PURCHASE AND SALE OF A BUSINESS - Law Society of …library.lawsociety.sk.ca/.../CPLED200506CorporatePurchase.pdf · PURCHASE AND SALE OF A BUSINESS Glen Lekach Balfour Moss 700,

PURCHASE AND SALE OF A BUSINESS

Glen Lekach Balfour Moss

700, 2103 – 11th Avenue Regina, SK S4P 4G1

Revised 2001 Not to be used or reproduced without permission – Saskatchewan Legal Education Society Inc.

Saskatchewan: Bar Admission Program i Corporate Commercial - Purchase and Sale of a Business

TABLE OF CONTENTS

I. INTRODUCTION ...............................................................................................................1

II. THE NEGOTIATIONS – A TEAM EFFORT ....................................................................1

III. ACQUISITION, MERGER AND AMALGAMATION.....................................................2

IV. SELECTING THE BUSINESS VEHICLE .........................................................................3 A. PARTNERSHIP.............................................................................................................3 B. CO-TENANCY OR JOINT VENTURE........................................................................4 C. SOLE PROPRIETORSHIP............................................................................................4 D. THE CORPORATION ..................................................................................................4

V. THE METHODS OF ACQUIRING OR MERGING BUSINESSES .................................5

VI. TAX CONSIDERATIONS..................................................................................................5 A. PURCHASE OF ASSETS .............................................................................................6 1. Allocation of Purchase Price .................................................................................6 2. Accounts Receivable .............................................................................................7 3. Inventory ...............................................................................................................7 4. Eligible Capital Property.......................................................................................7 B. SALE OF SHARES – TAX IMPLICATIONS ..............................................................8 C. DEDUCTIBILITY OF INTEREST ...............................................................................8 D. GENERAL.....................................................................................................................8

VII. THE LETTER OF INTENT ................................................................................................9

VII. DUE DILIGENCE.............................................................................................................10

IX. THE CONTRACT .............................................................................................................10 A. SALE/PURCHASE OF ASSETS ................................................................................13 1. The Assets Being Purchased ...............................................................................13 2. Assumption of Liabilities ....................................................................................14 3. Allocation of Purchase Price ...............................................................................14 4. Representations and Warranties by Vendor ........................................................15 5. Representations and Warranties by Purchaser ....................................................19 6. Covenants of the Vendor.....................................................................................19 7. Covenants by the Purchaser ................................................................................20 8. Indemnification ...................................................................................................20 9. Conditions of Closing..........................................................................................22 10. “Boiler Plate”.......................................................................................................23 B. DISTINGUISHING FEATURES OF SHARE PURCHASE AGREEMENT.............23 1. Documents to be Examined.................................................................................23 2. Employer/Employee Relations............................................................................23 3. Legal Considerations...........................................................................................24 4. Drafting ...............................................................................................................25


ii Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

X. CHECKLIST – PURCHASE AND SALE OF ASSETS...................................................26 XI. CHECKLIST – PURCHASE AND SALE OF SHARES..................................................38 APPENDICES: Appendix AA - Allocation of Economic Risk Between a Purchaser and Vendor in a Transaction Involving the Purchase and Sale of a Business or Shares........ AA - 1 Appendix A - Checklist, Purchase and Sale of a Business....................................................... A - 1 Appendix B - Letter of Intent ....................................................................................................B - 1 Appendix C - Assignment of Letter of Intent ............................................................................C - 1 Appendix D - Confidentiality Agreement ................................................................................ D - 1 Appendix E - Purchase and Sale Agreement (Long Form) .......................................................E - 1 Appendix F - Asset Purchase Agreement (Short Form) ............................................................F - 1 Appendix G -Share Purchase Agreement (Long Form) ........................................................... G - 1 Appendix H - Share Purchase Agreement (Short Form) .......................................................... H - 1 Appendix I -Certified Copy of Resolution of Shareholders Authorizing Sale of Assets ...........I - 1 Appendix J - Certified Copy of Resolution of Directors Authorizing Sale of Assets ................J - 1 Appendix K - Certified Copy of Resolution of Directors Authorizing Purchase of Assets ..... K - 1 Appendix L - Certified Copy of Resolution of Directors - Transfer of Shares of Corporation.....................................................................................................L - 1 Appendix M - Certified Copy of Resolution of Directors - Transfer of Shares by Director....M - 1 Appendix N - Certified Copy of Resolution of Directors - Corporation Authorizing Transfer of Shares .............................................................................................. N - 1 Appendix O - Certified Copy of Resolution - Transfer of Common Shares ............................ O - 1 Appendix P - Certificate as to Corporate Documents................................................................P - 1 Appendix Q - Resignation of Officer and Director .................................................................. Q - 1 Appendix R - Release of Director by Corporation ....................................................................R - 1 Appendix S - Release of Corporation by Director.....................................................................S - 1 Appendix T - Release of Shareholder by Corporation ..............................................................T - 1 Appendix U - Release of Corporation by Shareholder ............................................................. U - 1 Appendix V - Certificate as to Representations, Warranties and Performance........................ V - 1 Appendix W - Incumbency Certificate ..................................................................................... W -1 Appendix X - Officers' Certificates .......................................................................................... X - 1 Appendix Y - Standard Search Letters for Sale or Purchase of a Business.............................. Y - 1 Appendix Z - Closing Agenda ...................................................................................................Z - 1


Saskatchewan: Bar Admission Program 1 Corporate Commercial - Purchase and Sale of a Business

I. INTRODUCTION

"Though he love not to buy the pig in a poke."

John Heywood (1497-1580)

The Oxford English Dictionary tells us that to buy a pig in a poke (or bag) is to buy anything

without seeing it or knowing its value. To play an effective role in any acquisition, the lawyer

acting for the purchaser must understand that his role is not simply to reduce to writing the

bargain made by his client but he, as part of the negotiating team, and by the use of the purchase

agreement, is to ensure that his client is not buying a pig in a poke.

This is achieved in several ways. Most important are the representations and warranties as to the

condition of the business. The agreement will also provide for the purchaser having access to

the business premises and to information to ascertain that the condition of the business and assets

is as warranted. The agreement will also provide that the vendor will, after the agreement is

executed, operate the business in the normal course of business until closing. The agreement is a

tool that should, if properly drawn, ensure that the purchaser not only knows the value he is

getting, but that on closing that value has not been diminished through indifferent management

or other reasons.

II. THE NEGOTIATIONS - A TEAM EFFORT

Ideally, the client should involve the lawyer and the accountant at an early stage so that the

business is investigated from three points of view:

(1) a business perspective, (2) the accounting, and (3) the legal. An exchange of information among the three will help each to do their job more effectively. For

example, if the accountant discovers a substantial income tax deficiency of the vendor for past

years, the client will use this knowledge in assessing the value of the business. The lawyer may


2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

also use this information to draft a clause in the agreement to protect against the assumption of

such an obligation. If the deficiency is significant, he may wish to provide that a certain portion

of the purchase price be held in escrow to ensure that the indemnities of the vendor in respect of

such deficiency will be covered.

Of course, there is always the practical problem of the client wishing to avoid the extra cost of

the lawyer and accountant being involved at the outset. If the acquisition involves a significant

value, the cost of the lawyer and the accountant will not be a deterrent. In smaller acquisitions,

the client should at least have a meeting with the lawyer and accountant before negotiating.

With some knowledge, he may not move too far down the road toward an "agreement in

principle" which he will have difficulty renegotiating later. The client should be aware, for

example, that he can use a capital gain exemption up to $500,000 (if it is qualified farm property

or small business).

III. ACQUISITION, MERGER AND AMALGAMATION

The terms "acquisition" and "merger" are used loosely to describe the act of acquiring and

integrating two businesses. Merger, however, is more commonly used in the United States

where it connotes the acquisition of one company by another, after which the acquired company

is liquidated into the parent company. Canadian tax law deters anyone from using this procedure

because the acquiring company would be deemed to have received a dividend in the year in

which the acquisition took place in an amount equal to the undistributed income on hand of the

acquired company at the beginning of the fiscal year.

Such a combination of business interests in Canada can be achieved without the adverse tax

consequences by amalgamating the companies in accordance with either the Business

Corporations Act (Saskatchewan) or the Canada Business Corporations Act. In such an

amalgamation, the two corporations come together to form a new entity, selecting a new name or

using the name of one of the amalgamating corporations. The shareholders in each of the

corporations then exchange their shares for shares in the new entity.


Saskatchewan: Bar Admission Program 3 Corporate Commercial - Purchase and Sale of a Business In an amalgamation, a rollover (i.e., tax free) is automatic so that each shareholder acquires the

new shares at the stated capital of his shares in the amalgamated company. Similarly, there is no

disturbance with respect to the liabilities and obligations of the amalgamated corporations and

they continue to be the liabilities and obligations of the new entity. The advantage of this form

of business "merger" is that, as with the purchase of business through the shares of a company,

consents of third parties to the transfer of assets, the transfer rights under a patent licensing

agreement, or the necessity to obtain a consent to an assignment of leases or similar agreements,

is not required as it is for an asset purchase (unless, of course, such agreements require consents

on an amalgamation). An amalgamation is completed by the corporations entering into an

amalgamation agreement which sets out, among other terms, the name of the amalgamated

corporation, particulars about the new directors and how they are to be elected, the authorized

capital and stated capital of the new corporation, the proposed bylaws of the new corporation and

articles. All of these procedures are set out in the corporation Acts.

