McCoy Corporation

and - Manac Inc.

SHARE PURCHASE AGREEMENT

June 17, 2014

Stein Monast L.L.P.

ARTICLE 1	DEFINITIONS AND PRINCIPLES OF INTERPRETATION ................................ 1
1.1	Definitions .............................................................................................................. 1
1.2	Certain Rules of Interpretation ............................................................................. 12
1.3	Knowledge ........................................................................................................... 13
1.4	Entire Agreement ................................................................................................. 13
1.5	Schedules .............................................................................................................. 13
ARTICLE 2	PURCHASE AND SALE ....................................................................................... 14
2.1	Action by Seller and Buyer .................................................................................. 14
ARTICLE 3	PURCHASE PRICE ................................................................................................ 14
3.1	Purchase Price ...................................................................................................... 14
3.2	Satisfaction of the Estimated Purchase Price ....................................................... 14
3.3	Delivery of Closing Date Balance Sheet .............................................................. 14
3.4	Net Working Capital and Net Debt Adjustments ................................................. 14
3.5	Objection to Closing Date Balance Sheet ............................................................ 15
3.6	Interest .................................................................................................................. 15
3.7	Pre-Closing and Post-Closing Taxes and Tax Returns ........................................ 16
3.8	December 31, 2013 Income Tax Returns ............................................................. 17
3.9	Cooperation .......................................................................................................... 17
3.10	Transfer Taxes ...................................................................................................... 17
ARTICLE 4	REPRESENTATIONS AND WARRANTIES OF THE SELLER ........................ 17
4.1	Incorporation and Corporate Power ..................................................................... 18
4.2	Registration .......................................................................................................... 18
4.3	Incorporation, Corporate Power and Registration of the Subsidiary ................... 18
4.4	Subsidiary ............................................................................................................. 18
4.5	Residence of the Seller ......................................................................................... 18
4.6	Status of the Seller and Right to Sell.................................................................... 18
4.7	Securities Laws .................................................................................................... 18
4.8	Capitalization ....................................................................................................... 19
4.9	Due Authorization ................................................................................................ 19
4.10	Enforceability of Obligations ............................................................................... 19
4.11	Absence of Conflicts ............................................................................................ 19
4.12	Regulatory Approvals .......................................................................................... 20
4.13	Financial Statements ............................................................................................ 20
4.14	Monthly Financial Statements .............................................................................. 20
4.15	Absence of Undisclosed Liabilities ...................................................................... 21
4.16	Absence of Changes and Unusual Transactions .................................................. 21
4.17	No Material Adverse Change. .............................................................................. 23
4.18	Non-Arm’s Length Transactions .......................................................................... 23
4.19	Absence of Contingent Liabilities ........................................................................ 23
4.20	Sufficiency of Assets ............................................................................................ 23
4.21	Title to Certain Assets .......................................................................................... 24
4.22	Condition of Certain Assets ................................................................................. 24
4.23	Location of the Assets .......................................................................................... 24
4.24	Inventories ............................................................................................................ 24
4.25	Collectability of Accounts Receivable ................................................................. 24
4.26	Government Grants .............................................................................................. 24
4.27	Business in Compliance with Law ....................................................................... 24
4.28	Governmental Authorizations .............................................................................. 25

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4.29	Restrictive Covenants ........................................................................................... 25
4.30	Technology ........................................................................................................... 25
4.31	Owned Real Property ........................................................................................... 27
4.32	Leased Real Property ........................................................................................... 27
4.33	Real Property Generally ....................................................................................... 28
4.34	Environmental Matters ......................................................................................... 30
4.35	Personal Information ............................................................................................ 32
4.36	Insurance .............................................................................................................. 32
4.37	Litigation .............................................................................................................. 33
4.38	Tax Matters .......................................................................................................... 33
4.39	Tax Data ............................................................................................................... 35
4.40	Books and Records ............................................................................................... 36
4.41	Corporate Records ................................................................................................ 36
4.42	Accounts Receivable and Trade Allowances ....................................................... 36
4.43	Bank Accounts, etc. .............................................................................................. 37
4.44	Powers of Attorney............................................................................................... 37
4.45	No Broker ............................................................................................................. 37
4.46	Sales Bonus .......................................................................................................... 37
ARTICLE 5	REPRESENTATIONS AND WARRANTIES OF THE BUYER.......................... 37
5.1	Status of the Buyer ............................................................................................... 37
5.2	Due Authorization ................................................................................................ 37
5.3	Enforceability of Obligations ............................................................................... 37
5.4	Absence of Conflicts ............................................................................................ 38
5.5	Litigation .............................................................................................................. 38
5.6	Regulatory Approvals .......................................................................................... 38
5.7	No Broker ............................................................................................................. 38
5.8	Securities Laws .................................................................................................... 39
ARTICLE 6	NON-WAIVER; SURVIVAL ................................................................................. 39
6.1	Non-Waiver .......................................................................................................... 39
6.2	Nature and Survival .............................................................................................. 39
ARTICLE 7	CLOSING ................................................................................................................ 39
7.1	Deliveries for the Benefit of Seller ...................................................................... 39
7.2	Deliveries for the Benefit of Buyer ...................................................................... 40
7.3	Date, Time and Place of Closing .......................................................................... 40
ARTICLE 8	INDEMNIFICATION ............................................................................................. 40
ARTICLE 9	POST-CLOSING COVENANTS ........................................................................... 40
ARTICLE 1	0 GENERAL ............................................................................................................ 41
10.1	Dispute Resolution ............................................................................................... 41
10.2	Confidentiality and Public Notices ...................................................................... 41
10.3	Expenses ............................................................................................................... 41
10.4	Notices .................................................................................................................. 41
10.5	Assignment ........................................................................................................... 43
10.6	Enurement ............................................................................................................ 43
10.7	Amendment .......................................................................................................... 43
10.8	Further Assurances ............................................................................................... 43
10.9	Execution and Delivery ........................................................................................ 43

THIS SHARE PURCHASE AGREEMENT is made in as of June 17, 2014.

BETWEEN:

MCCOY CORPORATION, a corporation governed by the laws of Alberta,

(the “Seller”)

and -

MANAC INC., a corporation governed by the laws of Québec,

(the “Buyer”).

RECITALS:

A. The Seller has assigned to the Corporation before the Closing Date the assets described in Schedule A which are requisite to continue the operations of the business carried on by the Corporation and its Subsidiary.
B. The Seller beneficially owns and controls all of the issued and outstanding shares of Peerless Limited, a corporation governed by the laws of Alberta (the “Corporation”).
C. The Seller has agreed to sell to the Buyer and the Buyer has agreed to purchase from the Seller all of the issued and outstanding shares of the Corporation, on the terms and conditions of this Agreement.

THEREFORE, the Parties agree as follows:

ARTICLE 1

DEFINITIONS AND PRINCIPLES OF INTERPRETATION

1.1 Definitions

Whenever used in this Agreement, the following words and terms have the meanings set out below:

“Accounts Payable” means all amounts owing by the Corporation or its Subsidiary to any Person which are incurred in connection with the purchase of goods or services but excluding intercompany payables between the Corporation and the Subsidiary and all current federal, state and provincial income tax and Texas state sales tax payables;

“Accounts Receivable” means accounts receivable, third party and Affiliate receivables, bills receivable, trade accounts, book debts and insurance claims recorded as receivable in the Books and Records due to the Corporation or its Subsidiary including refunds and rebates receivable, all due within one year, but excluding intercompany receivables between the Corporation and the Subsidiary and all current federal, state and provincial income tax and Texas state sales tax receivables;

“Accrued Liabilities” means all third party and Affiliate operating expenses of the Corporation and its Subsidiary but which are not yet due and payable and claims against the Corporation and its Subsidiary that are increasing with the passage of time or receipt of goods or services but are not yet due and payable, including, but not limited to accruals for benefits, vacation pay, bonuses, retention bonuses, signing bonuses, severance cost, warranty, property taxes, customer rebates, discounts and allowances for product returns, customer deposits and or down payments, legal, audit other service providers, cheques and wires that are issued and outstanding at the Closing Date, but excluding all current federal, state and provincial income tax and Texas state sales tax ;

“Affiliate” of any Person means, at the time such determination is being made, any other Person controlling, controlled by or under common control with such first Person, in each case, whether directly or indirectly, and “control” and any derivation thereof means the possession, directly or indirectly, of the power to direct the management and the affairs of a Person whether through the ownership of voting securities or otherwise;

“Agreement” means this Share Purchase Agreement, including all schedules, and all amendments or restatements, as permitted, and references to “Article” or “Section” mean the specified Article or Section of this Agreement;

“Ancillary Agreements” means the Escrow Agreement and the Non-Competition Agreement;

“Appurtenances” means privileges, rights, easements, servitudes and appurtenances both at law and equity, as applicable, attaching to or for the benefit of Real Property, including means of access between Real Property and a public way, rights in respect of or for any other uses upon which the present use is dependent (such as pipelines, cables, railway sidings) and rights existing in and to any streets, alleys, passages and other rightsof-way;

“arm’s length” has the meaning that it has for purposes of the Income Tax Act (Canada);

“Balance Sheet” means the consolidated balance sheet of the Corporation and the Subsidiary as at December 31, 2013, forming part of the Financial Statements;

“Benefit Plans” means plans, arrangements, agreements, programs, policies, practices or undertakings, whether oral or written, formal or informal, funded or unfunded, insured or uninsured, registered or unregistered to which the Corporation or the Subsidiary is a party or bound or in which the Employees participate or under which the Corporation or the Subsidiary has, or will have, any liability or contingent liability, or pursuant to which payments are made, or benefits are provided to, or an entitlement to payments or benefits may arise with respect to any of its Employees or former employees, directors or officers, individuals working on contract with the Corporation or the Subsidiary or other individuals providing services to any of them of a kind normally provided by employees (or any spouses, dependants, survivors or beneficiaries of any such persons), excluding statutory benefit plans which the Corporation or the Subsidiary are required to participate in or comply with, including the Canada Pension Plans and plans administered pursuant to applicable health tax, workplace safety insurance and employment insurance

legislation. For clarity, Benefit Plans include, but not limited to health, dental, vision, short term disability, long term disability, life insurance;

“Books and Records” means books and records of the Corporation and the Subsidiary relating to the Corporation or the Subsidiary, including financial, corporate, operations and sales books, records, books of account, sales and purchase records, lists of suppliers and customers, formulae, business reports, plans and projections and all other documents, surveys, plans, manuals, environmental and feasibility studies, memoranda, files, records, assessments, correspondence, and other data and information, financial or otherwise, including all data, information and databases stored on computer-related or other electronic media (and all software, passwords and other information and means of or for access thereto);

“Business Day” means any day, other than a Saturday or Sunday, on which banks in Vancouver, British Columbia and Montréal, Québec are open for commercial banking business during normal banking hours;

“Buyer Indemnified Parties” has the meaning given in Section Error! Reference source not found.;

“Claims” includes claims, demands, complaints, grievances, actions, applications, suits, causes of action, Orders, charges, indictments, prosecutions, or other similar processes, assessments or reassessments, judgments, debts, liabilities, penalties, fines, expenses, costs, damages or losses, contingent or otherwise, whether liquidated or unliquidated, matured or unmatured, disputed or undisputed, contractual, legal or equitable, including loss of value, professional fees, including fees and disbursements of legal counsel on a full indemnity basis, and all costs incurred in investigating or pursuing any of the foregoing or any proceeding relating to any of the foregoing;

“Closing” means the completion of the sale to and purchase by the Buyer of the Purchased Shares under this Agreement;

“Closing Date” means June 17, 2014, or such other date as the Parties may agree in writing as the date upon which the Closing shall take place;

“Closing Date Balance Sheet” means the consolidated balance sheet of the Corporation and the Subsidiary as at the Closing Date, showing to the extent permitted in accordance with IFRS all of the assets and liabilities of the Corporation and the Subsidiary, prepared by the Buyer on a basis consistent with that used in the Financial Statements, and shall also include a statement of the Closing Net Working Capital and Closing Net Debt;

“Closing Net Debt” means Net Debt as at the Closing Date;

“Closing Net Working Capital” means [Redacted Definition of Closing Net Working Capital];

