UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Amendment No. 2
OBSIDIAN ENERGY LTD.
(Name of Issuer)
Common Shares
(Title of Class of Securities)
674482104
(CUSIP Number)
Kernwood Limited
Suite 605
79 Wellington Street West
Toronto, ON M5K 1K7
(416) 423-3251
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 4, 2018
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.
*
Note
: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
1
|
NAMES OF REPORTING PERSONS
Edward J. Kernaghan
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS:
|
PF
|
5
|
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e):
|
[ ]
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH:
|
7
|
SOLE VOTING POWER
|
10,025,500
|
8
|
SHARED VOTING POWER
|
|
9
|
SOLE DISPOSITIVE POWER
|
10,025,500
|
10
|
SHARED DISPOSITIVE POWER
|
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
34,791,375
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.9%
|
14
|
TYPE OF REPORTING PERSON
IN
|
1
|
NAMES OF REPORTING PERSONS
Kernwood Limited
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS:
|
PF
|
5
|
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e):
|
[ ]
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Ontario, Canada
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH:
|
7
|
SOLE VOTING POWER
|
0
|
8
|
SHARED VOTING POWER
|
20,184,200
|
9
|
SOLE DISPOSITIVE POWER
|
0
|
10
|
SHARED DISPOSITIVE POWER
|
20,184,200
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20,184,200
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.0%
|
14
|
TYPE OF REPORTING PERSON
CO
|
1
|
NAMES OF REPORTING PERSONS
Principia Research Inc.
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS:
|
PF
|
5
|
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e):
|
[ ]
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Ontario, Canada
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH:
|
7
|
SOLE VOTING POWER
|
0
|
8
|
SHARED VOTING POWER
|
71,500
|
9
|
SOLE DISPOSITIVE POWER
|
0
|
10
|
SHARED DISPOSITIVE POWER
|
71,500
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
71,500
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
|
14
|
TYPE OF REPORTING PERSON
CO
|
1
|
NAMES OF REPORTING PERSONS
Edward H. Kernaghan
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS:
|
PF
|
5
|
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e):
|
[ ]
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH:
|
7
|
SOLE VOTING POWER
|
0
|
8
|
SHARED VOTING POWER
|
282,975
|
9
|
SOLE DISPOSITIVE POWER
|
0
|
10
|
SHARED DISPOSITIVE POWER
|
282,975
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
282,975
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
|
14
|
TYPE OF REPORTING PERSON
IN
|
1
|
NAMES OF REPORTING PERSONS
Alice Kernaghan
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS:
|
PF
|
5
|
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e):
|
[ ]
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH:
|
7
|
SOLE VOTING POWER
|
0
|
8
|
SHARED VOTING POWER
|
2,750,500
|
9
|
SOLE DISPOSITIVE POWER
|
0
|
10
|
SHARED DISPOSITIVE POWER
|
2,750,500
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,750,500
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
|
14
|
TYPE OF REPORTING PERSON
IN
|
1
|
NAMES OF REPORTING PERSONS
Elizabeth Kernaghan
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS:
|
PF
|
5
|
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e):
|
[ ]
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH:
|
7
|
SOLE VOTING POWER
|
0
|
8
|
SHARED VOTING POWER
|
1,548,200
|
9
|
SOLE DISPOSITIVE POWER
|
0
|
10
|
SHARED DISPOSITIVE POWER
|
1,548,200
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,548,200
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.3%
|
14
|
TYPE OF REPORTING PERSON
IN
|
1
|
NAMES OF REPORTING PERSONS
Jennifer Kernaghan
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS:
|
PF
|
5
|
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e):
|
[ ]
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON WITH:
|
7
|
SOLE VOTING POWER
|
0
|
8
|
SHARED VOTING POWER
|
32,000
|
9
|
SOLE DISPOSITIVE POWER
|
0
|
10
|
SHARED DISPOSITIVE POWER
|
32,000
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
32,000
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
|
14
|
TYPE OF REPORTING PERSON
IN
|
This Amendment No. 2 to Schedule 13D (this “
Statement
”) is being filed on behalf of Kernwood Limited, an Ontario corporation (“
Kernwood
”), Principia Research Inc., an Ontario corporation (“
Principia
”), Edward J. Kernaghan, Edward H. Kernaghan, Alice Kernaghan, Elizabeth Kernaghan and Jennifer Kernaghan, each of whom are Canadian citizens residing in the Province of Ontario (collectively, the “
Reporting Persons
”), relating to common shares, no par value (the “
Common Shares
”), of Obsidian Energy Ltd., a corporation organized and existing under the laws of Alberta, Canada (the “
Issuer
”). This Statement amends and supplements the initial statement on Schedule 13D, filed by the Reporting Persons on October 16, 2017, as amended by Amendment No. 1 filed by the Reporting Persons on December 5, 2017 (the “
Original Statement
”). The Original Statement is hereby amended as follows.
