DATED as of the 13th day of May, 2011 BETWEEN THE VENDORS - and - GILLES MAZOYER - and - 7834080 CANADA INC.

1.1

1.1.1

“Accounting Records” means all of the books of account, accounting records and other financial data and information of the Corporation and includes all records, data and information stored electronically, digitally or on computer related media;

1.1.2

“Accounts Receivable” means any and all trade and other accounts receivable of the Corporation;

1.1.3

“Adjustment” has the meaning set out in Section 2.5;

1.1.4

“Adjustment Summary” has the meaning set out in Section 2.4, a form of which is attached as Exhibit 2.4;

1.1.5

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with that other Person.  For purposes of this definition, a Person “controls” another Person if that Person directly or indirectly possesses the power to direct or cause the direction of the management and policies of that other Person, whether through ownership of securities, by contract or otherwise and “controlled by” and “under common control with” have similar meanings;

1.1.6

“Agreement” means this Share Purchase Agreement and all Schedules and Exhibits attached hereto;

1.1.7

“Applicable Law” means, in respect of any Person, property, transaction or event, any domestic or foreign statute, law (including the common law), ordinance, rule, regulation, treaty, restriction, regulatory policy, standard, code or guideline, by-law (zoning or otherwise) or Order and directives, policies, guidelines, standards, requirements, notices and protocols that applies in whole or in part to such Person, property, transaction or event;

1.1.8

“BAI Shares” means the 3 250 000 Class “D” and 200 Class “C” Shares in the capital of the Corporation;

1.1.9

“Bargaining Unit” means the Corporation’s bargaining unit represented by SYNDICAT QUÉBÉCOIS DES EMPLOYÉES ET EMPLOYÉS DE SERVICE, SECTION LOCALE 298 (FTQ) and covering the unionized Employees of the Corporation under the Collective Agreement;

1.1.10

“Books and Records” means the Accounting Records and all books, records, books of account, sales and purchase records, lists of suppliers and customers, credit and pricing information, personnel and payroll records, production, inventory and accounts receivable data, tax records, environmental reports, list of potential customers, business reports, marketing and advertising materials, formulae, business, engineering and consulting reports and research and development information and plans and projections of or relating to the Corporation, and all other documents, files, records, maps, site plans, surveys, soil and substratum studies, as–built drawings, appraisals, electrical and mechanical plans and studies, correspondence, and other data and information, financial or otherwise, which are relevant to the Corporation, as applicable, including all data and information stored electronically, digitally or on computer related media;

1.1.11

“Building” means the land and buildings bearing civic address 33 Racine, Farnham (Quebec) and currently owned by the Building Owner;

1.1.12

“Building Owner” means Mazoyer;

1.1.13

“Business” means the type of business carried on by the Corporation immediately prior to the Closing Date, which consists of designing, producing and selling medium and high voltage transformers and line reactors;

1.1.14

“Business Day” means any day other than a Saturday, Sunday or any statutory holiday in the Province of Québec;

1.1.15

“Claim” means any act, omission or state of facts, and any Legal Proceeding, assessment, judgment, settlement or compromise relating thereto, which may give rise to a right to indemnification under Sections 6.1 or 6.2;

1.1.16

“Closing” means the completion of purchase and sale of the Purchased Shares by the Purchaser and the completion of all other transactions contemplated by this Agreement that are to occur contemporaneously therewith;

1.1.17

“Closing Date” means June 30, 2011, or such earlier or later date as may be agreed upon by the Parties, in writing;

1.1.18

“Closing Document” means any document or instrument delivered at or subsequent to the Closing as provided in or pursuant to this Agreement;

1.1.19

“Closing Financial Statements” means the audited financial statements of the Corporation prepared by the Corporation Accountant, as at and for the fiscal period starting July 1, 2010 and ending on the Closing Date, prepared in accordance with Canadian GAAP consistently applied and reconciled by the Corporation Accountant into US GAAP consistently applied (to the extent possible given that the Financial Statements were prepared in accordance with Canadian GAAP) and consisting of a balance sheet, a statement of income, a statement retained earnings and a statement of cash flows, the whole together with the notes attached thereto and the unqualified auditor’s letter pertaining thereto;

1.1.20

“Closing Time” means 10 a.m. Montreal time on the Closing Date or such other time on the Closing Date as the Parties agree that the Closing shall take place;

1.1.21

“Collective Agreement” means any collective agreement, letter of understanding, letter of intent or written communication or agreement with any labour union or employee association that governs the terms and conditions of employment with any Employees;

1.1.22

“Competitive Business” means any Person that is engaged in any business in direct or indirect competition with the Business;

1.1.23

“Consent” means any consent, approval, permit, waiver, ruling, exemption, or acknowledgement from any Person including under the terms of any Contract, Real Property Lease or Equipment Lease issued to or for the benefit of the Corporation which is provided for or required pursuant to the terms of such Contract, Real Property Lease or Equipment Lease in connection with the sale of the Purchased Shares to the Purchaser and the completion of the other transactions contemplated herein or which is otherwise necessary to permit the Parties to perform their obligations or is otherwise required to permit the consummation of the transactions as contemplated herein;

1.1.24

“Constating Documents” means, with respect to any body corporate, partnership or trust, as applicable, the original or restated articles of incorporation, certificates of amendment, articles of amalgamation, articles of arrangement, articles of reorganization, articles of revival, letters patent, memorandum of agreement, special act or statute and any other instrument or organisational document by or pursuant to which the body corporate is incorporated or comes into existence, as well as any partnership agreement, partnership certificate, partnership declaration, trust deed, trust agreement or trust declaration pursuant to which the partnership or trust is formed, settled or comes into existence;

1.1.25

“Contracts” means all contracts, agreements, instruments and other legally binding commitments or arrangements, written or oral, including those listed or identified on any Schedule;

1.1.26

“Corporation” means Bemag Transformer Inc.;

1.1.27

“Corporation Accountant” means collectively Blain, Joyal, Charbonneau and Raymond Chabot Grant Thornton, or any other reputable accounting firm;

1.1.28

“Debt Instrument” means any bond, debenture, promissory note or other instrument evidencing indebtedness for borrowed money or other liability;

1.1.29

“Defending Party” has the meaning set out in Section 6.6;

1.1.30

“Direct Claim” means any Claim asserted against an Indemnitor by an Indemnitee which does not result from a Third Party Claim;

1.1.31

“Dispute Notice” has the meaning set out in Section 2.4;

1.1.32

“Employee” means an individual who is employed by the Corporation whether on a full-time or part-time basis, and whether active or inactive, including an individual on disability leave, pregnancy, parental or other statutory leave or other absence from work;

1.1.33

“Employee Benefit Plans” means all compensation, bonus, deferred compensation, incentive compensation, share purchase, share appreciation, share option, severance or termination pay, vacation pay, hospitalization or other medical, health and welfare benefits, life or other insurance, dental, eye care, disability, salary continuation, supplemental unemployment benefits, profit-sharing, hypothec or credit assistance, employee loan, employee discount, employee assistance, counselling, pension, retirement or supplemental retirement benefit plan, arrangement or agreement, including any defined benefit or defined contribution pension plan, post retirement benefit and post employment benefit plans, and any group registered retirement savings plan, and any other similar employee benefit plan, arrangement or agreement, whether oral or written, formal or informal, funded or unfunded, including policies with respect to holidays, sick leave, short-term or long-term disability, vacations, expense reimbursements and automobile allowances and rights to company-provided automobiles, that are sponsored or maintained or contributed to or required to be contributed to, by the Corporation for the benefit of any of the Employees, former employees or beneficiaries of any of them, whether or not insured and whether or not subject to any Applicable Law, except that the term “Employee Benefit Plans” shall not include any statutory plans with which the Corporation is required to comply, including the Canada Pension Plan, Québec Pension Plan or plans administered pursuant to applicable federal or provincial health, tax, workers’ compensation and employment insurance legislation;

1.1.34

“Employment Agreements” means any Contract relating to an Employee, including any communication of a practice relating to an Employee, that imposes any obligation on the Corporation;

1.1.35

“Encumbrance” means any encumbrance of any kind whatsoever which secures payment or performance of an obligation, and which includes any hypothec, prior claim, mortgage, charge, pledge, lien (including any lien for unpaid Taxes), restriction, option, right of others or security interest or security of any kind, whether fixed or floating, absolute, contingent or conditional;

1.1.36

“Enforceability Limitations” means (i) bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights and (ii) the discretion of the appropriate Governmental Authority with respect to specific performance, injunctive relief or other terms of equitable remedies or similar recourses;

1.1.37

“Environment” means surface waters, ground water, drinking water supply, land-surface, subsurface strata, air, soil, sewer system both inside and outside of buildings and structures, and plant and animal and the environment in the workplace;

1.1.38

“Environmental Laws” means all Applicable Laws, as well as Licenses, Orders, decrees, rules, judgments or injunctions issued, prolongated, approved or entered thereunder relating to the pollution or protection of the Environment;

1.1.39

“Equipment” means equipment and includes machinery, machine tools, motors, furniture, furnishings, fixtures, vehicles (including motor vehicles), computer hardware, tools, parts, and goods (other than consumer goods), wherever located, including all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing;

1.1.40

“Equipment Leases” means all leases of movable property, including those listed on Schedule 3.1.33;

1.1.41

“Escrow Agent” means Fraser Milner Casgrain llp;

1.1.42

“Escrow Agreement” means that certain escrow agreement to be entered into on the Closing Date in the form attached hereto as Exhibit 5.1.12 between the Purchaser and the Escrow Agent;

1.1.43

“Escrowed Funds” has the meaning set out in Section 2.3.1(a);

1.1.44

“Excluded Assets” means the assets set out in Schedule 4.3.2;

1.1.45

“Extraordinary Event” has the meaning set out in Section 3.1.20;