“Closing Time” means 10 o’clock a.m. (Calgary time), on the Closing Date or such other time on such date as the Parties may agree in writing as the time at which the Closing shall take place;

“Collective Agreements” means all collective employment agreements (including expired collective agreements which have not been renewed) and related documents including benefit agreements, letters of understanding, letters of intent and other written communications (including arbitration awards) by which the Corporation or the Subsidiary is bound or which impose any obligations upon the Corporation or set out the understanding of the parties or an interpretation with respect to the meaning of any provisions of such collective agreements, letters of understanding, letters of intent and other written communications, together with any certifications or voluntary recognition of bargaining authority relating to the Employees covered thereby;

“Contracts” means contracts, licences, leases, agreements, obligations, promises, undertakings, understandings, arrangements, documents, commitments, entitlements or engagements to which the Corporation or the Subsidiary is a party or by which any of them are bound or under which the Corporation or the Subsidiary has, or will have, any liability or contingent liability (in each case, whether written or oral, express or implied), and includes any quotations, orders, proposals or tenders which remain open for acceptance and warranties and guarantees;

“Employees” means individuals employed by the Corporation or the Subsidiary on a fulltime, part-time or temporary basis, including those employees on disability leave, parental leave or other absence or on lay-off with rights of recall;

“Employment Contracts” means Contracts, other than Benefit Plans, whether oral or written, relating to an Employee, including any communication or practice relating to an Employee which imposes any obligation on the Corporation or the Subsidiary;

“Encumbrances” means, whether or not registered or registrable or recorded or recordable, and regardless of how created or arising, any and all:

(i) mortgages, assignments of rent, liens, encumbrances, adverse claims, charges, executions, title defects, security interests, hypothecs or pledges, whether fixed or floating, against assets or property (whether real, personal, mixed, tangible or intangible), hire-purchase agreements, conditional sales contracts, title retention agreements, equipment trusts or capital leases, or any subordination to any right or claim of others in respect thereof;

(ii) claims, interests or estates against or in assets or property (whether real, personal, mixed, tangible or intangible), including, without limitation, easements, rights-of-way, servitudes or other similar rights in property granted to or reserved or taken by any Person, but excluding easements, right-of-ways, servitudes and other similar rights in property for highways and other roads, railways, sewers, drains, water mains and other utilities infrastructure or other similar easements, rights-of-way, servitudes and other similar rights in property shown on the existing Certificates of Title in respect of the Real Property;

(iii) an option or other right to acquire, or to acquire any interest in, any assets or property (whether real, personal, mixed, tangible or intangible);

(iv) without limiting the generality of the foregoing, any other encumbrance of whatsoever nature and kind against assets or property (whether real, personal, mixed, tangible or intangible); and

(v) any agreement to create, or right capable of becoming, any of the foregoing;

“Environment” means the environment and natural environment as defined in any Environmental Laws and includes indoor air, the environment in the workplace and any living things;

“Environmental Approvals” means permits, certificates, licences, authorizations, consents, agreements, instructions, directions, notices, registrations, approvals or other rights made, issued, granted, conferred or required by a Governmental Authority pursuant to any Environmental Law relating to the operations, business or assets of the Corporation or the Subsidiary and includes any sewer surcharge or over strength agreements;

“Environmental Health and Safety Liabilities” means any cost, damage, expense (including legal, consultant and engineer fees and expenses), liability, obligation or other responsibility arising from or under any Environmental Law or Occupational Safety and Health Law, including those consisting of or relating to:

(a) any environmental, health or safety matter or condition (including on-site or offsite contamination, occupational safety and health and regulation of any chemical substance or product);
(b) any fine, penalty, judgment, award, settlement, legal or administrative proceeding, damages, loss, claim, demand or response, remedial or inspection cost or expense arising under any Environmental Law or Occupational Safety and Health Law;
(c) any Remedial Action; or
(d) any other compliance, response corrective or remedial measure required under any Environmental Law or Occupational Safety and Health Law;

“Environmental Laws” means Laws relating to pollution or the protection of the Environment or public health or safety, and includes Laws relating to any sewer system and to the storage, generation, use, handling, manufacture, processing, labelling, advertising, sale, display, transportation, treatment, reuse, recycling, Release and disposal of Hazardous Substances, including the common law and civil law that relate to making responsible parties pay for damages to the health or property of Persons or the Environment;

“Environmental Orders” means Orders issued, filed, imposed or threatened by any Governmental Authority pursuant to any Environmental Laws and include certificates of property use and Orders requiring investigation, assessment, monitoring, managing, controlling, treatment, removal, excavation or remediation of any site or Hazardous Substance, or requiring that any Release or any other activity be reduced, modified,

managed, controlled, stopped or eliminated or requiring any form of payment or cooperation be provided to any Governmental Authority;

“Escrow Agent” means Stein Monast L.L.P.;

“Escrow Agreement” means the escrow agreement to be entered into among the Escrow Agent, the Seller and the Buyer on the Closing Date;

“Escrow Amount” has the meaning given in Section 3.2;

“Estimated Purchase Price” has the meaning given in Section 3.1;

“Estimated Closing Net Debt” means the best estimate of the Buyer and Seller of any Net Debt as of the Closing Date as indicated in Schedule 3.1;

“Estimated Net Working Capital” means the best estimate of the Buyer and Seller of the Closing Net Working Capital as of the Closing Date as indicated in Schedule 3.1;

“Financial Statements” means the consolidated financial statements of the Corporation and the Subsidiary for the fiscal year ended December 31, 2013, consisting of the Balance Sheet and the statements of earnings and retained earnings and cash flows a copy of which is attached as Schedule 4.13;

“Governmental Authorities” means governments, regulatory authorities, governmental departments, agencies, commissions, bureaus, officials, ministers, Crown corporations, courts, bodies, boards, tribunals or dispute settlement panels or other law, rule or regulation-making organizations or entities:

(a) having or purporting to have jurisdiction on behalf of any nation, province, territory or state or any other geographic or political subdivision of any of them; or
(b) exercising, or entitled or purporting to exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power;

“Governmental Authorizations” means authorizations, approvals, including Environmental Approvals, franchises, Orders, certificates, consents, directives, notices, licences, permits, variances, agreements, instructions, registrations or other rights issued to or required by the Corporation or the Subsidiary by or from any Governmental Authority;

“Hazardous Substances” means pollutants, contaminants, wastes of any nature, hazardous substances, hazardous materials, toxic substances, prohibited substances, dangerous substances or dangerous goods as defined, judicially interpreted or identified in any Environmental Laws including asbestos, asbestos-containing materials, polychlorinated biphenyls (PCBs) and mould;

“IFRS” means international financial reporting standards as defined by the Accounting Standards Board of the Canadian Institute of Chartered Accountants in the Handbook of

the Canadian Institute of Chartered Accountants as they exist as of the date of the preparation of any financial statements referred to herein;

“Improvements” means plants, buildings, structures, fixtures, erections and improvements located on, over, under or upon the Real Property and mechanical, electrical, plumbing, heating and air-conditioning systems relating to the Real Property, including any of the foregoing under construction;

“Indemnified Party” has the meaning given in Section Error! Reference source not found.;

“Indemnifying Party” has the meaning given in Section Error! Reference source not found.;

“Independent Auditor” means Ernst & Young LLP or such other independent auditing firm as the Parties may otherwise agree;

“Information Technology” means computer hardware, software in source code and object code form (including documentation, interfaces and development tools), websites for the Corporation or the Subsidiary, databases, telecommunications equipment and facilities and other information technology systems owned, used or held by the Corporation or the Subsidiary;

“Intellectual Property” means intellectual property rights, whether registered or not, owned, used or held by the Corporation or the Subsidiary, including:

(a) inventions, pending patent applications (including divisionals, reissues, renewals, re-examinations, continuations, continuations-in-part and extensions) and issued patents;
(b) trade-marks, trade dress, trade-names, business names, logos, slogans, other indicia of origin and all registrations and applications for registration therein, and all goodwill associated with the foregoing but, specifically, excluding the use of McCoy’s name;
(c) copyrights and all other rights of authorship and registrations therein; and
(d) industrial designs and similar rights and all registrations therein.

“Inventories” means items that are held by the Corporation or the Subsidiary for sale, license, rental, lease or other distribution in the ordinary course of business, or are being produced for sale, or are to be consumed, directly or indirectly, in the production of goods or services to be available for sale, of every kind and nature and wheresoever situated including inventories of raw materials, work-in-progress, finished goods and byproducts;

“Laws” means applicable laws, statutes, by-laws, rules, regulations, Orders, ordinances, protocols, codes, guidelines, treaties, policies, notices, directions, decrees, judgments, awards or requirements, in each case of any Governmental Authority;

“Leased Real Property” means lands and/or premises which are used by the Corporation or the Subsidiary and which are leased, subleased, licensed to or otherwise occupied by the Corporation or the Subsidiary;

“Manufacturing Agreements” means the manufacturing agreements between the Corporation and each of Scott Manufacturing Inc., C & F Steel Company, Inc. and KNL Holding, LLC.

“Material Adverse Effect” means a change, effect or circumstance that, when considered either individually or in the aggregate together with all other adverse changes, effects or circumstances with respect to which such phrase is used in this Agreement, is materially adverse to, or could reasonably be expected to have a material adverse effect on, the financial condition or results of operations of the Corporation or the Subsidiary, excluding, however, in each case, any event, change, condition, development, circumstance, effect, factor or occurrence resulting from or arising out of or in connection with: (A) conditions affecting the economy of Canada, as a whole, (B) economic conditions or other circumstances affecting the industry in which the Corporation or Subsidiary operate generally, including, without limitation, increases in the price of any raw material or supply used by the Corporation or Subsidiary and general market prices, (C) national or international political or social conditions, or the occurrence of natural disasters or acts of terrorism, (D) financial, banking or securities markets (including any disruption thereof and any decline in the price of any security or any market index), (E) any changes in IFRS or the interpretation thereof as imposed on the Corporation or Subsidiary or their business (F) any changes in Laws or the interpretation thereof affecting the Corporation or Subsidiary or (G) any change resulting from the announcement or pendency of the transaction contemplated by this Agreement or compliance by the Seller or the Corporation or Subsidiary with any action contemplated or required by this Agreement that were not caused by a termination of a Material Contract due to any provisions in such Material Contract permitting such termination due to a change of control of the Corporation;

“Material Contracts” has the meaning given in Section Error! Reference source not found.;

“Multi-Employer Plans” means Benefit Plans to which the Corporation or the Subsidiary is required to contribute and which are not maintained or administered by the Corporation or the Subsidiaries;

“Net Adjustment Amount” has the meaning given in Section Error! Reference source not found.;

“Net Debt” means the sum of (i) notes payable and other long term debt (current and long term amounts), (ii) capital lease obligations (current and long term amounts, excluding operating leases), (iii) future commitments or payables for property and equipment on order or received; (iv) bank debt, overdraft, line of credit, (v) any amounts repayable to any Government Authority in relation to any grants or other forms of assistance received by the Corporation or Subsidiary which is more likely than not to be required to repaid by the Corporation or the Subsidiary, (vi) any other interest bearing debt and (vii) any interests or penalties payable pursuant to the Income Tax Act (Canada),

the Taxation Act (Québec) and any other similar act, less cash and cash equivalents and deposits with respect to equipment purchases, in all cases of the Corporation or its Subsidiary;

“Non-Competition Agreement” means the non-competition agreement entered into among, inter alia, Seller, the Corporation and Buyer on the Closing Date;

“Non-Permitted Encumbrances” means Encumbrances which the Seller has agreed to discharge prior to Closing and listed in Schedule 4.21;

“Notice” has the meaning given in Section 10.4;

“Objection Notice” has the meaning given in Section 3.5;

“Occupational Safety and Health Law” means any Law designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, including the Workers Compensation Act (British Columbia) and the Occupational Health and Safety Regulation (British Columbia), and any program, whether governmental or private (such as those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions;

“Orders” means orders, injunctions, judgments, administrative complaints, decrees, rulings, awards, assessments, directions, instructions, penalties or sanctions issued, filed or imposed by any Governmental Authority or arbitrator, including Environmental Orders;

