Document:

EX-10.12

 Exhibit 10.12 

Confidential portions of this exhibit have been omitted because it is both (i) not material and (ii) would be competitively
harmful if publicly disclosed. The redacted terms have been marked at the appropriate place with “[XXX]”. 
 TRAXYS 

September 24th, 2020 

 

			
	BETWEEN	  	 Traxys North America LLC
 a limited
liability company organized under the laws of Delaware, with its main office and principal place of business at
 299 Park Avenue

New York, NY 10171
 USA

		
	AND	  	 Li-Cycle Corp.

2351 Royal Windsor Dr., Unit 10
 Mississauga, ON L51457

Canada
 Hereinafter called “Seller”

  

BLACK MASS—Marketing, Logistics and Working Capital Agreement 

Dear Sirs, 
 We, Buyer, are pleased to have concluded with you,
Seller, this sales contract as per the terms and conditions stated hereinafter: 
 TRAXYS North America LLC (“Buyer”, “Traxys” or
“we”) shall buy from “Seller”, (“Seller”, “Li-Cycle” or “you”) 100% of the annual production of Black Mass (“Concentrate” or “Material” or
“Black Mass”), with analyses as set out below, from North America Commercial Spoke 1 (“Spoke 1”, in Kingston, Ontario, Canada), North America Commercial Spoke 2 (“Spoke 2”, in Rochester, NY, USA)and from any other
Commercial Spoke where Li-Cycle has rights to the Black Mass production until such time as the Spoke/s Material/s are integrated by the Seller into its Hubs (namely, with regards to all Material other than
Material which will be consumed by the Sellers’ Hubs or directly consumed by other JV partners of the Spokes in their capacity as end-users of said Material). This agreement shall be subject to the terms
and conditions hereinafter set forth. 
  

	1	 QUALITY 

Typically, of the following approximate target analysis as per production at the Seller’s operations: 

Form: [XXX] 
 Chemical properties: 

 

					
	 Property
	  	Unit	  	 
	 [XXX] 
	  	wt%	  	2 — 15%
	 [XXX] 
	  	wt%	  	10 — 25%
	 [XXX] 
	  	wt%	  	>15%
	 [XXX] 
	  	wt%	  	5 — 25%
	 [XXX] 
	  	wt%	  	1 — 2%
	 [XXX] 
	  	PPM	  	<3

 TRAXYS 
  

 Otherwise free of deleterious elements,
non-radioactive and IMO conforming. If the material is not conforming to above specifications, then the Buyer and Seller will work out a mutually agreeable solution. If the Buyer and Seller are unable to agree
on any solution, then the material will be considered as rejected and the Seller will promptly pick up the rejected material and ship it back to Seller at Seller’s expense. 

All claims of Customers or other third parties arising from the Material or the use thereof, including quality claims, shall be for the sole
account of Seller. 
 Packing: UN Rated Bulk Bag 

Lot size: 18 — 20 MT 
 The Material
shall fully conform to REACH and IMO code of safe practice for cargoes (when designated for export) and always compliant with UN3077 packing instructions. Material and packing to be suitable for maritime transport. Any changes in typical assay shall
be communicated to the Buyer timely. 
  

	2	 DURATION 

This Agreement shall endure from the date hereof and shall continue until the commencement of commercial operation at Li-Cycle’s North America Commercial Hub (“Hub”) and Spokes 1 and 2’s Materials integration thereinto, and after all terms and conditions have been met. 

 

	3	 COOPERATION AND TRANSPARENCY 

 

	 	3.1	 Traxys shall be the off-taker and pay and take title to the Material as
principal and sell to third party final buyers as principal. The payment collections and credit risk shall remain with Traxys. 

  

	 	3.2	 Traxys will handle sales and / or marketing in agreement with the Seller in the various possible global
markets. The terms and conditions, contracts, and agreements with third party final buyers shall be made in transparency to Seller and said terms will be agreed in advance of sales being concluded to any third party. 

 

	 	3.3	 Traxys will handle logistics globally and shall execute all contract handling and shipping matters at cost for
the Seller. 

  

	 	3.4	 Traxys shall provide the Seller with continuous transactional financing as per clause 9.1 for Material released
ex-works and delivered FOB, until payments are received from the third party final buyer. Such financial service shall constitute a Working Capital Facility for the Buyer and will be interest bearing for the
Seller. The cost of the Working Capital Facility is the 3 month Libor plus [XXX] %, This shall be adjusted from time to time in line with Traxys’ cost of capital. 

 

	 	3.5	 Traxys shall be paid a marketing fee of [XXX] % of the final sales price to Third Party customers

  

	 	3.6	 “Transaction Costs” means all costs, losses or damages reasonably incurred in relation to the
purchase, transportation, transactional financing and sale of the Concentrate to third parties that shall be for account of the Seller, advanced by the Buyer and deducted from the final invoice at the liquidation of a delivery/shipment. These costs
inter alia include: 

  

	 	3.6.1	 Costs associated with the transportation of the Concentrate, inter alia including all freight, demurrage, dead
freight, charter hire and any other sums due pursuant to any charter of any vessel engaged in the carriage of the Concentrate, together with costs of inspection of the carrying vessels. 

 

	 	3.6.2	 Port costs at both loading and discharge port (6.1). 

 

	 	3.6.3	 Costs of inspection, supervision and testing/analyzing of the Concentrate. 

 

	 	3.6.4	 Costs of insurance [XXX]  

 TRAXYS 
  

	 	3.6.5	 Taxes, duties or other sums, whether levied against the Concentrate, the freight or otherwise.

  

	 	3.6.6	 Losses, claims, damages or expenses incurred or paid to third parties in respect of the Concentrate, its
transportation and on-sale including legal expenses incurred in defending or bringing such claims. 

  

	 	3.6.7	 Hedging costs and expenses if hedging is requested by Seller or mandated by Buyer 

 

	 	3.6.8	 Finance charges in respect of all sums paid by the Buyer, including fees and expenses in relation to any
letters of credit; 

  

	 	3.6.9	 Any other relevant costs and expenses attributable to the sale of the Concentrate. 

 

	4	 CURRENCY 

All references to dollar amounts are quoted in U.S. funds. 
  

	5	 QUANTITY 

The Quantity shall be 100% of production from the Seller’s Spoke 1 and Spoke 2 facilities, and any other Spoke where Li Cycle has rights
to the Black Mass until such time as the Spoke/s Material/s are integrated by the Seller into its Hubs (namely, with regards to all Material other than Material which will be consumed by the Sellers’ Hubs or directly consumed by other Ai
partners of the Spokes in their capacity as end-users of said Material). 
 Nameplate production at
Spoke 1 is 2,200 tonnes of Material per annum and of Spoke 2 is expected to be 2,200 tonnes of Material per annum. Variances either way shall be advised to the Buyer timely. The Seller shall advise the Buyer of the startup date of each
production facility. 
  

	6	 DELIVERY & SHIPMENT 

FOB-BoyeA works 

Expected to be in semi-monthly shipments in a quantity to be mutually agreed. Packaging to be UN-rated
bulk bags for shipment and adjusted as necessary according to customer demand. 
 Reasonably prior to commencement of deliveries and/or
production in each Spoke (for the remainder of the calendar year/s) and thereon, each year’s shipping schedule shall be mutually agreed tentatively before the start of the calendar year between Seller and Buyer in accordance with the production
plan and third party final buyers’ needs. 
 Benchmark prices: 

Nickel: LME daily settlement 

Cobalt: Fast markets Standard Grade low quotation 

Provisional Price: 

If the material has been sold forward: 

If the final price for a shipment for sale to a third party Buyer is known at the time of Delivery to the Buyer, the provisional price will be
75% of the known final price. 
 If the final price is unknown, the provisional price will be based upon the expected provisional sales value
to the third party using the benchmark prices and all relevant formulas in the contract with the third party, multiplied by 75%. 

 TRAXYS 
  

 If the material is unsold: 

The provisional price will be mutually agreed. 

Final price: As agreed with third party Customers 
  

	8	 QUOTATIONAL PERIOD 

Provisional QP: the average of the five (5) business days preceding the date of Delivery 

Final QP: As agreed with third party Customers 
  

	9	 PAYMENT 

All payments shall be carried out in US Dollars. 
  

	 	9.1	 Provisional Payment 

 

	 	9.1.1	 Provisional payment shall be made against documentation proving release at the Seller’s works:

 Holding and Title Certificate issued to Buyer’s order 

Provisional commercial invoice Truck or railway bills of lading 
  

	 	–	 Original provisional Seller’s weight certificates 

 

	 	–	 original Seller’s provisional assay certificates indicating all the metals contents and approved by buyer
on a lot by lot basis; 

  

	 	–	 original certificate of origin issued by the Seller; Packing lists issued by the Seller. 

