Share Purchase Agreement, dated September 30, 2019, among ADT Security Holdings Canada Ltd., ADT Inc., and TELUS Communications Inc

ARTICLE 1 INTERPRETATION

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ARTICLE 2 PURCHASED SHARES AND PURCHASE PRICE

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ARTICLE 3 REPRESENTATIONS AND WARRANTIES AS TO THE CORPORATION

3.1

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF VENDOR AND PARENT AS TO THEMSELVES

4.1

4.2

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PURCHASER

5.1

ARTICLE 6 PRE-CLOSING COVENANTS OF THE PARTIES

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ARTICLE 7 CONDITIONS OF CLOSING AND TERMINATION

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ARTICLE 8 CLOSING

8.1

8.2

ARTICLE 9 POST-CLOSING COVENANTS

9.1

9.2

9.3

ARTICLE 10 INDEMNIFICATION

10.1

10.2

10.3

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ARTICLE 11 MISCELLANEOUS

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Vendor is the beneficial and registered owner of 100% of the issued and outstanding shares in the capital of the Corporation (the ”Purchased Shares”).

Vendor wishes to sell and Purchaser wishes to purchase the Purchased Shares from Vendor upon and subject to the terms and conditions set out herein.

Parent indirectly holds all of the issued and outstanding shares in the capital of Vendor and will derive substantial benefit from the transactions contemplated by this Agreement.

Defined Terms

“Accounts Receivable” means all accounts receivables, trade receivables and other debts due or accruing due to the Corporation determined in accordance with GAAP.

“Active Customer Account” means a Customer Account (i) that is not a Disqualified Account and (ii) that has not been cancelled pursuant to policy (consistent with past practice) or for which the Corporation has not received a valid notice of cancellation in accordance with the terms of the end-user contract for such Customer Account. For purposes of this definition, multiple accounts for services for the same customer at same or different sites will be counted as separate accounts if such accounts are separated by service type or address, provided, however, that if the aggregate number of Customer Accounts attributable to all multiple accounts for the same customer exceeds 2% of all Active Customer Accounts, then the number of multiple accounts included in the Active Customer Accounts will be reduced by such amount as is required in order not to exceed such 2% threshold.

“Adjustment Escrow Amount” means $4,000,000 that will be deposited in escrow and will be held and disbursed by the Escrow Agent in accordance with the Escrow Agreement.

“Affiliate” means any other Person that directly or indirectly controls, is controlled by or is under common control with such Person, where “control” means the possession, directly or indirectly of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” means this share purchase agreement.

“Ancillary Agreements” means the Escrow Agreement, the Non-Competition Agreement, the Patent and Trademark License Agreement, and the Transition Services Agreement.

“Arm’s Length” has the meaning that it has for purposes of the ITA.

“Authorization” means, with respect to any Person, any order, permit, approval, waiver, license or similar authorization of any Governmental Entity having jurisdiction over the Person.

“Balance Sheet Date” means January 1, 2019.

“Balance Sheet Principles” means the accounting principles set forth on Exhibit “D”.

“Benefit Plans” means all employee benefit, fringe benefit, deferred Compensation, incentive Compensation, bonus, savings, profit sharing, change of control, share purchase, share appreciation, share or stock option, equity or equity-like, hospitalization or other medical benefits, life or other insurance, dental, disability, salary continuation, supplemental unemployment benefits, mortgage assistance, Pension Plans and other similar employee benefit plans, programs, agreements or arrangements sponsored, maintained or contributed to or required to be contributed to by the Corporation, or under which the Corporation may have any liability contingent or otherwise, for the benefit of any Employee, Contractor, officer or director or former employee, contractor, officer or director, whether written or oral, funded or unfunded, insured or self-insured, registered or unregistered, whether or not subject to any applicable legislation, excluding Statutory Plans and Multi-Employer Plans.

“Books and Records” means the books and records of the Corporation including, to the extent existing, financial, corporate, operations and sales books, records, books of account, sales, purchase and billing records, lists of suppliers and customers, business reports, employee documents and files and all other documents, files, records, and other data and information, financial or otherwise, including all data, information and databases stored on computer-related or other electronic media, and all Tax forms, Tax elections and Tax Returns.

“Breach of Security Safeguards” means the loss of, unauthorized access to or unauthorized disclosure of Personal Information resulting from a breach of an organization’s security safeguards.

“Business” means the business conducted by the Corporation consisting of providing professionally installed monitored security, safety, interactive home and business video and automation, access control, CCTV, video verification, elevator monitoring, personal emergency response, fire monitoring, environment monitoring and related remote electronic event monitoring services to customer locations in Canada.

“Business Day” means a day that is not a Saturday, Sunday or statutory holiday in Vancouver, BC or Toronto, Ontario and on which the principal commercial banks in downtown Vancouver, BC and Toronto, Ontario are open for the transaction of commercial banking business during regular business hours.

“Cash” means, in respect of the Corporation, all cash and cash equivalents convertible into cash within 30 days and without duplication (including cash on hand and deposits in transit), and cash deposits in bank accounts of the Corporation, net of the amount of all outstanding checks written against the Corporation’s accounts (including cash book overdrafts and issued but uncashed checks), excluding Restricted Cash, in each case, determined in accordance with the Balance Sheet Principles.

“CASL” means An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act, S.C. 2010, c. 23.

“Closing” means the completion of the transaction of purchase and sale contemplated in this Agreement.

“CM Dealer” means a third party alarm dealer.

“Collective Agreements” means collective 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 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.

“Commissioner” means the Commissioner of Competition appointed under the Competition Act and includes any Person duly authorized to exercise the power and to perform the duties of the Commissioner.

“Company Software” means collectively, any Software: (i) sold, licensed, sub-licensed, distributed or otherwise provided by the Corporation (including on a stand-alone basis, or in connection with or embedded in any other Software) to any Person; or (ii) used or exploited by the Corporation to provide services to any Person.

“Compensation” means base salary, hourly wages, overtime pay, commission pay, sales incentive pay, vacation pay, bonus payments, discretionary payments, allowances (vehicle, parking, housing, etc.), one time pay and compensation or benefits under any Benefit Plans and Multi-Employer Plans whether due or owing under contract, statute, civil or common law or otherwise relating to the Employees, Contractors or officers or directors of the Corporation.

“Competition Act” means the Competition Act, R.S.C., 1985, c. C 34.

“Competition Act Approval” means:

the issuance to Purchaser of an advance ruling certificate by the Commissioner of Competition under subsection 102(1) of the Competition Act to the effect that the Commissioner of Competition is satisfied that he would not have sufficient grounds on which to apply to the Competition Tribunal for an order under section 92 of the Competition Act with respect to the transactions contemplated by this Agreement; or

both of (A) the applicable waiting period, including any extension thereof, under section 123 of the Competition Act has expired or been terminated or the obligation to provide a pre-merger notification in accordance with Part IX of the Competition Act has been waived in accordance with paragraph 113(c) of the Competition Act, and (B) unless waived by Purchaser in its discretion, Purchaser has received a letter from the Commissioner of Competition indicating that he does not, as of the date of the letter, intend to make an application under section 92 of the Competition Act in respect of the transactions contemplated by this Agreement.

“Contract Monitored Account” means an account CM Dealer for the provision of monitoring services by the Corporation to end user customers of such CM Dealer on a subcontract basis, whether such end user is billed directly by the Corporation and remitted to the CM Dealer (less fees for the Corporation) or such end user is billed by the CM Dealer.

“Contractors” means all independent contractors, sub-contractors, consultants and any other individuals who have been engaged to provide services to the Corporation and who are not directors or Employees.

“Contracts” means any agreement, contract, lease, license, undertaking, engagement or commitment of any nature, whether written or oral.

“Corporation” means ADT Security Services Canada, Inc.

“Corporation Transaction Expenses” means the sum of:

all fees and expenses of the Corporation (including any Taxes payable on or triggered by such fees or expenses) incurred in connection with, or triggered by, the negotiation, execution and delivery of this Agreement and any agreement contemplated hereby or thereby and the consummation of the purchase and sale of the Purchased Shares, to the extent such fees and expenses are payable or reimbursable by the Corporation, and any related brokerage fees, commissions, finders’ fees, financial advisory fees, and fees and expenses of legal counsel, accountants, consultants and other experts and advisors so incurred or triggered;

any Employees Costs, Severance Obligations or other payment or Compensation (including incentive payments, change in control payments, severances and retention liabilities or bonuses) that is created, accelerated, accrued or becomes payable in connection with the completion of the transactions contemplated by this Agreement, including the purchase and sale of the Purchased Shares, to any present or former director, Employee, shareholder, Affiliate or Contractor of the Corporation, including pursuant to any Employment Contract, Benefit Plan or other Contract, including any Taxes payable on or triggered by any such Employee Costs, Severance Obligations or other payment or Compensation; and

50% of the premium and underwriting fees (but not any applicable sales, value added or similar tax) incurred by Purchaser in connection with obtaining the R&W Insurance Policy.

“Current Assets” means, with respect to the Corporation, the aggregate of accounts receivable (net of allowance for doubtful accounts), inventory (net of reserves), prepaid expenses to the extent that they have value to the Corporation after the Effective Time, and any other current assets, but excluding (i) Cash and Restricted Cash; (ii) any future (deferred) income taxes recoverable; (iii) any Tax refunds or Tax credits receivable by the Corporation; (iv) short term cost investments; (v) any intercompany receivables from Vendor or any of its Affiliates and/or their related parties; (vi) dealer loan receivables and advances (to extent included in Indebtedness); and (vii) capitalized debt issuance costs or financing fees, all as determined in accordance with the Balance Sheet Principles.

“Current Liabilities” means the sum of, without duplication, all current liabilities of the Corporation, including accounts payable, accrued liabilities, accrued and unpaid salaries and other employee-related liabilities (including bonuses), deferred revenues, advanced billings, customer deposits, any other current liabilities, long term accrued insurance, but excluding (i) any deferred Tax liabilities, (ii) any deferred subscriber acquisition sales, (iii) any uncertain Tax position and interest thereon, (iv) any long term escheatment payable and (v) any item included in Indebtedness, all as determined in accordance with the Balance Sheet Principles.

“Customer Account” means a unique customer billing account of the Corporation, excluding Contract Monitored Accounts.

“Customer Adjustment Amount” means the lesser of:

the RMR Adjustment Cap; and

the amount equal to the result of the following formula (which amount cannot be less than zero):

“Disclosure Letter” means the disclosure letter dated the date of this Agreement and delivered by Vendor to Purchaser with this Agreement.

“Disqualified Account” means a Customer Account that has accounts payable or other debts due or accruing due to the Corporation that are in arrears for more than 90 days from the date of billing.

“Effective Time” means 12:01 a.m. (Toronto time) on the Closing Date.

“Employee Costs” means all statutory, civil or common law and contractual financial obligations and liabilities relating to Benefit Plans, Multi-Employer Plans, Compensation and Statutory Plans. For greater clarity, Employee Costs does not include Severance Obligations.

“Employees” means all individuals who are currently employed by the Corporation on a full-time, part-time or temporary basis, whether unionized or non-unionized, including Leave Employees and includes officers of the Corporation.

“Employment Contracts” means Contracts, other than Benefit Plans, Statutory Plans and participation or other agreements related to a Multi-Employer Plan, relating to an Employee which impose any obligation on the Corporation (including any termination, notice or severance agreements in excess of the obligations imposed by applicable employment standards legislation, as well as retention, transaction bonus or change of control agreements).

“Environmental Laws” means all applicable Laws and agreements with Governmental Entities and all other statutory requirements relating to the protection of the environment and all Authorizations issued pursuant to such Laws, agreements or statutory requirements.

“Escrow Agent” means Computershare Trust Company of Canada, or any successor thereto, in its capacity as escrow agent under the Escrow Agreement.

“Escrow Agreement” means the escrow agreement to be entered into at Closing among Escrow Agent, Purchaser and Vendor, in form and substance acceptable to the Parties, acting reasonably.

“Escrow Amount” means, collectively, the Adjustment Escrow Amount and the Indemnification Escrow Amount.

“ETA” means the Excise Tax Act (Canada).

“Final Customer Adjustment Amount” means the Customer Adjustment Amount set out in the Final Statement.

“Financial Statements” means the unaudited financial statements of the Corporation for the fiscal year ending December 31, 2018 consisting of a balance sheet and the accompanying statement of income.

“Fluent Litigation” means the ongoing litigation between the Corporation and Fluent Home Ltd., as further described in Schedule 3.1(ii) of the Disclosure Letter.

“Fraud” means fraud, fraudulent misrepresentation, fraudulent misconduct.

“GAAP” generally accepted accounting principles, policies, practices, and procedures in the U.S.

“Governing Documents” means, with respect to any person, (a) if such Person is a corporation or company, its certificate and articles of incorporation (or equivalent) and the by-laws (or equivalent); (b) if a partnership, its partnership agreement and any declaration or statement of partnership required to be filed with any Governmental Entity in order to form the partnership or maintain the limited liability of any partners; (c) if a limited liability company, the articles of organization and operating agreement (or equivalent); (d) if another type of Person, any other charter or similar document adopted or filed in connection with the creation, formation or organization of the Person (including, if a trust, its declaration of trust or equivalent formation document); (e) all shareholders’ or equityholders’ agreements, voting agreements or voting trust agreements; and (f) any amendment or supplement to any of the foregoing.

“Governmental Entity” means: (i) any governmental or public department, central bank, court, minister, governor-in-council, cabinet, commission, tribunal, board, bureau, agency, commissioner or instrumentality, whether international, multinational, national, federal, provincial, state, county, municipal, local, or other; (ii) any subdivision or authority of any of the above; (iii) any stock exchange; and (iv) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the above.

“Harmful Code” is any “back door,” “drop dead device,” “time bomb,” “Trojan horse,” “virus,” or “worm” (as such terms are commonly understood in the software industry) or any other code designed or intended to have, or capable of performing, any of the following functions: (i) disrupting, disabling, harming, or otherwise impeding in any manner the operation of, or providing unauthorized access to, a computer system or network or other device on which such code is stored or installed; or (ii) damaging or destroying any data or file without the user’s consent.

“Inbound License” means any Contract pursuant to which the Corporation is authorized or otherwise permitted to use, access or exploit any other Person’s Intellectual Property, or any Contract pursuant to which the Corporation obtains a right to use, access or exploit any other Person’s Intellectual Property in the form of services, such as a software as a services Contract or a cloud services Contract.

“Inactive Account Amount” means the lesser of:

the amount equal to the RMR Adjustment Cap minus the Final Customer Adjustment Amount; and

the amount equal to the result of the following formula:

“Indebtedness” means, with respect to the Corporation:

all indebtedness for borrowed money (including overdraft facilities), whether current, short-term or long-term, secured or unsecured;

all obligations of the Corporation for the deferred purchase price of property or services (including the potential amount of any earn-out or other deferred purchase price liabilities calculated in accordance with GAAP as of the Effective Time, but excluding any such obligations to the extent there is cash being held for the purposes of satisfying such obligations but only to the extent that such cash is excluded from Cash in the calculation of Net Indebtedness);

all obligations of the Corporation owed to third parties evidenced by notes, bonds, debentures or other similar instruments;

all liabilities for retroactive payments to employees of the Corporation for services rendered prior to the Closing Date pursuant to any binding written agreement of the Corporation (including the currently negotiated Collective Agreements) but to be paid on or after the Closing Date, excluding regular accrued payroll and benefits owed in the ordinary course of business to the extent that such accrued payroll and benefits are included in the calculation of Current Liabilities;

any indebtedness arising under capitalized finance leases;

the dollar amount of any commitment by which the Corporation assures a creditor against loss (including contingent reimbursement obligations with respect to bankers acceptances, fidelity bonds, surety bonds, performance bonds, guarantees and letters of credit (in each case, only to the extent drawn or called as of the Effective Time));

all liabilities arising under any interest rate swap or other interest rate protection agreement or other similar interest rate agreement or other financial instruments or derivative arrangement;

all amounts owing to Vendor or its Affiliates or any Person not acting at Arm’s Length with any of them;

any OPEB Unfunded Liability;

any dividend declared but not paid by the Corporation;

the Corporation Transaction Expenses;

any legal claims accrued consistent with GAAP unless otherwise indemnified by Vendor pursuant to Section 10.1(d);

the value of the lifetime severance payable to the Vice-President of Operations Support of the Corporation;

all unpaid costs, fees, expenses and Taxes relating to the Pre-Closing Reorganization and the disposition of Ideal Life Inc.;

all Pre-Closing Income Taxes which for avoidance of doubt will not include non-current or long term tax liabilities, uncertain tax positions or deferred taxes;

any accrued or incurred restructuring costs, including severance and salary continuance costs and the taxes thereon;

current and non-current dealer loan receivables;

all indebtedness of others referred to in paragraphs (i) through (xvi) above guaranteed by the Corporation; and

all accrued interest, fees (including prepayment fees) or other similar obligations with respect to any of the foregoing,

“Indemnification Escrow Amount” means $2,625,000 that will be deposited in escrow and will be held and disbursed by the Escrow Agent for in accordance with the Escrow Agreement.

“Initial Customer Database” means the database sent on encrypted media to Purchaser’s counsel within three Business Days after the date of this Agreement, which shall be held in escrow by Purchaser’s counsel until Closing and treated as clean team confidential information, which database includes the details provided in Section 3.1(mm)(iv).