“Owned Real Property” means real property owned by the Corporation or the Subsidiary, and real property, other than Leased Real Property, in which the Corporation or the Subsidiary has an ownership interest, including Improvements and Appurtenances;

“Parties” means the Seller and the Buyer collectively, and “Party” means any one of them;

“Pension Plans” means all Benefit Plans of the Corporation or the Subsidiary providing pensions, superannuation benefits or retirement savings including pension plans, top up pensions or supplemental pensions, “registered retirement savings plans” (as defined in the Income Tax Act (Canada)), “registered pension plans” (as defined in the Income Tax Act (Canada)), “retirement compensation arrangements” (as defined in the Income Tax Act (Canada)) and any other similar plan of the Corporation or the Subsidiary;

“Permitted Encumbrances” means the Encumbrances listed in Schedule 4.21;

“Person” means any individual, sole proprietorship, partnership, firm, entity, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, Governmental Authority, and where the context requires any of the foregoing when they are acting as trustee, executor, administrator or other legal representative;

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“Personal Information” means information in the possession or under the control of the Corporation or the Subsidiary about an identifiable individual;

“Purchase Price” means the Estimated Purchase Price, as adjusted;

“Purchased Shares” means all of the issued and outstanding shares in the capital of the Corporation;

“Real Property” means Owned Real Property and Leased Real Property;

“Real Property Leases” means Contracts pursuant to which the Corporation or the Subsidiary uses or occupies the Leased Real Property, including all rights to related Improvements and Appurtenances;

“Release” has the meaning prescribed in any Environmental Laws and includes any release, spill, leak, pumping, addition, pouring, emission, emptying, discharge, injection, escape, leaching, disposal, dumping, deposit, spraying, burial, abandonment, incineration, seepage, placement or introduction, whether accidental or intentional;

“Remedial Action” means all actions to (i) cleanup remove, treat or in any other way address the presence of Hazardous Substances in violation of Environmental Laws or at concentrations exceeding remediation guidelines published by Governmental Authorities; (ii) prevent the Release of any Hazardous Substances; (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care; (iv) correct a condition of noncompliance with Environmental Laws; or (v) address, correct or respond to an Environmental Health and Safety Liability or any other claim;

“Required Consents” means those approval, Order, consent or filing listed and described in Schedule 4.12.

“Restricted Right” means any Contract or Governmental Authorization which by its terms requires consent or approval of the other party or parties thereto or the issuer for completion of the transactions contemplated by this Agreement or in respect of which the completion of the transactions contemplated by this Agreement will increase the obligations or decrease the rights or entitlements of the Corporation under such Contract or Governmental Authorization;

“Review Period” has the meaning given in Section 3.5(a);

“Seller Indemnified Parties” has the meaning given in Section Error! Reference source not found.;

“Software” means computer software and programs (in both source code and object code form), all proprietary rights in the computer software and programs and all documentation and other materials related to the computer software and programs;

“Subsidiary” means Scona US Inc.;

“Tangible Personal Property” means machinery, equipment, furniture, furnishings, office equipment, computer hardware, supplies, materials, vehicles, material handling

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equipment, implements, parts, tools, jigs, dies, moulds, patterns, tooling and spare parts and tangible assets (other than Real Property and Inventory) owned or held and used by the Corporation or the Subsidiary, including (i) any of the foregoing which are in transit; (ii) other tangible personal property of the Corporation or the Subsidiary whether located in or on the Real Property or elsewhere; and (iii) any of the foregoing which may be attached to Real Property but are not Improvements;

“Target Net Working Capital” means [Redacted Amount of Target Net Working Capital];

“Tax Returns” includes all returns, reports, declarations, elections, notices, filings, forms, statements and other documents (whether in tangible, electronic or other form) and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto, made, prepared, filed or required to be made, prepared or filed by Law in respect of Taxes;

“Taxes” includes, with respect to any entity, (i) any taxes, duties, fees, premiums, assessments, imposts, levies and other charges of any kind whatsoever imposed by any Governmental Authority, including all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Authority in respect thereof, and including those levied on, or measured by, or referred to as, income, gross receipts, profits, capital, transfer, land transfer, sales, goods and services, harmonized sales, use, value-added, excise, stamp, withholding, business, franchising, property, development, occupancy, employer health, payroll, employment, health, social services, education and social security taxes, all surtaxes, all customs duties and import and export taxes, countervail and anti-dumping, all licence, franchise and registration fees and all employment insurance, health insurance and Canada, British Columbia, Alberta and other government pension plan premiums or contributions, and (ii) any amounts described in (i) of any other Person which such entity is obligated by Law or Contract entered into prior to Closing to assume or pay;

“Technical Information” means know-how and related technical knowledge owned, used or held by the Corporation or the Subsidiary, including:

(a) trade secrets, confidential information and other proprietary know-how;
(b) public information and non-proprietary know-how;
(c) information of a scientific, technical, financial or business nature regardless of its form;
(d) uniform resource locators, domain names, telephone, telecopy, internet protocol and email addresses, and UPC consumer packaging codes; and
(e) documented research, forecasts, studies, marketing plans, budgets, market data, developmental, demonstration or engineering work, information that can be used to define a design or process or procure, produce, support or operate material and equipment, methods of production and procedures, all formulas and designs and
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drawings, blueprints, patterns, plans, flow charts, parts lists, manuals and records, specifications, and test data;

“Technology” means Intellectual Property, Technical Information and Information Technology;

“Third Party Claim” has the meaning given in Section Error! Reference source not found.; and

“Union” means an organization of employees formed for purposes that include the regulation of relations between employees and employers and includes any organization which has been declared a union pursuant to applicable labour relations legislation or which may qualify as a Union;

1.2 Certain Rules of Interpretation

In this Agreement:

(a) Consent – Whenever a provision of this Agreement requires an approval or consent and such approval or consent is not delivered within the applicable time limit, then, unless otherwise specified, the Party whose consent or approval is required shall be conclusively deemed to have withheld its approval or consent.
(b) Currency – Unless otherwise specified, all references to money amounts are to lawful currency of Canada.
(c) Governing Law – This Agreement is a contract made under and shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable in the Province of British Columbia.
(d) Headings – Headings of Articles and Sections are inserted for convenience of reference only and do not affect the construction or interpretation of this Agreement.
(e) Including – Where the word “including” or “includes” is used in this Agreement, it means “including (or includes) without limitation”.
(f) No Strict Construction – The language used in this Agreement is the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party.
(g) Number and Gender – Unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders.
(h) Severability – If, in any jurisdiction, any provision of this Agreement or its application to any Party or circumstance is restricted, prohibited or unenforceable, such provision shall, as to such jurisdiction, be ineffective only to the extent of such restriction, prohibition or unenforceability without invalidating the
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remaining provisions of this Agreement and without affecting the validity or enforceability of such provision in any other jurisdiction or without affecting its application to other Parties or circumstances.

(i) Statutory references – A reference to a statute includes all regulations and rules made pursuant to such statute and, unless otherwise specified, the provisions of any statute, regulation or rule which amends, supplements or supersedes any such statute, regulation or rule.
(j) Time – Time is of the essence in the performance of the Parties’ respective obligations.
(k) Time Periods – Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next Business Day following if the last day of the period is not a Business Day.

1.3 Knowledge

Any reference to the knowledge of any Party means to the actual knowledge, after due inquiry, of such Party and, in the case of the knowledge of the Seller, includes specifically the actual knowledge of [Redacted Personal Information].

1.4 Entire Agreement

This Agreement and the agreements and other documents required to be delivered pursuant to this Agreement, constitute the entire agreement between the Parties and set out all the covenants, promises, warranties, representations, conditions and agreements between the Parties in connection with the subject matter of this Agreement and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, pre-contractual or otherwise, including the Letter of Intent executed by the Parties on April 2, 2014. There are no covenants, promises, warranties, representations, conditions, understandings or other agreements, whether oral or written, pre-contractual or otherwise, express, implied or collateral, at law or in equity, between the Parties in connection with the subject matter of this Agreement except as specifically set forth in this Agreement and any document required to be delivered pursuant to this Agreement.

1.5 Schedules

The schedules to this Agreement are an integral part of this Agreement. Any matter disclosed pursuant to any of the Schedules whose relevance or applicability to any representation or warranty made elsewhere in this Agreement or to the information called for by any other section of, or Exhibit to, this Agreement or the Schedules is reasonably apparent on its face shall be deemed to be an exception to such representations and to be disclosed with respect to all such other sections of, and Exhibits to, this Agreement and the Schedules where it is so apparent on its face, notwithstanding the omission of a reference or cross-reference thereto.

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ARTICLE 2 PURCHASE AND SALE

2.1 Action by Seller and Buyer

Subject to the provisions of this Agreement, at the Closing Time:

(a) Purchase and Sale of Purchased Shares – the Seller shall sell and the Buyer shall purchase the Purchased Shares;
(b) Payment of Purchase Price – the Buyer shall pay the Purchase Price to the Seller as provided in Sections 3.2, 3.4 and 3.5; and
(c) Other Documents – the Seller and Buyer shall deliver such other documents as may be necessary to complete the transactions provided for in this Agreement.

ARTICLE 3 PURCHASE PRICE

3.1 Purchase Price

Subject to any adjustments pursuant to Section 3.4, the amount payable by the Buyer for the Purchased Shares shall be comprised of:

(a) an estimated purchase price (the “Estimated Purchase Price”) determined in accordance with the following formula:

[Redacted Description of Estimated Purchase Price]

3.2 Satisfaction of the Estimated Purchase Price

The Buyer shall satisfy the Estimated Purchase Price at the Closing Time as follows:

(a) by payment to the Seller by wire transfer of the Estimated Purchase Price, less an amount equal to [Redacted Escrow Amount] of the Estimated Purchase Price (the “Escrow Amount”); and
(b) by transfer to the Escrow Agent of the Escrow Amount which will be kept in escrow [Redacted Escrow Period] unless disbursed, in whole or in part, by the Escrow Agent in compliance with the procedure set out in the Escrow Agreement.

3.3 Delivery of Closing Date Balance Sheet

As soon as reasonably practicable after the Closing Date and in any event not later than 90 days thereafter, the Buyer shall prepare and deliver to the Seller the Closing Date Balance Sheet.

3.4 Net Working Capital and Net Debt Adjustments

(a) Subject to Section 3.5, the Estimated Purchase Price shall be:

[Redacted Description of Net Working Capital Adjustments]

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(b) [Redacted Description of Net Adjustment Amount]

(c) The Parties acknowledge having taken a physical account of the Inventories immediately preceding the Closing Date, the whole as described in Schedule 3.1.

3.5 Objection to Closing Date Balance Sheet

(a) Delivery of Objection Notice – In the event that the Seller objects in good faith to any item of the Closing Date Balance Sheet , the Seller shall so advise the Buyer by delivery to the Buyer of a written notice (the “Objection Notice”) within 30 days after the delivery to the Seller of the Closing Date Balance Sheet(the “Review Period”). The Objection Notice shall set out the reasons for the Seller’s objection as well as the amount in dispute and reasonable details of the calculation of such amount.
(b) Resolution of Disputes – The Buyer shall give the Seller and its accountants sufficient access to the Books and Records and working papers of the Buyer used in the preparation of the Closing Date Balance Sheet to enable the Seller to exercise its rights under this Section. The Seller and the Buyer shall attempt to resolve all of the items in dispute set out in any Objection Notice within 15 days of receipt of the Objection Notice by the Buyer. Any items in dispute not resolved within such 15 day period (the “remaining disputed items”) shall be referred as soon as possible thereafter by the Seller and the Buyer to the Independent Auditor. The Independent Auditor shall act as arbitrator. Each of the Seller and the Buyer shall submit to the Independent Auditor and exchange with the other, in accordance with the procedure to be established by the Independent Auditor, its best offer for the remaining disputed items. The Independent Auditor shall be limited to awarding only one Party or the other Party of the two positions submitted related to the remaining disputed items. The decision of the Independent Auditor shall be final and binding on the Parties and the Closing Date Balance Sheet shall be (or not be) adjusted in accordance with such decision.
(c) Audit Expenses – The fees and expenses of the Independent Auditor in acting in accordance with this ARTICLE 3 shall be borne by the losing Party.
(d) Payment in Accordance with Determination - Within 5 days after resolution, by agreement of the Parties, of the dispute which was the subject of the Objection Notice or, failing such resolution, within 5 days after the final determination of the Independent Auditor, the Seller or the Buyer, as the case may be, shall pay to the other the amount owing as a result of such resolution or final determination as provided in Section Error! Reference source not found..

