LAC 8-K
Lithium Americas Corp. (LAC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
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(Commission File Number) |
(I.R.S. Employer Identification Number) |
| (Address of principal executive office and Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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; Toronto Stock Exchange |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
| Item 1.01 | Entry into a Material Definitive Agreement |
On August 13, 2026, Lithium Americas Corp. (the “Company”) completed the initial closing of the transactions contemplated by the Securities Purchase Agreement dated August 5, 2026 (the “Purchase Agreement”), with YA II PN, Ltd. (the “Investor”), pursuant to which the Company issued $150.0 million in aggregate principal amount of subordinated convertible debentures (the “Debentures”). Pursuant to the Purchase Agreement, the remaining $25.0 million may be sold from time to time in one or more delayed closings upon exercise of the Company’s put right as further described in the Purchase Agreement.
Key Terms of the Purchase Agreement and Debentures:
| • | Proceeds to be used for general corporate purposes, which may include funding of corporate and project overhead expenses, financing of capital expenditures, repayment of indebtedness and additions to working capital. |
| • | Debentures were issued at 100% of principal. |
| • | 5 year maturity with 5% annual interest rate. The interest rate increases to 7.50% during the initial two year period, and to 15% after two years, in each case if certain specified events occur (including if the stock price falls below the floor price for a specified period, if the registration statement is unavailable for an extended period, or if the exchange cap is substantially exhausted). |
| • | Conversion price equal to the lower of (i) a fixed price equal to $4.56 or (ii) 95% of the lowest daily VWAP during the five consecutive trading days immediately preceding the date of conversion, subject to a floor price equal to $1.63 (which shall be reduced in certain circumstances, but in no event to less than $0.65). |
So long as any convertible notes previously issued to OMF Fund IV SPV M LLC (“Orion”) remain outstanding, cash repayments of principal under the Debentures are limited to $35 million. Such repayments are permitted only if the Company offers to repurchase the Orion notes under certain conditions. Any such payments must be funded solely from proceeds of a new equity financing and/or cash distributions from the joint venture between General Motors Holdings LLC and the Company. In addition, the Company has agreed not to pay cash interest on the Debentures unless, as of the applicable interest payment date, interest payments to Orion under the Orion notes have been made in cash on the most recent interest payment date.
Subject to the forgoing repayment limitations, following the 181st day after the date of issuance, the Company may exercise an optional redemption of all or a portion of the outstanding amounts at a redemption amount equal to outstanding principal plus a 10% payment premium plus accrued and unpaid interest. Upon delivery of a redemption notice, the Investor has ten trading days to elect to convert all or any portion of the Debenture prior to redemption.
The Investor may not convert the Debentures for common shares, no par value (“Common Shares”) representing more than 19.99% of the Company’s outstanding Common Shares as of signing unless stockholder approval to exceed such cap is obtained in accordance with the rules and regulations of the NYSE and the Toronto Stock Exchange (the “Exchange Cap”). In addition, the Investor may not convert Debentures for Common Shares if it would result in the Investor beneficially owning more than 4.99% of the Company’s Common Shares, which threshold may be increased to 9.99% upon 65 days’ prior written notice by the Investor.
If a change of control transaction occurs, the Investor may require the Company to repurchase all or any portion of the Debentures at a price equal to outstanding principal plus a 10% payment premium plus accrued and unpaid interest.
In connection with the Purchase Agreement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Investor, pursuant to which the Company agreed to file a registration statement covering the resale of the Common Shares issuable upon conversion of the Debentures within three business days after the filing of the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2026. The Purchase Agreement includes customary covenants and restrictions, including a prohibition on variable-rate transactions while amounts are outstanding, limitations on additional indebtedness and liens subject to agreed
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exceptions (including specified existing indebtedness and project-level indebtedness for subsidiaries), and limitations on the Company’s use of existing equity lines without Investor consent. Any subsidiary that directly receives Debenture proceeds must guarantee the Company’s obligations. The Investor agreed not to engage in short sales of the Company’s equity.
The Debentures and the Common Shares issuable upon conversion thereof have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and were offered and sold in a private placement in reliance on Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D thereunder. The Investor represented that it is an accredited investor.
The foregoing description of the Purchase Agreement, the Debentures and the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of each such agreement. The Purchase Agreement was previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 6, 2026, and a copy of the Debentures and the Registration Rights Agreement are filed as Exhibit 4.1 and 4.2, respectively, hereto.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information contained in Item 1.01 of this Current Report with respect to the Debentures is incorporated herein by reference.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The disclosure set forth above in Item 1.01 of this Current Report relating to the issuance of Common Shares to the Investor pursuant to the Purchase Agreement, including any shares to be issued in connection with a conversion of the Debentures, and relating to the issuance of the Debentures, is incorporated by reference herein in its entirety. The offer and sale of Common Shares and the issuance of the Debentures pursuant to the Purchase Agreement was made in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of any offer to buy the securities discussed herein, nor shall there be any offer, solicitation, or sale of the securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits.
| Exhibit Number |
Description | |
| 4.1*+ | Subordinated Convertible Debenture, dated August 13, 2026, issued by Lithium Americas Corp. to YA II PN, Ltd. | |
| 4.2*+ | Registration Rights Agreement, dated August 5, 2026, by and between Lithium Americas Corp. and YA II PN, Ltd. | |
| 10.1+ | Securities Purchase Agreement, dated August 5, 2026, by and between Lithium Americas Corp. and YA II PN, Ltd. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Lithium Americas Corp. on August 6, 2026) | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
| * | Filed herewith. |
| + | Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the Commission upon its request. |
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Lithium Americas Corp. | ||||||
| Date: August 13, 2026 | ||||||
| By: | /s/ Jonathan Evans | |||||
| Jonathan Evans | ||||||
| President and Chief Executive Officer | ||||||
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Exhibit 4.1
Certain identified information in this Agreement denoted with “[***]” has been excluded from this exhibit pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both not material and of the type that the registrant treats as private and confidential.
NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS DEBENTURE AND ANY SECURITY ISSUED ON CONVERSION HEREOF MUST NOT TRADE THE SECURITY BEFORE DECEMBER 14, 2026.
LITHIUM AMERICAS CORP.
SUBORDINATED CONVERTIBLE DEBENTURE
Original Principal Amount: $150,000,000.00
Issuance Date: August 13, 2026
Number: LAC-001
FOR VALUE RECEIVED, LITHIUM AMERICAS CORP., a company existing under the laws of the Province of British Columbia, Canada (the “Company”), hereby promises to pay YA II PN, LTD., or its registered assigns (the “Holder”) the amount set out above as the Original Principal Amount (or such lesser amount as reduced pursuant to the terms hereof pursuant to repayment, redemption, conversion or otherwise, the “Principal”) and the Payment Premium, as applicable, in each case when due, and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from the date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof). The Issuance Date is the date of the first issuance of this Subordinated Convertible Debenture (as amended, amended and restated, extended, supplemented or otherwise modified in writing from time to time, this “Debenture”) regardless of the number of transfers and regardless of the number of instruments, which may be issued to evidence such Debenture. This Debenture was originally issued pursuant to the Securities Purchase Agreement dated as of August 5, 2026, between the Company and the Buyers listed on the Schedule of Buyers attached thereto (as it may be amended from time to time, the “Securities Purchase Agreement”). Certain capitalized terms used herein are defined in Section (11).
(1) GENERAL TERMS
(a) Maturity Date. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, accrued and unpaid Interest, and any other amounts outstanding pursuant to the terms of this Debenture. The “Maturity Date” shall be August 14, 2031. Other than as specifically permitted by this Debenture, the Company may not prepay or redeem any portion of the outstanding Principal and accrued and unpaid Interest.
(b) Interest Rate and Payment of Interest. Interest on the Principal amount of this Debenture shall commence accruing on the Issuance Date from day to day, both before and after default, demand, maturity and judgment, at an annual rate equal to 5.00% (“Interest Rate”) (which Interest Rate shall increase to an annual rate of 18.00% upon the occurrence of an Event of Default (for so long as such event remains uncured or that is not waived)), and shall be computed on the basis of a 365-day year and shall be payable semi-annually in arrears on the last Business Day of June and December of each year following the Issuance Date through the Maturity Date (each, an “Interest Date”) with the first (1st) Interest Date being December 31, 2026. Notwithstanding the foregoing, during any Trigger Event Period, the Interest Rate shall increase to (y) at any time prior to the two-year anniversary of the Issuance Date, 7.50% per annum, and (z) at any time from and after the two-year anniversary of the Issuance Date, 15% per annum (or, in each case if the Interest Rate then in effect is higher, shall remain at such higher rate); provided, however, that the Interest Rate shall not increase on account of a Floor Price Event at any time prior to the two-year anniversary of the Issuance Date. Interest shall be payable on each Interest Date, to the record holder of this Debenture on the applicable Interest Date, at the option of the Company, either as (i) Cash Interest or (ii) Capitalized Interest. The Company shall deliver a written notice (an “Interest Election Notice”) to the Holder on or prior to the date that is five (5) Business Days immediately prior to the applicable Interest Date, which Interest Election Notice either (a) elects that Interest to be paid on such Interest Date shall be paid entirely as Cash Interest, or (b) elects that Interest to be paid on such Interest Date shall be paid entirely as Capitalized Interest; provided that notwithstanding anything to the contrary herein; upon the occurrence and during an Event of Default, all Interest shall be paid entirely as Cash Interest. If the Company does not timely deliver an Interest Election Notice in accordance with this Section 1(b), then the Company shall be deemed to have delivered an irrevocable Interest Election Notice confirming the payment of Interest as Capitalized Interest on such Interest Date.