1.1.46

“Farnham Lease” means the lease to be entered into on the Closing Date between the Corporation and the Building Owner in a form to be agreed upon between the Purchaser and the Building Owner, provided that the Farnham Lease shall be a “net net net lease” for a rent of $4.50 per square foot, for an initial term of 3 years, renewable thereafter at the sole option of the Corporation;

1.1.47

“Fiducie Mazoyer Shares” means the 100 Class “A” Shares in the capital of the Corporation;

1.1.48

“Financial Statements” means the annual financial statements of the Corporation for the periods ended June 30, 2009 and June 30, 2010, consisting in each case of a balance sheet, a statement of income, a statement of retained earnings and a statement of change in financial position, the whole together with the notes attached thereto and the letter pertaining thereto as well as the internal financial statements of the Corporation for the period ended March 31, 2011, consisting of a balance sheet and a statement of income, all of which are attached hereto as Schedule 1.1A;

1.1.49

“Gilles Mazoyer Shares” means the 250 000 Class “E” Shares in the capital of the Corporation;

1.1.50

“Government Assistance Programs” has the meaning set out in Section 3.1.50;

1.1.51

“Governmental Authority” means (i) any domestic or foreign government, whether federal, provincial, state, territorial or municipal or any political subdivision of any of the foregoing; and any governmental agency, ministry, department, Tribunal, commission, bureau, board or other instrumentality exercising or purporting to exercise legislative, judicial, quasi-judicial, regulatory or administrative functions of, or pertaining to, government; or any supranational body, (ii) any subdivision or authority of any of the foregoing, or (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the above;

1.1.52

“Guarantee” means any agreement, contract or commitment providing for the guarantee, indemnification, assumption or  endorsement or any like commitment with respect to the obligations, Liabilities or indebtedness of any Person;

1.1.53

“Hazardous Substances” means any toxic waste, pollutant, contaminant, hazardous substance, hazardous material, toxic substance, hazardous waste, special waste, industrial substance or waste, petroleum-derived substance or waste, or any constituent of any of same as such terms are regulated under or defined by any Environmental Law;

1.1.54

“Income Tax Act” means, collectively, the Income Tax Act, R.S.C. 1985, 5th Supplement, the Income Tax Application Rules, R.S.C. 1985, 5th Supplement, and the Income Tax Regulations, in each case as amended to the date hereof;

1.1.55

“Indemnitee” means any Party and its Representatives entitled to indemnification under this Agreement;

1.1.56

“Indemnitor” means any Party obligated to provide indemnification under this Agreement;

1.1.57

“Indemnity Payment” means any amount of a Loss required to be paid pursuant to Section 6.10;

1.1.58

“Intellectual and Industrial Property” means, collectively, all intellectual property used in whole or in part by the Corporation for the carrying on by the Corporation of the Business both domestic and foreign and whether or not registered including:

 

(a)

all trade-marks, trade names, business names, styles, designs, graphics, slogans, logos, service marks, brand names, internet domain names and registrations and other commercial symbols and all applications therefor;

 

(b)

all patents (including divisions, reissues, renewals, re-examinations, continuations, continuations in part and extensions) and all applications therefor;

 

(c)

all copyrights, integrated circuit topographies, industrial designs and other industrial property rights and all applications therefor;

 

(d)

all know-how, inventions, trade secrets, including business methodologies and processes, confidential information and any licensed property or technology, but excluding information which exists in the public domain; and

 

(e)

all computer software and software systems and rights related thereto including all related code, specifications, documentation, revisions, enhancements, and modifications thereto and all data, databases and related documentation, in whatever form and media, and including those set forth in Schedule 3.1.48;

1.1.59

“Intellectual and Industrial Property Rights” means:

 

(a)

any and all proprietary rights anywhere in the world provided under:

 

(b)

patent law; copyright law; trademark law; design patent or industrial design law; semiconductor chip or mask work law; trade secret law; or

 

(c)

any other statutory provision or common law principle applicable to rights to intellectual property which may provide a right in either:

 

(d)

ideas, formulae, algorithms, concepts, inventions, technologies, software, data compilations, drawings, specifications, confidential business information, procedures or know-how generally, including without limitation, trade secrets; or

 

(e)

the expression or use of such ideas, formulae, algorithms, concepts, inventions technologies, software, data compilations, drawings, specifications, confidential business information, procedures or know-how; and

 

(f)

any and all applications, registrations, licenses, sub-licenses, franchises, agreements or any other evidence of a right in any of the foregoing; and

 

(g)

internet domain names.

1.1.60

“Interested Person” means any Principal, any present or former officer, director, shareholder, employee or partner, as applicable, of the Corporation or any Person with which the Corporation does not deal at arm’s length within the meaning of the Income Tax Act;

1.1.61

“Interim Period” means the period from and including the time of execution of this Agreement to and including the Closing Time;

1.1.62

“Inventory” means all inventories of whatsoever nature, kind or description, including raw materials, work-in-progress, finished goods and packaging, manufacturing supplies and spare parts;

1.1.63

“Legal Proceeding” means any litigation, action, suit, investigation, audit, hearing, claim, complaint, grievance, arbitration or mediation proceeding or other proceeding and includes any appeal or review and any application for same;

1.1.64

“Liabilities” means, in relation to a Person, any and all liabilities, whether accrued, absolute, actual, contingent, fixed or otherwise, matured or unmatured;

1.1.65

“Licence” means any licence, certification, permit, approval, authorization, certificate directive, order, variance, registration, right, privilege, concession or franchise issued, granted, conferred or otherwise created by any Governmental Authority;

1.1.66

“License Agreement” means the acknowledgment of property and license agreement in respect of certain automated production technology to be entered into on the Closing Date between Mazoyer and the Corporation in a form to be agreed upon between Mazoyer and the Purchaser;

1.1.67

“Licensed I.P.” has the meaning set out in Section 3.1.48(a);

1.1.68

“Loss” means any and all loss, liability, damage, cost, expense, charge, fine, penalty or assessment, resulting from or arising out of any Claim, including the costs and expenses of any Legal Proceeding, assessment, judgment, settlement or compromise relating thereto and all interest, fines and penalties and reasonable legal fees and expenses incurred in connection therewith, net of any insurance proceeds received by any Indemnified Party and tax recovery of such Indemnified Party;

1.1.69

“Net Equity” means the book value of all assets of the Corporation minus the book value of all Liabilities of the Corporation as reflected in the Closing Financial Statements;

1.1.70

“Notice Period” has the meaning set out in Section 6.5;

1.1.71

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

1.1.72

“Owned I.P.” has the meaning set out in Section 3.1.48(a);

1.1.73

“Parties” means the Vendors, Mazoyer and the Purchaser; and “Party” means any one of them;

1.1.74

“Permitted Encumbrances” means those encumbrances listed on Schedule 1.1C;

1.1.75

“Person” includes any individual (whether acting as an executor, administrator, legal representative or otherwise), body corporate, limited liability company, unlimited liability company, limited liability corporation, partnership, limited liability partnership, sole proprietorship, firm, joint stock company, joint venture, trust, unincorporated association, unincorporated organization, syndicate, Governmental Authority and any other legal or business entity, including any judicial entity or organization of any nature whatsoever;

1.1.76

“Personal Information” means information about an identifiable individual, but does not include business contact information when collected, used or disclosed for the purposes of contacting an individual in that individual's capacity as an employee or an official of an organization and for no other purpose;

1.1.77

“Pre-Closing Transactions” means the pre-closing transactions listed in Schedule 4.3.2;

1.1.78

“Principal” means Gilles Mazoyer and Christian Roberge (collectively, the “Principals”);

1.1.79

“Principal Employment Agreement” means the employment agreement to be entered into on the Closing Date between Christian Roberge and the Corporation in a form to be agreed upon between Christian Roberge and the Purchaser;

1.1.80

“Purchase Price” has the meaning set out in Section 2.2;

1.1.81

“Purchased Shares” means collectively the BAI Shares, the Fiducie Mazoyer Shares and the Gilles Mazoyer Shares;

1.1.82

“Purchaser” has the meaning set out on the first page of this Agreement;

1.1.83

“Purchaser’s Accountants” means RSM Richter;

1.1.84

“Purchaser’s Advisors” means the directors, officers, employees, auditors, legal counsel and financial and tax advisors of the Purchaser and any other Person authorized in writing by the Purchaser to represent the Purchaser for purposes of Section 4.1.1;

1.1.85

“Real Property Leases” means real or immovable property leases and other rights of occupancy relating to real or immoveable property, whether as lessor or lessee;

1.1.86

“Regulatory Approval” means any approval, consent, ruling, authorization, notice, permit or acknowledgement that may be required from any Person by Applicable Law, the terms of any Licence or the conditions of any Order which is required pursuant to such Applicable Law, Licence or Order in connection with the sale of the Purchased Shares to the Purchaser and the completion of the other transactions contemplated herein or therein, or which is otherwise necessary to permit the Parties to perform their obligations hereunder or thereunder or required to permit the consummation of the transactions contemplated herein or therein;

1.1.87

“Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching, migration or other release or escape into the Environment;

1.1.88

“Representative” means, in respect of an Indemnitee, each director, officer, employee, agent, attorney, accountant, professional advisor and other representative of that Indemnitee and, in respect of the Purchaser, also includes the Corporation following Closing;

1.1.89

“Shares” means all of the Shares in the capital of the Corporation;

1.1.90

“Tax” or “Taxes” means all taxes, assessments, charges, dues, duties, rates, fees, imposts, levies and similar charges of any kind lawfully levied, assessed or imposed by any Governmental Authority under any applicable Tax Legislation, including, Canadian federal, provincial, territorial, municipal and local, foreign or other income, capital, goods and services, sales, use, consumption, excise, value-added, business, immovable property, movable property, transfer, franchise, withholding, payroll, or employer health taxes, customs, import, anti-dumping or countervailing duties, Canada Pension Plan or Québec Pension Plan contributions, employment insurance premiums, and provincial workers’ compensation payments, including any interest, penalties and fines associated therewith;

1.1.91

“Taxation Act” means the Taxation Act, R.S.Q. c.i-3 and the Regulation respecting the Taxation Act, R.R.Q. c.i-3, r.1, in each case as amended as at the date hereof;