IV. SELECTING THE BUSINESS VEHICLE

A. PARTNERSHIP

Another form of "merger" can be effected through the use of a partnership. The partnership

vehicle permits two persons or corporations to come together to own and operate a business

directly rather than indirectly by owning shares. The person or company making available the

partnership interest will not be required to pay income tax on the "merger" as he/she/it would if

the business and assets were sold directly to the other person or company. The original partner

does not sell a partnership interest but, rather, the new partner makes a capital contribution for its

partnership interest. The cash paid can be drawn out by the original partner as a cash draw. This

is not taxable as it is a return of capital. However, when the original partner disposes of the

partnership interest, he/she/it will be taxed to the extent that he/she/it has received more cash than

the tax value of his/her/its partnership interest. This will be taxed as a capital gain. The

advantage to the original partner is tax deferral and, also, that the proceeds are treated as capital

gain.



B. CO-TENANCY OR JOINT VENTURE

Co-tenancy or joint ventures are business arrangements governed by the joint venture agreement

which allows two persons or corporations to own and operate an undivided interest in a business.

The business is operated by the co-tenants or by a neutral corporation under a management

contract. The most significant difference between a partnership and a co-tenancy is that a

partnership owns the assets and depreciation is taken at the partnership level, with each partner

reporting his/her/its share of partnership income or loss individually. In a co-tenancy, each

co-tenant or joint venturer owns the assets contributed to the business and each depreciates

his/her/its share of property to suit that individual's or corporation's needs. Since a joint venture

can be easily confused with a partnership, it is important that the agreements make it clear that a

joint venture is being created.

C. SOLE PROPRIETORSHIP

A third method of owning and operating a business is through the sole proprietorship. This

method has a disadvantage of not limiting the liability of the owner in respect of the business.

However, for most small businesses, the owner is generally required by its banker to sign a

personal guarantee and, accordingly, the limited liability feature of the corporation is applicable

only to parties other than the financial institution (i.e., trade creditors). In these circumstances

and at least in the initial years when the company is becoming established and probably

incurring losses, it is advantageous for the individual to use the sole proprietorship because

losses can be written off against other income of the owner. Once the company becomes

successful and the sole proprietor is no longer encumbered with personal guarantees, he can then

do a tax-free rollover into a corporation under s. 85 of the Income Tax Act (Canada) (“the ITA”).

D. THE CORPORATION

The most common method in which businesses are operated, however, is through the use of a

corporation.



V. THE METHODS OF ACQUIRING OR MERGING BUSINESSES

There are four distinct ways in which separate businesses can be acquired or combined. They

are:

(a) through the acquisition of the shares of a company in exchange for cash, securities or shares of the acquiring company or any other consideration;

(b) through the purchase of assets for cash, or cash and some form of security if it is to be operated as a sole proprietorship, or by cash, securities or shares if the purchaser is a corporation;

(c) by "merging" the interests of two separate businesses statutory amalgamation or the formation of a partnership; and

(d) through the joint participation in a business venture through a co-tenancy (or joint venture).

VI. TAX CONSIDERATIONS

Due to the zeal of the tax reformists, income tax law is a field of constant change. This is largely

due to the role that taxes play in the fiscal management of our economy as well as a means by

which the federal government can implement economic policies through various incentives and

disincentives.

If this is not your area of practice, you should not rely on information or knowledge that is stale-

dated. To properly represent your client, you should seek the assistance of a fellow practitioner who

specializes in tax or work with your client's accountants since many of the major accounting firms

have tax specialists. This is not to suggest that you can "wipe your hands" of any involvement. You

should understand and review advice from third parties and be able to explain it to your client. If you

are not qualified to do so, then avoid giving tax advice on how to structure a purchase. With this

caveat in mind, as a commercial law practitioner you should have a general idea of a number of tax

concepts which will play a role in either a purchase of assets or a purchase of shares.


6 Saskatchewan: Bar Admisison Program Corporate Commercial - Purchase and Sale of a Business

Generally, the vendor's tax position tends to govern how an acquisition will be structured (as a

share purchase or a purchase of assets) because any increase in asset values (e.g., inventory or

depreciable assets) over the vendor's tax base (i.e., the values to which depreciable property has

been depreciated or the cost of his inventory) must be included in his income in the year of the

closing of the sale. On the other hand, such increase in asset values may be depreciated by the

purchaser only over a period of time. Individual vendors (as opposed to corporate vendors) of a business will also want the acquisition

structured as a share purchase agreement because any increase in the amount they paid for their

shares (the adjusted cost base) will be capital gains in the vendor's hands. 50% of the capital

gain for 1990 and subsequent years is taxable. More importantly, however, an individual

shareholder may have the benefit of the capital gain exemptions. From the purchaser's point of view, he will generally wish to purchase assets in order to "step

up" the adjusted cost base of assets purchased. On the other hand, if the company being

purchased has significant tax losses due to a difficult start-up or other reasons, purchasing shares

may be attractive, especially if the future of the company looks bright, as these losses may be

used to offset income. These losses cannot be acquired in an asset purchase.

A. PURCHASE OF ASSETS

1. Allocation of Purchase Price

Section 68 of the ITA requires that the purchase price be allocated among the assets on a

reasonable basis. As indicated above, the interests of the vendor are directly opposite those of

the purchaser on the allocation. If the allocation is arrived at from fair, arm's length negotiations, Canada Revenue Agency ("CRA")

will normally accept the allocations arrived at between the parties. However, CRA does have the

power to review and reassess any allocation which it considers unreasonable in the circumstances.

Revised August 2004 Not to be used or reproduced without permission - Saskatchewan Legal Education Society Inc.

Saskatchewan: Bar Admission Program 7 Corporate Commercial - Purchase and Sale of a Business 2. Accounts Receivable

Unless the parties agree to a joint election pursuant to s. 22 of the ITA, the transfer of accounts

receivable will be treated as a capital transaction. Thus, any gain or loss realized on the transfer

of accounts receivable will be treated as a capital gain or loss by the vendor.

If a joint election is properly filed, the vendor is entitled to deduct the difference between the

face value of the accounts receivable (other than those that have already been deducted as bad

debts) and the consideration received for the accounts receivable in the allocation. The

purchaser must include the value allocated to the accounts receivable in income and can

similarly make a claim at year end for non-collected accounts receivable. In the event the

purchaser is able to collect accounts receivable which were previously claimed as bad debts by

the vendor, then the purchaser must include the amount collected as income.

3. Inventory

Inventories are a non-capital item and, therefore, any gain resulting from the sale is treated as

income by the vendor. The value allocated to the inventory is treated as part of the cost of sales

by the purchaser.

4. Eligible Capital Property

Goodwill and other non-depreciable intangible properties such as customer lists, copyright and

technical knowledge are treated somewhat like depreciable capital property in that the proceeds

allocated to goodwill are generally taxable. Subject to the balance in the vendor's cumulative

eligible capital account, one-half of the proceeds are credited to the cumulative eligible capital

account, and, to the extent that it represents a recovery of "depreciated goodwill", will be taxed

as active business income. The other 25% of the proceeds is credited to the capital dividend

account. The purchaser should attempt to allocate as little of the purchase price as possible to

those types of assets and the vendor should attempt the opposite.



The purchaser will be permitted to include 3/4 of the cost of the goodwill in the cumulative

eligible capital account which is then eligible to be amortized on a declining balance at 10% per

annum. This will assist the purchaser in reducing future taxable income.

B. SALE OF SHARES - TAX IMPLICATIONS

Generally, the tax implications on the sale of shares are straightforward. The price paid for the

shares becomes the cost to the purchaser and any sale of these shares in the future will result in a

capital gain or loss to the purchaser measured from this base. From the vendor's perspective, the net proceeds (purchase price less the cost of selling) on the sale

of shares will result in a capital gain or loss, depending on the cost base of the shares. The vendor

may be entitled to claim a capital gains exemption and it would be recommended that you review

the recent tax changes which provide individuals with a $500,000 exemption where the shares

represented "qualified farm property" or shares of a small business corporation which have not been

held by anyone other than the individual, or related persons, throughout the immediately preceding

24 months (note that during the required holding period, more the 50% of the value of the assets of

the corporation must have been used in an active business carried on, primarily in Canada, by the

corporation, or a related corporation).

C. DEDUCTIBILITY OF INTEREST

Interest paid in connection with the purchase of assets (i.e., acquisition financing) or shares of a

business is generally a deductible expense.

D. GENERAL

It is understandable from the above that a vendor will usually demand a higher price for the sale

of assets as opposed to the sale of shares. After he pays corporate taxes on the proceeds obtained

from the sale, there is the additional cost of distributing the proceeds from the selling corporation

to the shareholders. The job of carrying out the analysis required to determine the price

differential between the two types of transactions is, of course, for the accountant.



VII. THE LETTER OF INTENT

"A gentlemen's agreement is an agreement which is not an agreement, made between two persons, neither of whom is a gentleman, whereby each expects the other to be strictly bound without himself being bound at all."