(c) Limitation on Cash Interest Payments. Notwithstanding anything to the contrary in this Debenture, the Company shall not make, and shall not be required or permitted to make, any payment of Interest as Cash Interest if the interest payment made on the latest Interest Date (as defined in the Orion Note) under the Orion Note was paid as Capitalized Interest (as defined in the Orion Note), provided that the Orion Note remains outstanding. For so long as the foregoing restriction is in effect, all Interest on this Debenture shall be paid as Capitalized Interest, notwithstanding any Interest Election Notice or Section (1)(b) to the contrary.
(d) Optional Redemption. At any time following the one hundred eighty-first (181st) day after the Issuance Date, the Company at its option shall have the right, but not the obligation, to redeem (“Optional Redemption”) early a portion or all amounts outstanding under this Debenture as described in this Section; provided, that the Company provides the Holder with written notice (each, a “Redemption Notice”) of its desire to exercise an Optional
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Redemption, which Redemption Notice shall be delivered to the Holder after the close of regular trading hours on a Trading Day. Each Redemption Notice shall be irrevocable and shall specify the outstanding balance of the Debenture to be redeemed and the Redemption Amount. The “Redemption Amount” shall be an amount equal to (a) the outstanding Principal balance being redeemed by the Company plus (b) the Payment Premium in respect of such Principal amount plus (c) all accrued and unpaid Interest hereunder as of the date of such redemption, which for the avoidance of doubt, shall be Cash Interest. After receipt of a Redemption Notice, the Holder shall have ten (10) Trading Days (beginning with the Trading Day immediately following the date such Redemption Notice is delivered to the Holder in accordance with this term of this Section (1)(d)) to elect to convert all or any portion of this Debenture. On the eleventh (11th) Trading Day following the delivery of the applicable Redemption Notice, the Company shall deliver to the Holder the Redemption Amount with respect to the Principal amount redeemed to the extent not converted and otherwise after giving effect to conversions or other payments made during such ten (10) Trading Day period.
(e) Repurchase at the Option of the Holder Upon a Change of Control. The Company shall deliver written notice to the Holder of any proposed Change of Control Transaction (a “Change of Control Notice”) no later than the later of (x) ten (10) Business Days prior to the date the Company reasonably anticipates consummating such Change of Control Transaction, or (y) five (5) Business Days after the public announcement of such Change of Control. The Change of Control Notice shall describe the material terms and conditions of such Change of Control Transaction and the anticipated date of consummation. Within seven (7) Business Days of receipt of such Change of Control Notice, the Holder shall have the right, but not the obligation, to require the Company to repurchase all or any portion of this Debenture, exercisable by delivering written notice (a “Change of Control Put Notice”) to the Company specifying the outstanding Principal balance to be repurchased, for a cash purchase price equal to the sum of (a) the outstanding Principal balance to be repurchased, plus (b) the Payment Premium in respect of such Principal amount, plus (c) all accrued and unpaid Interest with respect to such Principal amount to, but excluding, the date of such repurchase (the “Change of Control Repurchase Price”). The Holder shall be deemed to have waived its repurchase right under this Section (1)(e) if it does not deliver a Change of Control Put Notice within the time period specified herein. The Company shall, subject to the Subordination Agreement, pay the Change of Control Repurchase Price substantially concurrently with the consummation of such Change of Control Transaction. Nothing in this Section (1)(e) shall limit the Holder’s right to instead convert all or any portion of this Debenture in accordance with Section (3).
(f) Payment Dates. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and, solely with respect to such payment being made, no interest shall be payable for the period from the original due date to such next succeeding Business Day.
(g) Subordination. Notwithstanding anything to the contrary herein, the rights of the Holder hereunder are subject to the Subordination Agreement (the “Subordination Agreement”) dated August 13, 2026, by and between YA II PN, LTD., and OMF FUND IV SPV M LLC; and acknowledged by the Company. For the avoidance of doubt, upon termination of the Subordination Agreement in accordance with its terms, this Section (1)(g) shall no longer be of force and effect.
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(2) EVENTS OF DEFAULT.
(a) An “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body, in each case of competent jurisdiction) shall have occurred:
(i) The Company’s failure to pay to the Holder any amount of Principal, Interest, Redemption Amount, Payment Premium, or other amounts when and as due under this Debenture or any other Transaction Document, subject in any case to the Subordination Agreement, if such failure continues for a period of five (5) Business Days;
(ii) (A) The Company or any Significant Subsidiary of the Company shall commence, or there shall be commenced against the Company or any Significant Subsidiary of the Company, any proceeding under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company or any Significant Subsidiary of the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or any Significant Subsidiary of the Company, in any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of sixty one (61) days; (B) the Company or any Significant Subsidiary of the Company is adjudicated insolvent or bankrupt; (C) any order of relief or other order approving any such case or proceeding is entered; (D) the Company or any Significant Subsidiary of the Company suffers any appointment of any custodian, private or court appointed receiver or the like for it or all or substantially all of its property which continues undischarged or unstayed for a period of sixty one (61) days; (E) the Company or any Significant Subsidiary of the Company makes a general assignment of all or substantially all of its assets for the benefit of creditors; (F) the Company or any Significant Subsidiary of the Company shall fail to pay, shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; (G) the Company or any Significant Subsidiary of the Company shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; (H) the Company or any Significant Subsidiary of the Company shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or (I) any corporate or other action is taken by the Company or any Significant Subsidiary of the Company for the purpose of effecting any of the foregoing;
(iii) (A) The Company or any Significant Subsidiary of the Company shall default in any of its obligations under any note, debenture, mortgage, credit agreement or other facility, indenture agreement, or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money of the Company or any Significant Subsidiary of the Company and (i) such indebtedness is in an amount exceeding $30,000,000, whether such indebtedness now exists or shall hereafter be created and such default is not cured within the time prescribed by the documents governing such indebtedness or if no time is prescribed, within thirty (30) days, or, (ii) such indebtedness becomes or is declared due and payable; or (B) the Company or any Significant Subsidiary shall default in any of its obligations under the Orion Note, the Additional Orion Notes or the Orion Transaction
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Documents and the Orion Note or the Additional Orion Notes becomes or is declared due and payable.
(iv) A final judgment or judgments for the payment of money in excess of $30,000,000 in the aggregate are rendered against the Company and/or any Significant Subsidiary and which judgments are not, within sixty (60) days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within sixty (60) days after the expiration of such stay; provided, however, any judgment which is covered by insurance or an indemnity from a creditworthy party shall not be included in calculating the $30,000,000 amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company or such Significant Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;
(v) The Common Shares shall cease to be quoted or listed for trading, as applicable, on a Principal Market for a period of ten (10) consecutive Trading Days;
(vi) A Change of Control Transaction occurs, unless in connection with such Change of Control Transaction this Debenture is repaid in accordance with the optional redemption provisions set forth in Section (1)(d), subject to the Subordination Agreement;
(vii) The Company’s (A) failure to deliver the required number of Common Shares to the Holder within five (5) Trading Days after the applicable Share Delivery Date or (B) notice to any holder of the Debenture, including by way of public announcement, at any time, of its intention not to comply with a request for conversion of all or a portion of this Debenture into Common Shares that is tendered in accordance with the provisions of this Debenture;
(viii) The Company shall fail for any reason to deliver the payment in cash pursuant to a Buy-In (as defined below) within five (5) Business Days after such payment is due;
(ix) The Company’s failure to file with the Commission any Periodic Report on or before the due date of such filing as established by the Commission, it being understood, for the avoidance of doubt, that due date includes any permitted filing deadline extension under Rule 12b-25 under the Exchange Act and such failure continues for a period of ten (10) days;
(x) Any representation or warranty made by or on behalf of the Company in or in connection with any Transaction Document shall prove to have been incorrect in any material respect (or, in the case of any such representation or warranty already qualified by materiality, such representation or warranty shall prove to have been incorrect) when made or deemed made;
(xi) (A))(i) The Subordination Agreement ceases to be in full force and effect (other than because all senior indebtedness subject thereto is no longer
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outstanding), or (ii) the Subordinating Creditor (as defined therein) ceases to have any of the rights set forth in the Subordination Agreement for any reason whatsoever, or (iii) any party to the Subordination Agreement (other than the Subordinating Creditor) or the Company or any Subsidiary of the Company shall contest in any manner the validity, binding nature or the enforceability of any provision set forth in the Subordination Agreement or the Subordination Agreement itself; or (B) (i) any subordination provision in any document or instrument governing subordinated debt or any subordination agreement entered into in connection with such subordinated debt, in either such case, to which the Holder has rights thereunder shall cease to be in full force and effect; or (ii) any party to any such subordination provision or subordination agreement or the Company or any Subsidiary of the Company shall contest in any manner the validity, binding nature or enforceability of any such provision or subordination agreement;
(xii) (A) Any material provision of any Transaction Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder, ceases to be in full force and effect; (B) the Company, acting in bad faith, or any other Person contests in writing the validity or enforceability of any provision of any Transaction Document; or (C) the Company, acting in bad faith, denies in writing that it has any or further liability or obligation under any Transaction Document, or purports in writing to revoke, terminate (other than in accordance with the relevant termination provisions) or rescind any Transaction Document;
(xiii) The Company uses the proceeds of the issuance of this Debenture, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulations T, U and X of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof), or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose; or
(xiv) The Company shall fail to observe or perform any material covenant, agreement or warranty contained in, or otherwise commit any material breach or default of any provision of this Debenture (except as may be otherwise covered by Sections (2)(a)(i) through (2)(a)(xiii) hereof) or any other Transaction Document, which is not cured or remedied within the time prescribed or if no time is prescribed within thirty (30) days.