“Insolvency Event” means, with respect to a specified Person, (i) filing for protection under bankruptcy or insolvency Laws, (ii) making an assignment for the benefit of creditors, (iii) appointing or suffering appointment of a receiver or trustee over substantially all of its property that is not discharged within 90 days after such filing, (iv) entering into a written agreement of composition or

“Intellectual Property” means domestic and foreign: (i) issued patents, applications for patents and reissues, divisions, divisional applications, continuations, renewals, extensions and continuations-in-part of issued patents or patent applications; (ii) proprietary and non-public business information, including inventions (whether patentable or not), information disclosed in invention disclosures, improvements, discoveries, trade secrets, confidential information, know-how, methods, processes, designs, technology, technical data, schematics, formulae and customer lists, and documentation embodying any of the foregoing; (iii) copyrights, copyright registrations and copyright applications; (iv) mask works and integrated circuit topographies and applications and registrations for mask works and integrated circuit topographies; (v) industrial designs, designs, design registrations, design registration applications; (vi) trade names, business names, corporate names, domain names, website names and world wide web addresses, common law trademarks, trademark registrations, trade mark applications, trade dress and logos, and the goodwill associated with any of the foregoing; (vii) Software; and (viii) any other intellectual property and industrial property rights in any jurisdiction worldwide.

“Interim Financial Statements” means the unaudited financial statements of the Corporation as at May 31, 2019, consisting of a balance sheet and the accompanying unaudited statement of income for the five-month period then ended.

“Interim Period” means the period between the close of business on the date of this Agreement and Closing.

“Inventory” means all inventories of the Corporation, including finished goods, work in process, raw materials, and production, manufacturing, packing, operating and shipping supplies determined in accordance with GAAP.

“ITA” means the Income Tax Act (Canada).

“IT Systems” means the computer, information technology, and data processing systems, facilities and services used by the Corporation in the conduct of its business, including all Software, systems hardware, networks, interfaces, platforms and related systems and services.

“Key Consent” means those consents listed in Schedule 1.1(nnn) of the Disclosure Letter.

“Key Employees” means the individuals identified by TELUS during the Interim Period as having relationships with customers, dealers, or suppliers that are essential for continuity of the Business, having critical operational or technical knowledge required for continuity of the Business or who are involved in matters relating to collective bargaining.

“Law” or, collectively “Laws” means all applicable Canadian and non-Canadian (i) constitutions, treaties, laws, statutes, codes, ordinances, principles of common law, orders, notices, decrees, rules, regulations and municipal by-laws, whether domestic, foreign or international; (ii) judgments, orders, writs, injunctions, decisions, sanctions and awards of any Governmental Entity; and (iii) policies, practices, mandate and guidelines of any Governmental Entity which, although not actually having the force of law, are considered by such Governmental Entity as requiring compliance as if having the force of law or which establish the interpretative position of the Law by such Governmental Entity, in each case binding on or affecting the Person referred to in the context in which such word is used; and with respect to each of (i), (ii) and (iii) above, as amended, modified or supplemented from time to time.

“Leased Properties” means the lands and premises leased pursuant to the Leases.

“Leases” means all oral and written leases and all amendments, extensions, assignments and variations thereof or any guarantee or security agreements therefor, of the properties leased by the Corporation.

“Leave Employees” means all employees not actively working at the Effective Time and who are on an approved leave, including those employees on a statutory leave, disability leave, maternity / parental leave or approved personal leave of absence.

“Lien” means any mortgage, charge, pledge, hypothec, security interest, assignment, lien (statutory or otherwise), title retention agreement or arrangement, restrictive covenant or other encumbrance of any nature or any other arrangement or condition which, in substance, secures payment or performance of an obligation.

“Limitations Act” means the Limitations Act (Ontario), 2002, S.O. 2002, c. 24, Sched. B.

“Made Available” means uploaded to the data room established by the Corporation with Intralinks titled “Project Gecko” by 5:00 P.M. EST on the day immediately prior to the date hereof.

“Material Adverse Effect” means (1) any fact, change, circumstance, condition (financial or otherwise), event or development that, when considered individually or in the aggregate, has resulted in, or would reasonably be expected to result in, a material adverse effect in, or has had or would reasonably be expected to have a material adverse effect on the Business or the financial condition or results of operations of the Corporation, taken as a whole, other than any change or effect resulting from (i) general economic or regulatory

“Multi-Employer Plans” means a registered pension plan, as defined under the ITA, to which the Corporation is required to contribute pursuant to a Collective Agreement, participation agreement, any other agreement or statute or municipal by-law and which are not maintained or administered by the Corporation.

“Net Indebtedness” means the amount of Indebtedness of the Corporation minus the amount of Cash of the Corporation, in each case, as at the Effective Time, calculated in accordance with the Net Indebtedness calculation set forth on Exhibit “D” and determined in accordance with the Balance Sheet Principles. Net Indebtedness shall be expressed as a positive amount if it is a net liability or a negative amount if it is a net asset.

“Non-Competition Agreement” means the non-competition and non-solicitation agreement to be entered into among Vendor, Parent, the Corporation and Purchaser, substantially in the form attached hereto as Exhibit “A”.

“OPEB Unfunded Liability” means any liability in respect of any non-pension post-retirement benefits of the Corporation.

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

“Outbound License” means any Contract pursuant to which the Corporation authorizes or otherwise permits any other Person to use, access or exploit any Intellectual Property owned by the Corporation (or licensed to the Corporation), or any Contract pursuant to which any other Person obtains a right to use, access or exploit any Intellectual Property owned by the Corporation (or licensed to the Corporation) in the form of services, such as a software as a services Contract or a cloud services Contract.

“Outside Date” means December 31, 2019, provided that if the Competition Act Approval has not been obtained by such date, the Outside Date may be extended by either Purchaser or Vendor by up to two successive periods of 30 days each by providing notice to the other party of such extension within 5 Business Days of the Outside Date (as extended, if applicable).

“Parties” means Purchaser, Vendor and Parent and any other Person that may become a party to this Agreement.

“Patent and Trademark License Agreement” means the patent and trademark license agreement to be entered into at Closing among The ADT Security Corporation and the Corporation, substantially in the form attached hereto as Exhibit “B”.

“Pension Plans” means any plan, program, agreement or arrangement providing pensions, superannuation benefits or retirement savings including pension plans, top-up pensions or supplemental pensions, “registered retirement savings plans”, “registered pension plans” and “retirement compensation arrangements”, as such terms are defined in the ITA, excluding Statutory Plans and Multi-Employer Plans.

“Per Customer RMR” means the recurring monthly revenue generated by a Customer Account (excluding upfront revenues related to installation and equipment) for the relevant measurement period.

“Permitted Liens” means:

Liens for Taxes, assessments or governmental charges or levies which relate to obligations not yet due or delinquent or the validity of which are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP have been made in the books of the Corporation if required;

undetermined or inchoate Liens arising or potentially arising under statutory provisions which have not at the time been filed or registered in accordance with applicable Laws or of which written notice has not been given in accordance with applicable Laws;

applicable municipal by-laws, development agreements, subdivision agreements, site plan agreements, other agreements, building and other restrictions, easements, servitudes, rights of way and licences which do not in the aggregate materially adversely affect the use or value of the Leased Property affected thereby and provided the same have been complied with in all material respects to the Closing Date including the posting of any required security for performance of obligations thereunder;

defects or irregularities in title to the Leased Property which are of a minor nature and do not materially adversely affect the use or value of the Leased Property affected thereby and provided the same have been complied with in all material respects to the Closing Date;

any privilege in favour of any lessor, licensor or permitter in respect of rent to become due or for other obligations or acts, the performance of which is required under written Leases so long as such Leases have been complied with, the payment of or the performance of such other obligation or act is not delinquent and provided that such liens or privileges do not materially adversely affect the use or value of the assets affected thereby;

Liens relating to leased vehicles; and

Liens set out and described in Schedule 1.1(iiii) of the Disclosure Letter, but only to the extent such Liens conform to their description in Schedule 1.1(iiii) of the Disclosure Letter.

“Person” means a natural person, partnership, corporation, joint stock company, trust, unincorporated association, unlimited liability company, limited liability company, joint venture or other entity or Governmental Entity, and pronouns have a similarly extended meaning.

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

“Pre-Closing Income Taxes” means all liabilities for income Taxes of the Corporation for Pre-Closing Tax Periods reflected in the Final Statement and unpaid as of the Effective Time.

“Pre-Closing Tax Period” means any taxation year or other Tax period ended on or prior to the time of Closing, or any portion of a taxation year or other Tax period up to and including the time of Closing.

“Purchaser Material Adverse Effect” means a material adverse effect on the ability of Purchaser to timely consummate the transactions contemplated but this Agreement and to perform its obligations under this Agreement and the Ancillary Agreements.

“R&W Insurance Policy” means the representations and warranties insurance policy taken out by Purchaser as of the date hereof in relation to the transactions contemplated herein, on terms and conditions set forth therein.

“Reactivated Account” means a Customer Account that was characterized as a Disqualified Account for purposes of calculating the Estimated Customer Adjustment Amount and that, as of the day that is 105 days following the Closing Date, is an Active Customer Account.

“RMR Adjustment Cap” means $25,000,000.

“Restricted Cash” means any cash or cash equivalents which is not freely usable by the Corporation because it is subject to restrictions or limitations on use or distribution by law, contract or otherwise, including without limitation, restrictions on dividends and repatriations or any other form of restriction, determined in accordance with the Balance Sheet Principles.

“Severance Obligations” means all statutory, civil or common law and contractual obligations owed or owing to Employees upon a change of control of the Corporation and / or the termination of their employment, as applicable, and includes payment in lieu and severance.

“Software” means computer software and programs (in both source code and object code form and including off the shelf and shrink wrap software), all proprietary rights in the computer software and programs and all documentation and other materials related to computer software and programs.

“Statutory Plans” means statutory benefit plans which the Corporation is required to participate in or comply with, including the Canada Pension Plan, the Quebec Pension Plan, the federal Employment Insurance Act and similar provincial legislation, and any other federal or provincial employment-related plans and programs such as health tax programs and workers compensation / workplace safety insurance programs.

“Target Working Capital” means negative $26,968,000.

“Tax” or, collectively, “Taxes” includes (i) any taxes, duties, fees, premiums, assessments, imposts, levies and other charges of any kind whatsoever, including all interest, penalties, fines, additions to tax or other additional amounts 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 license, franchise, universal service, regulatory and registration fees and all employment insurance, health insurance and Canada, Québec and other government pension plan premiums or contributions.

“Tax Return” or, collectively “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.

“Transition Services Agreement” means the transition services agreement to be entered into at Closing among ADT LLC, Parent and Purchaser, substantially in the form attached hereto as Exhibit “C”.

“Union” means an organization of employees formed for purposes that include the regulation of relations between employees and employers and includes a sectoral, provincial, territorial, national or international union, a certified council of unions, a designated or certified employee bargaining agency, and any organization which has been declared a union pursuant to applicable labour relations legislation or which may qualify as a union under applicable labour relations legislation.

“Vendor Guarantees” means the letters of credit, guarantees, surety bonds, performance bonds, capital maintenance agreements or commitments, and other contractual obligations or commitments entered into by or on behalf of Vendor or any of its Affiliates (other than solely by the Corporation) in connection with the Corporation (together, the “Vendor Guarantees”) outstanding as of the date hereof and as disclosed in Schedule 1.1(aaaaa) of the Disclosure Letter.

“Vendor’s Core Representations” means the representations and warranties in Sections 3.1(a) (Incorporation and Qualification), 3.1(b) (No Default), 3.1(c)(i) (No Conflict), 3.1(f) (Authorized and Issued Capital), 3.1(g) (No Other Agreement to Purchase), 3.1(q) (Title to Assets), 3.1(qq) (No Brokers), Section 4.1(a), 4.1(b)(i), and 4.1(d) through 4.1(g) (Representations and Warranties of Vendor as to Itself) and Section 4.2(a), 4.2(b)(i), 4.2(d) and 4.2(e) (Representations and Warranties of Parent as to Itself).

“Working Capital” means the positive or negative difference between Current Assets and Current Liabilities of the Corporation as at the Effective Time, calculated in accordance with the Working Capital calculation set forth on Exhibit “D” and determined in accordance with the Balance Sheet Principles. Working Capital shall be expressed as a positive amount if it is a net asset or a negative amount if it is a net liability.

Other Defined Terms

Section

111(4)(e) Election

Alternative Transaction

Assessment

Base Price

Cap

Claims

Closing Date

Collective Bargaining Litigation

Connectivity Agreements

Consents

Corporate Records

Corporation Released Parties

Customer Databases

Damages

Deductible

Disclosed Personal Information

Draft Statement

Estimated Customer Adjustment Amount

Estimated Net Indebtedness

Estimated Purchase Price

Estimated Statement

Estimated Working Capital

Final Determination Date

Final Negative Adjustment Amount

Final Positive Adjustment Amount

Final Statement

Incumbent Provider

Indemnified Party

Indemnifying Party

Material Contracts

Minimum Customer Certificate

Non-Arm’s Length Transactions

OHSA

Open Source Software

Section

Parent

PIPEDA

Pre-Closing Reorganization

Products

Purchase Price

Purchased Shares

Purchaser

Purchaser Indemnified Parties

Purchaser’s Closing Certificate

Purchaser’s Core Representations

Sales Taxes

Third Party Auditors

Third Party Claim

Vendor

Vendor Released Parties

Vendor Indemnified Parties

Vendor’s Closing Certificates

References and Usage

reference to a gender includes all genders;

the singular includes the plural and vice versa;

“or” is used in the inclusive sense of “and/or”;

“any” means “any and all”;

the words “including”, “includes” and “include” mean “including (or includes or include) without limitation”;

the phrase “the aggregate of”, “the total of”, “the sum of”, or a phrase of similar meaning means “the aggregate (or total or sum), without duplication, of”;

$ or dollars refers to the Canadian currency unless otherwise specifically indicated;

accounting terms not specifically defined in this Agreement are to be interpreted in accordance with GAAP;

a statute includes all rules and regulations made under it, if and as amended, re-enacted or replaced from time to time;

a Person includes its predecessors, successors and permitted assigns;

the term “notice” refers to oral or written notices except as otherwise specified; and

the term “Agreement” and any reference in this Agreement to this Agreement or any other agreement or document includes, and is a reference to, this Agreement or such other agreement or document as it may have been, or may from time to time be amended, restated, replaced, supplemented or novated and all schedules to it, except as otherwise provided in this Agreement.

Headings, etc.

References to the Tax Act

Knowledge

Exhibits

Schedules and Disclosure Letter

The schedules attached to this Agreement shall, for all purposes of this Agreement, form an integral part of it.

The purpose of the Disclosure Letter is to set out the qualifications, exceptions and other information called for in this Agreement. The Parties acknowledge and agree that the Disclosure Letter and the information and disclosures contained in it do not constitute or imply, and will not be construed as:

any representation, warranty, covenant or agreement which is not expressly set out in this Agreement;

an admission of any liability or obligation of Vendor, Parent or any of their respective Affiliates;

an admission that the information is material;

a standard of materiality, a standard for what is or is not in the ordinary course of business, or any other standard contrary to the standards contained in this Agreement; or

an expansion of the scope or effect of any of the representations, warranties and covenants set out in the Agreement.

Disclosure of any information in the Disclosure Letter that is not strictly required under this Agreement has been made for informational purposes only and does not imply disclosure of all matters of a similar nature. Inclusion of an item in any section of the Disclosure Letter is deemed to be disclosure for all purposes for which disclosure is required under this Agreement to the extent it is reasonably apparent on the face of such disclosure that such item is applicable to the corresponding section of this Agreement.

The Disclosure Letter itself is confidential information and may not be disclosed unless (i) it is required to be disclosed pursuant to applicable Law, unless such Law permits the Parties to refrain from disclosing the information for confidentiality or other purposes or (ii) a Party needs to disclose it in order to enforce or exercise its rights under this Agreement.

Purchase and Sale

Purchase Price

$700,000,000 (the ”Base Price”);

minus the Net Indebtedness;

plus the amount (if any) by which the Working Capital at the Effective Time exceeds the Target Working Capital;

minus the amount (if any) by which the Target Working Capital exceeds the Working Capital at the Effective Time;

minus the Final Customer Adjustment Amount; and

minus the Final Inactive Account Amount.

Delivery of Estimated Statement

Net Indebtedness (“Estimated Net Indebtedness”), calculated in accordance with Exhibit “D” and determined in accordance with the Balance Sheet Principles;

Working Capital (“Estimated Working Capital”), calculated in accordance with Exhibit “D” and determined in accordance with the Balance Sheet Principles; and

the Customer Adjustment Amount (the “Estimated Customer Adjustment Amount”),

Determination of Estimated Purchase Price

the Base Price;

minus the Estimated Net Indebtedness;

plus the amount (if any) by which the Estimated Working Capital exceeds the Target Working Capital;

minus the amount (if any) by which the Target Working Capital exceeds the Estimated Working Capital; and

minus the Estimated Customer Adjustment Amount.

Payment of the Estimated Purchase Price

by paying to the Escrow Agent (i) the Indemnification Escrow Amount, which amount will secure the indemnification obligations of Vendor pursuant Article 10; and (ii) the Adjustment Escrow Amount, which amount will secure any Purchase Price adjustments payable by Vendor pursuant to Section 2.6, which Escrow Amount will be held and released by the Escrow Agent in accordance with and subject to the terms and conditions of the Escrow Agreement; and

by paying to Vendor an amount equal to:

the Estimated Purchase Price;

minus the Escrow Amount.

