MOD Modine Manufacturing Co

 TABLE OF CONTENTS

 

		Page
ARTICLE 1 INTERPRETATION		1
1.1	Defined Terms.	1
1.2	Construction.	17
1.3	Certain Rules of Interpretation.	17
1.4	Knowledge.	18
1.5	Computation of Time.	18
1.6	Performance on Business Days.	18
1.7	Currency and Payment.	18
1.8	Accounting Terms.	18
1.9	Schedules and Exhibits.	19
ARTICLE 2 PURCHASE AND SALE OF THE PURCHASED SHARES		20
2.1	Agreement to Purchase and Sell.	20
2.2	Purchase Price.	20
2.3	Payment of Purchase Price.	20
2.4	Estimated Balance Sheet, Payout Letters and Transaction Expenses.	22
2.5	Closing Statements.	23
2.6	Purchase Price Adjustments.	25
2.7	Wrong Pockets and Supplier Rebates.	27
ARTICLE 3 CLOSING ARRANGEMENTS		28
3.1	Closing.	28
3.2	Vendor’s Closing Deliveries.	28
3.3	Purchaser’s Closing Deliveries.	29
ARTICLE 4 CONDITIONS		30
4.1	Conditions for the Benefit of the Purchaser.	30
4.2	Conditions for the Benefit of the Vendor.	31
4.3	Termination Events.	31
4.4	Effect of Termination.	32
ARTICLE 5 COVENANTS		32
5.1	Exclusive Dealings.	32
5.2	Transfer of Documentation.	33
5.3	Investigation.	33
5.4	Risk of Loss.	34
5.5	Conduct Prior to Closing.	34
5.6	Satisfaction of Conditions	37
5.7	Notification of Certain Matters.	37
5.8	Required Approvals.	38
5.9	Estoppel Certificate.	39
5.10	Tax Matters.	39
5.11	Data Room.	42

 

5.12	Post-Closing Bonus Payments.	42
5.13	Transaction Personal Information.	43
5.14	Investment Canada Act Notification.	43
5.15	Director and Officer Liability and Indemnification.	43
5.16	Pre-Closing Reorganization.	44
ARTICLE 6 REPRESENTATIONS AND WARRANTIES		44
6.1	Representations and Warranties of the Vendor.	44
6.2	Representations and Warranties of the Vendor related to the Corporation.	47
6.3	Representations and Warranties of the Purchaser and the Parent.	66
ARTICLE 7 INDEMNIFICATION		68
7.1	Survival of Representations, Warranties and Covenants of the Vendor.	68
7.2	Survival of the Representations, Warranties and Covenants of the Purchaser.	69
7.3	Indemnification by the Vendor.	69
7.4	Indemnification by the Purchaser.	70
7.5	Limitations on Indemnity.	70
7.6	Notice of Claim.	72
7.7	Third Party Claims.	73
7.8	Tax Contests.	76
7.9	Direct Claims.	77
7.10	Indemnification Payments.	77
7.11	Adjustment to Purchase Price.	78
7.12	Waiver.	79
7.13	Exclusivity.	79
7.14	Trust and Agency.	79
7.15	One Recovery.	79
7.16	No Contribution from the Corporation.	80
7.17	Mitigation.	80
7.18	Insurance Proceeds.	80
ARTICLE 8 SHAREHOLDER RELEASE		80
8.1	Shareholder Release.	80
ARTICLE 9 GUARANTEE		81
9.1	Guarantee of the Purchaser’s Obligations.	81
ARTICLE 10 GENERAL		82
10.1	Confidentiality, Announcements and Disclosure.	82
10.2	Expenses.	83
10.3	Retention of Counsel and Privilege.	83
10.4	Entire Agreement; No Third Party Beneficiary.	84
10.5	Amendment.	84
10.6	Non-Merger.	84
10.7	Waiver of Rights.	84
10.8	Time of Essence.	85

(1)	“Accounts Payable” means all accounts payable of any of the Corporation, including accrued expenses, accrued salaries and wages, vacation payable and other similar accruals, but excluding all accounts payables owing to a Related Party.

(2)	“Accounts Receivable” means all accounts receivable, trade accounts receivable, notes receivable, book debts and other debts due or accruing due to the Corporation, and the full benefit of any related security, but excluding all accounts receivable from a Related Party (other than OIS).

(3)	“Adjustment Holdback” means the amount of $7,500,000.

(4)

“Affiliate” means, with respect to any Person, any Person controlling, controlled by or under common control with such Person. For the purposes of this definition, “control” means, with respect to any entity, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting Equity Interests (or other ownership interest), by Contract or otherwise.

(5)	“Agreement” means this share purchase agreement, any agreement that is an amendment to, amendment and restatement of, or confirmation of this Agreement and includes all schedules and exhibits hereto or thereto.

(6)	“Agreement Date” has the meaning attributed to such term in the preamble.

(7)	“Ancillary Agreements” means all Contracts, instruments, certificates or other documents to be executed and/or delivered by any of the Parties pursuant to this Agreement.

(8)	“Announcement” has the meaning attributed to such term in Section 10.1(4).

(9)

“Applicable Law” means, in respect of any Person, property, transaction or event, (a) any domestic or foreign statute, law (including the common law), ordinance, rule, regulation, treaty, restriction, by-law (zoning or otherwise) or Order; and (b) to the extent that they have the force of law, any regulatory policy, standard, code or guideline, in each case that applies in whole or in part to such Person, property, transaction or event.

(10)	“Approvals” means licences, qualifications, approvals, authorizations, consents, certificates, registrations, exemptions, variances, waivers, filings, grants, rulings, permits,  accreditations and Orders.

(11)	“Appurtenances” means, with respect to any real property, all buildings, structures, fixtures, improvements and appurtenances located on or forming part of that real property, including those under construction.

(12)	“Arm’s Length” has the meaning attributed to that term by the Tax Act.

(13)

“Assets” means all undertakings, property, assets, rights and interests of the Corporation, including the following: (a) all leasehold rights in the real property and Appurtenances leased by the Corporation, including all Leased Real Property, and all rights and interests of the Corporation in and to the Contracts in respect of such real property and Appurtenances, including the Leases; (b) the Personal Property, including prepaid rents, security deposits and options to renew or purchase; (c) work in process and the Accounts Receivable; (d) all Inventories; (e) all rights and interests of the Corporation under or pursuant to all warranties, representations and guarantees, express, implied or otherwise, of or made by contractors, suppliers or others in connection with the undertakings, property, assets, rights and interests of the Corporation; (f) the rights and interests of the Corporation in and to the Owned Intellectual Property and the Third Party Intellectual Property; (g) the IT Systems; (h) all rights and interests of the Corporation in and to all Contracts to which it is a party or by which any of the undertakings, property, assets, rights and interests of the Corporation or the Business is bound or affected (including the Material Contracts); (i) all Permits obtained by or issued to the Corporation; (j) the Books and Records; (k) all prepaid charges, deposits, sums and fees paid by the Corporation before the Closing Date; (l) all goodwill of the Corporation, including the present telephone numbers, internet domain addresses and other communications numbers and addresses of the Corporation; and (m) all proceeds of any or all of the foregoing received or receivable after the Closing Date.

(14)	“Base Purchase Price” has the meaning attributed to such term in Section 2.2.

(15)

“Books and Records” means all books, records, files and papers of the Corporation, including title documentation, software documentation, electronic data, financial and Tax working papers, financial and Tax books and records, business reports, business plans and projections, sales and advertising materials, sales and purchases records, trade association files, material research and development records, lists of licensees and customers, personnel and employment records, employee data, minute and share certificate books, including all data and information stored electronically.

(16)	“Business” has the meaning attributed to such term in the recitals.

(17)

“Business Day” means any day, except Saturdays and Sundays, statutory holidays or days on which commercial banks are authorized or required by Applicable Law to close except for non-automated business: (a) for purposes of Section 10.10, in the place specified in that Section; and (b) for all other purposes in this Agreement, in Calgary, Alberta.

(18)	“Business Permits” has the meaning attributed to such term in Section 6.2(10).

(19)	“Cash” means, without duplication, an aggregate amount equal to all cash and cash equivalents in bank accounts of the Corporation and marketable securities of the Corporation plus uncleared deposits minus outstanding cheques.

(20)	“Cash Decrease” has the meaning attributed to such term in Section 2.6(2).

(21)	“Cash Increase” has the meaning attributed to such term in Section 2.6(2).

(22)	“CASL” means the Canadian Anti-Spam Legislation.

(23)	“Claim” means any act, omission or state of facts or any demand, action, investigation, inquiry, suit, proceeding, claim, assessment, judgment or settlement or compromise relating thereto which may give rise to a right of indemnification under this Agreement.

(24)	“Closing” means the completion of the Transactions on the Closing Date in accordance with terms and conditions of this Agreement.

(25)	“Closing Cash” has the meaning attributed to such term in Section 2.5(1)(b)(iii).

(26)

“Closing Date” means the later of (A) March 1, 2024 in the event that each of the conditions set out in Section 4.1(1) and Section 4.2(1) have been satisfied (except for those conditions which by their nature can only be satisfied as of the Closing Date) or waived,  (B) the date which is the seventh Business Day immediately following the date that each of the conditions set out in Section 4.1(1) and Section 4.2(1) are satisfied (except for those conditions which by their nature can only be satisfied as of the Closing Date) or waived, or (C) such other date as the Purchaser and the Vendor may otherwise agree in writing.

(27)	“Closing Indebtedness” has the meaning attributed to such term in Section 2.5(1)(b)(v).

(28)	“Closing Net Working Capital” has the meaning attributed to such term in Section 2.5(1)(b)(i).

(29)	“Closing Statements” has the meaning attributed to such term in Section 2.5(1).

(30)	“Closing Statements Dispute Auditor” has the meaning attributed to such term in Section 2.5(2).

(31)

“Confidential Information” means all information and know-how and any tangible embodiments thereof provided by or on behalf of one Party to the another Party or an Affiliate thereof either in connection with the discussions and negotiations pertaining to this Agreement or in the course of performing under this Agreement, which may include data, knowledge, practices, processes, ideas, research plans, formulation or manufacturing processes and techniques, scientific, manufacturing, marketing and business plans, all client, customer, licensee, employee, contractor and supplier information (including contact information) and financial and personnel matters relating to the disclosing Party or to its present or future products, sales, contractors, suppliers, customers, licensee, employees, investors or business; provided, that, information or know-how of a Party will not be deemed Confidential Information of such Party for purposes of this Agreement if such information or know-how: (a) was already known to the receiving Party, other than under an obligation of confidentiality or non-use, at the time of disclosure to such receiving Party, as can be shown by written records; (b) was generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or was otherwise part of the public domain, at the time of its disclosure to such receiving Party; (c) became generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or otherwise became part of the public domain, after its disclosure to such receiving Party through no fault of the receiving Party; (d) was disclosed to such receiving Party, other than under an obligation of confidentiality or non-use, by a Person who had no obligation to the disclosing Party not to disclose such information or know-how to others, as can be shown by written records; or (e) was independently discovered or developed by such receiving Party, as can be shown by its written records, without the use or benefit of, or reliance on, Confidential Information of the disclosing Party.

(32)

“Constating Documents” means, with respect to any Person, its articles or certificate of incorporation, amendment, amalgamation or continuance, memorandum and articles of association, letters patent, supplementary letters patent, by-laws, partnership agreement, limited liability company agreement or other similar document, and all unanimous shareholder agreements, other shareholder agreements, voting trusts, pooling agreements and similar Contracts, arrangements and understandings applicable to the Person’s Equity Interests, all as amended, supplemented, restated and replaced from time to time.

(33)

“Contaminant” means any substance, emission or material, which has an adverse effect on the environment, any ecological system or natural resource, or human health or safety, or regulated as “hazardous”, “toxic” or “dangerous” or any type of “waste”, “contaminant” or “pollutant” in each case which is defined or regulated by any Environmental Law and includes petroleum hydrocarbons and fractions thereof, halogenated or chlorinated solvents, asbestos and asbestos-containing materials, and polychlorinated biphenyls.

(34)

“Contract” means any agreement, contract, indenture, lease, sublease, agreement to lease, agreement to sublease, occupancy agreement, deed of trust, licence, option, undertaking or any other legally binding commitment, promise or obligation, whether oral or written, express or implied, and including all amendments, renewals, extensions and/or assignments thereto, other than a Permit.

(35)

“Copyrights” means works of authorship, copyrights, whether registered or unregistered, and registrations and applications for registration thereof including moral rights therein and all neighbouring or related rights of any kind whatsoever and renewals, extensions and reversions thereof, and all other rights corresponding thereto throughout the world.

(36)	“Corporation” has the meaning attributed to such term in the recitals.

(37)	“Cost Determination Percentage” has the meaning attributed to such term in Section 2.5(5).

(38)	“COVID-19” means the COVID-19 pandemic and the response of Governmental Authorities applicable to the Corporation related thereto.

(39)

“COVID-19 Relief” means any support payments, loans, benefits or other incentives being provided as a result of COVID-19 by any Governmental Authority or financial institution, including the 10% Temporary Wage Subsidy, Canada Emergency Wage Subsidy, Canada Emergency Rent Subsidy, Canada Recovery Hiring Program, Canada Emergency Business Account, interest-free loans, Work-Sharing Program, Loan Guarantee for Small and Medium-Sized Enterprises offered through Export Development Canada, EDC Business Credit Availability Program Guarantee offered through Export Development Canada, Co-Lending Program for Small and Medium-Sized Enterprises offered through the Business Development Bank of Canada, and Large Employer Emergency Financing Facility delivered by the Canada Development Investment Corporation.

(40)

“Current Assets” means, in respect of the Corporation, without duplication, all current assets of the Corporation contemplated in the illustrative Net Working Capital calculation set out in Exhibit 2.4(1)(b), including Accounts Receivable, prepaid expenses, deposits, all Inventories and financial assets, but excluding (a) Cash; (b) Taxes receivable, and (c) receivables from any Related Party other than OIS; in each case prepared in accordance with GAAP and Applicable Laws applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Financial Statements as of the date of the most recent annual Financial Statements as if such accounts were being prepared as of a fiscal year end.

(41)

“Current Liabilities” means, in respect of the Corporation, without duplication, all current liabilities of the Corporation contemplated in the illustrative Net Working Capital calculation set out in Exhibit 2.4(1)(b), including Accounts Payable, accrued liabilities, deferred revenue, but excluding (a) all Indebtedness, including the current portion of all indebtedness for borrowed money; (b) deferred and future Tax liabilities; (c) any payables to any Related Party other than OIS; (d) the Transaction Expenses; and (e) the Retention Bonuses; in each case prepared on a basis consistent with the Corporation’s past practice and in accordance with GAAP and Applicable Laws applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Financial Statements as of the date of the most recent annual Financial Statements as if such accounts were being prepared as of a fiscal year end.

(42)	“D&O Indemnitee” has the meaning attributed to such term in Section 5.15(1).

(43)	“D&O Tail Policy” has the meaning attributed to such term in Section 5.15(2).

(44)	“Data Room” means the electronic data room established and maintained by the Vendor and hosted by Intralinks in respect of the Transaction containing documents and information relating to, among other things, the Corporation and the Business.

(45)	“Direct Claim” means any Claim by an Indemnified Party against an Indemnifying Party (other than in respect of Taxes of the Corporation) which does not result from a Third Party Claim.

(46)

“Disabling Code” means any code which is intended or designed to have the effect of disabling or denying authorized access to any Hardware, Software or any data or files on or used in conjunction with any of the aforementioned, including any malicious code, clock, timer, counter, software lock, drop dead device, Trojan horse routine, trap door, back door, date bomb or time bomb, and excluding legitimate access rights control mechanisms used to enforce software licences or other commercial agreements with end users of the subject Hardware or Software.

(47)	“Disclosure Schedules” means the written schedules delivered to the Purchaser by the Vendor in connection with this Agreement.

(48)	“Discussion Period” has the meaning attributed to such term in Section 2.5(2).

(49)	“Disputed Items” has the meaning attributed to such term in Section 2.5(2).

(50)	“Effective Time” has the meaning attributed to such term in Section 2.1.

(51)	“Electronic Delivery” has the meaning attributed to such term in Section 10.14.

(52)	“Employee Plans” has the meaning attributed to such term in Section 6.2(33)(a).

(53)	“Employment Laws” means any Applicable Law relating to employment standards, labour standards, human rights, occupational health and safety, pay equity or similar workplace matters enforceable against or imposed upon an employer.

(54)

“Encumbrance” means any encumbrance, lien, charge, hypothec, pledge, mortgage, title retention agreement, security interest of any nature, prior claim, adverse claim, exception, reservation, restrictive covenant, easement (whether or not registered against title), lease, licence, right of occupation, option, right of use, right of first refusal, right of pre-emption, privilege or any matter capable of registration against title, or any Contract to create any of the foregoing.

(55)	“Enforceability Exceptions” has the meaning attributed to such term in Section 6.1(4)(a).