(b) During the time that any portion of this Debenture is outstanding, if any Event of Default has occurred (other than an event with respect to the Company described in Section (2)(a)(ii)), the full unpaid Principal amount of this Debenture, together with the Payment Premium in respect of such Principal amount, and all Interest and other amounts owing in respect of this Debenture to the date of acceleration, shall become, at the Holder’s election given by notice pursuant to Section (5), immediately due and payable in cash; provided that, in the case of any event with respect to the Company described in Section (2)(a)(ii), the full unpaid Principal amount of this Debenture, together with the Payment Premium in respect of such Principal amount, and all accrued and unpaid Interest and other amounts owing in respect of this Debenture to the date of acceleration, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company. Notwithstanding the foregoing, the Holder shall not be entitled to declare, and there shall not occur, any acceleration of any amounts owing under this Debenture as a result of a failure to pay described
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in Section (2)(a)(i) that results from any prohibition or restriction on such payment under the Subordination Agreement; provided that such failure shall continue to constitute an Event of Default for all other purposes hereunder. Furthermore, in addition to any other remedies, the Holder shall have the right (but not the obligation) to convert, on one or more occasions all or part of the unpaid Principal amount of this Debenture, together with the Payment Premium in respect of such Principal amount, and Interest and other amounts owing in respect of this Debenture, in accordance with Section (3) (subject only to the limitations set out in Section (3)(c)(i) and Section (3)(c)(ii), but not subject to any other limitations contained herein) at any time after (x) an Event of Default (provided that such Event of Default is continuing) or (y) the Maturity Date, provided that this Debenture remains outstanding. The Holder need not provide, and the Company hereby waives, any presentment demand, protest or other notice of any kind (other than any required notice of conversion), and the Holder may immediately enforce any and all of its rights and remedies hereunder and all other remedies available to it under Applicable Law. Such declaration may be rescinded and annulled by the Holder in writing at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
(3) CONVERSION OF DEBENTURE. This Debenture shall be convertible into Common Shares, on the terms and conditions set forth in this Section (3).
(a) Conversion Right. Subject to the limitations of Section (3)(c), at any time or times on or after the Issuance Date, the Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully paid and nonassessable Common Shares in accordance with Section (3)(b), at the Conversion Price (as defined below). The number of Common Shares issuable upon conversion of any Conversion Amount pursuant to this Section (3)(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price. The Company shall not issue any fraction of a Common Shares upon any conversion. All calculations under this Section (3) shall be rounded to the nearest $0.0001. If the issuance would result in the issuance of a fraction of a Common Share, the Company shall round such fraction of a Common Share down to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the issuance and delivery of Common Shares upon conversion of any Conversion Amount, except any tax that is due because the converting Holder requests those shares to be registered in a name other than the Holder’s name.
(b) Mechanics of Conversion.
(i) Optional Conversion. To convert any Conversion Amount into Common Shares on any date (a “Conversion Date”), the Holder shall (A) transmit by email (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”) to the Company and (B) if required by Section (3)(b)(iii), surrender this Debenture to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking reasonably satisfactory to the Company with respect to this Debenture in the case of its loss, theft or destruction). On or before the first (1st) Trading Day following the date of receipt of a Conversion Notice (the “Share Delivery Date”); provided, that a Conversion Notice received after 1:00 p.m., Eastern time, shall be deemed received on the following Trading
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Day solely for purposes of determining the Share Delivery Date, the Company shall (X) if legends are not required to be placed on certificates, direct registration system advice or the book-entry position of the Common Shares and provided that the Transfer Agent is participating in the Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer Program, instruct such transfer agent to credit such aggregate number of Common Shares to which the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program or legends are required, issue and deliver to the address as specified in the Conversion Notice, a certificate, direct registration system advice or book-entry position, registered in the name of the Holder or its designee, for the number of Common Shares to which the Holder shall be entitled which certificates shall not bear any restrictive legends unless required pursuant to rules and regulations of the Commission. If this Debenture is physically surrendered for conversion and the outstanding Principal of this Debenture is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than three (3) Business Days after receipt of this Debenture and at its own expense, issue and deliver to the holder a new Debenture representing the outstanding Principal not converted. The Person or Persons entitled to receive the Common Shares issuable upon a conversion of this Debenture shall be treated for all purposes as the record holder or holders of such Common Shares upon the transmission of a Conversion Notice. Notwithstanding anything to the contrary in this Debenture, if the Common Shares are issued upon a conversion of this Debenture (i) prior to the effectiveness of a Registration Statement or (ii) to a resident of Canada, within four months and a day from the date this Debenture, such Common Shares shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such certificates), as applicable:
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE DECEMBER 14, 2026.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE [OR DRS ADVICE] ARE LISTED ON THE TORONTO STOCK EXCHANGE (“TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES OF TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE [OR DRS ADVICE] REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON TSX”
(ii) Company’s Failure to Timely Convert. If the Company shall fail, for any reason, on or prior to the applicable Share Delivery Date to issue and deliver a certificate or direct registration system advice to the Holder or credit the Holder’s balance account with DTC for the number of Common Shares to which the Holder is entitled upon such Holder’s conversion of any Conversion Amount (a “Conversion Failure”), and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) Common Shares to deliver in satisfaction of a sale by the Holder of Common Shares issuable upon such conversion that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within five (5) Business Days after the Holder’s request, either (i) subject to the Subordination Agreement, pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage
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commissions and other reasonable and documented out of pocket expenses, if any) for the Common Shares so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate or direct registration system advice (and to issue such Common Shares) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates or direct registration system advice representing such Common Shares to which the Holder is entitled with respect to such Conversion Notice and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Common Shares, multiplied by (B) the Closing Price on the Conversion Date.
(iii) Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Debenture in accordance with the terms hereof, the Holder shall not be required to physically surrender this Debenture to the Company unless (A) the full Conversion Amount represented by this Debenture is being converted or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Debenture upon physical surrender of this Debenture. The Holder and the Company shall maintain records showing the Principal and Interest converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Debenture upon any conversion.
(c) Limitations on Conversions.
(i) Beneficial Ownership. The Holder shall not have the right to convert any portion of this Debenture to the extent that after giving effect to such conversion, the Holder, together with any affiliate thereof, would beneficially own (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 4.99% of the number of Common Shares outstanding immediately after giving effect to such conversion. Since the Holder will not be obligated to report to the Company the number of Common Shares it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of Common Shares in excess of 4.99% of the then outstanding Common Shares without regard to any other shares which may be beneficially owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the limitation contained in this Section applies, the determination of which portion of the Principal amount of this Debenture is convertible shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice for a Principal amount of this Debenture that, without regard to any other shares that the Holder or its affiliates may beneficially own, would result in the issuance in excess of the permitted amounts hereunder, the Company shall notify the Holder of this fact and shall honor the conversion for the maximum Principal amount permitted to be converted on such Conversion Date in accordance with Section (3)(a) and, any Principal amount tendered for conversion in excess of the permitted amount hereunder shall remain outstanding under this Debenture. The provisions of this Section may be waived by a Holder (but only as to itself and not to any other Holder) upon not less than sixty-five (65) days prior notice to the Company. Other Holders shall be unaffected by any such waiver.
(ii) Principal Market Limitation. Notwithstanding anything in this Debenture to the contrary, the Company shall not issue any Common Shares upon conversion
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of this Debenture, or otherwise, if the issuance of such Common Shares, together with any Common Shares issued in connection with any other related transactions that may be considered part of the same series of transactions, would exceed the aggregate number Common Shares that the Company may issue in a transaction in compliance with the Company’s obligations under the Principal Market and shall be referred to as the “Exchange Cap,” except that such limitation shall not apply if the Company’s stockholders have approved such issuances on such terms in excess of the Exchange Cap in accordance with the rules and regulations of the Principal Market and the necessary filings required by the Principal Market have been made. Furthermore, the Holder shall not have the right to convert any portion of this Debenture to the extent that after giving effect to such conversion, the Holder, together with any affiliate thereof, would beneficially own in excess of 9.99% of the number of Common Shares outstanding immediately after giving effect to such conversion until it has cleared any requisite personal information forms with the Toronto Stock Exchange.
(d) Other Provisions.
(i) All calculations under this Section (3) shall be rounded to the nearest $0.0001 or whole share.
(ii) [RESERVED].
(iii) Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section (2) herein for the Company’s failure to deliver certificates representing Common Shares upon conversion within the period specified herein and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or provide other security. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under Applicable Law.
(iv) Legal Opinions. The Company is obligated to use commercially reasonable efforts to cause its legal counsel to deliver legal opinions to the Company’s transfer agent in connection with any legend removal upon the expiration of any holding period or other requirement for which the Underlying Shares may bear legends restricting the transfer thereof (i) following any sale of such Underlying Shares pursuant to Rule 144 or pursuant to an effective registration statement or (ii) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC); provided, however, that such Holder has delivered such reasonably requested representations to such transfer agent, the Company and the Company’s legal counsel in connection with the request for such opinion (including from the Holder’s broker, if applicable). To the extent a legal opinion is not provided (either timely or at all), then, the Company agrees to reimburse the Holder for all reasonable and documented costs incurred by the Holder in connection with any legal opinions paid for by the Holder in connection with the sale or transfer of the Underlying Shares. The Holder shall notify the Company of any such costs and expenses it incurs that are referred to in this section from time to time and all amounts owed hereunder shall be paid by the Company with reasonable promptness.
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(e) Adjustment of Conversion Price upon Subdivision or Combination of Common Shares. If the Company, at any time while this Debenture is outstanding, shall (i) pay a stock dividend or otherwise make a distribution or distributions on its Common Shares or any other equity or equity equivalent securities payable in Common Shares, (ii) subdivide outstanding Common Shares into a larger number of shares, (iii) combine (including by way of reverse stock split) outstanding Common Shares into a smaller number of shares, or (iv) issue by reclassification of Common Shares any shares of capital stock of the Company, then each of the Fixed Price and the Floor Price shall be multiplied by a fraction of which the numerator shall be the number of Common Shares (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of Common Shares outstanding after such event. Any adjustment made pursuant to this Section shall become effective, in the case of a dividend distribution, immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution or, in the case of a subdivision, combination or re-classification, and shall become effective immediately after the effective date of such subdivision, combination or re-classification.
(f) [RESERVED].