Calculation of Post-Closing Adjustments

Draft Statement. Purchaser will use its commercially reasonable efforts to prepare and deliver to Vendor within 120 days following the Closing Date (or such other date as is mutually agreed to by Vendor and Purchaser in writing) a draft unaudited consolidated balance sheet of the Corporation and a statement (the ”Draft Statement”) setting forth: (i) the Working Capital; (ii) the Net Indebtedness, in each case, calculated in accordance with Exhibit “D” and determined in accordance with the Balance Sheet Principles; and (iii) the Customer Adjustment Amount.

Objection Period. Within 45 days following delivery of the Draft Statement (during which period, Purchaser will, upon reasonable request, provide Vendor and its advisors with reasonable access to the work papers and other Books and Records of the Corporation within normal business hours and upon sufficient prior notice, as is necessary to verify the accuracy of the Draft Statement), Vendor shall notify Purchaser in writing if it has any objections to the Draft Statement. The notice of objection must state in reasonable detail the basis of each objection and the amounts in dispute. Vendor shall be deemed to have accepted the Draft Statement if it does not notify Purchaser of any objection within such period of 45 days.

Settlement of Dispute. If Vendor disputes the Draft Statement in accordance with Section 2.6(b), then Vendor and Purchaser will work expeditiously and in good faith in an attempt to resolve such dispute within a further period of 30 days after the date of the notification of such dispute, failing which the dispute may be submitted by Vendor or Purchaser for final determination to

Final Statement. Promptly following the 45-day period referred to in Section 2.6(b) during which no notice of objection was given or the resolution of any dispute in accordance with Section 2.6(c), as the case may be, Purchaser shall deliver to Vendor the final unaudited closing date balance sheet and statement of (i) the Working Capital as at the Effective Time calculated in accordance with Exhibit “D”, (ii) the Net Indebtedness calculated in accordance with Exhibit “D”, and, in each case, determined in accordance with the Balance Sheet Principles and (iii) the Customer Adjustment Amount, which shall become the ”Final Statement” for purposes of this Section 2.6(d). The Final Statement shall reflect the resolution of any dispute in accordance with Section 2.6(c), if applicable. The Final Statement shall be final and binding upon the Parties on the date of delivery thereof, such date to be referred to as the ”Final Determination Date”, and shall not be subject to appeal, absent manifest error.

Fees and Expenses. Vendor, on the one hand, and Purchaser, on the other hand, will bear the fees and expenses of their respective accountants, auditors and other professional advisors in preparing, reviewing or settling the Draft Statement and the Final Statement, as the case may be. In the case of a dispute and the retention of Third Party Auditors to determine such dispute, the fees and expenses of the Third Party Auditors will be divided between Vendor, on the one hand, and Purchaser, on the other hand, based on the percentage which the portion of the contested amount not awarded to each Party bears to the amount actually contested by such Party. For example, if closing accounts receivable is

Post-Closing Adjustment Payment

If the Net Indebtedness set forth in the Final Statement is less than the Estimated Net Indebtedness set forth in the Estimated Statement, the amount of such difference will be owed to Vendor by Purchaser. If the Net Indebtedness set forth in the Final Statement is greater than the Estimated Net Indebtedness set forth in the Estimated Statement, the amount of such difference will be owed to Purchaser by Vendor.

If the Working Capital set forth in the Final Statement is less than the Estimated Working Capital set forth in the Estimated Statement, the amount of such difference will be owed to Purchaser by Vendor. If the Working Capital set forth in the Final Statement is greater than the Estimated Working Capital set forth in the Estimated Statement, the amount of such difference will be owed to Vendor by Purchaser.

If the Customer Adjustment Amount set forth in the Final Statement is less than the Customer Adjustment Amount set forth in the Estimated Statement, the amount of such difference will be owed to Vendor by Purchaser. If the Customer Adjustment Amount set forth in the Final Statement is greater than the Customer Adjustment Amount set forth in the Estimated Statement, the amount of such difference will be owed to Purchaser by Vendor.

If the net amount based on the calculations set forth in Sections 2.7(a) through 2.7(c) is owed by Vendor to Purchaser (the ”Final Negative Adjustment Amount”), then within three Business Days of the final determination of the Final Statement, Vendor and Purchaser will send a joint written notice to the Escrow Agent directing it to pay the Final Negative Adjustment Amount to Purchaser from the Adjustment Escrow Amount, and to release the balance of the Adjustment Escrow Amount, if any, to Vendor by wire transfer of immediately available funds to the account designated by Vendor, the whole in accordance with the Escrow Agreement. If the Final Negative Adjustment Amount is greater than the Adjustment Escrow Amount, Vendor will pay such difference by wire transfer of immediately available funds to Purchaser within five Business Days of the final determination of the Final Statement.

If the net amount based on the calculations set forth in Sections 2.7(a) through 2.7(c) is owed by Purchaser to Vendor (the ”Final Positive Adjustment Amount”), then within three Business Days of the final determination of the Final Statement, Vendor and Purchaser will send a joint written notice to the

Inactive Account Adjustment

Draft Inactive Account Statement. Purchaser will deliver to Vendor no later than the 12-month anniversary of the Closing Date a statement (the ”Draft Inactive Account Statement”) setting forth Purchaser’s good faith determination of the Inactive Account Amount.

Objection Period. Within 45 days following delivery of the Draft Inactive Account Statement (during which period, Purchaser will, upon reasonable request, provide Vendor and its advisors with reasonable access to the work papers and other Books and Records of the Corporation within normal business hours and upon sufficient prior notice, as is necessary to verify the accuracy of the Draft Inactive Account Statement ), Vendor shall notify Purchaser in writing if it has any objections to the Draft Inactive Account Statement. The notice of objection must state in reasonable detail the basis of each objection and the amounts in dispute. Vendor shall be deemed to have accepted the Draft Inactive Account Statement if it does not notify Purchaser of any objection within such period of 45 days.

Settlement of Dispute. If Vendor disputes the Draft Inactive Account Statement in accordance with Section 2.8(b), then Vendor and Purchaser will work expeditiously and in good faith in an attempt to resolve such dispute within a further period of 30 days after the date of the notification of such dispute, failing which the dispute may be submitted by Vendor or Purchaser for final determination to the Third Party Auditors, who will review such dispute in accordance with the terms of Section 2.6(c).

Final Inactive Account Statement. Promptly following the 45-day period referred to in Section 2.8(b) during which no notice of objection was given or the resolution of any dispute in accordance with Section 2.8(c), as the case may be, Purchaser shall deliver to Vendor a statement (the ”Final Inactive Account Statement”) setting forth the Inactive Account Amount (the ”Final Inactive Account Amount”). The Final Inactive Account Statement shall reflect the resolution of any dispute in accordance with Section 2.8(c), if applicable. The Final Inactive Account Statement shall be final and binding upon the Parties on the date of delivery thereof, and shall not be subject to appeal, absent manifest error.

Fees and Expenses. The terms of Section 2.6(e) will apply with respect to the fees and expenses incurred by Vendor and Purchaser in preparing, reviewing or settling the Draft Inactive Account Statement and the Final Inactive Account Statement.

Payment. Vendor will pay the Final Inactive Account Amount by wire transfer of immediately available funds to Purchaser within five Business Days of the final determination of the Final Inactive Account Amount.

Representations and Warranties as to the Corporation

Incorporation and Qualification. The Corporation is a corporation incorporated and existing under the laws of its jurisdiction of formation and has the corporate power to own or lease and operate its property, carry on its business as presently conducted and enter into and perform its obligations under this Agreement and each of the Ancillary Agreements to which it is a party. The Corporation is qualified, licensed or registered to carry on business in the jurisdictions listed in Schedule 3.1(a) of the Disclosure Letter. The jurisdictions listed in Schedule 3.1(a) of the Disclosure Letter include all jurisdictions in which the nature of the Business makes such qualification necessary or where the Corporation owns or leases any material assets or conducts any material business, except for those jurisdictions where such failure to be so qualified would not be material to the Business.

No Default. The Corporation is not in breach, default or violation (and no event has occurred that with the giving of notice, the lapse of time, or both would constitute a breach, default or violation) of any term, condition or provision of its Governing Documents, except as would not be material.

No Conflict. Except for the Consents disclosed in Schedule 3.1(e) of the Disclosure Letter and the Competition Act Approval, the performance and consummation of the transactions contemplated by this Agreement and each of the Ancillary Agreements by the Corporation:

do not and will not (or would not with the giving of notice or the lapse of time) constitute or result in a violation or breach of, or conflict with, or allow any Person to exercise any rights under, any of the terms or provisions of the Corporation’s Governing Documents;

do not and will not (or would not with the giving of notice or the lapse of time) constitute or result in a breach or violation of, or conflict with or allow any Person to exercise any rights under, any of the terms or provisions of any Contract or instruments to which the Corporation is a party or pursuant to which the Corporation’s assets or property may be affected;

do not and will not result in a breach of, or cause the termination or revocation of, any Authorization held by the Corporation or the operation of the Business; and

do not and will not result in the violation of any Law,

Required Authorizations. Other than the Competition Act Approval, there is no requirement to make any filing with, give any notice to, or obtain any Authorization of, any Governmental Entity as a condition to the lawful completion of the transactions contemplated by this Agreement or any Ancillary Agreement, except as would not be material.

Required Consents. There are no consents, approvals, waivers or authorizations required to be obtained by the Corporation under any Material Contract to which the Corporation is bound, or is a party in connection with the transactions contemplated hereby or under any Ancillary Agreement, except for consents, approvals, waivers and authorizations described in Schedule 3.1(e) of the Disclosure Letter (collectively, the ”Consents”). Other than the Consents, there are no consents, approvals, waivers or authorizations required to be obtained by the Corporation under any Contract to which the Corporation is bound, or is a party in connection with the transactions contemplated hereby or under any Ancillary Agreement, except where the failure to obtain such consent, approval, waiver or authorization would not be material to the Business.

Authorized and Issued Capital.

Part A of Schedule 3.1(f) of the Disclosure Letter sets out (A) the authorized share capital and (B) the issued and outstanding share capital of the Corporation on the date hereof. Part B of Schedule 3.1(f) of the Disclosure Letter sets out the issued and outstanding share capital of the Corporation as at Closing. All shares in the capital of the Corporation have been duly issued, are outstanding as fully paid and non-assessable, and have been issued in compliance with all applicable Laws. At Closing, the Purchased Shares will constitute all of the issued and outstanding shares in the capital of the Corporation;

the Corporation does not own or hold any shares or other ownership, equity or proprietary interest in any Person; and

other than as set forth in Part C of Schedule 3.1(f) of the Disclosure Letter, no Person has any options, warrants, securities convertible into or exchangeable for, or other rights to acquire shares in the capital of the Corporation.

No Other Agreement to Purchase. Except as set out in Schedule 3.1(g) of the Disclosure Letter and except for Purchaser’s rights under this Agreement, no Person has any Contract, option or warrant or any right or privilege (whether by Law, pre-emptive or contractual granted by the Corporation) for the purchase of any of the Purchased Shares.

Dividends and Distributions. Since the Balance Sheet Date, except as set out in Schedule 3.1(h) of the Disclosure Letter, the Corporation has not, directly or indirectly, declared or paid any dividends or declared or made any other distribution on any of its shares of any class nor has the Corporation, directly or indirectly, redeemed, purchased or otherwise acquired any of its shares of any class or agreed to do so.

Corporate Records. Since the last three fiscal years, the corporate records of the Corporation, including all Governing Documents, minute books, registers, share certificate books and all other similar documents and records (“Corporate Records”) are complete and accurate in all material respects and all material corporate proceedings and actions (including all meetings, passing of resolutions, transfers, elections and appointments) are reflected in the Corporate Records and have been conducted or taken in compliance with all applicable Laws and with the Governing Documents of the Corporation in all material respects. A true and complete copy of the Governing Documents (with all amendments) of the Corporation has been Made Available to Purchaser. The Corporation is not subject to, or affected by, any unanimous shareholders agreement.

Conduct of Business in Ordinary Course. Except as disclosed in Schedule 3.1(j) of the Disclosure Letter and except in connection with the Pre-Closing Reorganization, since the Balance Sheet Date: (A) the Corporation has carried on its business in the Ordinary Course and (B) without limiting the generality of the foregoing, the Corporation has not:

made or assumed any commitment, obligation or liability which individually or in the aggregate exceeded $150,000 other than in the Ordinary Course;

ceased to operate its properties and to carry on the Business as heretofore carried on;

suffered any material shortage or any material cessation or interruption of supplies or ordinary services in connection with the Business;

sold, transferred or disposed of, or created or imposed any Lien (other than Permitted Liens) upon, any of its assets;

made any capital expenditure or commitment to do so which individually or in the aggregate exceeded $1,000,000;

discharged any secured or unsecured obligation or liability (whether accrued, absolute, contingent or otherwise), other than obligations and liabilities discharged in the Ordinary Course;

incurred any Indebtedness other than to trade creditors in the Ordinary Course or as set forth in Schedule 3.1(aa) of the Disclosure Letter, or made any loan or advance, or assumed, guaranteed or otherwise became liable with respect to the liabilities or obligation of any Person which individually or in the aggregate exceeded $150,000;

purchased or otherwise acquired any securities in any Person;

modified its Governing Documents;

made any change in its accounting principles and practices as utilized in the preparation of the Financial Statements except as required by GAAP;

removed any auditor or had any auditor resign;

suffered any material damage or destruction of its property or suffered any other material extraordinary loss in respect of the Business or the Leased Properties, whether or not covered by insurance;

terminated the employment or services of any (A) director of the Corporation or (B) Employee receiving annual base Compensation in excess of $100,000;

entered into any agreement relating to Severance Obligations or relating to any retention, transaction bonus, or change of control of the Corporation with any of its officers, directors or Employees receiving annual base Compensation in excess of $100,000;

made any change in the rate or form of Compensation payable or to become payable to any of its directors, Employees or Contractors which is outside the Ordinary Course;

increased the benefits to which Employees or former employees of the Corporation are entitled under any Benefit Plan or instituted or, adopted any new Benefit Plan or made any amendments to any existing Benefit Plan (or committed to do so);

made any bonus or profit sharing distribution or similar payment of any kind to any current or former shareholder, director, Employee or Contractor of the Corporation;

granted to any customer of the Business any special allowance or discount, or changed its pricing, credit or payment policies, delayed or postponed the payment of trade payables, or changed normal operating balances of Inventory, in each case, other than in the Ordinary Course;

delayed or postponed in a way which would be outside the Ordinary Course, the discharge of any obligation, liability or capital expenditure when such liability, obligation or capital expenditure becomes due;

settled any litigation or claim, or suffered any judgment, requiring payment by the Corporation of an amount in excess of $50,000 or granting injunctive relief or specific performance;

received written notice of, or to the knowledge of Vendor, oral notice of, or commencement of an investigation or proceeding against the Corporation by a Governmental Entity;

cancelled or reduced any of its insurance coverage, or received notice thereof or of non-renewal or material increase in premium from the underwriters or any of its brokers; or

authorized, agreed or otherwise committed in writing to do any of the foregoing.

No Material Adverse Effect. Since the Balance Sheet Date, there has not been any Material Adverse Effect and no event has occurred or circumstance exists which would be reasonably expected to have a Material Adverse Effect.

Compliance with Laws. The Corporation is conducting and has conducted for the last three fiscal years its business in material compliance with all applicable Laws, except as would not be material. Except as set forth in Schedule 3.1(l) of the Disclosure Letter, the Corporation has not received any written notice of any alleged violation of any Laws, except as would not be material. The Corporation has established compliance programs and procedures reasonably designed to assure compliance of its Contractors with all applicable Laws.

Consumer Protection. The Corporation is, and has been during the last three fiscal years, conducting the Business in material compliance with all applicable consumer protection Laws including the Consumer Protection Act (Québec) and all applicable provincial statutes and regulations relating to consumer protection. Except as set forth in Schedule 3.1(m) of the Disclosure Letter, the Corporation has not received, during the last three fiscal years, any written complaint from the Office de la protection du consommateur du Québec or other relevant provincial consumer regulatory authority in respect of non-compliance with applicable consumer protection Laws.

Anti-Corruption. Neither the Corporation nor any of its officers, directors, shareholders, employees or, to the knowledge of Vendor, agents, distributors or other Persons associated with or acting on its behalf has (i) used or is using any corporate funds for any illegal contributions, gifts, entertainment or other unlawful expenses relating to any political activity; (ii) used or is using any corporate funds for any direct or indirect unlawful payments to any foreign or domestic governmental official or employee; or (iii) made any false or fictitious entry on the Books and Records of the Corporation or made any bribe, rebate, payoff, kickback or other unlawful payment of any nature using corporate funds or on behalf of the Corporation. The Corporation has not received written or, to the knowledge of Vendor, oral notice that it, or any of its officers, directors, shareholders, agents, distributors, employees and other Persons associated with or acting on its behalf, is or has been the subject of any investigation, complaint or claim by any Governmental Entity of any violation of any Law.

Authorizations. Schedule 3.1(o) of the Disclosure Letter sets out a complete and accurate list of all material Authorizations held by the Corporation in connection with the Business. The Corporation has, and to the knowledge of the Vendor, its Contractors have, all Authorizations required to carry on the Business as presently conducted by the Corporation, except where the failure to have such Authorization would not be material. The Authorizations held by the Corporation are valid, subsisting and in good standing and the Corporation is, and to the knowledge of Vendor, its Contractors are not in material default or breach of any of such Authorizations and, no proceeding is pending or, to the knowledge of Vendor, threatened to revoke or limit any of such Authorizations.