In many cases, the purchaser and vendor, enthused with having "made a deal", will want a

binding agreement as soon as they settle on the price and a rough description of the assets being

purchased. A "term sheet", "letter of intent" or a "memorandum of understanding" are generally

not legally binding documents (if they are, a lawyer will have a difficult time elaborating on such

agreements) except in, generally, three important areas:

(a) the obligation of the parties to negotiate in good faith towards the execution and delivery of a definitive and binding agreement of purchase and sale, but specifically disclaiming any contractual intent, and allowing either party to terminate negotiations without obligation unless a final binding agreement is signed;

(b) the right of the proposed purchaser to conduct an investigation of the business and affairs of the corporation, in the case of a share purchaser, or of the business carried on with the assets which are the subject matter of a proposed asset purchase - the purchaser's so-called "due diligence"; and

(3) the obligation of the proposed purchaser to maintain the confidentiality of the information received as a result of the purchaser's due diligence and to only utilize such information in connection with the proposed acquisition.

The only way to satisfy the desire of the anxious purchaser and vendor if they want a legally

binding document at the outset is to provide for an option to purchase with a draft acquisition

agreement attached. This will enable the purchaser to have time to investigate the business he is

buying. Experience shows, however, that investigation and negotiation of a detailed acquisition

contract should be conducted concurrently, without any prior written agreement of any sort.

Invariably, the investigation will reveal facts which will affect the contract details. The

requirements of the purchase contract in respect of representations and warranties will force the

vendor to make disclosures that will give the purchaser a different perspective on the business.

Accordingly, it is best to go to the basic objective, which is a completed acquisition contract.



VIII. DUE DILIGENCE

The careful completion of the due diligence process is a sine qua non to a successful transaction.

Generally, due diligence falls into two main categories - so-called legal due diligence and business

due diligence - and even those categories overlap. Legal due diligence involves such matters as

minute book reviews (including the constating documents, bylaws, organizational proceedings,

minutes, resolutions, etc.), some related financial statement review, normal corporate searches, title

searches and searches to determine security interests held by others, reviews and confirmations of

lease terms, reviews of material contracts, reviews of loan agreements, etc. - all with a view to

permitting the proposed purchaser to satisfy itself that the vendor owns the shares or assets being sold

and that they are free from all encumbrances other than those that the proposed purchaser may have

agreed to assume and, in the case of a share purchaser, that the shares being purchased have been duly

allotted and issued, are fully paid and otherwise unencumbered. The business due diligence involves

an understanding of the material contracts, contacts with customers and suppliers, reviews of

inventories of raw materials, work in process and finished goods, employee relations, status of

payables and receivables, banking relations and the like. Usually lawyers conduct the legal due

diligence and businessmen conduct the business due diligence. The proposed purchaser always

conducts due diligence reviews of the vendor and/or the corporation whose shares or assets are being

purchased. However, the vendor may also conduct due diligence on the proposed purchaser where,

for instance, the vendor is taking back debt, whether secured or unsecured, as part of the purchaser

price or is receiving shares or other securities of the purchaser as part of the purchase price.

Generally, however, the vendor's due diligence will not involve as extensive a review as the

purchaser's.

IX. THE CONTRACT

Two basic forms of acquisition contracts are provided as precedents: the share purchase contract

and the asset purchase contract. Whether shares are acquired or assets are acquired, the contract

provisions are, by and large, similar. In both forms of acquisition, the contract should contain

clauses which define the property being acquired, the purchase price, the representations and


Saskatchewan: Bar Admission Program 11 Corporate Commercial - Purchase and Sale of a Business warranties of the vendor and the purchaser, the liabilities, if any, assumed, the mechanics for

closing the transaction, and covenants or representations and warranties that survive the closing.

Of course, there are certain differences for a share purchase agreement which will be discussed

immediately after the asset purchase provisions.

It should be remembered that the acquisition agreement embodies or makes reference to all the

terms and conditions of the "deal" and governs not only the more fundamental matters of price

and the assets being purchased and sold, but everything including the nature of the documents to

be delivered on closing and matters to be completed after closing. Again, it cannot be too

strongly emphasized that the lawyer must know as much as possible about all of the details of the

transaction when drawing the agreement. Learning of information subsequent to the signing of

the acquisition agreement will be too late and the failure to have obtained this information earlier

might be costly.

During the initial due diligence process, often after the proposed purchaser has progressed to the

point that it is satisfied that there is a transaction to be done, one of the parties' solicitors

(usually, but not always, the purchaser's) will produce a draft of the definitive acquisition

agreement. This first draft is often most responsive to the needs and concerns of the party whose

solicitors produce the draft and less responsive to the other party's needs and concerns. While

this bias in the first draft is completely natural, the more even-handed the first draft is, the

shorter and less costly the negotiation process will be and, in many cases, the more likely it will

be that a definitive agreement will, in fact, be signed and the transaction closed. We have all had

the experience of reviewing a first draft and finding little to connect its terms and provisions with

the economic terms negotiated between the parties. This is not only annoying but, in some

cases, destroys the trust and confidence which the vendor and the purchaser have carefully

nurtured and threatens the fabric of the proposed transaction.

The following is an outline of the non-tax considerations which can affect whether the sale of a

business takes the form of an asset versus a share transaction:



(a) Basic Conceptual Difference Between the Asset and Share Techniques

The conceptual difference between an asset purchase agreement and a share purchase agreement is fundamental and simple, but sometimes misunderstood. In a share purchase transaction, the purchaser is obviously buying the entire corporation which itself owns the business in question. This means that the purchaser inherits the full spectrum of assets and liabilities of the incorporated business, stretching back to its original establishment. While the purchaser will normally have paid close attention to the assets owned by the incorporated business, it may not be as aware or familiar with the liabilities inherent in a share purchaser. Such liabilities may be unrecorded on the books of the corporation, unquantified or unquantifiable and contingent upon the occurrence of future events. For example, income tax reassessments of the corporate vendor, arising many months after closing, will constitute a liability of the purchased corporation and hence the liability of the purchaser, subject to contractual protections from the vendor. On the other hand, in an asset purchase deal, the purchaser acquires only the specific assets identified and conveyed in the transaction. Every other aspect of the business, including excluded assets and liabilities, remain with the vendor. In an asset purchase deal the risk to the purchaser of undisclosed liabilities is dramatically reduced, since only encumbrances attaching to the specifically purchased assets will become the responsibility of the purchaser, and these can usually be clearly ascertained and dealt with. At the same time, it is sometimes difficult in an asset purchaser agreement to achieve a comprehensive description of the business which the purchaser wishes to acquire, since the purchaser will acquire only the assets listed in the agreement as part of the deal.

(b) Acquisition of Assets Involving Third Parties

Some businesses own assets which may be of critical value to a purchaser but which involved third parties and many be more difficult to acquire in an asset purchase deal. For example, franchise and distributorship rights, licenses and leases will all involve the purchaser, in an asset purchase deal, seeking assignments, consents and possible novations from the third parties, in order to effectively capture the assets. Where the business is centered around such assets, a share purchaser deal may be more effective from a purchaser's perspective, even though a change of control in the corporate vendor often gives rise to a requirement of consent from the third party.

(c) Transfer Costs

Where the assets of the business are such as require processing through a title transfer agency and the costs of effecting the title transfer are significant, a share purchase may be more attractive. In some provinces and with respect to certain assets, provincial sales tax is charged on every sale, which can make asset purchase transactions expensive on this level.



A. SALE/PURCHASE OF ASSETS

1. The Assets Being Purchased

Obviously, greater care must be taken in drafting the clause describing the assets being acquired

in an asset purchase agreement than in a share purchase agreement. In a share acquisition, all of

the assets owned by the company automatically are acquired through the acquisition of shares

and, therefore, the inclusion of schedules of assets in such an agreement are more for information

and investigation purposes and to ensure that on closing all of those assets as represented and

warranted by the vendor will be acquired and will not vanish.

In an asset purchase agreement, aside from listing the assets in schedules, a general clause is

required to ensure that all assets, even those that the purchaser (and perhaps the vendor) is

unaware of, will be acquired on the closing. An example of such an omnibus clause is "all other

property or assets, whether real or personal, tangible or intangible, owned by the corporation in

the purchased business on the closing date which are not specifically listed above or excluded

below".

Such a clause also serves to capture assets acquired in the ordinary course of business from the

date of the last financial statement (or other disclosure date) to the closing date.

Provision must also be made to exclude assets not intended to be sold, such as assets disposed of

in the ordinary course of business, the name of the corporation (i.e., TransCanada Pipelines

Limited would not wish to sell the name with the assets of a subsidiary pipeline), cash on hand

or in banks or other depositories, credits or refunds of income or other taxes, specific contracts,

the minute book, the corporate seal of the vendor corporation, and, of course, the purchase price

provided for in the purchase agreement.

It is also usual to include appropriate clauses providing for inventory quantification and

valuation as of the closing and a corresponding adjustment to, or determination of a portion of,

the purchase price. Such clauses reflect the fact that inventory will, of course, continue to be

sold in the ordinary course of the business prior to closing.