(g) Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of Common Shares are entitled to receive securities or other assets with respect to or in exchange for Common Shares that is not a Change of Control Transaction (a “Corporate Event”), the Company shall make appropriate provision to ensure that the Holder will thereafter have the right to receive upon a conversion of this Debenture, (i) in addition to the Common Shares receivable upon such conversion, such securities or other assets to which the Holder would have been entitled with respect to such Common Shares had such Common Shares been held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of this Debenture) or (ii) in lieu of the Common Shares otherwise receivable upon such conversion, such securities or other assets received by the holders of Common Shares in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to receive had this Debenture initially been issued with conversion rights for the form of such consideration (as opposed to Common Shares) at a conversion rate for such consideration commensurate with the Conversion Price. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of this Debenture.
(h) Whenever the Conversion Price is adjusted pursuant to Section (3)(e) hereof, the Company shall promptly provide the Holder with a written notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
(i) In case of any (1) merger or consolidation of the Company with or into another Person, or (2) sale by the Company or any Subsidiary of the Company of more than one-half of the assets of the Company and its subsidiaries, taken as a whole, in one or a series of related transactions, a Holder shall have the right to (A) convert the aggregate amount of this Debenture then outstanding into the shares of stock and other securities, cash and property receivable upon or deemed to be held by holders of Common Shares following such merger, consolidation or sale,
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and such Holder shall be entitled upon such event or series of related events to receive such amount of securities, cash and property as the Common Shares into which such aggregate Principal amount of this Debenture could have been converted immediately prior to such merger, consolidation or sales would have been entitled, or (B) in the case of a merger or consolidation, require the surviving entity to issue to the Holder a convertible debenture with a Principal amount equal to the aggregate Principal amount of this Debenture then held by such Holder, plus all accrued and unpaid Interest and other amounts owing thereon, which such newly issued convertible debenture shall have terms identical (including with respect to conversion) to the terms of this Debenture, and shall be entitled to all of the rights and privileges of the Holder of this Debenture set forth herein and the agreements pursuant to which this Debenture was issued. In the case of clause (B), the conversion price applicable for the newly issued shares of convertible preferred stock or convertible debentures shall be based upon the amount of securities, cash and property that each Common Shares would receive in such transaction and the Conversion Price in effect immediately prior to the effectiveness or closing date for such transaction. The terms of any such merger, sale or consolidation shall include such terms so as to continue to give the Holder the right to receive the securities, cash and property set forth in this Section upon any conversion or redemption following such event. This provision shall similarly apply to successive such events.
(4) REISSUANCE OF THIS DEBENTURE.
(a) Transfer. Holder shall not transfer this Debenture other than to its affiliates who are non-residents of Canada for purposes of the Income Tax Act (Canada) for two years from the Issuance Date. Thereafter, this Debenture may be offered, sold, assigned or transferred by the Holder, in whole or in part, with the consent of the Company (not to be unreasonably withheld, conditioned or delayed), subject to the provisions of this Note and the Subordination Agreement, including the requirement that any such transferee sign onto the Subordination Agreement. If this Debenture is to be transferred, the Holder shall surrender this Debenture to the Company, whereupon the Company will forthwith issue and deliver to the Holder a new Debenture (in accordance with Section (4)(d)), registered in the name of the registered transferee or assignee, representing the outstanding Principal being transferred by the Holder (along with any accrued and unpaid Interest thereof) and, if less than the entire outstanding Principal is being transferred, a new Debenture (in accordance with Section (4)(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of Section (3)(b)(iii) following conversion or redemption of any portion of this Debenture, the outstanding Principal represented by this Debenture may be less than the Principal stated on the face of this Debenture.
(b) Lost, Stolen or Mutilated Debenture. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Debenture, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and substance and, in the case of mutilation, upon surrender and cancellation of this Debenture, the Company shall execute and deliver to the Holder a new Debenture (in accordance with Section (4)(d)) representing the outstanding Principal.
(c) Debenture Exchangeable for Different Denominations. This Debenture is exchangeable, upon the surrender hereof by the Holder at the principal office of the
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Company, for a new Debenture or Debentures (in accordance with Section (4)(d)) representing in the aggregate the outstanding Principal of this Debenture, and each such new Debenture will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.
(d) Issuance of New Debentures. Whenever the Company is required to issue a new Debenture pursuant to the terms of this Debenture, such new Debenture (i) shall be of like tenor with this Debenture, (ii) shall represent, as indicated on the face of such new Debenture, the Principal remaining outstanding (or in the case of a new Debenture being issued pursuant to Section (4)(a) or Section (4)(c), the Principal designated by the Holder which, when added to the Principal represented by the other new Debentures issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Debenture immediately prior to such issuance of new Debentures), (iii) shall have an issuance date, as indicated on the face of such new Debenture, which is the same as the Issuance Date of this Debenture, (iv) shall have the same rights and conditions as this Debenture, and (v) shall represent accrued and unpaid Interest from the Issuance Date. For greater certainty, no assignment or transfer shall be or shall be deemed to be a discharge, recission, extinguishment, novation or substitution of this Note and any new Debenture shall continue to be the same obligation and not a new obligation.
(5) NOTICES. Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing by letter or electronic mail (“e-mail”) and will be deemed to have been delivered (i) upon receipt, when delivered personally, (ii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, as applicable or (iii) receipt, when sent by e-mail, and, in each case of the foregoing clauses (i), (ii) and (iii), properly addressed to the party to receive the same. The addresses and e-mail addresses for such communications shall be:
| If to the Company, to: | LITHIUM AMERICAS CORP. | |
| 3260-666 Burrard Street | ||
| Vancouver, British Columbia, Canada V6C 2X8 Attention: Jonathan Evans, President and CEO E-Mail: [***] | ||
| with a copy (which shall not constitute notice) to: |
Vinson & Elkins LLP 1114 6th Avenue, 32nd Floor New York, NY 10036
| |
| If to the Holder: | YA II PN, Ltd | |
| c/o Yorkville Advisors Global, LLC 1012 Springfield Avenue | ||
| Mountainside, NJ 07092 | ||
| Attention: Mark Angelo | ||
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| Telephone: [***] | ||
| Email: [***] |
or at such other address and/or e-mail address and/or to the attention of such other person as the recipient party has specified by written notice given to each other party in accordance with this Section at least three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (a) given by the recipient of such notice, consent, waiver or other communication, (b) electronically generated by the sender’s email service provider containing the time, date, recipient email address or (c) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt from a nationally recognized overnight delivery service or receipt by e-mail in accordance with clause (i), (ii) or (iii) above, respectively.
(6) NO IMPAIRMENT. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligations of the Company, which are absolute and unconditional, to pay the Principal of, and Interest and other charges (if any) on, this Debenture at the time, place, and rate, and in the currency, herein prescribed. This Debenture is a direct obligation of the Company. As long as this Debenture is outstanding, the Company shall not and shall cause each of its subsidiaries not to, without the consent of the Holder, enter into any agreement, arrangement or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability of the Company to perform its obligations under the this Debenture, including, without limitation, the obligation of the Company to make cash payments hereunder, and the Company shall not amend, modify or waive any of its rights under its notice of articles, articles, or other organizational or governing documents, to the extent any such amendment, modification or waiver would be adverse to the Holder.
(7) This Debenture shall not entitle the Holder to any of the rights of a stockholder of the Company, including without limitation, the right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholders or any other proceedings of the Company, unless and to the extent converted into Common Shares in accordance with the terms hereof.
(8) CHOICE OF LAW; VENUE; WAIVER OF JURY TRIAL
(a) Governing Law. This Debenture and the rights and obligations of the Parties hereunder shall, in all respects, be governed by, and construed in accordance with, the laws (excluding the principles of conflict of laws) of the State of New York (the “Governing Jurisdiction”) (including Section 5-1401 and Section 5-1402 of the General Obligations Law of the State of New York), including all matters of construction, validity and performance.
(b) Jurisdiction; Venue; Service.
(i) The Company and the Holder each hereby irrevocably consents to the non-exclusive personal jurisdiction of the state courts of the Governing Jurisdiction and, if a basis for federal jurisdiction exists, the non-exclusive personal jurisdiction of any United States District Court for the Governing Jurisdiction.
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(ii) The Company and the Holder each agrees that venue shall be proper in any court of the Governing Jurisdiction or, if a basis for federal jurisdiction exists, in any United States District Court in the Governing Jurisdiction. The Company waives any right to object to the maintenance of any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, in any of the state or federal courts of the Governing Jurisdiction on the basis of improper venue or inconvenience of forum.
(iii) Any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or tort or otherwise, brought by the Company against the Holder arising out of or based upon this Debenture or any matter relating to this Debenture, or any other Transaction Document, or any contemplated transaction, shall be brought in a court only in the Governing Jurisdiction. The Company shall not file any counterclaim against the Holder in any suit, claim, action, litigation or proceeding brought by the Holder against the Company in a jurisdiction outside of the Governing Jurisdiction unless under the rules of the court in which the Holder brought such suit, claim, action, litigation or proceeding the counterclaim is mandatory, and not permissive, and would be considered waived unless filed as a counterclaim in the suit, claim, action, litigation or proceeding instituted by the Holder against the Company. The Company agrees that any forum outside the Governing Jurisdiction is an inconvenient forum and that any suit, claim, action, litigation or proceeding brought by the Company against the Holder in any court outside the Governing Jurisdiction should be dismissed or transferred to a court located in the Governing Jurisdiction. Furthermore, the Company irrevocably and unconditionally agrees that it will not bring or commence any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Holder arising out of or based upon this Debenture or any matter relating to this Debenture, or any other Transaction Document, or any contemplated transaction, in any forum other than the courts of the State of New York sitting in New York County, and the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such suit, claim, action, litigation or proceeding may be heard and determined in such New York State Court or, to the fullest extent permitted by Applicable Law, in such federal court. The Company and the Holder agree that a final judgment in any such suit, claim, action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(iv) The Company and the Holder irrevocably consent to the service of process out of any of the aforementioned courts in any such suit, claim, action, litigation or proceeding by e-mail or the mailing of copies thereof by registered or certified mail postage prepaid, to it at the e-mail address or physical address, as applicable, provided for notices in this Debenture, such service to become effective thirty (30) days after the date of such e-mail or mailing, as applicable. The Company and the Holder each irrevocably waive any defense it may have on the grounds of insufficient or improper service with respect to service of process effected in accordance with this Section (8)(b)(iv).