 

	 	–	 Any other required documents for the safe domestic and international transport and handling of the material

 Buyer reserves the right to conduct an independent Third party assay on the material prior to payment 

Payments to be provided in line with clause 3.4 of this agreement. The detailed conditions of such payments are to be mutually agreed. 

Payments shall be made net of the Transaction Costs and the marketing fee. 

 

	 	9.2	 2nd Provisional Payment 

A second provisional payment based on the latest known provisional and final contract data, shall be made, either way (namely, either by
Traxys to the Seller or by the Seller to Traxys, as the case may be), when the current provisional value differs more than 10% from the initial provisional invoice. 
  

	 	9.3	 Final payment 

The final payment shall be made, either way (namely, either by Traxys to the Seller or by the Seller to Traxys, as the case may be),
immediately upon all final details known, by telegraphic transfer upon presentation of final invoice. 
  

	10	 WEIGHING, SAMPLING AND MOISTURE DETERMINATION 

 

	 	10.1	 [XXX]. 

  

	 	10.2	 [XXX]. 

 TRAXYS 
  

	11	 LICENSES, TAXES, EXPENSES 

 

	 	11.1	 Any and all taxes and duties, whether now existing or new, imposed outside of the country of origin on the
export of the Material shall be borne by Seller. 

  

	12	 INSURANCE 

Buyer shall insure under its marine cargo policy with an internationally reputable company, from the time the Material is under Buyer’s
title and control and up to the destination point for 110% of the provisional value of the Material. The insurance shall cover All Risks as per current Institute Cargo Clauses All Risks, Institute War Clauses and Institute Strike, Riots and Civil
Commotions clauses. The claim shall be payable in US Dollars. 
  

	13	 TITLE AND RISK 

 

	 	13.1	 Title to the Material for each shipment or any part thereof shall pass from Seller to Buyer upon receipt by
Seller of the Provisional Payment as per clause 8.1 (Payment) of this agreement. 

  

	 	13.2	 Risk of loss or damage to the Material shall pass from Seller to Buyer as per agreed incoterm in clause 5
(Incoterms® 2020). 

  

	14	 INCOTERMS 

Unless otherwise specified herein, Incoterms® 2020 shall be applicable for the
execution of this agreement. 
  

	15	 CHANGES IN QUOTATIONS 

The quotations of the metals specified under this agreement are those actually in general use to establish the price of metallic contents in
concentrates. Should any of these quotations cease to exist or cease to be published or cease to be internationally recognized as the basis to calculate ore and/or concentrate contracts, or should they fail to reflect the real value of the metals in
the markets, then (at the request of any of the parties), Buyer and Seller shall get together and mutually consult with the aim to agree on a new basis and price, and a date to execute same. The basic objective shall be the continuity of a fair
price. 
  

	16	 FORCE MAJEURE 

Neither Buyer nor Seller would be responsible for non-performance under this agreement provided such non-performance is due to the occurrence of an event of Force Majeure as hereunder described: 
  

	 	16.1	 In the event of any war (declared or undeclared), revolution, terrorism, act of God, flood, storm, earthquake,
fire, explosion, strike, lockout, act of Government or Government appointed agents including but not limited to changes in tariffs, duties, import and export controls or quotas, and environmental regulations, obstruction or blockage of port or
wharf, lack of railway facilities or delays on route whether due to mechanical fault or action of the elements, or in the event of any other like events or causes whatsoever beyond the reasonable control of Seller or Buyer which were not reasonably
foreseeable and which could not be reasonably avoided (any such cause being hereinafter called “Force Majeure”) preventing or hindering Seller or Buyer from performing its obligations in this agreement, the party whose performance is
prevented or hindered by Force Majeure may suspend delivering or accepting a delivery of Material hereunder for the period of the Force Majeure event (but no longer) if it shall give prompt written notice to the other party of the details of such
Force Majeure event, and an estimate of the time period for which the Force Majeure event shall remain in effect. Force Majeure shall not apply to any tonnage for which a pricing has been established in part or in full or transport of any kind has
been booked. In no event shall Force Majeure operate to delay or extend the due date for any repayments of principal or interest of any loans or advances extended to Seller by Buyer or an affiliate of Buyer. 

 TRAXYS 
  

 The party declaring Force Majeure shall take all reasonable steps to resume with the least
possible delay its performance hereunder, provided that nothing herein shall require a party to settle any strike, lockout or stoppage of work on terms which in its opinion are not satisfactory. 

 

	 	16.2	 Each party is fully aware of the potential impact on the performance of the other party’s obligations
under this Agreement arising out of the COVID-19 pandemic and governmental and other actions that have been taken or may in the future be taken in response thereto, and each party acknowledges that the
awareness of such event or condition will not act to prevent the other party from declaring a Force Majeure event that otherwise would be applicable hereunder. 

 

	17	 NOTICES 

It is agreed that any and all notices required or permitted to be given to either party under the terms of this agreement shall be given in
writing under envelope with postage prepaid and duly addressed and sent by registered airmail to the party to be notified at the following respective addresses or any new addresses regarding which the respective parties have been informed to the
sending of such notices, or by facsimile namely: 
 Li Cycle Corp. 

2351 Royal Windsor Dr, Unit 10 

Mississauga, ON 
 L6J 7A2 

Canada 
 Attention: Bruce
Maclnnis 
 Traxys North America, LLC 

299 Park Avenue, 38th Floor 

New York, NY 10171 
 USA 

Facsimile:
+1-212-918-8071 

Attention: Cobalt Department 

Any notice permitted or required to be given hereunder shall be validly given if in writing and sent by facsimile, and prepaid registered first
class mail, or delivered by hand to the party to which the notice is directed at the above address or, in either case, such other address as may be notified by the relevant party to the other. 

Any such notice shall be deemed to have been given 24 (twenty-four) hours after dispatch, the next business day in the place to which it is
sent (if sent by fax with a transmission report confirming completed transmission to the required number), 10 days after posting (if by mail) or at the time of delivery (if by hand). In the event that notice is given by fax then the party so doing
shall also mail the original the same day. 
  

	18	 GOVERNING LAW 

This agreement shall be governed by, and interpreted in accordance with, the laws of New York, USA, without regard to its principle of
conflicts of laws. 
  

	19	 DISPUTE RESOLUTION 

Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration
administered in New York by the American Arbitration Association (“AAA”) in accordance with its Commercial Arbitration Rules then in effect. Each party shall by written notice to the other have the right to appoint one arbitrator. If,
within thirty (30) days following the giving of such notice by one party, the other shall not, by written notice, appoint another arbitrator, the first arbitrator shall be 

 TRAXYS 
  

 
the sole arbitrator. If two arbitrators are so appointed, they shall appoint a third arbitrator. If thirty (30) days elapse after the appointment of the second arbitrator and the two
arbitrators are unable to agree upon the third arbitrator, then either party may, in writing, request that the AAA appoint the third arbitrator. Any award from any such arbitration proceeding may be entered as a judgment in any court of competent
jurisdiction. Each party shall bear its own costs in connection with any arbitration hereunder. Nothing herein shall prevent a party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the parties
and the subject matter of the dispute as is necessary to protect such party’s rights. 
  

	20	 SUCCESSION AND ASSIGNMENT 

Neither party may assign this agreement or its rights or obligations hereunder, either in whole or in part, without the express written consent
of the other party. This agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective successors and permitted assigns. 

 

	21	 LIMITATION ON DAMAGES 

The parties agree that neither party hereto shall be liable for special, indirect, punitive, exemplary or consequential damages, including but
not limited to lost profits, lost savings, loss of use of facility or equipment, regardless of whether arising from breach of contract, warranty, tort, strict liability or otherwise, and even if advised of the possibility of such losses or damages
or if such losses or damages could have been reasonably foreseen, unless resulting from a party’s actions that are found to constitute willful misconduct or to have been taken in bad faith. 

 

	22	 CONFIDENTIALITY 

The contents of this agreement are confidential. Each party and Its employees, consultants and contractors shall hold in confidence any copies
of this agreement and all documents and other forms of communications required to be provided under, or in connection with, this agreement. Notwithstanding the foregoing, each party may disclose this agreement to its professional advisors and to
prospective lenders to such party, to the government, to the stock exchange, to succeeding entities and to prospective transferees or assignees who, in any such case, have agreed to be bound by these confidentiality provisions. The provisions shall
be valid during the terms of this agreement. 
  

	23	 ANNOUNCEMENTS 

The Parties acknowledge that Li-Cycle may seek to or be required to disclose the execution of this
Agreement and/or any binding engagement to follow to the Securities Authorities and/or the Stock Exchange where it seeks to list its shares (“Public Announcement” and the “Stock Exchange”). 