Sufficiency of Assets. The Business is the only business operation carried on by the Corporation. The Corporation will hold at Closing all material assets, rights and property necessary to enable the Corporation to conduct the Business immediately after the Closing substantially in the same manner as it was conducted prior to the Closing, other than (i) those services to be provided pursuant to the Transition Services Agreement, and (ii) those goods and services provided pursuant to Contracts with third parties where Consent to a change of control of the Corporation is required and such Consent is not obtained. With the exception of Inventory held by Contractors, motor vehicles and equipment in transit, all of the tangible personal property owned by the Corporation is situated at the Leased Properties, except as would not be material.

Title to Assets. The Corporation owns (with good and valid title) all of the material properties and assets that it purports to own including all the properties and assets reflected as being owned by the Corporation in its financial Books and Records and does not own any other material property or assets. The Corporation has legal and beneficial ownership of such assets free and clear of all Liens, except for Permitted Liens. No other Person owns any material property or assets which are being used in the Business except for the Leased Properties, the personal property leased by the Corporation, the Intellectual Property licensed to the Corporation and the assets used in connection with the services to be provided pursuant to the Transition Services Agreement.

Condition of Tangible Assets. The tangible assets of the Corporation (including equipment and Inventory) are in good operating condition and repair having regard to their use and age, except as would not be material to the Corporation. As of the date hereof, no material tangible asset is in need of maintenance or repairs except for routine maintenance and repairs in the Ordinary Course that are not material in nature or cost.

No Options, etc. to Purchase Assets. No Person has any Contract, option, understanding, or any right or privilege capable of becoming such for the purchase or other acquisition from the Corporation of any of the assets of the Corporation, other than Inventory to be sold in the Ordinary Course.

Real Property. The Corporation does not own, and has not since 2014 owned, any real property.

Leased Properties. Schedule 3.1(u) of the Disclosure Letter sets out all of the Leased Properties. The Leased Properties are the only real properties leased by the Corporation and the Leases are in good standing, valid and in full force and effect. True and complete copies of all Leases have been Made Available to Purchaser. With respect to the Leases: (i) all rents, additional rents, security and rental deposits and any other amounts which are to be paid by the lessee have been paid to date; (ii) no waiver, indulgence or postponement of the lessee’s obligations has been granted by any lessor; (iii) except as would not be material, the Corporation is not in breach, default or violation of any of the Leases or alleged to be in such breach, default or violation; (iv) each of the Leased Properties is adequate and suitable for the purposes for which it is presently being used and the Corporation has adequate legal rights of ingress and egress into each of the Leased Properties for the operation of its Business in the Ordinary Course; (v) the Corporation has not subleased, assigned, licensed or otherwise granted any Person the right to use or occupy any of the Leased Properties or any portion thereof; (vi) the Corporation has not received any written notice from any Governmental Entity asserting any violation or alleged violation of applicable Laws with respect to any of the Leased Properties that remains uncured or that would reasonably be expected to be material; and (vii) there are no other amendments or side agreements (or ongoing negotiations therefor) that impact the Leased Properties.

Environmental Matters.

Except as set forth in Schedule 3.1(v) of the Disclosure Letter, to the knowledge of Vendor, none of the Leased Properties has asbestos, asbestos-containing materials, PCBs, radioactive substances or other hazardous materials or aboveground or underground storage systems, active or abandoned, located on, at or under them.

Except as set forth in Schedule 3.1(v) of the Disclosure Letter, the Corporation is in compliance with all applicable Environmental Laws in all material respects.

Schedule 3.1(v) of the Disclosure Letter lists all material reports and documents relating to the environmental matters affecting the Corporation or any of the Leased Properties that are in the possession or under the control of Vendor. Copies of all such reports and documents have been Made Available to Purchaser.

Material Contracts. Except for the Contracts disclosed under the applicable subsection of Schedule 3.1(w) of the Disclosure Letter (all such Contracts disclosed or required to be disclosed being the ”Material Contracts”), the Corporation is not a party to or bound by:

any Contract that is a service agreement with any of the top ten customers of the Business (determined on the basis of revenues) for trailing twelve-month period ended August 31, 2019;

any Contract that is a supplier agreement with any of the top ten suppliers of the Business (determined on the basis of cost of goods and services purchased) for trailing twelve-month period ended August 31, 2019;

any Contract that is a dealer agreement with any of the top ten dealers of the Business (determined on the basis of the number of Customer Accounts purchased from such dealer) for trailing twelve-month period ended August 31, 2019;

any Contract which provides the Corporation with any internet or telecommunications services which are resold by the Corporation;

any Contract that relates to the sale of any assets by the Corporation, other than sales of assets in the Ordinary Course, for consideration in excess of $100,000 and for which the Corporation has any ongoing obligation after the date of this Agreement;

any ongoing Contract requiring the Corporation to purchase materials, supplies, equipment or services for amounts in excess of $200,000 per annum;

any Contract for capital expenditures involving future payments in excess of $200,000 in the aggregate;

any Contract relating to the acquisition of any business, a material amount of shares or assets of any other Person or any real property (whether by amalgamation, arrangement, sale of any Contract, shares, sale of assets or otherwise) with ongoing rights or obligations;

any Contract relating to Indebtedness in an amount in excess of $200,000 in the aggregate;

any Contract pursuant to which the Corporation is a lessor of any machinery, equipment, motor vehicles, office furniture, fixtures or other movable or personal property for obligations in excess of $200,000 per annum;

any Contract that limits or restricts in any material respect the ability of the Corporation to engage in any line of business (including to sell products or deliver services) or carry on business in any geographic area;

any Contract that limits the freedom of the Corporation to (A) compete with any Person, in any line of business or in any geographic area, or sell goods or services to any customer or potential customer; (B) establish the prices at which it may sell any goods or services including Contracts which provide any customer of the Business with pricing, discounts or benefits that change based on the pricing, discounts or benefits offered to other customers of the Business; (C) operate its assets at maximum production capacity or otherwise conduct its business; or (D) solicit any person for any purpose;

any Contract where the Corporation is bound by any exclusive dealing or similar exclusivity provision;

any Contract relating to grants or other forms of assistance received by the Corporation from any Governmental Entity;

any partnership, joint venture or alliance Contract in which a third party has rights to share in any revenues or direct any part of the Business;

any Contract with Employees or Contractors providing for annual base compensation in excess of $150,000, other than subcontract agreements entered into in the Ordinary Course pursuant to which the subcontractor is paid based on work performed and which does not require a minimum amount of work entitling such subcontractor to not less than $100,000 of payments per annum and individuals provided by a staffing agency;

a Contract with any Person with whom the Corporation, or Vendor, does not deal at Arm’s Length, where such Contract will not be terminated as of Closing; or

any Contract involving the settlement of any lawsuit with respect to which (i) there is any unpaid amount in excess of $150,000 or (ii) conditions precedent to the settlement thereof have not been satisfied.

No Breach of Contracts.

Material Contracts. Except for certain acts of default or breach which, in the aggregate, are not material, the Corporation has performed all of the obligations required to be performed by it and is entitled to all benefits under the Material Contracts and is not in breach, default or violation or alleged to be in breach, default or violation of, any Material Contract. Each of the Material Contracts is in full force and effect, unamended, and there exists no actual, alleged or anticipated default or event of default or event or condition (including the purchase of the Purchased Shares) which would with the giving of notice, the lapse of time, or both, or the happening of any other event or condition, result in a breach, default or violation under any Material Contract. Complete and accurate copies of all Material Contracts have been Made Available to Purchaser.

Other Contracts. With respect to Contracts to which the Corporation is a party and that are not Material Contracts, except for certain acts of default or breach which, in the aggregate, are not material, the Corporation has not violated or breached, in any respect, any of the terms or conditions of any such Contract, and to the knowledge of Vendor, all the covenants to be performed by any other party to such Contracts have been fully performed.

Books and Records. All accounting and financial Books and Records of the Corporation have been fairly and accurately kept and completed in all material respects. Except as contemplated by the Transition Services Agreement, the Books and Records of the Corporation are recorded, stored, maintained, operated and held in a manner which is available to the Corporation in the Ordinary Course.

Accounts Receivable. All Accounts Receivable of the Corporation are bona fide, have been incurred in the Ordinary Course consistent with past practices and on Arm’s Length terms, have been properly recorded in the Financial Statements of the Corporation, subject to normal and customary trade discounts and allowance for doubtful reserves provided for such accounts therein, in accordance with GAAP and, subject to normal and customary trade discounts and allowance for doubtful reserves recorded in the Interim Financial Statements, are good and collectible in full when due without any discount, set-off, compensation or counterclaim and without the need to resort to litigation.

Indebtedness. The Corporation does not have any Indebtedness other than as set forth in the Financial Statements, the Interim Financial Statements or in Schedule 3.1(aa) of the Disclosure Letter.

Inventories. The Inventories of the Corporation 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 other than those items which have been written down in the Interim Financial Statements, and only to the extent so written down. The Inventory levels of the Corporation have been maintained at levels sufficient for the continuation of the Business in the Ordinary Course. All Inventories of the Corporation have been determined and valued in accordance with the policies, practices and procedures set forth in Schedule 3.1(bb) of the Disclosure Letter.

Financial Statements. The Financial Statements and the Interim Financial Statements have been prepared in accordance with GAAP subject to the exceptions set forth in Schedule 3.1(cc) of the Disclosure Letter, and each presents fairly, in all material respects (i) balance sheet of the Corporation, and (ii) the statement of income of the Corporation, all as at the dates and for the periods therein specified. Complete and accurate copies of the Financial Statements and the Interim Financial Statements are attached as Schedule 3.1(cc) of the Disclosure Letter.

No Liabilities. The Corporation has no material liability or obligation of any nature (whether known or unknown and whether absolute, accrued, contingent, or otherwise) other than (i) liabilities or obligations to the extent properly reflected on the balance sheet of the most recent Financial Statements or the Interim Financial Statements; (ii) current liabilities incurred in the Ordinary Course since the Balance Sheet Date; (iii) performance obligations pursuant to any Contracts and commitments entered into in the Ordinary Course; (iv) as disclosed in Schedule 3.1(dd) of the Disclosure Letter; and (v) performance obligations under this Agreement and any Ancillary Agreement.

Intellectual Property.

Complete List and Registrations. Schedule 3.1(ee)(i) of the Disclosure Letter contains a complete and accurate list of all registrations and applications for registration of Intellectual Property owned by the Corporation and Intellectual Property that is owned by an Affiliate and licensed to the Corporation which is used by the Corporation in carrying on its Business. All of such Intellectual Property which has been registered and which is material to the Business has been properly maintained in all material respects and renewed in accordance with all applicable Laws and has not been used or enforced, or failed to be used or enforced, in a manner that would result in the abandonment, cancellation or unenforceability of any such Intellectual Property.

Title. Except as set forth in Schedule 3.1(ee)(ii) of the Disclosure Letter, the Corporation owns all right, title and interest in and to the Intellectual Property owned by the Corporation, free and clear of all Liens and, to the knowledge of Vendor, the Corporation has the right to use all the Intellectual Property used by it in carrying on the Business in the manner it is currently used by the Corporation.

License Agreements. Schedule 3.1(ee)(iii) of the Disclosure Letter sets forth a complete and correct list of all material: (A) Outbound Licenses; and (B) Inbound Licenses (other than: (i) Inbound Licenses relating to off-the-shelf, commercially available software that has not been customized for the Corporation, and which has an aggregate annual cost to the Corporation of $50,000 or less; (ii) Inbound Licenses and Outbound Licenses granted by operation of law or equity or implicitly, such as Contracts for the purchase, transfer, lease or right to use materials,

No Restrictions. Except as set forth in Schedule 3.1(ee)(iv) of the Disclosure Letter and Outbound Licenses granted in the Ordinary Course, the Corporation: (A) is not a party to or bound by any written Contract or other obligation that limits or impairs its ability to use, sell, transfer, assign or convey, or that otherwise affects, any of the Intellectual Property owned and used by the Corporation; and (B) has not granted to any Person any right, license or permission to use all or any portion of, or otherwise encumbered any of its rights in or to, any of the Intellectual Property owned and used by the Corporation, except, in each case, as would not result in a Material Adverse Effect. Except as set forth in Schedule 3.1(ee)(iv) of the Disclosure Letter and those Inbound Licenses licensing off-the-shelf, commercially available Software, software provided as a service and “shrink-wrap” or “click-through” license agreements, including any software preinstalled in the ordinary course of business as a standard part of purchased hardware, to the knowledge of Vendor, the Corporation is not obligated to pay any royalties, fees or other compensation to any Person in respect of its ownership, use or license of any Intellectual Property except as would not be material.

No Infringement by the Corporation. To the knowledge of Vendor, neither: (i) the Corporation; (ii) the use of the Intellectual Property owned by, licensed to or used by the Corporation; (iii) any goods or services sold, distributed or otherwise provided by the Corporation (collectively, “Products”); nor (iv) the operation of the Business, infringes upon the Intellectual Property rights of any Person. No claims that remain unresolved have been asserted or are threatened by any Person alleging that any of the Products or the conduct of the Business, including the use of the Intellectual Property owned by, licensed to or used by the Corporation, infringes upon or misappropriates any of such Person’s Intellectual Property rights. There are no valid grounds for any bona fide claims by any Person alleging an infringement or misappropriation of its Intellectual Property rights.

No Breach. The transaction contemplated by this Agreement and the operation of the Business as currently conducted will not constitute a breach of the terms of any Inbound Licenses or Outbound Licenses, or entitle any other party to any such license to terminate or modify such license in a manner that would materially adversely affect the Corporation’s rights under such license or result in the loss or impairment of any Intellectual Property owned, licensed or used by the Corporation under such license that is material to the operation of the Business.

Use of IP Following Closing. The Intellectual Property owned by the Corporation or licensed by the Corporation pursuant to the Inbound Licenses constitutes all Intellectual Property necessary for the conduct of the Business as presently conducted. Following Closing, but subject to the provisions of any Ancillary Agreements, the Corporation will be entitled to continue to use, practice and exercise rights in, all such Intellectual Property, to the same extent and in the same manner as used, practiced and exercised by the Corporation prior to Closing without, except as set forth in Schedule 3.1(ee)(iv) of the Disclosure Letter, financial obligation to any Person other than any such financial obligation as prescribed in the Inbound Licenses under which the Corporation is entitled to continue to use, practice and exercise such right.

No Infringement by Third Parties. To the knowledge of Vendor, no Person is currently violating, infringing or misappropriating any of the Intellectual Property owned by the Corporation.

No Rights Retained. Subject to the provisions of any Ancillary Agreements, following Closing, neither Vendor nor its Affiliates will retain any rights in or have any right to use any of the Intellectual Property owned by the Corporation or licensed by the Corporation pursuant to the Inbound Licenses.

No Governmental Entity Assistance, etc. No funding from a Governmental Entity, facilities of a university, college, other educational institution or research center was used in the development of any Intellectual Property owned by the Corporation. No Person who was involved in, or who contributed to, the creation or development of any Intellectual Property owned by the Corporation has performed services

Software and Technology. The Corporation has taken commercially reasonable steps and implemented commercially reasonable safeguards to ensure that the IT Systems are substantially free from Harmful Code. The IT Systems are sufficient for the needs of the Corporation’s business, as currently conducted. The IT Systems are in good working condition to effectively perform all computing, information technology and data processing operations necessary for the operation of such business. Except as disclosed in Schedule 3.1(ee)(xi) of the Disclosure Letter, in the three-year period prior to the date of this Agreement, there has been no failure, breakdown or continued substandard performance of any IT System that has caused a material disruption or interruption in or to the operation of any business of the Corporation. The Corporation has taken commercially reasonable steps to provide for the remote-site back-up of data and information critical to the conduct of its business in a commercially reasonable attempt to avoid material disruption to, or material interruption in, the conduct of such business.

Source Code. The Corporation has treated any Software owned by, licensed to, or held for use or used by the Corporation in connection with the Business for which the Corporation has in its possession copies of the source code, as confidential and proprietary business information, has not disclosed same to any third parties without taking all reasonable steps to protect the same as trade secrets of the Corporation. Such source code is fully documented in a manner that a reasonably skilled programmer could understand, modify, compile and otherwise utilize all aspects of the related computer programs without reference to other sources of information. No Company Software owned by the Corporation consisting of source code has been placed into escrow and no Person or entity is a beneficiary of any escrow agreement relating to Company Software consisting of software. Except as disclosed in Schedule 3.1(ee)(xii) of the Disclosure Letter, all copies of any Products distributed in connection with the Business have been distributed solely in object code form. Each copy so distributed is the subject of a valid, existing and enforceable license agreement.

Open Source, etc. Except as set forth in Schedule 3.1(ee)(xiii) of the Disclosure Letter, no material Company Software contains, incorporates, links or calls to or otherwise uses Open Source Software (as defined below). “Open Source Software” means any software (in source or object

Websites, etc. Schedule 3.1(ee)(xiv) of the Disclosure Letter sets out the physical location of the computer servers that are currently hosting the Corporation’s Internet websites. To the extent such services are currently owned or licensed by the Corporation, such servers are validly owned, or a portion is validly leased, by the Corporation. Schedule 3.1(ee)(xiv) of the Disclosure Letter also sets out any applicable written Internet hosting Contract for such websites, copies of which have been Made Available to Purchaser. In addition, Schedule 3.1(ee)(xiv) of the Disclosure Letter sets out the domain names owned by the Corporation, when the domain name was registered, the current registrar, and the date of the next renewal. The Corporation’s websites contain all legal disclaimers and privacy policies that, in accordance with industry practice, are customarily contained on websites similar to the Corporation’s websites.