1.1.92

“Tax Legislation” means, collectively, the Income Tax Act, the Taxation Act and all federal, provincial, territorial, municipal, foreign, or other statutes imposing a tax, including all treaties, conventions, case law, interpretation bulletins, circulars and releases, rules, regulations, orders, and decrees of any jurisdiction;

1.1.93

“Tax Returns” means all reports, elections, returns, and other documents required to be filed under the provisions of any Tax Legislation and any tax forms required to be filed, whether in connection with a Tax Return or not, under any provisions of any applicable Tax Legislation;

1.1.94

“Third Party Accountant” means the Brossard office of Samson Bélair Deloitte & Touche LLP;

1.1.95

“Third Party Claim” means any Claim asserted against an Indemnitee that is paid or payable to, or claimed by, any Person who is not a Party;

1.1.96

“Transferred Information” means the Personal Information to be disclosed or conveyed to the Purchaser or to any of its representatives or agents by or on behalf of the Corporation or the Vendors as a result of or in conjunction with the transactions contemplated herein, and includes all such Personal Information disclosed to the Purchaser and in its custody or control during the period leading up to and including the completion of the transactions contemplated herein;

1.1.97

“Tribunal” means any court (including a court of equity), arbitrator or arbitration panel, stock exchange, professional or business organization or association or other body exercising adjudicative, regulatory, judicial or quasi-judicial powers;

1.1.98

“Vendor” has the meaning set out in the recitals hereto and “Vendors” means all of them, provided that, for the purposes of Liabilities and obligations of the Vendors hereunder, including representations, warranties, indemnities and, as applicable, covenants, all references to a “Vendor” or “Vendors” herein shall be deemed to include Mazoyer;

1.1.99

“Vendors’ Representative” means the representative appointed by and on behalf of the Vendors, collectively, to perform certain administrative functions hereunder, initially being Mazoyer;

1.1.100

“VTI” means Vermont Transformers, Inc.; and

1.1.101

“VTI Transaction” as the meaning set out in Section 5.1.17.

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

1.10

1.11

1.12

1.13

1.13.1

In this Agreement, unless the context requires otherwise, words in one gender include all genders and words in the singular include the plural and vice versa.

1.13.2

The division of this Agreement into Articles, Sections, Sections, Schedules and other subdivisions, the inclusion of headings and the provision of a table of contents are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.  The headings in this Agreement are not intended to be full or precise descriptions of the text to which they refer.

1.13.3

Unless something in the subject matter or context is inconsistent therewith, references herein to an Article, Section, Section, paragraph, clause, Schedule or Exhibit are to the applicable article, section, Section, paragraph, clause, Schedule or Exhibit of this Agreement.

1.13.4

Wherever the words “include”, “includes” or “including” are used in this Agreement or in any Closing Document, they shall be deemed to be followed by the words “without limitation” and the words following “include”, “includes” or “including” shall not be considered to set forth an exhaustive list.

1.13.5

The words “hereof”, “herein”, “hereto”, “hereunder”, “hereby” and similar expressions shall be construed as referring to this Agreement in its entirety and not to any particular Section or portion of it.

1.13.6

Unless otherwise specified, all dollar amounts in this Agreement, including the symbol “$”, refer to Canadian currency.  In the event that any currency figures are required to be converted to Canadian currency for purposes of making any calculations or Adjustments under this Agreement or any Closing Document, all such conversions shall be completed, effected and calculated at the noon nominal exchange rate on the date on which such calculation is made, as indicated by the Bank of Canada currently accessible through www.bankofcanada.ca.

1.13.7

Wherever in this Agreement reference is made to generally accepted accounting principles (“GAAP”), such reference shall be deemed to be to generally accepted accounting principles  in Canada, applicable as at the date on which such principles are applied, provided, however, that the Closing Financial Statements shall be prepared in accordance with both Canadian GAAP and GAAP applicable in the United States.

1.13.8

Unless otherwise indicated, all references in this Agreement to any statute include the regulations thereunder and all applicable guidelines, bulletins or policies made in connection therewith and which are legally binding, in each case as amended, re-enacted, consolidated or replaced from time to time and in the case of any such amendment, re-enactment, consolidation or replacement, reference herein to a particular provision shall be read as referring to such amended, re-enacted, consolidated or replaced provision.

1.13.9

All references herein to any agreement (including this Agreement), document or instrument mean such agreement, document or instrument as amended, supplemented, modified, varied, restated or replaced from time to time in accordance with the terms thereof and, unless otherwise specified therein, include all schedules, exhibits and appendices attached thereto.

1.13.10

The term “ordinary course”, when used in relation to the conduct by the Corporation of the Business, or the conduct of business by any other Person, means any transaction which constitutes an ordinary day-to-day business activity, conducted in a commercially reasonable and businesslike manner, having no unusual or special features, consistent with past practice.

1.13.11

Unless otherwise defined herein, words or abbreviations which have well-known trade meanings are used herein with those meanings.

1.14

Schedule 1.1A

–

Financial Statements

Schedule 1.1B

–

Permitted Encumbrances

Schedule 2.6

–

Allocation of Purchase Price

Schedule 3.1.6

–

Approvals and Consents

Schedule 3.1.10

–

Incorporation, Formation and Organization of the Corporation

Schedule 3.1.14

–

Authorized and Issued Capital of the Corporation

Schedule 3.1.17

–

Regulatory Approvals

Schedule 3.1.19

–

Adjustments to Financial Statements

Schedule 3.1.20

–

Liabilities

Schedule 3.1.21

–

Material Change

Schedule 3.1.22

–

Business carried on Outside Ordinary Course

Schedule 3.1.23

–

Guarantees

Schedule 3.1.24

–

Non-Arm’s Length Transactions

Schedule 3.1.25

–

Employees

Schedule 3.1.26

–

Employee Benefit Plans

Schedule 3.1.27

–

Debt Instruments

Schedule 3.1.29

–

Leased Real Property

Schedule 3.1.32

–

Movable Property

Schedule 3.1.33

–

Equipment Leases

Schedule 3.1.36

–

Sufficiency and Condition of Assets

Schedule 3.1.37

–

Insurance

Schedule 3.1.38

–

Contracts

Schedule 3.1.39

–

Customers and Suppliers

Schedule 3.1.40

–

Vendors’ Suppliers

Schedule 3.1.41

–

Legal Proceedings

Schedule 3.1.42

–

Banking Information

Schedule 3.1.44

–

Accounts Receivable

Schedule 3.1.47

–

Licences

Schedule 3.1.48  

–

Intellectual and Industrial Property

Schedule 3.1.49

–

Privacy Compliance

Schedule 3.1.50

–

Government Assistance Programs

Schedule 3.2.3

–

Consents

Schedule 4.3.2

–

Pre-Closing Transactions

Exhibit 2.4

–

Form of Adjustment Summary

2.1

2.2

2.3

2.3.1

The Purchase Price shall be payable as follows:

 

(a)

an amount equal to four million nine hundred fifty thousand dollars ($4,950,000), shall be paid and satisfied by the Purchaser on the Closing Date by way of bank draft or wire transfer to each of the Vendors as set out in Section 2.6; and

 

(b)

an amount equal to five hundred and fifty thousand dollars ($550,000) (the “Escrowed Funds”) shall be paid and satisfied by the Purchaser on the Closing Date by a bank draft or wire transfer to the account of the Escrow Agent. The Escrowed Funds shall be released in accordance with the Escrow Agreement.

2.4

2.4.1

The Vendors shall, at the Purchaser’s expense, but only up to maximum of forty thousand dollars ($40,000), instruct and cause the Corporation Accountant to prepare and deliver to the Purchaser, as soon as practicable following the Closing, and in any event no later than August 31, 2011, draft Closing Financial Statements in accordance with the provisions hereof.  The Corporation Accountant shall be instructed to deliver to the Purchaser, for review by the Purchaser and the Purchaser’s Accountants, a draft of the Closing Financial Statements, together with a draft statement reflecting the Adjustment (the “Adjustment Summary”) setting forth the amount of the Adjustment and the particulars of how the Adjustment was determined.

2.4.2

The Purchaser shall have fifteen (15) Business Days to review the draft Closing Financial Statements and the draft Adjustment Summary.  The Purchaser shall be entitled to all reasonable access to the Books and Records as well as to the complete files, records and working papers of the Corporation Accountant related to the Corporation for the purpose of investigating and verifying the matters set out in the draft Closing Financial Statements or the draft Adjustment Summary.  Moreover, the Vendors shall cause the Corporation’s Accountant to be available to meet the Purchaser and the Purchaser’s Accountant to discuss the draft Closing Financial Statements and the draft Adjustment Summary.

2.4.3

If the Purchaser is satisfied with the Adjustment set forth therein, it shall sign a copy of such Adjustment Summary to evidence its agreement therewith.  If the Purchaser is not satisfied with the Adjustment set out in the Adjustment Summary or with the contents of the Draft Financial Statements, it shall provide a Dispute Notice and the Purchaser and the Vendors shall adhere to the mechanism for settling such matters as provided for in this Section 2.4.  If the Purchaser does not deliver a Dispute Notice within fifteen (15) Business Days after receipt of the draft Closing Financial Statements and the draft Adjustment Summary, then the Purchaser shall be deemed to have accepted the Closing Financial Statements and the Adjustment Summary.