Li-Cycle agrees that, to the extent that it will not cause Li Cycle to breach its Stock Exchange
disclosure obligations, a Public Announcement will not occur until: 
  

	 	(a)	 Traxys has been provided with a reasonable and proper opportunity to review and comment on the requirement for
the disclosure and the content and wording of the Stock Exchange Announcement, and without limitation to the aforesaid to any reference to or description of Traxys and/or any of it stakeholders; and 

 

	 	(b)	 Traxys has given prior written approval on final draft of the Public Announcement. 

The same shall apply, mutatis mutandis, to any other announcement and or public relations communique and/or any social media by or other
communication reference by Li- Cycle, whether voluntary or compulsory, of Traxys and/or any of it stakeholders and/or this Agreement and/or any other engagement by and between Traxys and Li-Cycle. 

 TRAXYS 
  

	24	 SEVERABILITY 

Whenever possible, each provision of this agreement shall be interpreted in such a manner as to be effective and valid under the applicable
laws. However, if any provision of this agreement shall be held to be invalid or prohibited under applicable laws, such provision shall be ineffective only to the extent of such invalidity or prohibition without affecting the validity of the
remainder of such provision or the remaining provisions of this agreement, which shall remain in full force and effect. 
  

	25	 TERMINATION 

Each party may terminate this agreement by written notice, with immediate effect: 

 

	 	25.1	 If the other party commits a breach of its obligations under this Contract and, when such breach is capable of
being remedied, fails to remedy such breach within a reasonable time (not less than 30 days) of written notice of breach; 

  

	 	25.2	 If the other party enters into liquidation, becomes insolvent, is declared bankrupt, enters into any kind of
receivership or makes any arrangement or composition or assignment for the benefit of any creditor; or 

  

	 	25.3	 as provided in clause 16 (Force Majeure). 

 

	26	 DEFINITIONS 

The terms “tonne” or “ton” means a metric ton of 1000 kilograms (Kgs) equivalent to 2,204.62 pounds avoirdupois, wet (WMT)
or dry (DMT) basis as specifically stated herein; 
 The term “unit” means one per cent of the net dry weight. 

“USD” or “US Dollar” is the currency of United States of America. 

The term “troy ounce” is equivalent to 31,1035 grams. 

“PPM” means part per million and is equivalent to one gram per ton. 

“Kg” shall mean one kilogram, or 1,000 (one thousand) grams, 2.2046 (two decimal two zero four six) pounds. 

“LME” shall mean the London Metal Exchange. 

“MB” shall mean the Metal Bulletin 

Any other abbreviations shall be as per the usual standard of the industry. 

 

	27	 NO OTHER AGREEMENT 

 

	 	27.1	 This Agreement supersedes all correspondence, orders, or confirmations of the parties with respect to matters
covered hereby. For sake of clarity and avoidance of doubts only, the Parties acknowledge that they are and/or shall be entering additional memoranda and/or agreements with regards to refined materials (Hub Materials) distribution.

  

	 	27.2	 No modification or waiver of this Agreement or any right of any party hereunder shall be binding upon such
party unless it is in writing and signed by an officer thereof. 

  

	 	27.3	 No waiver by a party of any of delay, fault or breach shall be deemed a waiver of any other delay, default or
breach. 

 TRAXYS 
  

	
	For TRAXYS NORTH AMERICA LLC
	
	

	 Dated: September 24, 2020

Landon Berns
 Cobalt + Special Metals

Traxys North America, LLC

  

	
	
	

	 Dated: September 24, 2020

Ajay Kochhar
 President and CEO, Co-Founder Li-Cycle
Corp.EX-10.13

 Exhibit 10.13 

bdc* 
 December 16, 2019 

Li-Cycle Corp. 

2351 Royal Windsor Dr. 
 Mississauga, ON 

L5J 4S7 
 Attention of: Mr. Alay Kochhar 

Re:    Letter of Offer of financing no. 165165-01 granted to
Li-Cycle Corp. 
 Sir, 

On the basis of the preliminary information obtained from the Borrower and subject to the acceptance of the present letter of offer of financing, as amended
from time to time (the “Letter of Offer”), BDC Capital Inc. (“BDC Capital”), a wholly owned subsidiary of Business Development Bank of Canada (the “Bank”) is prepared to grant the following
financing (the “Financing”). 
  

					
	 FINANCING PURPOSE
	  			
	 Commercial Spoke 1 — Kingston Re-location and
Expansion
	  	$	2,000,000	 
	 Commercial Spoke 2 — Rochester Build
	  	$	5,000,000	 
	 Operating and Working Capital
	  	$	7,000,000	 
		  	  
	  
	 
		  	$	14,000,000	 
	 FUNDING
	  			
	 BDC Capital
	  	$	7,000,000	 
	 Equity — TechMet Ltd.
	  	$	6,500,000	 
	 Equity — Sustainable Chemistry Alliance, part of Bioindustrial Innovation Canada
	  	$	500,000	 
		  	  
	  
	 
		  	$	14,000,000	 

 No change to the Financing purpose or funding may be made without BDC Capital’s prior written consent. The proceeds of
the Financing may only be used for this Financing purpose. 
 The Letter of Offer is open for acceptance until, December 30, 2019 (the
“Acceptance Date”). Unless the Letter of Offer executed by the Financing Parties is received by BDC Capital no later than the Acceptance Date, the Letter of Offer shall automatically become null and void. 

 

			
	 BORROWER:
	 	Li-Cycle Corp. (the “Borrower”)
		
	 GUARANTORS:
	 	 Li-Cycle Inc. (the “Corporate Guarantor”)

 
 (the Corporate Guarantor are also sometimes collectively referred to herein as the
“Guarantor(s)”).

		
	 FINANCING AMOUNT:
	 	$7,000,000, in Canadian currency.
		
	 INTEREST RATE:
	 	 The Financing and all other amounts owed by the Financing Parties pursuant to the Financing Documents for which an applicable rate is not
otherwise provided for herein shall bear interest at the following rate:
  
 Fixed
Rate
 16.00% per year, being BDC Capital’s Base Rate on the date hereof of 5.95% per year plus a variance (the “Variance”) of
10.05% per year.

			
		 	  
 The Interest Expiration Date for this fixed interest rate plan is
December 15, 2023.

		
	 INTEREST CALCULATION:
	 	 Interest shall be calculated daily on the outstanding principal, commencing on the date of the first disbursement, both before and after
maturity, default and judgment.
  
 Arrears of interest or interest on outstanding
principal arrears shall bear interest at the higher of: ij the rate applicable to the Financing, or ii) BDC Capital’s Base Rate at the relevant time plus 5%. Interest on any overdue Fixed or Variable Component of the Additional Return and other
amounts owing by the Financing Parties pursuant to the Financing Documents shall bear interest at the higher of: i) the rate applicable to the Financing, or ii) BDC Capital’s Base Rate at the relevant time plus 5%, with the exception of the
management fees of the Financing and cancellation fees that will not bear interest. In all cases, interest on arrears shall be calculated daily and compounded monthly.

		
	 MATURITY DATE:
	 	                     December 14, 2023 or the date on which the last principal payment hereunder is scheduled to be made,
which ever date comes last, as amended from time to time (the “Maturity Date”).
		
	 REPAYMENT:
	 	 Instalments and Balloon Payment

Principal of the Financing shall be payable by way of consecutive monthly instalments commencing on December 15, 2020 and continuing up to and including
the Maturity Date and by way of one balloon payment of $700,000, payable on the Maturity Date. The amounts of the principal instalments are as follows:

  

					
	Instalments Nos.	  	Amount of Instalment	 
	 1-36
	  	$	175,000.00	 
	 37
	  	$	700,000.00	 

  

			
	 

        
	 	 Accrued interest is payable monthly on the 15th day of the month (the
“Payment Date”) commencing on the next occurring Payment Date following the first advance on the Financing.
  

On the Maturity Date, all other amounts owing pursuant to the Financing Documents will become due and payable.

		
	 PREPAYMENT:
	 	 The Borrower may prepay at any time all or part of the outstanding principal provided that the Borrower pays to BDC Capital:

 

(1) the full or partial amount of the Financing, as
applicable,
  
 (ii)  all interest,
any Fixed Component of the Additional Return and any other fees then due, as applicable, and
  

(iii)  the Prepayment Bonus.
  

Partial prepayments shall be applied regressively on the then last maturing instalments of principal.