(56)

“Environmental Laws” means any Applicable Law relating to: (a) the protection of the environment and any natural resource; (b) the presence, release, discharge, handling, transportation, storage, remediation or disposal of Contaminants; (c) the ownership, occupation, management, transfer or sale of contaminated sites; (d) the exposure of workers to Contaminants in the workplace, and worker right-to-know legislation pertaining thereto; (e) the manufacture, distribution, labelling, import, export or sale of products or product ingredients by virtue of their composition or any other physical properties; (f) climate change, greenhouse gas emissions and the regulation of carbon; (g) the protection of endangered species and their habitat; and (h) the reporting of environmental matters and/or liabilities to any Governmental Authority or in any publicly accessible venue.

(57)	“Equity Interests” means, with respect to any Person, any and all present and future securities, units, trust units, partnership or other interests, participations or other equivalent rights in that Person’s equity or capital, however designated and whether voting or non-voting.

(58)	“Escrow Agent” means Computershare Trust Company of Canada.

(59)	“Escrow Agreement” means the escrow agreement to be entered at the Closing by the Purchaser, the Vendor and the Escrow Agent, in a form mutually agreed to by the Purchaser, the Vendor and the Escrow Agent, with the Purchaser and the Vendor each acting reasonably.

(60)	“Estimated Balance Sheet” has the meaning attributed to such term in Section 2.4(1)(a).

(61)	“Estimated Closing Cash” has the meaning attributed to such term in Section 2.4(1)(c).

(62)	“Estimated Closing Indebtedness” has the meaning attributed to such term in Section 2.4(1)(e).

(63)	“Estimated Closing Net Working Capital” has the meaning attributed to such term in Section 2.4(1)(b).

(64)	“Estimated Closing Statements” has the meaning attributed to such term in Section 2.4(1).

(65)	“ETA” means the Excise Tax Act (Canada) and the regulations made thereunder.

(66)	“Final Loss” has the meaning attributed to such term in Section 7.10(5).

(67)

“Financial Statements” means, collectively: (a) the unaudited financial statements of the Corporation as at and for the financial years ended 2022 and 2021, in each case consisting of the balance sheet, statement of operations and retained earnings and statement of cash flows, which shall be accompanied by a review engagement report from the Corporation’s independent accountants, and all notes, schedules and exhibits thereto, copies of which are attached hereto as Schedule 1.1(67); and (b) the Interim Financial Statements.

(68)

“Fraud” means, with respect to any Party, (a) with respect to any breach or inaccuracy of a representation or warranty contained in this Agreement, any intentional misrepresentation by such Party with respect to the making of a representation or warranty contained in this Agreement by such Party to deceive another Party for the purpose of receiving a material benefit from such deception, provided that at the time such representation or warranty was made (i) such representation or warranty was inaccurate, and (ii) such Party had knowledge that on the date such representation or warranty was made that it was inaccurate; and (b) with respect to any breach of a covenant contained in this Agreement, (i) any intentional breach of a covenant contained in this Agreement by such Party to deceive another Party for the purpose of receiving a material benefit from such deception, and (ii) any deliberate or wilful breach of a covenant in this Agreement by such Party.

(69)	“Funds Flow Agreement” means the funds flow agreement to be entered at the Closing by the Purchaser, the Vendor and the Vendor’s Counsel.

(70)	“GAAP”, when used in respect of accounting terms or accounting determinations relating to a Person, means the Accounting Standards for Private Enterprises which are in effect from time to time in Canada, as published in Part II of the CPA Canada Handbook.

(71)	“General Rep Liability Cap” has the meaning attributed to such term in Section 7.5(2).

(72)

“Governmental Authority” means any domestic or foreign government, whether federal, provincial, state, territorial, local, regional, municipal, or other political jurisdiction, and any agency, authority, instrumentality, court, tribunal, board, commission, bureau, arbitrator, arbitration tribunal or other tribunal, or any quasi-governmental or other entity, body, organization or agency, insofar as it exercises a legislative, judicial, regulatory, administrative, expropriation or taxing power or function of or pertaining to government.

(73)	“GST/HST” means all Taxes payable under Part IX of the ETA (including where applicable both the federal and provincial portion of those Taxes) or and under any provincial legislation imposing a similar value added or multi-staged tax.

(74)	“Hardware” means mainframes, personal computers, devices, appliances, servers, encryption equipment, data storage equipment, network equipment, routers, firewalls, semi-conductor chips, embedded Software, communication lines and other equipment.

(75)

“Indebtedness” means, without duplication, all principal, interest, premiums or other obligations and liabilities (including all premiums, penalties, fees, expenses, indemnities or breakage costs payable as a result of the consummation of the Closing or that would be required to be paid to extinguish the indebtedness at the Closing) (i) of the Corporation related to (a) indebtedness for borrowed money, (b) obligations for the deferred purchase price of property or services (including any “earn-out” or similar payments, but other than Accounts Payable incurred in the Ordinary Course of the Business and included as Current Liabilities in Closing Net Working Capital), (c) obligations evidenced by notes, bonds, debentures or other similar instruments, and the amount of all cheques drawn in excess of balances, (d) indebtedness created or arising under any conditional sale or other title retention agreement, (e) obligations under leases that have been or should be, in accordance with GAAP, recorded as capital leases, (f) obligations, contingent or otherwise, under acceptance, letter of credit or similar facilities, (g) obligations pursuant to factoring agreements for Accounts Receivable, including any obligations under any receivables financing, (h) obligations with respect to interest rate, commodity, currency or financial markets swaps, collars, caps, options, futures or other hedging obligations, (i) severance obligations to any current or former employee of the Corporation whose employment terminated prior to the Closing or who receives or provides a notice of termination prior to the Closing, (j) obligations of the Corporation on account of advances made by its Affiliates and the Corporation’s and its Affiliate’s respective current or former directors, employees, officers and shareholders, or (k) unpaid current Tax liabilities of the Corporation with respect to any Pre-Closing Tax Period (this clause (k) not to be less than zero), or (l) indebtedness of Persons other than the Corporation of the type referred to in clauses (i)(a) through (k) above that is guaranteed directly or indirectly in any manner, by the Corporation or that is secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any property of the Corporation (for clarity, excluding any guarantee or security of the Corporation that is released and discharged prior to or concurrently with the Closing). For greater certainty, Indebtedness of the Corporation shall not include any Transaction Expenses.

(76)	“Indebtedness Decrease” has the meaning attributed to such term in Section 2.6(3).

(77)	“Indebtedness Increase” has the meaning attributed to such term in Section 2.6(3).

(78)	“Indemnification Notice” means written notice by an Indemnified Party to the applicable Indemnifying Party of a Third Party Claim or Direct Claim, as the case may be.

(79)	“Indemnified Party” means any Person entitled to indemnification under this Agreement.

(80)	“Indemnified Party’s Representative” means: (a) in respect of the Purchaser’s Indemnified Parties, the Purchaser; and (b) in respect of the Vendor’s Indemnified Parties, the Vendor.

(81)	“Indemnified Taxes” has the meaning attributed to such term in Section 7.8(1).

(82)	“Indemnifying Party” means any Party obligated to provide indemnification under this Agreement.

(83)	“Indemnifying Party’s Representative” means: (a) in respect of the Purchaser, the Purchaser; and (b) in respect of the Vendor, the Vendor.

(84)	“Indemnity Holdback” means the amount of $642,500.

(85)	“Indemnity Threshold” has the meaning attributed to such term in Section 7.5(2).

(86)	“Industrial Designs” means industrial designs and design patents and all applications and registrations therefor, and all other rights corresponding thereto throughout the world.

(87)	“Initial Loss” has the meaning attributed to such term in Section 7.10(5).

(88)	“Insurance Policies” has the meaning attributed to such term in Section 6.2(16).

(89)

“Intellectual Property” means all worldwide (a) Patents; (b) Trade Secrets; (c) integrated circuit topographies and mask works; (d) Copyrights; (e) Trademarks; (f) Internet domain names; (g) registered and unregistered designs; (h) Industrial Designs; (i) derivatives, improvements, modifications, enhancements, revisions and releases relating to any of the foregoing; (j) any other intellectual property rights of any nature whatsoever anywhere in the world; and (k) claims and causes of action arising out of or related to infringement or misappropriation or violation of any of the foregoing.

(90)

“Interim Financial Statements” means (a) the unaudited internally-prepared financial statements of the Corporation as at and for the financial period from January 1, 2024 to January 31, 2024; and (b) the unaudited internally-prepared financial statements of the Corporation as at and for the financial period from January 1, 2023 to December 31, 2023, and in each case, consisting of the balance sheet, statement of operations and retained earnings and statement of cash flows, copies of which are attached hereto as Schedule 1.1(90).

(91)	“Interim Period” means the period from the Agreement Date to the Closing Date.

(92)	“Inventories” means inventories,  works-in-progress, raw materials, spare parts, replacement parts, and all other materials and supplies to be used or consumed by the Corporation in the production of finished goods.

(93)

“IT Systems” means all Hardware, peripheral equipment, Software and firmware, processed data, Technology infrastructure and other computer systems and services that are used by or accessible to the Corporation to receive, retrieve, store, process, analyze or transmit data to carry on the Business or to carry on its day-to-day operations and affairs.

(94)	“Lease” has the meaning attributed to such term in Section 6.2(12)(a).

(95)	“Leased Real Property” has the meaning attributed to such term in Section 6.2(12)(a).

(96)

“Losses” means any and all loss, liability, obligation, damage, cost, expense, charge, fine, fee, Tax, penalty or assessment, suffered, incurred, sustained or required to be paid by an Indemnified Party (including lawyers’, experts’ and consultants’ fees and expenses), resulting from or arising out of any Claim, including the costs and expenses of any action, suit, proceeding, investigation, inquiry, arbitration award, grievance, demand, assessment, judgment, settlement or compromise relating thereto.

(97)

“Material Adverse Change” or “Material Adverse Effect” means, with respect to any event, matter or circumstance, any change or effect that individually or when taken together with all other adverse changes or effects that have occurred during any relevant period of time before the determination of the occurrence of that change or effect, is or is reasonably likely to be materially adverse to the Business, the business currently contemplated to be conducted by the Corporation as set forth in the Confidential Information Presentation dated Summer 2023 and presented in the Data Room, the Assets, and the operations, liabilities, capital, condition (financial or otherwise) or results of operation, of the Corporation. Notwithstanding the foregoing, “Material Adverse Change” or “Material Adverse Effect” shall not include any event, matter or circumstance, any change or effect arising out of or attributable to: (i) general economic, regulatory, financial or political conditions or the state of credit, capital, currency or securities markets; (ii) changes adversely affecting the industry in which the Business operates; (iii) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (iv) any implementation of or changes in Applicable Laws or the enforcement, implementation or interpretation thereof; (v) any natural or man-made disaster or acts of God, COVID-19 or any other epidemic, pandemic, outbreak of illness or public health event (or the escalation of worsening thereof) or any other similar calamity or other force majeure event; (vi) any change in GAAP or any interpretation thereof; (vii) the entry into or announcement of this Agreement, including the identity of the Purchaser and its Affiliates and any communication by the Purchaser or its Affiliates regarding its plans or intentions for the Business; (viii) the taking of any action or the omission of taking any action by the Vendor, in each case, at the written request or direction of, or with written Approval from, the Purchaser, or in accordance with the terms of this Agreement; and (ix) any failure to meet any projections, forecasts or estimates in respect of the Business, provided that the underlying events, changes or effects that contributed to such failure shall be taken into consideration in determining whether a Material Adverse Change or Material Adverse Effect has occurred (except to the extent, if any, referred to in clauses (i) through (viii) of this definition). Notwithstanding the preceding sentence, any event, matter or circumstance, any change or effect referred to in clauses (i) through (vi) shall be taken into account in determining whether a Material Adverse Change or Material Adverse Effect has occurred or is reasonably likely to occur to the extent that such event, matter or circumstance, any change or effect has a disproportionate effect on the Corporation compared to other participants in the industries in which the Corporation conduct the Business.

(98)	“Material Contracts” means collectively: (i) each Contract required to be set out in Schedule 6.2(17); (ii) each Lease; and (iii) each Related Party Contract.

(99)	“Material Customer” has the meaning attributed to such term in Section 6.2(35).

(100)

“Material Supplier” has the meaning attributed to such term in Section 6.2(35).

(101)

“Net Working Capital” means, at any time, the difference in the value of the Current Assets and the Current Liabilities, calculated in accordance with the accounting methods, practices, principles, policies and procedures that were used in the preparation of the example calculation of the Net Working Capital set out in Exhibit 2.4(1)(b).

(102)

“Net Working Capital Decrease” has the meaning attributed to such term in Section 2.6(1).

(103)

“Net Working Capital Increase” has the meaning attributed to such term in Section 2.6(1).

(104)

“Non-Competition Agreement” means the non-competition agreement to be entered into between Michael Mahannah, the Purchaser and the Corporation, substantially in the form of Exhibit 1.1(104).

(105)

“notice” has the meaning attributed to such term in Section 10.10.

(106)

“Objection Notice” has the meaning attributed to such term in Section 2.5(2).

(107)

“OIS” means Olympic International Sales Ltd., a company incorporated under the laws of the Province of British Columbia.

(108)

“Order” means any order, directive, judgment, decree, award, or writ of any Governmental Authority.

(109)

“Ordinary Course” means, with respect to an action taken by a Person, that the action is consistent with the past practices of the Person and is taken in the normal day-to-day operations of the Person.

(110)

“Owned Intellectual Property” means Intellectual Property that is owned by the Corporation, and excludes Third Party Intellectual Property.

(111)

“Parent” has the meaning attributed to such term in the preamble.

(112)

“Parties” means collectively, the Purchaser, the Vendor, the Parent, and any Person that becomes a party hereto by execution of a joinder to this Agreement during the Interim Period, and “Party” means any of them.

(113)

“Patent” means patents and patent applications, provisionals, reissuances, divisions, revisions, supplementary protection certificates, continuations, continuations in part, extensions, renewals, substitutions and re-examinations, and all patents issuing on the foregoing and all equivalent or similar registered rights anywhere in the world in inventions.

(114)

“Payout Letter” has the meaning attributed to such term in Section 2.4(2).

(115)

“Permits” means Approvals obtained from or issued by a Governmental Authority pursuant to Applicable Law.

(116)

“Permitted Encumbrances” means: (a) servitudes, easements, restrictions, rights-of-way and other similar rights in real property or any interest therein, provided that those servitudes, easements, restrictions, rights-of-way and other similar rights are not of such a nature as to materially adversely affect the use or value of the property subject thereto; (b) security given in the Ordinary Course of the Business to any public utility or Governmental Authority in connection with the operations of the Business, other than Encumbrances for borrowed money; (c) the reservations, limitations, provisos and conditions in any original grants from the Crown of all real property leased by the Corporation or interest therein and statutory exceptions to title that do not materially impair the use of such real property in the operation of the Business; (d) undetermined or inchoate liens, charges and privileges incidental to current construction or current operations, provided that such Encumbrances are related to obligations not yet due or delinquent and in respect of which an adequate reserve has been made as required by Applicable Law, except for liens, charges and privileges related to Taxes not yet due or delinquent or which are being contested in good faith by appropriate proceedings and in respect of which an adequate reserve has been made as required by Applicable Law; (e) statutory liens, charges, adverse claims, security interests or Encumbrances of any nature whatsoever claimed or held by any Governmental Authority that have not at the time been filed or registered against the title to the Asset or served on the Corporation or the Vendor pursuant to Applicable Law and that relate to obligations not due or delinquent, except for statutory liens, charges, adverse claims, security interests or Encumbrances related to Taxes not yet due or delinquent or which are being contested in good faith by appropriate proceedings and in respect of which an adequate reserve has been made as required by Applicable Law; (f) assignments of insurance provided to landlords or their mortgagees pursuant to the terms of any Lease and liens, security interests or rights reserved in or granted pursuant to any Lease as security for payment of rent or for compliance with the terms of that Lease; (g) encroachments and title defects or irregularities which are of a minor nature and which do not materially reduce the value of the Assets so affected or materially interfere with its use in the operation of the Business; and (h) the Permitted Encumbrances described in Schedule 1.1(116).

(117)

“Person” is to be broadly interpreted and includes an individual, a corporation, a partnership, a joint venture, a trust, an association, a syndicate, an unincorporated organization, a Governmental Authority, an executor or administrator or other legal or personal representative, or any other juridical entity.

(118)

“Personal Information” means any information about an identifiable person that was collected, used or disclosed and is being stored by or is otherwise under the direction or control of the Corporation, excluding business contact information (as defined under the Personal Information Protection Act (Alberta)).

(119)

“Personal Property” has the meaning attributed to such term in Section 6.2(13).

(120)

“Post-Closing Tax Period” means any Tax period beginning on or after the Closing Date (including, for greater certainty, a Tax period commencing at the beginning of the Closing Date), and with respect to a Straddle Period, the portion of such Tax period beginning on the Closing Date.

(121)

“Pre-Closing Reorganization” has the meaning attributed to such term in Schedule 1.1(121).

(122)

“Pre-Closing Tax Period” means any Tax period that is not a Post-Closing Tax Period and with respect to a Straddle Period, the portion of such Tax period ending on the day prior to the Closing Date.

(123)

“Privacy Law” means any Applicable Law that regulates the collection use, disclosure, processing, retention and/or storage of Personal Information, including the Personal Information Protection and Electronic Documents Act (Canada), the Personal Information Protection Act (British Columbia), the Personal Information Protection Act (Alberta), the Act respecting the protection of personal information in the private sector (Québec) as amended by An Act to modernize legislative provisions as regards the protection of personal information, CASL, and any legislation of any legislature of any province or territory of Canada and any regulations made thereunder in force of like or similar effect.