2.4.4

In the event that the Purchaser wishes to dispute in any way the draft Closing Financial Statements or the draft Adjustment Summary, the Purchaser shall advise the Vendors’ representative in writing with full particulars of such dispute (the “Dispute Notice”) within fifteen (15) Business Days of receipt of the draft Closing Financial Statements or the draft Adjustment Summary and with a copy of such notification to the Corporation Accountant and the Purchaser’s Accountants.  The Purchaser and the Vendors, together with the Corporation Accountant and the Purchaser’s Accountants, respectively, shall, for a period of fifteen (15) Business Days from the date of receipt of the Dispute Notice, attempt to resolve such dispute.  In the event that such dispute cannot be resolved within such fifteen (15) Business Day period, the Purchaser and Vendors shall forthwith refer the matter to the Third Party Accountant.  The Purchaser and Vendors shall, and shall cause their respective accountant or auditor, as the case may be, to provide the Third Party Accountant with any information, documentation and assistance as the Third Party Accountant may request in connection with resolving any said disputes. The Third Party Accountant shall be requested and shall have the right to make any determination or report of the Closing Financial Statements or the Adjustment Summary and to determine the amount, if any, of any Adjustment and the decision of the Third Party Accountant in this regard shall be final and binding on all Parties hereto, and no appeal shall lie therefrom.  The Third Party Accountant shall have sixty (60) days to render a decision.  The fees and expenses of the Corporation Accountant shall be borne by the Vendors and the fees and expenses of the Purchaser’s Accountants shall be borne by the Purchaser.  The fees and expenses of the Third Party Accountant shall be borne fifty percent (50%) by the Vendors and fifty percent (50%) by the Purchaser.

2.4.5

The Third Party Accountant shall be provided with all reasonable access to the books, records and other information of the Corporation (including its Accounting Records) as the Third Party Accountant may reasonably request, from time to time, for the purpose of reviewing all transactions and financial books, records and accounts required in connection with their calculation of the and the finalization of the Closing Financial Statements.

2.5

2.5.1

The Purchase Price shall be adjusted, upwards or downwards, based on the difference, if any, between the Net Equity reflected in the Closing Financial Statements (provided that the Canadian GAAP figures reflected in the Closing Financial Statement shall be used for the purpose of determining the amount of the Net Equity) and the Adjustment Summary (the “Adjusted Equity”), and an amount of $3,300,000 (the “Benchmark Value”), and:

 

(a)

if the Adjusted Equity and the Benchmark Value are equal, there shall be no additional payments on account of the Purchase Price;

 

(b)

if the Benchmark Value exceeds the Adjusted Equity, the Vendors shall pay to the Purchaser within ten (10) Business Days of the final determination of the Adjustment Summary such difference by bank draft or other means of immediately available funds, provided that if the Vendors fail to so pay, the Purchaser shall have the right at its sole option to (i) set-off such amount against the Escrowed Funds, or (ii) set-off such amount against any other amounts payable by the Purchaser to the Vendors under this Agreement;

 

(c)

if the Adjusted Equity exceeds the Benchmark Value, the Purchaser shall pay to the Vendors within ten (10) Business Days of the final determination of the Adjustment Summary such difference by bank draft, wire transfer or other means of immediately available funds; and

 

(d)

Any adjustment made pursuant to this Section 2.5 shall hereinafter be referred to as the “Adjustment”.

2.6

2.7

2.8

3.1

3.1.1

3.1.2

3.1.3

 

(a)

Fiducie Mazoyer is the sole registered owner of the Fiducie Mazoyer Shares. The Trustees have the rights to transfer, on behalf of the beneficiaries of Fiducie Mazoyer, such Purchased Shares beneficially owned by such beneficiaries. Fiducie Mazoyer holds good and marketable title to the Purchased Shares, and such Purchased Shares are owned free and clear of all Encumbrances.

 

(b)

BAI is the sole registered and beneficial owners of the BAI Shares, BAI holds good and marketable title to the Purchased Shares owned by it, and such Purchased Shares are owned free and clear of all Encumbrances.

 

(c)

Mazoyer is the sole registered and beneficial owners of the Mazoyer Shares, Mazoyer holds good and marketable title to the Purchased Shares owned by him, and such Purchased Shares are owned free and clear of all Encumbrances.

 

(d)

There is no Contract, option or any other right of another Person binding upon or which at any time in the future may become binding upon any of the Vendors to sell, transfer, assign or in any other way dispose of or grant any encumbrance on any of the Purchased Shares other than pursuant to the provisions of this Agreement.  On Closing, the Purchaser shall acquire good title to the Purchased Shares, free and clear of all Encumbrances.

3.1.4

 

(a)

All necessary action has been taken by the Trustees in accordance with the provisions of the Constating Documents of Fiducie Mazoyer, acting in their capacity as trustees of Fiducie Mazoyer, respectively, to transfer the legal and beneficial title and ownership of the Fiducie Mazoyer Shares to the Purchaser free and clear of all Encumbrances, and to authorize the execution and performance of their obligations under this Agreement and any Closing Document. The Trustees have all requisite power and authority to enter into this Agreement and any Closing Document, in their capacity as trustees of the Fiducie Mazoyer and to perform their obligations hereunder and thereunder and have obtained all necessary authorizations and consents to fulfil their obligations hereunder and thereunder. The trust patrimony of Fiducie Mazoyer is sufficient to allow the Trustees to discharge any obligation of the Trustees created under this Agreement or any Closing Document.  The obligations of the Trustees created under this Agreement can be legally and validly enforced against the trust patrimony of Fiducie Mazoyer.

 

(b)

BAI has full power, authority, capacity and right to enter into this Agreement and any Closing Document, to transfer the legal and beneficial title and ownership of the BAI Shares to the Purchaser free and clear of all Encumbrances and to perform its obligations hereunder.  All corporate action has been taken by BAI and its shareholders, directors and officers to enter into and execute this Agreement and any Closing Document, to transfer the legal and beneficial title and ownership of the Purchased Shares it owns to the Purchaser free and clear of all Encumbrances and to perform its obligations hereunder or under any Closing Document.

3.1.5

3.1.6

3.1.7

3.1.8

3.1.9

3.1.10

3.1.11

3.1.12

3.1.13

3.1.14

3.1.15

3.1.16

3.1.17

3.1.18

3.1.19

 

(a)

have been prepared from the Books and Records in accordance with GAAP, applied on a basis consistent with that of the preceding periods;

 

(b)

present fairly the financial position of the Corporation;

 

(c)

fairly disclose the assets and liabilities (whether accrued, absolute, contingent or otherwise) of the Corporation and present fairly the financial condition and the results of operations of the Corporation, each as at the dates thereof and for the periods covered thereby;

 

(d)

reflect all proper accruals as at the dates thereof and for the periods covered thereby of all amounts and other employment arrangements for current employees of the Corporation (including management fees and employee incentives) which, though not payable until a time after the end of the relevant period, are attributable to activities undertaken during that period; and

 

(e)

contain or reflects adequate reserves for all liabilities and obligations (including for warranty claims, bonuses, vacation pay and Taxes) of the Corporation, whether absolute, contingent or otherwise, as at the date thereof.

3.1.20

3.1.21

3.1.22

 

(a)

transferred, assigned, sold or otherwise disposed of any of its assets;

 

(b)

settled any Liability or Legal Proceeding pending against it or any of its assets;

 

(c)

discharged or satisfied any Encumbrance, or paid any obligation or Liability other than Liabilities included in the Financial Statements, current Liabilities incurred since March 31, 2010, in the ordinary course of business and scheduled payments under loan agreements and other Contracts;

 

(d)

suffered an operating loss or any extraordinary loss;

 

(e)

made any change in the method of billing customers or the credit terms made available to customers;

 

(f)

made any change with respect to any method of management operation or accounting in respect of the Business;

 

(g)

created or permitted to exist any Encumbrance on any of its assets other than a Permitted Encumbrance;

 

(h)

made any capital expenditures;

 

(i)

waived or cancelled any rights or claims;

 

(j)

modified, amended or terminated any Contract or waived or released any right which it has or had, other than in the ordinary course of business;

 

(k)

declared or paid any dividend or declared or made any other distribution or return of capital in respect of any of its Shares (or been deemed under the Income Tax Act or the Taxation Act to have done so) or purchased, redeemed or otherwise acquired any of its Shares or agreed to do so except as disclosed by the Financial Statements;

 

(l)

had a supplier terminate, or communicate to the Corporation the intention or threat to terminate, its relationship with the Corporation, or the intention to reduce substantially the quantity of products or services it sells to the Corporation or the intention to increase the prices it charges for goods or services it sells to the Corporation;

 

(m)

had any customer terminate, or communicate to the Corporation, the intention or threat to terminate, its relationship with the Corporation, or the intention to reduce substantially the quantity of products or services it purchases from the Corporation, or its dissatisfaction with the products or services sold by the Corporation;

 

(n)

made any payment to any Interested Person, except as disclosed by the Financial Statements; or

 

(o)

authorized or agreed or otherwise become committed to do any of the foregoing (each an “Extraordinary Event”);

3.1.23

3.1.24

3.1.25

 

(a)

Schedule 3.1.25 contains a complete and accurate list of the titles or positions of all Employees identified by their respective employee number, including Employees who are on a leave of absence, sick leave, disability leave, pregnancy leave, parental leave or other statutory leave (including salary, wages and eligibility for any bonuses, incentives, allowances or other perquisites), date of hire, current status (whether active or inactive) the location of their employment, a list of all Employees in alphabetical order, a list of all Employment Agreements and whether such Employees are part of the Bargaining Unit or not, a summary of the terms of all oral contracts with Employees, a list of all Collective Agreements, and the remuneration of, and Employee Benefit Plans applicable to, each Employee.  Schedule 3.1.25 also contains a list of all Persons receiving compensation for work provided to the Corporation with respect to the Business (which for greater certainty shall include any contractual parties and shall exclude any lawyers or accountants, or other similar advisers) who are not Employees, particulars of their terms of engagement and lists of any written contacts with those Persons, if any.  Schedule 3.1.25 also contains a list of all Persons who have, or may be able to, assert rights to be reinstated to employment or recalled from layoff from employment, as well as an explanation of the basis on which such assertion may be made.

 

(b)

Except as set out in Schedule 3.1.25, the Corporation is not a party to or bound by or subject to any Collective Agreement, nor has the Corporation made any commitment to, or conducted any negotiation or discussion with, any labour union or employee association with respect to any future agreement or arrangement, and the Corporation is not required to recognize any labour union or employee association representing its Employees or any agent having bargaining rights for its Employees and there is no current attempt to organize, certify or establish any labour union or employee association with respect to Employees nor has there been any attempt to do so during the period of five (5) years preceding the date hereof.