 
 The occurrence of any event of default listed in Schedule A — SECTION VI resulting
in BDC Capital demanding payment of the Financing prior to the Maturity Date will be deemed to be a prepayment, and the Borrower will pay to BDC Capital:
  

( ) the outstanding balance of the
Financing,

  
 2 

			
		 	  
 (i) all interest, any
Fixed Component of the Additional Return and any other fees then due, as applicable, and
  

(ii)  the Prepayment Bonus.
  

Notwithstanding any repayment, prepayment or deemed prepayment of the Financing, each Variable Component of the Additional Return, as defined hereafter,
survives and remains payable, as if the Financing had not been repaid, prepaid or deemed prepaid. All obligations related to such Variable Components of the Additional Return as well as any security granted in connection therewith shall remain in
full force and effect until all such obligations are fully satisfied.

		
	 ADDITIONAL RETURN FIXED COMPONENT OF THE ADDITIONAL RETURN COMPONENTS:
	 	 Payment in kind interest (the “PIK”):
  

In addition to the interest payable on the Financing, the Borrower will also pay to BDC Capital non-compounding
interest at the rate of 3% per annum on the outstanding principal of the Financing commencing the date of the initial disbursement, accrued monthly and collected at the earlier of full repayment of the Financing or the Maturity Date.

 
 Upon Borrower’s request to BDC Capital, the PIK is to be reduced through three
(3) reductions of 1.0% per annum each (“PIK Reduction”) up to 3% per annum in total, based on the following three milestones:
  

1)  1.0% per annum PIK reduction upon successful completion of Spoke 2 within an estimated budget of
$5 million anticipated to coincide with the disbursement of Tranche 3 (“Milestone 1”);
  

2)  1.0% per annum PIK reduction when the Borrower has processed 4,000 tonnes of batteries. Calculation
begins post Tranche 3 disbursement (“Milestone 2”); and
  

3)  1.0% per annum PIK reduction upon achieving a trailing four quarters EBITDA equal or greater than $0
on a consolidated basis (“Milestone 3”).
  
 Any PIK Reduction shall only
apply on a go-forward basis commencing the month immediately after an aforementioned milestone is achieved, such that any PIK amount accrued up until before the milestone is achieved is not affected by the
reduction.
  
 For illustrative purposes only, if Milestone 1 is achieved in July 2020,
the PIK going forward will be reduced to 2% per annum whereas all the accrued PIK until June 2020 will remain at 3% per annum.
  

VARIABLE COMPONENT OF THE ADDITIONAL RETURN
  

None

		
	 SECURITY:
	 	 As collateral security for the fulfilment of all present and future obligations of the Borrower and the Corporate Guarantor, each
Financing Party, as applicable, shall provide BDC Capital with the following security or guarantees (collectively the “Security”), namely:
  

a)  General Security Agreement, granting a general and continuing security interest in all of the
Borrower’s present and after acquired personal property and, without limiting the foregoing, on all present and future assets of the Borrower related to intellectual property of the Borrower including, without limitation,
patents,

  
 3 

			
		 	 trademarks, domain names, source codes, licences and any other forms of intellectual property including those already
known (the “Intellectual Property”). This security interest shall rank in first position with respect to the Intellectual Property and applicable proceeds of assigned key man life insurance.

 
 b)  US equivalent of General Security
Agreement, granting a general and continuing security interest in all of the Corporate Guarantor’s present and after acquired personal property and, without limiting the foregoing, on all present and future assets of the Corporate Guarantor.
This security interest shall rank in first position with respect to the Intellectual Property and applicable proceeds of assigned key man life insurance.
  

c)  a duly executed guarantee for an unlimited amount from the Corporate Guarantor;

 
 d)  Assignment to BDC Capital of a
Life insurance policy owned by the Borrower on the life of Ajay Kochhar in the coverage amount of $2,500,000 with BDC Capital also named as beneficiary thereof. Such assignment may be delivered to BDC Capital no later than 30 days following the
disbursement of Tranche 1 of the Financing;
  

e)  If not converted, Postponement and Subordination Agreement in favour of BDC Capital with respect to
$500,000 of capital plus accrued interest at the rate of 8% per annum owing under the convertible debenture issued by the Borrower to Sustainable Chemistry Alliance, part of Bioindustrial Innovation Canada. Cash interest not exceeding 16% per annum
may be paid on $500,000 capital plus any accrued interest (accrued interest not to exceed 8% per annum up to and including March 5, 2021) after March 6, 2021 provided that the Borrower is current with the Financing and in compliance with
all its covenants.
  
 f)   Any
other security or such other documents as BDC Capital may reasonably request, including in order to register and/or to perfect the Security to be granted to BDC Capital as provided hereunder.

 
 All security documents shall be in form and substance satisfactory to BDC Capital and
prepared by BDC Capital’s legal counsel.

		
	 CONDITIONS PRECEDENT TO DISBURSEMENT:
	 	 Any obligation to make any advance under the Letter of Offer is subject to the following conditions being fulfilled to the entire
satisfaction of BDC Capital:
  
 Receipt by BDC Capital of:

 
 The Security in form and substance satisfactory to BDC Capital,
registered as required to perfect and maintain the validity and rank of the Security, and such certificates, authorizations, resolutions and legal opinions as BDC Capital may reasonably require, including legal opinions on the existence and
corporate capacity of the Financing Parties as well as on the validity and enforceability of the Security;
  

–   Written evidence, including evidence of payment, attesting that the Financing Parties have
obtained all the other sources of financing, as applicable, on terms acceptable to BDC Capital, acting reasonably;

  
 4 

			
		 	  
 Financial and other information relating to
each Financing Party and their businesses as BDC Capital may reasonably require, including, without limiting the foregoing, for any disbursement occurring more than one hundred and twenty (120) days after year end, the Borrower and Corporate
Guarantor will provide BDC Capital with audited annual financial statements and the certificate of conformity relating to the operating line of credit of the Borrower provided to the banker or the short-term lender;

 
 –   A duly executed copy
of the memorandum of understanding with respect to the methods used for establishing the EBITDA.
  

Completion to the satisfaction of BDC Capital of the following events:
  

–   Legal due diligence of the Financing Parties.

 
 Furthermore, without limiting the foregoing:

 
 No Material Adverse Change in the financial situation of the Financing Parties or in the
risk evaluation shall have occurred as at the date of any disbursement of the Financing and the Borrower and the Corporate Guarantor shall provide updated in-house financial statements never older than 60 days
which compare favourably with budgets provided and which show no Material Adverse Change in the financial situation of the Borrower or the Corporate Guarantor since the last audited financial statements submitted to BDC Capital and the internal
financial statements submitted to BDC Capital at the time of authorization. The Borrower and Corporate Guarantor shall provide BDC Capital with the certificate of conformity relating to the operating line of credit of the Borrower provided to the
banker or the short-term lender.
  
 All the representations and warranties made by the
Borrower or the Corporate Guarantor and its representatives shall be true and exact as at the date of any disbursement of the Financing and a certificate to that effect must be signed by the Borrower and the Corporate Guarantor and its
representatives prior to any such disbursement.
  
 The Borrower and the Corporate
Guarantor shall have transferred in favour of BDC Capital all the rights which the Borrower and the Corporate Guarantor holds in any all-risk insurance, including fire insurance, policies affecting its assets,
BDC Capital being designated by the Borrower and the Corporate Guarantor as loss payee on such policies for the full amount of the Financing.
  

The Financing Parties shall not be (i) in default pursuant to the terms of any other contract, agreement or obligation entered into or executed in favour
of BDC Capital nor (ii) in default under any other agreement with any third party for the granting of a loan or other financial assistance.
  

The Financing is expected to be disbursed in three tranches, the first tranche in the amount of $3,000,000, the second tranche in the amount of $2,000,000 and
the third tranche in the amount of $2,000,000. In addition to the conditions precedent set out above for each disbursement, the obligation to advance the first tranche is subject to the following conditions being fulfilled to the entire satisfaction
of BDC Capital:

  
 5 

			
		 	  
 Prior to the disbursement of the first tranche of $3,000,000
(“Tranche 1”):
  
 1)  The
Borrower shall provide to BDC Capital an executed fixed price construction contract for the Spoke 2 Commercial Plant anticipated at the leased location in Rochester, NY satisfactory to BDC Capital;

 
 2)  Notwithstanding the
aforementioned, for Tranche 1, the following financial statements are required for disbursement:
  

a.   Interim financial statements less than 60 days together with compliance certificate provided to
the chartered bank or operating lender (if applicable);
  

b.  If disbursement occurs greater than 90 days after the year end, year end financial statements prepared
by external auditor, in draft version, together with compliance certificate provided to the chartered bank or operating lender (if applicable);
  

c.   If disbursement occurs more than 120 days after the Borrower’s year end, the Borrower must
provide financial statements prepared by external auditor together with compliance certificate provided to the chartered bank or operating lender (if applicable).
  

