a legal holiday.

 

21.          Qualifying Public Offering. If the Company shall effect a firm commitment underwritten Public Offering of Common Shares which results in the conversion of the Preferred Shares into Common Shares pursuant to the Company’s Articles in effect immediately prior to such offering, then, effective upon such conversion, this Warrant shall change from the right to purchase Preferred Shares to the right to purchase Common Shares, and the Holder shall thereupon have the right to purchase, at a total price equal to that payable upon the exercise of this Warrant in full, the number of Common Shares which would have been receivable by the Holder upon the conversion into Common Shares of all Preferred Shares then issuable upon exercise of this Warrant, and in such event appropriate provisions shall be made with respect to the rights and interest of the Holder to the end that the provisions hereof (including, without limitation, the provisions for the adjustment of the Purchase Price and of the number of shares purchasable upon exercise of this Warrant and the provisions relating to the net issue election) shall thereafter be applicable to any Common Shares deliverable upon the exercise hereof.

 

	
 
    	
 
    	
ENERKEM INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Vincent Chornet
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Vincent Chornet
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
President & CEO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ACKNOWLEDGED AND AGREED, this July 1, 2011
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
LIGHTHOUSE CAPITAL PARTNERS VI, L.P.,
    	
 
    	
 
    
	
by LIGHTHOUSE MANAGEMENT PARTNERS VI, L.L.C., its   general partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Ryan Turner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Ryan Turner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Managing Director
    	
 
    	
 
    

 

10

 

Subscription

 

To:

 

Date:

 

The undersigned hereby subscribes for                                                     Preferred Shares covered by this Warrant. The certificate(s) for such shares shall be issued in the name of the undersigned or as otherwise indicated below:

 

 

	
 
    	
 
    
	
Signature
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name for   Registration
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Mailing Address
    	
 
    

 

1

 

Net Issue Election Notice

 

	
To:
    	
 
    	
Date:
    

 

The undersigned hereby elects under Section 4 to surrender the right to purchase Preferred Shares pursuant to this Warrant. The certificate(s) for such shares issuable upon such net issue election shall be issued in the name of the undersigned or as otherwise indicated below:

 

	
 
    	
 
    
	
Signature
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name for   Registration
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Mailing Address
    	
 
    

 

1

 

Assignment

 

For value received                                                                                              hereby sells, assigns and transfers unto 

 

 

[Please print or typewrite name and address of Assignee]

 

the within Warrant, and does hereby irrevocably constitute and appoint                                                                           its attorney to transfer the within Warrant on the books of the within named Company with full power of substitution on the premises.

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Signature
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name for   Registration
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
In the Presence   of:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

1

 

EXHIBIT A

 

Articles of Amendment of Enerkem Inc.

 

See attached pages.

 

1

 

EXHIBIT B

 

Capitalization Table

 

See attached.

 

1Exhibit 10.1

 

RV V HOLDINGS SRL

 

- and —

 

RHO VENTURES VI LUXEMBOURG HOLDINGS, S.A.R.L.

 

- and —

 

BEV HOLDINGS SRL

 

- and -

 

ENERKEM HOLDCO I, LLC

 

- and —

 

ENERKEM HOLDCO II, LLC

 

- and —

 

VINCENT CHORNET

 

— and —

 

ESTEBAN CHORNET

 

— and —

 

MICHAEL DENNIS

 

— and —

 

PIERRE RICHARD

 

— and —

 

BDR CAPITAL L.P.

 

- and -

 

CYCLE CAPITAL FUND I, L.P.

 

- and —

 

WASTE MANAGEMENT OF CANADA CORPORATION

 

— and —

 

SC FUELS INC.

 

- and —

 

ATEL VENTURES, INC., AS TRUSTEE

 

 — and —

 

ENERKEM INC.

 

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

 

 

January 27, 2010

 

 

TABLE OF CONTENTS

 

	
ARTICLE 1.   INTERPRETATION
    	
3
    
	
 
    	
 
    
	
1.1
    	
Definitions
    	
3
    
	
1.2
    	
Headings
    	
7
    
	
1.3
    	
Gender and Number
    	
7
    
	
1.4
    	
Currency
    	
7
    
	
1.5
    	
Invalidity of Provisions
    	
7
    
	
1.6
    	
Entire Agreement
    	
7
    
	
1.7
    	
Governing Law
    	
7
    
	
1.8
    	
Extended Meanings
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE 2.   DISTRIBUTION RIGHTS
    	
8
    
	
 
    	
 
    
	
2.1
    	
Rights Pursuant to Corporation   Registration
    	
8
    
	
2.2
    	
Demand Registration
    	
9
    
	
2.3
    	
Limitations on Demand   Distribution
    	
11
    
	
2.4
    	
Qualification Procedure
    	
11
    
	
2.5
    	
Distribution Expenses
    	
12
    
	
2.6
    	
Short-Form Distribution
    	
13
    
	
2.7
    	
Indemnification
    	
14
    
	
2.8
    	
Information by the Investors
    	
15
    
	
2.9
    	
Limitations on Subsequent   Registration Rights
    	
16
    
	
2.10
    	
Rule 144 Reporting
    	
16
    
	
2.11
    	
Canadian Securities Law   Requirements
    	
17
    
	
2.12
    	
Standoff Agreement
    	
17
    
	
 
    	
 
    	
 
    
	
ARTICLE 3.   REMEDIES
    	
17
    
	
 
    	
 
    
	
3.1
    	
Injunctive Relief
    	
17
    
	
 
    	
 
    	
 
    
	
ARTICLE 4.   GENERAL PROVISIONS
    	
18
    
	
 
    	
 
    
	
4.1
    	
Transfer of Rights
    	
18
    
	
4.2
    	
ATEL Special Provision
    	
18
    
	
4.3
    	
Aggregation of Registrable   Securities
    	
18
    
	
4.4
    	
Amendment of Distribution Rights
    	
18
    
	
4.5
    	
Termination of Rights
    	
19
    
	
4.6
    	
Notices
    	
19
    
	
4.7
    	
Time of Essence
    	
22
    
	
4.8
    	
Enurement
    	
23
    
	
4.9
    	
Delays or Omissions
    	
23
    
	
4.10
    	
Further Assurances
    	
23
    
	
4.11
    	
Counterparts
    	
23
    

 

 

THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT is made as of the 27th day of January, 2010.

 

AMONG:

 

RV V HOLDINGS SRL, a limited liability society constituted under the laws of the Societies with Restricted Liability Act 1995 (Barbados) (“Rho Barbados”);

 

- and -

 

RHO VENTURES VI LUXEMBOURG HOLDINGS, S.A.R.L., a Luxembourg société à responsabilité limitée  (“Rho Luxco”);

 

- and —

 

BEV HOLDINGS SRL, a limited liability society constituted under the laws of the Societies with Restricted Liability Act 1995 (Barbados) (“Braemar”);

 

ENERKEM HOLDCO I, LLC, a limited liability company constituted under the laws of Delaware (“Holdco I”)

 

- and —

 

ENERKEM HOLDCO II, LLC, a limited liability company constituted under the laws of Delaware (“Holdco II”)

 

- and -

 

VINCENT CHORNET, an individual residing at 135 Ballantyne North Montreal West, Québec, H4X 2B9 (“Vincent”);

 

— and —

 

ESTEBAN CHORNET, an individual residing at 470 Montmagny, Sherbrooke, Québec, J1L 1H3 (“Esteban”);

 

— and —

 

MICHAEL DENNIS, an individual residing at 1095 Park Ave.,17C, New York, NY 10128, USA (“Dennis”);

 

— and —

 

PIERRE RICHARD, an individual residing at 242 Pasteur, Repentigny, Québec, J6A 7L8 (“Richard”);

 

— and —

 

 

BDR CAPITAL L.P., a limited partnership formed under the laws of Québec (“BDR”);

 

- and —

 

CYCLE CAPITAL FUND I, L.P., a limited partnership formed under the laws of Québec (“Cycle”);

 

- and-

 

WASTE MANAGEMENT OF CANADA CORPORATION, an unlimited liability company constituted under the laws of Nova Scotia (“WM”);

 

- and -

 

SC FUELS INC., a corporation constituted under the laws of Canada (“SC”);

 

- and -

 

ATEL VENTURES, INC., AS TRUSTEE, a California corporation (“ATEL”)

 

- and -

 

ENERKEM INC., a corporation incorporated under the Canada Business Corporations  Act (the  “Corporation”)

 

- and -

 

any other person who, after the date of this Agreement, acquires Class A Preferred Shares and signs an attornment to this Agreement substantially in the form of Schedule B hereto or in such other form as may be approved by the directors of the Corporation.