(v) Nothing herein shall affect the right of the Holder to serve process in any other manner permitted by law or to commence legal proceedings or to otherwise
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proceed against the Company or any other Person in the Governing Jurisdiction or in any other jurisdiction.
(c) THE PARTIES MUTUALLY WAIVE ALL RIGHT TO TRIAL BY JURY OF ALL CLAIMS OF ANY KIND ARISING OUT OF OR BASED UPON THIS DEBENTURE OR ANY MATTER RELATING TO THIS DEBENTURE, OR ANY OTHER TRANSACTION DOCUMENT, OR ANY CONTEMPLATED TRANSACTION. THE PARTIES ACKNOWLEDGE THAT THIS IS A WAIVER OF A LEGAL RIGHT AND THAT THE PARTIES EACH MAKE THIS WAIVER VOLUNTARILY AND KNOWINGLY AFTER CONSULTATION WITH COUNSEL OF THEIR RESPECTIVE CHOICE. THE PARTIES AGREE THAT ALL SUCH CLAIMS SHALL BE TRIED BEFORE A JUDGE OF A COURT HAVING JURISDICTION, WITHOUT A JURY.
(9) PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Debenture is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Debenture or to enforce the provisions of this Debenture or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Debenture, then the Company shall pay the reasonable and documented out-of-pocket costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, reasonable and documented out-of-pocket attorneys’ fees and disbursements.
(10) Any waiver by the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture. No provision of this Debenture may be waived or amended other than by a written agreement signed by the parties to this Debenture. No custom or practice of the parties at variance with the terms hereof shall constitute a waiver by any party of its right to exercise any right, power or remedy available to it hereunder or any other right, power or remedy or to demand strict compliance with the terms of this Debenture.
(11) If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any Interest or other amount deemed Interest due hereunder shall violate Applicable Laws governing usury, the applicable rate of Interest due hereunder shall automatically be lowered to equal the maximum permitted rate of Interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the Principal of or Interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Debenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such
16
law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such power as though no such law has been enacted.
(12) CERTAIN TAX MATTERS.
(a) No Debenture shall be held or owned or purchased or otherwise acquired by either a “specified foreign entity” or a “foreign-influenced entity” as defined in Section 7701(a)(51)(B) or (D), as applicable, of the Internal Revenue Code of 1986, as amended, or in temporary, proposed or final United States Treasury Regulations or other guidance promulgated or proposed thereunder or issued in respect thereof.
(b) The Company shall be entitled to deduct and withhold taxes on any payments (including non-cash payments of Common Shares) made pursuant to this Debenture to the Holder to the extent required by law (as determined in the good faith discretion of the Company); provided that the Company shall (i) use commercially reasonable efforts to notify the Holder reasonably in advance of such deduction or withholding and (ii) cooperate in good faith with the Holder to reduce or eliminate any such deduction or withholding. To the extent that amounts are so withheld and paid over to the applicable governmental body or agency, such withheld amounts shall be treated for all purposes of this Debenture as having been paid to the Holder in respect of which such deduction or withholding was made.
(13) CERTAIN DEFINITIONS. For purposes of this Debenture, the following terms shall have the following meanings:
(a) “Additional Orion Notes” shall have the meaning set forth in the Securities Purchase Agreement.
(b) “Applicable Laws” means, with respect to any Person, any constitution, statute, law, rule, regulation, code, ordinance, treaty, judgment, order or any published directive, guideline, requirement or other governmental rule or restriction which has the force of law, by or from a court, arbitrator or other Governmental Authority having jurisdiction over such Person or any of its properties, whether in effect as of the date of this Agreement or as of any date hereafter.
(c) “Bloomberg” means Bloomberg Financial Markets (or if not available, a similar service provider of national recognized standing).
(d) “Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close.
(e) “Buy-In” shall have the meaning set forth in Section (3)(b)(ii).
(f) “Buy-In Price” shall have the meaning set forth in Section (3)(b)(ii).
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(g) “Capitalized Interest” means, with respect to the payment of Interest on an Interest Date, the amount of such Interest that the Company has elected to pay by way of inclusion of such Interest in the Principal.
(h) “Cash Interest” means, with respect to the payment of Interest on an Interest Date, the amount of such Interest that the Company has elected (or is deemed to have elected) in accordance with Section 1(b) to pay in cash
(i) “Change of Control Transaction” means the occurrence of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Sections 13(d) and 14(b) of the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of fifty percent (50%) of the voting power of the Company (except that the acquisition of voting securities by the Holder or any other current holder of convertible securities of the Company shall not constitute a Change of Control Transaction for purposes hereof) or (b) the sale of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, in one or a series of related transactions. No transfer to a wholly-owned Subsidiary shall be deemed a Change of Control Transaction under this provision.
(j) “Closing Price” means the price per share in the last reported trade of the Common Shares on a Principal Market or on the exchange which the Common Shares is then listed as quoted by Bloomberg, provided that if the Common Shares are listed or traded on both the NYSE and the TSX, then the Principal Market for the purposes of this definition shall be the NYSE.
(k) “Commission” means the Securities and Exchange Commission.
(l) “Common Shares” means the common shares, no par value, of the Company and stock of any other class into which such shares may hereafter be changed or reclassified.
(m) “Conversion Amount” means the portion of the Principal, Interest, or other amounts outstanding under this Debenture to be converted, redeemed or otherwise with respect to which this determination is being made.
(n) “Conversion Date” shall have the meaning set forth in Section (3)(b)(i).
(o) “Conversion Failure” shall have the meaning set forth in Section (3)(b)(ii).
(p) “Conversion Notice” shall have the meaning set forth in Section (3)(b)(i).
(q) “Conversion Price” means, as of any Conversion Date or other date of determination the lower of (i) $4.56 per Common Share (the “Fixed Price”), or (ii) 95% of the lowest daily VWAP during the five (5) consecutive Trading Days immediately preceding the Conversion Date or other date of determination (the “Variable Price”), but which Variable Price
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shall not be lower than the Floor Price then in effect. The Conversion Price shall be adjusted from time to time pursuant to the other terms and conditions of this Debenture.
(r) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(s) “Floor Price” solely with respect to the Variable Price, shall mean $1.63 per Common Share; provided, if at any time after the date of the Securities Purchase Agreement the daily VWAP is less than the Floor Price then in effect for ten (10) Trading Days during a period of fifteen (15) consecutive Trading Days (the date of any such occurrence, a “Reset Date”), then the Floor Price then in effect shall automatically, and without any further action required of the Company or the Holder, be reduced by an amount equal to $0.33 per Common Share; provided, provided however, if such reduced Floor Price would be greater than the Closing Price as of the Reset Date, then the Floor Price shall be reduced to a price equal to 90% of such Closing Price, provided further, that in no event shall the Floor Price be reduced to an amount less than $0.65 per Common Share (the “Hard Floor Price”).
(t) “Fundamental Transaction” means any of the following: (1) the Company effects any merger or consolidation of the Company with or into another Person and the Company is the non-surviving company (other than a merger or consolidation with a wholly owned Subsidiary of the Company for the purpose of redomiciling the Company), (2) the Company effects any sale of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, in one or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Shares are permitted to tender or exchange their shares for other securities, cash or property, or (4) the Company effects any reclassification of the Common Shares or any compulsory share exchange pursuant to which the Common Shares is effectively converted into or exchanged for other securities, cash or property.
(u) “Governmental Authority” means the government of the U.S., Canada, any other nation or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entirety exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
(v) “Material Adverse Effect” has the meaning given such term in the Securities Purchase Agreement.
(w) “NYSE” means the New York Stock Exchange.
(x) “Orion Note” means that certain Convertible Note, dated April 1, 2025, issued by the Company to OMF Fund IV SPV M LLC, as amended, restated, supplemented, or otherwise modified from time to time.
(y) “Orion Transaction Documents” shall have the meaning set forth in the Securities Purchase Agreement.
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(z) “Optional Redemption” shall have the meaning set forth in Section (1)(d).
(aa) “Other Debentures” means any other outstanding debentures issued pursuant to the Securities Purchase Agreement and any other debentures, notes, or other instruments issued in exchange, replacement, or modification of the foregoing.
(bb) “Payment Premium” means 10% of the Principal Amount being paid.
(cc) “Periodic Reports” shall mean all of the Company’s reports required to be filed by the Company with the Commission under Applicable Laws and regulations (including, without limitation, Regulation S-K), on Form 10-K and on Form 10-Q, for so long as any amounts are outstanding under this Debenture; provided that all such Periodic Reports shall include, when filed, all information, financial statements, audit reports (when applicable) and other information required to be included in such Periodic Reports in compliance with all Applicable Laws and regulations.
(dd) “Person” means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.
(ee) “Principal Market” means the NYSE and the Toronto Stock Exchange, provided however, that in the event the Common Shares are ever listed or traded on any of the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Select Market or the Nasdaq Global Market, the “Principal Markets” shall include those markets on which the Common Shares are then listed or traded.
(ff) “Redemption Amount” shall have the meaning set forth in (1)(d).
(gg) “Redemption Notice” shall have the meaning set forth in (1)(d).
(hh) “Registration Rights Agreement” has the meaning given such term in the Securities Purchase Agreement.
(ii) “Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement, covering among other things the resale of the Underlying Shares and naming the Holder as a “selling stockholder” thereunder.