In addition to the conditions precedent set out above for each disbursement, the obligation to advance the second tranche is subject to the following
conditions being fulfilled to the entire satisfaction of BDC Capital:
  
 Prior to the
disbursement of the second tranche of $2,000,000 (“Tranche 2”):
  

1)  The Borrower shall provide to BDC Capital a written confirmation by Zeton Inc., satisfactory to BDC
Capital, confirming the following:
  

a.   that all work pertaining to plans and specifications of the modules has been completed;

 
 b.  there are no deficiencies to the
final construction for Spoke 2 modules;
  

c.   that all modules have passed the Zeton Inc. factory testing as per the agreement between Zeton
Inc. and the Borrower; and
  

d.  that the modules are ready to ship to the Rochester, NY location for installation and
commissioning.
  
 In addition to the conditions precedent set out above for each
disbursement, the obligation to advance the third tranche is subject to the following conditions being fulfilled to the entire satisfaction of BDC Capital:
  

Prior to the disbursement of the third tranche of $2,000,000 (“Tranche 3”):
  

1)  BDC Capital representative to perform a site visit of the operations at anticipated Rochester, NY site
to ensure Spoke 2 commissioning is completed and the Spoke 2 facility is operational to the satisfaction of BDC Capital;

  
 6 

			
		 	  
 2)  Borrower to
provide BDC Capital with an updated general liability insurance policy, satisfactory to BDC Capital, that provides coverage for commercial operations

		
	 UNDERLYING CONDITIONS:
	 	 So long as any amount owing pursuant to the Financing Documents remains unpaid, the following conditions shall be met:

 
 a)  Requested documents:

 
 (i) the Borrower shall remit to BDC Capital
its annual audited financial statements, on a consolidated basis, within 120 days after the end of its financial year;
  

(ii)  the Corporate Guarantor shall remit to BDC Capital its annual audited financial statements within
120 days after the end of its financial year;
  

(iii)  the Borrower shall remit to BDC Capital its consolidated internal financial statements, on a
monthly basis, within 30 days after the end of each month;
  

(iv) The monthly internal financial statements remitted to BDC Capital shall have a comparative section with the
results of the corresponding period of the last financial year;
  

(v)   Each of the Borrower and the Corporate Guarantor shall remit further to any change in the
enterprise or on demand to BDC Capital (i) a corporate ownership chart, (ii) an organizational chart and (iii) an updated list of employees reporting to the President and CEO;

 
 (vi) Each of the Borrower and the Corporate
Guarantor shall remit annually to BDC Capital a listing of all aged accounts payable and accounts receivable with a copy of the approved annual budget;
  

b)  Each of the Financing Parties must provide BDC Capital, as quickly as possible, with the financial
statements and reports and any other financial information that BDC Capital may reasonably require from time to time;
  

c)  So long as the Borrower has a compensation committee comprised of all independent members of the Board
of Directors who determine management compensation, BDC Capital permits management remuneration to be determined by the compensation committee. In absence of such committee, BDC Capital reserves the right to approve management renumeration on an
annual basis;
  
 d)  Maximum
unfunded capital expenditures not to exceed $100,000 per annum, without prior written approval by BDC Capital;
  

e)  BDC Capital will be provided the authorization to make public announcements regarding the Financing in
addition to reporting details of the Financing to the Government of Canada. The Borrower will have the opportunity to review and approve the language prior to presentation;

  
 7 

			
		 	  
 f)   Copy
of compliance certificate no older than 30 days from Senior Lender satisfactory to BDC Capital (if and when applicable);
  

g)  100 days post-close, the Borrower agrees to have BDC Capital and BDC Advisory Services meet with
management to conduct a post-close update whereby the intent is to validate if the growth is on plan, identify any challenges and see if BDC Capital can provide any additional support;

 
 h)  BDC shall be entitled to have an
observer (the “Observer”) present at each meeting of the board of directors of the Borrower and Corporate Guarantor and to receive all documents sent to any of the directors, including minutes of all meetings, at the same time as
sent to the directors. The Observer will have the same access to information as a regular director has and shall be convened to each meeting of the board of directors by notice in writing to the Observer at the same time as notice is given to the
other directors. For greater certainty, it is acknowledged that the Observer shall have the same access as a director to any directors’ meetings held by means of telephonic, electronic or other communication facility;

 
 i)   The Borrower agrees to
maintain its head office and intellectual property in Canada;
  

j)   BDC Capital reserves the right to require and register additional security at the
Borrower’s expense, in form and substance and having such priority satisfactory to BDC Capital;
  

k)  BDC Capital reserves the right to request financial statements of additional corporate entities and
the Borrower commits to providing such statements on a timely basis from the date of BDC Capital’s request;
  

l)   Prior to the build of any commercial scale hydrometallurgical plant, the Borrower commits to
providing BDC Capital with the necessary environmental risk assessments, permits, confirmation of financial resources, or other items requested by BDC Capital to the satisfaction of BDC Capital.

 
 In addition, so long as any amount owing under or pursuant to this Letter of Offer or
any other Financing Document remains unpaid, the financial ratio mentioned below must be met at all time by the Borrower on a consolidated basis tested monthly:
  

a)  Working Capital Ratio of at least 1.00:1, starting with either the disbursement of Tranche 2 or
October 31, 2020, whichever comes first. Beginning January 31, 2021, the working capital will be a minimum of 1.25:1;
  

The abovementioned ratios shall be calculated on the basis of the financial statements of the Borrower and/or the Corporate Guarantor.

		
	 DISBURSEMENT:
	 	Unless otherwise authorized and except for refinancing of BDC Capital loans, funds will be disbursed to BDC Capital’s legal counsel who will confirm to BDC Capital the execution, delivery and registration of the security.
The latter may, if they have provided their final invoicing

  
 8 

			
		 	 concurrently with the above confirmation, pay it from the disbursed funds. Any subsequent fees or disbursement shall be collected directly
from the Borrower.
  
 BDC Capital may cancel any portion of the Financing which has not
been disbursed after nine months from December 12, 2019 (the “Authorization Date”).

		
	 FEES:
	 	 Cancellation Fee
 If no part of
the Financing has been disbursed by December 12, 2020 (the “Lapsing Date”), the Borrower and the Corporate Guarantor shall pay BDC Capital a cancellation fee of 3% of the amount of the Financing, provided, however, that BDC
Capital shall have the right to extend the Lapsing Date in its sole and entire discretion without notice to or consent from the Borrower and the Corporate Guarantor. For greater certainty and in any event, BDC Capital will not charge a cancellation
fee on any portion of the Financing cancelled by BDC Capital prior to the Lapsing Date.
  

In case of partial disbursement not already provided for in this Letter of Offer, any part of the Financing that has not been disbursed by the Lapsing Date
will automatically be cancelled. If more than 50% of the Financing is so automatically cancelled, the Borrower and the Corporate Guarantor shall pay a cancellation fee of 3% of the portion of the Financing automatically so cancelled.

 
 The cancellation fee is payable on demand and is liquidated damages, not a penalty, and
represents a reasonable estimate of BDC Capital’s damages should the Financing be cancelled or allowed to lapse in whole or in part.
  

Standby Fee
 Commencing 12 months after the
Authorization Date, the Borrower and the Corporate Guarantor shall pay BDC Capital a non-refundable standby fee calculated at a rate of 3% per annum on the portion of the Financing which has not been advanced
or cancelled. This fee shall be calculated daily and be payable in arrears commencing on the next occurring Payment Date and on each Payment Date thereafter.
  

Financing Management Fee
 The Borrower and the
Corporate Guarantor shall pay BDC Capital a non-refundable management fee of $700.00 per month. This management fee is payable on the date of the first Payment Date following the initial advance of the
Financing and thereafter on each monthly anniversary of such first advance, until the Maturity Date.
  

Legal Fees and Expenses
 The Borrower and the
Corporate Guarantor shall pay all legal fees and expenses of BDC Capital incurred in connection with the Financing and the Financing Documents including the enforcement of the Financing and the Financing Documents. All legal fees and expenses of BDC
Capital in connection with any amendment or waiver related to the foregoing shall also be for the account of the Borrower and the Corporate Guarantor.
  

The Borrower’s and the Corporate Guarantor’s obligation to indemnify BDC Capital under this Section continues before and after default and
notwithstanding repayment of the Financing or discharge of any part or all of the Security.

  
 9 

			
		
	 REPRESENTATIONS AND WARRANTIES:
	 	Each of the Borrower and the Corporate Guarantor makes the representations and warranties in Schedule A — Section III. These representations and warranties shall survive the execution of the Letter of Offer and shall
continue in force and effect until the full payment and performance of all obligations of the Financing Parties pursuant to the Financing Documents.
		