(124)

“Privacy Requirements” means all of the obligations restrictions and prohibitions of or applicable to the Corporation in connection with the Personal Information, regardless of the authority under which they are imposed, including resolutions of the board of the directors of the Corporation, policies, agreements and any and all Privacy Law to which the Corporation is subject or by which the Corporation is bound.

(125)

“Proceeding” means: (a) any suit, action, dispute, investigation, claim, arbitration, Order, summons, citation, charge, demand or prosecution, whether legal or administrative; (b) any other proceeding; or (c) any appeal or application for review; in each case at law or in equity or before or by any Governmental Authority.

(126)

“Purchase Price” has the meaning attributed to such term in Section 2.2.

(127)

“Purchase Price Adjustment Date” means the earlier of: (a) the date of acceptance or deemed acceptance of the Closing Statements by the Vendor pursuant to Section 2.5(2) and (b) the date of deemed amendment of the Closing Statements pursuant to Section 2.5(4).

(128)

“Purchased Shares” has the meaning attributed to such term in the recitals.

(129)

“Purchaser” has the meaning attributed to such term in the preamble.

(130)

“Purchaser Affiliate” has the meaning attributed to such term in Section 10.11(2).

(131)

“Purchaser’s Counsel” has the meaning attributed to such term in Section 3.1.

(132)

“Purchaser’s General Representations” has the meaning attributed to such term in Section 7.2(b).

(133)

“Purchaser’s Fundamental Representations” has the meaning attributed to such term in Section 7.2(a).

(134)

“Purchaser’s Indemnified Parties” means the Purchaser and its Affiliates and Representatives (including the Parent) and, as of and following the Closing, the Corporation and its Affiliates and Representatives.

(135)

“Purchaser Obligations” has the meaning attributed to such term in Section 9.1.

(136)

“Purchaser Prepared Returns” has the meaning attributed to such term in Section 5.10(2).

(137)

“R&W Policy” has the meaning attributed to such term in Section 7.5(1).

(138)

“R&W Policy Expenses” has the meaning attributed to such term in Section 7.5(1).

(139)

“Related Party” means, with respect to the Corporation: (i) the Vendor, (ii) any Affiliate of the Vendor or the Corporation, (iii) any current officer, director or shareholder of the Corporation or the Vendor; and/or (iv) any Person not dealing at Arm’s Length with any of the Corporation or the Vendor.

(140)

“Related Party Contract” means any Contract between the Corporation and any Related Party (other than employment Contracts between the Corporation and any Related Party).

(141)

“Release Direction” has the meaning attributed to such term in Section 7.10(4).

(142)

“Released Claims” has the meaning attributed to such term in Section 8.1(1).

(143)

“Releasees” has the meaning attributed to such term in Section 8.1(1).

(144)

“Remaining Escrow Amount” has the meaning attributed to such term in Section 7.10(4).

(145)

“Representatives” means, with respect to any of the Parties or the Corporation, its Affiliates and, if applicable, its and their respective directors, officers, employees, agents and other representatives and advisors.

(146)

“Required Approvals” has the meaning attributed to such term in Section 6.2(11).

(147)

“Retention Bonuses” means those retention bonuses described in Schedule 1.1(147).

(148)

“Review Period” has the meaning attributed to such term in Section 2.5(2).

(149)

“Satisfied Payees” has the meaning attributed to such term in Section 2.4(2).

(150)

“Security Incident” means (a) the loss or misuse of Personal Information or third party confidential information, (b) the accidental, unauthorized and/or unlawful access or handling of Personal Information or third party confidential information, or (c) any other act or omission that compromises the security, confidentiality and/or integrity of Personal Information or third party confidential information, where such act or omission has resulted in, or is reasonably likely to result in, the occurrence of a loss, misuse, access or handling contemplated by clauses (a) or (b) of this definition. Security Incidents include, among other things, the loss of paper files and portable devices, such as laptops and CDs, network breaches, and failure to implement appropriate security safeguards to protect IT Systems, containing Personal Information or third party confidential information.

(151)

“Service Awards” mean those award payments described in Schedule 1.1(151).

(152)

“Software” means software, firmware and other software embedded in Hardware, software code, applications, routines, subroutines, interfaces, APIs, algorithms, computer programs, code, instructions, scripts, macros, tools, document display definitions, object libraries or software tools, or other instructions or set of machine instructions for the operation of Hardware or software, and all versions, updates, upgrades, releases, corrections, enhancements, replacements, patches, bug fixes and modifications thereof, whether operational, under development or inactive, and whether in source code or object code, regardless of the language in which they are expressed, including embedded program and human interfaces, SQL and other query languages, hypertext mark-up language and other computer mark-up languages, and all documentation, manuals, specifications or instructions related to any of the foregoing.

(153)

“Statutory Plans” means benefit plans that the Corporation is required by any Applicable Law to participate in or contribute to in respect of a current or former employee, director, or officer of the Corporation or any beneficiary or dependent thereof, including the Canada Pension Plan, the Québec Pension Plan and plans administered pursuant to Applicable Laws.

(154)

“Straddle Period” means any Tax period that begins before and ends after the Closing Date.

(155)

“Success Bonuses” means those bonus payments described in Schedule 1.1(155) payable pursuant to the Success Bonus Agreements.

(156)

“Success Bonus Agreements” has the meaning attributed to such term in Schedule 1.1(155);

(157)

“Successful Party” has the meaning attributed to such term in Section 2.5(5).

(158)

“Target Closing Cash” means $0.

(159)

“Target Net Working Capital” means $50,000,000.

(160)

“Tax Act” or any reference to a specific provision thereof means the Income Tax Act (Canada) and legislation of any legislature of any province or territory of Canada, and includes any regulations made thereunder in force of like or similar effect.

(161)

“Tax Contest” has the meaning attributed to such term in Section 7.8(2).

(162)

“Tax Notice” has the meaning attributed to such term in Section 7.8(1).

(163)

“Tax Refund” has the meaning attributed to such term in Section 5.10(5).

(164)

“Tax Returns” means all returns, declarations, designations, forms, schedules, reports, elections, notices, filings, statements (including withholding tax returns and reports, and information tax returns and reports) and other documents of every nature whatsoever filed or required to be filed with any Governmental Authority with respect to any Taxes, together with all amendments and supplements thereto.

(165)

“Taxes” means taxes, duties, fees, premiums, assessments, imposts, levies and other charges of any kind whatsoever imposed by any Governmental Authority in the nature of a tax (including those levied on, or measured by, income, gross receipts, profits, windfall profits, capital, transfer, land transfer, gains, capital stock, severance, ad valorem, production, gift, wealth, environment, net worth, utility, sales, goods and services, harmonized sales, use, consumption valued-added, excise, stamp, withholding, premium, business, franchising, property, employer health, payroll, employment, health, social services, education and social security taxes, surtaxes, customs duties and import and export taxes, development, occupancy, social services, licence, franchise and registration fees and employment insurance, health insurance and Canada, Québec and other government pension plan premiums or contributions), and including further any obligation to pay or repay COVID-19-related tax subsidies or credits paid or credited by or on behalf of a Governmental Authority under Applicable Laws relating to any of the foregoing taxes, premiums or duties, and whether disputed or not, and including all interest, penalties, fines, tax indemnity obligations, additions to tax or other additional amounts imposed in respect of any of the foregoing and “Tax” has a corresponding meaning.

(166)

“Technology” means (a) technology, proprietary information and materials; (b) technical, business, financial and other information, know-how, data, databases, data compilations and data collections and Software; (c) plans, drawings, schematics, sketches, graphs, product specifications, machine settings; (d) developments, inventions and ideas, invention disclosures and discoveries, whether or not patentable or reduced to practice, including processes, methods of manufacture, process engineering, techniques, methods, formulae, designs; (e) current and anticipated customer requirements, price lists, client and customer and prospect lists, purchasing histories, files and contact information; (f) projections and budgets, analyses, and market studies, business plans, strategic plans and marketing and advertising plans; and (g) product designs, reference designs and product specifications and documentation; in each of the foregoing cases whether written or oral provided, and including all rights therein and thereto.

(167)

“Third Party Claim” means any Claim asserted against an Indemnified Party by any Person who is not a Party or an Affiliate of a Party.

(168)

“Third Party Intellectual Property” means Intellectual Property that is owned by a Person other than the Corporation and is used by or licensed to the Corporation.

(169)

“Trade Secrets” means information, including any Technology, that (a) derives independent economic value, actual or potential, from not being generally known to or readily ascertainable through appropriate means by other Persons who might obtain economic value from its disclosure or use; (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and (c) is confidential.

(170)

“Trademarks” means trademarks, service marks, brand names, trade dress, distinguishing guises, logos, corporate names, business names, trade names, product names and other source or business identifiers, social media identifiers (including account names, user names, nicknames and display names), slogans and other indicia of source or origin, whether or not registered, including all common law rights thereto and all goodwill associated therewith, and registrations and applications for registration thereof, regardless of the jurisdiction in which they are registered, applied for or used and any renewals or extensions of any of the foregoing.

(171)

“Transaction Expenses” means the following expenses in respect of the Corporation that remain outstanding and are to be paid at or after the Closing: (a) all expenses of the Corporation incurred or to be incurred in connection with the Transactions which are payable by the Corporation (including, to the extent payable by the Corporation, expenses incurred in connection with the preparation, negotiation, execution or consummation of this Agreement, the Pre-Closing Reorganization, the Transactions and the process conducted in respect thereof, including all fees and disbursements of legal advisors, investment bankers, brokers, accountants and other advisors and service providers); (b) payments, bonuses or severance, including payments relating to the termination of any Employee Plan, becoming due or otherwise required to be made to any director, officer or employee of the Corporation, or former director, officer or employee of the Corporation, pursuant to any change of control agreement or success fee agreement with any such Person or any written or oral agreement, arrangement or understanding providing for an existing retention, severance or termination compensation or benefits to any such Person as a result of or in connection with the Closing, or are otherwise required to be made as a result of or in connection with the Closing or as a result of any change of control or other similar provisions, including without limitation the Success Bonuses and any payroll, withholding, or similar Taxes in respect of any of the foregoing amounts; (c) the costs of the D&O Tail Policy; (d) one half of the Escrow Agent’s fees; and (e) the Service Awards (including, for greater certainty, any payroll, withholding, or similar Taxes in respect thereof); but excluding the Retention Bonuses and the remaining one half of the Escrow Agent’s fees.

(172)

“Transaction Expenses Invoice” has the meaning attributed to such term in Section 2.4(3).

(173)

“Transaction Tax Benefit” means any reduction in the Taxes of the Corporation (including any successor entity resulting from an amalgamation or other merger thereof) in respect of a taxation year or other fiscal period which ends as a result of signing this Agreement or the Closing or any subsequent taxation year or other fiscal periods, resulting from the utilization of a Transaction Tax Deduction (or the application of a loss resulting from the utilization of a Transaction Tax Deduction), being the amount by which the liability for Taxes of the Corporation or the Purchaser relevant to such period calculated by taking into account the Transaction Tax Deduction (or loss) is less than the liability for Taxes of the Corporation or the Purchaser relevant to such period calculated by excluding the Transaction Tax Deduction (or loss).

(174)

“Transaction Tax Deduction” shall mean the amounts described in subparagraphs (b) and (e) of the definition of “Transaction Expenses”, as well as any amounts otherwise contemplated by that subparagraph (b) but paid prior to the Closing, to the extent deductible for Tax purposes under the Tax Act by the Corporation.

(175)

“Transaction Personal Information” means Personal Information in the possession, custody or control of the Vendor or the Corporation, including Personal Information about the employees, contractors, suppliers, customers, directors, officers or shareholders of the Corporation, that is or will be (a) disclosed to the Purchaser prior to the Closing Date by the Vendor or the Corporation, or (b) collected by the Purchaser prior to the Closing Date from the Vendor or the Corporation, in either case in connection with the Transactions.

(176)

“Transactions” means the purchase and sale of the Purchased Shares and all other transactions contemplated by this Agreement.

(177)

“Transfer Restrictions” has the meaning attributed to such term in Section 6.1(5)(a).

(178)

“Vendor” has the meaning attributed to such term in the recitals.

(179)

“Vendor’s Counsel” has the meaning attributed to such term in Section 3.1.

(180)

“Vendor’s Fundamental Representations” has the meaning attributed to such term in Section 7.1(a).

(181)

“Vendor’s General Representations” has the meaning attributed to such term in Section 7.1(b).

(182)

“Vendor’s Indemnified Parties” means the Vendor and its Affiliates and Representatives.

(183)

“Vendor Prepared Returns” has the meaning attributed to such term in Section 5.10(1).

(1)	The following schedules and exhibits are attached to and form part of this Agreement:

	Schedule 1.1(67)	Annual Financial Statements
	Schedule 1.1(90)	Interim Financial Statements
	Schedule 1.1(116)	Permitted Encumbrances
	Schedule 1.1(121)	Pre-Closing Reorganization
	Schedule 1.1(147)	Retention Bonuses
	Schedule 1.1(151)	Award Payments
	Schedule 1.1(155)	Success Bonuses
	Schedule 2.2	Allocation of Purchase Price
	Schedule 2.4(2)	Satisfied Payees
	Schedule 3.2(m)	Resigning Directors and Officers
	Schedule 5.5	Conduct Prior to Closing
	Schedule 6.2(5)	Authorized and Issued Capital
	Schedule 6.2(8)	Litigation
	Schedule 6.2(9)	Conduct of the Business
	Schedule 6.2(10)	Permits
	Schedule 6.2(11)	Required Approvals
	Schedule 6.2(12)	Leased Real Property
	Schedule 6.2(13)	Personal Property Matters
	Schedule 6.2(14)	Intellectual Property Matters
	Schedule 6.2(16)	Insurance Policies
	Schedule 6.2(17)	Material Contracts
	Schedule 6.2(18)	No Default Under Material Contracts
	Schedule 6.2(20)	Non-Arm’s Length Transactions
	Schedule 6.2(25)	Bank Accounts
	Schedule 6.2(27)	Absence of Changes
	Schedule 6.2(28)	Tax Matters
	Schedule 6.2(31)	Environmental
	Schedule 6.2(33)	Employee Plans
	Schedule 6.2(34)	Labour and Employment Matters
	Schedule 6.2(35)	Material Customers and Material Suppliers
	Schedule 6.2(36)	Product Warranties
	Exhibit 1.1(104)	Non-Competition Agreement
	Exhibit 2.4(1)(b)	Example Net Working Capital Calculation
	Exhibit 3.2(m)	Form of Resignation and Mutual Release

(2)

The Disclosure Schedule relate to certain matters pertaining to, and qualify certain representations and warranties made by the Vendor under, this Agreement. Any matter disclosed in any Disclosure Schedule or any section of any Disclosure Schedule delivered by the Vendor shall be considered disclosed also for other Disclosure Schedules and sections of Disclosure Schedules delivered by the Vendor where: (i) it is reasonably apparent that such matter is pertinent to such other Disclosure Schedules or sections of Disclosure Schedules or (ii) such matter is expressly cross-referenced or incorporated by reference in such other Disclosure Schedules or sections of Disclosure Schedules. Any disclosure made in any particular Disclosure Schedule that expressly states that it is an exception to one or more specified representations in the accompanying Section of this Agreement, or with respect to which it is reasonably apparent on its face that it is an exception to one or more specified representations in the accompanying Section of this Agreement, shall constitute an exception to the representations and warranties contained in such Section, whether or not the representation contains the phrase “except as set forth in schedule” or similar language. The term “Nil” as used in any Disclosure Schedule indicates that no facts or circumstances are required to be disclosed under this Agreement in such Disclosure Schedule and no facts or circumstances are inconsistent with or in contradiction to the representations and warranties set out in this Agreement. The matters disclosed in the Disclosure Schedules delivered by the Vendor shall be limited to matters that: (i) are expressly required by this Agreement to be disclosed in the Disclosure Schedules delivered by the Vendor or (ii) relate to a representation and warranty made by the Vendor under this Agreement. The matters disclosed in the Disclosure Schedules delivered by the Vendor which are not expressly required by this Agreement to be disclosed shall be deemed to be set forth for informational purposes only. Any attachments or annexes to any particular section of the Disclosure Schedules form an integral part of the Disclosure Schedules and shall be deemed to be incorporated by reference for all purposes as if set forth fully in such Disclosure Schedules. No item in the Disclosure Schedules delivered by the Vendor shall be deemed adequate to disclose an exception to a representation or warranty made in this Agreement unless the matter relating to the exception is described with reasonable particularity and describe the relevant facts in reasonable detail. Notwithstanding the foregoing, to the extent that a disclosure in the Disclosure Schedules describes all or any part of a Contract, such reference or description is qualified in its entity by the terms and provisions of such Contract provided that a copy of such Contract has been made available to the Purchaser prior to the date hereof. The purpose of the Disclosure Schedules is to set out qualifications and exceptions to, and other information called for by, this Agreement. The Purchaser acknowledges and agrees that the Disclosure Schedules and the information and disclosures contained therein do not constitute or imply, and will not be construed as: (A) a representation, warranty, covenant, agreement, undertaking or obligation that is not expressly set out in this Agreement; (B) an expansion of the scope of the representations, warranties, covenants, agreements, undertakings or obligations set out in this Agreement; (C) an admission that the information is material or would constitute a Material Adverse Change or Material Adverse Effect;  (D) a standard of materiality, a standard for what is or is not in the Ordinary Course, or any other standard contrary to the standards contained in the Agreement; or (E) conferring or giving to any third party any remedy, claim, liability, reimbursement, cause of action or other right.