In drafting a clause relating to the assets being purchased and the clauses of representation and

warranty, it is particularly important to ensure that upon the acquisition, title to the technology

necessary to run the business will pass to the purchaser. If the technology were developed

in-house, it is important to ensure that the technology belongs to the company selling and not to

an employee or to a third party. It is important further to check to see that the company

protected its rights, preferably by patenting hardware and by copyrighting written processes,

know-how and software. If such precautions were not taken, customers may be free to clone and

re-sell the technology which would undercut the products and severely reduce the company's

markets. In some cases, companies will only have the marketing rights to a technology and not

own it. An investigation is required to see that the marketing rights can be transferred from the

owner.

2. Assumption of Liabilities

Depending on the transaction negotiated, the purchaser will be required to assume certain

liabilities and obligations. These may include various contracts, agreements, employment

agreements and possibly the liabilities on the balance sheet of the corporation as at a certain date.

Under the Trade Union Act for Saskatchewan, a purchaser of a business as a going concern is

bound by the union agreement entered into by the vending corporation or owner. It is not

similarly obligated with respect to employment agreements. Obviously, the vendor will wish the

purchaser to assume the employment agreements of its non-unionized staff to avoid the cost of

making payments in lieu of notice on terminating them. The purchase price should be stated to

include the assumption of liabilities plus cash, shares or other consideration.

3. Allocation of Purchase Price

The importance of the allocation of the purchase price among the various assets acquired was

discussed above. It will, of course, have a considerable impact upon the taxable incomes of both

the purchaser and the vendor. It is for this reason that early consideration be given to the impact


Saskatchewan: Bar Admission Program 15 Corporate Commercial - Purchase and Sale of a Business the allocation will have on the purchase price. From a bargaining position, it is easier to have

taken into account an unfavorable allocation of the purchase price and initially offer a lower

price than later upon learning of the adverse impact, and trying to get the vendor to agree to a

lower price after "agreement in principle" has been reached.

4. Representations and Warranties by Vendor

The representations and warranties of the vendor are his statements as to the condition of his

business and assets on a specified date, which is generally the date of the last financial statement.

The negotiation of the representations and warranties section of the purchase agreement is one of

the most time-consuming exercises in drafting the definitive agreement and also one of the most

important. Representations and warranties document the understanding between the parties as to

what the purchaser is agreeing to buy and what the vendor is agreeing to sell.

A representation is nothing more than a statement of past or existing fact. A warranty is a promise

that an existing or future fact is or will be true. It is important when drafting representations and

warranties in a purchase agreement that it is made clear that each statement of fact is being warranted

to be true and the party making the representation acknowledges that the other party is relying on the

truth of the statement in entering into the transaction. In practice it is sufficient to say that

representations and warranties are statements that, if inaccurate, give rise to a right to sue for

damages. Thus, where a vendor makes a representation and warrants that it has not infringed the

intellectual property rights of another person in designing its product, and it is subsequently

discovered that it has, the vendor will be liable to the purchaser for any damages arising out of such

infringement.

Representations and warranties allow the parties to allocate the various economic risks associated

with the transaction. A representation and warranty identifies a possible risk and then allocates

that risk to the party making the representation and warranty. If the vendor gives a representation

and warranty as to the accuracy of its financial statements and that representation and warranty

proves to be incorrect, the vendor will then be liable in damages or to indemnify. The nature and



the extent of the representations and warranties given may have a correlation with the purchase

price to be paid for the shares or assets in the purchase agreement, such that the more specific

and comprehensive the representations and warranties, the higher the consideration flowing from

the other party. On the other hand, a vendor which is unwilling or unable to provide

representations and warranties, such as a vendor conducting an auction or a trustee in

bankruptcy, will often accept a lower price than a vendor willing and able to offer

comprehensive representations and warranties.

It is clear that the negotiation of representations and warranties has a significant impact upon the

allocation of risk. The more difficult question to answer is who should bear the risk. Typically,

the question of who should bear the risk is answered by the economics of the transaction and the

relative bargaining strength of the parties.

For instance, a purchase agreement with very specific representations and warranties covering

every aspect of the vendor's business leaves little risk to the purchaser. The purchaser can be

comfortable that it knows the business it is buying and, if it is wrong, it has a remedy against the

vendor for the error. Absolute representations and warranties serve to protect the purchaser from

uncertainty but there is a cost to such certainty. In theory, the more protected the purchaser is,

the higher the consideration flowing to the vendor should be. More common than absolute

representations and warranties is that the purchaser will be willing to accept some risk through

the dilution (through materiality or knowledge qualifications) or deletion of some or all of the

representations and warranties. The purchaser will generally require absolute certainty on only

those matters which it considers to be vital and will accept a lower threshold on matters which

are less material to it. For instance, where the vendor's business receives a great deal of value

from its intellectual property, the purchaser will see and be willing to pay for strong

representations and warranties on that intellectual property, but may be willing to accept weaker

assurances regarding the company's inventory.

Despite its effect on the purchase price, the purchaser must resist the almost inevitable push of

vendor's counsel to qualify each representation and warranty. The effect of such qualification is

to significantly weaken the protection afforded the purchaser by the representations and


Saskatchewan: Bar Admission Program 17 Corporate Commercial - Purchase and Sale of a Business warranties and therefore transfers a significant amount of risk to the purchaser. It should not be

forgotten that the vendor is the party most capable of insuring against such risk, as it has the

most detailed and intimate knowledge of the business being acquired.

There are, of course, other factors which may come into play in determining who should bear the

risk. For instance, the question of who should bear the risk in a purchase agreement is often

decided by the relative bargaining positions of the vendor and purchaser. For example, a vendor

conducting an auction or a trustee in bankruptcy will generally assume less risk than a

"motivated" vendor which desires to sell its operations as a going concern in an orderly way.

Similarly, where a purchaser is already a customer or supplier of the business or a competitor,

the purchaser may require less representations and warranties because it is already familiar with

the business it is acquiring. The purchaser is therefore more capable and confident in assuming

the risk of unknown factors. The question of who should bear the risk is a function of the

economics of the transaction, the relative bargaining strength of the parties and transaction-

specific factors.

Survival clauses are included in a purchase agreement to avoid case law that held that

representations and warranties would otherwise merge upon closing (that is, cease to be actionable).

The negotiation of the length of time that representations and warranties should be sufficiently long

for inaccuracies to become apparent to the purchaser but not so long as the vendor must forever

remain uncertain that the business it has sold could continue to pose the potential for liability.

There will be varying survival times depending upon the nature of the representation. Often, a

period of from one to three years following closing is agreed to. For instance, for matters such

as the correctness of a statement that the vendor is not in default under any lease, a period of one

to three years should be sufficient to deliver any inaccuracies. However, an indefinite survival

period for representations dealing with title to property, pensions and environmental matters may

be more appropriate as these liabilities may not be discovered until years into the future.

Whether these liabilities arise two years from the date of purchase or 20 years from the date of

purchase, it would be reasonable to expect the purchaser to assume the risk for loss arising out of

actions taken on the part of the vendor unless it is specifically bargained to do so. The purchaser



must assess the particular risks of the business it is acquiring and ensure that appropriate survival

periods for the representations and warranties are negotiated such that it is protected against

unforeseeable losses that arise in the future from actions taken by the vendor in the past.

One of these important representations is that the financial statements of the selling corporation

delivered by the vendor as at a certain date, fairly present, in accordance with generally accepted

accounting principles, consistently applied, the financial condition of the corporation as at the

date of the statement. Other representations will supply descriptions and representations as to

the vendor's title to the property (i.e., free and clear of all encumbrances), the nature of that title

(i.e., whether the particular property is owned or leased), the condition of the property (i.e.,

fixtures and equipment "as is" or in good working condition), the location of the property (i.e.,

some assets may be off-site in storage or transit), the non-occurrence of any material adverse

change in the financial condition of the business since the date of the last financial statements,

the state of the inventory and receivables and intangibles (such as patents, trademarks,

copyrights and important contracts). Here it is important to get representations as to the good

standing of all leases and contracts and that they are assignable.

The representations and warranties, together with the schedules of assets that they relate to, will

supply the purchaser with detailed information that he may utilize in investigating the vendor's

business to assure himself before closing that he is, indeed, getting the value represented to be

shown by the financial statements. In addition, of course, representations and warranties are

included to provide the purchaser with the right to take action for an indemnification if the

representations and warranties are not true.

Other clauses dealing with the state of the assets will provide details as to the various properties

owned including all material contracts, litigation and other claims, payment of taxes, the state of

the pension plan, insurance, employment contracts, and similar matters. The vendor will also be

expected to represent and warrant as to the standing of the company, that the business was

legally operated and that it legally can enter into the contract and has been authorized to do so.


Saskatchewan: Bar Admission Program 19 Corporate Commercial - Purchase and Sale of a Business Where inventory is an important part of the seller's business, representations of the condition of

the inventories should be obtained. Obviously a buyer will not want to pay for slow moving or

obsolete inventory. He will want contractual assurances that the inventory he purchases is

merchantable or can be sold in the ordinary course of business and at a profit.

In an acquisition agreement, the representations and warranties relate to three different time

periods. The seller represents the condition of his business as of the date of his last financial

statement. He further represents that his business has not been adversely affected to the date of

the execution of the contract, and, thirdly, there will be no adverse change to the time of closing.