 

WHEREAS Rho Barbados, Braemar, Vincent, Esteban, Dennis, Richard, BDR (as a Permitted Transferee of Fonds de solidarité des travailleurs du Québec (F.T.Q.)) and the Corporation are party to that certain Registration Rights Agreement dated as of April 1, 2008 (the “Original Agreement”);

 

WHEREAS section 2.9 of the Original Agreement contains limitations on the Corporation’s ability to grant registration rights;

 

WHEREAS pursuant to section 4.3 of the Original Agreement, the Original Agreement can be amended by the written consent of the Corporation and the Investors holding at least a majority of the total number of Registrable Securities then held by all Investors;

 

2

 

WHEREAS the Original Agreement was amended (the “First Amendment”) on or about March 11, 2009 in connection with the issuance to ATEL of a warrant to acquire Series 3 Class A Preferred Shares in the capital of the Corporation (the “Warrant”);

 

WHEREAS the Corporation and Rho Barbados, Rho Luxco, Holdco I, Holdco II, Dennis, Cycle, WM and SC are parties to a subscription agreement of even date herewith (the “Subscription Agreement”), which provides for the execution and delivery of this Agreement as a closing condition to the transactions contemplated thereby;

 

AND WHEREAS the Investors wish certain registration rights with respect to the sale of Registrable Securities.

 

NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each of the parties), the parties agree as follows:

 

ARTICLE 1
 INTERPRETATION

 

1.1                               Definitions

 

(1)                                  As used in this Agreement, the following terms shall have the meanings set forth below:

 

“Affiliate” shall have the meaning ascribed thereto in the Canada Business Corporations Act;

 

“Agreement” means this agreement entitled “Amended and Restated Registration Rights Agreement” and all schedules and all instruments supplemental hereto or any amendment or confirmation hereof, as they may be supplemented or amended from time to time, and “hereof”, “hereto”, “hereunder” and similar expressions mean and refer to this Agreement and not to any particular article or Section or subsection and “Article” or “Section” or “subsection” mean and refer to the specified article or Section or subsection of this Agreement;

 

“ATEL” has the meaning set out in the recitals;

 

“BDR” has the meaning set out in the recitals;

 

“Braemar” has the meaning set out in the recitals;

 

“Business Day” means any day except Saturday, Sunday or any statutory or civic holiday in the Province of Québec and in the state of New York;

 

“Canadian Securities Laws” includes the Securities Act and any other similar legislation in any other province in which the Corporation is or becomes a reporting issuer;

 

“Class A Preferred Shares” means the Class A Preferred Shares in the capital of the Corporation, as those shares may be amended, revised, updated, converted, consolidated,

 

3

 

subdivided, exchanged, redesignated, reclassified, or otherwise changed from time to time;

 

“Common Shares” means the Class A Common Shares in the capital of the Corporation as they may be converted, consolidated, subdivided, exchanged, redesignated, reclassified, or otherwise changed from time to time including the Common Shares underlying the Class A Preferred Shares;

 

“Cycle” has the meaning set out in the recitals;

 

“Demand Distribution” has the meaning set out in Section 2.2(1);

 

“Dennis” has the meaning set out in the recitals;

 

“Distribution” means a distribution of Common Shares to the public by way of a Prospectus under securities legislation in any applicable jurisdiction in Canada or in the United States and does not include a distribution under the U.S. Securities Act made solely in respect of a merger, acquisition or employee benefits plan or a transaction to which Rule 144 made under the U.S. Securities Act is applicable;

 

“Distribution Expenses” means all expenses incurred by the Corporation in complying with Sections 2.1, 2.2 and 2.6, including, without limitation, all distribution and filing fees, printing expenses, fees and disbursements of counsel for the Corporation and independent public accountants or chartered accountants for the Corporation, fees and expenses (including counsel fees) incurred in connection with complying with provincial and state securities laws, stock exchange listing fees, fees of the National Association of Securities Dealers, Inc. and any successor institution, transfer taxes, fees of transfer agents and registrars, costs of insurance and fees and disbursements of one legal counsel for the sellers of Registrable Securities not to exceed US$30,000 if applicable, but excluding any Selling Expenses;

 

“Esteban” has the meaning set out in the recitals;

 

“Holdco I” has the meaning set out in the recitals;

 

“Holdco II” has the meaning set out in the recitals;

 

“Indemnified Parties” has the meaning set out in Section 2.7(1);

 

“Initial Distribution” means the first Distribution;

 

“Investors” means Rho Barbados, Rho Luxco, Braemar, Holdco I, Holdco II, Vincent, Esteban, Dennis, Richard, BDR, WM, SC, Cycle and any other Person holding Registrable Securities to whom the registration rights granted under this Agreement have been transferred in accordance with Section 4.1, and “Investor” means any one of the foregoing;

 

“Long-Form Distribution” means any Distribution other than a Short-Form Distribution;

 

4

 

“Person” means an individual, partnership, corporation, business trust, limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity of whatever nature;

 

“Prospectus” means any of:

 

(a)                                  “preliminary prospectus” and a “prospectus” as those terms are used in the Securities Act;

 

(b)                                 a “prospectus” as that term is used in the U.S. Securities Act; and

 

(c)                                  a “registration statement” as that term is used in the U.S. Securities Act;

 

including in each case all amendments, supplements and exhibits thereto;

 

“Recognized Stock Exchange” means a recognized stock exchange such as the Toronto Stock Exchange, the New York Stock Exchange or the NASDAQ stock market;

 

“Registrable Securities” means (i) Common Shares issued or issuable pursuant to the conversion of the Class A Preferred Shares; (ii) Common Shares issued as a dividend or other distribution with respect to or in exchange for or in replacement of the Class A Preferred Shares or the Common Shares issued or issuable pursuant to the conversion of the Class A Preferred Shares; (iii) any Common Shares acquired by an Investor pursuant to the Shareholders Agreement or pursuant to any other arrangement; (iv) any Common Shares issued or issuable upon conversion of any debt instrument or other right held by an Investor; and (v) any other Common Shares issued in respect of stock splits, stock consolidations, reclassifications, recapitalizations or similar events in respect of the Class A Preferred Shares; provided, however, that Registrable Securities shall not include (A) any Common Shares which have previously been registered or which have been sold to the public either pursuant to a registration statement or Rule 144, or which have been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned or (B) any Common Shares held by holders who are residents in Canada not subject to applicable Canadian Securities Laws, if such holders have the right (subject to any contractual commitments to the contrary) to freely sell such Common Shares on a Recognized Stock Exchange without a prospectus or resort to a prospectus exemption under applicable securities laws. Notwithstanding the foregoing, any Common Shares acquired by Vincent, Esteban, Dennis or Richard by way of direct subscription or pursuant to the conversion of Class D Common Shares into Class A Common Shares shall be deemed not to be Registrable Securities;

 

The terms “register,” “registered” and “registration” refer to a registration effected by preparing and filing a prospectus in compliance with the Securities Act and/or a registration statement in compliance with the U.S. Securities Act and applicable rules and regulations thereunder, and the issuance of a final receipt with respect to such prospectus filed in compliance with the Securities Act and/or the declaration or ordering of the effectiveness of such registration statement pursuant to the U.S. Securities Act.