	 COVENANTS:
	 	 So long as any amount owing pursuant to the Financing Documents remains unpaid, each Borrower and the Corporate Guarantor shall perform
the covenants set forth in Schedule “A” — Sections IV and V.
  
 Without
limiting the above, the Borrower and the Corporate Guarantor will notify BDC Capital of its intent to use IFRS and acknowledges, by undertaking to sign the resulting amended forms or contracts, that there may be modifications required to the
calculation of EBITDA, Excess Available Funds, required ratios and to other pertinent calculations to ensure the spirit of the underlying conditions is maintained.

		
	 EVENTS OF DEFAULT:
	 	The occurrence of any of the events listed in Schedule A — SECTION VI constitutes an Event of Default under the Letter of Offer. If a default occurs, any obligation of BDC Capital to make any advance, shall, at BDC
Capital’s option, terminate and BDC Capital may, at its option, demand immediate payment of the Financing and enforce any security, the whole without any prejudice to the covenants of the Financing Parties to pay the Royalties, the Bonus on
Sale, the Bonus Equity or the Prepayment Bonus, as applicable, if a portion of the Financing has been disbursed before the occurrence of the default justifying the application of this paragraph.
		
	 CONFLICTS:
	 	The Financing Documents constitute the entire agreement between BDC Capital and the Financing Parties. To the extent that any provision of the Financing Documents is inconsistent with or in conflict with the provisions of the
Letter of Offer, the provisions of the Letter of Offer shall govern.
		
	 INDEMNITY:
	 	The Borrower and the Corporate Guarantor shall indemnify and hold BDC Capital harmless against any and all claims, damages, losses, liabilities and expenses incurred, suffered or sustained by BDC Capital by reason of or relating
directly or indirectly to the Financing Documents save and except any such claim, damage, loss, liability and expense resulting from the gross negligence or wilful misconduct of BDC Capital.
		
	 SCHEDULES:
	 	All Schedules have been inserted after the signature page and form an integral part of the Letter of Offer.
		
	 DEFINITIONS:
	 	In the Letter of Offer, capitalized terms have the meanings described in Schedule “A”-Section I or Section II or are defined elsewhere in the text of the Letter of Offer.
		
	 GOVERNING LAW:
	 	The Letter of Offer shall be governed by and construed in accordance with the laws of the province of Ontario and the laws of Canada applicable therein. Any claim or suit for any reason whatsoever under this Letter of Offer shall
be brought in the judicial district of Toronto, province of Ontario, Canada, at the exclusion of any other judicial district which may have jurisdiction over such dispute as prescribed by
law.

  
 10 

			
		
	 SUCCESSORS AND ASSIGNS:
	 	The Letter of Offer shall be binding on and enure to the benefit of each Financing Party and BDC Capital and their respective successors and assigns. No Financing Party shall have the right to assign, in whole or in part, its
rights and obligations under or pursuant to the Financing Documents without BDC Capital’s prior written consent.
		
	 ACCEPTANCE
	 	The Letter of Offer and any modification of it may be executed and delivered by original signature, fax, or any other electronic means of communication acceptable to BDC Capital and in any number of counterparts, each of which is
deemed to be an original and all of which taken together shall constitute one and the same Letter of Offer.

 Should you have any questions regarding the Letter of Offer, do not hesitate to communicate with the undersigned. 

This 16th day of December 2019. 

BDC CAPITAL INC. 
  

					
	

	 		 	

	Jahangir Bhatti	 		 	Susan Rohac
	 Director, Cleantech Practice
 BDC Capital

(416) 736-3423

(613) 943-9866

Jahangir.BhattiPbdc.ca
	 		 	 Vice President, Cleantech Practice
 BDC
Capital
 (613) 995-9598

(613) 943-9866

Susan.RohacPbdc.ca

  
 11 

 CONSENT AND ACCEPTANCE 

Each Financing Party hereby accepts the foregoing terms and conditions set forth above and in all attached Schedules. 

Signed this 20 day of December    2019. 
  

					
	Li-Cycle Corp.	 	
		
	 

	 	 , Authorized Signing Officer

 

	Name:	 	 Bruce MacInnis

 
	 	
		 	[Please print name of signing party]	 	

  

					
	 GUARANTOR
  

Li-Cycle Inc.
	 	
		
	 

	 	 , Authorized Signing Officer

 

	Name:	 	 Bruce MacInnis

 
	 	
		 	[Please print name of signing party]	 	

  
 12 

 SCHEDULE A 

 

 SECTION I 

DEFINITIONS 
 “ASPE” —
means the accounting standards for private enterprises, Part II CPA Canada Handbook. 
 “BDC Capital’s Base Rate” — means the
annual rate of interest announced by the Bank through its offices from time to time as its base rate applicable to each of BDC Capital’s fixed interest rate plans then in effect for determining the fixed interest rates on Canadian dollar loans.

 “Change of Control” — means any operation or series of successive and subsequent transactions pursuant to which the Control of a
Person is transferred from one Person to another or required by a Person, or any binding undertaking to proceed with any such operations. 

“Control” — means the power to, directly or indirectly, direct or cause the direction of the management and business or affairs of a
Person, whether through ownership of voting securities, by contract or otherwise, including, but without limiting the foregoing, in the case of a corporation the holding, directly or indirectly of more than fifty per cent (50%) of the voting shares
of such corporation. 
 “EBITDA” — has the meaning set forth in Schedule B hereof. 

“Financing” — shall have the meaning indicated in the preamble, or, as the context may require, at any time the unpaid principal balance
of the Financing. 
 “Financing Documents” — means, collectively, the application for financing, the Letter of Offer, the security
contemplated by the Letter of Offer and all other documents, instruments and agreements delivered in connection with the foregoing. 
 “Financing
Party” — means either the Borrower or any of the Guarantors and “Financing Parties” means collectively each of the Borrower or Guarantors. 

“Fixed Component of the Additional Return” — means and shall refer to any additional return component described and contained in the
Fixed

 
Component of the Additional Return sub-section of the present Letter of Offer. 

“IFRS” — means the International Financial Reporting Standards issued by the International Accounting Standards Board and adopted by the
Accounting Standards Board as Canadian GAAP for publicly accountable enterprises and the ones which opt to adopt such standards. 
 “Interest
Adjustment Date”- means, in respect of any fixed interest rate plan, the day after the Interest Expiration Date of such fixed interest rate plan. 

“Interest Expiration Date”- means the date on which a fixed interest rate plan expires. 

“Material Adverse Change” — means (i) a material adverse change in, or a material adverse effect upon, the financial condition,
operations, assets, business, properties or prospects of any Financing Party, (ii) a material impairment of the ability of any Financing Party to perform any of its obligations under any Financing Document, or (iii) a material adverse
effect upon any substantial portion of the assets subject to security in favour of BDC Capital or upon the legality, validity, binding effect, rank or enforceability of any Financing Document. 

Memorandum of Understanding means the memorandum of understanding in the form attached as Schedule B to be executed by BDC Capital, the Borrower and
the Corporate Guarantor. 
 “Person” — includes any individual, natural person, sole proprietorship, partnership, limited partnership,
unincorporated association, syndicate or organization, any trust, body corporate, government agency, and a natural person in his or her capacity as trustee, executor, administrator, or other legal representative and any other form of organization or
entity whatsoever. 
 “Working Capital” — means the total current assets minus (i) the total current liabilities (within the
meaning ascribed to them by ASPE, applied consistently) less (ii) future income tax receivables and less (iii) the account receivables due from related parties or outside the ordinary course of business.

 

  
 13 

 “Working Capital Ratio” — is calculated by dividing total current assets (within the
meaning ascribed to them by ASPE, applied consistently) less future income tax receivable, less account receivable due from related parties or outside the ordinary course of business by the total current liabilities. 