In other words, the vendor is saying through these representations and warranties:

(a) that on the date of the financial statement, this was the condition of my business;

(b) my business continues to be at least as good at the execution of the agreement; and

(c) my business will not be in any worse condition when we close the deal.

5. Representations and Warranties by Purchaser

The representations and warranties of the purchaser are more brief and generally parallel only

those representations and warranties of the vendor which relate to corporate standing and that it

has authority to enter into the agreement.

6. Covenants of the Vendor

Whereas a representation and warranty is a promise that a statement of fact is true and correct, a

covenant serves to ensure that a future event will or will not occur. Covenants are generally used

as a mechanism to govern the behavior of the parties in the interim period between the date that

the agreement is signed and the date that the transaction closes. The vendor's covenants are an

assurance to the purchaser that it is buying the business it agreed to buy, while the purchaser's

covenants require it to do everything in its power to close the transaction.



Similar to representations and warranties, the performance of all covenants is often made a

condition to closing. Thus, if the vendor covenants "not to make or agree to make any material

change in the compensation of any director, officer or employee" in the period between signing

the agreement and closing the transaction and the vendor breaches this provision, the purchaser

has recourse against the vendor and has the option of not purchasing the business.

These clauses are different from the representations and warranties in that the vendor agrees to

do certain things. For example, the vendor will be required to:

(a) provide information and access to the premises so that the purchaser can properly carry out further investigations of the condition of the assets and the business;

(b) continue to operate the business and affairs of the corporation in the ordinary course of business from the date of the agreement to the closing date (in this clause, restrictions as to particular transactions relative to the property or business which the purchaser may wish to impose can be included);

(c) preserve the goodwill and business of the corporation;

(d) obtain consents of third parties required to assign contracts and will take all necessary steps to assign the various contracts prior to closing;

(e) provide and make available copies of software and information systems to enable the purchasing company to use the systems employed, data processing, marketing, etc.; and

(f) not compete for a reasonable period of time in a reasonable stated territory after the closing.

7. Covenants by the Purchaser

The purchaser usually covenants that it will treat the information it receives prior to the closing

on a confidential basis.

8. Indemnification

Indemnities are provisions whereby one party protects the other from damages or losses that are a

consequence of the ownership of the property and the transaction of purchase and sale. The

essential purpose of an indemnity is to allocate risk. Indemnities are particularly useful in


Saskatchewan: Bar Admission Program 21 Corporate Commercial - Purchase and Sale of a Business dealing with genuine unknowns in a business such as future environmental liabilities or

unknown intellectual property violation claims where the vendor refuses to make a

representation or warranty on the basis that the facts are not within its knowledge. Indemnities

are also utilized by the parties to a purchase agreement in order to avoid the common law

concepts of remoteness and foreseeability which can serve to limit the amount and type of

damages recoverable for a breach of a representation or warranty. In addition, indemnities can

be drafted in a way such that the indemnified party is entitled to all of its legal expenses in

bringing the action, rather than subjecting the award to the jurisdiction of the court.

In terms of risk allocation, imagine an example of a vendor which may be reluctant to make the

representation that its company's financial statements are absolutely true and correct, claiming

that the statements are prepared by management and that it has no knowledge of their

accurateness. Instead of providing for a representation or warranty with respect to the accuracy

of such statements, the vendor may indemnify the purchaser in the form of a lower purchase

price for any incorrectness in the financial statements that adversely affects the value of the

purchased company. In this way, the vendor assumes some or all of the risk for any inaccuracies

in the financial statements that adversely impact the business.

On the other hand, where the vendor refuses to provide either a representation and warranty or

any indemnity in favour of the purchaser in respect of the accuracy of the financial statements,

the risk of inaccuracy in those statements is borne by the purchaser. The allocation of risk

function translates into the indemnification section of the purchase agreement being the subject

of intense bargaining. It represents the tension between the purchaser's desire for protection

against breaches of the vendor's representations and warranties and the risk of unknown factors,

and the vendor's desire to avoid liability and the assumption of risk arising out of a business it no

longer owns.

Once it has been determined that an indemnity or indemnities are appropriate in a transaction, it

must be decided what type of indemnity is suitable to protect the parties' interests. There are a

number of ways of structuring indemnity clauses, each with their own characteristics and



consequences. The following are common indemnity clauses and their appropriateness:

(a) deductibles ("basket clause"), (b) thresholds, (c) caps, (d) absolute indemnities, (e) length of time, and (f) holdbacks and escrows.

9. Conditions of Closing

A condition is a term of the purchase agreement that is so important to the understanding

between the parties that a breach of the term will mean that the agreement is at an end. The

purchase agreement will normally be executed prior to the deal closing. Therefore, conditions

both for the benefit of the purchaser and for the benefit of the vendor are often inserted to be

satisfied before the deal may close. Conditions of closing permit time for the necessary consents

and approvals to be obtained and, in the event that they are refused, permit a party to decline to

be bound by the contract. Conditions of closing also permit the purchaser to feel comfortable

that in between signing the purchase agreement and closing the deal it will not be required to be

bound by the contract and in the event of material adverse changes to the business.

The common law provides that a party is only entitled to waive a condition that is included for its

benefit. Thus, conditions should be separated in the agreement by who the condition benefits. If

this step is not taken, a relatively unimportant condition (to the benefiting party) may be construed

by a court as a "true condition precedent" and would then have to be strictly compiled with or

waived by both parties, otherwise the agreement will be deemed terminated. For instance, if an

agreement stated that closing was conditional upon receipt by the purchaser of a regulatory

certificate and did not say the purchaser could waive this condition, the vendor might rely on the

failure of the government to supply the certificate on time to terminate the agreement, even though

the purchaser was prepared to proceed without receiving the certificate. It is imperative that the

party in whose favour a condition runs has the ability to waive the condition should it so choose.



10. "Boiler Plate"

Boilerplate clauses at the end of an agreement should not be viewed as unnecessary "legal mumbo

jumbo". Boilerplate clauses are important and indeed necessary additions to any purchase

agreement. However, boilerplate clauses are in a sense not boilerplate at all. They cannot merely

be thrown in at the end of the agreement without paying them any thought. In fact, they will vary

depending upon the nature of the transaction and the will of the parties to the agreement. For

instance, without a "Governing Law" provision, it is unclear whether the agreement is to be

governed by the laws of British Columbia or the laws of Ontario. This scope of this problem is

magnified when interprovincial or international enterprises are th parties to a purchase agreement.

B. DISTINGUISHING FEATURES OF SHARE PURCHASE AGREEMENT

A purchaser of shares wants the same level of comfort in respect of the shares as a person buying

assets of a business as a going concern. The important distinguishing features of a share

purchase are as follows: 1. Documents to be Examined

Since shares represent ownership in a corporation, more attention has to be paid to the corporate

and financial structure of the corporation. Is there a Unanimous Shareholder Agreement

("USA") and, if so, does the purchaser become a party to it? Examine all of the corporate

records, registers and ledgers to determine if all is in order and if the shares have been properly

recorded. Are there any unusual share restrictions (i.e., rights of first refusal) and, if so, have

these restrictions been met and is your client prepared to assume the restrictions? Are there any

unusual share provisions which would affect voting or dividend rights? 2. Employer/Employee Relations

In a share purchase, the purchaser is assuming all obligations to employees, both in-scope and

out-of-scope. If a union is in place, then the considerations and review should be the same as for

an asset purchase since the collective bargaining agreement will detail the terms, commitments

and obligations which the purchaser will be assuming.



If there is no union, then an assessment of the employer/employee relations will be important as

the impact of unionization could be significant on the business. As a lawyer, you are not in a

position to advise your client of the probability of employees banding together to form a union;

however, you should raise it with your client to determine if the issue has been considered in

making the purchase decision.

Examine any employment contracts to determine whether valuable employees have long-term

commitments or whether non-productive employees can be replaced and the cost of doing so.

3. Legal Considerations

If the company is listed on a stock exchange, you should determine the requirements of the stock

exchange. Many smaller corporations require approval of the directors or shareholders before

shares can be transferred; therefore, compliance is necessary.

Will a change in control of the corporation result in default under any debentures or loan

agreements carried by the corporation? Are the financial commitments supported by personal

guarantees which are to be released and replaced?

Is the sale of shares exempted under the Securities Act, 1988 from the registration and prospectus

requirements? Are there any filing requirements with the Saskatchewan Securities Commission

in connection with the sale?

Fewer tax implications are involved in a sale of shares; however, the considerations are different

than in a sale of assets. (See the section "VI. Tax Considerations" in this paper.)

The drafting of the warranties and representations does not change in kind but rather in

substance. For example, in an asset sale, the purchaser wants a representation that the assets are

free and clear of encumbrances, except those permitted. In a share sale, the purchaser is more

concerned that the financial statements properly disclose all debts and liabilities.

Revised August 2004 Not to be used or reproduced without permission – Saskatchewan Legal Education Society Inc.