 

“Rho Barbados” has the meaning set out in the recitals;

 

5

 

“Rho Luxco” has the meaning set out in the recitals;

 

“Richard” has the meaning set out in the recitals;

 

“Rule 144” means Rule 144 as promulgated by the U.S. Commission under the U.S. Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the U.S. Commission;

 

“SC” has the meaning set out in the recitals;

 

“Securities Act” means the Securities Act (Québec) as it may be amended from time to time and any successor legislation;

 

“Selling Expenses” means all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel for the Investors (other than the fees and disbursements of one legal counsel for the sellers of Registrable Securities included in  Distribution Expenses);

 

“Shareholders Agreement” means the amended and restated shareholders agreement among the Corporation and all the shareholders of the Corporation dated as of the date hereof, as amended from time to time;

 

“Short-Form Distribution” means a distribution on Form S-3 or Form F-3 under the U.S. Securities Act  or under National Instrument 44-101 adopted as a rule pursuant to the Securities Act, as they may be amended or replaced from time to time;

 

“Subscription Agreement” has the meaning set forth in the recitals;

 

“U.S. Blue Sky Laws” includes securities laws and any other similar legislation in any United States state in which the Corporation is or becomes a reporting issuer;

 

“U.S. Commission” means the United States Securities and Exchange Commission or any other United States federal agency at the time administering the U.S. Securities Act and the U.S. Exchange Act;

 

“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended, or any similar successor United States federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time;

 

“U.S. Securities Act” means the United States Securities Act of 1933, as amended, or any similar successor United States federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time;

 

“Vincent” has the meaning set out in the recitals; and

 

“WM” has the meaning set out in the recitals.

 

(2)                                  The definitions contained in the Subscription Agreement are hereby incorporated by reference into and form part of this Agreement.  To the extent that there is an inconsistency

 

6

 

between a term defined herein and defined in the Subscription Agreement, the definition used herein shall prevail.

 

1.2                               Headings

 

The inclusion of headings in this Agreement is for convenience of reference only and does not affect the construction or interpretation of this Agreement.

 

1.3                               Gender and Number

 

In this Agreement, unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender includes both genders.

 

1.4                               Currency

 

Except as otherwise expressly provided in this Agreement, all amounts in this Agreement are stated and, if applicable, will be paid in Canadian currency.

 

1.5                               Invalidity of Provisions

 

Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any provision by a court of competent jurisdiction will not affect the validity or enforceability of any other provision.

 

1.6                               Entire Agreement

 

This Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement. This Agreement supersedes any prior contracts, negotiations and discussions of the parties in respect of the subject matter hereof, including the Original Agreement, the First Amendment and the term sheet dated on or about January 5, 2009 among Dennis, Rho Barbados, Braemar, BDR, WM, Cycle, SC and the Corporation.  There are no warranties, conditions or representations (including any that may be implied by statute) and there are no agreements in connection with the subject matter except as specifically set out or referred to in this Agreement.  No reliance is placed on any warranty, representation, opinion, advice or assertion of fact made by one party to this Agreement or its directors, officers, employees or agents, to the other parties to this Agreement or their respective directors, officers, employees or agents, except to the extent that the reliance has been reduced to writing and included as a term of this Agreement.  Accordingly, there will be no liability, either in tort or in contract, assessed in relation to any warranty, representation, opinion, advice or assertion of fact, except to the extent aforesaid.

 

1.7                               Governing Law

 

This Agreement is governed by the laws of  the Province of Québec and the federal laws applicable therein.

 

1.8                               Extended Meanings

 

The terms “including” or “include” shall mean “including without limitation” and “include without limitation”, respectively.

 

7

 

ARTICLE 2
 DISTRIBUTION RIGHTS

 

2.1          Rights Pursuant to Corporation Registration

 

(1)           If the Corporation shall determine to qualify or register any of its securities under the Canadian Securities Laws and/or the U.S. Securities Act (including the Initial Distribution, provided that the underwriters for such Initial Distribution acting reasonably, determine that such registration shall not affect the Initial Distribution), either for its own account or the account of a security holder or holders (other than pursuant to Section 2.2 or 2.6 hereof), other than a registration relating solely to employee benefit plans, a registration relating to the offer and sale of debt securities (other than convertible debt securities), or a registration on any registration form that does not permit secondary sales, the Corporation will:

 

(a)                                  at least 30 Business Days prior to the proposed date of such qualification or registration give the Investors written notice thereof; and

 

(b)                                 subject to Section 2.1(3), include in such registration or qualification, and in any underwriting involved therein, all the Registrable Securities specified in a written request by the Investors and received by the Corporation within 10 Business Days after the written notice from the Corporation described in Section 2.1(1)(a) above is delivered by the Corporation.  Such written request may specify all or a part of an Investor’s Registrable Securities.

 

(2)           If the registration of which the Corporation gives notice is for a registered public offering or Distribution involving an underwriting, the Corporation shall so advise the Investors as a part of the written notice given pursuant to Section 2.1(1)(a).  In such event, the right of each Investor to registration pursuant to this Section 2.1 shall be conditional upon such Investor’s participation in such underwriting and the inclusion of such Investor’s Registrable Securities in the underwriting to the extent provided herein.  If an Investor proposes to distribute its Registrable Securities through such underwriting, then the Investor (together with the Corporation and the other holders of securities of the Corporation distributing their securities through such underwriting) will enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Corporation.

 

(3)           Notwithstanding any other provision of this Section 2.1, if the lead underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the managing underwriter may limit the Registrable Securities and other securities to be distributed through such underwriting to any amount for the Initial Distribution but to not less than the amount of 25% of any offering after the Initial Distribution and the number of shares that may be included in the underwriting shall be allocated (i) first, to the Corporation; (ii) second, to the applicable Investors on a pro rata basis based on the total number of Registrable Securities held by such Investors; (iii) third, to any shareholder of the Corporation (other than an Investor) on a pro rata basis.  The Corporation shall so advise the Investors requesting registration of its pro rata allocation.  The right of the Corporation or the underwriters to exclude shares (including Registrable Securities) from the registration and underwriting as described above shall be restricted so that all shares that are not Registrable Securities and are held by Persons who are employees or former employees of the Corporation (or any subsidiary

 

8

 

of the Corporation) shall first be excluded from such registration and underwriting before any Registrable Securities held by the Investor are so excluded.

 

(a)                                  If the Investor does not agree to the terms of any such underwriting (including the terms of the underwriting agreement referred to in Section 2.1(2)), the Investor shall be excluded therefrom by written notice from the Corporation or the underwriter.  Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration.

 

(b)                                 If Registrable Securities are so withdrawn from the registration and if the number of Registrable Securities to be included in such registration was previously reduced so as not to jeopardize the offering, the Corporation shall then offer to all applicable Investors who have retained the right to include Registrable Securities in the registration the right to include additional Registrable Securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated on a pro rata basis among the applicable Investors requesting additional inclusion in accordance with Section 2.1 hereof.

 

(4)           The Corporation shall have the right, without the consent of any holder of Registrable Securities, to terminate or withdraw any registration initiated by it under this Section 2.1 prior to the effectiveness of such registration whether or not any Investor has elected to include Registrable Securities in such registration.