Data Security. The Corporation has in place cybersecurity measures and policies that are consistent with current standards and practices of a reasonably prudent business operating in a similar industry and that such measures and policies reasonably safeguard proper access to and the security of, the data of the Corporation. The Corporation has not received any written complaint relating to an improper use or disclosure of any Personal Information involving the Corporation in the past two years, except as would not result in a Material Adverse Effect. Except as would not be material, there have been no Breaches of Security Safeguards of the Corporation in the past two years. There is no material deficiency in the Corporation’s cybersecurity measures or policies that could reasonably result in a loss of data or a breach of security of the data of the Corporation in any material respect.

Confidentiality and Assignment of Proprietary Rights. The Corporation has taken commercially reasonable steps (including security precautions) to maintain the confidentiality of Intellectual Property consisting of confidential or non-public information, including without limitation trade secrets, and to maintain its rights therein. Vendor is not aware of any security or confidentiality breach regarding such confidential or non-public information. All current and former employees, officers, managers (or equivalent Persons) or agents of the Corporation whose duties or responsibilities relate to the creation, development or invention of any Intellectual Property owned by the Corporation as of the Closing Date have entered into intellectual property assignment agreements that convey to the Corporation all right, title and interest that such Persons may possess in and to such Intellectual Property. Each such Person has irrevocably waived in writing any non-assignable rights (including moral rights) that such Person may possess in or to any and all such Intellectual Property. No such Person has claimed an ownership interest in any of the Intellectual Property of the Corporation.

Employee Matters.

Compliance. Except as disclosed at Schedule 3.1(ff)(i) of the Disclosure Letter, the Corporation is in material compliance with all terms and conditions of employment, terms of all Collective Agreements, and all Laws respecting employment and labour relations including pay equity, French language, employment standards, labour standards, human rights, pensions, immigration, income tax withholding, payroll taxes, remittances, harassment, occupational health and safety, privacy and accessibility. Except as disclosed at Schedule 3.1(ff)(i) of the Disclosure Letter, the Corporation is not subject to any outstanding claims, complaints, investigations or orders relating to breach of such Laws, including for wrongful dismissal, constructive dismissal or any other claim, complaint or litigation relating to employment, discrimination, harassment or termination of employment or engagement of any of its Employees or former employees and to the knowledge of Vendor there is no basis for any such claim, complaint, investigation or order other than as disclosed. The Corporation has policies and processes in place, which have been communicated to the Employees, that allow Employees who are subjected to any form of workplace violence or harassment (including sexual harassment) to report such incidents without fear of reprisal and Vendor does not reasonably expect any liability with respect to any allegations of workplace violence or harassment (including sexual harassment).

Labour Relations.

Except as disclosed at Schedule 3.1(ff)(ii)(A) of the Disclosure Letter, there is no Collective Agreement (or commitment to enter into any new Collective Agreement) in force with respect to the Employees, no Union holds bargaining rights with respect to any Employees and the Corporation has not received written notice that any Union has applied to be certified as the bargaining agent of any of the Employees, and there are no current or, to the knowledge of Vendor, threatened attempts to organize or establish any Union with respect to the Corporation, nor has there been any such attempts within the past five years.

The Corporation has not received written notice that a Union has applied to have the Corporation declared a related employer pursuant to the Labour Relations Act (Ontario) or any similar Law in any jurisdiction in which the Corporation carries on business.

Except as disclosed at Schedule 3.1(ff)(ii)(C) of the Disclosure Letter, there is no unfair labour practice complaint, grievance or arbitration proceeding, labour strike, slow down, work stoppage or lockout in progress or, to the knowledge of Vendor, threatened against the Corporation, which could have an adverse effect on the Business or require the Corporation to modify any labour practices in a manner that is materially adverse to the Business or make a payment in excess of $100,000.

No Amounts Owing. All amounts due and owing or accrued due but not yet owing to any Employees and Contractors including as to Benefit Plans, Compensation, Severance Obligations (solely to the extent due and owing) and Statutory Plans have been paid or, if accrued, are properly accrued and accurately reflected in the Books and Records of the Corporation.

No Loans. There are no outstanding loans or advances made by the Corporation to any Employee or former employee, other than outstanding reimbursements of Employee expenses in the Ordinary Course.

No Resignations. Except as disclosed at Schedule 3.1(ff)(v) of the Disclosure Letter, to the knowledge of Vendor, no Employee with a base salary in excess of $100,000 per annum has any plans to terminate his or her employment or relationship with the Corporation prior to the Closing or, with Purchaser after the Closing.

Employees. Schedule 3.1(ff)(vi) of the Disclosure Letter contains a complete and accurate list, as of the date of this Agreement, of each Employee listed by their employee number (and not by name), if any, title/position, whether active or inactive, base salary and annual incentive entitlements, whether unionized or non-unionized, location of

Contractors. Each Contractor has been properly classified by the Corporation as an independent contractor and the Corporation has not received any notice in the last three years from any Governmental Entity disputing such classification.

Employee Agreements. Schedule 3.1(ff)(viii) of the Disclosure Letter contains a complete and accurate list of all written agreements of the Corporation with its Employees who receive annual base Compensation in excess of $100,000, copies of which have been Made Available to Purchaser.

Occupational Health and Safety. The Corporation has Made Available to Purchaser all outstanding orders and inspection reports under applicable occupational health and safety Laws (“OHSA”) relating to the Corporation for the past three years. There have been no fatal or critical accidents in the last three years. To the knowledge of Vendor, there are no charges pending under OHSA in respect of the Corporation. The Corporation has complied with any orders issued under OHSA. There are no appeals by the Corporation of any orders under OHSA currently outstanding.

No Severance, etc. No officer, director, Employee or Contractor of the Corporation has any agreement as to (i) change of control entitlements; (ii) payment of any amount which is triggered by, or expected to be triggered by, the transactions contemplated hereby; (iii) retention payment; (iv) acceleration of the time of payment, funding or vesting, or increase the amount of Compensation due to any such individual, which is triggered by, or expected to be triggered by, the transactions contemplated by this Agreement; or (v) except as set forth in any Employment Contract disclosed in Schedule 3.1(ff)(x) of the Disclosure Letter solely for officers, directors or Employees who receive annual base Compensation in excess of $100,000, any contractual severance or termination payment required to terminate his employment or his service agreement.

No Illegal Workers. No Employee or, to the knowledge of Vendor, former employee of the Corporation is or has been, during his employment with the Corporation, an illegal or undocumented worker. All current Employees and, to the knowledge of Vendor, former employees of the Corporation, and Contractors have and had all work permits, visas and authorizations, as the case may be, required to perform work or provide services in Canada.

Workers’ Compensation. There are no outstanding or unaccrued assessments, penalties, fines, liens, charges, surcharges, or other amounts due or owing pursuant to any workers’ compensation Laws in respect of the Corporation and the Corporation has not been reassessed under such Laws during the past three years and, to the knowledge of Vendor, no audit of the Corporation is currently being performed pursuant to any applicable workers’ compensation legislation. To the knowledge of Vendor, there are no claims or potential claims which may materially adversely affect the Corporation’s accident cost experience.

Authority to Work. No Employee is during his employment with the Corporation, an illegal or undocumented worker. All current Employees have all work permits, visas, authorizations, or status as the case may be, required to perform work in their respective jurisdictions of employment.

Plans.

Schedule 3.1(gg)(i) of the Disclosure Letter lists all Benefit Plans. Vendor has Made Available to Purchaser true, correct and complete copies of all written Benefit Plans (or if oral, summaries thereof) as amended, together with all material related documentation. No changes to the Benefit Plans are currently contemplated or are expected to occur prior to Closing which would materially change the information disclosed pursuant to this Section 3.1(gg)(i).

All Benefit Plans have been established, registered, administered and invested in all material respects in accordance with their terms and all applicable Laws. To the knowledge of Vendor, no fact or circumstance exists which could adversely affect the registered status of any Benefit Plan.

Except as disclosed in Schedule 3.1(gg)(iii) of the Disclosure Letter, the Corporation does not sponsor, contribute to, or participate in any Pension Plan, and has not within the past two (2) years previously sponsored, contributed to, or participated in any Pension Plan.

No Pension Plan of the Corporation contains a “defined benefit provision” and no Pension Plan of the Corporation is or is intended to be a “retirement compensation arrangement”, as such terms are defined in the ITA.

The Corporation has made all required contributions and paid all premiums and benefits in respect of each Benefit Plan in a timely fashion in accordance, in all material respects, with the terms of each Benefit Plan, Collective Agreement, participation agreement, and applicable Laws. The Corporation has made all required contributions in respect of each Multi-Employer Plan in a timely fashion in accordance, in all material respects, with the terms of each Multi-Employer Plan, Collective Agreement, participation agreement, and applicable Laws. The Corporation has paid in full all contributions and premiums, benefits and costs for the period up to the Closing Date even though not otherwise required to be paid until a later date and no Benefit Plan has a deficit, or the Corporation has made full and adequate disclosure of and provision for such amounts in its Books and Records.

Other than routine claims for benefits, no Benefit Plan is subject to any pending action, investigation, examination, claim (including claims for Taxes) or any other proceeding initiated by any Person, and, to the knowledge of Vendor, there exists no state of facts which could reasonably be expected to give rise to any such action, investigation, examination, claim or other proceeding. Except as disclosed in Schedule 3.1(gg)(vi) of the Disclosure Letter, there are no outstanding long-term disability claims.

No insurance policy or any other agreement affecting any Benefit Plan requires or permits a retroactive increase in contributions, premiums or other payments due under such insurance policy or agreement. The level of reserves under each Benefit Plan which provides group benefits and contemplates the holding of such reserves is reasonable and sufficient to provide for all incurred but unreported claims.

Except as disclosed in Schedule 3.1(gg)(viii) of the Disclosure Letter, none of the Benefit Plans provides for retiree or post-termination life, health, medical or other welfare benefits or for such benefits to retired or terminated Employees, Contractors, officers or directors of the Corporation or to the beneficiaries or dependants of such Persons.

Subject to the requirements of applicable Laws, no provision of any Benefit Plan or of any agreement, and no act or omission of the Corporation, in any way limits, impairs, modifies or otherwise affects the right of the Corporation to unilaterally amend or terminate any Benefit Plan, and no commitments to improve or otherwise amend any Benefit Plan have been made.

The execution and delivery of, and performance by Vendor of, this Agreement and the consummation of the transactions contemplated by it will not (i) accelerate the time of payment or vesting under any Benefit Plan, (ii) result in an obligation to fund (through a trust or otherwise) any Compensation or benefits under any Benefit Plan, (iii) increase any amount payable under any Benefit Plan, or (iv) result in the acceleration of any other material obligation relating to any Benefit Plan.

Only Employees, officers or directors or former employees, officers or directors (or any spouses, dependents, survivors or beneficiaries of such Persons) of the Corporation are entitled to participate in the Benefit Plans and no entity other than the Corporation is a participating employer under any Benefit Plan.

Except as disclosed in Schedule 3.1(gg)(xii) of the Disclosure Letter, the Corporation has no obligation to contribute to a Multi-Employer Plan.

Statutory Plans. There are no outstanding premiums, contributions, assessments, penalties, fines, liens, charges, surcharges, or other amounts due or owing pursuant to any Statutory Plan by the Corporation and the Corporation has not been reassessed in any material respect under applicable Laws relating to Statutory Plans during the past three (3) years and, to the knowledge of Vendor, no audit of the Corporation is currently being performed pursuant to any applicable Statutory Plans. There are no claims or, to the knowledge of Vendor, potential claims under any Statutory Plans that may materially adversely affect the Corporation’s rating, standing or accident cost experience in respect of the Business.

Litigation. Except as disclosed in Schedule 3.1(ii) of the Disclosure Letter, there are no, and have not been at any time in the last two years, any claims, actions, proceedings, suits, investigations, reviews, judgments or decrees pending or, to the knowledge of Vendor, threatened against or involving the Corporation, before any court or other tribunal, or by or before any Governmental Entity or arbitrator requiring payment by the Corporation of amounts in excess of $50,000 or granting injunctive relief or specific performance. Except as disclosed in Schedule 3.1(ii) of the Disclosure Letter, the Corporation is not, and has not at any time in the last two years been, the plaintiff or complainant in any action, claim, suit or proceeding, arbitration or alternative dispute resolution process arising out of or in connection with the Business requiring payment to the Corporation of amounts in excess of $50,000 or granting injunctive relief or specific performance. In the last two years, the Corporation has not settled any litigation or claims, or suffered any judgments, requiring payment by the Corporation of amounts in excess of $50,000 or granting injunctive relief or specific performance.

Insurance. Schedule 3.1(jj) of the Disclosure Letter sets forth a true and accurate list of the insurance policies maintained by or on behalf of the Corporation, complete copies of which have been Made Available to Purchaser. All such insurance policies are in full force and effect. The Corporation is not in default with respect to any of the provisions contained in the insurance policies or the payment of any premiums under any insurance policy, nor, other than as disclosed in Schedule 3.1(jj) of the Disclosure Letter, in the past five years has it failed to give any notice or to present any claim under any insurance policy in a due and timely fashion. Schedule 3.1(jj) of the Disclosure Letter lists all claims for individual amounts in excess of $50,000 in the past five years that have been

Tax Matters.

Computation, Preparation and Payment. The Corporation has, in all material respects, correctly prepared and duly and timely filed all Tax Returns required to be filed by it, paid all Taxes which were due and payable by it on or before the date hereof within the time required by applicable Laws and made adequate provision for Taxes in the Books and Records of the Corporation in the Financial Statements that would be owing if it had a taxation year end immediately before Closing. The Corporation has made adequate and timely installments of all material Taxes required to be made.

Status of Assessments. Other than as described in Schedule 3.1(kk)(ii) of the Disclosure Letter, all Tax Returns of the Corporation have been assessed and there are no outstanding waivers of any limitation periods or agreements providing for an extension of time for the filing of any Tax Return or the payment of any material amount of Tax by the Corporation.

Status of Audits. Except as set forth in Schedule 3.1(kk)(iii) of the Disclosure Letter, there are no material proceedings, investigations or audits pending or, to the knowledge of Vendor, threatened against or affecting the Corporation in respect of any Taxes. There are no material matters under discussion, audit or appeal with any Governmental Entity relating to Taxes in respect of the Corporation.

Tax Elections. Other than the agreements and arrangements described in Schedule 3.1(kk)(iv) of the Disclosure Letter, the Corporation has not 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.

Financial Statement Tax Reserves. The only reserves for Taxes recorded on the Corporation’s Financial Statements prepared in accordance with GAAP are described on Schedule 3.1(kk)(v) of the Disclosure Letter.

Withholdings. The Corporation has, in all material respects, withheld from each payment made to any of its past and present shareholders, directors, Employees, suppliers and Contractors the amount of all Taxes and other deductions required to be withheld and has paid such amounts when due, in the form required under appropriate Laws, or made adequate provision in its Books and Records for the payment of such amounts to the proper receiving authorities.

Collection and Remittance. The Corporation has, in all material respects, collected from any of its past and present customers the amount of all Taxes required to be collected and has paid and remitted such Taxes when due, in the form required under appropriate Laws or, if not yet due, has made adequate provision in its Books and Records for the remittance of such amounts to the proper Governmental Entities.

Jurisdictions of Taxation. Except as set forth in Schedule 3.1(kk)(viii) of the Disclosure Letter, the Corporation has not been, or is currently, required to file any Tax Returns with any taxation authority located in any jurisdiction outside Canada.

Registration. Schedule 3.1(kk)(ix) of the Disclosure Letter sets forth the relevant registration numbers of the Corporation pursuant to Part IX of the ETA, Chapter VIII of QSTA, Division 1 of Part 8 of the Provincial Sales Tax Act (British Columbia), section 5 of the Retail Sales Tax Act (Manitoba), and/or section 4 of the Provincial Sales Tax Act (Saskatchewan), if applicable.

Related Party Transactions. To the knowledge of Vendor, and except as otherwise expressly permitted or required by the ITA, all material transactions or arrangements made by the Corporation with any Person with whom it does not deal at Arm’s Length have been made on arm’s length terms and conditions for purposes of the ITA. For all transactions between the Corporation, on the one hand, and any non-resident Person with whom the Corporation was not dealing at Arm’s Length, on the other hand, during a taxation year commencing after 2007 and ending on or before the Closing Date, the Corporation has made or obtained records or documents that satisfy the requirements of paragraphs 247(4)(a) to (c) of the ITA. The Corporation has not entered into an agreement contemplated by Section 191.3 of the ITA.

Tax Returns. The Corporation has Made Available to Purchaser complete and accurate copies of all foreign, federal, provincial, state, municipal and local income, added value, goods and services and sales and use Tax Returns for the Corporation filed for all periods terminating after August 2015, other than monthly GST forms, as well as all material communications to or from any Governmental Entity relating to Taxes of the Corporation to the extent relating to periods or events in respect of which any Governmental Entity may by Law assess or otherwise impose any such tax on the Corporation.

Subsection 89(1). The Corporation has not made an “excessive eligible dividend election” as defined in subsection 89(1) of the ITA in respect of any dividend paid, or deemed by any provision of the ITA to have been paid on any class of shares of its capital.