Item 4. Purpose of Transaction.
The shares reported in this Statement were acquired by the Reporting Persons from time to time in open market transactions with a view towards investment. The Reporting Persons review their investments in the Issuer on a continuing basis. As part of this review, the Reporting Persons evaluate various alternatives that are or may become available with respect to the Issuer and its securities.
The Reporting Persons may from time to time and at any time, in their sole discretion, acquire or cause to be acquired, additional equity or debt securities or other instruments of the Issuer, its subsidiaries or affiliates, or dispose or cause to be disposed, such equity or debt securities or instruments, in any amount that the Reporting Persons may determine in their sole discretion, through open market transactions, privately negotiated transactions or otherwise. Depending upon a variety of factors, the Reporting Persons may from time to time and at any time, in their sole discretion, consider, formulate and implement various plans or proposals intended to enhance the value of their investment in the Issuer, including, among other things, proposing or effecting any matter that would constitute or result in any of the matters or effects enumerated in subparagraphs (a)-(j) of this Item 4 of Schedule 13D. Except as described above, the Reporting Persons do not have any present plans or proposals that relate to or would result in the consequences listed in subparagraphs (a)-(j) of Item 4 of Schedule 13D. See, also, Item 6.
Item 5. Interest in Securities of the Issuer.
(a) and (b) The beneficial ownership percentage of the Reporting Persons is calculated based upon 504,340,988 Common Shares of the Issuer reported to be outstanding as of January 3, 2018 as reported by the Toronto Stock Exchange. The information disclosed in response to Item 2 in the Original Statement is incorporated by reference herein.
|
a.
|
Amount beneficially owned: 34,791,375 Common Shares
|
|
b.
|
Percent of class: 6.90%
|
|
c.
|
Number of shares as to which the Reporting Person has:
|
|
i.
|
Sole power to vote or to direct the vote: 10,025,500
|
|
ii.
|
Shared power to vote or to direct the vote: 24,765,875
|
|
iii.
|
Sole power to dispose or to direct the disposition of: 10,025,500
|
|
iv.
|
Shared power to dispose or to direct the disposition of: 24,765,875
|
Includes (i) 10,025,500 Common Shares held directly by Edward J. Kernaghan, (ii) 20,184,200 Common Shares held directly by Kernwood, which Edward J. Kernaghan directly controls as the controlling shareholder, (iii) 71,500 Common Shares held directly by Principia, of which Edward J. Kernaghan is a shareholder, (iv) 282,975 Common Shares held directly by Edward H. Kernaghan, which Edward J. Kernaghan indirectly shares control of, (v) 2,750,500 Common Shares held directly by Alice Kernaghan, which Edward J. Kernaghan indirectly shares control of, (vi) 1,548,200 Common Shares held directly by Elizabeth Kernaghan, which Edward J. Kernaghan indirectly shares control of, and (vii) 32,000 Common Shares held directly by Jennifer Kernaghan, which Edward J. Kernaghan indirectly shares control of.
|
a.
|
Amount beneficially owned: 20,184,200 Common Shares
|
|
b.
|
Percent of class: 4.00%
|
|
c.
|
Number of shares as to which the Reporting Person has:
|
|
i.
|
Sole power to vote or to direct the vote: 0
|
|
ii.
|
Shared power to vote or to direct the vote: 20,184,200
|
|
iii.
|
Sole power to dispose or to direct the disposition of: 0
|
|
iv.
|
Shared power to dispose or to direct the disposition of: 20,184,200
|
Includes 20,184,200 Common Shares held directly by Kernwood, which Edward J. Kernaghan is deemed to control.
|
a.
|
Amount beneficially owned: 71,500 Common Shares
|
|
b.
|
Percent of class: 0.01%
|
|
c.
|
Number of shares as to which the Reporting Person has:
|
|
i.
|
Sole power to vote or to direct the vote: 0
|
|
ii.
|
Shared power to vote or to direct the vote: 71,500
|
|
iii.
|
Sole power to dispose or to direct the disposition of: 0
|
|
iv.
|
Shared power to dispose or to direct the disposition of: 71,500
|
Includes 71,500 Common Shares held directly by Principia, of which Edward J. Kernaghan and Edward H. Kernaghan are deemed to share control.
|
a.
|
Amount beneficially owned: 282,975 Common Shares
|
|
b.
|
Percent of class: 0.06%
|
|
c.
|
Number of shares as to which the Reporting Person has:
|
|
i.
|
Sole power to vote or to direct the vote: 0
|
|
ii.
|
Shared power to vote or to direct the vote: 282,975
|
|
iii.