(jj) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(kk) “Share Delivery Date” shall have the meaning set forth in Section (3)(b)(i).
(ll) “Subordination Agreement” shall have the meaning set forth in Section 1(g) of this Debenture.
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(mm) “Subsidiary” shall mean any Person in which the Company, directly or indirectly, (x) owns a majority of the outstanding capital stock or holds a majority of the equity or similar interest of such Person or (y) controls or operates all or substantially all of the business, operations or administration of such Person, and the foregoing are collectively referred to herein as “Subsidiaries.”
(nn) “Significant Subsidiary” means all Subsidiaries of the Company that are direct or indirect parent companies of Lithium Nevada Ventures, LLC and its successors.
(oo) “Trading Day” means a day on which the Common Shares are quoted or traded on a Principal Market on which the Common Shares are then quoted or listed; provided, that in the event that the Common Shares are not listed or quoted, then Trading Day shall mean a Business Day, provided that if the Common Shares are listed or traded on both the NYSE and the TSX, then the Principal Market for the purposes of this definition shall be the NYSE.
(pp) “Transaction Document” has the meaning given such term in the Securities Purchase Agreement.
(qq) “Trigger Event Period” means each period commencing on the first date on which (A) (i) the daily VWAP is less than the Hard Floor Price then in effect for fifteen Trading Days during a period of twenty consecutive Trading Days (a “Floor Price Event”), (ii) at any time after the Effectiveness Deadline (as defined in the Registration Rights Agreement), the Holder is unable to utilize a Registration Statement to resell Underlying Shares for a period of twenty (20) consecutive Trading Days (not including during any allowable grace period pursuant to an in accordance with the terms of the Registration Rights Agreement) (a “Registration Event”), or (iii) the Company has issued in excess of 99% of the Common Shares available under the Exchange Cap (an “Exchange Cap Event”), and ending on (B) (i) in the event of a Floor Price Event, the date that is the 10th consecutive Trading Day that the daily VWAP is greater than the Floor Price then in effect, (ii) in the event of a Registration Event, the date that the condition or event causing the Registration Event has been cured or the Holder is able to resell the Common Shares issuable upon conversion of this Debenture in accordance with Rule 144 under the Securities Act, and (iii) in the event of an Exchange Cap Event, the date on which the Company first obtains the approval of its stockholders for the issuance of Common Shares in excess of the Exchange Cap in accordance with the rules and regulations of the TSX and the NYSE.
(rr) “Underlying Shares” means the Common Shares issuable upon conversion of this Debenture in accordance with the terms hereof.
(ss) “VWAP” means, for any Trading Day, the daily volume weighted average price of the Common Shares for such Trading Day on the Principal Market during regular trading hours as reported by Bloomberg L.P., provided that if the Common Shares are listed or traded on both the NYSE and the TSX, then the Principal Market for the purposes of this definition shall be the NYSE.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Convertible Debenture to be duly executed by a duly authorized officer as of the date set forth above.
| COMPANY: | ||
| LITHIUM AMERICAS CORP. | ||
| By: | /s/Jonathan Evans | |
| Name: Jonathan Evans | ||
| Title: President and Chief Executive Officer | ||
EXHIBIT I
CONVERSION NOTICE
(To be executed by the Holder in order to Convert the Debenture)
TO: LITHIUM AMERICAS CORP.
Via Email:
The undersigned hereby irrevocably elects to convert a portion of the outstanding and unpaid Conversion Amount of Debenture No. LAC-001 into Common Shares of LITHIUM AMERICAS CORP., according to the conditions stated therein, as of the Conversion Date written below.
Conversion Date:
Principal Amount to be Converted:
Payment Premium (if applicable):
Accrued Interest to be Converted:
Total Conversion Amount to be converted:
Fixed Price:
Variable Price:
Applicable Conversion Price:
Number of Common Shares to be issued:
Please issue the Common Shares in the following name and deliver them to the following account:
Issue to:
Broker DTC Participant Code:
Account Number:
| Authorized Signature: |
||||
| Name: |
||||
| Title: | ||||
Exhibit 4.2
Certain identified information in this Agreement denoted with “[***]” has been excluded from this exhibit pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both not material and of the type that the registrant treats as private and confidential.
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into effective as of August 5, 2026 by and between Lithium Americas Corp., a corporation existing under the laws of the Province of British Columbia, Canada (the “Company”), and YA II PN, Ltd., a Cayman Islands exempt limited company (the “Buyer”).
WHEREAS:
A. In connection with the Securities Purchase Agreement by and between the Company and the Buyer, dated as of August 5, 2026 (as may be amended, amended and restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions of the Purchase Agreement, to issue and sell to the Buyer up to $175,000,000 in aggregate principal amount of subordinated convertible debentures (the “Convertible Debentures”), which will, among other things, be convertible into the Company’s common shares, no par value per share (the “Common Shares”) (the Common Shares issuable upon conversion under the terms of the Convertible Debentures, collectively, the “Conversion Shares”).
B. In accordance with the terms of the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Buyer hereby agree as follows:
1. Definitions.
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
(a) “Affiliate” shall have the meaning ascribed to such term in Rule 405 of the Securities Act.
(b) “Automatic Shelf” means an “automatic shelf registration statement” within the meaning of Rule 405 under the Securities Act.
(c) “Business Day” means any day, other than (i) a Saturday, Sunday or statutory holiday in the Province of British Columbia or the City of New York and (ii) a day on which banks are generally closed in the Province of British Columbia or the City of New York.
(d) “Delayed Convertible Debentures” means the Convertible Debentures issued in connection with a Delayed Closing.
(e) “effective” and “effectiveness” refer to a Registration Statement that has been declared effective by the SEC or otherwise becomes effective automatically in accordance with the rules and regulations of the SEC and is available for the resale of the Registrable Securities required to be covered thereby.
(f) “Effective Date” means the date that the Registration Statement has been declared effective by the SEC or otherwise becomes effective automatically in accordance with the rules and regulations of the SEC.
(g) “Effectiveness Deadline” means if the Company is not eligible to file an Automatic Shelf (i) 60 calendar days after the Filing Deadline in the case of a filing on Form S-3 and (ii) 90 days calendar after the Filing Deadline in the case of a filing on Form S-1.
(h) “Eligible Markets” means the New York Stock Exchange, the NYSE American, The Nasdaq Capital Market, The Nasdaq Global Select Market or The Nasdaq Global Market (or any of their respective successors).
(i) “Filing Date” means the date on which the Registration Statement is initially filed with the SEC.
(j) “Filing Deadline” means (i) three (3) Business Days following the date of filing of the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2026, in respect of the Initial Convertible Debentures, and (ii) if required, ten (10) business days after a Delayed Closing, in respect of the Delayed Convertible Debentures.
(k) “Initial Convertible Debentures” means the Convertible Debentures issued in connection with the First Closing.
(l) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and any government or any department or agency thereof.
(m) “register,” “registered,” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements in compliance with the Securities Act and pursuant to Rule 415, and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC or such Registration Statement otherwise becoming automatically effective in accordance with the rules and regulations of the SEC.
(n) “Registrable Securities” means (i) the Conversion Shares issued or issuable pursuant to the terms of the Initial Convertible Debentures and the Delayed Convertible Debentures, it being understood that the Conversion Shares issuable upon conversion of the Delayed Convertible Debentures shall not be “Registrable Securities” unless and until the corresponding Delayed Convertible Debentures are issued and sold to the Buyer, and (ii) any capital stock of the Company issued or issuable with respect to the Convertible Debentures or the Conversion Shares as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, in each case, without regard to any limitations on conversion and/or redemption of the Convertible Debentures; provided, that any Registrable Security will cease to be a Registrable Security upon the earliest to occur of when (A) a Registration Statement covering
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such Registrable Security has become effective under the Securities Act and such Registrable Security has been disposed of pursuant to such Registration Statement, (B) such Registrable Security may (at such time and/or upon issuance, as applicable) be disposed of without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under the Securities Act, and any restrictive legend thereon has been removed or (C) such Registrable Security has been sold or disposed of in a transaction in which the Transferor’s rights under this Agreement are not assigned to the Transferee pursuant to Section 9; and provided, further, that any security that has ceased to be a Registrable Security shall not thereafter become a Registrable Security and any security that is issued or distributed in respect of any security that was a Registrable Security and has ceased to be a Registrable Security shall not be a Registrable Security.
(o) “Registration Statement” means a registration statement or registration statements of the Company filed under the Securities Act covering the resale of the Registrable Securities.
(p) “Required Registration Amount” means, with respect to the Registration Statement to be filed in connection with the Initial Convertible Debentures, 72,553,609, and as of any other time of determination, the Registrable Securities then issued or issuable pursuant to the terms of the Convertible Debentures, determined without regard to any limitations on conversion of the Convertible Debentures and assuming that the Convertible Debentures are then fully convertible into Common Shares at the then prevailing applicable conversion contemplated therein.
(q) “Rule 415” means Rule 415 promulgated under the Securities Act or any successor rule providing for offering securities on a continuous or delayed basis.
(r) “SEC” means the United States Securities and Exchange Commission.
(s) “Transfer” means any offer, sale, pledge, encumbrance, hypothecation, entry into any contract to sell, grant of an option to purchase, short sale, assignment, transfer, exchange, gift, bequest or other disposition, direct or indirect, in whole or in part, by operation of law or otherwise. “Transfer,” when used as a verb, and “Transferee” and “Transferor” have correlative meanings.
(t) “WKSI” means a “well-known seasoned issuer” within the meaning of Rule 405 under the Securities Act.