 

2.2          Demand Registration

 

(1)           Subject to Section 2.3, if the Corporation shall receive from Investors holding at least 25% of all of the then outstanding Registrable Securities, at any time or times not earlier than 180 days after the effective date of the Corporation’s Initial Distribution, a written request that the Corporation effect any registration pursuant to this Section 2.2 (a “Demand Distribution”), the Corporation will:

 

A.                                   within ten days of such receipt, give written notice of the proposed registration to the Investors; and

 

B.                                     use its best efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under, where applicable, the Securities Act, Canadian Securities Laws, U.S. Securities Act, U.S. Blue Sky Laws and/or other United States securities laws, and appropriate compliance with the U.S. Securities Act) as soon as practicable, and in any event within 90 days, as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Investor or Investors joining in such request as are specified in a written request received by the Corporation within 20 days after such written notice from the Corporation is mailed or delivered. Notwithstanding any other provision contained herein, if the lead underwriter determines in good faith that marketing factors require

 

9

 

a limitation of the number of securities to be underwritten, no Registrable Securities will be so excluded unless the underwriter first excludes all other securities proposed to be included in such underwriting and registration (including securities for the account of the Corporation) and the underwriter shall allocate the number of Registrable Securities that may be included in the underwriting among the holders of Registrable Securities that have elected to participate, pro rata according to the number of Registrable Securities held by each such holder.

 

(2)           The Corporation shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 2.2 if:

 

A.                                   the Corporation shall furnish to the Investors a certificate signed by the President of the Corporation stating that in the good faith judgment of the Board of Directors, the effect of the filing would materially impede the ability of the Corporation to consummate a significant transaction or there exists at the time material non-public information relating to the Corporation the disclosure of which would be seriously detrimental to the Corporation and that it is on that basis alone, in the best interests of the Corporation to defer the filing of such registration statement at such time, then the Corporation’s obligation to use its best efforts to register, qualify or comply under this Section 2.2 shall be deferred for a period of not more than 90 days from the date of receipt of the request of the Investor(s) in accordance with Section 2.2(1); provided, however, that the Corporation shall not defer its obligation pursuant to this Section 2.2(2)A more than once in any 12 month period;

 

B.                                     at the time of such request, the Corporation is engaged in a self-tender or exchange offer and the filing of a Prospectus would cause a violation of the U.S. Exchange Act or applicable Canadian Securities Laws;

 

C.                                     within 30 days of receipt of a written request that the Corporation effect a Demand Distribution the Corporation delivers a written notice to all holders of Registrable Securities of its intent to file a registration statement for its Initial Distribution within 90 days; provided, however, that the Corporation shall not defer its obligation pursuant to Section 2.2(2)C more than once in any 12 month period; or

 

D.                                    such Demand Distribution will be completed within the 90 day period commencing on the date of any Distribution in which the Investors were entitled (subject to underwriter cutbacks) to include Registrable Securities pursuant to this Agreement; or

 

10

 

E.                                      such Demand Distribution will be completed within the 180 day period commencing on the date of the Corporation’s Initial Distribution.

 

2.3          Limitations on Demand Distribution

 

(1)           The rights granted to the Investors in Section 2.2 are subject to the following limitations:

 

(a)                                  the Investors will be entitled to require the Corporation to cause a Demand Distribution under Section 2.2 only if the anticipated gross proceeds of the Distribution are at least $5 million; and

 

(b)                                 the Investors shall be entitled to require only two completed Long-Form Distributions (Demand Distributions), provided that (i) any Long-Form Distribution in which the lead underwriter reduces the number of Registrable Securities of the Investors to be included by more than 25%; or (ii) any Long-Form Distribution that occurs after the delivery of a written notice under Section 2.2(2)C, shall not be one of the two Long-Form Distributions permitted under this Section.

 

2.4          Qualification Procedure

 

The Corporation will keep each Investor whose Registrable Securities are part of the Distribution advised in writing as to the terms and timing of any Distribution to be effected, and as to the completion thereof, by the Corporation pursuant to this Agreement.  At its expense, the Corporation will in connection with each Distribution under this Agreement:

 

(a)                                  use its best efforts to prepare and file with the appropriate securities regulatory authorities a Prospectus and any other documents necessary, including amendments and supplements in respect of those documents, to permit the Distribution and use its best efforts to keep such registration effective for a period of 120 days or until the Investor or Investors have completed the Distribution in compliance with all applicable securities laws, whichever first occurs;

 

(b)                                 furnish that number of Prospectuses, including a preliminary prospectus, and other documents incident thereto, including any amendment of or supplement to the prospectus, as the Investors from time to time may reasonably request in order to facilitate the Distribution;

 

(c)                                  in the event of any underwritten Distribution, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the lead underwriter of the Distribution;

 

(d)                                 cause all the Common Shares to be Distributed to be listed on each stock exchange or quotation or other system on which the Common Shares are then listed or posted for trading;

 

(e)                                  provide a transfer agent and registrar and a  CUSIP number for all Common Shares to be Distributed not later than the date of filing of the Prospectus;

 

11

 

(f)                                    furnish to the underwriter or underwriters involved in the Distribution all documents as they may reasonably request;

 

(g)                                 subject to applicable law and reasonable requests of any applicable underwriter, use all reasonable commercial efforts to minimize the number of shares of the Investors that are escrowed on any Distribution;

 

(h)                                 notify each Investor of Registrable Securities covered by such registration statement at any time when a Prospectus relating thereto is required to be delivered under the securities laws of Canada and/or the United States of the happening of any event as a result of which the Prospectus included in such registration, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statement therein not misleading in the light of the circumstances then existing, and promptly file such amendments and supplements which may be required on account of such event and use its best efforts to cause such amendment and supplement to become effective; and

 

(i)                                     use its best efforts to furnish, at the request of any Investor requesting registration of Registrable Securities pursuant to this Article 2, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Article 2, if such Registrable Securities are sold through underwriters, or, if such Registrable Securities are not being sold through underwriters, on the date that the registration statement with respect to such Registrable Securities becomes effective (i) an opinion, dated such date, of the counsel representing the Corporation for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Investors requesting registration of Registrable Securities and (ii) a letter dated such date, from the auditors of the Corporation, in form and substance as is customarily given by the auditors to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Investors requesting registration of Registrable Securities.

 

2.5          Distribution Expenses

 

The Corporation will pay all Distribution Expenses in connection with all Distributions under Sections 2.1, 2.2 and 2.6, provided, however, that any of the expenses for any Distribution or Prospectus requested by any Investor pursuant to this Agreement and subsequently withdrawn solely by the Investor, and not due to the exercise of the right of the Corporation pursuant to Section 2.2(2) hereunder, will be borne by the Investor (or if applicable, the Investors on a pro rata basis) unless the Investors holding at least a majority of the then outstanding Registrable Securities agree to forfeit their right to one registration pursuant to Section 2.2; provided, further that, if at the time of that withdrawal, the Investor has learned of a material adverse change in the condition, business, or prospects of the Corporation from that known to the Investor at the time of its request and has withdrawn the request with reasonable promptness following discovery by the Investor of that material adverse change, in which case the Investor will not be required to pay any of those expenses (and, for greater certainty, if those expenses are in respect of a Long-Form Distribution, those expenses will not apply to reduce the number of remaining Long-Form

 

12

 

Distributions permitted under Section 2.3(1)(b)).  All Selling Expenses in connection with each Distribution under Sections 2.1, 2.2 and 2.6 will be borne by the participating sellers in proportion to the number of Registrable Securities sold by each relative to the total number of Common Shares sold pursuant to the Distribution.

 

2.6          Short-Form Distribution

 

(1)           After the Corporation has conducted its Initial Distribution, the Corporation shall use its best efforts to qualify for a Short-Form Distribution.  After the Corporation has qualified to conduct a Short-Form Distribution effective until all the Registrable Securities can be sold pursuant to Rule 144, in addition to the rights contained in the foregoing provisions of this Section 2, the holders of Registrable Securities shall have the right to request, subject to the terms hereof, an unlimited number of Short-Form Distributions (such requests shall be in writing and shall state the number of shares of Registrable Securities to be disposed of and the intended methods of disposition of such shares by the Investor), provided, however, that the Corporation shall not be obligated to effect any such registration if (i) the anticipated net proceeds of such Short-Form Distribution (after distribution of underwriter’s discount and expenses related to the offering) is not expected to be at least CDN$1 million or (ii) if the Corporation furnishes the certification described in Section 2.2(2)A. The Corporation shall not be obliged to effect more than two registrations in any 12 month period.