3.6 Interest

The amounts paid as adjustments under Section 3.4 shall be paid together with interest thereon calculated and compounded monthly from the Closing Date to the date of payment, at the rate per annum equal to the rate quoted by the National Bank of Canada on the Closing Date as the

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reference rate of interest it uses for determining interest rates on Canadian dollar commercial loans in Canada and designated as such bank’s prime rate.

3.7 Pre-Closing and Post-Closing Taxes and Tax Returns
(a) Pre-Closing Tax Returns - The Buyer shall cause each of the Corporation and the Subsidiary to duly and timely make or prepare all Tax Returns required to be made or prepared by them and to duly and timely file all Tax Returns required to be filed by them for any period which ends on or before the Closing Date and for which Tax Returns have not been filed as of such date.
(b) Pre-Closing Taxes - The Seller shall be responsible for the payment of all Taxes owing by the Corporation and the Subsidiary for any period which ends before the Closing Date. With respect to the fiscal year of the Subsidiary beginning on January 1, 2014 and ending at the earliest of the following dates: i) December 31, 2014 and ii) the date of the winding-up of the Subsidiary, the Seller shall pay to the Buyer an amount equal to the amount of Taxes due by the Subsidiary for the period of time beginning on January 1, 2014 and ending at the Closing Date. For the purposes of calculating Taxes owed by the Seller, provided the Subsidiary is operated by the Buyer in a manner consistent with past practice, then such Taxes may be calculated as follows:

(A ÷ B) x C, where:

A: The number of days between January 1, 2014 and the Closing Date;
B: The number of days between January 1, 2014 and the earliest of the following dates: i) December 31, 2014 and ii) the date of the winding-up of the Subsidiary; and
C: The amount of all Taxes due by the Subsidiary with respect to the fiscal year of the Subsidiary beginning on January 1, 2014 and ending at the earliest of the following dates: i) December 31, 2014 and ii) the date of the winding-up of the Subsidiary
(c) Refunds or Credits - The Buyer will cause the Corporation and the Subsidiary to pay, promptly upon receipt, to the Seller any refunds or credits of Taxes that relate to a Tax period or portions thereof ending on or before the Closing Date. For purposes of this Section 3.7(c), the term “refund” shall include a reduction in Taxes and the use of an overpayment of Taxes as a credit or other Tax offset and receipt of a refund shall occur upon the filing of a return or an adjustment thereto using such reduction, overpayment or offset, or upon the receipt of cash. Upon the reasonable request of the Seller, the Buyer, the Corporation or the Subsidiary shall prepare and file, or cause to be prepared and filed, all claims for refunds relating to such Taxes. In no event shall the Buyer amend any of the Corporation’s or the Subsidiary’s Tax Returns relating to any Taxes for a period (or portion thereof) ending on or prior to the Closing Date or the carry-back of an item to a period ending prior to Closing Date without the Seller’s prior written consent (which will not be unreasonably withheld).
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(d) Election - The Buyer may cause the Corporation and the Subsidiary to make the election referred to in subsection 256(9) of the Income Tax Act (Canada), and comparable provisions of applicable provincial or territorial legislation, and to file such election(s) for the Corporation’s and the Subsidiary’s taxation year(s) ending immediately before the Closing Time.
(e) Mutual Cooperation - The Seller and the Buyer shall cooperate fully with each other and make available to each other in a timely fashion such data and other information as may reasonably be required for the preparation of i) any Tax Return of the Corporation for the period ending on the Closing Date and ii) any Tax Return of the Subsidiary for the period ending on December 31, 2014 and shall preserve such data and other information until the expiration of any applicable limitation period under any applicable law with respect to Taxes.
(f) Post-Closing Tax Returns - The Buyer shall also cause each of the Corporation and the Subsidiary to duly and timely make or prepare all Tax Returns required to be made or prepared by them and to duly and timely file all Tax Returns required to be filed by them for periods beginning and ending after the Closing Date.

3.8 December 31, 2013 Income Tax Returns

The Seller has prepared and filed all income Tax Returns for the Corporation and its Subsidiary for the December 31, 2013 taxation year-end (the “Corporation Tax Returns”). All such Corporation Tax Returns have been prepared in a manner consistent with the past practice of the taxpayer to which they relate except as required by applicable Laws.

3.9 Cooperation

For the purpose of Section 3.7, the Parties shall cooperate with each other to provide each other with such assistance as may be reasonably requested by them in connection with the preparation of any Tax Returns, any tax audit or other examination or legal proceedings relating to Taxes of the Corporation and the Subsidiaries for the period which ends on or before Closing Date and the enforcement of the provisions of this section. Such cooperation shall include providing records and information that are reasonably relevant to any such matters and making employees available on a mutually convenient basis to provide additional information.

3.10 Transfer Taxes

In the event that any transfer taxes are charged as a result of the transaction contemplated by this Agreement, said transfer taxes will be borne between the Buyer and the Seller in equal shares.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller represents and warrants to the Buyer the matters set out below.

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4.1 Incorporation and Corporate Power

The Corporation is a corporation duly continued and validly existing under the laws of the Province of Alberta and has all necessary corporate power, authority and capacity to own its assets and to carry on its business as presently conducted.

4.2 Registration

Neither the nature of the Corporation’s business nor the location or character of the assets owned or leased by the Corporation requires it to be registered, licensed or otherwise qualified as an extra-provincial or foreign corporation in any jurisdiction other than in the Province of Alberta and the Province of British Columbia where it is duly registered, licensed or otherwise qualified for such purpose.

4.3 Incorporation, Corporate Power and Registration of the Subsidiary

The Subsidiary is a corporation duly incorporated and validly existing under the laws of the State of Texas and has all necessary corporate power, authority and capacity to own its assets and to carry on its business as presently conducted. Neither the nature of its business nor the location or character of the assets owned or leased by the Subsidiary requires it to be registered, licensed or otherwise qualified as an extra-provincial, extra-territorial or foreign corporation in any jurisdiction other than in the State of Texas where the Subsidiary is duly registered, licensed or otherwise qualified for such purpose.

4.4 Subsidiary

The Corporation is the sole registered and beneficial owner of all of the issued and outstanding shares in the capital of the Subsidiary, free and clear of all Encumbrances, and the shares of the Subsidiary are not subject to any shareholders agreement. The Corporation does not own directly or indirectly, or have any direct or indirect interest in any shares or have an ownership interest in any other Person other than its shareholdings in the Subsidiary.

4.5 Residence of the Seller

The Seller is not a non-resident of Canada for the purposes of the Income Tax Act (Canada).

4.6 Status of the Seller and Right to Sell

The Seller is a corporation existing under the laws of Canada. The Seller is the sole registered and beneficial owner of the Purchased Shares, free and clear of all Encumbrances. The Seller has the exclusive right to dispose of the Purchased Shares as provided in this Agreement and such disposition will not violate, contravene, breach or offend against or result in any default under any Contract, charter or by-law provision, Order, judgment, decree, licence, permit or Law, to which the Seller is a party or subject or by which the Seller is bound or affected. The Purchased Shares are not subject to the terms of any shareholders agreement.

4.7 Securities Laws

The Corporation is an issuer: (i) that is not a reporting issuer or an investment fund; (ii) whose securities, other than non-convertible debt securities, (A) are subject to restrictions on transfer

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that are contained in their constating documents, or security holders agreement, and (B) are beneficially owned directly or indirectly, by no more than 50 Persons, not including employees and former employees of the Corporation or its affiliates, provided that each Person is counted as one beneficial owner unless the Person is created or used solely to purchase or hold securities of the issuer in which case each beneficial owner or each beneficiary of the Person, as the case may be, must be counted as a separate beneficial owner, (iii) that has distributed securities only to Persons described in Section 2.4 of National Instrument 45-106 respecting Prospectus and Registration Exemption. Assuming the accuracy of the representations and the warranties of the Buyer in Section 5.8, the sale of the Purchased Shares constitutes a transaction exempt from the dealer registration and prospectus requirements under applicable securities Laws.

4.8 Capitalization

The authorized and issued share capital of the Corporation and the Subsidiary is as set forth in Schedule 4.8. All of the Purchased Shares and all the shares of the Subsidiary have been duly and validly issued and are outstanding as fully paid and non-assessable shares. No options, warrants or other rights to purchase shares or other securities of the Corporation or the Subsidiary and no securities or obligations convertible into or exchangeable for shares or other securities of the Corporation or the Subsidiary have been authorized or agreed to be issued or are outstanding.

4.9 Due Authorization

The Seller has all necessary corporate power, authority and capacity to enter into this Agreement and each other agreement to be entered into under the terms of this Agreement and to carry out its obligations thereunder. The execution and delivery of this Agreement and of each other agreement to be entered into under the terms of this Agreement and the consummation of the transactions contemplated thereby have been duly authorized by all necessary corporate action of the Seller.

4.10 Enforceability of Obligations

This Agreement constitutes, and each other agreement to be executed by the Seller in connection with the Closing will constitute, a valid and binding obligation of the Seller enforceable against it in accordance with its terms, subject, however, to limitations with regards to enforcement imposed by Law in connection with bankruptcy or similar proceedings and to the extent that equitable remedies such as specific performance and injunction are in the discretion of the court from which they are sought.

4.11 Absence of Conflicts

Except for the Restricted Rights which are listed on Schedule 4.11, neither the Corporation nor the Subsidiary is a party to, bound or affected by or subject to any:

(a) Contract;
(b) charter or by-law; or
(c) Laws or Governmental Authorizations;
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that would be violated, breached by, or under which default would occur or an Encumbrance would be created, or in respect of which the obligations of the Corporation or the Subsidiary will increase or the rights or entitlements of the Corporation or the Subsidiary will decrease or any obligation on the part of the Corporation or the Subsidiary to give notice to any Governmental Authority will arise, as a result of the execution and delivery of, or the performance of obligations under, this Agreement or any other agreement to be entered into under the terms of this Agreement. Except as disclosed in Schedule 4.11, there has been no sale, assignment, subletting, licensing or granting of any rights in or other disposition of or in respect of any of the Corporation’s or the Subsidiary’ assets or any granting of any Contract or right capable of becoming an agreement or option for the purchase, assignment, subletting, licensing or granting of any rights in or other disposition of any of such assets other than pursuant to the provisions of, or as disclosed in, this Agreement or pursuant to purchase orders accepted by the Corporation or the Subsidiary in the ordinary course of business.

4.12 Regulatory Approvals

Except as disclosed in Schedule 4.12, no approval, Order, consent of or filing with any Governmental Authority is required on the part of the Seller, the Corporation or the Subsidiary, in connection with the execution, delivery and performance of this Agreement or any other documents and agreements to be delivered under this Agreement or the performance of the Seller’s obligations under this Agreement or any other documents and agreements to be delivered under this Agreement.

4.13 Financial Statements

Except as disclosed in Schedule 4.13, the consolidated financial statements of the Corporation and of the Subsidiary for the fiscal years ended December 31, 2011, 2012 and 2013 respectively (which are attached as Schedule 4.13) have been prepared in all material respects in accordance with IFRS accounting policies applied on a basis consistent with that of the preceding period and present fairly:

(a) all of the assets, liabilities and financial position of the Corporation and of the Subsidiary and, as at December 31, 2011, 2012 and 2013, respectively; and
(b) the sales, earnings, results of operation and changes in financial position of the Corporation and of the Subsidiary for the fiscal years ended December 31, 2011, 2012 and 2013 respectively.