2. Registration.
(a) Mandatory Registration. The Company shall use commercially reasonable efforts to prepare, and, as soon as reasonably practicable but in no event later than the applicable Filing Deadline, to file with the SEC (1) a Registration Statement covering the resale of the Required Registration Amount of Registrable Securities in respect of the Initial Convertible Debentures; and (2) a Registration Statement covering the resale of the Required Registration Amount of Registrable Securities in respect of the Delayed Convertible Debentures, provided such Registration Statement may be effected via post-effective amendment to such Registration Statement covering the resale of the Required Registration Amount of Registrable Securities in
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respect of the Initial Convertible Debentures. Each such Registration Statement shall be on Form S-3 and shall be an Automatic Shelf if the Company shall then be a WKSI (any such Registration Statement, a “WKSI Registration Statement”)); provided that, and subject to Section 2(c), if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, such registration shall be on Form S-1, and if for any reason the Company is not then eligible to register for resale the Registrable Securities on Form S-1, then such registration shall be on another appropriate form for such purpose. Each such Registration Statement shall contain (except if otherwise directed by the Buyer) the “Plan of Distribution” and “Selling Shareholders” sections in form reasonably satisfactory to the Buyer. If a Registration Statement is not a WKSI Registration Statement, the Company shall use its commercially reasonable efforts to have such Registration Statement declared effective by the SEC as soon as reasonably practicable after the filing thereof and in any event, no later than the applicable Effectiveness Deadline.
(b) Legal Counsel. Subject to Section 5 hereof, the Buyer shall have the right to select one legal counsel to review and oversee any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Duane Morris LLP or such other counsel as thereafter designated by the Buyer. The Company and Legal Counsel shall reasonably cooperate with each other in performing the Company’s obligations under this Agreement.
(c) Ineligibility for Form S-3. In the event that Form S-3 (or such other form type applicable to an existing Registration Statement) is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on Form S-1 or another appropriate form reasonably acceptable to the Buyer and (ii) undertake to register the Registrable Securities on Form S-3 reasonably promptly after such form becomes available (and, to the extent the Company qualifies as a WKSI as of the initial filing date for such Registration Statement, such Registration Statement shall be an Automatic Shelf); provided, that the Company shall use commercially reasonable efforts to maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC or otherwise becomes effective automatically in accordance with the rules and regulations of the SEC.
(d) Sufficient Number of Shares Registered. In the event the number of shares registered for resale by the Buyer under a Registration Statement filed pursuant to Section 2(a) or Section 2(c) is insufficient to cover the number of Conversion Shares issued or issuable pursuant to the terms of the Convertible Debentures and, without duplication, all of the Registrable Securities (a “Registration Deficiency”), the Company shall, upon the Buyer’s written request, in the case of an existing and effective Automatic Shelf, promptly file a new prospectus supplement, or use commercially reasonable efforts to amend the applicable Registration Statement, or file a new Registration Statement (on Form S-3 or another short form registration available therefor and as an Automatic Shelf, if applicable), or both, so as to cover at least the Required Registration Amount of Registrable Securities as of the Business Day immediately preceding the date of the filing of such prospectus supplement, amendment or new Registration Statement, in each case, as soon as practicable, but in any event not later than ten (10) calendar days after such request is received. The Company shall use commercially reasonable efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof.
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3. Related Obligations.
At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), 2(c) or 2(d), the Company will use its commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall use its commercially reasonable efforts to comply with the following obligations:
(a) The Company shall keep each Registration Statement effective pursuant to Rule 415 at all times until all of the Registrable Securities covered by such Registration Statement have ceased to be Registrable Securities (the “Registration Period”). The Company shall ensure that, when effective, (i) each Registration Statement (including any amendments or supplements thereto) will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) in the case of any prospectus contained in a Registration Statement, such prospectus will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which such statements were made, not misleading. The Company shall respond in writing to comments made by the SEC in respect of a Registration Statement or any of the documents incorporated by reference therein as soon as reasonably practicable after receipt thereof.
(b) Subject to the provision by each holder of Registrable Securities of all information reasonably requested by the Company for such purposes, the Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424(b) promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q, Form 8-K, proxy statement or any analogous report under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company shall, if permitted under the applicable rules and regulations of the SEC, have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements to such Registration Statement with the SEC on the same day on which the Exchange Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement.
(c) The Company shall (A) permit the Buyer and Legal Counsel to review and comment upon (i) a Registration Statement at least five (5) Business Days prior to its filing with the SEC, with comments to be furnished within 24 hours of the receipt thereof from the Company and (ii) all amendments and supplements to all Registration Statements (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and any similar or successor reports) within a reasonable number of days prior to their filing with
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the SEC, and (B) not file any Registration Statement or amendment or supplement thereto in a form to which the Buyer and/or Legal Counsel reasonably objects in writing, unless the Company determines in good faith that such filing is required by applicable law. The Company shall not submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto without the prior approval of the Buyer and Legal Counsel, which consent shall not be unreasonably withheld. The Company shall furnish to the Buyer and Legal Counsel, without charge, (i) copies of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to any Registration Statement, (ii) unless the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system, promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by the Buyer, and all exhibits and (iii) upon the effectiveness of any Registration Statement, one PDF copy of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such number of written copies as Legal Counsel or the Buyer may reasonably request). The Company shall reasonably cooperate with the Buyer and Legal Counsel in performing the Company’s obligations pursuant to this Section 3.
(d) The Company shall furnish to the Buyer, without charge, such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including financial statements and schedules, all exhibits and, if requested by the Buyer, all documents incorporated therein by reference), the prospectus included therein (including each preliminary prospectus) and such other documents as the Buyer may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Buyer.
(e) If applicable, the Company shall cooperate with the Buyer to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by the Buyer of the Registrable Securities covered by a Registration Statement under such other securities or “blue sky” laws of such jurisdictions in the United States as the Buyer shall reasonably request, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and the Buyer who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any applicable jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.
(f) The Company shall notify Legal Counsel and the Buyer in writing of the happening of any event, as promptly as practicable after becoming aware of such event but in any event no later than the next Business Day following such event, as a result of which the prospectus
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included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and, subject to Section 3(o), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and, if requested by the Buyer, deliver one PDF copy of such supplement or amendment to Legal Counsel and the Buyer (or such number of written copies as Legal Counsel or the Buyer may reasonably request). The Company shall also promptly notify Legal Counsel and the Buyer in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and the Buyer by facsimile or email on the same day of such effectiveness), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate, and (iv) of the Company’s reasonable determination that the Company is no longer eligible to use an existing Registration Statement. In the event that clause (iv) of the immediately preceding sentence is applicable, the Company shall file a new or amended Registration Statement on an appropriate form in accordance with Section 2(c), provided, that if such existing Registration Statement is on Form S-3, the Company will not be required to file a new or amended Registration Statement prior to the filing of its next update to the Registration Statement under Section 10(a)(3) of the Securities Act, provided that the existing Registration Statement on Form S-3 remains useable until such next update.
(g) The Company shall prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to promptly obtain the withdrawal of such order or suspension and to notify Legal Counsel and the Buyer of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.
(h) The Company shall hold in confidence and not make any disclosure of information concerning the Buyer provided to the Company unless (i) disclosure of such information is necessary to comply with federal, state or provincial securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning the Buyer is sought by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Buyer and allow the Buyer, at the Buyer’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.
(i) The Company shall (i) cause all of the Registrable Securities covered by a Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable
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Securities is then permitted under the rules of such exchange or (ii) secure the inclusion for listing or quotation of all of the Registrable Securities on at least one of the Eligible Markets. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 3(i).
(j) The Company shall instruct its transfer agent to issue (and shall cooperate with its transfer agent with respect to such issuance) all Registrable Securities (i) covered by a Registration Statement, to the extent they are issued or delivered to the Buyer after the effective date of such Registration Statement, and if the applicable holder of such Registrable Securities delivers to the Company a customary “will-comply” representation letter agreeing that such Registrable Securities will be sold under such effective registration statement, or (ii) eligible upon issuance for sale under Rule 144 without the requirement that the Company has complied with the public reporting requirements of the Exchange Act, free of any U.S. restrictive legends, and the Company shall direct its transfer agent to issue or transfer all such Registrable Securities without such legends and deposit such Registrable Securities in the appropriate account balance account at the Depository Trust Company (“DTC”) in accordance with the instructions of the holder of such Registrable Securities. The Company shall cooperate with the Buyer and, to the extent applicable, facilitate the timely preparation and delivery of certificates (or book-entry notations) (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates (or book-entry notations) to be in such denominations or amounts, as the case may be, as the Buyer may reasonably request and registered in such names as the Buyer may request; provided, that the Buyer has provided all documentation and evidence (which may include an opinion of counsel and a customary representation letter) as may be reasonably required by the Company, its counsel or its transfer agent. Notwithstanding anything to the contrary in this Agreement, if the Registrable Securities are issued within four months and a day from the date on which the Convertible Debentures are issued to a resident of Canada, such Registrable Securities will bear the following legend: “UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [Insert date that is 4 months and a day from issuance of the Convertible Debentures], 2026.” and be subject to any applicable resale restrictions under the securities laws of Canada.
(k) If requested by the Buyer, the Company shall as soon as practicable (i) incorporate in a prospectus supplement or post-effective amendment to the Registration Statement such information as the Buyer reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the Buyer and the number of Registrable Securities being offered or sold by the Buyer and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably requested by the Buyer holding any Registrable Securities.
(l) The Company shall cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.
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(m) The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the Securities Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following the applicable Effective Date of a Registration Statement.
(n) The Company shall otherwise comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.