Saskatchewan: Bar Admission Program 25 Corporate Commercial - Purchase and Sale of a Business Additional representations and warranties of the vendor found in purchase agreement are as follows:

(a) the total amount of authorized and issued capital in the company; (b) the due incorporation and compliance with necessary corporate filings in all

jurisdictions where it carries on business; (c) the names and shareholdings of all directors, officers and shareholders. A

certificate of incumbency taken by the secretary of the company is normally filed as part of the closing documents;

(d) the vendor's shares are not subject to any encumbrances or unanimous shareholder agreements (other than as disclosed) and that the sale of the shares will not result in a breach of an agreement with others;

(e) there are no outstanding options, warrants or any other rights in persons to acquire company shares or securities;

(f) there is no pending or threatened litigation; (g) there are no undisclosed liabilities of any kind including threatened, contingent or

potential ones; (h) there has been proper and timely filing of tax returns and there are no outstanding

assessments; (i) there will be no corporate changes made and no dividends or distributions of any

kind will be made prior to closing; (j) there are no outstanding loans or guarantees to shareholders, directors or employees; (k) the financial and corporate records are complete and correct in all material respects; (l) the company is in good standing with the Workers' Compensation Board, the

municipality (as to payment of all taxes and license fees), and with respect to payment of and remittance all income taxes, employment insurance, Canada Pension Plan, and pension plans, if any;

(m) warranty with respect to subsidiaries or affiliated companies; and (n) shareholder loans have been forgiven, assigned or otherwise dealt with.

4. Drafting

Since assets are not being purchased, it is not common practice to itemize the assets of the

corporation in schedules. However, lists of assets can be included which are useful to the

purchaser in investigating the state of the business. Similarly, an allocation of the purchase price

among the assets of the corporation is not necessary.



This changes the complexion of the closing and document preparation for the closing. There

will be no requirement to execute separate transfers, assignments and bills of sale; however, the

corporate shareholder registry will have to be updated. In taking control, the purchaser will likely want the resignations of all officers and directors and

the purchaser will have to call a shareholder meeting to replace the outgoing officers and

directors. If payment is deferred, then provision should be made for having the shares held in escrow until

there is full payment. The escrow agreement should address what happens with the voting

rights, declaration of dividends and other corporate activities.

X. CHECKLIST - PURCHASE AND SALE OF ASSETS 1. Searches

(a) Personal Property Registry - to determine if there are any security interests or writs of execution registered against the assets being purchased or the vendor.

(b) Corporations Branch - to determine whether the vendor and purchaser are in good

standing and the correct corporate name and spelling, and past corporate history of the vendor (i.e., former names and/or predecessor amalgamating corporations) to identify all corporate names to be searched for encumbrances which may affect the assets. If a business name is used, a search should be made to determine if it is duly registered.

(c) Bank of Canada - to determine if there has been any registrations pursuant to s. 427 of

the Bank Act. (d) Registrar of the Court of Queen's Bench - to determine if there have been any actions

by or against the vendor which may affect the assets being purchased. (e) Registrar of the Court of Appeal - to determine if there have been any appeals of any

actions by or against the vendor which may affect the assets being purchased. (f) Sheriff's Office - to determine if there are outstanding writs of execution (g) Land Titles Registry - title searches of any real property being purchased as well as a

Writ Registry search to determine if any writs of execution have been lodged.


Saskatchewan: Bar Admission Program 27 Corporate Commercial - Purchase and Sale of a Business (h) Registrar of Bankruptcy - to determine if there are any bankruptcy proceedings filed

against the corporation. (i) Municipal Tax Office - to determine outstanding taxes owed with respect to any real

property being purchased and any outstanding business taxes. (j) Workers' Compensation Board - to determine if the vendor's account is in good

standing. (s. 155(1), Certificate at Closing). (k) Municipal Planning Office - to determine if use of the vendor's property complies with

zoning bylaws and regulations. (l) Department of Finance - to determine if any outstanding taxes under the Revenue and

Financial Services Act (s. 51, Certificate at Closing). A consent to the release of information is required by the Department from the party being investigated.

(m) Canada Revenue Agency - to determine if any outstanding source deductions. ("Super"

priority charge granted Canada Revenue Agency on assets pursuant to s. 227 of the ITA). (n) District Excise - to determine if there are any tax remittances due or outstanding. (o) Corporate Minute Book (p) Environment Canada - to determine if there are any outstanding notices of contravention,

complaints, investigations, work orders or proceedings of any nature that have been filed. (q) Saskatchewan Environment - to determine if there are any outstanding notices of

contravention, complaints, investigations, work orders or proceedings of any nature that have been filed.

(r) SaskPower (Inspection Divisions) - to determine if there are any notices of contravention,

complaints, investigations, work orders or proceedings of any nature that have been filed. (s) SaskPower (Accounts Receivable) - to determine if there are any outstanding utility

accounts. (t) SaskEnergy (Accounts Receivable) - to determine if there are any outstanding utility

accounts. (u) Saskatchewan Labour Relations Board - to determine if there are any outstanding

notices of contravention, allegations of unfair labour practices, complaints, investigations, work orders or proceedings of any nature that have been filed.



(v) Saskatchewan Human Rights Commission - to determine if there have been any

outstanding notices of contravention, allegations of unfair labour practices, complaints, investigations, work orders or proceedings of any nature that have been filed.

(w) Pension Benefits Branch - to determine if there have been any notices of contravention,

unfunded liabilities, complaints, investigations or proceedings of any nature that have been filed.

(x) Occupational Health and Safety Branch - to determine if there have been any notices of

contravention, complaints, investigations or proceedings of any nature that have been filed. (y) Labour Standards Branch - to determine if there have been any notices of

contravention, allegations of unpaid wages, complaints, investigations, work orders or proceedings of any nature that have been filed.

(z) Fire Commissioner - to determine if the building(s) have been properly inspected. (aa) Special Searches - may be required as a result of the nature of the assets and business

carried on using the assets (i.e., search at Department of Energy and Mines with respect to mineral or petroleum Crown leases).

NOTE: Searches should be conducted in other jurisdictions where the vendor has carried on business. All searches should be conducted in the initial stages of the transaction and updated at the time of closing.

lA. Environmental Assessment

In recent years environmental issues have gained importance in corporate/commercial transactions. This is understandable when one considers the variety of individuals who are potentially subject to liability (i.e., current and past owners, secured creditors, lessees and directors). Additionally, the potential liability may be huge such as where the transaction involves numerous facilities with environmental considerations

Consequently, environmental assessments or audits have become an important part of the due diligence conducted by a purchaser to determine if any environmental contamination or concerns exist, including potential ones. There are two principal environmental audits - a compliance audit which, as its name suggests, evaluates the corporation's compliance with environmental laws by measuring pollution levels with permitted levels; and a management audit which evaluates the corporation's policies, practices and controls and its compliance with the foregoing.



Not all transactions will trigger environmental concerns - an example being the sale of a retail clothing store. The degree to which any transaction is environmentally sensitive will determine how extensive and detailed the environmental provisions of the purchase agreement will be and how much, if any, liability will remain with the vendor. At one end of the spectrum, the transaction may be structured on an "as is" basis, with the vendor passing all risk to the purchaser while taking an indemnity protecting the vendor from any liability it may have as a former owner. At the other end, the vendor remains liable for all matters existing prior to the closing and covenants to indemnify the purchaser from any liability with respect to such matters.

In an environmentally sensitive transaction, an environmental audit will no doubt be commissioned. When drafting the purchase agreement, the results of that audit should be considered and appropriately incorporated. Where the audit discloses existing or potential environmental concerns, the representations and warranties of the vendor will need to be qualified to fully disclose them. This is usually done by qualifying the relevant representations with appropriate exceptions (i.e., "except as disclosed in Schedule A"). Such exceptions are of extreme importance. Unless further terms and conditions are imposed by the agreement, the effect of disclosing such environmental concerns as exceptions to the vendor's representations and warranties is to force the purchaser to accept them as part of the purchase price. If the indemnity given by the vendor is limited to breaches of representations and warranties, then the indemnity will not extend to cover the cost of any remedial action required relative to the problems which were disclosed.

Generally speaking, the representations and warranties of the vendor will address its compliance with all environmental laws; that the vendor holds all required permits; that such permits are transferable; that there is no proceeding or notice of a review by which any such permit may be jeopardized; that all hazardous materials have been treated, transported, stored and disposed of in compliance with all environmental laws; that there is no action or proceeding or claim pending or threatened for non-compliance with environmental laws, including, any order imposing remedial action on the vendor; and that none of the properties have been used as a landfill site, have asbestos, PCB waste, radioactive substances, underground storage tanks and no past spills. The scope and detail of the representations and warranties will, as mentioned, be determined by how environmentally sensitive the transaction is, the bargaining skills of the respective parties and/or how anxious the vendor may be to sell.

As pre-closing obligations to be performed by the vendor, the purchase agreement should obligate it to provide the purchaser with access to the properties to permit it to conduct the audit and otherwise investigate the assets being purchased.

The purchase agreement may also include as a condition precedent to the purchaser's

obligation to close, that it has received the results of the environmental audit which are to disclose no (or no material) environmental liability or concern. Exceptions may be carved out from the vendor's representations and warranties to disclose liabilities or concerns identified by the audit. Where problems are identified, the parties may agree to resolve them in a variety of different ways. For example, the purchase agreement may provide for its termination with all deposits refunded; an adjustment to the purchase price; it may require that certain remedial action be taken, when, and how the costs of same are to be borne; or the offending assets may be deleted from those being sold.