SECTION II  

PREPAYMENT DEFINITIONS 

“Prepayment Indemnity” — means the sum of the Present Values calculated for each Payment Date from the date of prepayment until the
Maturity Date of the Financing. 
 “Interest Differential Charge” — means the sum of the Present Values calculated for each Payment
Date from the date of prepayment until the Maturity Date of the difference between BDC Capital’s Base Rate on this Financing and BDC Capital’s Base Rate for the Corresponding Fixed Interest Rate Plan, which is applicable only if BDC
Capital’s Base Rate on this Financing is greater than BDC Capital’s Base Rate at the time of a prepayment. 
 “Prepayment Bonus”
— means the sum of the Interest Differential Charge and the Prepayment Indemnity. 
 “Present Values” — for the purpose of
determining the Interest Differential Charge and the Prepayment Indemnity will be computed at a discount rate (“DR”) equal to (i) BDC Capital’s Base Rate for the Corresponding Fixed Interest Rate Plan as the discount rate in the
case of a Financing subject to a fixed interest rate, or (ii) BDC Capital Floating Base Rate as the discount rate in the case of a Financing subject to a floating interest rate and the manner of such computation will be according to the
following formula: 
  

	
	
          CF   
       

	{1 + (DR /12)}t

 Where: 
  

	 	•	 	“Cr is the sum of: (i) the Variance (if positive) multiplied by the principal prepayment amount, (ii) the difference between BDC Capital’s Base Rate on this Financing and BDC Capital’s Base Rate
for

	 	 	 
the Corresponding Fixed Interest Rate Plan (if positive and if the Financing is subject to Fixed Interest Rate Plan) multiplied by the principal prepayment amount, (iii) the financing
management fees and (iv) if applicable, any Fixed Component of the Additional Return which would otherwise have been outstanding at the Payment Date until the Maturity Date; 

 

	 	•	 	“DR” is the applicable discount rate; and 

  

	 	•	 	“t” is the number of monthly periods between the prepayment date and the Maturity Date. 

SECTION III  

REPRESENTATIONS AND WARRANTIES 
 The
Borrower and the Corporate Guarantor hereby represents and warrants to BDC Capital that: 
  

	 	1.	 It is a partnership, trust or corporation, as the case may be, duly constituted, validly existing and duly
registered or qualified to carry on business in each jurisdiction where it is required by applicable laws to be so registered or qualified. 

  

	 	2.	 The execution, delivery and performance of its obligations under the Letter of Offer and the other Financing
Documents to which it is a party have been duly authorized and constitute legal, valid and binding obligations enforceable in accordance with their respective terms. 

 

	 	3.	 It is not in violation of any applicable law, which violation could lead to a Material Adverse Change.

  

	 	4.	 No Material Adverse Change exists and there are no constitute, with the lapse of time, the giving of notice or
otherwise, a Material Adverse Change. 

  

	 	5.	 It is not in default under the Letter of Offer or any other Financing Document. 

 

	 	6.	 All information provided by it to BDC Capital is complete and accurate and does not omit any material fact and,
without limiting the generality of the foregoing, all financial statements delivered by it to BDC Capital fairly present its financial condition

 

  
 14 

	 	
as of the date of such financial statements and the results of its operations for the period covered by such financial statements, all in accordance with ASPE. 

 

	 	7.	 There is no pending or threatened claim, action, prosecution or proceeding of any kind including but not
limited to non-compliance with environmental law or arising from the presence or release of any contaminant against it or its assets before any court or administrative agency which, if adversely determined,
could lead to a Material Adverse Change. 

  

	 	8.	 In respect of properties and assets charged pursuant to the Financing Documents, it has good and marketable
title, free and clear of any encumbrances, except for what has been disclosed herein or has been accepted in writing by BDC Capital. 

  

	 	9.	 It is the rightful owner of all its intellectual property with all right, title and interest in and to all of
its intellectual property. 

 The foregoing representations and warranties shall remain in full force and true until the
Financing is repaid in full. 
 SECTION IV  

COVENANTS 
 The Borrower and the Corporate
Guarantor shall: 
  

	 	1.	 Perform its obligations and covenants under the Financing Documents. 

 

	 	2.	 Maintain in full force and effect and enforceable the Security contemplated by this Letter of Offer.

  

	 	3.	 Notify BDC Capital immediately of the occurrence of any default under the Letter of Offer or any other
Financing Documents. 

  

	 	4.	 Comply with all applicable laws and regulations. 

 

	 	5.	 Keep all its assets insured for physical damages and losses on an
“All-Risks” basis for their full replacement value and cause all such insurance policies to name BDC Capital as loss payee as its interests may

	 	
appear. The policies shall also name BDC Capital as mortgagee and include a standard mortgage clause in respect of buildings over which BDC Capital holds security and, as further security, assign
or hypothecate all insurance proceeds to BDC Capital; and 

  

	 	 	 If requested by BDC Capital, maintain adequate general liability insurance and environmental insurance or any
other type of insurance it may reasonably require to protect it against any losses or claims arising from pollution or contamination incidents and to provide certified copies of such policies. 

 

	 	6.	 Notify BDC Capital immediately of any loss or damage to its property. 

 

	 	7.	 Without limiting the generality of paragraph 4 above, in relation to its business operations and the assets and
projects of its business, operate in conformity with all environmental laws and regulations; make certain that its assets are and will remain free of environmental damage; inform BDC Capital immediately upon becoming aware of any environmental issue
and promptly provide BDC Capital with copies of all communications with environmental authorities and all environmental assessments; pay the cost of any external environmental consultant engaged by BDC Capital to effect an environmental audit and
the cost of any environmental rehabilitation or removal necessary to protect, preserve or remediate the assets, including any fine or penalty BDC Capital is obligated to incur by reason of any statute, order or directive by a competent authority.

  

	 	8.	 Promptly pay all government remittances, assessments and taxes including real estate taxes and provide BDC
Capital with proof of payments as BDC Capital may request from time to time. 

  

	 	9.	 Promptly furnish to BDC Capital such information, reports, certificates and other documents concerning any
Financing Party as BDC Capital may reasonably request from time to time. 

 

  
 15 

	 	10.	 Not engage in, or permit its premises to be used by a tenant or other person, for any activity which BDC
Capital, from time to time, deems ineligible, including without limitation any of the following ineligible activities: 

  

	 	a)	 businesses that are sexually exploitive or that are inconsistent with generally accepted community standard of
conduct and propriety, including those that feature sexually explicit entertainment, products or services; businesses that are engaged in or associated with illegal activities; businesses trading in •countries that are proscribed by the Federal
Government; 

  

	 	b)	 businesses that operate as stand-alone nightclubs, bars, lounges, cabarets, casinos, discotheques, video
arcades, pool and billiard halls, and similar operations; 

  

	 	c)	 businesses that promote nudism and naturism. 

 

	 	 	 BDC Capital’s finding that there is an ineligible activity will be final and binding between the parties
and shall not be subject to review. The prohibition set out in this paragraph 10 shall also apply to any entity that Controls, is Controlled by, or that is under the common control with, any Financing Party. 

 

	 	11.	 In the event that one or several related corporations are incorporated or acquired, including all new
subsidiaries and sister companies of the Borrower, these new entities shall ratify and become a party to this Letter of Offer as co-borrower or guarantor at the sole discretion of BDC Capital. BDC Capital may
require that these new entities grant in favour of BDC Capital security which shall be registered on their assets to guarantee their respective obligations and the obligations and the Financing pursuant to this Letter of Offer.

 SECTION V  

NEGATIVE COVENANTS 
 Without the prior
written consent of BDC Capital, neither the Borrower nor the Corporate Guarantor shall: 
  

	 	1.	 Change the nature of its business. 

 

	 	2.	 Amalgamate, merge, acquire or otherwise combine its business, or create an affiliated company
(“affiliate” having the meaning given to it in the Canada Business Corporations Act), or sell or otherwise transfer a substantial part of its business or any substantial part of its assets, or grant any operating license.

  

	 	3.	 Permit any of its shareholders to sell or transfer their shares in the capital stock of such Financing Party
save and except shares listed on a recognized stock exchange acceptable to BDC Capital. 

  

	 	4.	 Permit any Change of Control of such Financing Party or change the capital structure of such Financing Party by
contractual or other means. 

  

	 	5.	 Permit any change in the shareholding of such Financing Party, except for options issued to employees under an
approved stock option plan. 

  

	 	6.	 Allow a loan to be sought or extended, an investment to be made, a guarantee to be given, and no asset securing
the Financing shall be pledge or hypothecated to another creditor, whether done for the benefit of the Borrower or for the benefit of a third party. 

  

	 	7.	 Declare a dividend on, or redeem or repay any obligation in respect of any shares in its capital. In addition,
any advance or transfer of funds in any form whatsoever shall be made to the ultimate shareholders and/or to the corporations they own. 

  

	 	8.	 Make any modifications to the end date of its fiscal year, its accounting standards and/or policies.

 

  
 16 

 SECTION VI  

EVENTS OF DEFAULT 
  

	 	1.	 Any Financing Party fails to pay any amount owing under or pursuant to the Financing Documents.

  

	 	2.	 Any Financing Party fails to comply with or to perform any provision of the Letter of Offer or any other
Financing Documents. 

  

	 	3.	 Any Financing Party is in default under any other agreement with BDC Capital or any third party for the
granting of a loan or other financial assistance and such default remains unremedied after any cure period provided in such other agreement. 