Sections 78, 80, 80.01, 80.02, 80.03 or 80.04. None of sections 78, 80, 80.01, 80.02, 80.03 or 80.04 of the ITA, or any equivalent provision of the Tax legislation of any province or any other jurisdiction, have applied or will apply to the Corporation at any time up to and including the Closing Date.

Section 160 and Prior Tax Indemnities. The Corporation (i) does not have any joint and several liability for Taxes as a result of the application of section 160 of the ITA, and (ii) does not have any material liability for Taxes of any other Person as a result of any indemnification, allocation or sharing agreement the subject matter of which includes Taxes.

Income Tax Statutory Reserves. The only reserves under the ITA or any equivalent provincial or territorial statute to be claimed by the Corporation for the taxation year ended immediately prior to the acquisition of control of the Corporation by Purchaser are disclosed in Schedule 3.1(kk)(xv) of the Disclosure Letter.

Bank Accounts. Schedule 3.1(ll) of the Disclosure Letter is a true, correct and complete list showing the name of each bank in which the Corporation has an account or safety deposit box and the names of all Persons authorized to draw on the account or to have access to the safety deposit box.

Customers, Suppliers and Dealers.

Schedule 3.1(mm)(i) of the Disclosure Letter contains a true and correct list setting forth the 20 largest customers of the Business by the Per Customer RMR attributable to such customers for the twelve month period ended August 31, 2019. Since the Balance Sheet Date, none of such customers has indicated in writing, or to the knowledge of Vendor, orally, its intention to cease or to materially reduce its business with the Corporation. Vendor has no reason to believe that the benefits of any relationship with any of such customers will not continue after the Closing Date in substantially the same manner as prior to the date of this Agreement. Since the Balance Sheet Date, each of such customers has paid their bills within 90 days of the billing date (or when due, if later) and the Corporation has not received notice of the bankruptcy, insolvency, winding-up or similar (or proceedings in respect thereof) of such customer. In addition, the Corporation is not in default under any material terms of any of the Contracts between the Corporation and any such customer. The Corporation has Made Available to Purchaser true, correct and complete copies of the written Contracts (or if oral, summaries of the material terms thereof) with each such customer and, other than such Contracts, there are no other Contracts or oral agreements with such customers. The Corporation’s dealers are independent contractors and are not franchisees of the Corporation.

Schedule 3.1(mm)(ii) of the Disclosure Letter contains a true and correct list setting forth a list of each supplier of goods and/or services (including goods and/or services purchased by any Affiliate of the Corporation and subsequently provided to the Corporation) to the Business for which the aggregate cost of goods and services was $250,000 or more during the twelve month period ended August 31, 2019 by cost of goods/services purchased, together with, in each case of the top 20 suppliers (determined based on the cost of goods and/or services), a listing of all Contracts with such supplier. Since the Balance Sheet Date, there has been no termination or material modification or adverse change in the business relationship with any supplier listed on Schedule 3.1(mm)(ii) of the Disclosure Letter. Vendor has no reason to believe that the benefits of any relationship with any supplier listed on Schedule 3.1(mm)(ii) of the Disclosure Letter will not continue after the Closing Date in substantially the same manner as prior to the date of this Agreement. In addition, the Corporation is not in default under any material terms of any of the Contracts between the Corporation and any supplier listed on Schedule 3.1(mm)(ii) of the Disclosure Letter. The Corporation has not received written notice or to the knowledge of Vendor, oral notice, of the bankruptcy, insolvency, winding-up or similar (or proceedings in respect thereof) of any supplier listed on Schedule 3.1(mm)(ii) of the Disclosure Letter. The Corporation has Made Available to Purchaser true, correct and complete copies of each written Contract (or if oral, summaries of the material terms thereof) with each supplier listed on Schedule 3.1(mm)(ii) of the Disclosure Letter and, other than such Contracts, there are no other Contracts or oral agreements with such suppliers.

Schedule 3.1(mm)(iii) of the Disclosure Letter contains a true and correct list setting forth the 10 largest dealers of the Business for twelve month period ended August 31, 2019 (determined on the basis of recurring monthly revenue, excluding upfront revenues related to installation and equipment, attributable to Customer Accounts originated by such dealers) (the “Top Dealers”), together with, in each case, a listing of all Contracts between the Corporation and each Top Dealer. Since the Balance Sheet Date, there has been no termination or material modification or adverse change in the business relationship with any Top Dealer. Vendor has no reason to believe that the benefits of any relationship with any Top Dealer will not continue after the Closing Date in substantially the same manner as prior to the date of this Agreement. In addition, the Corporation is not in default under any material terms of any of the Contracts between the Corporation and any Top Dealer. The Corporation has not received written notice or to the knowledge of Vendor, oral notice, of the bankruptcy, insolvency, winding-up or similar

The Initial Customer Database contains a true and correct, in all material respects, list setting forth, as of the date of this Agreement, (a) all customers of the Corporation by customer number (and not by name), (b) the services provided to each such customer, (c) the Per Customer RMR by service attributable to each such customer for the 30-day period ended on the day immediately prior to the date of this Agreement, (d) the province or territory of each such customer and (e) indicating whether each such customer has accounts payable or other debts due or accruing due to the Corporation that are in arrears for more than 90 days from the date of billing. Ten days prior to the Closing Date, Vendor will cause its legal counsel to provide Purchaser’s legal counsel (on an external counsel only basis) with a revised version of the Initial Customer Database (the “Closing Customer Database”), updated as of such date, which shall be true and correct in all material respects as of such date. The Contracts with all the customers of the Business are entered into between such customer, on the one hand, and the Corporation, on the other hand. None of the customers of the Business is located outside of Canada. Each customer listed on the Initial Customer Database and the Closing Customer Database represents, as of the relevant date, a customer account of a unique Person (without any duplication).

The Corporation (i) does not have more than 17,150 Contract Monitored Accounts and (ii) does not have more than 10,000 Customer Accounts monitored by third-party monitoring stations. The Corporation’s only third-party monitoring vendors are set forth on Schedule 3.1(mm)(v) of the Disclosure Letter.

Product and Service Warranties. Other than in the Ordinary Course, the Corporation is not subject to any material warranty claim in respect of products or services provided in connection with the Business, except for such claims that are specifically accrued for or reflected in the Financial Statements or the Interim Financial Statements.

Personal Information, Privacy and Anti-Spam. The Corporation is conducting the Business in compliance, in all material respects, with all applicable Laws governing privacy and the protection of Personal Information, including the Personal Information Protection and Electronic Documents Act (“PIPEDA”), provincial Laws relating to privacy and CASL. The Corporation has a written privacy policy which governs the collection, use and disclosure of Personal Information. The Corporation is in compliance, in all material respects, with such privacy policy since it was first adopted by the Corporation. The Corporation has not been the subject of any inquiry, proceeding, investigation or claim by any Governmental Entity with respect to any violation of Laws governing privacy and the protection of Personal Information, its own privacy policy or CASL. All applicable consents to the collection, use or disclosure of Personal Information in connection with the conduct of the Business have been obtained. The Corporation has not experienced any actual or suspected loss of, unauthorized access to or unauthorized disclosure of Personal Information. The Corporation possesses the records necessary to demonstrate the existence of the necessary consent, or its eligibility to rely on one of the exceptions/exemptions available under CASL and its associated regulations pursuant to which that company has sent “commercial electronic messages”, within the meaning of CASL.

Non-Arm’s Length Transactions. Other than as disclosed in Schedule 3.1(pp) of the Disclosure Letter, no shareholder or Employee or former employee of, or any other Person not dealing at Arm’s Length with the Corporation or not dealing at Arm’s Length with Vendor is engaged in any transaction or arrangement (other than pursuant to an employment relationship in the Ordinary Course) with or is a party to a Contract with (other than an Employment Contract or a Contract for the purchase of goods and series on Arm’s Length terms), or has any indebtedness, liability or obligation to, the Corporation (the Contracts, transactions and arrangements disclosed in Schedule 3.1(pp) of the Disclosure Letter, the “Non-Arm’s Length Transactions”). As of the Closing, all Non-Arm’s Length Transactions between the Corporation on the one hand and any Affiliate of the Corporation on the other hand (except as expressly contemplated by this Agreement), have been completed, satisfied, terminated, canceled, paid or otherwise settled, without any continuing liability to Purchaser or the Corporation thereunder.

No Brokers. Except for fees incurred in respect of the engagement of RBC Capital Markets as financial advisor, neither the Corporation nor any of its representatives has incurred any liability or obligation to any broker, agent, investment bank or other intermediary for any fee, commission or other similar payment in connection with the transactions contemplated by this Agreement.

Representations and Warranties of Vendor as to Itself

Incorporation and Qualification. Vendor is duly incorporated or formed and validly subsisting under the Laws of its jurisdiction of incorporation or formation and is duly qualified to carry on its business in each jurisdiction in which its business as now being conducted by it makes such qualification necessary, except for any failure to be so qualified that would not reasonably be expected to have a Material Adverse Effect.

No Conflict. Except for the Competition Act Approval, the execution, delivery and performance by Vendor of this Agreement and the consummation of the transaction of purchase and sale contemplated by this Agreement and each of the Ancillary Agreements to which it is a party:

do not and will not (or would not with the giving of notice or the lapse of time) constitute or result in a violation or breach of, or conflict with, or allow any other Person to exercise any rights under, any of the terms or provisions of Vendor’s Governing Documents;

do not and will not result in a breach of, or cause the termination or revocation of, any Authorization held by Vendor in connection with the ownership of the Purchased Shares; and

do not and will not result in the violation of any Law,

Litigation. There are no (i) actions, complaints, claims, grievances, suits or proceedings by any Person (including the Corporation), (ii) arbitration or alternative dispute resolution processes or (iii) any administrative or other proceedings by or before any Governmental Entity, pending or, to the knowledge of Vendor, threatened against Vendor, which prohibit, restrict or seek to enjoin the transactions contemplated by this Agreement.

Authority and Enforceability. Vendor has the requisite power and authority and, except for the Competition Act Approval, has received all necessary approvals to enter into this Agreement and to complete the transactions contemplated herein. This Agreement has been duly authorized, executed and delivered by Vendor and constitutes a valid and binding obligation of Vendor, enforceable against it in accordance with its terms, subject, however, to

Title to Purchased Shares. Vendor is the registered and beneficial owner of the Purchased Shares with a good and valid title thereto, free and clear of all Liens (other than transfer restrictions contained in the Corporation’s Governing Documents). Upon completion of the transaction contemplated by this Agreement, Vendor will have transferred to Purchaser good and valid title to the Purchased Shares, free and clear of all Liens other than (i) the restrictions on transfer, if any, contained in the Governing Documents of the Corporation, and (ii) Liens granted by Purchaser.

Residence of Vendor. Vendor is not a non-resident of Canada for the purposes of the ITA.

No Brokers. Except for fees incurred in respect of the engagement of RBC Capital Markets as financial advisor, neither it nor any of its representatives has incurred any liability or obligation to any broker, agent, investment bank or other intermediary for any fee, commission or other similar payment in connection with the transactions contemplated by this Agreement.

Representations and Warranties of Parent as to Itself

Incorporation and Qualification. Parent is duly incorporated or formed and validly subsisting under the Laws of its jurisdiction of incorporation or formation and is duly qualified to carry on its business in each jurisdiction in which its business as now being conducted by it makes such qualification necessary, except for any failure to be so qualified that would not be material.

No Conflict. Except for the Competition Act Approval, the execution, delivery and performance by Parent of this Agreement and the consummation of the transaction of purchase and sale contemplated by this Agreement and each of the Ancillary Agreements to which it is a party:

do not and will not (or would not with the giving of notice or the lapse of time) constitute or result in a violation or breach of, or conflict with, or allow any other Person to exercise any rights under, any of the terms or provisions of Parent’s Governing Documents;

do not and will not result in the violation of any Law,

Litigation. There are no (i) actions, complaints, claims, grievances, suits or proceedings by any Person (including the Corporation), (ii) arbitration or alternative dispute resolution processes or (iii) any administrative or other proceedings by or before any Governmental Entity, pending or, to the knowledge of Parent, threatened against Parent, which prohibit, restrict or seek to enjoin the transactions contemplated by this Agreement.

Authority and Enforceability. Parent has the requisite power and authority and, except for the Competition Act Approval, has received all necessary approvals to enter into this Agreement and to complete the transactions contemplated herein. This Agreement has been duly authorized, executed and delivered by Parent and constitutes a valid and binding obligation of Parent, enforceable against it in accordance with its terms, subject, however, to limitations with respect to enforcement imposed by Law in connection with bankruptcy, arrangement or similar proceedings, the equitable power of the courts to stay proceedings before them and the execution of judgments 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.

No Brokers. Except for fees incurred in respect of the engagement of RBC Capital Markets as financial advisor, neither it nor any of its representatives has incurred any liability or obligation to any broker, agent, investment bank or other intermediary for any fee, commission or other similar payment in connection with the transactions contemplated by this Agreement.

Representations and Warranties of Purchaser

Incorporation and Qualification. Purchaser is duly incorporated or formed and validly subsisting under the Laws of its jurisdiction of incorporation or formation and is duly qualified to carry on its business in each jurisdiction in which its business as now being conducted by it makes such qualification necessary, except for any failure to be so qualified that would not be material.

No Conflict. Except for the Competition Act Approval, the execution, delivery and performance by Purchaser of this Agreement:

do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) constitute or result in a violation or breach of, or conflict with, or allow any other Person to exercise any rights under, any of the terms or provisions of its Governing Documents;

do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) constitute or result in a breach or violation of, or conflict with or allow any other Person to exercise any rights under, any of the terms or provisions of any Contract or instruments to which it is a party; and

do not and will not result in the violation of any Law,

Authority and Enforceability. Purchaser has the requisite power and authority and, except for the Competition Act Approval, has received all necessary approvals to enter into this Agreement and to complete the transactions contemplated herein. This Agreement has been duly authorized, executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against it in accordance with its terms, subject, however, to limitations with respect to enforcement imposed by Law in connection with bankruptcy, arrangement or similar proceedings, the equitable power of the courts to stay proceedings before them and the execution of judgments 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.

Litigation. There are no (i) actions, complaints, claims, grievances, suits or proceedings by any Person, (ii) arbitration or alternative dispute resolution processes or (iii) any administrative or other proceedings by or before any Governmental Entity, pending or, to the knowledge of Purchaser, threatened against Purchaser, which would, or would reasonably be expected to, prevent Purchaser from paying the Purchase Price to Vendor or prohibit, restrict or seek to enjoin the transactions contemplated by this Agreement.

Purchaser’s Purchase Price Funds. Purchaser has, and will have at Closing, all funds on hand necessary to pay the Purchase Price.

Due Diligence by Purchaser. Purchaser acknowledges that it has conducted an independent investigation of the financial condition, liabilities, results of operations of the Corporation and the nature and condition of its properties and assets and, without limiting Purchaser’s recourses for Fraud, in making the determination to proceed with the transactions contemplated by this Agreement, has relied solely on the results of its own independent investigation and the representations, warranties, conditions and statements in Article 3 and Article 4.

No Brokers. Neither Purchaser nor any of its representatives has incurred any liability or obligation to any broker, agent, investment bank or other intermediary for any fee, commission or other similar payment in connection with the transactions contemplated by this Agreement for which Vendor would be liable.

Conduct of Business Before Closing

Except (i) as required by Law or any Governmental Entity, (ii) for the declaration or payment of cash distributions (for any reason) that will be entirely paid prior to the Effective Time, (iii) as otherwise expressly provided for in this Agreement or the Disclosure Letter (including pursuant to Section 6.12 (Pre-Closing Reorganization) and Section 6.14 (Fluent Litigation)), (iv) as Purchaser may expressly consent to in writing, which consent may not be unreasonably withheld, conditioned or delayed, (v) for repayments, redemptions or repurchases of loans or other obligations under any Indebtedness, or amendments, refinancings, restatements or extensions of Indebtedness or documents thereof (and any release or incurrence of Liens in connection therewith), (vi) for any matter which has general application to the Parent’s business as a whole, provided that such action does not have a disproportionate effect on the Corporation as compared to Parent’s business as a whole, or (vii) in relation to any product that is proprietary or exclusive to the business of Parent and its subsidiaries, which is not being transferred or licensed to Purchaser for sale to new customers of the Corporation beyond an initial transition period after Closing pursuant to the terms of this Agreement and the Ancillary Agreements, during the Interim Period, Vendor shall cause the Corporation to conduct its business and activities in the Ordinary Course. Without limiting the generality of the foregoing and notwithstanding the preceding clause (vi), during the Interim Period, Vendor shall cause the Corporation not to:

make or assume any commitment, obligation or liability which individually or in the aggregate exceeds $500,000, other than Contracts entered into in the Ordinary Course;

cease to operate its properties or to carry on the Business as heretofore carried on, in all material respects;

sell, transfer or dispose of, or create or impose any Lien (other than Permitted Liens) upon, any of its assets other than sales, transfers or dispositions of assets sold, transferred or disposed of in the Ordinary Course;

make any capital expenditure or commitment to do so which individually or in the aggregate exceeds $1,000,000, other than purchases of customer Contracts from ADT Authorized Dealers in the Ordinary Course;

discharge any secured or unsecured obligation or liability (whether accrued, absolute, contingent or otherwise), other than obligations and liabilities discharged in the Ordinary Course;

make any loan or advance which individually or in the aggregate exceed $150,000;

purchase or otherwise acquire any securities in any Person;

modify its Governing Documents;

make any change in its accounting policies and practices as utilized in the preparation of the Financial Statements except as required by GAAP;

terminate the employment or services of any (A) director of the Corporation or (B) Employee or Contractor receiving annual base Compensation in excess of $100,000;

enter into any agreement relating to Severance Obligations or relating to any retention, transaction bonus, or change of control of the Corporation with any of its officers, directors or Employees or Contractors receiving annual base Compensation in excess of $100,000;

make any change in the rate or form of Compensation payable or to become payable to any of its directors, Employees or Contractors which is outside the Ordinary Course;

increase the benefits to which Employees or former employees of the Corporation are entitled under any Benefit Plan which is outside the Ordinary Course or institute or, adopt any new Benefit Plan or make any amendments to any existing Benefit Plan (or commit to do so);

make any bonus or profit sharing distribution or similar payment of any kind to any current or former shareholder, director, Employee or Contractor of the Corporation which is outside the Ordinary Course;

terminate or waive any material right under, amend or otherwise modify in any material respect any Material Contract;

grant to any customer of the Business any special allowance or discount, or change its pricing, credit or payment policies, delay or postpone the payment of trade payables, or change normal operating balances of Inventory, in each case, other than in the Ordinary Course;

delay or postpone in a way which would be outside the Ordinary Course, the discharge of any obligation, liability or capital expenditure when such liability, obligation or capital expenditure becomes due;

settle any litigation or claim imposing obligations on the Corporation other than payment of money damages, provided, however, that Vendor shall notify Purchaser in writing of such settlement and shall obtain a full release in favour of Corporation in connection with such settlement;

cancel or reduce any of its insurance coverage; or

authorize, agree or otherwise commit in writing to do any of the foregoing.