(1)	The Purchaser shall pay, or cause to be paid, and satisfy the Purchase Price as follows and in accordance with the instructions set forth in the Funds Flow Agreement:

(a)

by payment at Closing to or to the order of the Vendor’s Counsel, in trust:

(i)

the Base Purchase Price,

(ii)

plus the amount by which the Estimated Closing Net Working Capital is greater than the Target Net Working Capital or minus the amount by which the Estimated Closing Net Working Capital is less than the Target Net Working Capital (as applicable),

(iii)

plus the amount by which the Estimated Closing Cash is greater than the Target Closing Cash or minus the amount by which the Estimated Closing Cash is less than the Target Closing Cash (as applicable),

(iv)

minus the amount of the Indemnity Holdback,

(v)

minus the amount of the Adjustment Holdback,

(vi)

minus 50% of the aggregate amount of the R&W Policy Expenses,

(vii)

minus the amount of the Estimated Closing Indebtedness, and

(viii)

minus the amount of the Transaction Expenses,

(b)

by payment at Closing, on the Vendor’s behalf, to the Escrow Agent the amount of the Indemnity Holdback to secure certain indemnification obligations of the Vendor in favour of the Purchaser and the Purchaser’s Indemnified Parties arising out of or pursuant to Article 7, to be held by the Escrow Agent in escrow in accordance with the Escrow Agreement. On the first anniversary of the Closing Date, the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Vendor the amount of the Indemnity Holdback, minus all amounts paid to the Purchaser in accordance with Section 7.10(4) (if any) and minus all amounts continued to be held back in accordance with Section 2.3(1)(b) (if any). If any bona fide Claim to which the Vendor may be liable under this Agreement is not resolved as of the date that the Indemnity Holdback is to be released to the Vendor in accordance with Section 2.3(1)(b) and the Escrow Agreement, then the portion of the Indemnity Holdback subject to such unresolved Claim shall not be released from escrow to the Vendor until such Claim is resolved or settled in accordance with Article 7;

(c)

by payment at Closing on the Vendor’s behalf to the Escrow Agent the amount of the Adjustment Holdback to secure certain obligations of the Vendor in favour of the Purchaser arising out of or pursuant to Sections 2.6(1), 2.6(2), 2.6(3) and 2.6(4). No later than five Business Days following the Purchase Price Adjustment Date, the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Vendor the amount of the Adjustment Holdback, minus all amounts paid to the Purchaser in accordance with Sections 2.6(1), 2.6(2), 2.6(3) and/or 2.6(4) (if any); and

(d)

by payment at Closing on the Vendor’s behalf to the insurer under the R&W Policy the amount equal to 50% of the aggregate amount of the R&W Policy Expenses.

(2)	At Closing, the Purchaser shall pay or cause to be paid on behalf of the Vendor or the Corporation:

(a)

all amounts necessary to discharge fully the then outstanding balance of all Indebtedness of the Corporation owed to each Satisfied Payee in the amounts and in accordance with the instructions set forth in the applicable Payout Letter and the Funds Flow Agreement (provided that any unpaid current Tax liabilities of the Corporation with respect to any Pre-Closing Tax Period included in such Indebtedness will be paid by the Corporation post-Closing in the Ordinary Course);

(b)

to each Person who is owed Transaction Expenses (other than the Success Bonuses and the Service Awards) the amount of such applicable Transaction Expenses owed to such Person, in accordance with the instructions set forth in the applicable Transaction Expenses Invoice and the Funds Flow Agreement; and

(c)

in respect of the aggregate amount of the Success Bonuses and the Service Awards, to the Corporation in accordance with the instructions set forth in the Funds Flow Agreement, to be paid by the Corporation to the recipients of such Success Bonuses and Service Awards in accordance with Section 5.12.

(1)	The Vendor acknowledges and confirms that it has caused the Corporation to prepare the following statements (collectively, the “Estimated Closing Statements”), copies of which are attached hereto as Schedule 2.4(1):

(a)

a good faith best estimated balance sheet of the Corporation as of the Effective Time without giving effect to the Transactions, prepared on a basis consistent with the Corporation’s past practice and in accordance with GAAP and Applicable Laws as if such accounts were being prepared as of a fiscal year end (the “Estimated Balance Sheet”);

(b)

a good faith best estimate of a detailed calculation of the Net Working Capital as of the Effective Time without giving effect to the Transactions, prepared in accordance with the accounting methods, practices, principles, policies and procedures that were used in the preparation of the example calculation of the Net Working Capital set out in Exhibit 2.4(1)(b) (the “Estimated Closing Net Working Capital”).

(c)

a calculation of the amount by which the Estimated Closing Net Working Capital exceeds or is less than, as the case may be, the Target Net Working Capital;

(d)

a good faith best estimate of the Cash as of the Effective Time (the “Estimated Closing Cash”);

(e)

a good faith best estimate of the Indebtedness as of the Effective Time (the “Estimated Closing Indebtedness”); and

(f)

the Purchase Price, as adjusted in accordance with Section 2.3(1)(a).

(2)

At least two Business Days prior to the Closing Date, the Vendor shall deliver or cause to be delivered to the Purchaser a payout letter (each, a “Payout Letter”) from each Person holding secured Indebtedness of the Corporation as of the Closing Date set out in Schedule 2.4(2) (the “Satisfied Payees”), each in form and substance satisfactory to the Purchaser, acting reasonably, setting out the amount of all secured Indebtedness owed by the Corporation to such Satisfied Payee as of the Closing Date and conditionally releasing upon receipt of payment in accordance with such Payout Letter all Encumbrances held by such Satisfied Payee affecting any of the Assets or any of the Purchased Shares (as applicable).

(3)	At least two Business Days prior to the Closing Date, the Vendor shall deliver or cause to be delivered to the Purchaser an invoice or similar documentary proof, with full payment details (each, a “Transaction Expenses Invoice”) from each Person who is owed Transaction Expenses.

(1)	As soon as possible, but not later than 120 days, following the Closing Date, the Purchaser shall prepare and deliver to the Vendor the following (collectively, the “Closing Statements”):

(a)

unaudited financial statements of the Corporation for the period from the date of the most recent annual Financial Statements of the Corporation to the Effective Time and as at the Effective Time prepared in accordance with GAAP and Applicable Laws;

(b)

calculations of:

(i)

the Net Working Capital as of the Effective Time (the “Closing Net Working Capital”), prepared in accordance with the accounting methods, practices, principles, policies and procedures that were used in the preparation of the example calculation of the Net Working Capital set out in Exhibit 2.4(1)(b);

(ii)

the amount by which the Closing Net Working Capital exceeds or is less than, as the case may be, the Estimated Closing Net Working Capital;

(iii)

the Cash as of the Effective Time (the “Closing Cash”);

(iv)

the amount by which the Closing Cash exceeds or is less than, as the case may be, the Estimated Closing Cash;

(v)

the Indebtedness as of the Effective Time (the “Closing Indebtedness”);

(vi)

the amount by which the Closing Indebtedness is greater than or less than, as the case may be, the Estimated Closing Indebtedness; and

(vii)

the Purchase Price, as adjusted in accordance with Section 2.6.

(2)

The Vendor shall have 30 days from receipt of the Closing Statements (the “Review Period”) within which to review the Closing Statements. During the Review Period, upon reasonable request from the Vendor, the Purchaser shall cause the Corporation to provide the Vendor and its Representatives with reasonable access, during normal business hours, to the personnel and financial Books and Records of the Corporation for the purpose of enabling the Vendor to review the Closing Statements. If the Vendor acting in good faith and in consultation with its independent accounting advisors dispute any matters set out in the Closing Statements, then the Vendor may deliver written notice (an “Objection Notice”) to the Purchaser within the Review Period setting forth in detail the particular matters in the Closing Statements to which the Vendor objects (the “Disputed Items”). If the Vendor does not deliver an Objection Notice to the Purchaser within the Review Period, then the Vendor shall be deemed to have accepted the Closing Statements. If the Vendor delivers an Objection Notice to the Purchaser within the Review Period, then: (i) the Purchaser and the Vendor shall work expeditiously and in good faith in an attempt to resolve all of the Disputed Items within 15 days of receipt of the Objection Notice (the “Discussion Period”) and (ii) all matters in the Closing Statements, other than the Disputed Items, shall be deemed to have been accepted by the Vendor. If all Disputed Items are not resolved within the Discussion Period, the Purchaser and the Vendor shall within 10 days following the end of the Discussion Period appoint PwC Canada (or, if such independent accounting firm is conflicted or otherwise refuses to act, then such other independent national accounting firm as may be mutually agreed by the Vendor and the Purchaser) (the “Closing Statements Dispute Auditor”) to resolve the remaining items in dispute.

(3)

Within ten Business Days of the appointment of the Closing Statements Dispute Auditor, the Purchaser and the Vendor shall furnish to the Closing Statements Dispute Auditor those working papers, schedules and other documents, accounting Books and Records and information relating to the Disputed Items that are available to the Purchaser and the Vendor or their respective Representatives as the Closing Statements Dispute Auditor may require together with their respective written statements in support of their respective positions with respect to the Disputed Items. Within one Business Day following receipt of such submissions, the Closing Statements Dispute Auditor shall deliver such submissions to the Purchaser and the Vendor, as the case may be, and the Purchaser and the Vendor shall be allowed one opportunity to respond to the submissions of the Purchaser and the Vendor, as the case may be, within five Business Days of the receipt of such submissions from the Closing Statements Dispute Auditor. The Closing Statements Dispute Auditor shall make a determination, based solely on the written submissions of the Parties and not by independent investigation, regarding only the specific items under dispute by the Parties. No Party shall engage in any ex parte communication (i.e., without the inclusion of the other Party) with the Closing Statements Dispute Auditor, and any information or documentation provided to the Closing Statements Dispute Auditor shall be simultaneously provided to the other Party. The Purchaser and the Vendor shall instruct the Closing Statements Dispute Auditor that: (i) time is of the essence in proceeding with its determination of the Disputed Items and the Closing Statements Dispute Auditor shall use its best efforts to deliver the decision of the Closing Statements Dispute Auditor with respect to the Disputed Items within 15 Business Days following receipt of the submissions from the Purchaser and the Vendor and (ii) in making its determination of the Disputed Items, the Closing Statements Dispute Auditor (A) shall be bound by the provisions of this Section 2.5 and shall be instructed to resolve the dispute and computation of the Purchase Price based solely on the terms of this Agreement, and (B) may not award to the Purchaser or the Vendor (as applicable) an amount greater than the amount asserted by the Purchaser or the Vendor (as applicable); and (iii) its decision shall be in writing. The Closing Statements Dispute Auditor’s decision, absent any manifest error or prior agreement of the Purchaser and the Vendor otherwise, shall be final and binding on the Purchaser and the Vendor with no rights of challenge, review, or appeal to the courts in any manner. The Closing Statements Dispute Auditor, in making its determination of the Disputed Items, will be acting as an expert and not as an arbitrator and will not be required to engage in a judicial inquiry worked out in a judicial manner.

(4)

On agreement of the Purchaser and the Vendor or the decision of the Closing Statements Dispute Auditor, as the case may be, with respect to the Disputed Items, the Closing Statements shall be deemed to be amended as may be necessary to reflect the agreement of the Purchaser and the Vendor or the decision of the Closing Statements Dispute Auditor, as the case may be, and in this event, all references in this Agreement to the Closing Statements shall be deemed to be references to the Closing Statements as so amended.

(5)

The Purchaser and the Vendor shall be responsible for their own costs and expenses in connection with the preparation and review of the Closing Statements and the calculations contained therein and the settlement of any Disputed Items. The fees and expenses of the Closing Statements Dispute Auditor pursuant to this Section 2.5 will be borne by the Purchaser and the Vendor based upon the percentage which the aggregate portion of the contested amounts of the Disputed Items not awarded to the Purchaser and the Vendor, as the case may be, bears to the aggregate amount actually contested by the Purchaser or the Vendor, as the case may be (the “Cost Determination Percentage”). For example, if the Vendor delivers an Objection Notice in which the Disputed Items claims the Purchase Price is $100,000 greater than the amount determined by the Purchaser in the Closing Statements, and the Purchaser contests only $50,000 of the amount claimed by the Vendor, and if the Closing Statements Dispute Auditor ultimately resolves the dispute by awarding the Vendor $30,000 of the $50,000 contested, then the costs and expenses of the Closing Statements Dispute Auditor will be allocated 60% (i.e. 30,000 ÷ 50,000) to the Purchaser and 40% (i.e. 20,000 ÷ 50,000) to the Vendor. If the Cost Determination Percentage is 0% for the Purchaser or the Vendor, as the case may be (the “Successful Party”), then the non-Successful Party shall pay, in addition to the fees and expenses of the Closing Statements Dispute Auditor, all of the Successful Party’s reasonable out-of-pocket fees and expenses incurred in connection with the resolution of the Disputed Items, including the reasonable out-of-pocket fees and expenses of the Successful Party’s legal counsel, accountants, consultants and Representatives engaged by such Party to assist with the resolution of the Disputed Items, in respect of which the Successful Party has provided satisfactory written evidence to the non-Successful Party, up to a maximum of $50,000. Any and all payments required pursuant to this Section 2.5(5) shall be made within five Business Days following the date of the Closing Statements Dispute Auditor’s decision.

(1)

If the Closing Net Working Capital is less than the Estimated Closing Net Working Capital, then the Purchase Price shall be adjusted downward by the amount of such difference (the “Net Working Capital Decrease”) and, within five Business Days following the Purchase Price Adjustment Date, the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser, from the amount of the Adjustment Holdback available for the payment of the Net Working Capital Decrease as of the date of such payment (in this Section 2.6(1), the “remaining amount”), the amount of the Net Working Capital Decrease. If the Net Working Capital Decrease is greater than the remaining amount of the Adjustment Holdback, then, within five Business Days following the Purchase Price Adjustment Date: (A) the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser the remaining amount of the Adjustment Holdback and (B) the amount of the Net Working Capital Decrease in excess of the remaining amount of the Adjustment Holdback shall be paid by the Vendor to the Purchaser as the Purchaser may direct, acting reasonably. If the Closing Net Working Capital is greater than the Estimated Closing Net Working Capital, then the Purchase Price shall be adjusted upward by the amount of such difference (the “Net Working Capital Increase”) and, within five Business Days following the Purchase Price Adjustment Date: (A) the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Vendor the Adjustment Holdback and (B) the amount of the Net Working Capital Increase in excess of the amount of the Adjustment Holdback shall be paid by the Purchaser to the Vendor’s Counsel, in trust, for distribution to the Vendor.

(2)

If the Closing Cash is less than the Estimated Closing Cash, then the Purchase Price shall be adjusted downward by the amount of such difference (the “Cash Decrease”) and, within five Business Days following the Purchase Price Adjustment Date, the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser, from the amount of the Adjustment Holdback available for the payment of the Cash Decrease as of the date of such payment (in this Section 2.6(2), the “remaining amount”), the amount of the Cash Decrease. If the Cash Decrease is greater than the remaining amount of the Adjustment Holdback, then, within five Business Days following the Purchase Price Adjustment Date: (A) the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser the remaining amount of the Adjustment Holdback and (B) the amount of the Cash Decrease in excess of the remaining amount of the Adjustment Holdback shall be paid by the Vendor to the Purchaser as the Purchaser may direct, acting reasonably. If the Closing Cash is greater than the Estimated Closing Cash, then the Purchase Price shall be adjusted upward by the amount of such difference (the “Cash Increase”) and the amount of the Cash Increase shall be paid by the Purchaser to the Vendor’s Counsel, in trust, within five Business Days following the Purchase Price Adjustment Date, for distribution to the Vendor.

(3)

If the Closing Indebtedness is greater than the Estimated Closing Indebtedness, then the Purchase Price shall be adjusted downward by the amount of such difference (the “Indebtedness Increase”) and, within five Business Days following the Purchase Price Adjustment Date, the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser, from the amount of the Adjustment Holdback available for the payment of the Indebtedness Increase as of the date of such payment (in this Section 2.6(3), the “remaining amount”), the amount of the Indebtedness Increase. If the Indebtedness Increase is greater than the remaining amount of the Adjustment Holdback, then, within five Business Days following the Purchase Price Adjustment Date: (A) the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser the remaining amount of the Adjustment Holdback and (B) the amount of the Indebtedness Increase in excess of the remaining amount of the Adjustment Holdback shall be paid by the Vendor to the Purchaser as the Purchaser may direct, acting reasonably. If the Closing Indebtedness is less than the Estimated Closing Indebtedness, then the Purchase Price shall be adjusted upward by the amount of such difference (the “Indebtedness Decrease”) and the amount of the Indebtedness Decrease shall be paid by the Purchaser to the Vendor’s Counsel, in trust, within five Business Days following the Purchase Price Adjustment Date, for distribution to the Vendor.