4.14 Monthly Financial Statements

(a) Except as disclosed in Schedule 4.14, the monthly consolidated financial statements of the Corporation and of the Subsidiary for each month of the fiscal year ended December 31, 2013 and for the five months ended May 31, 2014 have been prepared in all material respects in accordance with IFRS accounting policies applied on a basis consistent with that of the preceding period and present fairly:
(i) all of the assets, liabilities and financial position of the Corporation and of the Subsidiary on a consolidated basis as at the end of each month; and
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(ii) the sales, earnings, results of operation and changes in financial position of the Corporation and of the Subsidiary on a consolidated basis for each month;
(b) The monthly consolidated financial statements for the fiscal year ended December 31, 2013 and for the month of April 2014 and for the five months ended May 31, 2014 are attached to this Agreement as Schedule 4.14.

4.15 Absence of Undisclosed Liabilities

Neither the Corporation nor the Subsidiary has incurred any liabilities or obligations (whether accrued, absolute, contingent or otherwise), which continue to be outstanding, except (a) as disclosed in the Financial Statements and the May 31, 2014 financial statements, (b) as disclosed on Schedule 4.15, or (c) as incurred in the ordinary course of business.

4.16 Absence of Changes and Unusual Transactions

Since December 31, 2013:

(a) there has not been any change in the financial condition, operations or, to the knowledge of Seller, prospects of the Corporation or the Subsidiary other than changes in the ordinary course of business, none of which has a Material Adverse Effect;
(b) there has not been any damage, destruction, loss, virus or denial of service attack, Information Technology failure, labour dispute, organizing drive, application for certification or other event, development or condition of any character (whether or not covered by insurance) which has a Material Adverse Effect;
(c) there has not been any material change in the level or value of Inventories nor has there been any change in the determination of their value;
(d) neither the Corporation nor the Subsidiary has transferred, assigned, sold or otherwise disposed of any of the assets shown or reflected in the Financial Statements or cancelled any debts or entitlements except, in each case, in the ordinary course of business;
(e) neither the Corporation nor the Subsidiary has discharged or satisfied any Encumbrance, or paid any obligation or liability (fixed or contingent) other than liabilities included in the Financial Statements and liabilities incurred since the date of the Financial Statements in the ordinary course of business;
(f) neither the Corporation nor the Subsidiary has suffered an operating loss or any unusual or extraordinary loss, waived or omitted to take any action in respect of any rights, or entered into any commitment or transaction not in the ordinary course of business where such loss, rights, commitment or transaction is or would be material in relation to the Corporation or the Subsidiary;
(g) except as disclosed in Schedule 4.16(g), neither the Corporation nor the Subsidiary has granted any bonuses or other profit sharing distribution, whether
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monetary or otherwise, or made any general wage, benefits or salary increases in respect of its Employees, other than (1) in the ordinary course of business or (2) as provided for in the Collective Agreements, or changed the terms of employment for any Employee or entered into a written contract with any Employee;

(h) neither the Corporation nor the Subsidiary has hired or dismissed any senior employees or hired or dismissed more than 10 employees;
(i) neither the Corporation nor the Subsidiary has, directly or indirectly, engaged in any transaction, made any loan or entered into any arrangement with any officer, director, partner, shareholder, employee (whether current or former or retired), consultant, independent contractor or agent of the Corporation;
(j) neither the Corporation nor the Subsidiary, except for Permitted Encumbrances, has created or permitted to exist any Encumbrance affecting any of its assets or property;
(k) neither the Corporation nor the Subsidiary has changed the manner of billing of, payment terms or the credit lines made available to, any of its customers;
(l) except as disclosed in Schedule 4.16(l), neither the Corporation nor the Subsidiary, directly or indirectly, has declared or paid any dividends or declared or made any other payments or distributions on or in respect of any of its shares and has not, directly or indirectly, purchased or otherwise acquired any of its shares;
(m) made or assumed any commitment, obligation or liability which is outside the ordinary course;
(n) transferred to any Person any rights to the Technology owned, held or used by it, except in connection with sales of the Corporation's or the Subsidiary's products or services, as applicable, in the ordinary course;
(o) except as disclosed in Schedule 4.16(o), terminated, entered into, amended or otherwise modified any agreements pursuant to which any Person is granted manufacturing, marketing, distribution or similar rights of any type or scope or any third party royalty rights with respect to any products or services of the Corporation or the Subsidiary, or entered into or amended any strategic alliance, license or sub-license agreement, or joint development agreement;
(p) except as disclosed in Schedule 4.16(p), terminated, entered into, amended or otherwise modified in any material respect any Contract which involves in the case of any such Contract revenue or expenditures of over $150,000 over the term of the Contract;
(q) suffered any extraordinary loss, whether or not covered by insurance, any material shortage or any cessation or interruption of inventory, shipments, supplies or ordinary services;
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(r) made any change in the accounting principles, policies and practices as utilized in the preparation of the Financial Statements, including any changes to the methods for determining valuation, reserves, allowances, provisions and capitalization policies;
(s) granted to any customer any special allowance or discount, or changed its pricing, credit or payment policies, other than in the ordinary course; and
(t) neither the Corporation nor the Subsidiary has authorized, agreed or otherwise become committed to do any of the foregoing.

4.17 No Material Adverse Change.

Since December 31, 2013, there has been no change in the business of the Corporation or the Subsidiary or any assets, liabilities, operations, properties, results of operation, prospects or condition (financial or otherwise) of the Corporation or the Subsidiary and no event has occurred or circumstances exist which may result in such a Material Adverse Effect.

4.18 Non-Arm’s Length Transactions

Other than as disclosed in Schedule 4.18 (which describes every category or type of transaction and the relevant amount) and except for the transactions or arrangements between the Seller, the Corporation and/or the Subsidiary, no current or former director, officer, shareholder or employee of, or any other Person not dealing at arm’s length with, the Corporation or the Subsidiary or the Seller is engaged in any transaction or arrangement with or is a party to a Contract with, or has any indebtedness, liability or obligation to, the Corporation or the Subsidiary, except for employment arrangements with Employees, the terms of which are disclosed in Schedule Error! Reference source not found..

4.19 Absence of Contingent Liabilities

Except as disclosed in Schedule 4.19, neither the Seller, Corporation nor the Subsidiary has given or agreed to give, or is a party to or bound by, any guarantee, surety or indemnity in respect of indebtedness, or other obligations, of any Person, or any other commitment by which the Corporation or the Subsidiary is, or is contingently, responsible for such indebtedness or other obligations.

[Redacted Customers, Dealers and Suppliers Representations and Warranties]

[Redacted Foreign Contracts Representations and Warranties]

[Redacted Product and Service Warranties]

4.20 Sufficiency of Assets

The Real Property, Real Property Leases, Tangible Personal Property, Contracts, Appurtenances, Accounts Receivable, Technology, Environmental Approvals, Governmental Authorizations, Improvements and Inventories of the Corporation and the Subsidiary are sufficient for the continued conduct of the Corporation’s and the Subsidiary’ businesses after the Closing in substantially the same manner as conducted prior to the Closing.

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4.21 Title to Certain Assets

Each of the Corporation and the Subsidiary is the sole legal and beneficial and (where its interests are registrable) the sole registered owner of all of its assets and interests in its assets, with good and valid title, free and clear of all Encumbrances, other than Permitted Encumbrances listed in Schedule 4.21 and Non-Permitted Encumbrances (which will be discharged prior to Closing).

4.22 Condition of Certain Assets

Except as disclosed in Schedule 4.25, the Tangible Personal Property owned, leased or used by the Corporation is in good condition, repair and (where applicable) proper working order, having regard to its use, age and normal wear and tear, and such assets have been properly and regularly maintained. None of such Tangible Personal Property is in need of maintenance or repairs, except for normal maintenance and repairs that are not material in nature or cost.

4.23 Location of the Assets

All of the assets of the Corporation and the Subsidiary are located on the Real Property or listed on Schedule 4.23 which are in transit to or from the Real Property.

4.24 Inventories

Except for items and amounts listed on Schedule 4.24, the Inventories of the Corporation and the Subsidiary do not include any items which are slow-moving, below standard quality or of a quality or quantity not usable or saleable in the ordinary course at normal profit margins in the Financial Statements. The inventory levels of each of the Corporation and the Subsidiary have been maintained at levels sufficient for the continuation of the business of the Corporation and the Subsidiary in the ordinary course.

4.25 Collectability of Accounts Receivable

The Accounts Receivable are good and collectible in the ordinary course of business at the aggregate recorded amounts, except to the extent of any reserves and allowances for doubtful accounts provided for such Accounts Receivable in the Books and Records, and are not subject to any defence, counterclaim or set off.

4.26 Government Grants

Schedule 4.26 sets forth a complete list of all contracts or agreements relating to grants or other forms of assistance received by the Corporation or the Subsidiary from any Governmental Authority and describes the terms and conditions of repayment, if any.

4.27 Business in Compliance with Law

The operations of the Corporation and the Subsidiary have been and are now conducted in compliance with all Laws of each jurisdiction the Laws of which have been and are now applicable to the business or products of the Corporation or the Subsidiary and neither the Corporation nor the Subsidiary has received any notice of any alleged violation of any such Laws. There are no, and there have not during the last five years been any, adverse or negative

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past performance evaluations or ratings by any Governmental Authority relating to the business or products of the Corporation or of the Subsidiary which have been communicated to the Corporation or the Subsidiary. Neither the Corporation nor the Subsidiary, nor any other Person acting on behalf of the Corporation or the Subsidiary, acting alone or together, has, in order to (i) obtain favourable treatment in securing business, (ii) pay for favourable treatment for business secured, or (iii) obtain special concessions or pay for special concessions already obtained for or in respect of either the Corporation or the Subsidiary: (A) received, directly or indirectly, any economic benefits, regardless of their nature or type, from any customer, supplier, governmental employee or other Person with whom either the Corporation or the Subsidiary has done business directly or indirectly, or (B) directly or indirectly, given or agreed to give any contribution, gift, bribe, rebate, payoff, influence payment, kickback or similar benefit to any customer, supplier, governmental employee or other Person, regardless of form, whether in money, property or services.

4.28 Governmental Authorizations

Schedule 4.28 sets forth a complete list of the Governmental Authorizations, other than the Environmental Approvals which are listed in Schedule 4.34, and true and complete copies of such authorizations have been delivered or made available to the Buyer. The Governmental Authorizations listed in Schedules 4.28 and 4.34 are all the authorizations required by the Corporation or the Subsidiary to enable each of them to carry on its business in compliance with all Laws. Such Governmental Authorizations are in full force and effect in accordance with their terms, and no event has occurred or circumstance exists that (with or without notice or lapse of time) may constitute or result in a violation of any such Governmental Authorization or give rise to an obligation on the part of the Corporation or the Subsidiary to undertake or bear any cost. No proceedings are pending or, to the knowledge of the Seller, threatened, which could result in their revocation or limitation and all steps have been taken and filings made on a timely basis with respect to each Governmental Authorization and its renewal.

4.29 Restrictive Covenants

Except as disclosed in Schedule 4.32, neither the Corporation nor the Subsidiary is a party to or bound or affected by any Contract limiting the freedom of the Corporation or the Subsidiary to compete in any line of business or any geographic area, acquire goods or services from any supplier, establish the prices at which it may sell any goods or services, sell goods or services to any customer or potential customer, or transfer or move any of its assets or operations.