|
Sole power to dispose or to direct the disposition of: 0
|
|
iv.
|
Shared power to dispose or to direct the disposition of: 282,975
|
Includes (i) 179,475 Common Shares held directly by Edward H. Kernaghan, (ii) 71,500 Common Shares held directly by Principia, of which Edward J. Kernaghan is a shareholder and (iii) 32,000 Common Shares held directly by Jennifer Kernaghan, of which Edward H. Kernaghan indirectly shares control.
|
a.
|
Amount beneficially owned: 2,750,500 Common Shares
|
|
b.
|
Percent of class: 0.55%
|
|
c.
|
Number of shares as to which the Reporting Person has:
|
|
i.
|
Sole power to vote or to direct the vote: 0
|
|
ii.
|
Shared power to vote or to direct the vote: 2,750,500
|
|
iii.
|
Sole power to dispose or to direct the disposition of: 0
|
|
iv.
|
Shared power to dispose or to direct the disposition of: 2,750,500
|
Includes 2,750,500 Common Shares held directly by Alice Kernaghan, of which Edward J. Kernaghan indirectly shares control.
|
a.
|
Amount beneficially owned: 1,548,200 Common Shares
|
|
b.
|
Percent of class: 0.31%
|
|
c.
|
Number of shares as to which the Reporting Person has:
|
|
i.
|
Sole power to vote or to direct the vote: 0
|
|
ii.
|
Shared power to vote or to direct the vote: 1,548,200
|
|
iii.
|
Sole power to dispose or to direct the disposition of: 0
|
|
iv.
|
Shared power to dispose or to direct the disposition of: 1,548,200
|
Includes 1,548,200 Common Shares held directly by Elizabeth Kernaghan, of which Edward J. Kernaghan indirectly shares control.
|
a.
|
Amount beneficially owned: 32,000 Common Shares
|
|
b.
|
Percent of class: 0.01%
|
|
c.
|
Number of shares as to which the Reporting Person has:
|
|
i.
|
Sole power to vote or to direct the vote: 0
|
|
ii.
|
Shared power to vote or to direct the vote: 32,000
|
|
iii.
|
Sole power to dispose or to direct the disposition of: 0
|
|
iv.
|
Shared power to dispose or to direct the disposition of: 32,000
|
Includes 32,000 Common Shares held directly by Jennifer Kernaghan, of which Edward J. Kernaghan and Edward H. Kernaghan indirectly share control.
Kernwood has made the following open-market purchases of Common Shares of the Issuer during the past 60 days on the Toronto Stock Exchange (excluding purchases disclosed in the Original Statement):
Date
|
Purchaser
|
Number of Shares
|
Price Per Share
|
December 8, 2017
|
Kernwood
|
843,000
|
CDN $1.5554
|
December 18, 2017
|
Kernwood
|
200,000
|
CDN $1.4848
|
December 21, 2017
|
Kernwood
|
184,500
|
CDN $1.5154
|
Other than the foregoing transactions and any transactions disclosed in the Original Statement, none of the Reporting Persons has effected any transaction in Common Shares of the Issuer during the past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
The disclosure in Item 6 of the Original Statement is hereby supplemented by adding the following. The Issuer and Kernwood, on its own behalf and on behalf of its affiliates, entered into a Letter Agreement dated December 30, 2017 (the “
Agreement
”), pursuant to which the Issuer has appointed Edward H. Kernaghan as a director of the Issuer and agreed to include Edward H. Kernaghan as a director nominee in its management information circular for election at each of its 2018 annual general meeting of shareholders and the 2019 annual general meeting of shareholders, and solicit proxies on behalf of and recommend to its shareholders that they vote in favor of Edward H. Kernaghan. In the event that Edward H. Kernaghan is unable or unwilling to continue as a director of the Issuer during the term of the Agreement, Kernwood is entitled to make nominations for replacement to the board of directors of the Issuer (the “
Board
”), which are subject to the Board’s approval. The Chairman of the Board position will be determined pursuant to the Issuer’s normal governance process and the size of the Board will be no greater than 11 for the purposes of the Issuer’s 2018 annual general meeting of shareholders (including Edward H. Kernaghan or any replacement director nominee).