(o) Notwithstanding anything to the contrary herein, the Company may (i) delay the filing or effectiveness of a Registration Statement (or any amendment thereto) or (ii) suspend the Buyer’s use of any prospectus that is part of a Registration Statement upon prompt written notice to the Buyer whose Registrable Securities are included in such Registration Statement (a “Suspension Notice”) (provided that in no event shall such notice contain any material non-public information regarding the Company) (in which event the Buyer shall discontinue sales of Registrable Securities pursuant to such Registration Statement but may settle any then-contracted sales of Registrable Securities), in each case for a period of up to forty-five (45) days, if the Board of Directors of the Company determines that (A) such delay or suspension is in the best interest of the Company and its shareholders generally due to a pending financing or other transaction involving the Company (including a pending securities offering by the Company), (B) such registration or use of such prospectus would render the Company unable to comply with applicable securities laws in any material respect or (C) such registration or use of such prospectus would require disclosure of material information that the Company has a bona fide business purpose for preserving as confidential (any such period, a “Grace Period”); provided, that the Company shall promptly notify the Buyer in writing of the date on which the Grace Period ends; and, provided further, that no Grace Periods collectively shall exceed an aggregate of ninety (90) days during any three hundred sixty five (365) day period (each, an “Allowable Grace Period”). For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Buyer receive the notice referred to above and shall end on and include the later of (x) the date the Buyer receives the notice referred to above and (y) the date referred to in such notice. Upon expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information is no longer applicable.
(p) Other than as disclosed in its filings or any of its documents furnished with the SEC, neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of materially impairing the rights granted to the Buyer in this Agreement or that otherwise materially conflicts with the provisions hereof.
(q) The Company shall instruct its transfer agent to remove (and shall cooperate with the transfer agent with respect to the removal of) any legend, notation or similar designation restricting transferability of the Registrable Securities from the certificates or book-entries evidencing Registrable Securities and deposit such Registrable Securities in the appropriate account balance account at the DTC (as directed by the holder of such Registrable Securities) if
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such Common Shares (i) are sold pursuant to an effective registration statement under the Securities Act, (ii) a registration statement covering the resale of the Registrable Securities is effective under the Securities Act and the applicable holder of such Registrable Securities delivers to the Company a customary “will-comply” representation letter agreeing that such Registrable Securities will be sold under such effective registration statement, (iii) are sold or transferred pursuant to Rule 144 or (iv) are eligible for sale under Rule 144 without the requirement that the Company has complied with the public reporting requirements of the Exchange Act. Each holder of Registrable Securities agrees to provide the Company, its counsel and/or the transfer agent with evidence reasonably requested by it in order to cause the removal of such legend, including, as may be appropriate, any information the Company reasonably deems necessary to determine that the legend, notation or similar designation is no longer required under the Securities Act or applicable state laws, including, in the case of clause (iv) of the immediately preceding sentence only, a certification that the holder is not an Affiliate of the Company and regarding the length of time the Convertible Debentures and/or Common Shares have been held since the date such securities were acquired from the Company or an Affiliate of the Company. Any fees of the Company, the transfer agent and the Company’s counsel or Legal Counsel associated with the issuance of any legal opinion required by the Company’s transfer agent or the removal of such legend shall be borne by the Company.
(r) [Omitted.]
(s) In the event that the Buyer elects to dispose of Registrable Securities totaling 5% or more of the outstanding Common Shares of the Company pursuant to a block trade (a “Block Trade”), the Company shall, at the request of the Buyer, enter into customary agreements and shall take all such other customary actions as are requested by the Buyer in order to expedite or facilitate the disposition of such Registrable Securities.
4. Obligations of the Buyer.
(a) At least five (5) Business Days prior to the first anticipated Filing Date of a Registration Statement, the Company shall notify the Buyer in writing of the information the Company requires from the Buyer if the Buyer elects to have any of the Buyer’s Registrable Securities included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete any registration pursuant to this Agreement with respect to the Registrable Securities of the Buyer that the Buyer shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.
(b) The Buyer, by the Buyer’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder.
(c) The Buyer agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or Section 3(f), the Buyer will immediately discontinue disposition of Registrable Securities pursuant to any Registration
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Statement(s) covering such Registrable Securities until the Buyer’s receipt of copies of the supplemented or amended prospectus, or new or amended Registration Statement, as contemplated by Section 3(g) or Section 3(f) or receipt of notice that no supplement or amendment or new or amended Registration Statement is required. Notwithstanding anything to the contrary, subject to compliance with applicable securities laws and Section 3(j) herein, the Company shall cause its transfer agent to deliver unlegended certificates for Common Shares to a transferee of the Buyer in accordance with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which the Buyer has entered into a contract for sale prior to the Buyer’s receipt of a notice from the Company of the happening of any event of the kind described in Section 3(o) and for which the Investor has not yet settled.
(d) The Buyer covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.
5. Expenses of Registration.
All reasonable and documented expenses, other than underwriting discounts and commissions and any fees and expenses of counsel engaged by the Buyer, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company, shall be paid by the Company.
6. Indemnification.
With respect to Registrable Securities that are included in a Registration Statement under this Agreement:
(a) To the fullest extent permitted by law, the Company shall, and hereby does, indemnify, hold harmless and defend the Buyer, its Affiliates, the directors, officers, partners, members, employees of, and each Person, if any, who controls the Buyer or its Affiliates within the meaning of the Securities Act or the Exchange Act (each, an “Indemnified Person”), against any losses (other than loss of profits), claims (including claims asserted directly by or between an Indemnified Person and the Company), damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several (collectively, “Claims”), incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered, or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus if used prior
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to the effective date of such Registration Statement, or included in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary in order to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”), except in each case as arises from such Indemnified Person’s own gross negligence, willful misconduct or bad faith. Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable and documented expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto; and (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the Transfer of the Registrable Securities by the Buyer pursuant to Section 9.
(b) In connection with any Registration Statement, the Buyer agrees to indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Buyer expressly for use in connection with such Registration Statement; and, subject to Section 6(c), the Buyer shall reimburse the Indemnified Party for any legal or other expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Claim that relates to such a Violation; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Buyer, which consent shall not be unreasonably withheld or delayed; provided, further, however, that the Buyer shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to the Buyer as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the Transfer of the Registrable Securities by the Buyer pursuant to Section 9.
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(c) Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and, the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses of not more than one counsel for all such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the Indemnified Person or Indemnified Party, as applicable, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. In the case of an Indemnified Person, legal counsel referred to in the immediately preceding sentence shall be selected by the Buyer. The Indemnified Party or Indemnified Person shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation and such settlement shall not include any admission as to fault on the part of the Indemnified Party. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6.
(d) The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.
(e) The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.
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7. Contribution.
To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement.
8. Reports Under the Exchange Act.
With a view to making available to the Buyer the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Buyer to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees to use its reasonable best efforts to:
(a) make and keep public information available, as those terms are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and
(c) furnish to the Buyer so long as the Buyer owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company (the delivery of which will be satisfied by the Company’s filing of such reports with the SEC through EDGAR), and (iii) such other information as may be reasonably requested to permit the Buyer to sell such securities pursuant to Rule 144 without registration.
9. Assignment of Registration Rights.
The rights under this Agreement may be assigned to a Transferee of Registrable Securities pursuant to the terms and subject to the restrictions on transfer set forth in the Purchase Agreement.
10. Amendment of Registration Rights.
Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Buyer. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon the Buyer and the Company. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities.
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No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to this Agreement.
11. Miscellaneous.
(a) If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable Securities.
(b) Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon delivery, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii) upon delivery, when sent by electronic mail (provided that the sending party does not receive an automated rejection notice); or (iv) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and email addresses for such communications shall be:
If to the Company:
Lithium Americas Corp.
3260-666 Burrard Street
Vancouver, British Columbia, Canada V6C 2X8
Attention: Jonathan Evans, President and CEO
E-Mail: [***]
With a copy (for informational purposes only) to each of:
Vinson & Elkins L.L.P.
845 Texas Avenue
Suite 4700
Houston, Texas 77001
Attention: Jackson O’Maley; Ben Heriaud; Layton Suchma
Email: [***]
and
Cassels Brock & Blackwell LLP
Suite 2200, RBC Place, 885 West Georgia St.
Vancouver, BC V6C, 3E8
Attention: David Redford
Email: [***]
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If to Legal Counsel:
c/o Yorkville Advisors Global, LP
1012 Springfield Avenue
Mountainside, NJ 07092
Attention: David Fine, Esq.
Email: [***]
If to the Buyer, to its address and/or email address set forth on the Buyer Schedule attached hereto, with copies to such Buyer’s representatives as set forth on the Buyer Schedule, or to such other address and/or email address to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s email containing the time, date and an image of the first page of such transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service or receipt from a reputable overnight delivery service in accordance with clause (A), (B) or (C) above, respectively.
(c) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.
(d) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(e) If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
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broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
(f) This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.
(g) Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.
(h) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(i) This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile or email transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
(j) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(k) All consents and other determinations required to be made by the Buyer pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Buyer, determined as if all of the outstanding Notes then held by the Buyer have been converted for Registrable Securities without regard to any limitations on redemption and/or conversion of the Convertible Debentures.
(l) The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.
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(m) This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
(n) Legal Counsel may rely on instructions from the Buyer.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Buyer and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.
| COMPANY: | ||
| LITHIUM AMERICAS CORP. | ||
| By: | /s/ Jonathan Evans | |
| Name: | Jonathan Evans | |
| Title: | President and Chief Executive Officer | |
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the Buyer and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.
| BUYER: | ||
| YA II PN, LTD. | ||
| By: Yorkville Advisors Global, LP | ||
| Its: Investment Manager | ||
| By: Yorkville Advisors Global II, LLC | ||
| Its: General Partner | ||
| By: | /s/ Matt Beckman | |
| Name: | Matt Beckman | |
| Title: | Member | |
[Signature Page to Registration Rights Agreement]
BUYER SCHEDULE
| Buyer |
Buyer Address and Email Address |
Buyer’s Representative’s Address | ||
| YA II PN, Ltd. | c/o Yorkville Advisors Global, LP 1012 Springfield Avenue Mountainside, NJ 07092 Attention: David Fine, Esq. Email: [***] |
Duane Morris LLP 22 Vanderbilt 335 Madison Avenue, 23rd Floor New York, New York 10017 Attention: James T. Seery Email: [***] |