 

(c)

Without limiting the generality of the provisions of this Agreement, the Bargaining Unit is the only bargaining unit representing the Employees.  The Collective Agreement listed in Schedule 3.1.25 is the only Collective Agreement to which the Corporation is a party.  Such Collective Agreement is in force and effect and has a term expiring on March 15, 2013 and the Corporation is not in default thereunder.  The Corporation is not required to negotiate any terms and conditions with the Employees other than those contained in such Collective Agreement.

 

(d)

Except as set out in Schedule 3.1.25, the Corporation has no reason to believe that any Employee or other person listed in Schedule 3.1.25 will terminate his or her employment or contractual relationship as a result of or in anticipation of the transactions herein contemplated.  To the knowledge of the Vendors, general relations between the Corporation and its Employees are good and there is no present, pending or threatened labour strike, dispute, arbitration, slowdown or work stoppage with respect to the Employees of the Corporation.

 

(e)

Except as set out in Schedule 3.1.25, the Corporation is not liable to any Employee or other person listed in Schedule 3.1.25  or former employee on contractual party for any damages under any Applicable Law or any agreement or arrangement relating to any Employee Benefit Plan.

 

(f)

Except as set out in Schedule 3.1.25, the Corporation is not in arrears in the payment of wages, salary, commissions, overtime pay, bonuses, vacation pay, expense reimbursement or any other amounts owing to Employees or former employees under Applicable Law.  

 

(g)

Except as set out in Schedule 3.1.25, none of the Employees are entitled to any carried over or accrued vacation time or vacation pay relating to any time prior to March 31, 2010.

 

(h)

Other than as set out in Schedule 3.1.25, there are no known existing or threatened losses, damages, expenses, liabilities, claims, complaints, proceedings or demands against the Corporation by employees, contractual parties, directors, or former employees, directors or contractual parties of the Corporation, as applicable, for unpaid wages, professional fees, wrongful termination, accidental injury or death, sexual harassment or discrimination or violation of any Applicable Law or Order.

 

(i)

Other than as set out in Schedule 3.1.25, the Corporation has complied with all Applicable Law and Orders relating to any of their Employees, other person listed in Schedule 3.1.25 or former employees, independent contractors, contractual parties, partners and consultants, as applicable.

 

(j)

The Corporation has not received, within the past three (3) years, any notice of failure to comply with any Applicable Law or Order that has not been rectified.  All previously alleged or filed charges or complaints of non-compliance with Applicable Law or Orders relating to any of the Employees or other person listed in Schedule 3.1.25 or former employees, independent contractors, contractual parties or consultants of the Corporation are disclosed in Schedule 3.1.25.

 

(k)

There are no outstanding assessments, penalties, fines, liens, charges, surcharges, or other amounts due or owing by the Corporation pursuant to An Act respecting industrial accidents and occupational diseases or its regulations and the Corporation has not been reassessed pursuant to such legislation or regulations during the past three (3) years.  There is no audit currently being performed pursuant to any applicable workers’ compensation legislation or regulations nor has any such audit been announced or threatened.  Except as set out in Schedule 3.1.25, there are no existing claims or, to the knowledge of the Vendors, potential claims which may materially adversely affect the accident cost experience or premiums of the Corporation and there are no appeals pending before the Commission de la Santé et de la Sécurité du Travail du Québec.  

 

(l)

The Corporation has provided to the Purchaser all Orders and inspection reports under An Act respecting occupational health and safety or the regulations thereunder (“AOHS”) relating to the Corporation for the past three (3) years.  There are no outstanding Orders or charges or, to the knowledge of the Vendors, pending or threatened against the Corporation under the AOHS.  

 

(m)

The Corporation has complied with all Applicable Law relating to the employment and the termination of employment of any Employees or former employees.  There are no outstanding, pending or threatened claims, complaints or proceedings by any of the Employees or any other Person against the Corporation under any Employment Agreement or Employee Benefit Plan (whether oral or written) or under any human rights, employment standards, pay equity, occupational health and safety, workers’ compensation or any other employment-related statute, and the Corporation has not been advised, and to the knowledge of the Vendors, no such claims, complaints or proceedings may be filed.

 

(n)

The Corporation has not engaged in any unfair labour practice and no unfair labour practice complaint, grievance or arbitration proceeding is outstanding or, to the knowledge of the Vendors, pending or threatened against the Corporation.

3.1.26

 

(a)

Schedule 3.1.26 lists and describes each of the Employee Benefit Plans in which Employees and/or retired or former employees of the Corporation participate.  Copies of each written Employee Benefit Plan, as amended to the date hereof, as well as summary descriptions of the Employee Benefit Plans provided to Employees and former employees of the Corporation have been provided to or made available to the Purchaser.  All copies and summary descriptions of each written Employee Benefit Plan completely and accurately describe, in all material respects, the benefits provided therein.  In the case of each unwritten Employee Benefit Plan, a written description thereof which accurately describes, in all material respects, all provisions of such Employee Benefit Plan, as amended to the date hereof, has been provided to or made available to the Purchaser.  There have been no promised improvements, increases or changes to the benefits provided under any Employee Benefit Plan.  None of the other Persons listed on Schedule 3.1.25, including contractual parties participate in any Employee Benefit Plan, and no former independent contractor or contractual party is eligible to participate in or receive benefits under any current or former Employee Benefit Plan.

 

(b)

The Corporation does not have nor has it ever had, any registered pension plan under which the Employees accrue pension benefits or under which benefits are provided to retired or former employees or contractual parties or any supplemental retirement plans or top-up plans to provide supplemental retirement income to any of its Employees or other person listed in Schedule 3.1.25.  Further, the Corporation is not participating nor has it ever participated in a multi-employer pension plan or a multi-employer health and welfare trust.  The Corporation has no current or past obligation to make contributions to a multi-employer pension plan or a multi-employer health and welfare trust.

 

(c)

Each Employee Benefit Plan is, and has been, established, registered (where desirable or required), administered and invested, in compliance with the terms of such Employee Benefit Plan and every agreement (past or present) relating to the benefits provided under each such Employee Benefit Plan and all Applicable Law.  Where required by Applicable Law or pursuant to the Employee Benefit Plans, each Employee Benefit Plan has been fully funded or fully insured.

 

(d)

All employer payments, contributions or premiums required to be remitted or paid to or in respect of each Employee Benefit Plan have been remitted and paid in a timely fashion in accordance with the terms thereof, and no Taxes, penalties or fees are owing or exigible under or in respect of any Employee Benefit Plan.  To the knowledge of the Vendors, there are no outstanding defaults or violations thereunder by the Corporation or the administrator of any Employee Benefit Plan, or by the agent of any of them, which could result in or give rise to any liability of the Corporation.

 

(e)

There is no investigation, examination, proceeding, action, suit or claim (other than routine claims for benefits) pending or threatened involving any Employee Benefit Plan or its assets, and, to the knowledge of the Vendors, no facts exist which presently or after notice or lapse of time or both could reasonably be expected to give rise to any such investigation, examination, proceeding, action, suit or claim (other than routine claims for benefits).

 

(f)

All employee data necessary to administer each Employee Benefit Plan in respect of the Employees and retired or former employees of the Corporation and their beneficiaries is in the possession of the Corporation, and is complete and accurate, in all material respects, and in a form which is sufficient for the proper administration of the Employee Benefit Plans in respect of such Employees, retired or former employees and their beneficiaries.

 

(g)

None of the Employee Benefit Plans provides post-employment or post-retirement benefits to or in respect of the Employees or any retired or former employees of the Corporation or to or in respect of the beneficiaries of such Employees and retired or former employees.

 

(h)

None of the Employee Benefit Plans requires or permits a retroactive increase in premiums or payments.  All Employee Benefit Plans which provide for health and welfare benefits are fully insured.

 

(i)

There exists no liability in connection with any former benefit plan relating to the Employees or retired or former employees of the Corporation and their beneficiaries that has terminated and all procedures for termination of each such former benefit plan has been properly followed in accordance with the terms of such former benefit plan and Applicable Law.

 

(j)

Neither the execution of this Agreement nor the consummation of any of the transactions contemplated in this Agreement will:

 

(i)

result in any payment (including, without limitation, bonus, golden parachute, retirement, severance, unemployment compensation, or other benefit or enhanced benefit) becoming payable under any Employee Benefit Plan;

 

(ii)

increase any benefits otherwise payable under any Employee Benefit Plan;

 

(iii)

entitle any Employee or other person listed in Schedule 3.1.25 to any job security or similar benefit or any enhanced benefits; or

 

(iv)

result in the acceleration of the time of payment payable under any Employee Benefit Plan, or result in any Employee Benefit Plan becoming terminable other than at the sole and unfettered discretion of the Corporation.

 

(k)

Any data provided by the Corporation to the Purchaser in connection with the Employees or other person listed in Schedule 3.1.25 and retired or former employees or contractual parties of the Corporation and their beneficiaries, including the demographic data and information relating to such Persons, was true, accurate and complete on the date that it was provided to the Purchaser and remains true, accurate and complete in all material respects as of the date hereof.