(4)

To the extent that any Transaction Expenses are not paid at the Closing in accordance with Section 2.3(2)(b), then the Purchaser may deliver written notice to the Vendor setting out the amount of all such unpaid Transaction Expenses (provided that such notice must be delivered by the Purchaser to the Vendor on or before the Purchase Price Adjustment Date) and, within five Business Days following the date of written notice by the Purchaser to the Vendor in accordance with this Section 2.6(4), the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser, from the amount of the Adjustment Holdback available for the payment of the unpaid Transaction Expenses as of the date of such payment (in this Section 2.6(4), the “remaining amount”), the amount of all such unpaid Transaction Expenses. If the amount of all such unpaid Transaction Expenses is greater than the remaining amount of the Adjustment Holdback, then, within five Business Days following the date of written notice by the Purchaser to the Vendor in accordance with this Section 2.6(4): (i) the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser the remaining amount of the Adjustment Holdback and (ii) the amount of all such unpaid Transaction Expenses in excess of the remaining amount of the Adjustment Holdback shall be paid by the Vendor to the Purchaser or as the Purchaser may direct, acting reasonably. If the Purchaser and the Vendor disagree with respect to the amount of the unpaid Transaction Expenses and are unable to reach an agreement within five Business Days following the date of written notice by the Purchaser to the Vendor in accordance with this Section 2.6(4), then the Purchaser may, but shall not be required to, refer the matter to the Closing Statements Dispute Auditor and Sections 2.5(3) to 2.5(5) shall apply mutatis mutandis to the resolution of any such determination of the unpaid Transaction Expenses. Within five Business Days following the date of agreement of the Purchaser and the Vendor or the decision of the Closing Statements Dispute Auditor, as the case may be, the Purchaser and the Vendor shall jointly deliver the applicable joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with this Section 2.6(4). The Purchase Price shall be adjusted downward by the amount of any Transaction Expenses paid pursuant to this Section 2.6(4) to the extent such Transaction Expenses have not previously been deducted from the Purchase Price.

(5)

The determination and adjustment of the Purchase Price in accordance with this Section 2.6 will not limit or affect any other rights or causes of action that the Parties may have with respect to the representations, warranties, covenants and indemnities in its favour contained in this Agreement. The Parties agree that there shall be no double counting to the detriment of any of the Parties in respect of the calculation of any part of Estimated Closing Net Working Capital, the Closing Net Working Capital, the Estimated Closing Cash, the Closing Cash, the Estimated Closing Indebtedness, the Closing Indebtedness, the Transaction Expenses and/or any Claims.

(1)

Following the Closing, the Vendor shall, and shall cause each of its Affiliates to, promptly pay to the Corporation all amounts received by the Vendor or any of its Affiliates after the Closing from any Person related to the supply of any goods and/or provisions of any services by the Corporation or the Business to such Person at any time prior to, on, or following the Closing Date.

(2)

Following the Closing, if the Corporation receives a refund or rebate from any supplier or vendor of the Corporation that relates to purchases by the Corporation from such supplier or vendor during the period prior to the Closing, then within 10 Business Days following receipt of such refund or rebate by the Corporation, the Purchaser shall pay or cause to be paid to the Vendor’s Counsel, in trust, such amount received, for distribution to the Vendor.

(3)

All amounts paid to the Purchaser pursuant to this Section 2.7 (if any) will constitute a dollar-for-dollar decrease of the Purchase Price, except to the extent inconsistent with Applicable Law. All amounts paid to the Vendor’s Counsel, in trust, pursuant to this Section 2.7 (if any) will constitute a dollar-for-dollar increase of the Purchase Price, except to the extent inconsistent with Applicable Law.

(a)

a certificate of status (or its equivalent) for each of the Corporation and the Vendor dated no more than one Business Day prior to the Closing Date;

(b)

a bring-down certificate of the Vendor in respect of the conditions set out in Section 4.1(1)(a) and Section 4.1(1)(b);

(c)

a certificate of an officer of the Vendor dated as of the Closing Date, attaching and certifying true, accurate and complete copies of: (i) the Constating Documents of the Vendor in effect as of the Closing Date; (ii) directors’ and shareholders’ resolutions (as applicable) for the Vendor approving the Transactions; and (iii) the incumbency and signatures of the officers of the Vendor executing this Agreement and any other document relating to the Transactions;

(d)

a certificate of an officer of the Corporation dated as of the Closing Date, attaching and certifying true, accurate and complete copies of: (i) the Constating Documents of the Corporation in effect as of the Closing Date; (ii) directors’ and shareholders’ resolutions (as applicable) for the Corporation approving the Transactions and the execution of any Ancillary Agreements, as applicable; and (iii) the incumbency and signatures of the officers of the Corporation executing this Agreement and any other document relating to the Transactions;

(e)

certificates representing the Purchased Shares, accompanied by duly executed instruments of transfer, and all such other assurances, consents and other documents as the Purchaser reasonably requests to effectively transfer title to the Purchased Shares to the Purchaser, free and clear of all Encumbrances;

(f)

evidence of the release and discharge of all Encumbrances affecting any of the Assets and any of the Purchased Shares, other than the Permitted Encumbrances;

(g)

evidence that all of the Required Approvals that are required to be obtained for Closing, as identified in Schedule 6.2(11), have been obtained and are in full force and effect (for clarity, excluding any Required Approvals that are not required to be obtained for Closing, as identified in Schedule 6.2(11);

(h)

the Funds Flow Agreement, duly executed by each of the parties thereto other than the Purchaser;

(i)

the Escrow Agreement, duly executed by each of the parties thereto other than the Purchaser;

(j)

a restrictive covenant agreement between the Vendor, the Purchaser and the Corporation, duly executed by the Vendor and the Corporation;

(k)

the Non-Competition Agreement, duly executed by the parties to those agreements (other than the Purchaser);

(l)

evidence that all Indebtedness owed to or by the Corporation by or to any Related Party (other than OIS) have been settled, paid, discharged and/or terminated (as applicable);

(m)

written resignations and mutual releases duly executed by all of the directors and officers of the Corporation and the Corporation, substantially in the form attached as Exhibit 3.2(m), in each case effective as of the Closing Date;

(n)

original share registers, share transfer ledgers, minute books and corporate seals (if any) of the Corporation; and

(o)

such other documentation as the Purchaser reasonably requests on a timely basis in order to establish the completion of the Transactions and the taking of all corporate proceedings in connection with the Transactions.

(a)

the payments required to be made at Closing pursuant to Section 2.3;

(b)

a certificate of status (or equivalent) for each of the Purchaser and the Parent dated no more than one Business Day prior to the Closing Date;

(c)

a bring-down certificate of the Purchaser in respect of the conditions set out in Section 4.2(1)(a) and Section 4.2(1)(b);

(d)

a certificate of an officer of the Purchaser dated as of the Closing Date, attaching and certifying true, accurate and complete copies of: (i) the Constating Documents of the Purchaser in effect as of the Closing Date; (ii) directors’ and shareholders’ resolutions (as applicable) for the Purchaser approving the Transactions; and (iii) the incumbency and signatures of the officers of the Purchaser executing this Agreement and any other document relating to the Transactions;

(e)

a certificate of an officer of the Parent dated as of the Closing Date, attaching and certifying true, accurate and complete copies of: (i) the Constating Documents of the Parent in effect as of the Closing Date; (ii) directors’ and shareholders’ resolutions (as applicable) for the Parent approving the Transactions; and (iii) the incumbency and signatures of the officers of the Parent executing this Agreement and any other document relating to the Transactions;

(f)

the Funds Flow Agreement, duly executed by the Purchaser;

(g)

the Escrow Agreement, duly executed by the Purchaser;

(h)

the Non-Competition Agreement, duly executed by the Purchaser; and

(i)

a restrictive covenant agreement between the Vendor, the Purchaser and the Corporation, duly executed by the Purchaser.

(1)	The Purchaser shall be obliged to complete the Transactions only if each of the following conditions precedent has been satisfied in full at or before the time of Closing on the Closing Date:

(a)

the Vendor’s Fundamental Representations will be true and correct in all respects as of the Agreement Date and at the time of Closing on the Closing Date with the same force and effect as if made at and as of such time, except for de minimis inaccuracies. The Vendor’s General Representations will be true and correct as of the Agreement Date and at the time of Closing on the Closing Date with the same force and effect as if made at and as of such time, except (i) to the extent such representations and warranties are made only as of another date, including the Agreement Date, in which case such representations and warranties will be true and correct as of such other date, and (ii) to the extent the failure of such representations and warranties to be true and correct at such time would not, in the aggregate, have a Material Adverse Effect (it being understood that for the purposes of such determination, all such representations and warranties that are qualified as to “material”, “material respects”, “Material Adverse Effect” or words of similar import or effect will be deemed to have been made without such qualification);

(b)

the Vendor has complied with or performed, in all material respects, all of the obligations, covenants and agreements under this Agreement to be complied with or performed by it on or before the time of Closing on the Closing Date;

(c)

there is no Order issued preventing, and no pending or threatened Proceeding, against any Party or the Corporation, for the purpose of enjoining or preventing, the completion of the Transactions or otherwise claiming that this Agreement or the completion of Transactions is improper or would give rise to such a Proceeding;

(d)

since the Agreement Date there has not occurred any event that is reasonably likely to have a Material Adverse Effect;

(e)

the Vendor have caused to be delivered to the Purchaser all closing deliveries as required under Section 3.2.

(2)	Each of the conditions set out in Section 4.1(1) is for the exclusive benefit of the Purchaser and the Purchaser may waive compliance with any such condition in whole or in part by notice in writing to the Vendor, except that no such waiver operates as a waiver of any other condition.

(1)	The Vendor shall be obliged to complete the Transactions only if each of the following conditions precedent has been satisfied in full at or before the time of Closing on the Closing Date:

(a)

the Purchaser’s Fundamental Representations will be true and correct in all respects as of the Agreement Date and at the time of Closing on the Closing Date with the same force and effect as if made at and as of such time, except for de minimis inaccuracies. The Purchaser’s General Representations will be true and correct as of the Agreement Date and at the time of Closing on the Closing Date with the same force and effect as if made at and as of such time, except (i) to the extent such representations and warranties are made only as of another date, including the Agreement Date, in which case such representations and warranties will be true and correct as of such other date, and (ii) to the extent the failure of such representations and warranties to be true and correct at such time would not, in the aggregate, have a Material Adverse Effect (it being understood that for the purposes of such determination, all such representations and warranties that are qualified as to “material”, “material respects”, “Material Adverse Effect” or words of similar import or effect will be deemed to have been made without such qualification);

(b)

the Purchaser and the Parent have complied with or performed, in all material respects, all of the obligations, covenants and agreements under this Agreement to be complied with or performed by them on or before the time of Closing on the Closing Date;

(c)

there is no Order issued preventing, and no pending or threatened Proceeding, against any Party or the Corporation, for the purpose of enjoining or preventing, the completion of the Transactions or otherwise claiming that this Agreement or the completion of the Transactions is improper or would give rise to such a Proceeding;

(d)

the Purchaser has caused to be delivered to the Vendor: (i) evidence of all payments in accordance with Section 3.3(a) and (ii) all closing deliveries as required under Section 3.3.

(2)	Each of the conditions set out in Section 4.2(1) is for the exclusive benefit of the Vendor and the Vendor may waive compliance with any such condition in whole or in part by notice in writing to the Purchaser, except that no such waiver operates as a waiver of any other condition.

(a)

by the Purchaser if a breach of Section 4.1(1)(a) or Section 4.1(1)(b) has occurred (other than as a result of a failure of the Purchaser to comply with its obligations under this Agreement), and: (i) such breach is, in the opinion of the Purchaser, acting reasonably, incapable of being cured or such breach has not been cured within 10 days following delivery by the Purchaser to the Vendor of a notice of breach and (ii) the Purchaser has not waived the condition to which the breach relates;

(b)

by the Purchaser if a breach of Section 4.1(1) has occurred (other than a breach of Section 4.1(1)(a) or Section 4.1(1)(b)), other than as a result of a failure of the Purchaser to comply with its obligations under this Agreement, and the Purchaser has not waived the condition to which the breach relates;

(c)

by the Purchaser pursuant to Section 5.4;

(d)

by the Vendor if a breach of Section 4.2(1)(a) or Section 4.2(1)(b) has occurred (other than as a result of a failure of the Vendor to comply with its obligations under this Agreement), and: (i) such breach is, in the opinion of the Vendor, acting reasonably, incapable of being cured or such breach has not been cured within 10 days following delivery by the Vendor to the Purchaser of a notice of breach and (ii) the Vendor has not waived the condition to which the breach relates;

(e)

by the Vendor if a breach of Section 4.2(1) has occurred (other than a breach of Section 4.2(1)(a) or Section 4.2(1)(b)), other than as a result of a failure of the Vendor to comply with its obligations under this Agreement, and the Vendor has not waived the condition to which the breach relates;

(f)

by mutual consent of the Purchaser and the Vendor; or

(g)

unilaterally by the Purchaser or the Vendor if the Closing has not occurred on or before April 1, 2024, or such later date as may be agreed to by the Parties in writing from time to time.

(1)

On the Closing Date, the Vendor shall deliver, and shall cause to be delivered, to the Purchaser or make available to the Purchaser at the Leased Real Property, the Books and Records and all documents (except in the case of those required by Applicable Law to be retained by the Vendor, copies thereof) and other data, technical or otherwise, which are owned by the Corporation at the Closing Date, relating to the Corporation, the Business and the Assets. The Purchaser shall preserve all those documents delivered to it for the longer of six years and the period required by Applicable Law. The Purchaser shall permit the Vendor with reasonable access to those documents while they are in the Purchaser’s or the Corporation’s possession or control solely to the extent that access is required by the Vendor to perform its obligations under this Agreement or under Applicable Law, but the Purchaser shall not be responsible or liable to the Vendor for, or as a result of, any loss or destruction of or damage to any such documents and other data unless that destruction, loss or damage is caused by the Purchaser’s gross negligence or wilful misconduct. The Vendor shall be responsible for all reasonable out-of-pocket costs and expenses, incurred, directly or indirectly, by the Purchaser in connection with any access contemplated by this Section 5.2(1).

(2)

Notwithstanding Section 5.2(1), the Vendor shall be entitled to retain copies of any documents or other data delivered to the Purchaser pursuant to Section 5.2(1) provided that those documents or data are reasonably required and only used or relied on by the Vendor to perform its obligations under this Agreement or under Applicable Law. The Vendor shall retain any documents or data which relate to the Business and which are retained by the Vendor pursuant to this Section 5.2(2) in strict confidence and shall not use or otherwise disclose the data or information contained therein except in accordance with Section 10.1.

(1)

During the Interim Period, subject to Applicable Laws and upon prior reasonable notice, the Vendor shall, and shall cause the Corporation and each of their Representatives to, permit the Purchaser and its Representatives and its lenders, and the insurers, underwriters, brokers, advisors, legal counsel and other representatives in connection with the R&W Policy, to make such due diligence investigations and inspections in relation to the Corporation, the Purchased Shares, the Business, and the Assets, and of their respective financial, legal and physical condition as the Purchaser, acting reasonably, deems necessary or desirable to familiarize itself with the Business, Assets and other matters. Subject to Applicable Laws and upon prior reasonable notice, the Vendor shall, and shall cause the Corporation and each of their Representatives to, provide the Purchaser and its Representatives with complete access during normal business hours (without undue interference to the Business in the Ordinary Course) to its Books and Records, corporate records, accounts, Contracts and other Assets. Any such access or requests shall be conducted by the Purchaser or its Representatives in such a manner so as not to interfere in any material way with the Business or the Corporation, shall not contravene any Applicable Laws, shall not jeopardize any solicitor-client or other legal privilege, and shall comply with any applicable safety or security requirements. Notwithstanding the foregoing, the Purchaser and its Representatives shall not (a) contact any employee, customer, agent, distributor or supplier of the Corporation with respect to the Transactions without the prior consent of the Vendor, which consent shall not be unreasonably withheld, conditioned or delayed, or (b) perform invasive or subsurface investigations of the Leased Real Property without the prior consent the Vendor, which consent shall not be unreasonably withheld, conditioned or delayed. At the Purchaser’s reasonable request, the Vendor shall, and shall cause the Corporation to, execute or cause to be executed, such approvals and authorizations as may be necessary to permit any reasonable inspection of the Corporation, the Business or any of the Assets and to enable the Purchaser and its Representatives to obtain reasonably required access to files and records relating to the Corporation or relating to any of the Assets maintained by Governmental Authorities.

(2)	The exercise of any rights of inspection by or on behalf of the Purchaser under this Section 5.3 does not mitigate or otherwise affect the representations and warranties of the Vendor under this Agreement, which continue in full force and effect as provided in Section 7.1.

(a)

terminate this Agreement in accordance with the provisions of Section 4.3(c); or

(b)

complete the Transaction without reduction of the Purchase Price, in which event all proceeds of insurance or compensation for appropriation, expropriation or seizure shall be paid to the Purchaser (or as the Purchaser may direct).