Vendor and Parent shall not, and shall cause the Corporation not to, transfer or assign any Contract with any customer of the Business to Parent or any of its Affiliates (other than the Corporation), and shall use, and shall cause the Corporation to use, commercially reasonable efforts to preserve intact the Business’ relationships with customers, suppliers, dealers and other third parties.

Access for Due Diligence

Request for Consents

Vendor shall use its commercially reasonable efforts to seek and obtain, before Closing, all Key Consents, which Key Consents will be in writing and upon such terms as are acceptable to Purchaser, acting reasonably.

Each Party shall coordinate and cooperate with one another in seeking the Key Consents, including providing any information in respect of Purchaser as reasonably requested by the counterparty from whom such Key Consent is sought, and shall provide prompt notification to the other Parties when any such Key Consent is obtained.

Filings and Authorizations

Unless Purchaser and Vendor mutually agree in writing not to take such action, within 4 Business Days of the date of this Agreement or such other date as the Parties may agree in writing, Purchaser and Vendor shall each make a premerger notification filing in respect of the transactions contemplated by this Agreement with the Commissioner in accordance with Part IX of the Competition Act. Purchaser and Vendor shall provide to the Commissioner at the earliest practicable date all additional information, documents or other materials that may be requested by the Commissioner in connection with his review of the transactions contemplated by this Agreement. Purchaser and Vendor shall each pay half of the filing fees incurred in connection with the Competition Act Approval.

Purchaser and Vendor shall consult and cooperate with each other in connection with the effort to obtain the Competition Act Approval. Without limiting the generality of the foregoing, (i) each Party shall be given a reasonable opportunity to review in advance and comment on any proposed submissions to any Governmental Entity with respect to the Competition Act Approval, and reasonable consideration shall be given to any comments made by such Party, (ii) each Party shall promptly notify the other Parties of any communication from any Governmental Entity in connection with the Competition Act Approval and provide a copy thereof, and shall permit the other Parties to review in advance any proposed communication with a Governmental Entity, (iii) no Party shall participate in any meeting, discussion or correspondence of a substantive nature (whether in person or by telephone or otherwise) with a Governmental Entity in connection with the Competition Act Approval unless it consults with the other Parties in advance and provides the other Parties or their external counsel the opportunity to attend and participate thereat, and (iv) neither Party will (and Vendor will cause the Corporation not to) take any action that is likely to have the effect of materially delaying, impairing or impeding the receipt of any Competition Act Approval. Notwithstanding the foregoing, it is agreed that where submissions or communications contain competitively sensitive information of a Party, such submissions or communications will be shared on an external counsel only basis with counsel to the other Parties, and redacted versions of such submissions or communications will be provided to the other Parties.

Purchaser and Vendor shall (and Vendor shall cause the Corporation to) use their commercially reasonable efforts to obtain the Competition Act Approval as soon as reasonably practicable but, in any event, no later than the Outside Date.

Purchaser, acting reasonably, and after consultation with the Vendor, will determine and direct the efforts to obtain the Competition Act Approval, including leading all communications and strategy relating to such efforts.

Satisfaction of Conditions

Privacy Issues

Customer Database

Purchaser will direct its legal counsel to hold the Initial Customer Database (and any updates thereto) on an external-counsel only basis until Closing. Following Closing, ownership of the Initial Customer Database (and any updates thereto) will transfer to Purchaser.

Within seven days following the date hereof, Vendor shall provide to a Purchaser Database Professional a live overview of all reasonably accessible

Joint Communication Strategy; Customer and Dealer Calls

collaborate in good faith to implement a joint communication strategy with respect to the Employees, Contractors, customers, suppliers and dealers of the Business, to provide for an orderly transition of the Business; and

cooperate and take all necessary steps to complete the calls between Vendor and any of (i) the 20 largest customers of the Business by the Per Customer RMR attributable to such customers for the twelve-month period ended August 31, 2019, (ii) the 10 largest suppliers of the Business determined based on the cost of goods and/or services and (iii) Top Dealers, in compliance with applicable Laws and in accordance with the procedures agreed upon between Purchaser and Vendor.

Exclusive Dealing

Release

Effective as of the Closing, Vendor unconditionally, irrevocably and forever releases and discharges the Corporation, each of the successors and assigns of the Corporation, and all present or former directors, officers, employees or agents of the Corporation (collectively, the “Corporation Released Parties”), of and from, and hereby unconditionally and irrevocably waives, any and all claims, debts, losses, expenses, proceedings, covenants, liabilities, suits, judgments, damages, actions and causes of action, obligations, accounts, and liabilities of any kind or character whatsoever, known or unknown, suspected or unsuspected, in contract or in tort, direct or indirect, at law or in equity (collectively, “Claims”), that Vendor ever had, now has or ever may have or claim to have against any of the Corporation Released Parties in their capacity as such, for or by reason of any matter, circumstance, event, action, inaction, omission, cause or thing whatsoever arising prior to the Effective Time; provided, that this release does not extend to any Claim (i) to enforce the terms or any breach of this Agreement or any Ancillary Agreement, or (ii) against any of the Corporation’s present or former directors, officers, employees or agents with respect to their (A) violation of criminal law; or (B) Fraud.

Effective as of the Effective Time, Purchaser, on its own behalf and on behalf of the Corporation, unconditionally and irrevocably and forever releases and discharges Vendor (solely in its capacity as a shareholder of the Corporation), Vendor’s successors and assigns, and all present or former directors, officers, employees or agents of the Corporation and Vendor (collectively, the “Vendor Released Parties”), of and from, and hereby unconditionally and irrevocably waives, any and all Claims that Purchaser or the Corporation ever had, now has or ever may have or claim to have against any of Vendor Released Parties in their capacity as such, for or by reason of any matter, circumstance, event, action, inaction, omission, cause or thing solely related to Vendor as shareholder of the Corporation arising prior to the Closing; provided, that this release does not extend to any Claim: (i) to enforce the terms or any breach of this Agreement or any Ancillary Agreement, or (ii) against any Vendor Released Party due to such Vendor Released Party’s (A) violation of a criminal law or (B) Fraud.

R&W Insurance Policy

Pre-Closing Reorganization

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Litigation

During the Interim Period, Vendor shall cause the Corporation to continue prosecuting the Fluent Litigation at its cost. If the Fluent Litigation is settled prior to the Closing, the Corporation shall be permitted to distribute the proceeds of the Fluent Litigation settlement to the Vendor. If the Fluent Litigation is not settled prior the Closing, the Vendor shall continue to assume carriage of and control over the defense of the Fluent Litigation at its cost and the Purchaser shall cooperate with the Vendor, provided that such cooperation shall not cause undue interference to the ordinary conduct of the Business, at Vendor’s cost, in prosecution of the Fluent Litigation, including (A) making available to the Vendor, at Vendor’s cost, those Employees whose assistance, testimony or presence is necessary to assist the Vendor in the Fluent Litigation, (B) providing, at Vendor’s cost, all records and other materials in the possession of the Corporation reasonably required by the Vendor for the Fluent Litigation, and (C) otherwise cooperating on a timely basis with the Vendor in the prosecution of the Fluent Litigation. Upon the settlement of the Fluent Litigation following the Closing, Purchaser agrees to cause the Corporation to promptly pay over to the Vendor all proceeds of such settlement.

Following the Closing, the Purchaser shall assume carriage of and control over the defense of the litigation matters identified as “Collective Bargaining” in the column entitled “Type” set forth in Schedule 3.1(ii) of the Disclosure Letter (the “Collective Bargaining Litigation”) at its cost and the Vendor shall cooperate with the Purchaser, provided that such cooperation shall not cause undue interference to the ordinary conduct of the business of Vendor or Parent, at Purchaser’s cost, in prosecution of such litigation matters, including (A) making available to the Purchaser, at Purchaser’s cost, those employees of the Vendor or Parent whose assistance, testimony or presence is necessary to assist the Purchaser in such litigation matters, (B) providing, at Purchaser’s cost, all records and other materials in the possession of the Corporation reasonably required by the Purchaser for such litigation matters, and (C) otherwise cooperating on a timely basis with the Purchaser in the prosecution of such litigation matters. Vendor shall have the right to participate in any such Collective Bargaining Litigation matters at its cost.

Following the Closing, the Vendor shall continue to assume carriage of and control over the defense of the non-Collective Bargaining Litigation matters set forth in Schedule 3.1(ii) of the Disclosure Letter at its cost and the Purchaser shall cooperate with the Vendor, provided that such cooperation shall not cause undue interference to the ordinary conduct of the Business, at Vendor’s cost, in prosecution of such litigation matters, including (A) making available to the Vendor, at Vendor’s cost, those Employees whose assistance, testimony or presence is necessary to assist

No Party will enter into any settlement in respect of the litigation matters set forth in Schedule 3.1(ii) of the Disclosure Letter, except with the consent of the other Parties (such consent not to be unreasonably withheld, conditioned or delayed).

Guarantees

Conditions for the Benefit of Purchaser

Truth of Representations and Warranties and Performance of Covenants

(A) Vendor’s Core Representations in Sections 3.1(a), 3.1(f), 3.1(g), 3.1(qq), 4.1(a), 4.1(d), 4.1(e), 4.1(f), 4.1(g), 4.2(a), 4.2(d) and 4.2(e) will be true and accurate in all respects (except in the case of Section 3.1(f), for de minimus inaccuracies) on the Closing Date with the same force and effect as if made at and as of the Closing Date (except to the extent that such representations and warranties refer specifically to an earlier date, in which case such representations and warranties will have been true and correct as of such earlier date), and (B) Vendor’s Core Representations in Sections 3.1(b), 3.1(c)(i), 3.1(q), 4.1(b)(i) and 4.2(b)(i) will be true and

all other representations and warranties of Vendor and Parent made pursuant to this Agreement will be true and accurate in all respects (disregarding for purposes of this Section 7.1(a)(ii) any materiality or Material Adverse Effect qualification contained in any such representation or warranty, other than the phrase “Material Contract”) on the Closing Date with the same force and effect as if made at and as of the Closing Date (except to the extent that such representations and warranties refer specifically to an earlier date, in which case such representations and warranties will have been true and correct as of such earlier date), except where the failure of such representations and warranties to be so true and correct in all respects, has not had, individually or in the aggregate, a Material Adverse Effect;

the covenants contained in this Agreement to be performed by Vendor and Parent on or before the Closing Date will have been performed in all material respects and neither Vendor nor Parent will be in material breach, default or violation of any agreement on its part contained in this Agreement;

Competition Act Approval

No Legal Action

No Material Adverse Effect

Minimum Customers

Conditions for the Benefit of Vendor

Truth of Representations and Warranties and Performance of Covenants

the representations and warranties of Purchaser (i) in Sections 5.1(a) (Incorporation and Qualification), 5.1(b) (No Conflict), and 5.1(c) (Authority and Enforceability) (“Purchaser’s Core Representations”) will, in each case, be true and accurate in all respects on the Closing Date with the same force and effect as if made at and as of the Closing Date (except to the extent that such representations and warranties refer specifically to an earlier date, in which case such representations and warranties will have been true and correct as of such earlier date);

all other representations and warranties of Purchaser made pursuant to this Agreement will be true and accurate in all respects (disregarding for purposes of this Section 7.2(a)(ii) any materiality or Material Adverse Effect qualification contained in any such representation or warranty,

the covenants contained in this Agreement to be performed by Purchaser on or before the Closing Date will have been performed in all material respects and Purchaser will not be in material breach, default or violation of any agreement on its part contained in this Agreement;

Competition Act Approval

No Legal Action

Frustration of Conditions to the Closing.

Termination Rights

by mutual written consent of Purchaser and Vendor;

by Purchaser by notice in writing, if:

there has been a material breach of this Agreement by Vendor or Parent that would give rise to the failure of any of the conditions specified in Section 7.1 to be satisfied and such breach has not been waived by Purchaser in writing or cured within 30 days by Vendor or Parent following written notice of such breach by Purchaser; or

if any of the conditions set forth in Section 7.1 have not been satisfied or waived on or prior to the Outside Date and Purchaser has not waived such conditions in writing on or prior to the Outside Date;

by Vendor by notice in writing, if:

there has been a material breach of this Agreement by Purchaser that would give rise to the failure of any of the conditions specified in Section 7.2 to be satisfied and such breach has not been waived by Vendor in writing or cured within 30 days by Purchaser following written notice of such breach by Vendor; or

if any of the conditions set forth in Section 7.2 have not been satisfied or waived on or prior to the Outside Date and Vendor has not waived such condition in writing on or prior to the Outside Date

Effects of Termination

Date, Time and Place of Closing

Closing Procedures

Subject to satisfaction or waiver by the relevant Party of the conditions to Closing set forth in Article 7, on the Closing Date, Vendor will deliver actual possession of the Purchased Shares to Purchaser and, upon such delivery, Purchaser will pay or satisfy the Estimated Purchase Price in accordance with Section 2.5.

Deliveries by Vendor

certificates representing the Purchased Shares accompanied by irrevocable stock transfer powers duly executed in blank by the holders of record;

certified copies of (i) the Governing Documents of the Corporation and Vendor, (ii) all required resolutions of Vendor and Parent approving the entering into and completion of the transactions contemplated by this Agreement, and (iii) the resolution of the board of directors of the Corporation authorizing the transfer of the Purchased Shares;

a certificate of status, compliance, good standing or like certificate with respect to the Corporation issued by appropriate government officials of its jurisdictions of incorporation;

the Ancillary Agreements, duly executed by each Person party thereto other than Purchaser;

the Vendor’s Closing Certificates;

the Minimum Customer Certificate;

the minute books of the Corporation;

a duly executed resignation effective as at the Closing of such directors and officers of the Corporation as requested by Purchaser and duly executed releases by such directors and officers in favour of Purchaser and the Corporation;

evidence that each domain name owned by the Corporation has been unlocked, and a list of such domain names together with the authorization code for each domain to be transferred will have been sent to ***@*** with a cc: to Purchaser’s legal counsel; and

all such other documents and instruments that Purchaser may reasonably request to effect the transactions contemplated by this Agreement.

Deliveries by Purchaser

certified copies of (i) the Governing Documents of Purchaser and all required resolutions of Purchaser approving the entering into and completion of the transactions contemplated by this Agreement;

a certificate of status, compliance, good standing or like certificate with respect to Purchaser issued by appropriate government officials of its jurisdictions of incorporation;

the Purchaser’s Closing Certificate;

the Ancillary Agreements, duly executed by Purchaser as applicable;

evidence that the R&W Insurance Policy has been issued to Purchaser;

the Estimated Purchase Price payable pursuant to Section 2.5(b); and

all such other documents and instruments that Vendor may reasonably request to effect the transactions contemplated by this Agreement.

Books and Records

Further Assurances

Tax Matters

Part III.1 Tax. If the Corporation is assessed Part III.1 Tax under the ITA, Vendor undertakes to execute and deliver, and Purchaser to cause the Corporation to execute and deliver, any election (and applicable concurrences) under subsection 185.1(2) of the ITA and the corresponding provisions of any applicable provincial or territorial legislation within filing due date of such election. Vendor accepts responsibility for the related Taxes.

Amended Tax Returns. Notwithstanding anything to the contrary in this Agreement, neither Purchaser nor the Corporation shall file any amended Tax Return relating to the Corporation with respect to taxable periods or portions thereof ending on or prior to the Closing Date relating to the Corporation without a written consent of Vendor. If Purchaser or the Corporation is required by Law to file an amended Tax Return for the Corporation (or otherwise change such Tax Returns) or make an election with respect to taxable periods or portions thereof ending on or prior to the Closing Date, Vendor, shall have control over the preparation and filing of such amended return.

Filing of Tax Returns for Pre-Closing Periods.