3.1.27

3.1.28

3.1.29

3.1.30

 

(a)

There are no work orders outstanding against the Building and the Corporation has not received any deficiency notices, requests or written or oral advice of any breach of any Applicable Law in respect of the foregoing which could, if not corrected, become a work order or could require performance of work or expenditure of money to correct. The Building is in compliance with the requirements of all insurance companies who have policies covering the Building;

 

(b)

The Building has not been insulated with urea formaldehyde foam insulation nor has it been fireproofed or insulated with any asbestos fibre product;

 

(c)

There are not outstanding against the Building any present or future capital levies, sewer impost charges, local improvement rates, special assessments, deferred or instalment charges of a capital nature or any other similar charges;

 

(d)

There is permitted motor vehicle access (ingress and egress) to the Building from immediately contiguous public roads;

 

(e)

All of the land, buildings, structures, fixtures and improvements currently used by the Corporation in the conduct of the Business are included in the Farnham Lease;

 

(f)

All water, gas, electrical, steam, compressed air, telecommunication, sanitary and storm sewage lines and systems and other similar systems serving the Building are in good working order and operating condition. The continued existence, use, occupancy and operation of each such line and system is not dependent on the granting of any special Permit, exception, approval or variance;

 

(g)

All Licenses of all Governmental Authorities having jurisdiction over the Building, and from all insurance companies and fire rating organizations, required to have been issued to the Corporation to enable the Building to be lawfully occupied and used by the Corporation for all of the purposes for which they are currently occupied and used have been lawfully issued and are in full force and effect and no action by the Corporation or the Purchaser is required in order that such Permits will remain valid following the completion of the transactions contemplated hereby.

3.1.31

 

(a)

the operations of, and the use of the Building by, the Corporation are now and have been in compliance with all applicable Environmental Laws, and the operations and use of the Building by any predecessor in interest of the Corporation or any prior owner, lessee or occupant of the Building have been in compliance with all applicable Environmental Laws;

 

(b)

the Corporation has obtained and holds all Licenses required under applicable Environmental Laws for the conduct of the Business as it is currently conducted and all such Licenses are valid and in full force and effect, and none of such Licenses will be affected by the transactions contemplated hereby.  The Corporation has not received any notice amending, revoking or replacing any such Licenses or requiring the issuance of any additional Licenses. The Corporation has filed in a timely manner all reports, notifications and plans required pursuant to any such Permits;

 

(c)

there has been no Release by the Corporation (or any predecessor in interest of the Corporation or any prior owner, lessee or occupant of the Building), of Hazardous Substances in, under or on the Building and the Building is free of any contamination by the Corporation (or any predecessor in interest of the Corporation or any prior owner, lessee or occupant of the Building) of the Environment by Hazardous Substances therein or thereon;

 

(d)

the Corporation has not received, nor is likely to receive as a result of the consummation of the transactions contemplated hereby, any notification pursuant to any applicable Environmental Laws that any of its current or past operations (or those of any predecessor in interest of the Corporation or any prior owner, lessee or occupant of the Building) or any by-product thereof or of the Building, is or may be implicated in or subject to any proceeding, investigation, claim, lawsuit, order, agreement or evaluation by any applicable Governmental Authority or any other Person as to whether (i) any remedial action is or may be needed to respond to a Release or threatened Release of a Hazardous Substance into the Environment; (ii) any recovery is sought from the Vendors for any liability, damage or loss, or any action, suit or proceeding commenced against the Corporation, related to or arising from the current or past operations of the Corporation or the operation of the Building; or (iii) the Corporation is or may be a potentially responsible party for a remedial action, pursuant to any applicable Environmental Law; and

 

(e)

there is no basis for any action, suit, claim, penalty, fine, investigation or proceeding with respect to any obligation of the Vendors to remediate conditions pursuant to any applicable Environmental Laws or any other potential source of liability for the Corporation under applicable Environmental Laws in connection with any Release of Hazardous Substance by the Corporation (or any predecessor in interest of the Corporation or any prior owner, lessee or occupant of the Building).

3.1.32

3.1.33

3.1.34

3.1.35

3.1.36

 

(a)

The assets owned, licensed or leased by the Corporation constitute all of the property and assets used to carry on the Business as it is currently carried on, are free of defects and include all proprietary rights, and Intellectual and Industrial Property Rights relating to the Business.

 

(b)

Assets located in a location other than the Leased Real Property are set out in Schedule 3.1.36.

3.1.37

 

(a)

The Corporation has insured the Corporation, its assets, operations and the Business, by reputable insurers in such amounts and against such risks as are customarily carried and insured against by owners of comparable business, properties or assets.

 

(b)

Schedule 3.1.37 sets forth and describes all insurance policies currently maintained by each of the Corporation, including a brief description of the type of insurance, the name of the insurer, policy number, coverage limits, expiration date and annual premiums.  Each of such insurance policies is valid and subsisting and in good standing, there is no default thereunder and the Corporation is an insured party thereunder and is entitled to all rights and benefits thereunder.

 

(c)

Schedule 3.1.37 sets forth and describes all pending claims under any of such insurance policies and identifies the most recent inspection reports, if any, received from insurance underwriters as to the condition or insurance value of the insured property and assets, copies of which have been made available to the Purchaser.  The Corporation has not failed to give any notice or present any claim under any of such insurance policies in due and timely fashion. Except as set out in Schedule 3.1.37, to the knowledge of the Vendors, there are no circumstances which might entitle the Corporation to make a claim under any of such insurance policies or which might be required under any of such insurance policies to be notified to the insurers.

 

(d)

No notice of cancellation or non-renewal with respect to, nor disallowance of any claim under, any of such insurance policies has been received by the Corporation.  To the knowledge of the Vendors, there are no circumstances or occurrences which would or might form the basis of an increase in premiums for the current insurance coverage maintained by the Corporation.

3.1.38

 

(a)

the Real Property Leases set forth on Schedule 3.1.29;

 

(b)

the Equipment Leases set forth on Schedule 3.1.33;

 

(c)

service contracts on office equipment;

 

(d)

Permitted Encumbrances set forth and described in Schedule 1.1C;

 

(e)

agreements and arrangements with respect to Employees and Persons receiving compensation for work or services provided to the Corporation set forth and described in Schedule 3.1.25;

 

(f)

Employee Benefit Plans set forth and described in Schedule 3.1.26;

 

(g)

the insurance policies set forth and described in Schedule 3.1.37;

 

(h)

the Contracts whose value exceeds $10,000 set forth and described on Schedule 3.1.38;

 

(i)

the agreements and arrangements relating to Licensed I.P. as set forth and defined in Schedule 3.1.48,

3.1.39

3.1.40

3.1.41

3.1.42

3.1.43

 

(a)

 

(b)

 

(c)

 

(d)

 

(e)

 

(f)

3.1.44

3.1.45

3.1.46

3.1.47

3.1.48

 

(a)

Schedule 3.1.48 sets forth and describes all of the Corporation’s registered Intellectual and Industrial Property and specifies, for each item, whether such Intellectual and Industrial Property (including all Intellectual and Industrial Property Rights pertaining thereto) are owned by the Corporation (“Owned I.P.”) or whether such Intellectual and Industrial Property is used by the Corporation under a licence agreement or arrangement from another Person (“Licensed I.P.”).

 

(b)

Except as set forth and described in Schedule 3.1.48, all of the Owned I.P. is valid and subsisting, is owned by the Corporation with good title thereto free of any Encumbrance, except for Permitted Encumbrances, and the Corporation has the unencumbered right to use (where use includes the ability to modify, market, license, and any other activity associated with the term “use”, all without restriction of any kind from any third Person (in this Section “Use”)) the Owned I.P.

 

(c)

Except as set out in Schedule 3.1.48, the Corporation has taken all commercially reasonable steps to protect and preserve the confidentiality of all the Owned I.P. not otherwise protected by patents, patent applications or copyright.

 

(d)

Except as set forth on Schedule 3.1.48, to the knowledge of the Vendors each licence agreement or arrangement with respect to Licensed I.P. is in full force and effect and there is no default thereunder.

 

(e)

No Person has commenced, or provided notice of intention to commence, any Legal Proceeding claiming infringement, adverse ownership, invalidity, lack of distinctiveness or conflict with respect to any of the Owned I.P. or the Licensed I.P.

 

(f)

Except as set forth on Schedule 3.1.48, to the knowledge of the Vendors, the conduct of the Business by the Corporation and its use of the Owned I.P. and the Licensed I.P. does not conflict with, infringe upon or violate and is not alleged by any Person to conflict with, infringe upon or violate the Intellectual and Industrial Property Rights of any other Person.

 

(g)

All plans and drawing used or created in the ordinary course are owned by the Corporation, except where such plans and drawings have been assigned to clients of the Corporation pursuant to an agreement in writing.

 

(h)

The Corporation has taken commercially reasonable steps to maintain the secrecy of all trade secrets and other confidential information of the Corporation and all confidential information provided to third parties.  To the knowledge of the Vendors, all such non-disclosure agreements are valid, binding and enforceable and are in full force and effect and none of the Vendors is aware of any breach of any such non-disclosure agreement.  

3.1.49

 

(a)

Except as set out in Schedule 3.1.49, there are no investigations, inquiries, actions, suits, claims, demands or proceedings, whether statutory or otherwise, pending, ongoing, or to the knowledge of the Vendors, threatened, with respect to the Corporation’s collection, use, disclosure or retention of Personal Information. No Order, whether statutory or otherwise, is pending or has been made, and to the knowledge of the Vendors, no notice has been given pursuant to Applicable Law requiring the Corporation to take (or refrain from taking) any action with respect to Personal Information.