How the parties agree to resolve the matter will also be reflected in the form of the indemnity given by the vendor to the purchaser in terms of its scope relative to environmental matters, as well as the length of time it applies to such matters after the closing. The scope of the indemnity will vary not only in terms of the types of environmental liabilities it may cover and whether it extends to circumstances which existed after as well as prior to the time of closing, but also in terms of quantum. It may be drafted such that the vendor is not liable under the indemnity unless the damages to the purchaser first exceed a certain threshold amount, and then the vendor's liability may be limited to such excess amount subject to a maximum figure.

2. Documents to Examine

(a) Incorporation Documents - to determine powers of the vendor and any restrictions on the sale of assets.

(b) Company Minutes - to determine shareholders of record, directors, signing officers, etc. (c) Unanimous Shareholders Agreement (d) Contract Documents - to determine title to assets being purchased in all contracts in

respect to the business being acquired and obligations being assumed. A review should be made as to whether consent is required to assign the contracts.

(e) Inventory List - to determine the value and nature of inventory and any special

considerations which might apply. (f) Financial Statements/Documents - for review by your client's accountants and/or auditor. (g) Income Tax Act Declaration - obtain Statutory Declaration as to residence of vendor (s.

116).

3. Legal Considerations

(a) Investment Canada Approval - Does the agreement require approval under the Investment Canada Act?

(b) Competition Act Approval - Does the agreement require approval under the Investment

Canada Act? (c) Purchaser's Corporate Objective - Does the purchaser's corporate objective allow for

carrying on of the business being acquired? (d) Securities Legislation - If the method of payment involved is the issuance of shares in

the purchaser, consideration must be given to whether the transaction is affected by the Securities Act, 1988. If a listed public company is the purchaser, the requirements of its listing exchange must be reviewed.


Saskatchewan: Bar Admission Program 31 Corporate Commercial - Purchase and Sale of a Business (e) Licenses - If the business is one regulated by statute or requiring municipal, provincial or

federal licenses, (i.e., undertakers, liquor lounges, marketing board quotas etc.) you will have to determine that the appropriate licenses/quotas have been issued.

(f) Regulatory Agency Approval - Does the purchaser of assets require approval of some

regulatory agency (i.e., Canadian Radio-television Telecommunication Commission approval)?

(g) Corporate Action - If debt securities are to be issued by the purchaser the necessary

corporate steps must be taken. (h) Competition - If a competitor is being acquired, it is wise to consider whether or not the

transaction is affected by the Competition Act.

(i) Sales Tax Legislation - Is the transaction affected by any provincial or federal sales tax legislation (i.e., provincial sales tax or federal Goods & Services Tax)?

(j) Tax Implications - Has the client been properly advised? (Refer to the section "VI. Tax

Considerations" in this paper.) (k) Approval of Shareholders and Directors - Approval of the shareholders pursuant to

s. 183 of the Business Corporations Act is required where there is a sale, lease or exchange of all or substantially all of the property of a corporation.

4. Drafting of Agreement

(a) General - The aforementioned search results and legal considerations should be considered when drafting the agreement and timing the closing.

(b) Assets - The assets being purchased should be summarized and scheduled to the

agreement. The liabilities being assumed are more commonly defined or described in the agreement.

(c) Purchase and Sale (d) Purchase Price

(i) adjustment following the taking of an inventory of assets;

(ii) adjustment for prepaid expenses, realty taxes, insurance, rent, interest on purchase price in the event the purchaser is deemed to have taken possession prior to closing; and

(iii) adjustment for uncollectable receivables.



(e) Purchase Price Allocation - Allocation of purchase price among assets including:

(i) real property (land/buildings);

(ii) chattels;

(iii) resource properties (exploration and development expenses);

(iv) goodwill;

(v) accounts receivable;

(vi) trade marks and patents;

(vii) inventory; and

(viii) income tax consequences considered and reviewed with client. (f) Payment of Purchase Price - manner of payment (including deposit and interest on

deposit). (g) Security for Payment - Security for payment if securities of the corporate purchaser are

being used to pay the purchase price. The vendor will want suitable representations regarding the corporation's status in much the same way as purchaser would require on purchase of shares.

(h) Prepayment Rights (i) Assignability (j) Closing - time and place of closing. (k) Time - Time of the essence. (1) Financial Statements - The financial condition of the vendor is the most important

factor in a purchase and therefore the most recently audited statements should be attached as a schedule to the agreement.

(m) Covenants, Representations and Warranties of the Vendor:

(i) that the financial statements have been prepared in accordance with generally accepted accounting principles consistently applied and fairly represent the financial position of business and there have been no material changes since date of statement and to closing;

(ii) any accounts receivable being acquired are collectible;

(iii) the assets being acquired are in good condition unless specifically stated otherwise;

(iv) the vendor's title to assets is free and clear of encumbrances other than those being assumed, if any (the latter should be precisely identified);



(v) that the vendor is not in default in respect to any agreements (i.e., leases or mortgages) and no dispute arising out of them;

(vi) the business has been carried on in compliance with all applicable laws;

(vii) the business will and has been operated in the ordinary course between date of agreement and closing;

(viii) all appropriate corporate action (if the vendor is a corporation) has been taken;

(ix) the vendor is a Canadian resident (s. 116 of the ITA);

(x) no restriction on sale giving rise to default under any agreements;

(xi) that all assets are as stated in the inventory and there are no outstanding options in respect of the assets; and

(xii) warranties to survive closing. (n) Representations and Warranties by the Purchaser:

(i) that the purchaser has the necessary power and authority to enter into the agreement; and

(ii) the purchaser is a Canadian as in the meaning of the Investment Canada Act. (o) Default

(i) as breaches of warranties give rise to a claim for damages only, accordingly, with respect to certain critical warranties they should also be made conditions precedent to closing so that if not satisfied or waived by purchaser before closing he would be entitled to repudiate the Agreement. Warranties that probably deserve this treatment are those that relate to title, material changes before closing, failure to obtain appropriate consents and resignations, failure to obtain release of guarantees, approval under the Investment Canada Act and failure of purchaser to be able to obtain a necessary license;

(ii) ability of purchaser to waive; and

(iii ) liquidated damages. (p) Inventory Count - Provision should be made for physical inventory count at or near

closing. (q) Goodwill and Other Intangible Assets - i.e., business name and restrictions on use. (r) Access Prior to Closing - Purchaser should have access to business premises and records

before closing to take inventory, etc. (s) Location of Assets - If assets are being moved to new location or premises, special

provision should be made.



(t) Employees - If it is intended to re-hire some of vendor's employees, special provision

will be required. Purchaser may wish to make re-hiring a condition of purchase. (u) Guarantees - If there are any vendor's guarantees outstanding, it may be necessary to

make releases a condition of closing. (v) Non-Competition - Depending upon nature of business, it may be desirable from

purchaser's point of view to include a non-competition clause. The clause must be reasonable in scope, time and geographical area.

(w) Confidentiality - i.e., customer lists.

5. Assignment of Lease

(a) Lease reviewed. (b) Prepaid rentals dealt with. (c) Landlord's consent obtained. (d) Property in leasehold improvements dealt with. (e) Estoppel certificate from landlord. (f) Land Titles Registry registration of lease confirmed. (g) Release of lease guarantees or indemnity obtained from purchaser or purchaser's principal. (h) Assignee's covenant to maintain lease in good standing. (i) Assignor's covenant as to status of lease.

6. Closing

(a) Agenda, including Bill of Sale and Bulk Sales Declaration (Bulk Sales Declaration no longer required in Saskatchewan).

(b) Statement of Adjustments. (c) Searches repeated. (d) Registration of necessary transfers, assignments and security interests. (e) Clearance Certificate from Workers' Compensation Board and Revenue and Financial

Services Act.


Saskatchewan: Bar Admission Program 35 Corporate Commercial - Purchase and Sale of a Business 7. Income Tax Considerations for Purchaser

(a) Allocation of Purchase Price Among Assets - May be subject to revision by the Minister - see s. 68 of the ITA.

(b) Depreciable Capital Property

(i) Capital Cost Allowance (“CCA”) is limited to one half normal rate in year of acquisition;

(ii) The purchaser should attempt to have purchase price allocated to classes having the highest CCA rates; and

(iii) Each rental building acquired equaling or exceeding the cost of $50,000 will be required to be included in a separate class (see Regulation 1101(1ac)).

(c) Inventory - to the purchaser's benefit to allocate as much as the purchase price as

possible to inventory in order to reduce future profits for tax purposes. (d) Accounts Receivable - An election pursuant to s. 22(1) of the ITA permits a purchaser to

deduct a reserve for doubtful debts with respect to receivables being acquired. The purchaser is also entitled to deduct any bad debts as they occur and which have not been previously claimed by the vendor pursuant to such election. In the absence of an election, any excess of the purchase price paid for the receivables over the amount ultimately realized on such receivables will be treated as a capital loss to the purchaser and not as an ordinary business loss.

(e) Prepaid Expenses - Amounts paid by the purchaser for the vendor's prepaid expenses

will not be deductible in the year which they are paid but rather will be deductible in the year to which the particular prepaid expense relates.

(f) Goodwill and Other Intangibles

(i) Three-quarters the amount of goodwill and other non-depreciable intangible properties is deductible at the rate of sever per cent per annum on a declining balance basis; and

(ii) The purchaser should attempt to allocate as little of the purchase price as possible to these types of assets.