 

(2)           If the Corporation shall receive a written request that the Corporation effect any registration pursuant to this Section 2.6 with respect to all or a part of the Registrable Securities the Corporation will:

 

A.                                   within ten days of such receipt, give written notice of the proposed registration to all other Investors; and

 

B.                                     use its best efforts to effect such registration (including, without limitation post-effective amendments, appropriate qualifications under the applicable securities laws of Canada and/or the United States) as soon as practicable, and in any event within 120 days, and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Investor or Investors joining in such request as are specified in a written request received by the Corporation within 20 days after such written notice from the Corporation is mailed or delivered.  Notwithstanding anything to the contrary contained herein, if the registration requested is to be an underwritten offering and if the underwriters have not limited the number of Registrable Securities to be underwritten, the Corporation shall be entitled, at its election, to join in any such registration with respect to securities to be offered by it or any other party. Notwithstanding any other provision contained herein, if the lead underwriter determines in good faith that marketing factors require a limitation of the number of securities to be underwritten, no Registrable Securities will be so excluded unless the underwriter first excludes all other securities proposed to be

 

13

 

included in such underwriting and registration (including securities for the account of the Corporation) and the underwriter shall then allocate the number of Registrable Securities that may be included  to the applicable Investors on a pro rata basis based on the total number of Registrable Securities held by such Investors.

 

2.7          Indemnification

 

(1)           If any Registrable Securities held by an Investor are included in a registration statement of Prospectus pursuant to this Agreement, the Corporation will hold harmless and indemnify the Investors and their officers, directors, employees, partners, members, shareholders and underwriters (the “Indemnified Parties”), to the fullest extent permitted by law, from and against any losses (other than loss of profit), claims, damages or liabilities to which the Indemnified Parties may be subject under any applicable securities law or otherwise, insofar as those losses, claims, damages or liabilities (or actions in respect of them) arise out of or are based upon any untrue or alleged untrue statement of any material fact contained in any Prospectus under which Common Shares were distributed under this Agreement, or any document incidental to the qualification of those Common Shares, or that arise out of or are based upon the omission or alleged omission to state any material fact required to be stated or necessary to make any statement not misleading, or any violation by the Corporation of any applicable securities laws in connection with the qualification or sale of Common Shares under applicable securities laws; provided, however, that the Corporation will not be liable in any case to the extent that any loss, claim, damage or liability is based upon an untrue statement or omission made in any Prospectus or other document in reliance upon and in conformity with information furnished in writing to the Corporation by any Indemnified Party or its agent pertaining to that Indemnified Party specifically for use in the preparation of the Prospectus. If the Investor participates in a Distribution it will jointly (within the meaning given to such term in the Civil Code of Québec) but not solidarily or jointly and severally, hold harmless and indemnify the Corporation and each other, and their respective officers, directors and employees and any underwriter of the Corporation, up to an amount equal to the net proceeds to the Investor pursuant to that Distribution from and against any losses (other than a loss of profit), claims, damages or liabilities to which any of them may be subject under any applicable securities laws or otherwise, insofar as those losses, claims, damages or liabilities (or actions in respect of them) are based upon any information furnished in writing to the Corporation by the Investor or its agent pertaining to that Investor specifically for use in preparation of the Prospectus, or any violation by that Investor of any applicable securities laws in connection with the qualification or sale of Common Shares under applicable securities laws; provided, for greater certainty, however, that no Investor will be liable in any case to the extent that any loss, claim, damage or liability is based upon an untrue statement or omission made in any Prospectus or other document which is not in reliance upon or in conformity with information pertaining to that Investor furnished in writing to the Corporation by the Investor or the agents of the Investor specifically for use in the preparation of the Prospectus. If either indemnification provided for in this Section 2.7(1) is held by a court of competent jurisdiction to be unavailable to an Indemnified Party or the Corporation with respect to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such Indemnified Party or the Corporation hereunder, shall contribute to the amount paid or payable by such Indemnified Party or the Corporation as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party,

 

14

 

on the one hand, and of the Indemnified Party or the Corporation, on the other, in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations, provided, however that no Investor shall be obligated to contribute in excess of the amount equal to the net proceeds to the Investor pursuant to the relevant Distribution.  The relative fault of the indemnifying party and of the Indemnified Party or the Corporation shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the Indemnified Party or the Corporation and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

 

(2)           If any claim contemplated by this Section 2.7 is asserted against any party, or if any potential claim contemplated by this Section 2.7 comes to the knowledge of any party, the party concerned will notify the Corporation or the Investor (whichever is the indemnifying party), as the case may be, as soon as possible of the nature of the claim and the Corporation or the Investor, as the case may be, will be entitled (but not required) to assume the defence of any suit brought to enforce that claim.  Any defence will be through legal counsel approved by the party making the claim for indemnification (which approval will not be unreasonably withheld) and no admission of liability will be made by the Corporation or the Investor, as the case may be, or the party making the claim for indemnification without, in each case, the consent of the other party, which consent will not be unreasonably withheld.  The party making the claim for indemnification will have the right to employ separate counsel in any suit and participate in its defence but the fees and expenses of counsel will be at the expense of the party making the claim for indemnification unless (i) the Corporation or the Investor, as the case may be, fails to assume the defence of the suit on behalf of the party making the claim for indemnification within 10 days of receiving notice of the suit; or (ii) the retainer of separate counsel has been authorized in writing by the Corporation or the Investor, as the case may be (in each of which cases the Corporation or the Investor, as the case may be, will not have the right to assume the defence of the suit on behalf of the party making the claim for indemnification but will be liable to pay the reasonable fees and expenses of counsel for the party making the claim for indemnification).  Each indemnified party will furnish that information regarding itself or the claim in question as an indemnifying party may reasonably request in writing and as will be reasonably required in connection with the defence of that claim and litigation resulting from that claim.  Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in an underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement will prevail as among the parties to the underwriting agreement.

 

(3)           The provisions of this Section 2.7 will survive the completion of any and all Distributions under this Agreement.

 

2.8          Information by the Investors

 

The obligations of the Corporation to take any action pursuant to this Agreement in respect of the Registrable Securities of any selling Investor are conditional upon such selling Investor furnishing to the Corporation in writing all necessary information regarding such Investor and the proposed Distribution as the Corporation may reasonably request in writing and as may be reasonably required in connection with any qualification or compliance referred to in

 

15

 

this Agreement.  Such Investors also agree to notify the Corporation as promptly as practicable of any material inaccuracy or change in information.

 

2.9          Limitations on Subsequent Registration Rights

 

From and after the date of this Agreement, the Corporation shall not, without the prior written consent of the holders of not less than a majority of the then outstanding Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Corporation which would enable any or all of such holders or prospective holders to include such securities in any registration filed under Section 2.1, 2.2 and 2.6 hereof or to receive any other registration rights which have priority or could result in such holder or prospective holder having priority over any of the rights granted to the Investors under this Agreement.