3.1.50

3.1.51

3.2

3.2.1

3.2.2

3.2.3

3.2.4

3.2.5

3.3

3.3.1

3.3.2

3.4

3.4.1

The representations and warranties of the Vendors contained in this Agreement and in any Closing Document and in any agreement, certificate, affidavit, statutory declaration or other document delivered or given pursuant to this Agreement or any Closing Document shall survive the Closing and, notwithstanding the Closing or any investigation made by or on behalf of the Purchaser with respect thereto, shall continue in full force and effect for the benefit of the Purchaser provided, however, that no claim in respect thereof shall be valid unless it is made within the following time periods:

 

(a)

in the case of a claim in respect of the representations or warranties relating to the incorporation, formation or issued and outstanding capital of the Corporation or the Vendors, and the enforceability of the obligations of the Vendors hereunder; title of each of the Vendors to the Purchased Shares; title of the Corporation to its property and assets and, in the case of a claim in respect of a representation or warranty based on a fraud, including a claim relating to any Tax liability of the Corporation, based on a fraud committed in filing a Tax Return or supplying information for purposes of any applicable Tax Legislation, there shall be no time limit within which such a claim may be made;

 

(b)

in the case of a claim in respect of a representation or warranty relating to a Tax matter, other than a Claim in respect of a misrepresentation made or fraud committed in filing a Tax Return or supplying information for the purposes of any applicable Tax Legislation, within a period commencing on the Closing Date and ending on the date six (6) months following the date on which the last applicable limitation period under any applicable Tax Legislation expires with respect to any taxation year which is relevant in determining any liability under this Agreement with respect to Tax matters; and

 

(c)

in the case of a claim in respect of any other representation or warranty, three (3) years;

3.5

3.5.1

The representations and warranties of the Purchaser contained in this Agreement and in any Closing Document and in any agreement, certificate, affidavit, statutory declaration or other document delivered or given pursuant to this Agreement or any Closing Document shall survive the Closing and, notwithstanding the Closing or any investigation made by or on behalf of the Vendors with respect thereto, shall continue in full force and effect for the benefit of each of such parties provided, however, that no claim in respect thereof shall be valid unless it is made within the following time periods:

 

(a)

in the case of a claim in respect of Section 3.2.1 and in the case of a claim in respect of a representation or warranty based on fraud there shall be no time limit within which such a Claim may be made; and

 

(b)

in the case of a claim in respect of any other representation or warranty, three (3) years.

4.1

4.1.1

4.1.2

4.1.3

 

(a)

During the Interim Period, each of the Vendors shall cause the Corporation, except as may be otherwise required pursuant to the Pre-Closing Transactions, to:

 

(i)

carry on the Business in the ordinary course and in compliance with Applicable Law and to perform its obligations under all Contracts, Real Property Leases and Equipment Leases;

 

(ii)

use its best efforts to preserve the Business and the goodwill of suppliers, customers and others having business relations with the Corporation and maintain in full force and effect all Intellectual and Industrial Property Rights owned by the Corporation relating to the Business;

 

(iii)

use its best efforts to retain the services of the present executives, Employees, consultants and advisors of or to the Corporation (except as may be otherwise specifically required or contemplated by the provisions of this Agreement);

 

(iv)

use its best efforts to maintain in full force and effect all Contracts to which the Corporation is a party in respect of the Business;

 

(v)

pay, satisfy and discharge its obligations and Liabilities in the ordinary course of business, consistent with past practice;

 

(vi)

continue in full force and effect the insurance coverage referred to in Section 3.1.37, to take out such additional insurance as may be required in the ordinary course of the Business or as may be reasonably requested by the Purchaser and to give all notices and present all claims under all insurance policies in a due and timely fashion and promptly advise the Purchaser in writing of any such claims;

 

(vii)

prepare and file in a timely manner, to the satisfaction of the Purchaser acting reasonably, all Tax Returns required to be filed by them and pay all Taxes required under any applicable Tax Legislation to be paid by them for any taxation year ending on or before the Closing Date, including all Tax Returns required to be filed and all Taxes required to be paid by it for the taxation year ending as a consequence of the Closing and to ensure that all such Tax Returns are true, correct and complete and that such Tax Returns and all materials accompanying such Tax Returns reflect complete and accurate disclosure;

 

(viii)

pay within the time prescribed by applicable Tax Legislation any required instalments of Taxes owing by such parties;

 

(ix)

make adequate provision in its Books and Records for the Taxes which relate to any taxation year or part thereof ending or arising before the Closing Date or ending as a consequence of the Closing which are not yet due and payable and for which Tax Returns are not yet required to be filed;

 

(x)

withhold from each payment made by it the amount of all Taxes and other deductions required under any applicable Tax Legislation to be withheld therefrom and to pay all such amounts withheld to the relevant taxing or other authority within the time prescribed under any applicable Tax Legislation;

 

(xi)

refrain from entering into any arrangements to provide for an extension of time with respect to any assessment or reassessment of Tax, the filing of any Tax Return or the payment of any Tax by it without the prior written consent of the Purchaser; and

 

(xii)

use its best efforts to not cause or permit to exist a breach of any representations and warranties of the Vendors contained in this Agreement or in any Closing Document and to conduct the Business and preserve the Business in such a manner that at the Closing Time, the representations and warranties of the Vendors under this Agreement will be true and correct as if they were made at and as of that time.

 

(b)

During the Interim Period, the Vendors shall ensure that the Corporation does not (except as may be otherwise required pursuant to the Pre-Closing Transactions), without the prior written consent of the Purchaser:

 

(i)

become a party to or bound by or subject to any new Contract with any Interested Person or amend or concur in the amendment of any such existing Contract or make or authorize any payment to or for the benefit of any Interested Person;

 

(ii)

enter into any material Contract;

 

(iii)

become a party to or bound by or subject to any new agreement or arrangement with respect to employment or employee benefits (other than an employment or personal services agreement or arrangement which is terminable by the Corporation without liability on no more than thirty (30) days’ notice) or amend or concur in the amendment of or increase any payment or obligation under any existing agreement or arrangement with respect to Employee Benefit Plans other than such as is required or contemplated by an existing policy or practice as to periodic review of Employee Benefit Plans;

 

(iv)

take any step to dissolve, wind-up or otherwise affect, as applicable, its continuing existence as a corporation, or amalgamate or merge with any Person or amend the Corporation’s Constating Documents or by-laws;

 

(v)

make any loan to or investment in any other Person;

 

(vi)

become a party to or bound by or subject to any new Debt Instrument or amend or concur in the amendment of or prepay or vary the terms of any indebtedness or other obligation under any existing Debt Instrument, except for the payment in full of existing Debt Instruments at the Closing Time;

 

(vii)

become a party to or bound by or subject to any new Guarantee or amend or concur in the amendment of any existing Guarantee;

 

(viii)

declare or pay any dividend or other distribution (whether out of capital or surplus or otherwise) on any of the Corporation’s outstanding securities or redeem, purchase or otherwise acquire any of the Corporation’s outstanding securities except as contemplated by this Agreement at the Closing Time;

 

(ix)

sell, lease, assign, pledge, encumber or transfer any property, except for inventory sold in the ordinary course;

 

(x)

purchase any material property or material assets;

 

(xi)

cancel, waive or vary the terms of any debt owing to or any claim or right of the Corporation;

 

(xii)

modify the salary, wages, benefits or other compensation of any of the present executives, principals, Employees, consultants and advisors of or to the Corporation (except as may otherwise be disclosed in, required by or contemplated by the provisions of this Agreement or its Schedules);

 

(xiii)

issue any Shares or other securities or interests or make any change in the number or class of or rights attached to any issued or unissued Shares of its capital, or grant, issue or make any option, warrant, subscription, convertible security or other right or commitment to purchase or acquire any Shares of its capital, or interests or other securities;

 

(xiv)

incur any material obligation or liability or make, authorize or accept any early payment of any existing obligation or liability;

 

(xv)

create or permit the creation of any new Encumbrance on any of its property or assets (except for any Permitted Encumbrance) or amend or concur in the amendment of any such existing Encumbrance;

 

(xvi)

terminate, transfer, assign, modify or change, or grant any rights under, any Intellectual and Industrial Property Rights (except as may otherwise be required or contemplated by the provisions of this Agreement); or

 

(xvii)

take or refrain from taking any other action that would cause any of the representations and warranties of the Vendors under this Agreement or any Closing Document to be false or misleading;

 

(c)

During the Interim Period, the Vendors shall ensure that none of the Trustees (i) resigns as trustee of Fiducie Mazoyer; or (ii) amends or modifies the Constating Documents of Fiducie Mazoyer.

4.1.4

4.2

4.2.1

4.2.2

4.2.3

4.3

4.3.1

4.3.2

5.1

5.1.1

5.1.2

 

(a)

All representations and warranties of each of the Vendors made in or pursuant to this Agreement shall have been true and correct on the date hereof and shall be true and correct in all material respects at the Closing Time with the same force and effect as if such representations and warranties had been made at and as of the Closing Time.

 

(b)

Each of the Vendors shall have performed or complied with all obligations, covenants and agreements contained in this Agreement to be performed by it at or prior to the Closing Time.

 

(c)

As evidence of the satisfaction of the conditions in Sections 5.1.2(a) and (b), each of the Vendors shall deliver to the Purchaser at the Closing Time a certificate of each such Vendor confirming the matters in Sections 5.1.2(a) and (b), as applicable, and to the effect that as of the Closing Time all other conditions set forth in Section 5.1, including the condition in Section 5.1.4, have been satisfied or waived by the Purchaser in accordance with this Agreement.  To the extent that the matters set out in Section 5.1.2(a) cannot be so confirmed, such certificate shall set out the facts or circumstances that constitute or result in a change to the representations and warranties. Notwithstanding the foregoing, the receipt of such certificate and the completion of the transactions herein contemplated shall not constitute a waiver (in whole or in part) of, or have the effect of modifying or qualifying in any way, any breach or inaccuracy in such representations and warranties to the extent set out in such certificate, and shall not have the effect of modifying or qualifying the affected representations and warranties of the Vendors made (or, for purposes of Section 6.1, deemed to have been made) in or pursuant to this Agreement, each of which shall survive the Closing and remain in full force and effect for the benefit of the Purchaser as provided in Section 3.4.

5.1.3

5.1.4

5.1.5

5.1.6

5.1.7

5.1.8

5.1.9

5.1.10

5.1.11

5.1.12

5.1.13

5.1.14

5.1.15

5.1.16

5.1.17

5.2

5.2.1

 

(a)

The representations and warranties of the Purchaser made in or pursuant to this Agreement shall have been true and correct on the date hereof and shall be true and correct in all material respects at the Closing Time with the same force and effect as if such representations and warranties had been made at and as of the Closing Time.

 

(b)

The Purchaser shall have performed or complied with all obligations, covenants and agreements contained in this Agreement to be performed by it at or prior to the Closing Time.

