Enerkem Inc.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief from registration and prospectus requirements in connection with the use of electronic roadshow materials -- cross-border offering of securities -- conducting offer in typical U.S. manner leads to non-compliance with Canadian securities laws -- relief granted in connection with a cross-border offering -- decision subject to conditions.

Applicable Legislative Provisions

Securities Act (Ontario), s. 74(1).

National Policy 47-201 Trading Securities Using the Internet and Other Electronic Means, s. 2.7.

February 22, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUÉBEC AND ONTARIO

(the "Jurisdictions")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

ENERKEM INC.

(the "Filer")

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (each a "Decision Maker") has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the "Legislation"), granting relief from the prospectus and the registration requirements under the Legislation in order to post, without restrictions, certain electronic roadshow materials on the website of one or more commercial services, such as www.retailroadshow.com and/or www.netroadshow.com, during the Waiting Period (as hereinafter defined) (collectively, the "Exemption Sought").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (dual application),

a) the Autorité des marchés financiers is the principal regulator for the application,

b) the Filer has provided notice that section 4.7(1) of Regulation 11-102 respecting Passport System ("Regulation 11-102") is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Newfoundland and Labrador, New Brunswick, Nova Scotia, Prince Edward Island, Northwest Territories, Nunavut and Yukon, and

c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Defined terms contained in Regulation 14-101 respecting Definitions and Regulation 11-102 have the same meaning if used in this decision, unless otherwise defined.

In this decision:

"base PREP prospectus" and "supplemented PREP prospectus" have the meaning attributed to such term under Regulation 44-103 respecting Post-Receipt Pricing; and

"Notice 47-201" means Notice 47-201 relating to Trading Securities Using the Internet and Other Electronic Means.

Representations

This decision is based on the following facts and representations made by the Filer:

1. The Filer is a business corporation governed by the Canada Business Corporation Act and its head office is located at 1130 Sherbrooke Street West, suite 1400, Montreal, Quebec, H3A 2M8.

2. The Filer is a waste-to-biofuels and advanced chemicals company.

3. On February 3, 2012, the Filer filed a registration statement on Form F-1 (the "Form F-1") with the SEC relating to the distribution of common shares of the Filer (the "Offering") and filed a preliminary base PREP prospectus (the "Preliminary Prospectus") relating to the Offering with the securities regulatory authority of each of the jurisdictions of Canada.

4. The Filer has applied to have its common shares approved for listing on the NASDAQ Market under the symbol ''NRKM'' and on the Toronto Stock Exchange under the symbol ''NKM.''

5. During the period between the date of the receipt for the Preliminary Prospectus and the date of the receipt for the final base PREP prospectus in respect of the Offering (the "Waiting Period"), the Filer intends to use electronic roadshow materials (the "Website Materials") as part of the marketing of the Offering, as is now typical for initial public offerings in the United States.

6. Compliance with applicable United States securities laws requires the Filer to either make the Website Materials "available without restriction" or file the Website Materials on the SEC's Electronic Data-Gathering Analysis and Retrieval System (known under its acronym, EDGAR), which will have the same effect as making them "available without restriction". The Filer understands that, in practice, making documents "available without restriction" means that no restrictions on access or viewing may be imposed, such as password protection, both with respect to persons inside and outside of the United States.

7. The Filer and its underwriters wish to market the Offering in a manner that is typical for public offerings in the United States by posting the Website Materials on the website of one or more commercial services, such as www.retailroadshow.com and/or www.netroadshow.com, without any restriction thereon.

8. The prospectus and registration requirements of the Legislation, as well as the guidelines in Notice 47-201 regarding marketing and solicitation activities that are permissible during the Waiting Period, require that access to the Website Materials be controlled by the Filer or the underwriters, using such means as password protection.

9. Absent the Exemption Sought, the Filer could not use the Website Materials during the Waiting Period as part of the marketing of the Offering in a manner that complies with both United States securities laws and the Legislation.

10. The Website Materials will contain a statement that information conveyed through the Website Materials does not contain all of the information in the Preliminary Prospectus, the final base PREP prospectus relating to the Offering or the supplemented PREP prospectus relating thereto, including any amendments thereof (collectively the "Prospectuses"), and that prospective purchasers should review all of such Prospectuses for complete information regarding the shares offered pursuant to the Offering.

11. The Website Materials will also contain a hyperlink to the Prospectuses providing access to such documents as soon as they are filed.

12. The information contained in the Website Materials will be fair and balanced and will not contradict or distort information contained in the Prospectuses.

13. The Filer will state in the Website Materials and the Prospectuses that purchasers of the shares offered pursuant to the Offering in the jurisdictions of Canada will have a contractual right of action against the Filer and the Canadian underwriters in connection with the information contained in the Website Materials. To this end, these documents will include language substantially in the following form:

"The company may make available certain materials describing the offering (the "Website Materials") on the website of one or more commercial services, such as www.retailroadshow.com and/or www.netroadshow.com under the heading "Enerkem Inc." in accordance with U.S. federal securities laws during the period prior to obtaining a receipt for the final base PREP prospectus relating to the offering (the "Final Prospectus") from the securities regulatory authorities in each of the provinces and territories of Canada. In order to give purchasers in each of the provinces and territories of Canada the same unrestricted access to the Website Materials as provided to U.S. purchasers, the company has applied for and obtained exemptive relief in a decision dated February 22, 2012 from the securities regulatory authorities in each of the provinces and territories of Canada. Under the terms of that exemptive relief, the company and each of the Canadian underwriters signing the certificate contained in the Final Prospectus agreed that, if the Website Materials contained any untrue statement of a material fact or omitted to state a material fact required to be stated or necessary in order to make any statement therein not misleading in light of the circumstances in which it was made (a ''misrepresentation''), a purchaser resident in a province or territory of Canada who purchases common shares offered under the Final Prospectus during the period of distribution has, without regard to whether the purchaser relied on the misrepresentation, rights against the company and each of the Canadian underwriters for the misrepresentation that are equivalent to the rights under sections 217 and 218 of the Securities Act (Québec) or the comparable provision of the securities legislation in each of the other provinces and territories of Canada, as if that misrepresentation was contained in the Final Prospectus.".

14. The Filer and the Canadian underwriters will otherwise comply with all other provisions of Notice 47-201.

15. Purchasers in each of the jurisdictions of Canada will only be able to purchase shares under the Offering through an underwriter that is registered, or that is otherwise exempt from the registration requirement, in their jurisdiction.

16. At least one underwriter that will sign the Prospectuses will be registered in each of the jurisdictions of Canada.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted provided that:

a) the Filer complies with the representations in paragraphs 10 to 14 of this decision, and

b) the Website Materials will not include comparables unless the comparables are also included in the Prospectuses.

"Jean Daigle"
Director, Corporate Finance