 

2.10        Rule 144 Reporting

 

With a view to making available to each Investor the benefits of Rule 144 and any other rule or regulation of the U.S. Commission that may at any time permit an Investor to sell securities of the Corporation to the public without registration or pursuant to a Short-Form Distribution, the Corporation agrees to:

 

(a)                                  make and keep public information available, as those terms are understood and defined in Rule 144, at all times after 90 days after the effective date of the first registration statement filed by the Corporation for the offering of its securities to the general public so long as the Corporation remains subject to the periodic reporting requirements under Sections 13 or 15(d) of the U.S. Exchange Act;

 

(b)                                 file with the U.S. Commission in a timely manner all other reports and documents required of the Corporation under the U.S. Securities Act and the U.S. Exchange Act at any time after it has become subject to such reporting requirements;

 

(c)                                  so long as an Investor owns any Registrable Securities, furnish to the Investor forthwith upon written request a written statement by the Corporation as to its compliance with the reporting requirements of Rule 144 (at any time from and after 90 days following the effective date of the first registration statement filed by the Corporation for an offering of its securities to the general public provided the Corporation has become subject to such reporting requirements), and of the U.S. Securities Act and the U.S. Exchange Act (at any time after the Corporation has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Corporation, and such other reports and documents so filed or other information as an Investor may reasonably request in availing itself of any rule or regulation of the U.S. Commission allowing an Investor to sell any such securities without registration; and

 

(d)                                 take such action, including the voluntary registration of its Common Shares under Section 12 of the U.S. Exchange Act, as is necessary to enable the Investor to conduct a Short-Form Distribution for the sale of its Registrable Securities, such action to be taken as soon as practicable after the end of the fiscal year in which the first registration statement filed by the Corporation for the offering of its securities to the general public is declared effective.

 

16

 

2.11        Canadian Securities Law Requirements

 

With a view to making available the benefits of certain rules and regulations of any Canadian Securities Laws that may at any time permit the sale of the Registrable Securities to the public without the filing of a Prospectus, the Corporation agrees to use its best efforts to:

 

(a)                                  once a public market exists in Canada for the Common Shares, maintain a listing of the Common Shares on each Canadian stock exchange or quotation system on which the Common Shares were listed or quoted in connection with the Initial Distribution;

 

(b)                                 file with the appropriate Canadian Securities Laws regulatory authorities in a timely manner all reports and other documents required of the Corporation under Canadian Securities Laws (at any time after the date that the Corporation becomes a reporting issuer under Canadian Securities Laws); and

 

(c)                                  subject to the terms of this Agreement, qualify the Common Shares under any Prospectus filed by the Corporation in accordance with applicable Canadian Securities Laws including in connection with the Initial Distribution.

 

2.12        Standoff Agreement

 

Each Investor agrees in connection with the Corporation’s Initial Distribution of the Corporation’s securities, upon request of the underwriters managing any underwritten offering of the Corporation’s securities, not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Registrable Securities (other than those included in the registration) without the prior written consent of such underwriters, for such period of time (not to exceed one hundred eighty (180) days) as may be specified by such underwriters, plus a period of up to 34 days thereafter to comply with applicable National Association of Securities Dealers, Inc. rules from the effective date of such registration as may be requested by the underwriters, provided that (i) each officer and director of the Corporation and each holder of more than 1% of the Common Shares (determined on an as converted basis) shall agree to execute a similar document and (ii) if any such person is subsequently released in whole or in part from the restriction described in this Section then each Investor shall be released from such restriction in the same manner subject to such agreements pro rata based on the number of Registrable Securities each Investor holds.

 

ARTICLE 3
 REMEDIES

 

3.1          Injunctive Relief

 

The parties acknowledge that money damages are not an adequate remedy for violations of this Agreement and that any party may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunctive relief on an interim or interlocutory basis as the court may deem just and proper in order to enforce this Agreement or prevent any violation of this Agreement at an interim or interlocutory stage and, to the extent permitted by applicable law, each party waives any objection to the imposition of that relief.

 

17

 

ARTICLE 4
 GENERAL PROVISIONS

 

4.1                               Transfer of Rights

 

The rights granted by the Corporation under this Agreement may be assigned (subject to Section 4.2 below in the case of ATEL) to a transferee who acquires at least 25% of the Registrable Securities and/or a Permitted Transferee (as defined in the Shareholder Agreement) of a holder, provided that, in each case, (i) such transfer shall be in accordance with the terms and conditions of the Shareholder Agreement, (ii) the transferee or assignee agrees in writing to be bound by the provisions of this Agreement and (iii) the Corporation is given written notice at least two Business Days prior to the transfer, stating the name and address of the transferee or assignee and stating the number of Registrable Securities with respect to which these distribution rights are being assigned.  To the extent any rights have been transferred they may be exercised by an Investor on a pro rata basis with other transferees.

 

4.2                               ATEL Special Provision

 

Effective as of the date on which ATEL or its permitted assignee, as applicable, exercises the Warrant in whole or in part in accordance with its terms (including payment in full of the exercise price provided for therein) and becomes a holder of Class A Preferred Shares, but conditional upon ATEL becoming a party to the Shareholders Agreement:

 

(a)                                  the term “Investors” shall be deemed to include ATEL or its permitted assignee, as applicable; and

 

(b)                                 Schedule A shall be amended so as to add the name of ATEL or its permitted assignee, as applicable, and the number and series of Class A Preferred Shares held pursuant to such exercise.

 

ATEL shall not, without the prior written consent of the Corporation, be entitled to assign this Agreement or any of its rights hereunder, in whole or in part, except (i) at any time prior to exercise of the Warrant, to a permitted transferee of the Warrant, concurrently with any such permitted transfer (provided that such permitted transferee agrees in writing to be bound by the provisions hereof by executing an acknowledgment and attornment substantially in the form of Schedule B hereto (mutatis mutandis) or (ii) at any time after exercise of the Warrant, in accordance with section 4.1 above.

 

4.3                               Aggregation of Registrable Securities

 

All Registrable Securities held or acquired by an Investor and its Affiliates will be aggregated together for the purpose of determining the availability of any rights of that Investor under this Agreement.

 

4.4                               Amendment of Distribution Rights

 

Any provision of this Agreement may be amended and the observance of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Corporation and Investors holding at least

 

18

 

66-2/3% of the total number of Registrable Securities then held by the Investors.  Any amendment or waiver effected in accordance with this Section 4.4 will be binding upon the Corporation and each present and future Investor; provided that any amendment that would materially and adversely affect an Investor disproportionately (and without regard to the number of Registrable Securities held) more than any other Investor shall not be effective against such Investor without such Investor’s written consent with respect thereto.

 

4.5                               Termination of Rights

 

This Agreement, and the rights and obligations of the parties hereunder shall terminate with respect to any Investor on the earlier of:

 

(a)                                  seven years from the completion of the Corporation’s Initial Distribution;

 

(b)                                 on such date as a holder of Registrable Securities can sell all of its shares in any 3 month period pursuant to Rule 144 but only in respect of such holder of Registrable Securities;

 

(c)                                  the date on which an Investor no longer holds Registrable Securities but only in respect of such Investor; or

 

(d)                                 upon the agreement of Investors holding at least 70% of the total number of Registrable Securities then outstanding.

 

4.6                               Notices

 

Any notice or other communication required or permitted to be given under this Agreement will be in writing and given (i) by facsimile or (ii) by hand delivery and will be deemed to be received, in the case of (i), on the date after the communication has been successfully sent (as evidenced by printed receipt) and, in the case of (ii), on the date of delivery.  Notices and other communications will be addressed as follows:

 

	
in the case of the   Corporation:
    
	
 
    
	
 
    	
Enerkem Inc.
    
	
 
    	
615 René-Lévesque Blvd. West
    
	
 
    	
Room 820
    
	
 
    	
Montreal, Québec
    
	
 
    	
H3B 1P5
    
	
 
    	
 
    
	
 
    	
Attention:
    	
Chief Executive Officer
    
	
 
    	
Facsimile:
    	
514-875-0835
    
	
 
    	
 
    	
 
    
	
 
    	
with a copy to:
    
	
 
    	
 
    	
 
    
	
 
    	
Stikeman Elliott LLP
    
	
 
    	
1155 René-Lévesque Blvd. West
    
	
 
    	
40th Floor
    
	
 
    	
Montreal, Québec
    
	
 
    	
H3B 3V2
    

 

19

 

	
 
    	
Attention:
    	
Steeve Robitaille and Gayle Noble
    
	
 
    	
Facsimile:
    	
514-397-3222
    
	
 
    	
 
    	
 
    
	
in the case of Rho   Barbados:
    
	
 
    	
 
    
	
 
    	
“Braemar Court”, Suite 200
    
	
 
    	
Deighton Rd.,
    
	
 
    	
St. Michael, BB14017
    
	
 
    	
Barbados, W.I.
    