Vendor will work with the Corporation to prepare and Purchaser will cause the Corporation to file all Tax Returns for the Corporation that are due after the Closing Date in respect of periods ending on or before the Closing Date, which Tax Returns must be prepared and filed on a timely basis consistent with the Corporation’s existing procedures and past practice for preparing Tax Returns. Vendor shall provide Purchaser with a draft of such Tax Returns at least 55 days before the date on which such Tax Returns are required by Law to be filed with the relevant Governmental Entity (or such other date as is mutually agreed to by Vendor and Purchaser in writing). Purchaser shall have the right to review the draft of the Tax Returns provided to it by Vendor and make any comments that it deems appropriate, no later than 15 days after being provided with drafts by Vendor, and Vendor agrees, acting reasonably, to consider whether to make any changes to such Tax Returns requested by Purchaser (acting reasonably), provided that such changes are consistent with the terms of this Agreement and do not give rise to any additional claim for Damages by Purchaser under Article 10.

Purchaser may cause the Corporation to make the election referred to in subsection 256(9) of the ITA, and comparable provisions of applicable provincial or territorial legislation, and to file such election for the Corporation’s taxation year ending immediately before the Closing.

Purchaser may cause the Corporation to make an election under paragraph 111(4)(e) of the ITA and comparable provisions of applicable provincial or territorial legislation in its Tax Return for the Corporation’s taxation year ending immediately before the Closing (“111(4)(e) Election”). Purchaser will be responsible for additional income Tax that arises, if any, as a result of the 111(4)(e) Election.

Refunds. Purchaser shall promptly pay to Vendor, as an increase of the Purchase Price, an amount equal to any refunds of Taxes paid with respect to the Corporation attributable to any periods ending on or before or which include the Closing Date (plus an amount equal to any interest received with respect thereto from any applicable Governmental Entity, but net of any costs incurred in obtaining such refunds) to the extent not shown or reflected in the Final Statement other than to the extent that such refund relates to the carryback of any loss, credit or other tax attribute arising after Closing.

Tax Information. Vendor and Purchaser 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 purposes of complying with the Corporation’s obligations under the ITA and shall preserve such data and other information until the expiration of any applicable limitation period under any applicable law with respect to Taxes.

Tax Audits. Purchaser shall, and shall cause the Corporation to, promptly inform Vendor of any written audit inquiries received with respect to the representations and warranties in Sections 3.1(kk) (Tax Matters) that could give rise to a claim for Damages under this Agreement, and shall provide Vendor with the sole right to make representations on behalf of the Corporation.

Tax Reassessments. If, at any time, Purchaser or the Corporation receives any written proposal to audit, assess or reassess, or any assessment or reassessment, that could give rise to a claim for Damages against Vendor under this Agreement (an “Assessment”), Purchaser shall or shall cause the Corporation to deliver to Vendor within 20 days of receiving the Assessment, a copy of the Assessment on the assumption that the Assessment is valid and binding.

Notice Requirement. The failure of Purchaser to give Vendor any notice required by Sections 9.3(f) and 9.3(g) with respect to a Tax matter described in Sections 9.3(f) and 9.3(g) shall relieve Vendor of its obligations under this Agreement with respect to the Tax matters covered by such required notice to the extent that such failure precludes Vendor from managing or challenging the Tax matter as contemplated by Sections 9.3(f) and 9.3(g) or any related Tax Contest as contemplated by Section 9.3(i).

Tax Proceedings.

Where an Assessment relates solely to a Pre-Closing Tax Period, Vendor shall have, at its own expense and employing counsel of its own choice, the exclusive authority to control any submissions in respect of such Assessment and any objection or appeal in respect of such Assessment (each, a “Tax Contest”) and may make all decisions in connection with such Tax Contest, unless such Tax Contest may reasonably be expected to have a material adverse impact upon Taxes for a period other than a Pre-Closing Tax Period. If Vendor fails within 20 Business Days of receipt of an Assessment by the Vendor to assume control of a Tax Contest in accordance with this Section 9.3(i)(i), then Vendor shall be deemed to have waived its right to control the Tax Contest and Purchaser shall have the right (without prejudice to its right to be indemnified for the indemnified Taxes at issue) to settle and/or dispute the matter as it deems reasonable in its sole judgment.

Vendor and Purchaser shall jointly control and participate in all proceedings taken in connection with (a) any Tax Contest relating to Taxes for any taxable period that includes, but does not begin or end on, the Closing Date, (b) any Tax Contest relating partly to Pre-Closing Tax Periods and partly to other taxable periods, and (c) any Tax Contest relating solely to a Pre-Closing Tax Period that may reasonably be expected to have a material adverse impact upon Taxes for a period other than a Pre-Closing Tax Period. Neither Vendor nor Purchaser shall settle any such Tax Contest without the prior written consent of the other, which consent shall not be unreasonably withheld, conditioned or delayed.

Indemnification in favour of Purchaser

any failure of Vendor or Parent to perform or fulfil any of their respective covenants or obligations under this Agreement;

any breach or inaccuracy of any representation or warranty given by Vendor or Parent in Sections 3.1, 4.1 and 4.2, it being understood that, for purposes of determining any breach or inaccuracy of any such representations or warranties and calculating the amount of any Damages as a result of, in respect of or arising out of any breach or inaccuracy, all “material”, “materiality”, “in all material respects” and “Material Adverse Effect” qualifications contained in such representations will be disregarded;

Taxes of the Corporation for a Pre-Closing Tax Period, except to the extent reflected in the Final Statement and therefore included in Indebtedness;

the matters disclosed in Schedule 3.1(ii) (Litigation) of the Disclosure Letter;

the Pre-Closing Reorganization;

any inaccuracy in the Minimum Customer Certificate, but only to the extent such inaccuracy is as a result of the Corporation having fewer than 500,000 Active Customer Accounts at the time of Closing (it being understood and agreed that the Damages arising pursuant to this Section 10.1(f) will be calculated on a basis consistent with the formula in clause (ii) of the definition of “Inactive Account Amount” and Active Customer Accounts will include any Customer Accounts that, during the Interim Period, ceased being Active Customer Accounts as a result of them becoming customers of Purchaser or its Affiliates);

the Corporation’s minority interest in Ideal Life Inc. and the sale, compromise, redemption or disposition thereof, including in connection with any Person seeking to impose liability on Purchaser or any of its Affiliates based upon any theory of successor liability or based on any claim of fraudulent transfer or any other similar claims;

the misclassification, under applicable Law, of any Contractor, prior to the Closing; and

any claim made by any Governmental Entity against any of Purchaser or its Affiliates or the Corporation for failure to have made any required Tax withholdings on any payments made to Vendor pursuant to any of the transactions contemplated herein or under the Ancillary Agreements (other than in respect of the Transition Services Agreement).

Indemnification in favour of Vendor

any failure of Purchaser to perform or fulfil any of its covenants or obligations under this Agreement;

any breach or inaccuracy of any representation or warranty given by Purchaser in Section 5.1, it being understood that, for purposes of determining any breach or inaccuracy of any such representations or warranties and calculating the amount of any Damages as a result of, in respect of or arising out of any breach or inaccuracy, all “material”, “materiality”, “in all material respects” and “Material Adverse Effect” qualifications contained in such representations will be disregarded; and

any obligation or liability of Vendor arising after the Closing Date in connection with, arising from or relating to the Vendor Guarantees.

Time Limitations

The representations and warranties contained in Section 3.1, Section 4.1, Section 4.2 and Section 5.1 shall survive the Closing and shall continue for a period of 18 months from the Closing Date, except that:

Vendor’s Core Representations and the corresponding representations and warranties set out in Vendor’s Closing Certificate will survive Closing and continue in full force and effect until expiry of the ultimate limitation period under the Limitations Act;

Purchaser’s Core Representations and the corresponding representations and warranties set out in Purchaser’s Closing Certificate will survive Closing and continue in full force and effect until expiry of the ultimate limitation period under the Limitations Act;

the representations and warranties set out in Sections 3.1(kk) (Tax Matters) and Section 4.1(f) (Residence of Vendor) will survive until the date that is 30 days after the expiration of the period (having regard to any consent, waiver, agreement or other document that extends the

a breach of any representation and warranty in respect of which a claim is made based on Fraud on the part of Vendor, the Corporation, Parent or Purchaser, as the case may be, shall survive the Closing and continue in full force and effect until expiry of the ultimate limitation period under the Limitations Act.

The indemnification obligations of the Vendor pursuant to Section 10.1(h) shall continue for a period of 24 months from the Closing Date.

The covenants and obligations that by their terms apply or are to be performed in whole or in part after the Closing shall continue until performed and the covenants and obligations that by their terms apply or are to be performed in their entirety on or prior to the Closing shall terminate at the earlier of (x) the time at which they are performed and (y) immediately following the Closing Date.

An obligation to indemnify for Damages will continue after the end of the applicable survival period set forth in this Agreement if a claim with respect to such Damages was made in accordance with this Agreement before the end of the applicable survival period. Subject to Section 10.4 and provided that a claim is made in accordance with this Article 10 before the end of the applicable survival period, then the party making such claim may make subsequent claims directly related to or arising from the same matter in respect of such claim if the nature and extent of the Damages is not known at the time such claim is made, even if such subsequent claims are made after the expiry of the applicable survival period.

Limitation on Damages

Vendor has no obligation to make any payment for Damages for a breach of a representation or warranty pursuant to Section 10.1(b) or Damages arising pursuant to Section 10.1(h) until the total of all Damages arising from such indemnification obligations exceeds $2,625,000 (the “Deductible”). Once the total of all Damages arising pursuant to Sections 10.1(b) and 10.1(h) exceeds the Deductible, Vendor shall be fully liable for Damages in excess of the Deductible, up to an aggregate maximum amount equal to $2,625,000 (the “Cap”). The limitations contained in this Section 10.4(a) shall not apply in the case of a breach or inaccuracy of the representations and warranties set out in Sections 3.1(kk) (Tax Matters) and Section 4.1(f) (Residence of Vendor), a breach of Vendor’s Core Representations or any claim involving Fraud on the part of Vendor, Parent or the Corporation.

Purchaser has no obligation to make any payment for Damages for a breach of a

Vendor’s indemnification obligations for breach or inaccuracy of the representations and warranties set out in Sections 3.1(kk) (Tax Matters) and Section 4.1(f) (Residence of Vendor), a breach or inaccuracy of Vendor’s Core Representations, or indemnifiable matters set forth in Section 10.1(a) and Sections 10.1(c) through 10.1(g) and Section 10.1(i) shall be limited to an aggregate maximum amount equal to the Purchase Price. Vendor’s Indemnification obligations for the indemnifiable matter set forth in Section 10.1(h) shall be limited to an aggregate maximum amount equal to $10,000,000. Purchaser’s indemnification obligations for breach or inaccuracy of Purchaser’s Core Representations or indemnifiable matters set forth in Sections 10.2(a) and 10.2(c) shall be limited to an aggregate maximum amount equal to the Purchase Price.

The amount of the Damages suffered by Purchaser Indemnified Parties shall be reduced to the extent of the Tax benefit (net of any Tax costs) directly resulting from the occurrence of such Damages, but only to the extent such benefit is actually realized by Purchaser in a year prior to the year in which such Damages are suffered (pursuant to an amended Tax Return), the year in which such Damages are suffered, or in the two years immediately thereafter.

Purchaser acknowledges and agrees for itself and the Purchaser Indemnified Parties that:

the only recourse of the Purchaser Indemnified Parties at any time for Damages pursuant to Section 10.1(b) (other than Damages in respect of a breach or inaccuracy of the representations and warranties set out in Sections 3.1(kk) (Tax Matters) and Section 4.1(f) (Residence of Vendor), a breach of Vendor’s Core Representations or any claim involving Fraud on the part of Vendor, Parent or the Corporation) in excess of the Cap shall be to file a claim under the R&W Insurance Policy; and

in respect of Damages arising from a breach or inaccuracy of the representations and warranties set out in Section 3.1(kk) (Tax Matters) and Section 4.1(f) (Residence of Vendor), the matters set forth in Section 10.1(c) or a breach of Vendor’s Core Representations, prior to making a claim against Vendor or Parent for such Damages, Purchaser shall first file a claim against the R&W Insurance Policy (provided that the retention amount under such policy has been exceeded and that the coverage under such policy has not been exhausted) and shall take commercially reasonable steps to enforce recovery under such policy. To the extent that Purchaser does not obtain recovery for such Damages under the R&W Insurance Policy for any reason, then Vendor shall be required to indemnify Purchaser in accordance with Article 10.

Notwithstanding any provision in this Agreement, no Party shall be liable to any other Person under this Article 10 for any punitive damages of such other Person relating to the breach or alleged breach hereof, except if and to the extent any such damages are recovered against an Indemnified Party pursuant to a Third Party Claim.

Notification

Defense of Third Party Claim

Subject to Sections 9.3(g) and 9.3(i), if any legal proceeding shall be instituted or any claim or demand shall be asserted by a third party against the Indemnified Party (each a “Third Party Claim”), then the Indemnifying Party shall have the right, after receipt of the Indemnified Party’s notice under Section 10.5 and upon giving notice to the Indemnified Party within 20 days of such receipt, to defend the Third Party Claim at its own cost and expense with counsel of its own selection, provided that:

the Indemnified Party shall at all times have the right to fully participate in the defense at its own expense;

the Indemnifying Party unconditionally acknowledges in writing that it will indemnify and hold the Indemnified Party harmless with respect to the Third Party Claim;

the Third Party Claim does not relate to matters where a Purchaser Indemnified Party determines in good faith that resolution of such Third Party Claim could set a materially adverse precedent for the ongoing operations of the Business, as conducted by Purchaser or its Affiliates following the Closing Date;

if the Indemnifying Party is also a party to the Third Party Claim, the Indemnified Party determines in good faith that joint representation would not be inappropriate;

in the reasonable judgement of the Indemnified Party, the estimated amount of likely Damages in connection with such Third Party Claim is not greater than the unused portion of the maximum liability the Indemnifying Party is liable for under this Agreement;

in the reasonable judgment of the Indemnified Party, such Third Party Claim will not involve material reputational or regulatory risks to the Indemnified Party;

the Third Party Claim seeks only monetary damages and does not seek any injunctive or other relief against the Indemnified Party; and

legal counsel chosen by the Indemnifying Party is satisfactory to the Indemnified Party, acting reasonably.

If the Indemnifying Party fails 20 days from receipt of the notice of a Third Party Claim to give notice of its intention to defend the Third Party Claim in accordance with Section 10.5, then the Indemnifying Party shall be deemed to have waived its right to defend the Third Party Claim and the Indemnified Party shall have the right (but not the obligation) to undertake or to cause the Indemnifying Party to undertake the defence of the Third Party Claim and compromise and settle the Third Party Claim at the risk and expense of the Indemnifying Party; provided, however, that the obligation of the Indemnifying Party to indemnify the Indemnified Party in respect of the Third Party Claim shall terminate if the Indemnified Party settles such Third Party Claim without the consent of the Indemnifying Party (such consent not to be unreasonably withheld, conditioned or delayed).

Where the defence of a Third Party Claim is being undertaken and controlled by the Indemnifying Party, the Indemnified Party will use its commercially reasonable efforts to make available to the Indemnifying Party those Employees whose assistance, testimony or presence is necessary to assist the Indemnifying Party in evaluating and defending any such claims provided the Indemnifying Party reimburses the Indemnified Party for reasonable and documented expenses associated with any Employees made available by the Indemnified Party to the Indemnifying Party pursuant to this Section 10.6(c), which expenses shall not exceed the actual cost to the Indemnified Party associated with such Employees.

With respect to any Third Party Claim, the Indemnified Party shall make available to the Indemnifying Party or its representatives on a timely basis all documents, records and other materials in the possession of the Indemnified Party, at the expense of the Indemnifying Party, reasonably required by the Indemnifying Party for its use in defending any such claim and shall otherwise cooperate on a timely basis with the Indemnifying Party in the defence of such claim.

The Indemnifying Party will not, except with the consent of the Indemnified Party (such consent not to be unreasonably withheld, conditioned or delayed), enter into any settlement that (i) is not entirely indemnifiable by the Indemnifying Party, (ii) requires the Indemnified Party to admit any wrongdoing, take or refrain from taking any action, acknowledge any rights of the Person making the Third Party Claim or waive any rights that the Indemnified Party may have against the Person making the Third Party Claim, (iii) provides for injunctive or other equitable relief against the Indemnified Party, and (iv) does not include as an unconditional term thereof the giving by the Person or Persons asserting such Third Party Claim to all Indemnified Parties of an unconditional release from all liability with respect to such Third Party Claim.

Exclusive Remedy

Subject to Section 10.7(b) and except in respect of any claim involving Fraud, the rights of indemnity set forth in this Article 10 are the sole and exclusive remedy of each Party in respect of any misrepresentation, incorrectness in or breach of any representation or warranty, or breach of covenant, by the other Party under this Agreement or any certificate given pursuant to this Agreement, but not in respect of any agreement delivered pursuant to this Agreement. This Section 10.7 shall not apply to any rights of indemnity arising as a result of or pursuant to Section 11.6.

Notwithstanding Section 10.7(a), the Parties acknowledge that the failure to comply with a covenant or obligation contained in this Agreement may give rise to irreparable injury to a Party inadequately compensable in damages. Accordingly, a Party may seek to enforce the performance of this Agreement by injunction or specific performance upon application to a court of competent jurisdiction without proof of actual damage (and without the requirement of posting a bond or other security).

One Recovery

Duty to Mitigate

Guarantee

Payments

Notices