(a)

conduct the Business and the operations and affairs of the Corporation only in the Ordinary Course;

(b)

use commercially reasonable efforts to not take any action or refrain from taking any action that, if effected before the Agreement Date, would require disclosure pursuant to Section 6.2(27) except: (A) as expressly permitted pursuant to this Agreement, or (B) reasonably required to give effect to this Agreement; and, without limiting the generality of the foregoing, the Vendor shall not, and shall cause the Corporation to not:

(i)

amalgamate, merge or consolidate with, acquire any Equity Interests of, or acquire all or substantially all of the assets of, any Person;

(ii)

acquire or lease or agree to acquire or lease any material business operations from any Person, acquire any legal or beneficial interest in any real property, or occupy, lease, manage or control any facility or property that is not an Asset, other than the buy-out of certain equipment leased by the Corporation under capital leases (or otherwise converting such equipment from leased assets into owned assets), and the related termination of such capital leases;

(iii)

institute or discharge, or enter into any compromise or settlement of, any Proceeding relating to the Business or any of the Assets;

(iv)

sell, license, agree to sell, agree to license, allow to go abandoned or allow to lapse any Owned Intellectual Property;

(v)

enter into, amend or terminate any lease, agreement in the nature of a lease or offer to lease, whether as lessor or lessee, other than the buy-out of certain equipment leased by the Corporation under capital leases (or otherwise converting such equipment from leased assets into owned assets), and the related termination of such capital leases;

(vi)

take any action to terminate, dismiss or cause the retirement of any management-level employee;

(vii)

knowingly take any action, or omit to take any action, that would result in the Corporation being in violation of the Privacy Requirements;

(viii)

enter into, amend, supplement, restate, replace or terminate any Related Party Contract;

(ix)

make any change in the Tax reporting or accounting principles, practices, policies or methods, including with respect to (A) depreciation or amortization policies or rates or (B) the payment of Accounts Payable or the collection of Accounts Receivable, except as required by Applicable Law;

(x)

cancel or waive any material Indebtedness owed to the Corporation, claim or other right with a material value to the Corporation, as the case may be;

(xi)

apply for any COVID-19 Relief or make any change to any COVID-19 Relief which the Corporation has applied for or received;

(xii)

amend, cancel or reduce any of its insurance coverage or policies of insurance without obtaining comparable substitute coverage, other than with respect to the D&O Tail Policy;

(xiii)

prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, settle or otherwise compromise any claim relating to Taxes, otherwise settle any dispute relating to Taxes, or request, revise, or continue work on any ruling, interpretation or similar guidance from a Governmental Authority (or application therefor) with respect to Taxes;

(xiv)

make, amend or rescind any material election relating to Taxes, including elections for any and all joint ventures, partnerships, limited liability companies or other investments where it has the capacity to make such binding election;

(xv)

change any of its methods of reporting any item for Tax purposes from those employed in the preparation of its Tax Returns for the most recent taxable year for which a Tax Return has been filed;

(xvi)

amend any Tax Return;

(xvii)

amend, modify or make any change to any of its Constating Documents;

(xviii)

incur or increase the amount of any Indebtedness for borrowed money to any Person;

(xix)

give or become a party to or bound by any guarantee, surety or indemnity in respect of Indebtedness or other obligations or liabilities of any Person (other than indemnities granted under customer and supplier Contracts in the Ordinary Course);

(xx)

become a party to any other commitment by which the Corporation is, or is contingently, responsible for Indebtedness or other obligations or liabilities of any Person (other than indemnities granted under customer and supplier Contracts in the Ordinary Course);

(xxi)

terminate, cancel, modify or amend any Material Contract or Business Permit;

(xxii)

fail to take any action which would entitle any party to any Material Contract to terminate or cancel such Material Contract;

(xxiii)

fail to take any action which would entitle any Governmental Authority to terminate or cancel any Business Permit;

(xxiv)

make any change or amendment to any Employee Plans;

(xxv)

adopt any new Employee Plans;

(xxvi)

make any change in the compensation of any current employees, contractors or consultants, including salary, bonus or other benefits, other than changes made in accordance with normal compensation practices and consistent with past compensation practices;

(xxvii)

make or promise to make any compensation increases for, or any severance, special payment or deferred compensation arrangements for, any current or former employees, contractors or consultants of the Corporation;

(xxviii)

hire any individual or enter into any Contract with any Person for an annual base salary or wages in excess of $75,000 who would be a current employee, contractor or consultant, if such individual or Person had been employed by or contracted with the Corporation as of the Agreement Date, other than as set forth in Schedule 6.2(34);

(xxix)

change the status of any part-time employee to full-time of the Corporation;

(xxx)

terminate any employee except for cause;

(xxxi)

do any act or thing of the kind described in Section 6.2(20) and Section 6.2(27); and

(xxxii)

agree, authorize or otherwise commit or enter into any understanding to do any of the foregoing;

(c)

promote and use commercially reasonable efforts to preserve the goodwill and business relationships of the Business, including with the employees, contractors, customers, suppliers and others having business relations with the Corporation;

(d)

comply with all Applicable Laws in all material respects;

(e)

maintain the Assets in good operating condition and repair, normal wear and tear excepted. In the event of any loss or damage to any equipment of the Corporation during the Interim Period, the Corporation will use commercially reasonable efforts to make or cause to be made all repairs and replacements in connection therewith, consistent with past practice;

(f)

take all steps that are reasonably necessary and prudent to ensure that its Representatives comply with all Privacy Requirements; and

(g)

take all necessary corporate action, steps and proceedings to approve or authorize, validly and effectively, the execution and delivery of this Agreement and each of the Ancillary Agreements and to complete the Transactions and to cause all necessary meetings of directors and shareholders of the Corporation to be held for that purpose.

(a)

satisfy all conditions precedent to Closing set out in this Agreement that are within its power to satisfy;

(b)

defend all lawsuits or other legal, regulatory or other Proceedings against it or any of its Affiliates challenging or affecting this Agreement or any Ancillary Agreement (or any part hereof or thereof) or the consummation of the Transactions; and

(c)

have lifted or rescinded any injunction or restraining order which may adversely affect or delay the Closing, the Transactions or the ability of the Parties to perform their obligations hereunder or thereunder.

(1)	During the Interim Period, each Party shall, and the Vendor shall cause the Corporation to, give prompt notice in writing to the other Party of:

(a)

the occurrence, or failure to occur, of any event, which occurrence or failure would be likely to cause any of the representations or warranties of the notifying Party contained in this Agreement to be untrue or incorrect in any material respect during the Interim Period;

(b)

any notice or communication from any Person alleging that the Approval of such Person is or may be required in connection with the Transactions (other than the Required Approvals set out in Schedule 6.2(11));

(c)

any notice or communication from any Governmental Authority in connection with the Transactions;

(d)

any Proceeding commenced or threatened against the notifying Party or the Corporation or relating to or involving or otherwise affecting any of them, or which relates to the consummation of the Transactions; and

(e)

any failure by the notifying Party to comply with or satisfy, or, in the case of the Vendor, to cause the Corporation to comply with or satisfy, any covenant, condition or agreement to be complied with or satisfied under this Agreement.

(2)

During the Interim Period, upon request from the Purchaser and to the extent permitted by Applicable Law, the Vendor shall, and shall cause the Corporation to, confer on a regular and frequent basis with one or more designated Representatives of the Purchaser to report on operational matters and on the general status of the Business. During the Interim Period, the Vendor shall, and shall cause the Corporation to, notify the Purchaser of any emergency or other change in the Ordinary Course or in the operation of the Business and of any Proceedings involving any portion of the Business or the Assets, and will keep the Purchaser fully informed of such events and permit the Representatives of the Purchaser access to all materials prepared in connection therewith.

(3)

The giving of any notice under this Section 5.7 does not in any way change or modify the representations and warranties of the Vendor, or the conditions to the obligations of the Purchaser, contained in this Agreement or otherwise affect the remedies available to the Purchaser under this Agreement or otherwise, whether at law, in equity or otherwise.

(1)

The Vendor shall, and shall cause the Corporation to, use (a) best efforts to obtain the Required Approvals that are required to be obtained for Closing, as identified in Schedule 6.2(11), and (b) commercially reasonable efforts to obtain any Required Approvals that are not required to be obtained for Closing, as identified in Schedule 6.2(11), in each case as soon as reasonably practicable. The Purchaser shall cooperate with the Vendor in connection with obtaining the Required Approvals, including providing or submitting to any Persons to whom it is reasonably advisable to provide, on a timely basis and as promptly as practicable, all documentation and information that is required, requested, or reasonably advisable, in connection with obtaining Required Approvals.

(2)

The Vendor shall, and shall cause the Corporation to, cooperate with and keep the Purchaser informed as to the status of obtaining the Required Approvals. Without limiting the generality of the foregoing, the Vendor shall, and shall cause the Corporation to, provide the Purchaser (or the Purchaser’s Counsel in respect of competitively-sensitive, privileged or confidential matters) with reasonable opportunity to review and comment in advance on all filings, applications and submissions in connection with the Required Approvals and the Purchaser shall use commercially reasonable efforts to cooperate with and assist the Vendor in the preparation and making of all such filings, applications and submissions. The Vendor shall not, and shall cause the Corporation to not, participate in any substantive meetings or any material conversations in connection with the Required Approvals unless it consults with the Purchaser in advance and, to the extent possible, gives the Purchaser (or the Purchaser’s Counsel) the opportunity to attend and participate in any substantive meetings or material communications.

(1)

The Vendor shall cause to be prepared all Tax Returns of the Corporation required to be made or prepared by the Corporation for any period that ends on or before the Effective Time and for which such Tax Returns have not been filed as of such time (the “Vendor Prepared Returns”). Such Vendor Prepared Returns shall be prepared on a basis consistent with past practice except to the extent otherwise required by Applicable Law. Each Vendor Prepared Return shall be submitted by the Vendor in draft form to the Purchaser at least twenty (20) days before the date on which such Vendor Prepared Tax Return is required by Applicable Law to be filed with the relevant Governmental Authority (or ten (10) days in the case of any Tax Return covering GST/HST, provincial sales Tax, payroll, or source deduction Taxes). The Purchaser shall, subject to Applicable Law, have the right to request that the Vendor make reasonable changes to any such Vendor Prepared Return by communicating such changes in writing to the Vendor at least ten (10) days before the date on which such Vendor Prepared Return is required by Applicable Law to be filed with the relevant Governmental Authority (or five (5) days in the case of any Tax Return covering GST/HST, provincial sales Tax, payroll, or source deduction Taxes). The Purchaser shall cause the Corporation to duly and timely file such Vendor Prepared Return (as revised to incorporate any reasonable comments provided by the Purchaser) and duly and timely pay to the appropriate Governmental Authority any Taxes shown as owing on such Vendor Prepared Return, and the Purchaser will provide a true, correct, and complete copy thereof, as filed, to the Vendor. For the avoidance of doubt, in the Tax Return for the final Pre-Closing Tax Period under the Tax Act ending prior to the Closing, the Corporation will not make an election to have subsection 256(9) of the Tax Act apply and in preparing the Tax Returns described in this Section 5.10(1), the Corporation shall be entitled to carry-back, carry forward, claim or utilize any available capital or non-capital loss or other Tax attribute that arises or arose in any Pre-Closing Tax Period so as to reduce or eliminate Tax paid or payable by the Corporation in any Pre-Closing Tax Period to the maximum extent permitted by Applicable Law.

(2)

The Purchaser shall prepare or cause to be prepared all Tax Returns of the Corporation for all Straddle Periods of the Corporation (the “Purchaser Prepared Returns”). Such Purchaser Prepared Returns shall be prepared on a basis consistent with past practice except to the extent otherwise required by Applicable Law. Each Purchaser Prepared Return shall be submitted by the Purchaser in draft form to the Vendor at least twenty (20) days before the date on which such Purchaser Prepared Tax Return is required by Applicable Law to be filed with the relevant Governmental Authority (or ten (10) days in the case of any Tax Return covering GST/HST, provincial sales Tax, payroll, or source deduction Taxes). The Vendor shall, subject to Applicable Law, have the right to request that the Purchaser make reasonable changes to any such Purchaser Prepared Return by communicating such changes in writing to the Purchaser at least ten (10) days before the date on which such Purchaser Prepared Return is required by Applicable Law to be filed with the relevant Governmental Authority (or five (5) days in the case of any Tax Return covering GST/HST, provincial sales Tax, payroll, or source deduction Taxes). The Purchaser shall cause the Corporation to duly and timely file such Purchaser Prepared Return (as revised to incorporate any reasonable comments provided by the Vendor, as determined by the Purchaser in its sole but good faith discretion) and duly and timely pay to the appropriate Governmental Authority any Taxes shown as owing on such Purchaser Prepared Return, and the Purchaser will provide a true, correct, and complete copy thereof, as filed, to the Vendor.

(3)

The Purchaser and the Vendor will, and will cause their respective Affiliates to, provide each other in a timely fashion with such cooperation and information as any of them reasonably may request in connection with any Tax matters relating to the Corporation with respect to any Pre-Closing Tax Period or Straddle Period of the Corporation, including in relation to the preparation and filing of all Tax Returns of the Corporation and resolving any Proceedings relating to Taxes with any Governmental Authority in respect of a Pre-Closing Tax Period or Straddle Period of the Corporation. Such cooperation and information will include providing to each other in a timely fashion all data and other information as may reasonably be required for the preparation of all Tax Returns of the Corporation for a Pre-Closing Tax Period, copies of relevant Tax Returns or portions thereof, the provision of records and information which are reasonably relevant to any such matter, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, together with accompanying schedules, related working papers and documents relating to rulings, or other determinations by a Governmental Authority. The Vendor will retain all Tax Returns, schedules and working papers, records and other documents in its possession relating to Tax matters of the Corporation for all Pre-Closing Tax Periods of the Corporation until the expiration of any applicable limitation period for maintaining books and records under any Applicable Law, and shall provide copies thereof to the Purchaser in a timely manner, except to the extent such documentation is in the possession of the Corporation or the Purchaser.

(4)

Other than as required under Applicable Law, the Purchaser covenants and agrees that it will not request, cause, or allow the Corporation to request any audit by any Governmental Authority of any Tax Return of the Corporation for any Pre-Closing Tax Period (including, for greater certainty, any Tax Return described in Section 5.10(1)) and that it will not cause or allow the Corporation to amend, alter, or originate the recalculation or re-filing of any such Tax Return or file any waivers (including any waiver under subparagraph 152(4)(a)(ii) of the Tax Act) in respect of any Pre-Closing Tax Period of the Corporation, other than with the written consent of the Vendor, which consent shall not be unreasonably withheld.

(5)

All refunds of Taxes (whether in the form of cash received or a credit or offset against Taxes otherwise payable) (each, a “Tax Refund”) of the Corporation for any Pre-Closing Tax Period shall be for the account of the Vendor to the extent such Tax Refund was not included or reflected in the determination of Closing Net Working Capital or Closing Indebtedness. To the extent that the Corporation receives a Tax Refund that is for the account of the Vendor pursuant hereto, the Purchaser shall pay the amount of such Tax Refund (and any interest received from the Governmental Authority in respect of such Tax Refund) to the Vendor within ten (10) Business Days of receipt (or, if the Tax Refund is in the form of credit or offset, within ten (10) Business Days after the filing date of the Tax Return claiming such credit or offset). Any payment made by the Purchaser to the Vendor pursuant to this Section 5.10(5) will constitute a dollar-for-dollar increase of the Purchase Price.

(6)

Notwithstanding anything to the contrary herein, the Vendor and the Purchaser agree that all Transaction Tax Deductions will be treated as properly allocable to a Pre-Closing Tax Period of the Corporation and the Vendor will include all such Transaction Tax Deductions as deductions in the Tax Returns of the Corporation for such period, to the extent permitted by Applicable Law. To the extent that a Transaction Tax Deduction is determined by a Governmental Authority to be properly allocable to the first taxation year or fiscal period ending after the Closing, the Purchaser shall, within a reasonable time after such determination, pay or cause to be paid to the Vendor, as an increase to the Purchase Price, an amount equal to such Transaction Tax Benefit related to such Transaction Tax Deduction received, net of any reasonable out-of-pocket costs incurred in connection with such receipt.

(7)

The Parties agree that none of the Transactions or any other transaction, arrangement, or event described in or contemplated by this Agreement constitutes a “reportable transaction”, as defined in subsection 237.3(1) of the Tax Act (in this Section 5.10(7), a “reportable transaction”), or a “notifiable transaction”, as defined in subsection 237.4(1) of the Tax Act (in this Section 5.10(7), a “notifiable transaction”), and, accordingly, that none of the Parties, the Corporation, any of their respective Affiliates, or any “advisor” (as defined in subsection 237.3(1) of the Tax Act) thereto intend to file any Tax Return reporting a reportable transaction or notifiable transaction with any Governmental Authority. To the extent that, contrary to the foregoing, any such Person intends to file a Tax Return reporting a reportable transaction or notifiable transaction, no such Tax Return shall be filed except after prior reasonable written notice of any such filing has been given to each of the Parties not filing such a Tax Return and any reasonable comments provided by the Parties on a timely basis are incorporated therein. The Vendor and the Purchaser shall cooperate with each other and make available to each other in a timely fashion all data and other information as may reasonably be required for the preparation and review, as applicable, of any Tax Return described in this Section 5.10(7).