	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
Lindsay D. Arthur and Stephen L. Greaves
    
	
 
    	
Facsimile:
    	
246-437-6092
    
	
 
    	
 
    	
 
    
	
in the case of Rho Luxco:
    
	
 
    	
 
    	
 
    
	
 
    	
1, rue des Glacis
    
	
 
    	
L-1628 Luxembourg
    
	
 
    	
 
    
	
 
    	
Attention:
    	
Céline Pignon
    
	
 
    	
Facsimile:
    	
+352 26 39 12 00
    
	
 
    	
 
    	
 
    
	
in the case of BDR:
    
	
 
    	
 
    	
 
    
	
 
    	
BDR Capital L.P.
    
	
 
    	
1100, René Lévesque Boulevard West
    
	
 
    	
Suite 1313
    
	
 
    	
Montreal, Quebec
    
	
 
    	
H3B 4N4
    
	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
Jean   Bédard
    
	
 
    	
Facsimile:
    	
514-878-2446
    
	
 
    	
 
    	
 
    
	
in the case of Braemar:
    
	
 
    	
 
    	
 
    
	
 
    	
Braemar
    
	
 
    	
“Braemar Court”, Suite 200
    
	
 
    	
Deighton Rd.,
    
	
 
    	
St. Michael, BB14017
    
	
 
    	
Barbados, W.I.
    
	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
Lindsay D. Arthur and Stephen L. Greaves
    
	
 
    	
Facsimile:
    	
246-437-6092
    
	
 
    	
 
    	
 
    
	
in the case of Vincent:
    
	
 
    	
 
    	
 
    
	
 
    	
135   Ballantyne North
    
	
 
    	
Montreal   West, Québec
    
	
 
    	
H4X 2B9
    
	
 
    	
 
    
	
in the case of Esteban:
    

 

20

 

	
 
    	
470   Montmagny
    
	
 
    	
Sherbrooke,   Québec
    
	
 
    	
J1L 1H3
    
	
 
    	
 
    
	
in the case of Dennis:
    
	
 
    	
 
    	
 
    
	
 
    	
c/o   Azure Developments Inc.
    
	
 
    	
152   West 57th St.,23rd Floor,
    
	
 
    	
New   York, NY 10019 USA
    
	
 
    	
 
    	
 
    
	
 
    	
Facsimile:
    	
212-315-2086
    
	
 
    	
 
    	
 
    
	
in the case of Richard:
    
	
 
    	
 
    	
 
    
	
 
    	
242   Pasteur
    
	
 
    	
Repentigny,   Québec
    
	
 
    	
J6A 7L8
    
	
 
    	
 
    
	
in the case of ATEL:
    
	
 
    	
 
    
	
 
    	
ATEL   Ventures, Inc.
    
	
 
    	
600   California Street, 6th Floor
    
	
 
    	
San   Francisco, CA 94108-2733
    
	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
General   Counsel
    
	
 
    	
Facsimile:
    	
(415)   989-3796
    
	
 
    	
 
    	
 
    
	
in the case Cycle:
    
	
 
    	
 
    	
 
    
	
 
    	
c/o Cycle Capital Management I, inc.
    
	
 
    	
340-4050, Rue Molson
    
	
 
    	
Montréal, Québec
    
	
 
    	
H1Y 3N1
    
	
 
    	
 
    
	
 
    	
Attention:
    	
Ms Andrée-Lise Méthot
    
	
 
    	
Facsimile:
    	
(514) 495-8034
    
	
 
    	
 
    	
 
    
	
in the   case of WM:
    
	
 
    	
 
    
	
 
    	
Waste   Management of Canada Corporation
    
	
 
    	
c/o WM   Organic Growth, Inc.
    
	
 
    	
c/o   Waste Management, Inc.
    
	
 
    	
1001   Fannin St.
    
	
 
    	
Suite 4000
    
	
 
    	
Houston,   TX 77002
    
	
 
    	
Telephone:   (713) 394-2181
    
	
 
    	
 
    
	
 
    	
Attention:  Vice President/Director of   Business Development
    
	
 
    	
Facsimile:  (713) 209-9710
    

 

21

 

	
 
    	
With a   copy to General Counsel at the same address and following facsimile number:  (713) 209-9710
    
	
 
    	
 
    	
 
    
	
 
    	
With a   copy to:
    
	
 
    	
 
    
	
 
    	
Stinson   Morrison Hecker LLP
    
	
 
    	
1201   Walnut, Suite 2900
    
	
 
    	
Kansas   City, MO 64106
    
	
 
    	
Telephone:    (816) 842-8600
    
	
 
    	
 
    
	
 
    	
Attention:
    	
Robert   Hunter and Jack Bowling
    
	
 
    	
Facsimile:
    	
(816)   691-3495
    
	
 
    	
 
    	
 
    
	
in the   case of SC:
    
	
 
    	
 
    	
 
    
	
 
    	
SC   Fuels Inc.
    
	
 
    	
470   Montmagny
    
	
 
    	
Sherbrooke,   Québec
    
	
 
    	
J1L 1H3
    
	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
Esteban   Chornet
    
	
 
    	
 
    	
 
    
	
in the   case of Holdco I:
    
	
 
    	
 
    	
 
    
	
 
    	
Enerkem   Holdco I, LLC
    
	
 
    	
340   Madison Avenue, 18th Floor
    
	
 
    	
New   York, NY 10017
    
	
 
    	
Telephone:   (212) 210-5780
    
	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
Neil Suslak
    
	
 
    	
Facsimile:
    	
(212)   210-5788
    
	
 
    	
 
    	
 
    
	
in the   case of Holdco II:
    
	
 
    	
 
    
	
 
    	
Enerkem   Holdco II, LLC
    
	
 
    	
340   Madison Avenue, 18th Floor
    
	
 
    	
New   York, NY 10017
    
	
 
    	
Telephone:   (212) 210-5780
    
	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
Neil   Suslak
    
	
 
    	
Facsimile:
    	
(212)   210-5788
    

 

4.7                               Time of Essence

 

Time is of the essence of this Agreement.

 

22

 

4.8                               Enurement

 

This Agreement will enure to the benefit of and be binding upon the parties to this Agreement and their respective successors and permitted assigns.

 

4.9                               Delays or Omissions

 

Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative.

 

4.10                        Further Assurances

 

Each party hereto agrees to execute and deliver, by the proper exercise of its corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do such other acts and things as may be necessary to more fully effectuate this Agreement.

 

4.11                        Counterparts

 

This Agreement may be executed in any number of counterparts and via facsimile, each of which shall be enforceable against the parties that execute such counterparts, and all of which together shall constitute one instrument.

 

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 

23

 

IN WITNESS WHEREOF the parties have executed this Agreement.