  

	 	4.	 Any representation or warranty made by any Financing Party herein or in any other Financing Document is
breached, false or misleading in any material respect, or becomes at any time false. 

  

	 	5.	 Any schedule, certificate, financial statement, report, notice or other writing furnished by any Financing
Party to BDC Capital in connection with the Financing is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified. 

 

	 	6.	 Any Financing Party becomes insolvent or generally fails to pay, or admits in writing its inability or refusal
to pay its debts as they become due; or any Financing Party applies for, consents to, or acquiesces in the appointment of a trustee, receiver or other custodian for such Financing Party or any property thereof, or makes a general assignment for the
benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for any Financing Party or for a substantial part of the property of such Financing Party; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is commenced in respect of any Financing Party; or any Financing Party takes any action to authorize,
or in furtherance of, any of the foregoing.

	 	7.	 The Borrower and/or the Corporate Guarantor ceases or threatens to cease to carry on all or a substantial part
of its business. 

  

	 	8.	 The occurrence of a Change of Control of the Borrower and/or the Corporate Guarantor from the date of the
application of financing. 

  

	 	9.	 Any Financing Party is in violation of any applicable law relating to terrorism or money laundering, including
the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada). 

  

	 	10.	 The occurrence, in the opinion of BDC Capital, of a Material Adverse Change. 

SECTION VII  

GENERAL TERMS AND CONDITIONS 
 Each
Financing Party agrees to the following additional provisions: 
 Interest Cap 

If the aggregate amount of charges payable as interest, additional interest, interest on arrears, or any other charges paid or payable in connection with the
Financing (collectively the “Charges”) at any time whatsoever would constitute the application of an effective annual rate of interest in excess of the limit permitted by any applicable law, then the Charges shall be reduced so that the
charges paid or payable shall not exceed the maximum permissible under such law. Any excess which has been paid will be refunded by BDC Capital within ten business days following BDC Capital’s determination of the amount to be refunded. 

Other Available Interest Rate Plans 
 If applicable, the
Borrower having selected a floating interest rate plan may select BDC Capital available fixed interest rate plan. The expiry date of the selected plan shall occur after the initial Maturity Date or subsequently amended Maturity Date of the
Financing. If the Borrower so selects any fixed rate plan before the Acceptance Date, it shall be based on BDC Capital’s Base Rate in effect on the Authorization Date. If the selection is made after the Acceptance Date, the Borrower will have
to pay to 

 

  
 17 

 
BDC Capital applicable fee and the interest rate shall be based on BDC Capital’s Base Rate then in effect. The new rate shall become effective on the fourth day following receipt of the
request by BDC Capital. 
 However, in the event of a period of increased interest rate volatility, which will be determined by a fluctuation of greater
than 0.5% during the same transaction day of the yield to maturity of the five-year Canada bond benchmark, BDC Capital reserves the right to suspend the borrower’s right to switch from a floating interest rate plan to a fixed interest rate
plan. 
 Interest Adjustment Date 
 If the Financing is
not paid in full by the Interest Adjustment Date, BDC Capital will set a new interest rate plan based on the revised Interest Adjustment Date of the Financing at BDC Capital’s Base Rate then in effect adjusted by the Variance and shall then
notify the Borrower. 
 In the event BDC Capital should demand repayment of the Financing by reason of an event of default, any fixed interest rate
applicable at the time of demand shall continue to apply to the Financing until full repayment and shall not be adjusted at the next Interest Adjustment Date. 

Pre-Authorized Payment System 

All payments provided for in the Letter of Offer must be made by pre-authorized debits from the Borrower’s bank
account. The Borrower shall sign all documentation required to that effect and provide a sample cheque marked void. 
 Application of Payments 

All payments will be applied in the following order: 
  

	1.	 any Prepayment Bonus (including the monthly interest and Interest Differential Charge); 

 

	2.	 protective disbursements; 

 

	3.	 standby fees (arrears and current); 

 

	4.	 arrears, in the following order: transaction fees, administration fees, management fees, Royalties, bonuses or
other premiums, interest and principal;

	5.	 current balances, in the following order: transaction fees, management fees, Royalties, bonuses or other
premiums, interest and principal; 

  

	6.	 cancellation fees; and 

 

	7.	 other amounts due and payable under the Financing Documents. 

Other than regular payments of principal and interest, BDC Capital may apply any other monies received by it, before or after default, to any debt the Borrower
may owe BDC Capital under or pursuant to the Letter of Offer or any other agreement and BDC Capital may change those applications from time to time in its sole discretion. 

Consent to Disclosure and Exchange of Information 
 Each
Financing Party authorizes BDC Capital, at any time and from time to time, (i) to obtain financial, compliance, account status and any other information about a Financing Party and its respective business from its accountants, its auditors, any
financial institution, creditor, credit reporting or rating agency, credit bureau, governmental department, body or utility, and (ii) to disclose and exchange information with any financial institution relating to, in connection with or arising
from the business of any Financing Party which BDC Capital may currently have or subsequently obtain. 
 Each Financing Party recognizes that in accordance
with prudent business practices to « know your client » and in accordance with its internal policies, BDC Capital may be required to obtain, verify, maintain information regarding the Financing Parties, their directors, theirs officers
duly authorized to sign, their shareholders or other persons who exercise control over each Financing Party. Each Financing Party agrees to provide without delay all information, including supporting documents and other evidence that BDC Capital, or
a potential assignee or another company with an interest in BDC Capital, acting reasonably, could ask to comply with internal policies or legislation in the fight against the laundering of proceeds of crime or financing of terrorist activities that
apply to them. 

 

  
 18 

 Notices 

Notices must be in writing and may be given in person, or by letter sent by fax, mail, courier or electronically; if to a Financing Party, at its address above
or such other addresses as the Financing Party may advise BDC Capital in writing, or if to BDC Capital, at BDC Capital’s address above.

 

  
 19 

 SCHEDULE B 

Memorandum of Understanding 

Re: EBITDA calculations 
 This
memorandum is used to define the basis of the EBITDA that will be used for calculating the milestone completion for the PIK reduction, as set out in financing #165165-01 as authorized on December 12, 2019
by BDC Capital in favor of the Borrower. 
 DEFINITIONS: 

“EBITDA”: means with respect to the Borrower and the Corporate Guarantor, net Income before: 

 

	 	•	 	 interest (long term and short term); 

 

	 	•	 	 income taxes; 

  

	 	•	 	 depreciation and /or impairment and/or impairment of assets; 

 

	 	•	 	 management fees, royalties and charges of financial institutions; 

 

	 	•	 	 gains or losses from the disposal of assets; 

 

	 	•	 	 gains or losses on debt write-offs or to related persons; 

 

	 	•	 	 expenses related to stock-based compensation; 

 

	 	•	 	 any expenses related to the assessment of capital stock such as, without limiting the foregoing the adjustment of
the redemption value of preferred shares; 

  

	 	•	 	 any return on preferred shares to be submitted to the income statement; 

 

	 	•	 	 any other entry outside the ordinary course of business with no impact on cash flow, including without limiting
the generality of the foregoing, any impact of the transition to new accounting standards. 

 Finally, the Borrower and the
Corporate Guarantor commits itself to: 
  

	 	1.	 To produce its audited financial statements annually according the ASPE and to maintain the same accounting
principles as those used in the latest annual audited statements dated October 31, 2018. 

  

	 	2.	 To produce an annual confirmation of the EBITDA calculations by the external auditors starting with the 2020
financial year. 

  

	 	3.	 To obtain BDC Capital’s written permission before creating any new entity and allow the EBITDA and the
Excess Available Funds of such new entity, if positive, to be added to the present calculations. 

 IN WITNESS WHEREOF, the parties signed
this December 16, 2019. 
  

					
	BDC CAPITAL INC.	 		 	
			
	

	 		 	

			
	Jahangir Bhatti	 		 	Susan Rohac
	Director, Cleantech Practice	 		 	Vice President, Cleantech Practice
	BDC Capital	 		 	BDC Capital
	(416) 736-3423	 		 	(613) 995-9598
	(613) 943-9866	 		 	(613) 943-9866
	Jahangir.BhattiPbdc.ca	 		 	Susan.RohacPbdc.ca

  
 20 

					
	Li-Cycle Corp.	 	
		
	 

	 	 , Authorized Signing Officer

 

	Name:	 	 Bruce MacInnis
  
	 	
	 [Please print name of signing party]
	 	

  

					
	 GUARANTOR
  

Li-Cycle Inc.
	 	
		
	 

	 	 , Authorized Signing Officer

 

	Name:	 	 Bruce MacInnis
  
	 	
		 	 [Please print name of signing party]
	 	

  
 21

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