4.30 Technology

(a) Schedule 4.30(a) sets forth a complete list and a brief description of all Intellectual Property which has been registered, or for which applications for registration have been filed, by or on behalf of the Corporation or the Subsidiary.
(b) Schedule 4.30(b) sets forth a complete list and brief description of all Contracts and Encumbrances relating to any of the Technology. Such Contracts are in full force and effect and no default exists on the part of the Corporation or of the Subsidiary or, to the knowledge of the Corporation or of the Subsidiary, on the part of the other parties thereto.
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(c) Schedule 4.30(c) sets forth a complete list and brief description of the Technology of which the Corporation or the Subsidiary is not the sole beneficial and registered owner. Each of the Corporation and the Subsidiary is using or holding the Technology of which it is not the sole beneficial and registered owner with the consent of or a licence from the owner of such Technology, all of which such consents or licences are in full force and effect and no default exists on the part of the Corporation or of the Subsidiary or, to the knowledge of the Corporation or of the Subsidiary, on the part of any of the parties thereto.
(d) Except as disclosed in Schedule 4.30(d):
(i) all of the Intellectual Property is in full force and effect and has not been used or enforced or failed to be used or enforced in a manner that would result in its abandonment, cancellation or unenforceability; and
(ii) all Intellectual Property consisting of issued registrations is valid and enforceable.
(e) Except as disclosed in Schedule 4.30(e):
(i) there are no Claims by the Corporation or the Subsidiary relating to breaches, violations, infringements or interferences with any of the Technology by any other Person and neither the Corporation nor the Subsidiary has any knowledge of any facts upon which such a Claim could be based; and
(ii) to the knowledge of the Corporation or of the Subsidiary, no other Person is using any of the Technology so as to breach, violate, infringe or interfere with the rights of the Corporation or the Subsidiary.
(f) Except as disclosed in Schedule 4.30(f):
(i) there are no Claims in progress or pending or, to the knowledge of the Seller, threatened against the Corporation or the Subsidiary relating to the Technology and, to the knowledge of the Corporation or of the Subsidiary, there is no valid basis for any such Claim; and
(ii) to the knowledge of the Corporation or of the Subsidiary, the carrying on of the Corporation’s and of the Subsidiary’s business and the use, possession, reproduction, distribution, sale, licensing, sublicensing or other dealings involving any of the Technology does not breach, violate, infringe or interfere with any rights of any other Person.
(g) The Information Technology:
(i) is suitable for the purposes for which it is being used;
(ii) is suitable in order to carry on the Corporation’s and the Subsidiary’s businesses in a way that is consistent with past practices; and
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(iii) is, to the knowledge of the Seller, free from known material defects or deficiencies.
(h) Schedule 4.30(h) contains a complete list of Software owned by, licensed to or used by the Corporation or the Subsidiary, identifying whether such Software is (i) owned by the Corporation or the Subsidiary, (ii) customized for Seller, the object code and source code of which are licensed for use by Seller, (iii) customized for Seller, only the object code of which is licensed to Seller or (iv) off-the-shelf Software. To the knowledge of Seller, such Software does not contain any undisclosed program routine, device or other feature, including viruses, worms, bugs, time locks, Trojan horses or back doors, in each case that is designed to delete, disable, deactivate, interfere with or otherwise harm such Software, and any virus or other intentionally created, undocumented contaminant that may, or may be used to, access, modify, delete, damage or disable any hardware, system or data.
(i) All current and former Employees and consultants of the Corporation or the Subsidiary, as the case may be, whose duties or responsibilities relate to the Corporation's or the Subsidiary’s business have entered into confidentiality, intellectual property assignment and proprietary information agreements with and in favour of the Corporation or the Subsidiary, as applicable, in the form provided to Buyer. Each such Person has waived its non-assignable rights (including moral rights) to any Technology created by it on behalf of the Corporation or the Subsidiary, as the case may be.
(j) Schedule 4.30(j) sets out the domain names of the websites owned by the Corporation or the Subsidiary.

4.31 Owned Real Property

(a) Schedule 4.31(a) sets forth a complete list of the Owned Real Property in each case by reference to the owner, municipal address and legal description.
(b) Each of the Corporation and the Subsidiary, as the case may be, is the legal and beneficial owner of the Owned Real Property, with good and marketable title thereto, free and clear of all Encumbrances other than Permitted Encumbrances and Non-Permitted Encumbrances which will be discharged prior to Closing.
(c) Except as disclosed in Schedule 4.31(c), there are no Contracts which affect or relate to the title to, or ownership, operation or management of, or the ability of the Corporation or the Subsidiary as applicable to transfer, the Owned Real Property.

4.32 Leased Real Property

Neither the Corporation, nor the Subsidiary is a party to any Contracts related to any Leased Real Property.

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4.33 Real Property Generally

(a) True and complete copies, if any, of: (i) deeds, title insurance policies, title opinions, summaries or memoranda relating to title to the Real Property, (ii) appraisals, valuations or other information evidencing the cost, assessed value and/or market value of the Real Property, (iii) any surveys and certificates of location showing the property in its actual state, real property reports, reference plans, aerial photographs, site plans, (iv) any reports or findings relating to building inspections, roof conditions, structural elements, services or other physical conditions of the Improvements and Real Property, (v) reports or summaries relating to capital expenditure budgets or programs, (vi) materials evidencing Encumbrances and Appurtenances, and (vii) materials relating to work orders, notices or violation or deficiency notices affecting the Real Property, in each case within the possession or control of the Seller or the Corporation and/or its Subsidiary, have been delivered to the Buyer.
(b) The Improvements are in good condition, repair and proper working order, having regard to their use, age and normal wear and tear, and such assets have been properly and regularly maintained.
(c) Each Owned Real Property has direct legal access to a municipal right-of-way and the Corporation and the Subsidiary otherwise have such rights of entry and exit to and from the Real Property as are reasonably necessary to carry on the business of the Corporation and the Subsidiary upon the Real Property.
(d) Other than as set out in Schedule 4.36(d), no Person has any right to purchase, option to purchase, right of first refusal or other rights with respect to any of the Real Property other than the Buyer pursuant to this Agreement, and no Person other than the Corporation or the Subsidiary is using or has any right to use, or is in possession or occupancy of, any part of such Real Property.
(e) Except as disclosed in Schedule 4.36(e), neither the Corporation nor the Subsidiary has entered into any agreement to sell, transfer, encumber, hypothecate, or otherwise dispose of or impair the right, title and interest of the Corporation or of the Subsidiary in and to the Real Property.
(f) Neither the Corporation nor the Subsidiary has received any notification of and the Seller has no knowledge of, any outstanding or incomplete work orders, deficiency notices or other current non-compliance with Laws relating to any of the Real Property.
(g) The current uses of the Real Property are permitted under current zoning and land use regulations, local planning legislation, development restrictions or plans, Permitted Encumbrances and Laws. Neither the Corporation nor the Subsidiary has made application for any minor variance or derogation, as applicable, or amendments to zoning by-laws, or local planning legislation in respect of the Real Property and the Seller has no knowledge of any proposed or pending changes to any zoning regulation, or local planning legislation affecting the Real Property or any of it.
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(h) Except as disclosed in Schedule 4.36(h), no part of the Real Property is subject to any building or use restriction that restricts or would restrict or prevent the use and operation of the Real Property as it has been used or operated in the ordinary course in the past by the Corporation and the Subsidiary or is located in a flood plain or zone, as applicable, or is subject to flooding.
(i) No Improvements encroach on real property not forming part of the Real Property and no buildings, structures or other improvements on adjoining lands encroach upon the Real Property.
(j) The Seller has no knowledge of any expropriation or condemnation or similar proceeding pending or threatened against the Real Property or any part of the Real Property.
(k) All accounts for work and services performed or materials placed or furnished upon or in respect of the construction and completion of any Improvements have been fully paid and no one is entitled to claim any Encumbrance for such work performed by or on behalf of the Corporation or of the Subsidiary.
(l) The Real Property is fully serviced (including water, storm and sanitary sewer and electrical service) to a level sufficient to permit the operation of the business of the Corporation and the Subsidiary to be carried on after Closing as it has been carried on in the ordinary course by the Corporation and the Subsidiary. All municipal levies, assessments, local improvements, imposts and permit fees as well as all property, municipal, school and general and special taxes, rates, assessments, local improvements charges, frontage taxes, business taxes, development cost charges, other subdivision charges and costs and other levies which are chargeable against the Real Property due and payable prior to the Closing Date have been or shall be paid in full by the Corporation and the Subsidiary as at the Closing Date.
(m) There are no outstanding defaults (or events which would constitute a default with the passage of time or giving of notice or both) under the Permitted Encumbrances on the part of the Corporation or of the Subsidiary or, to the knowledge of the Seller, on the part of any other party to such Permitted Encumbrances.
(n) All Appurtenances necessary for the continued use and operation of the Real Property as it has been used by the Corporation or the Subsidiary in the ordinary course in the past, are listed in Schedule 4.31(n) and none of the Contracts creating or governing such Appurtenances require the consent of any other party to the transactions contemplated by this Agreement.
(o) There are no matters affecting the right, title and interest of the Corporation or of the Subsidiary in and to the Real Property which, in the aggregate, would materially and adversely affect the ability of the Corporation or of the Subsidiary after the Closing Date to carry on the business upon the Real Property as it has been carried on in the ordinary course by the Corporation and the Subsidiary.
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(p) All Taxes, including property taxes, that are due have been paid without subrogation.
(q) The Real Property is not situated in an agricultural zone.
(r) The Real Property is not a recognized or a classified cultural property and is not situated in a historic or natural district, within a classified historic site, or in a protected area, within the meaning of the Heritage Conservation Act (British Columbia).

4.34 Environmental Matters

Except as disclosed in Schedule 4.34:

(a) All Environmental Approvals have been obtained, are valid and in full force and effect, have been and are being complied with, and there have been and are no applications made or proceedings commenced or, to the knowledge of the Seller, threatened to revoke, suspend, amend or alter any Environmental Approval. Schedule 4.34 sets forth a complete list of such Environmental Approvals and true and complete copies of all such approvals have been delivered or made available to the Buyer. Neither the Corporation nor the Subsidiary has received any notice of any intention to revoke, suspend, amend or alter any Environmental Approval and there are no circumstances which exist which could result in the revocation, suspension, amendment or alteration of any Environmental Approval.
(b) All operations of the Corporation and the Subsidiary have been and are now, in compliance with all Environmental Laws. Neither the Corporation nor the Subsidiary has received any notice of any alleged violation of such Laws. Any Release by the Corporation or the Subsidiary in any manner whatsoever and to the knowledge of the Seller, by the Corporation’s or the Subsidiary’s predecessors in title of any Hazardous Substance into the Environment complied and complies with all Environmental Laws.
(c) None of the Corporation, the Subsidiary or any of their respective operations or any Real Property has been or is now the subject of any Environmental Order, nor does the Seller have any knowledge of any investigation or evaluation commenced or, to the knowledge of the Seller, threatened as to whether any such Environmental Order is necessary nor, to the knowledge of the Seller, has any threat of any such Environmental Order been made. Neither the Corporation nor the Subsidiary has received any notice of any Environmental Order or any notice of intention to issue an Environmental Order nor, to the knowledge of the Seller, are there any circumstances which could reasonably be expected to result in the issuance of any such Environmental Order.
(d) Neither the Corporation nor the Subsidiary is currently being prosecuted for or has been prosecuted for or convicted of any offence under any Environmental Law, nor has the Corporation or the Subsidiary been found liable in any proceeding or been required by any Environmental Order to pay any fine, penalty, damages, costs, expenses, amount or judgment to any Person as a result of any
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Release or threatened Release or as a result of the breach or contravention of any Environmental Law, and to the knowledge of the Seller there is no basis for any such proceeding or action. Neither the Corporation nor the Subsidiary has received any Claim, summons or charge or any notice of any violation or Claim under or alleging any contravention of any Environmental Law or any notice of any intention to issue any Claim, summons, charge or notice of violation or contravention of any Environmental Law.