 

 

	
 
    	
RV V HOLDINGS SRL
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffery Martin
    
	
 
    	
 
    	
Name:    Jeffery Martin
    
	
 
    	
 
    	
Title:    Director
    

 

 

Amended and Restated Registration Rights Agreement

 

S-1

 

	
 
    	
RHO VENTURES VI LUXEMBOURG   HOLDINGS, S.A.R.L.  
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeffery Martin
    
	
 
    	
 
    	
Name:    Jeffery Martin
    
	
 
    	
 
    	
Title:    Class A Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Céline Pignon
    
	
 
    	
 
    	
Name:    Céline Pignon
    
	
 
    	
 
    	
Title:    Class B Manager
    

 

 

Amended and Restated Registration Rights Agreement

 

S-2

 

	
 
    	
BEV HOLDINGS SRL
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Neil Suslak
    
	
 
    	
 
    	
Name:  Neil   Suslak
    
	
 
    	
 
    	
Title:    Managing Partner
    

 

 

Amended and Restated Registration Rights Agreement

 

S-3

 

	
 
    	
WASTE MANAGEMENT OF CANADA   CORPORATION  
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Don Carpenter
    
	
 
    	
 
    	
Name:  Don   Carpenter
    
	
 
    	
 
    	
Title:    Vice President
    

 

 

Amended and Restated Registration Rights Agreement

 

S-4

 

	
 
    	
SC FUELS INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Vincent Chornet
    
	
 
    	
 
    	
Name:    Vincent Chornet
    
	
 
    	
 
    	
Title: 
    

 

 

Amended and Restated Registration Rights Agreement

 

S-5

 

	
 
    	
CYCLE CAPITAL FUND I, L.P.,   by its general partner Cycle Capital, L.P., itself represented by its general   partner Cycle Capital Management 1 Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Andrée-Lise Methot
    
	
 
    	
 
    	
Name:    Andrée-Lise Methot
    
	
 
    	
 
    	
Title:    Founder and Senior Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bernhardt Zeisig
    
	
 
    	
 
    	
Name:    Bernhardt Zeisig
    
	
 
    	
 
    	
Title:    Senior Partner
    

 

 

Amended and Restated Registration Rights Agreement

 

S-6

 

	
 
    	
BDR   CAPITAL L.P., by its general partner, BDR Partners 1 L.P., itself   represented by its general partner 9198-1209 Québec Inc.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jean Bedard
    
	
 
    	
 
    	
Name:  Jean   Bedard
    
	
 
    	
 
    	
Title:
    

 

 

Amended and Restated Registration Rights Agreement

 

S-7

 

	
 
    	
/s/ Michael Dennis
    
	
 
    	
MICHAEL DENNIS
    

 

 

Amended and Restated Registration Rights Agreement

 

S-8

 

	
 
    	
/s/ Vincent Chornet
    
	
 
    	
VINCENT CHORNET
    

 

 

Amended and Restated Registration Rights Agreement

 

S-9

 

	
 
    	
/s/ Esteban Chornet
    
	
 
    	
ESTEBAN CHORNET
    

 

 

Amended and Restated Registration Rights Agreement

 

S-10

 

	
 
    	
/s/ Pierre Richard
    
	
 
    	
PIERRE   RICHARD
    

 

 

Amended and Restated Registration Rights Agreement

 

S-11

 

	
 
    	
ENERKEM   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Vincent Chornet
    
	
 
    	
 
    	
Name:    Vincent Chornet
    
	
 
    	
 
    	
Title: President, CEO
    

 

 

Amended and Restated Registration Rights Agreement

 

S-12

 

	
 
    	
ENERKEM HOLDCO I LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Neil S. Suslak
    
	
 
    	
 
    	
Name:  Neil   S. Suslak
    
	
 
    	
 
    	
Title: Managing Director
    

 

 

Amended and Restated Registration Rights Agreement

 

S-13

 

	
 
    	
ENERKEM HOLDCO II LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Neil S. Suslak
    
	
 
    	
 
    	
Name:  Neil   S. Suslak
    
	
 
    	
 
    	
Title:    Managing Director
    

 

 

Amended and Restated Registration Rights Agreement

 

S-14

 

	
 
    	
ATEL VENTURES, INC., AS TRUSTEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paritosh K. Choksi
    
	
 
    	
 
    	
Name: Paritosh K. Choksi
    
	
 
    	
 
    	
Title:    Executive Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
ATEL   LEGAL DEPARTMENT APPROVED AS TO FORM
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ KBJ
    

 

 

Amended and Restated Registration Rights Agreement

 

S-15

 

SCHEDULE A

 

INVESTOR

 

	
INVESTORS
    	
 
    	
Number and Series of Class A Preferred Shares
    
	
 
    	
 
    	
 
    
	
RV V HOLDINGS SRL
    	
 
    	
76,265   Class A Series 1
   100,583 Class A Series 2
   320,979 Class A Series 4
    
	
 
    	
 
    	
 
    
	
RHO VENTURES VI LUXEMBOURG   HOLDINGS, S.A.R.L.
    	
 
    	
245,436   Class A Series 4
    
	
 
    	
 
    	
 
    
	
BEV   HOLDINGS SRL
    	
 
    	
38,132   Class A Series 1
   50,291 Class A Series 2
   159,051 Class A Series 4
    
	
 
    	
 
    	
 
    
	
ENERKEM   HOLDCO I, LLC
    	
 
    	
23,132   Class A Series 4
    
	
 
    	
 
    	
 
    
	
ENERKEM   HOLDCO II, LLC
    	
 
    	
160,771   Class A Series 4
    
	
 
    	
 
    	
 
    
	
VINCENT CHORNET
    	
 
    	
978 Class A Series 2
    
	
 
    	
 
    	
 
    
	
ESTEBAN CHORNET
    	
 
    	
1,196 Class A Series 2
    
	
 
    	
 
    	
 
    
	
MICHAEL DENNIS
    	
 
    	
9,547   Class A Series 1
   18,691 Class A Series 2
   59,386 Class A Series 4
    
	
 
    	
 
    	
 
    
	
PIERRE RICHARD
    	
 
    	
2,174   Class A Series 2
    
	
 
    	
 
    	
 
    
	
BDR   CAPITAL L.P.
    	
 
    	
51,080   Class A Series 1  
    31,794   Class A Series 4
    
	
 
    	
 
    	
 
    
	
WASTE MANAGEMENT OF CANADA CORPORATION
    	
 
    	
115,663   Class A Series 4
    
	
 
    	
 
    	
 
    
	
CYCLE CAPITAL FUND I. L.P.
    	
 
    	
76,086   Class A Series 4
    
	
 
    	
 
    	
 
    
	
SC FUELS INC.
    	
 
    	
2,173   Class A Series 4
    

 

 

SCHEDULE B

 

ATTORNMENT TO AMENDED AND RESTATED 
 REGISTRATION RIGHTS AGREEMENT

 

1.                                       The undersigned hereby acknowledges:

 

a)                                      receipt of a copy of the amended and restated registration rights agreement between Enerkem Inc. (the “Corporation”) and certain shareholders of the Corporation (the “Registration Rights Agreement”); and

 

b)                                     that the undersigned has read and understands the provisions of the Registration Rights Agreement.

 

2.                                       Capitalized terms used but not otherwise defined herein have the meanings attributed to such terms in the Registration Rights Agreement.

 

3.                                       The undersigned hereby attorns to and agrees to be bound as a party to the Registration Rights Agreement and to be subject to all of the rights and obligations of an Investor.  The undersigned, by signing below, agrees that such signature constitutes a signature to the Registration Rights Agreement.

 

4.                                       The undersigned acknowledges and confirms that prior to executing this attornment agreement the Corporation requested the undersigned to obtain legal advice with respect to the undersigned’s rights and obligations under the Registration Rights Agreement; and, furthermore, the undersigned confirms and agrees that:

 

a)                                      the undersigned has executed this attornment agreement on the undersigned’s own volition and without any duress whatsoever from the Corporation, the other Investors or any other Person; and

 

b)                                     if the undersigned did not obtain legal advice prior to executing this attornment agreement, the undersigned will not in any proceeding relating to the enforcement of rights or obligations under the Registration Rights Agreement raise that fact as a defence or otherwise.

 

DATED the               day of                                       .

 

 

	
Signature of Investor:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name of Investor:
    	
 
    	
 
    
	
 
    	
(please print)
    	
 
    
	
 
    	
 
    	
 
    
	
Address of Investor:

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