Until January 1, 2019 (the “
Restricted Period
”), Kernwood and its affiliates must not, directly or indirectly, to do any of the following: (i) engage in, participate in, or in any way initiate, directly or indirectly, any “solicitation” (as such term is defined in the
Business Corporations Act
(Alberta) (the “
ABCA
”) and in any applicable securities laws) of proxies or consents, with respect to the voting of any shares of the Issuer; (ii) take action in any other manner in order to vote, advise or influence in any manner whatsoever any person, with respect to the voting of any securities of the Issuer; (iii) deposit any shares of the Issuer in any voting trust or subject any shares of the Issuer to any arrangement or agreement with respect to the voting of any such shares; (iv) seek, alone or in concert with others to, (A) requisition or call a meeting of shareholders of the Issuer, (B) other than as contemplated in the Agreement, obtain representation on, or nominate or propose the nomination of any candidate for election to the Board, or (C) effect the removal of any member of the Board or otherwise alter the composition of the Board; (v) submit, or induce any person to submit, any shareholder proposal pursuant to the ABCA; (vi) make, or induce any person to make, or cooperate with a third party to make, or induce any person to make, a takeover bid, as defined in the ABCA and in any applicable securities laws, or other merger or going private transaction; (vii) make any public or private disclosure of any consideration, intention, plan or arrangement inconsistent with any of the foregoing, except as required by law; or (viii) enter into any discussions, agreements or understandings with any person with respect to the foregoing, or advise, assist or encourage any person to take any action inconsistent with the foregoing (collectively, the “
Prohibited Activities
”), provided, that these restrictions cease to apply if any other person or group of persons holding, or offering to acquire (whether or not on conditions), more than 20% of the outstanding common shares of the Issuer initiates the discussion or negotiation that resulted in the Prohibited Activities. Kernwood and its affiliates must vote in favour of the election of all of the Issuer’s management nominees recommended by the Board at any annual or special meeting of shareholders during the Restricted Period.
Item 7. Material to be Filed as Exhibits.
The disclosure in Item 7 of the Original Statement is hereby supplemented by adding the following in appropriate numerical order:
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
7(b)
|
|
Letter Agreement, dated December 30, 2017, by and between Obsidian Energy Ltd. and Kernwood Limited, on its own behalf and on behalf of its affiliates.
|
Exhibit 7(b)
DELIVERED BY COURIER AND E-MAIL
December 21, 2017
Kernwood Limited
Suite 605
79 Wellington Street West
Toronto, ON M5K 1K7
Attention: Edward H. Kernaghan
Dear Mr. Kernaghan:
Letter Agreement
This letter agreement sets forth the understanding between Obsidian Energy Ltd. (
Obsidian
or the
Company
) and Kernwood Limited (
Kernwood
), on its own behalf and on behalf of its affiliates (collectively, the
Kernwood Parties
) regarding certain changes to the composition of the board of directors of Obsidian (the
Board
), namely the appointment of Edward H. Kernaghan to the Board (the
Director
). In consideration of the respective representations, warranties, covenants, agreements and conditions hereinafter set forth and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each party hereto), the parties agree as follows:
1
|
Director
. Obsidian and the Board shall: (i) immediately appoint the Director as a director of the Company; and (ii) include the Director as a director nominee in its management information circular for election at each of the 2018 annual general meeting of shareholders and the 2019 annual general meeting of shareholders of Obsidian and shall solicit proxies on behalf of and recommend to its shareholders that they vote in favour of the management nominees, including the Director. Upon appointment to the Board, the Director shall be entitled to the same protections, rights and benefits, including with respect to insurance, indemnification, compensation and fees as are currently applicable to all directors of the Company.
|
2
|
Replacement Director.
, In the event that Edward Kernaghan is unable or unwilling to continue as a director of the Company during the term of this Agreement, Kernwood shall be entitled to make nominations for replacement to the Board, which the Board will consider and approve at its sole discretion, acting reasonably, and once a suitable replacement is found, this Agreement shall apply to such replacement director as if he or she had been the Director and the Company shall immediately appoint such person to the Board and, as applicable, any committee of the Board, and include such person as a director nominee, and consider and treat such person, as contemplated in Section 1.
|
3
|
Kernwood Parties Standstill
. Upon acceptance of this letter agreement until January 1, 2019 (the
Restricted Period
), except with the prior written consent of Obsidian (in its sole discretion), the Kernwood Parties shall not, directly or indirectly, do any of the following: (i) engage in, participate in, or in any way initiate, directly or indirectly, any “solicitation” (as such term is defined in the
Business Corporations Act
(Alberta) (
ABCA
) and in any applicable securities laws) of proxies or consents, with respect to the voting of any shares of Obsidian; (ii) take action in any other manner in order to vote, advise or influence in any manner whatsoever any person, with respect to the voting of any securities of Obsidian; (iii) deposit any shares of Obsidian in any voting trust or subject any shares of Obsidian to any arrangement or agreement with respect to the voting of any such shares; (iv) seek, alone or in concert with others to, (A) requisition or call a meeting of shareholders of Obsidian, (B) other than as contemplated in this Agreement, obtain representation on, or nominate or propose the nomination of any candidate for election to the Board, or (C) effect the removal of any member of the Board or otherwise alter the composition of the Board; (v) submit, or induce any person to submit, any shareholder proposal pursuant to the
|