(e) No part of the Real Property or of any of the assets of the Corporation or of the Subsidiary or of any property used or occupied by or under the charge, management or control of the Corporation or of the Subsidiary has ever been used by the Corporation or the Subsidiary as a landfill or for the disposal or deposit of waste. To the knowledge of the Seller, no part of the Real Property or of any of the assets of the Corporation or of the Subsidiary or of any property used or occupied by or under the charge, management or control of the Corporation or of the Subsidiary has ever been used by any other Person as a landfill or for the disposal or deposit of waste.
(f) True and complete copies of all material environmental data and studies (including the results of any environmental audit assessment or environmental management system) relating to the Corporation and the Subsidiary have been delivered or made available to the Buyer.
(g) To the knowledge of the Seller, there are no Hazardous Substances present in, on, at or under any of the Real Property or any other assets of the Corporation or of the Subsidiary or any property currently or previously used, occupied or licensed by, or under the charge, management or control of the Corporation or of the Subsidiary (including underlying soils and substrata, vegetation, surface water and groundwater) at concentrations or in amounts which could reasonably be expected to result in or form the basis for the issuance of an Environmental Order or which exceed decommissioning or remediation standards under any applicable Environmental Laws or standards published or administered by Governmental Authorities. To the knowledge of the Seller, no asbestos or asbestos containing materials or polychlorinated biphenyls (PCBs) or equipment, waste or other materials containing polychlorinated biphenyls (PCBs) are used, stored or otherwise present in, on or at any of the Real Property or any other assets of the Corporation or of the Subsidiary.
(h) There is no restriction on the use of any Real Property or any part of the Real Property or on the operation or scope of the operations of the Corporation (except as may be apparent in any Environmental Approval) imposed pursuant to any Environmental Law, including any Environmental Order.
(i) There are no aboveground or underground (including partially underground) storage tanks, sumps or pits on the Real Property and any storage tanks or any storage tanks formerly on the Real Property have been removed and any affected soil, surface water or ground water has been remediated in compliance with all Laws.
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(j) The Seller has no knowledge of any Hazardous Substance originating from any neighbouring or adjoining properties which has migrated onto, into or under or is migrating towards any of the Real Property or any other assets of the Corporation.
(k) The Seller has no knowledge of any Hazardous Substance originating from any of the Real Property or any other assets of the Corporation or of the Subsidiary which has migrated onto, or is migrating towards any other property.
(l) The Corporation and the Subsidiary, as applicable, have in a timely manner, filed all reports and posted or displayed as required all notices or warnings required to be filed, posted or displayed with respect to the Real Property, or any other property or assets of the Corporation of the Subsidiary (whether owned, leased, occupied, controlled or licensed at any time prior to the date of this Agreement), or any products offered for distribution or sale, under all applicable Environmental Laws and Environmental Approvals.
(m) Neither the Corporation nor the Subsidiary has assumed the liability of any Person for matters pertaining to the Environment.
(n) The Corporation and Subsidiary have fully accrued, to the extent required, for any known or potential losses with respect to required remediation on any matter related to any breach of any Environmental Laws.

[Redacted Employment Matters Representations and Warranties]

[Redacted Collective Agreements Representations and Warranties]

[Redacted Pension and Other Benefit Plans Representations and Warranties]

4.35 Personal Information

All required consents to the collection, use or disclosure of Personal Information in connection with the conduct of the Corporation’s and Subsidiary’s businesses (including disclosure to Affiliates of the Corporation or of the Subsidiary) have been obtained.

4.36 Insurance

The Seller has maintained, for the benefit of the Corporation and the Subsidiary, such policies of insurance, issued by a responsible insurer, as were appropriate, in terms of coverage, for the operations, property and assets of each of the Corporation and the Subsidiary, in accordance with the Seller’s prudent standards. Schedule 4.36 sets forth (i) a complete list of all policies of insurance which are maintained for the benefit of the Corporation or the Subsidiary and the particulars of such policies, including the name of the insurer, the risk insured against, the amount of coverage and the amount of any deductible and a summary of all claims under each such policy for the past five years; (ii) details of any self-insurance arrangements by or affecting the Corporation and the Subsidiary, including any reserves established thereunder; and (iii) details of any insurance coverage provided to third parties and details of the policies under which such coverage was provided. All such policies of insurance were in full force and effect up to the

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Closing Date and neither the Seller, the Corporation nor the Subsidiary was in default, as to the payment of premiums or otherwise, under the terms of any such policy.

[Redacted Material Contracts Representations and Warranties]

4.37 Litigation

Except as disclosed in Schedule 4.37, there are no Claims, investigations or other proceedings, including appeals and applications for review, in progress, or, to the knowledge of the Seller, pending or threatened against or relating to the Corporation or the Subsidiary before any Governmental Authority, and the Seller has no knowledge of any existing ground on which any such action, suit, litigation or proceeding might be commenced with any reasonable likelihood of success. There is no judgment, decree, injunction, rule or Order of any Governmental Authority or arbitrator outstanding against the Corporation or the Subsidiary. Neither the Corporation nor the Subsidiary has undergone during the last five years, or is currently undergoing, any audit, review, inspection, investigation, survey or examination of records by a Governmental Authority relating to the business of the Corporation or the Subsidiary. The Corporation and Subsidiary have fully accrued, to the extent required, for any losses or potential losses on any matters related to any litigation. The legal provision in the Financial Statements is sufficient to cover costs of all known legal investigations and proceedings.

4.38 Tax Matters

Except as specifically disclosed in Schedule 4.38,

(a) Each of the Corporation and the Subsidiary has duly and timely made or prepared all Tax Returns required to be made or prepared by it, has duly and timely filed all Tax Returns required to be filed by it with the appropriate Governmental Authority and has duly, completely and correctly reported all income and all other amounts and information required to be reported thereon.
(b) Each of the Corporation and the Subsidiary has duly and timely paid all Taxes, including all instalments on account of Taxes for the current year, that are due and payable by it whether or not assessed by the appropriate Governmental Authority. Provision has been made on the Balance Sheet for amounts at least equal to the amount of all Taxes owing by any one of them that were not yet due and payable by the date of the Balance Sheet and that relate to periods ending on or prior to the date of the Balance Sheet. Provision will be made on the Closing Date Balance Sheet for amounts at least equal to the amount of all Taxes owing by any one of them that will not be due and payable by the Closing Date and that relate to periods ending on or prior to the Closing Date.
(c) Neither the Corporation nor the Subsidiary has requested, offered to enter into or entered into any advance Tax rulings or agreement or other arrangement, or executed any waiver, providing for any extension of time within which (i) to file any Tax Return covering any Taxes for which the Corporation or the Subsidiary is or may be liable; (ii) to file any elections, designations or similar filings relating to Taxes for which the Corporation or the Subsidiary is or may be liable; (iii) the Corporation or the Subsidiary is required to pay or remit any Taxes or amounts on
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account of Taxes; or (iv) any Governmental Authority may assess or collect Taxes for which the Corporation or the Subsidiary is or may be liable.

(d) Other than those agreements and arrangements described in Section 4.38(c), neither the Corporation nor the Subsidiary has made, prepared and/or filed any elections, designations or similar filings relating to Taxes or entered into any agreement or other arrangement in respect of Taxes or Tax Returns that has effect for any period ending after the Closing Date.
(e) All income, sales (including goods and services, harmonized sales and provincial or territorial sales) and capital tax liabilities of each of the Corporation and the Subsidiary have been assessed by the relevant Governmental Authorities and notices of assessment have been issued to each such entity by the relevant Governmental Authorities for all taxation years or periods ending prior to and including the taxation year or period ended December 31, 2012.
(f) There are no proceedings, investigations, audits or Claims now pending or, to the knowledge of the Seller, threatened against the Corporation or the Subsidiary in respect of any Taxes and there are no matters under discussion, audit or appeal with any Governmental Authority relating to Taxes. No reassessments of the Corporation's Taxes or the Taxes of any Subsidiary have been issued and are outstanding and there are no outstanding issues which have been raised and communicated in writing to the Corporation or the Subsidiary by any Governmental Authority for any fiscal period in respect of which a Tax Return of the Corporation or the Subsidiary has been audited. Neither the Corporation nor the Subsidiary has received any indication in writing from any Governmental Authority that a reassessment of the Corporation or the Subsidiary is proposed in respect of any Taxes, regardless of its merits. Neither the Corporation nor the Subsidiary has executed or filed with any Governmental Authority any agreement or waiver extending the period for assessment, reassessment or collection of any Taxes.
(g) Each of the Corporation and the Subsidiary has duly and timely withheld all Taxes and other amounts required by Law to be withheld by it (including Taxes and other amounts required to be withheld by it in respect of any amount paid or credited or deemed to be paid or credited by it to or for the account or benefit of any Person, including any Employee, officer or director and any non-resident Person), and has duly and timely remitted to the appropriate Governmental Authority such Taxes and other amounts required by Law to be remitted by it.
(h) Each of the Corporation and the Subsidiary has duly and timely collected all amounts on account of any sales or transfer taxes, including goods and services, harmonized sales and provincial or territorial sales taxes, required by Law to be collected by it and has duly and timely remitted to the appropriate Governmental Authority any such amounts required by Law to be remitted by it.
(i) Except pursuant to this Agreement or as specifically disclosed in writing to the Buyer, for purposes of the Income Tax Act (Canada) or any other applicable Tax
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Laws, no Person or group of Persons has ever acquired or had the right to acquire control of the Corporation or of the Subsidiary.

(j) None of sections 78, 80, 80.01, 80.02, 80.03 or 80.04 of the Income Tax Act (Canada), or any equivalent provision of the Tax legislation of any province or any other jurisdiction, have applied or will apply to the Corporation or to the Subsidiary at any time up to and including the Closing Date.
(k) Neither the Corporation nor the Subsidiary has acquired property from a Person with whom the Corporation or the Subsidiary was not dealing at arm’s length, for consideration, the value of which is less than the fair market value of the property acquired in circumstances which could subject it to a liability under section 160 of the Income Tax Act (Canada). The value of the consideration paid or received by the Corporation and the Subsidiary for the acquisition, sale, transfer or provision of property (including intangibles) or the provision of services (including financial transactions) from or to any person or partnership with which it was not dealing at arm's Length at the relevant time was the fair market value of such property acquired, provided or sold or services purchased or provided.
(l) For all transactions between the Corporation or the Subsidiary and any nonresident Person with whom the Corporation or the Subsidiary was not dealing at arm’s length during a taxation year commencing after 1998 and ending on or before the Closing Date, each of the Corporation and the Subsidiary has made or obtained records or documents that meet the requirements of paragraphs 247(4)(a) to (c) of the Income Tax Act (Canada).
(m) Each of the Corporation and the Subsidiary is duly registered under subdivision (d) of Division V of Part IX of the Excise Tax Act (Canada) ) or under any equivalent provision of the Tax legislation of any province or any other jurisdiction (including, without limitation, registered in British Columbia) with respect to the goods and services tax and harmonized sales tax and, and the registration numbers of each of them are:

GST BCST FEIN Corporation: [Redacted Registration Numbers] Subsidiary: N/A N/A

(n) The Buyer has been provided with copies of all Tax Returns and all communications to or from any Governmental Authority relating to the Taxes of the Corporation and the Subsidiary, to the extent relating to periods or events in respect of which any Governmental Authority may by Law assess or otherwise impose any such Tax on the Corporation or the Subsidiary.

4.39 Tax Data

Complete and accurate information relating to each of the matters referred to below is disclosed in Schedule 4.39:

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(a) paid up capital of each class of the Purchased Shares and of the issued and outstanding shares in the capital of the Subsidiary
(b) low rate income pool within the meaning of subsection 89(1) of the Income Tax Act (Canada); and
(c) general rate income pool within the meaning of subsection 89(1) of the Income Tax Act (Canada).

4.40 Books and Records

All Books and Records have been delivered or made available to the Buyer. Such Books and Records fairly and correctly set out and disclose in all material respects the financial position of the Corporation and all material financial transactions relating to each of their businesses has been accurately recorded in such Books and Records. Books and records stored on computerrelated or other electronic media are appropriately organized and indexed and no data conversions, translations or technology upgrades are required before such data can be accessed, read, searched and used by the Corporation’s and the Subsidiary’s current Information Technology.

4.41 Corporate Records

(a) The Articles and by-laws for the Corporation and the Subsidiary, including any and all amendments, have been delivered or made available to the Buyer and such Articles and by-laws as so amended are in full force and effect and no amendments are being made to them.
(b) The corporate records and minute books for the Corporation and the Subsidiary have been delivered or made available to the Buyer. The minute books include complete and accurate minutes of all meetings of the directors or shareholders for the Corporation and the Subsidiary, as applicable, held to date or resolutions passed by the directors or shareholders on consent, since the date of its incorporation. The share certificate book, register of shareholders, register of transfers and register of directors for the Corporation and the Subsidiary, are complete and accurate.

4.42 Accounts Receivable and Trade Allowances

All accounts receivable of the Corporation and the Subsidiary are bona fide, result from the ordinary course, have been properly recorded in the ordinary course and, subject to reserves for doubtful accounts recorded in the ordinary course, are good and collectible in full when due without any discount, set-off or counterclaim and without the need to resort to litigation.