(8)

The Purchaser and the Vendor agree that no portion of the Purchase Price or any other proceeds hereunder are receivable or will be received by the Vendor or any other Person for granting any “restrictive covenant” (as that term is defined in subsection 56.4(1) of the Tax Act), including those contained in the Non-Competition Agreement and the restrictive covenant agreements described in Sections 3.2(j) and 3.3(i). The Purchaser and the Vendor further agree that each of the Non-Competition Agreement and the restrictive covenant agreements described in Sections 3.2(j) and 3.3(i) is being entered into, and the covenants thereunder are being granted, in order to maintain or preserve the fair market value of the Purchased Shares and is integral to this Agreement. Accordingly, the Purchaser and the Vendor intend that subsections 56.4(5) and 56.4(7) of the Tax Act, and any equivalent or corresponding provision under applicable provincial or territorial law, apply to this Agreement. Notwithstanding the foregoing, to the extent that section 56.4 of the Tax Act requires the filing of one or more joint elections in order to apply, the Purchaser agrees to make, if requested by the Vendor, a joint election with the Vendor to have the provisions of section 56.4 of the Tax Act, and any equivalent or corresponding provision under applicable provincial or territorial law, apply in respect of any such covenants. Such joint election will reflect that, for purposes of the Tax Act, the Purchaser and the Vendor have each allocated no consideration to any restrictive covenants granted.

(9)

In the event that a dividend was or is paid by the Corporation at any particular time prior to the Closing, for which an election was made under subsection 83(2) of the Tax Act, in excess of the “capital dividend account”, as defined under subsection 89(1) of the Tax Act, of the Corporation immediately before that time, the Vendor hereby irrevocably concurs in the making of an election under subsection 184(3) of the Tax Act by the Corporation in respect of such dividend such that the excess portion thereof be deemed to be a separate taxable dividend at the time such dividend was declared.

(10)

In the event that the Corporation made or makes an “excessive eligible dividend designation” within the meaning of subsection 89(1) of the Tax Act in respect of any dividend paid before the Closing, the Vendor hereby irrevocably concurs in the making of an election under subsection 185.1(2) of the Tax Act by the Corporation to treat the “excessive eligible dividend designation” to be a separate dividend that is a taxable dividend other than an eligible dividend paid immediately before the time of the original dividend.

(11)

If the Corporation is, or would otherwise be, liable to pay a penalty tax under Part III or Part III.1 of the Tax Act in respect of any capital dividend or eligible dividend (each as defined in the Tax Act) made payable by the Corporation prior to the Closing, and the Corporation has not otherwise arranged to make an election pursuant to Section 5.10(9) or Section 5.10(10) above, as applicable, then, provided the Vendor reasonably believes such election is available to be made under the Tax Act in respect of the applicable dividend, the Vendor shall have the right (but not the obligation) to prepare and timely file on behalf of the Corporation a duly completed election pursuant to subsection 184(3) or 185.1(2) of the Tax Act, as the case may be, in order to avoid the imposition of such penalty tax, and the Purchaser and the Corporation shall each cooperate with the Vendor (at the Vendor’s expense) to the extent necessary to give effect to any such election.

(12)

All Taxes with respect to the Corporation that relate to a Straddle Period of the Corporation shall be apportioned between the final Pre-Closing Tax Period of the Corporation and the first Post-Closing Tax Period of the Corporation on the basis that the Straddle Period consisted of two taxable periods, one that ended immediately before the Effective Time and the other that began on the Effective Time, and such Taxes shall be allocated between such two periods in the following manner:

(a)

in the case of Taxes imposed on a periodic basis (such as business tax, real estate, or personal property Taxes), the amount of Tax allocable to a portion of the Straddle Period shall be the total amount of such Tax for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of calendar days (or portion of a day, as applicable) in such portion of such Straddle Period and the denominator of which is the total number of calendar days (or portion of a day, as applicable) in such Straddle Period; and

(b)

in the case of any other Taxes (such as Taxes based upon or measured by income or receipts, or Taxes that are based upon occupancy or imposed in connection with any sale or other transfer or assignment of property), the amount of such Tax that is allocable to the portion of such Straddle Period that ends immediately before the Effective Time shall be deemed to be equal to the amount that would be payable if the relevant Straddle Period had ended immediately before the Effective Time.

(1)	the Success Bonuses, which payments shall be made in accordance with the provisions of the Success Bonus Agreements; and

(2)	the Service Awards, which payments shall be made at the time of the first Ordinary Course payroll cycle of the Corporation following Closing.

(1)

Each Party shall comply in all material respects with all applicable Privacy Laws in the course of collecting, disclosing and using Transaction Personal Information. Subject to the foregoing, the Parties may collect, use and disclose Transaction Personal Information for purposes related to the Transactions. Prior to Closing, the Purchaser shall not disclose Transaction Personal Information to any Person other than its Representatives who are evaluating and advising on the Transactions.

(2)

The Purchaser shall protect and safeguard Transaction Personal Information against unauthorized use or disclosure and shall cause its Representatives to observe the terms of this Section 5.13 and protect and safeguard Transaction Personal Information in their possession. If this Agreement is terminated prior to Closing in accordance with its terms, the Purchaser shall promptly deliver to the Vendor or the Corporation, as the case may be, or permanently delete, all Transaction Personal Information in its possession or in the possession of any of its Representatives, including all copies, reproductions, summaries and extracts thereof.

(3)	Except to the extent permitted or required under applicable Privacy Law, after Closing, the Purchaser shall not, without the consent of the individuals to whom such Personal Information relates, use or disclose Transaction Personal Information:

(a)

for purposes other than those for which such Transaction Personal Information was collected prior to Closing; or

(b)

which does not relate to the carrying on of the Business or to the carrying out of the purposes for which the Transactions were implemented.

(4)	After Closing, the Vendor shall safeguard and protect any Transaction Personal Information which continues to be in its possession or under its control.

(1)

For a period of six years following the Closing Date, the Purchaser shall cause the Corporation to indemnify and hold harmless all past and present officers and directors of the Corporation (each, a “D&O Indemnitee”) to the same extent such D&O Indemnitees are currently indemnified and held harmless by the Corporation pursuant to the Constating Documents of the Corporation for acts or omissions occurring at or prior to the Closing Date, except as otherwise required by Applicable Law. Notwithstanding any other provision herein, in no event shall the Purchaser or the Corporation be required to indemnify, defend or hold harmless, or incur any other costs or expenses on behalf of any D&O Indemnitee with respect to any matter that is not otherwise covered by the D&O Tail Policy.

(2)

The Vendor shall cause the Corporation to purchase prior to the Closing (at the Vendor’s sole cost and expense, to be paid as a Transaction Expense), and the Purchaser shall cause the Corporation to maintain from and after the Closing Date, run-off “tail” coverage for directors’ and officers’ liability insurance on terms no less favorable than those in effect on the date hereof for a period of at least six years after the Closing (the “D&O Tail Policy”).

(3)

The provisions of this Section 5.15 are intended for the benefit of, and will be enforceable by (as express third party beneficiaries), each D&O Indemnitee and their respective heirs and representatives, successors and assigns and are in addition to, and not in substitution for, any other rights to indemnification or contribution that any such person may have had by Contract or otherwise.

(1)	Prior to the Closing, the Vendor will, and will cause the Corporation to, complete the Pre-Closing Reorganization, provided, that the Pre-Closing Reorganization shall:

(a)

be completed in accordance with Applicable Law in all material respects;

(b)

be fully, accurately and properly recorded in the Books and Records;

(c)

not materially impede, delay or prevent consummation of the Transactions;

(d)

not impair or materially adversely alter the operations of the Business; and

(e)

not result in an unreimbursed Loss or Tax for the Purchaser or the Corporation.

(2)

Prior to effecting the Pre-Closing Reorganization, the Vendor shall provide all material documentation relating to the Pre-Closing Reorganization to the Purchaser for the Purchaser’s review and the Vendor shall incorporate all reasonable comments that are provided by the Purchaser in a timely manner in relation to such documentation.

(1)	Organization and Status.

(a)

The Vendor is duly incorporated and organized, and is validly subsisting, under the laws of the Province of British Columbia and has filed all annual reports required to be filed by it under the laws of that jurisdiction.

(2)	Power and Authority.

(a)

The Vendor has all necessary corporate power and authority to execute and deliver this Agreement and each of the Ancillary Agreements required by this Agreement to be executed and delivered by it and to perform its obligations hereunder and thereunder. The Vendor has all corporate power and authority to dispose of its undertakings, property and assets (including the Purchased Shares).

(3)	Authorization.

(a)

All necessary corporate action has been taken by the Vendor or on its part to authorize the execution and delivery of this Agreement and each of the Ancillary Agreements required by this Agreement to be executed and delivered by it and the performance of its obligations hereunder and thereunder.

(4)	Enforceability.

(a)

This Agreement has been duly executed and delivered by the Vendor and (assuming due execution and delivery by the other Parties) is a legal, valid and binding obligation of the Vendor enforceable against the Vendor in accordance with its terms, except as that enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization and other similar laws affecting the rights of creditors generally and except that equitable remedies may be granted only in the discretion of a court of competent jurisdiction (the “Enforceability Exceptions”). Each of the Ancillary Agreements required by this Agreement to be executed and delivered by the Vendor will at the Closing have been duly executed and delivered by the Vendor (as applicable) and (assuming due execution and delivery by the other parties thereto) will at Closing be enforceable against the Vendor (as applicable) in accordance with its terms, except as that enforcement may be limited by the Enforceability Exceptions.

(5)	Authorized and Issued Capital.

(a)

The Vendor has good and marketable title to the Purchased Shares set out opposite its name in Schedule 6.2(5), free and clear of all Encumbrances, and has the exclusive right to dispose of the Purchased Shares owned by it as provided in this Agreement, except for the transfer restrictions in the Corporation’s articles or under applicable securities laws (the “Transfer Restrictions”). Except for the Transfer Restrictions, none of the Purchased Shares owned by the Vendor is subject to any Contract or restriction which in any way limits or restricts the transfer of the Purchased Shares to the Purchaser.

(b)

No Person, other than the Purchaser, will have any Contract or any right or privilege capable of becoming a Contract for the purchase or acquisition from the Vendor of any of the Purchased Shares.

(c)

On completion of the Transactions, the Purchaser will have good title to all of the Purchased Shares, free and clear of all Encumbrances other than the Transfer Restrictions and Encumbrances granted by the Purchaser.

(6)	Bankruptcy.

(a)

The Vendor is not an insolvent Person within the meaning of the Bankruptcy and Insolvency Act (Canada) and has not made an assignment in favour of its creditors or a proposal in bankruptcy to its creditors or any class thereof. No petition for a receiving Order has been presented in respect of the Vendor. The Vendor has not initiated proceedings with respect to a compromise or arrangement with its creditors or for its winding up, liquidation or dissolution. No receiver or interim receiver has been appointed in respect of the Vendor or any of its undertakings, property or assets (including any of the Purchased Shares owned by it) and no execution or distress has been levied on any of the Vendor’s undertakings, property or assets (including any of the Purchased Shares owned by it), nor have any proceedings been commenced in connection with any of the foregoing.

(7)	Residence.

(a)

The Vendor is not a non-resident of Canada for purposes of the Tax Act.

(8)	Absence of Conflict.

(a)

Except as set out in Schedule 6.1(8), the execution and delivery by the Vendor of this Agreement and each of the Ancillary Agreements required by this Agreement to be executed and delivered by it, the performance by the Vendor of its obligations under this Agreement and each of the Ancillary Agreements required by this Agreement to be executed and delivered by it and the completion of the Transactions will not (whether after the passage of time or notice or both) result in:

(i)

the breach or violation of any of the provisions of, or constitute a default under, or give any Person the right to seek or cause a termination, cancellation, amendment or renegotiation of, any Contract to which the Corporation is a party or by which any of the Assets is bound or affected;

(ii)

the breach or violation of any of the provisions of, or constitute a default under, or conflict with any of the obligations of the Vendor under:

(A)

any provision of the Constating Documents of the Vendor or any resolution of its shareholders, board of directors or any committee thereof;

(B)

any Order having jurisdiction over the Vendor;

(C)

any Applicable Law;

(iii)

the creation or imposition of any Encumbrance over any of the Purchased Shares and/or any of the Assets; or

(iv)

the requirement of any Approval from any Person.

(9)	Litigation. There are no Proceedings pending or outstanding or, to the knowledge of the Vendor, threatened against the Vendor which could affect any of the Purchased Shares and/or the Vendor’s ability to perform its obligations under this Agreement.

(1)

Organization and Status. The Corporation is a corporation duly incorporated and organized, and is validly subsisting, under the laws of the Province of Alberta and is up-to-date in the filing of all corporate returns under the laws of such jurisdiction. The Corporation is not required to be, registered, licensed or qualified as an extra-provincial or foreign corporation under the laws of any other jurisdiction, except where any failure to be so qualified would not be material.

(2)

Power and Authority. The Corporation has all necessary corporate power and authority to execute and deliver each of the Ancillary Agreements required by this Agreement to be executed and delivered by it and to perform its obligations thereunder. The Corporation has all necessary corporate power and authority to own or lease the Assets and to carry on the Business as now being conducted by it.

(3)	Authorization. All necessary corporate action has been taken by the Corporation or on its part to authorize the execution and delivery of each of the Ancillary Agreements required by this Agreement to be executed and delivered by it and the performance of its obligations thereunder.

(4)

Enforceability. Each of the Ancillary Agreements required by this Agreement to be executed and delivered by the Corporation will at the Closing have been duly executed and delivered by the Corporation (as applicable) and (assuming due execution and delivery by the other parties thereto) will at Closing be enforceable against the Corporation (as applicable) in accordance with its terms, except as that enforcement may be limited by the Enforceability Exceptions.

(5)	Authorized and Issued Capital.

(a)

Schedule 6.2(5) sets out in respect of the Corporation a true, accurate and complete list of: (i) the authorized share capital of the Corporation, (ii) the names of each Person who is a legal and/or beneficial owner of the issued and outstanding shares of the Corporation, and (iii) the number and class of shares of the Corporation held or owned, as the case may be, by each Person.

(b)

The shares of the Corporation set out in Schedule 6.2(5) are the only issued and outstanding shares in the capital of the Corporation, which have been validly issued and are outstanding as fully paid and non-assessable shares, and were not issued in violation of the pre-emptive rights of any Person or any Contract or Applicable Law by which the Corporation was bound at the time of the issuance. There are no outstanding shareholders agreements, voting trusts, pooling agreements or other Contracts in respect of the voting of any of the issued and outstanding shares of the Corporation.

(c)

No Person has any Contract or any right or privilege capable of becoming a Contract, including convertible securities, warrants or convertible obligations of any nature, for the purchase, subscription, allotment or issuance of any issued or un-issued Equity Interest in the capital of the Corporation.

(d)

Except as set out in Schedule 6.2(5), the Corporation has never owned or is a party to any Contract of any nature to acquire, directly or indirectly, any Equity Interests in any Person.

(e)

Except as set out in Schedule 6.2(5), the Corporation has never had any predecessors by amalgamation, arrangement or otherwise.

(6)

Bankruptcy. The Corporation is not an insolvent Person within the meaning of the Bankruptcy and Insolvency Act (Canada) or any other Applicable Law with respect to bankruptcy or insolvency law in any other jurisdiction and has not made an assignment in favour of its creditors or a proposal in bankruptcy to its creditors or any class thereof, and no petition for a receiving Order has been presented in respect of it. The Corporation has never initiated proceedings with respect to a compromise or arrangement with its creditors or for its winding up, liquidation or dissolution. No receiver or interim receiver has been appointed in respect of the Corporation or any of their respective undertakings, property or assets and no execution or distress has been levied on any of their respective undertakings, property or assets, nor have any proceedings been commenced in connection with any of the foregoing.

(7)

Absence of Conflict. Except as set out in Schedule 6.2(7), the execution and delivery by the Corporation of each of the Ancillary Agreements required by this Agreement to be executed and delivered by it, the performance by the Corporation of each of their respective obligations under each of the Ancillary Agreements required by this Agreement to be executed and delivered by it and the completion of the Transactions will not (whether after the passage of time or notice or both) result in:

(a)

the breach or violation of any of the provisions of, or constitute a default under, or give any Person the right to seek or cause a termination, cancellation, amendment or renegotiation of, any Contract to which the Corporation is a party or by which any of the Assets is bound or affected;

(b)

the breach or violation of any of the provisions of, or constitute a default under, or conflict with any of the obligations of the Corporation under:

(i)

any provision of its Constating Documents or any resolution of its shareholders, board of directors or any committee thereof;

(ii)

any Order having jurisdiction over the Corporation;

(iii)

any Permit obtained by or issued to the Corporation, or held for the benefit of or necessary to the ownership of any of the Assets or the operation of the Business; or

(iv)

any Applicable Law;

(c)

the creation or imposition of any Encumbrance over any of the Purchased Shares and/or any of the Assets; or

(d)

the requirement of any Approval from any Person.