 

(c)

As evidence of the satisfaction of the conditions in paragraph 5.2.1(a) and (b), the Purchaser shall deliver to the Vendors at the Closing Time a certificate of the Purchaser confirming the matters in paragraphs 5.2.1(a) and (b) and to the effect that as of the Closing Time all other conditions set forth in this Section 5.2.1 have been satisfied or waived by the Purchaser in accordance with this Agreement.  To the extent that the matters set out in Section 5.2.1(a) cannot be so confirmed, such certificate shall set out the facts or circumstances that constitute or result in a change to the representations and warranties.  Notwithstanding the foregoing, the receipt of such certificate and the completion of the transactions herein contemplated shall not constitute a waiver (in whole or in part) of, or have the effect of modifying or qualifying in any way, any breach or inaccuracy in such representations and warranties to the extent set out in such certificate, and shall not have the effect of modifying or qualifying the affected representations and warranties of the Purchaser made (or for the purpose of Section 6.2, deemed to have been made) in, or pursuant to, this Agreement, each of which shall survive the Closing and remain in full force and effect for the benefit of each of the Vendors as provided in Section 3.5.

5.2.2

5.2.3

5.2.4

5.2.5

5.2.6

5.2.7

5.2.8

5.2.9

5.3

5.4

6.1

6.1.1

Subject to Section 3.4 and the limitations set forth in Section 6.12, each of the Vendors on a joint and solidary basis shall indemnify, defend and save harmless the Purchaser and its Representatives from and against any and all Loss suffered or incurred by them, as a direct or indirect result of, or arising in connection with or related in any manner whatever to:

 

(a)

any misrepresentation or breach of warranty made or given by the Vendors in Section 3.1 of this Agreement, in any Closing Document or in any other document delivered pursuant to this Agreement or any Closing Document;

 

(b)

any failure by any of the Vendors to observe or perform any covenant or obligation to be carried out prior to Closing contained in this Agreement, any Closing Document or in any document delivered pursuant to this Agreement or any Closing Document;

 

(c)

any Liabilities to the Purchaser or the Corporation that may arise as a result of, or in connection with, the Pre-Closing Transactions, whether arising prior to, on or after the Closing Date;

 

(d)

any Liabilities in respect of the Excluded Assets, whether arising prior to, on or after the Closing Date;

 

(e)

any Loss arising from undisclosed Liabilities in respect of the Corporation;

 

(f)

any Taxes payable by the Corporation relating to a period prior to the Closing Date;

 

(g)

any Legal Proceeding arising prior to the Closing Date;

 

(h)

any Liabilities with respect to product warranty for products sold before the Closing Date, with respect to the conditions provided in Sections 7.1 and 7.2;

 

(i)

any Loss arising from the Corporation’s failure to establish and maintain a privacy policy;

 

(j)

any event occurring prior to the Closing Date, resulting in a Legal Proceeding against the Corporation or the Purchaser initiated following the Closing Date in circumstances where the Corporation was obliged to have made a claim under any of its insurance policies prior to the Closing Date in order to obtain coverage, including, for certainty, any claims made or which ought to have been made by the Corporation under any of its insurance policies for which coverage has been or is denied, and including claims relating to the Legal Proceedings set out in Schedule 3.1.41.

6.1.2

Notwithstanding the Closing and the delivery of the certificate pursuant to Section 5.1.2, for the purposes of the Purchaser’s right to be indemnified as provided in this Section 6.1 (but subject to the limitations in Section 6.12), the said certificate shall be deemed to repeat the representations and warranties of each of the Vendors made in this Agreement on and as of the Closing Date as if then made without qualification as to materiality, except for the representations and warranties expressly so qualified in this Agreement.

6.1.3

The Purchaser shall not be entitled to be indemnified pursuant to this Section 6.1 to the extent that the Loss claimed is already taken into account in connection with the Adjustment.

6.2

6.2.1

Subject to Section 3.5 the Purchaser shall indemnify, defend and save harmless the Vendors from and against any and all Loss suffered or incurred by them, as a direct or indirect result of, or arising in connection with or related in any manner whatsoever to:

 

(a)

any misrepresentation or breach of any warranty made or given by the Purchaser in this Agreement, in any Closing Document or in any document delivered pursuant to this Agreement or any Closing Document; or

 

(b)

any failure by the Purchaser to observe or perform any covenant or obligation contained in this Agreement, in any Closing Document or in any document delivered pursuant to this Agreement or any Closing Document.

6.2.2

Notwithstanding the Closing and the delivery of the certificate pursuant to Section 5.2.1, for the purposes of each of the Vendors’ right to be indemnified as provided in this Section 6.2, the said certificate shall be deemed to repeat the representations and warranties of the Purchaser made in this Agreement on and as of the Closing Date as if then made without qualification as to materiality, except for the representations and warranties expressly so qualified in this Agreement.

6.3

6.4

6.5

6.6

6.6.1

The Indemnitor and the Indemnitee will use all reasonable efforts to make available to the Party which is undertaking and controlling the defence of any Third Party Claim (the “Defending Party”),

 

(a)

those employees and other persons whose assistance, testimony or presence is necessary to assist the Defending Party in evaluating and in defending any Third Party Claim; and

 

(b)

all documents, records and other materials in the possession of such Party reasonably required by the Defending Party for its use in defending any Third Party Claim,

6.7

6.8

6.9

6.10

6.11

6.12

6.13

6.14

6.15

7.1

7.2

8.1

8.2

8.3

8.4

8.5

8.5.1

Each of the Vendors hereby covenants and agrees that during the period ending five (5) years after the Closing Date, none of them will, either, on their behalf or on behalf of any other Person, directly or indirectly, in any capacity whatsoever including, without limitation, as an employer, employee, principal, agent, joint venturer, partner, shareholder or other equity holder, independent contractor, licensor, licensee, franchisor, franchisee, distributor, consultant, supplier, trustee, or by, through or otherwise in connection with any Person, on behalf of any Competitive Business:

 

(a)

canvass, solicit, procure or assist the canvassing or soliciting of any customer or prospective customer of the Corporation;

 

(b)

discourage or attempt to discourage any customer or prospective customer of the Corporation from obtaining or purchasing any services or products relating to the Business from the Purchaser; or

 

(c)

supply or procure or assist the supply of any goods or services to any customer or any prospective customer of the Corporation.

8.6

8.7

8.8

8.9

8.10

8.10.1

Each of the Vendors hereby further acknowledges that:

 

(a)

the completion of the transactions for the sales of the Shares is of significant monetary and other benefit to it/him;

 

(b)

the Purchaser has a legitimate interest in protecting its ability to continue to develop and promote the Business in the Territory, free from interference, whether direct or indirect, on its part and that, but for the agreement of the Vendors to enter into the restrictive covenants set forth in this Section 8, the Purchaser would not have completed the transactions contemplated by this Agreement;

 

(c)

all of the restrictive covenants in this Section 8 are reasonable as to duration, geographic scope and business scope and that those restrictions are not unreasonably restrictive of the Vendors;

 

(d)

they are commercially sophisticated and obtained independent legal advice regarding the covenants contained in this Section 8 before executing this Agreement, and had the opportunity to negotiate over these restrictive covenants as part of the transactions contemplated by this Agreement;

 

(e)

if they had any concerns about the reasonableness, clarity, interpretation or enforceability of the covenants contained in this Section 8 or any of them, the Vendors have discussed those concerns with their counsel and have raised them with the Purchaser and its solicitors, and the Vendors no longer have any such concerns and are satisfied that the restrictive covenants are reasonable, clear and legally enforceable.

 

(f)

the foregoing restrictive covenants are both necessary and reasonable for the protection of the legitimate business interests of the Purchaser that the Purchaser is acquiring and its execution of this Agreement reflects its desire and intent that such provisions be upheld in their entirety and that the Purchaser have the full benefit of same.

8.11

8.12

9.1

9.1.1

9.1.2

9.1.3

9.1.4

 

(a)

the Purchaser shall be able to rely conclusively on the instructions and directions of the Vendors’ Representative as to any matters hereunder or any other actions required or desirable to be taken by the Vendors hereunder and no Vendor shall have any cause of action against the Purchaser for any action taken by the Purchaser in reliance upon the instructions or decisions of the Vendors’ Representative;

 

(b)

all actions, decisions and instructions of the Vendors’ Representative, shall be conclusive and binding upon all of the Vendors and no Vendor shall have any cause of action against the Vendors’ Representative for any action taken or not taken, decision made or instruction given by the Vendors’ Representative under this Agreement, except for fraud or wilful breach of this agreement by the Vendors’ Representative;

 

(c)

the provisions of this Section 9.1.4 are independent and several, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or recourses that any Vendors may have in connection with the transactions contemplated hereby; and

 

(d)

the provisions of this Section 9.1.4 shall be binding upon the heirs, legal representatives, successors and assigns of each Vendor, and any references in this agreement to a Vendor or Vendors shall mean and include the successors to the Vendor’s rights hereunder, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise.

9.1.5

9.2

9.3

9.4

9.4.1

Any notice, direction or other communication (in this Section, a “notice”) required or permitted to be given to a Party shall be in writing and shall be sufficiently given if delivered personally, sent by nationally recognized courier service, transmitted by facsimile or sent by PDF as follows:

 

(a)

in the case of the Vendors, at:

 

(b)

in the case of the Purchaser at

9.4.2

Any notice delivered personally, or by a nationally recognized courier service shall be deemed to have been given and received on the day on which it was delivered, if delivered prior to 5:00 p.m. (recipient’s time) on a Business Day; otherwise on the first (1st) Business Day thereafter.  Any notice transmitted by facsimile or PDF shall be deemed to have been given and received on the day of its transmission if the machine from which it was sent receives the answerback code of the Party to whom it was sent prior to 5:00 p.m. (recipient’s time) on such day; otherwise on the first (1st) Business Day thereafter.

9.4.3

Any Party may change its address for service from time to time by notice given to each of the other Parties in accordance with the foregoing provisions.

9.5

9.6

9.7

9.8

9.9

9.10

9.11

9.12

9.13