No customers of the Corporation or of the Subsidiary are entitled to, or customarily receive, discounts, allowances, rebates, credits, preferential terms, or similar reductions in price or other trade terms arising from any Contract with or concessions granted to any customer.

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4.43 Bank Accounts, etc.

Schedule 4.43 sets forth a complete list of all financial institutions in which the Corporation or the Subsidiary maintains any bank or depository account, trust account or safety deposit box and the names of all Persons authorized to draw on, send wires on or who have access to such accounts or safety deposit boxes.

4.44 Powers of Attorney

Save and except for any power of attorney with respect to duties, export and import taxes and trademark registration, there are no outstanding power of attorney granted by the Corporation or the Subsidiary.

4.45 No Broker

Except as disclosed in Schedule 4.45, the Seller has carried on all negotiations relating to this Agreement and the transactions contemplated in this Agreement directly and without intervention on its behalf of any other party in such manner as to give rise to any valid claim for a brokerage commission, finder’s fee or other like payment against the Buyer, the Corporation or the Subsidiary.

4.46 Sales Bonus

Except as disclosed in Schedule 4.53, the Seller has not and will not pay any transaction bonuses or sales bonuses related to this Transaction from the Corporation.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer represents and warrants to the Seller the matters set out below:

5.1 Status of the Buyer

The Buyer is a corporation existing under the laws of the Province of Quebec.

5.2 Due Authorization

The Buyer has all necessary corporate power, authority and capacity to enter into this Agreement and each other agreement to be entered into under the terms of this Agreement and to carry out its obligations thereunder. The execution and delivery of this Agreement and of each other agreement to be entered into under the terms of this Agreement and the consummation of the transactions contemplated thereby have been duly authorized by all necessary corporate action of the Buyer.

5.3 Enforceability of Obligations

This Agreement constitutes, and each other agreement to be executed by the Seller in connection with the Closing will constitute, a valid and binding obligation of the Buyer enforceable against it in accordance with its terms, subject, however, to limitations with regards to enforcement imposed by Law in connection with bankruptcy or similar proceedings and to the extent that

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equitable remedies such as specific performance and injunction are in the discretion of the court from which they are sought.

5.4 Absence of Conflicts

The Buyer is not a party to, bound or affected by or subject to any:

(a) indenture, mortgage, lease, agreement, obligation or instrument;
(b) charter or by-law provision; or
(c) Laws or Governmental Authorizations;

that would be violated, breached by, or under which default would occur or an Encumbrance would be created as a result of the execution and delivery of, or the performance of obligations under, this Agreement or any other agreement to be entered into under the terms of this Agreement.

5.5 Litigation

There are no Claims, investigations or other proceedings, including appeals and applications for review, in progress or pending or, to the knowledge of the Buyer, pending or threatened against or relating to the Buyer, before any Governmental Authority, which, if determined adversely to the Buyer, would,

(a) prevent the Buyer from paying the Purchase Price to the Seller;
(b) enjoin, restrict or prohibit the transfer of all or any part of the Purchased Shares as contemplated by this Agreement; or
(c) delay, restrict or prevent the Buyer from fulfilling any of its obligations set out in this Agreement or arising from this Agreement,

and the Buyer has no knowledge of any existing ground on which any such action, suit, litigation or proceeding might be commenced with any reasonable likelihood of success.

5.6 Regulatory Approvals

No approval, Order, consent of or filing with any Governmental Authority is required on the part of the Buyer, in connection with the execution, delivery and performance of this Agreement or any other documents and agreements to be delivered under this Agreement or the performance of the Buyer’s obligations under this Agreement or any other documents and agreements to be delivered under this Agreement.

5.7 No Broker

The Buyer has carried on all negotiations relating to this Agreement and the transactions contemplated in this Agreement directly and without the intervention on its behalf of any other party in such manner as to give rise to any valid claim for a brokerage commission, finder’s fee or other like payment.

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5.8 Securities Laws

The Buyer is an “accredited investor” as defined under Section 1.1 of National Instrument 45-106 Respecting Prospectus and Registration Exemptions and is purchasing the Purchased Shares as principal.

ARTICLE 6 NON-WAIVER; SURVIVAL

6.1 Non-Waiver

No investigations made by or on behalf of the Buyer at any time shall have the effect of waiving, diminishing the scope or otherwise affecting any representation or warranty made by the Seller in or pursuant to this Agreement. No waiver of any condition or other provisions, in whole or in part, shall constitute a waiver of any other condition or provision (whether or not similar) nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.

6.2 Nature and Survival

Subject to Section 6.2(a) and 6.2(b), all representations, warranties and covenants contained in this Agreement on the part of each of the Parties shall survive the Closing, the execution and delivery under this Agreement of any share or security transfer instruments or other documents of title to any of the Purchased Shares and the payment of the consideration for the Purchased Shares.

[Redacted Survival Periods]

ARTICLE 7 CLOSING

7.1 Deliveries for the Benefit of Seller

Buyer hereby delivers the following items:

(a) to the Seller payment of the Estimated Purchase Price less the Escrow Amount in accordance with Section 3.2;
(b) to the Escrow Agent payment of the Escrow Amount in accordance with Section 3.2;
(c) certified copies of all required resolutions of the board of directors of Buyer approving the entering into and completion of the transactions contemplated by this Agreement and the Ancillary Agreements;
(d) a certificate of compliance and good standing or with respect to Buyer issued by the appropriate government officials of its jurisdictions of incorporation;
(e) the Escrow Agreement duly executed by the Buyer and the Escrow Agent; and
(f) the Non-Competition Agreement duly executed by the Buyer.
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7.2 Deliveries for the Benefit of Buyer

Seller hereby delivers the following items:

(a) certified copies of (i) the charter documents and by-laws of the Corporation and the Subsidiary, (ii) all required resolutions of the board of directors of Seller approving the entering into and completion of the transactions contemplated by this Agreement, (iii) all required resolutions of the board of directors of Seller approving the entering into and completion of the transactions contemplated by this Agreement and the Ancillary Agreements, and (iv) all required resolutions of the board of directors of the Corporation (A) approving the entering into of the Ancillary Agreements to which it is a party and (B) authorizing the transfer of the Purchased Shares;
(b) a certificate of status, compliance, good standing or like certificate with respect to each of Seller, the Corporation and the Subsidiary issued by appropriate government officials of their respective jurisdictions of incorporation;
(c) all Required Consents;
(d) the Escrow Agreement duly executed by the Seller;
(e) the Non-Competition Agreement duly executed by the Seller.
(f) a legal opinion from Davis LLP with respect to Corporation and the Seller and from Shannon, Gracey, Ratliff & Miller, LLP with respect to Subsidiary;
(g) the share certificate, or other instrument evidencing equity ownership, representing all of the Purchased Shares, duly endorsed in blank for transfer, or accompanied by stock transfer powers duly executed in blank ;
(h) resignation and release of each of the directors and officers of each of the Corporation and the Subsidiary; and
(i) release by the Seller in favour of the Corporation and the Subsidiary.

7.3 Date, Time and Place of Closing

The Closing and the delivery of the items referred to in Sections 7.1 and 7.2 are taking place at the offices of Davis LLP, June 17, 2014, at 10:00 a.m. (Calgary time) on the date hereof.

ARTICLE 8

INDEMNIFICATION

[Redacted Indemnification Provisions]

ARTICLE 9 POST-CLOSING COVENANTS

[Redacted Post-Closing Covenants]

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ARTICLE 10 GENERAL

10.1 Dispute Resolution

(a) Any controversy or dispute arising out of or relating to this Agreement, including its negotiation, validity, existence, breach, termination, construction or application, or the rights, duties or obligations of any Party, shall first be referred to mediation.
(b) If the mediation is not successful, the parties hereby attorn to the exclusive jurisdiction of the courts of the Province of British Columbia for any proceedings arising out of this Agreement or the performance of the obligations hereunder.

10.2 Confidentiality and Public Notices

All information and data concerning or derived from this Agreement, including, without limitation, the Purchase Price, shall be kept confidential and, except to the extent required by Law, shall not be disclosed to any Person other than an Affiliate without the prior consent of the other party, which consent shall not be unreasonably withheld.

The Parties shall jointly plan and co-ordinate any public notices, press releases, and any other publicity concerning the transactions contemplated by this Agreement and no Party shall act in this regard without the prior approval of the other, such approval not to be unreasonably withheld, unless such disclosure is required to meet timely disclosure obligations of any Party under Laws, stock exchange rules or an order of a court of competent jurisdiction, provided that the disclosing Party notifies the other Party in advance of such requirement to disclose and takes reasonable steps to ensure such disclosed information is, to the extent reasonably possible, afforded confidential treatment.

10.3 Expenses

Except as otherwise provided in this Agreement each Party shall pay all costs and expenses (including the fees and disbursements of legal counsel and other advisers) it incurs in connection with the negotiation, preparation and execution of this Agreement and the transactions contemplated by this Agreement. No costs shall be borne by the Corporation or the Subsidiary. Any works and expenses related to correcting any potential issues related to the Environment shall be borne by the Seller.

10.4 Notices

Any notice, consent or approval required or permitted to be given in connection with this Agreement (in this Section referred to as a “Notice”) shall be in writing and shall be sufficiently given if delivered (whether in person, by courier service or other personal method of delivery), or if transmitted by facsimile or e-mail:

(a) in the case of a Notice to the Seller at:
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McCoy Corporation Suite 301, 9618 - 42 Ave., N.W. Edmonton, Alberta T6H 5Y6

Attention: Peter Watson, General Counsel & Corporate Secretary Fax: (866) 570-6730 E-mail: [email protected]

With a copy to: Davis LLP Livingston Place 1000 - 250 2^nd Street S.W. Calgary, Alberta T2P 0C1 Attention: Roy Hudson Fax: (403) 213-4464 Email: [email protected]

(b) in the case of a Notice to the Buyer at:

Manac Inc. 2275, 107e Rue St-Georges-de-Beauce (Québec) G5Y 8G6

Attention: Charles Dutil, President Fax: (418) 227-8888 E-mail: [email protected] with a copy to: Stein Monast L.L.P. 70, rue Dalhousie, Suite 300 Québec City (Québec) G1K 4B2

Attention: Jacques Cossette-Lesage Fax: 418 523-5391 E-mail: [email protected]

Any Notice delivered or transmitted to a Party as provided above shall be deemed to have been given and received on the day it is delivered or transmitted, provided that it is delivered or transmitted on a Business Day prior to 5:00 p.m. local time in the place of delivery or receipt. However, if the Notice is delivered or transmitted after 5:00 p.m. local time or if such day is not a Business Day then the Notice shall be deemed to have been given and received on the next Business Day.

Any Party may, from time to time, change its address by giving Notice to the other Parties in accordance with the provisions of this Section.

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10.5 Assignment

The Buyer shall be entitled to assign all of its rights and obligations under this Agreement to any Affiliate of the Buyer. Except for such permitted assignment, no Party may assign this Agreement or any rights or obligations under this Agreement without the prior written consent of the other Party.

10.6 Enurement

This Agreement enures to the benefit of and is binding upon the Parties and their respective successors (including any successor by reason of amalgamation of any Party) and permitted assigns.

10.7 Amendment

No amendment, supplement, modification or waiver or termination of this Agreement and, unless otherwise specified, no consent or approval by any Party, is binding unless executed in writing by the Party to be bound thereby.

10.8 Further Assurances

The Parties shall, with reasonable diligence, do all such things and provide all such reasonable assurances as may be required to consummate the transactions contemplated by this Agreement, and each Party shall provide such further documents or instruments required by any other Party as may be reasonably necessary or desirable to effect the purpose of this Agreement and carry out its provisions, whether before or after the Closing.

10.9 Execution and Delivery

This Agreement may be executed by the Parties in counterparts and may be executed and delivered by facsimile and all such counterparts and facsimiles together constitute one and the same agreement.

[Remainder of this page intentionally left blank]

IN WITNESS OF WHICH the Parties have executed this Agreement.

McCOY CORPORATION

By: (signed) "Jim Rakievich"

Name: Jim Rakievich

Title: President and Chief Executive Officer

MANAC INC.

By: (signed) "Charles Dutil" Name: Charles Dutil Title: President