(8)

Litigation. Except as set out in Schedule 6.2(8), there are no Proceedings pending or outstanding or, to the knowledge of the Vendor, threatened against the Corporation which could affect the Corporation, the Business, the Assets or the Corporation’ ability to perform its obligations under any Ancillary Agreement required by this Agreement to be executed and delivered by it. In the past five years there has not been any Proceedings commenced by or against the Corporation, the Business or any of the Assets. Except as set out in Schedule 6.2(8), to the knowledge of the Vendor, there is not any factual or legal basis on which any Proceeding would reasonably likely be commenced by or against the Corporation, the Business or any of the Assets.

(9)

Conduct of Business. The Corporation has complied with, and has conducted the Business in compliance with, all Applicable Laws in all material respects. The Business is the only business operation carried on by the Corporation and the Assets are sufficient to permit the continued operation of the Business after the Closing in substantially the same manner as conducted during the one year period preceding the Agreement Date. Except as set out in Schedule 6.2(9), during the past three years, there has never been any significant interruption of the Ordinary Course operations of the Business for more than 48 hours. True, accurate and complete copies of all reports completed in respect of the conduct of the Business by or for any Governmental Authority during the three year period preceding the Agreement Date have been provided to the Purchaser. Except as set out in Schedule 6.2(9), during the past three years, the Corporation has never received any notice or communication from any Governmental Authority alleging that the Corporation and/or the operation of the Business is not in compliance with Applicable Laws. True, accurate and complete copies of the results of all audits and investigations conducted by a Governmental Authority during the past three years and all material communications from any Governmental Authority during the past three years have been provided to the Purchaser.

(10)

Permits. Schedule 6.2(10) sets out a true, accurate and complete list of all Permits issued to, or held by or for the benefit of, the Corporation (collectively, the “Business Permits”), the Governmental Authority that issued the Business Permit, the renewal or expiration date thereof (as applicable). Schedule 6.2(10) sets out a true, accurate and complete list of all Permits that the Corporation has applied to a Governmental Authority for, but which has not been issued to or obtained by the Corporation as of the Agreement Date. Except for the Business Permits, there are no other Permits necessary to be held by the Corporation to conduct the Business as currently conducted or to own, lease or operate any of the Assets in compliance with all Applicable Laws. None of the Business Permits contains any burdensome term, provision, condition or limitation which has or is likely to have any Material Adverse Effect. Each of the Business Permits is valid, subsisting and in good standing, and to the knowledge of the Vendor, there are no facts or circumstances which could be a basis for the suspension, cancellation, revocation, non-renewal or limitation of any Business Permit or the imposition of any other sanction relating to any Business Permit. The Corporation has complied with, and has conducted the Business in compliance with, all of the Business Permits in all material respects and there exists no grounds, nor is any Proceeding pending or, to the knowledge of the Vendor, threatened to revoke, suspend, amend, limit or impose any condition in respect of, or commenced Proceedings to revoke, suspend, amend, limit or impose any condition in respect of, any of the Business Permits. The Corporation has never received any notice of any alleged non-compliance by the Business or the Corporation with any Business Permit, nor had any communication with any Governmental Authority in respect of any inquiry or investigation for any alleged non-compliance by the Business or the Corporation with any Business Permit. The Corporation has timely filed when due all material reports, documents, information, and applications required to be filed by it with any Governmental Authority pursuant to any Applicable Law and/or Business Permit, except where such delay or failure would not cause a Material Adverse Effect, and no such reports, documents, information or applications filed by the Corporation contained any material inaccuracy or misstatement or omitted any material fact or statement required to be disclosed therein. The completion of the Transactions will not (whether after the passage of time or notice or both) result in the imposition of any condition, limitation or restriction applicable to any Business Permit following the Closing or the inability of the Corporation to renew any Business Permit following the Closing. True, accurate and complete copies of all of the Business Permits have been provided to the Purchaser.

(11)

Required Approvals. There is no requirement for the Corporation to make any filing with, give any notice to or obtain any Permit or Approval from, any Person under any Applicable Law, any Material Contract or any Business Permit as a condition to the lawful completion of the Transactions or to permit the Corporation to conduct the Business after the Closing in the same manner as currently conducted, except for: (i) the filings, notifications, Permits and Approvals that relate solely to the identity of the Purchaser or the nature of any business carried on by the Purchaser and (ii) the filings, notifications, Permits and Approvals set out in Schedule 6.2(11) (the “Required Approvals”).

(12)	Leased Real Property.

(a)

Schedule 6.2(12) sets out a true, accurate and complete list of: (i) the municipal address of all real property leased to the Corporation (the “Leased Real Property”), and (ii) all Contracts in the nature of a lease (including all amendments, renewals, extensions, assignments, occupancy agreements, subleases, agreements to lease, offers to lease, letters of intent, agreements to sublease and offers to sublease) in respect of the Leased Real Property (the “Leases”).

(b)

The Corporation is not a beneficial or registered owner of or the lessor or lessee of, nor is the Corporation a party to any Contract to acquire or lease, any real property or Appurtenances, other than the Leased Real Property.

(c)

Except for the Leased Real Property, the Corporation has never, at any time: (i) owned, occupied, leased, managed or controlled, in whole or in part, any real property or Appurtenances, or (ii) had a legal or beneficial interest, on, at or from any real property.

(d)

Pursuant to the Leases, the Corporation has the exclusive right to possess, use and occupy the Leased Real Property during the term of the applicable Lease. The Corporation has never received any notice that it is potentially responsible for any clean-up or corrective action at any real property which is owned or occupied by any Person including the Leased Real Property.

(e)

To the knowledge of the Vendor, all  trade fixtures and leasehold improvements installed by or on behalf of the Corporation located on, in, under or forming part of the Leased Real Property, including those under construction, if any, have been constructed in a good and workmanlike manner and in compliance with all Applicable Laws, are in good operating condition and in a state of good maintenance and repair in all material respects (subject to normal wear and tear), and are adequate and suitable for the purposes for which they are currently being used.

(f)

To the knowledge of the Vendor, none of the Appurtenances located on or at any Leased Real Property, nor the operation or maintenance thereof, materially violates any restrictive covenant or any provision of any Applicable Law, or materially encroaches on any property owned by others.

(g)

The Corporation has adequate rights of ingress and egress to the Leased Real Property for the operation of the Business in the Ordinary Course.

(h)

To the knowledge of the Vendor, no Person has any Contract or any right or privilege capable of becoming a Contract, including any right of first offer or right of first refusal, for the purchase of all or any part of the Leased Real Property or any Appurtenances.

(i)

Neither the Corporation nor the Vendor has received any notice in writing from any Governmental Authority ordering, directing or requesting any alteration, repair, improvement or other work to be done or performed to or in respect of the Leased Real Property or to any of the plumbing, heating, ventilating, air-conditioning, sprinkler, elevating, water, drainage, mechanical or electrical systems, fixtures or works. To the knowledge of the Vendor, there is no reason why any such alteration, repair, improvement or other work is required.

(13)

Personal Property. Schedule 6.2(13) is a true, accurate and complete list of each material item of machinery, equipment, furniture, motor vehicles and other personal property owned or leased by the Corporation (including those in possession of third parties) which has a book value at the date of the Financial Statements of more than $100,000 (collectively, the “Personal Property”). The Corporation has good and marketable title to all the Personal Property owned by it, free and clear of any and all Encumbrances other than the Permitted Encumbrances. Except as set out in Schedule 6.2(13), all of the Personal Property is free of latent or patent defects, in good operating condition and in a state of good repair and maintenance having regard to their use and age, normal wear and tear excepted. The Assets owned and leased by the Corporation constitute all of the property and assets held for use in connection with the Business and are sufficient to permit the continued operation of the Business in the same manner as conducted prior to Closing.

(14)	Intellectual Property.

(a)

Schedule 6.2(14) lists all material Owned Intellectual Property (including particulars of any registrations or applications for registration in respect thereof) and all material Third Party Intellectual Property. Except as set out in Schedule 6.2(14), the Corporation wholly owns all right, title and interest in and to the Owned Intellectual Property free and clear of all Encumbrances, except Permitted Encumbrances. The Corporation is not a party to or bound by any Contract relating to, or that limits or impairs its ability to use, sell, transfer, assign, license, convey, exploit, assert or enforce any of the Owned Intellectual Property. All registrations and applications for registration of the Owned Intellectual Property are valid and subsisting, enforceable, in good standing and are recorded in the name of the Corporation. All Third Party Intellectual Property is used by the Corporation with the consent of, or license from, the owner thereof. No Intellectual Property used by the Corporation in its Business is owned by, or leased or licensed from, the Vendor.

(b)

The Owned Intellectual Property is not subject to any ownership interest, agreement or option permitting any Person to purchase or licence from the Corporation that Owned Intellectual Property and the Corporation has not granted to any Person a licence to use any of the Owned Intellectual Property or the Third Party Intellectual Property.

(c)

To the knowledge of the Vendor, no Person is infringing, misappropriating, or otherwise violating any rights in the Owned Intellectual Property. The Corporation has not brought or threatened any Proceeding against any Person for infringement, misappropriation, or violation of any Owned Intellectual Property or Third Party Intellectual Property.

(d)

To the knowledge of the Vendor, the conduct of the Business or the use of the Assets, including Third Party Intellectual Property,  does not infringe, misappropriate, or otherwise violate any Intellectual Property of any Person. There are no Proceedings in progress, pending or, to the knowledge of the Vendor, threatened against the Corporation alleging that the Corporation or the conduct of the Business infringes, misappropriates, or otherwise violates any Intellectual Property of any Person.

(e)

Except as set out in Schedule 6.2(14), the Corporation has taken all measures as are reasonable and customary for owners of comparable assets to protect and maintain the validity of its rights in the Owned Intellectual Property, to protect confidential information and the Trade Secrets of the Corporation, and to protect the confidential information and Trade Secrets of other Persons who have provided same to the Corporation in confidence.

(15)	IT Systems.

(a)

The IT Systems are either owned by the Corporation or the Corporation has obtained all necessary rights and licences to use such IT Systems in the manner in which they are currently being used. The IT Systems adequately meet the data processing and other computing needs of the Business and the operations of the Corporation as it is currently being conducted.

(b)

The IT Systems: (i) are free of all known Disabling Code, (ii) do not contain any bugs, errors or problems that, in each case, would reasonably be expected to cause a Material Adverse Effect, and (iii) to the knowledge of the Vendor, have not been subject to a security or firewall breach, penetration or intrusion by an unauthorized Person. The Corporation maintain security controls so as to restrict the use of its IT Systems where reasonably necessary to certain authorized Persons.

(c)

The IT Systems have been maintained and supported either internally by the Corporation or are required to be pursuant to warranty and/or maintenance agreements or arrangements with another Person, in each case in accordance with generally accepted industry standards and practices. The Business has measures in place, consistent with generally accepted industry standards and practices, to safeguard the IT Systems against loss or theft, as well as unauthorized access, disclosure, copying, use or modification. The Business has and maintains back-up systems consistent with current industry standards and practices.

(d)

The IT Systems have not been subject to any Security Incident.

(16)

Insurance. Schedule 6.2(16) sets out true, accurate and complete list of all insurance policies maintained by the Corporation or under which the Business or any of the Assets are covered (the “Insurance Policies”), specifying in each case, the name of the insurer, the risks insured against, the amount of the coverage, the amount of the annual premium, the amount of the deductible, details of the amount of premiums (whether prepaid or unpaid) from the two prior years, the policy number, and any pending claims under the policy. The Corporation is not in default, whether as to the payment of premiums or with respect to any other provision contained in any Insurance Policy. The Corporation has not failed to give any notice or present any claim under any Insurance Policy in a due and timely manner. To the knowledge of the Vendor, there is no reason to believe that any of the Insurance Policies will not be renewed by the insurer on the scheduled expiry of such Insurance Policy or will be renewed by the insurer only on the basis that there will be a material increase in premiums payable in respect of such Insurance Policy. The Assets are covered by insurance with responsible insurers against all reasonable and customary risks to the Business and in such amounts as are reasonable and customary for prudent owners of comparable assets. No other insurance is necessary to the conduct of the Business or is required to be maintained by the Corporation pursuant to the terms of any Contract or under any Applicable Law. True, accurate and complete copies of all Insurance Policies have been provided to the Purchaser.

(17)	Material Contracts. Except as set out in Schedule 6.2(17) or as disclosed in any other schedule to this Agreement, the Corporation is not a party to or bound by:

(a)

any Contract with any Material Customer or Material Supplier in excess of $250,000;

(b)

any Contract for the purchase of materials, supplies, equipment or services which involves or may reasonably involve the payment by the Corporation in excess of $250,000 in any 12 month period;

(c)

any Contract for capital expenditures or for the purchase, construction or improvement of any capital assets in excess of $100,000 individually;

(d)

any employment Contract or any other written Contract with any employee that provides for a salary in excess of $125,000 in any 12 month period or any consulting Contract or any other written Contract with any officer, employee, consultant, agent, contractor or Representative of the Corporation, in each case, that provides for aggregate compensation in excess of $125,000 in any 12 month period;

(e)

any Contract (i) relating to the licensing of any Intellectual Property by the Corporation to a third party or by a third party to the Corporation (other than licenses to the Corporation for generally available commercial, unmodified, “off the shelf” Software), or (ii) affecting the Corporation’s ability to use or enforce any Owned Intellectual Property (including concurrent use agreements, settlement agreements and consent to use agreements);

(f)

any Contract pursuant to which the Corporation is or will be obliged to make any rebates, discounts, promotional allowances or similar payments or arrangements to any Person;

(g)

any Related Party Contract, other than this Agreement and any employment agreements;

(h)

any trust indenture, mortgage, hypothec, promissory note, debenture, loan agreement, guarantee or other Contract for the borrowing of money;

(i)

any Contract for a leasing transaction of the type required to be capitalized in accordance with GAAP, including any equipment lease, rental agreement, conditional sales agreement or similar Contracts, except for any lease of personal property under which the aggregate annual rental payments do not exceed $100,000;

(j)

any agreement of guarantee, support, assumption or endorsement of, or any other similar commitment with respect to, the liabilities, obligations, indebtedness, or commitments (whether accrued, absolute, contingent or otherwise) of any other Person;

(k)

any Contract between the Corporation and any Governmental Authority;

(l)

any material confidentiality, secrecy or non-disclosure Contract (whether the Corporation is a beneficiary or obligor thereunder) relating to any proprietary or confidential information or Trade Secrets of any Person (other than Contracts relating to the sale process that resulted in the Transaction);

(m)

any material Contract that contains a non-competition or non-solicitation covenant or a covenant to provide or receive products or services on an exclusive basis that restricts the freedom of the Corporation to carry on the Business or to compete with any Person;

(n)

any Contract for any partnership, joint venture, strategic alliance or other similar arrangement;

(o)

any Contract which involves a right of first refusal, right of first offer, warrant, option, call, commitment or plan or agreement of any kind that would enable any Person to purchase or otherwise acquire any shares in the capital of the Corporation or an exclusivity obligation on the part of the Corporation in favour of any other Person;

(p)

any Contract that places an Encumbrance, other than a Permitted Encumbrance, over any of the Assets;

(q)

any Contract for charitable contributions or gifts during the past three years, other than any Contract for any donation in the Ordinary Course and less than $10,000;

(r)

any Contract for the sale of any material portion of the Assets or any part of the Business, other than sales of Inventories to customers of the Business in the Ordinary Course; or

(s)

any other Contract made in the Ordinary Course and which involves or may reasonably involve the payment to or by the Corporation in excess of $250,000 in any 12 month period.

(18)	No Default Under Material Contracts. Except as set out in Schedule 6.2(18):

(a)

the Corporation has performed all of the obligations required to be performed by it, in all material respects, and is entitled to all benefits, under each of the Material Contract;

(b)

the Corporation is not in default or alleged to be in default in respect of any of the Material Contract in any material respect;

(c)

each of the Material Contracts is in good standing and in full force and effect, and no event, condition or occurrence exists that, after notice or lapse of time or both, would constitute a default under any such Material Contract;

(d)

none of the Material Contracts creates an Encumbrance over any of the Assets;

(e)

there is no dispute between the Corporation and any other party under any Material Contract;

(f)

none of the Material Contracts contain terms under which the execution or performance of this Agreement would give any other contracting party the right to terminate or adversely change the terms of that Material Contract, or would otherwise require the Approval of any other Person; and

(g)

none of the Material Contracts have been assigned or are currently subleased (as applicable), in whole or in part.

(19)	Financial Statements. Each of the Financial Statements:

(a)

are true, accurate and complete in all material respects;

(b)

have been prepared in accordance with GAAP and applied on a basis consistent with that of the preceding periods, except in the case of the Interim Financial Statements, which are subject to the absence of footnotes and normal year-end adjustments;

(c)

accurately disclose in all material respects the assets, liabilities (whether accrued, absolute, contingent or otherwise) and financial condition of the Corporation and the results of the operations of the Corporation, as at the dates thereof and for the periods covered thereby;

(d)

reflect all proper accruals as at the dates thereof and for the periods covered thereby of all amounts which, though not payable until a time after the end of the relevant period, are attributable to activities undertaken by the Corporation during or prior to that period; and

(e)

contain or reflect adequate provision for all liabilities, obligations, indebtedness or commitments of the Corporation of any nature, whether absolute, contingent or otherwise, matured or unmatured, as at the date thereof to the extent required under GAAP.