(g) Reserves - If the purchaser is to assume the vendor's liability for goods and services not

yet delivered or rendered then consideration should be given to have the vendor pay the purchaser for assuming such liability. This permits the purchaser to claim a reserve pursuant to s. 20(1)(m) of the ITA.



(h) Blended Payments - If a portion of the purchase price is to remain outstanding for a

period of time then the agreement should specify what portion of the purchase price pertains to interest. In the absence of such specification, the purchaser will only be allowed a deduction for interest to the extent that a corresponding amount is included in the vendors’ income (s. 16(1) of the ITA).

(i) Non-Resident Vendor

(i) The purchaser, whether a resident of Canada or not, who purchased any of a non-resident's taxable Canadian property or Canadian resource properties (other than certain excluded property) is liable for tax on behalf of the non-resident vendor unless an appropriate certificate is obtained pursuant to s. 116 of the ITA or unless the purchaser had no reason to believe the vendor was not a resident in Canada after reasonable inquiry;

(ii) The purchaser is liable even though the vendor may not be taxable under the provisions of the applicable tax treaty; and

(iii) The definition of taxable Canadian property includes real property as well as any capital property used in carrying on business in Canada.

(j) Non-Arms Length Purchaser - The purchaser acquiring property through a non-arms

length transaction where the amount exceeds the fair market value will be deemed to have acquired the property at its fair market value and CCA will be calculated on the fair market value while the purchaser will be subject to recapture on the actual purchase price paid.

(k) Options

(i) Any amount paid for an option to purchase property will be included in the cost of the property if the option is exercised; and

(ii) If an option expires, then it is deemed to have been disposed of and will normally result in a capital loss.

8. Income Tax Considerations for Vendor

(a) Depreciable Capital Property

(i) The vendor must include in his income amount of CCA recaptured on a sale; and

(ii) The vendor should consider triggering recaptured CCA so as to utilize any non-capital loss carried forward; and

(iii) Consider terminal loss restrictions contained in s. 13(21.1) of the ITA.



(b) Inventory - Any gain on the sale of inventory will be treated as ordinary income and any

loss as a deductible business loss pursuant to s. 23(1) of the ITA. (c) Accounts Receivable - Any amount received by the vendor for accounts receivable of a

business is given capital gain treatment such that any discounting of the accounts receivable will be treated as capital loss despite the vendor having to include in income the previous year's reserve for doubtful accounts. An election pursuant to s. 22(1) of the ITA allows a vendor to deduct from income the amount of any discount on the accounts receivable.

(d) Reserves

(i) A reserve may be claimed pursuant to s. 20(1)(n) of the ITA with respect to proceeds from the sale of inventory that are not due for more than two years after the date of sale. There are restrictions to claiming the reserve where the vendor is a non-resident or where the sale occurred more than 36 months before the end of the year - see s. 20(8) of the ITA; and

(ii) A reserve pursuant to s. 40 may be claimed for the unpaid purchase price of capital property. The reserve is subject to residency restrictions and inclusion into income of the capital gain (20 per cent annually) – s. 40(1)(a)(iii) of the ITA.

(e) Goodwill and Other Intangibles

(i) Three-quarters of the sale proceeds allocated to goodwill and other non-depreciable intangible capital assets (i.e., franchise rights) must be applied to reduce the balance of the cumulative eligible capital account. Any such amount which exceeds the cumulative eligible capital account balance must be included in income by the vendor;

(ii) Where the vendor has ceased to carry on business, he is entitled to claim a terminal loss with respect to the cumulative eligible capital pertaining to that business; and

(iii) The vendor should negotiate an allocation as high as possible to such assets. (f) Warranties - Pursuant to s. 42 of the ITA where the vendor's proceeds of disposition of

capital property includes an amount received by the vendor as consideration for warranty obligations, any payments made by the vendor in subsequent years pursuant to such warranties are treated as capital losses.

(g) Options – s. 49 of the ITA

(i) An amount received by a vendor for the granting of an option to purchase is treated as capital gain unless the option is exercised in the year in which it is granted in which case the amount received will be considered proceeds of disposition; and



(ii) If an option exercised in the year subsequent to the year in which it was granted, the amount received for granting the option is added to the proceeds of disposition for the year of sale and an amended income tax return should be filed by the vendor to exclude such consideration from the vendor's income for the year in which the option was granted.

(h) Non-Resident Vendor - The vendor should obtain appropriate certificates pursuant to

s. 116 of the ITA so as to avoid a withholding tax by the purchaser. (i) Payments Based on Production or Use - Where the total purchase price is dependent on

future profitability there is a risk that the total purchase price (or portion thereof) could be treated as ordinary income to the vendor pursuant to s. 12(1)(g) of the ITA.

XI. CHECKLIST - PURCHASE AND SALE OF SHARES

1. Searches (a) Personal Property Registry - to determine if there are any security interests or writs of

execution registered against the assets being purchased or the vendor. (b) Corporations Branch - to determine if the corporation is in good standing, its correct

corporate name as well as its past corporate history to identify all corporate names to be searched for encumbrances which may affect the corporation and its assets, whether the vendor and purchaser are in good standing and the correct corporate name and spelling. If a business name is used, a search should be made to determine if it is duly registered. An additional search should be conducted to determine if the Director has been notified of the unanimous shareholder agreement pursuant to s. 140 of the Business Corporations Act of Saskatchewan. Also, a search of the articles of incorporation, and any amendments, as filed at the Corporations Branch should be conducted.

(c) Bank of Canada - to determine if there has been any registrations pursuant to s. 427 of

the Bank Act. (d) Registrar of the Court of Queen's Bench - to determine if there have been any actions

by or against the vendor which may affect the assets of the issuer. (e) Registrar of the Court of Appeal - to determine if there have been any appeals of any

actions by or against the vendor which may affect the assets being purchased. (f) Sheriff's Office - to determine if there are outstanding writs of execution. (g) Land Titles Registry - title searches of any real property of the issuer as well as a Writ

Registry search to determine if any writs of execution have been lodged.


Saskatchewan: Bar Admission Program 39 Corporate Commercial - Purchase and Sale of a Business (h) Registrar of Bankruptcy - to determine if there are any bankruptcy proceedings filed

against the corporation. (i) Municipal Tax Office - to determine outstanding taxes owed with respect to any real

property of the issuer and any outstanding business taxes. (j) Workers' Compensation Board - to determine if the issuer's account is in good standing. (k) Municipal Planning Office - to determine if use of the issuer's property complies with

zoning bylaws and regulations. (l) Department of Finance - to determine if any outstanding taxes under the Revenue and

Financial Services Act. A consent to the release of information is required by the Department from the party being investigated.

(m) Canada Revenue Agency - to determine if any outstanding source deductions. ("Super"

priority charge granted Canada Revenue Canada on assets pursuant to s. 227 of the ITA). A consent to the release of information is required by Canada Revenue Agency from the party being investigated.

(n) District Excise - to determine if there are any tax remittances due or outstanding. (o) Corporate Minute Book (p) Environment Canada - to determine if there are any outstanding notices of


(q) Saskatchewan Environment - to determine if there are any outstanding notices of


(r) SaskPower (Inspection Divisions) - to determine if there are any notices of


(s) SaskPower (Accounts Receivable) - to determine if there are any outstanding utility

accounts. (t) SaskEnergy (Accounts Receivable) - to determine if there are any outstanding utility

accounts. (u) Saskatchewan Labour Relations Board - to determine if there are any outstanding

notices of contravention, allegations of unfair labour practices, complaints, investigations, work orders or proceedings of any nature that have been filed.



(v) Saskatchewan Human Rights Commission - to determine if there have been any

outstanding notices of contravention, allegations of unfair labour practices, complaints, investigations, work orders or proceedings of any nature that have been filed.

(w) Pension Benefits Branch - to determine if there have been any notices of contravention,

unfunded liabilities, complaints, investigations or proceedings of any nature that have been filed.

(x) Occupational Health and Safety Branch - to determine if there have been any notices of

contravention, complaints, investigations or proceedings of any nature that have been filed. (y) Labour Standards Branch - to determine if there have been any notices of

contravention, allegations of unpaid wages, complaints, investigations, work orders or proceedings of any nature that have been filed.

(z) Fire Commissioner - to determine if the building(s) have been properly inspected. (aa) Special Searches - may be required as a result of the nature of the assets and business

carried on using the assets (i.e., search at Department of Energy and Mines with respect to mineral or petroleum Crown leases).

NOTE: Searches should be conducted in other jurisdictions where the vendor has carried on business. All searches should be conducted in the initial stages of the transaction and updated at the time of closing. 1A. Environmental Assessment

In a share purchase transaction, the environmental concerns and issues are as relevant as in an asset purchase transaction, and even more so in view of the fact that the purchaser of shares inherits all liabilities of the "acquired" corporation. Therefore, an environmental audit is an even more significant tool of due diligence in a share purchase transaction. However, since essentially the same considerations apply, please refer to the earlier discussion in these materials on environmental assessments. If the environmental audit, though, discloses environmental problems, one way the parties may elect to deal with them is to restructure the transaction from a share purchase to an asset purchase and exclude the offending asset(s). 2. Documents to Examine

(a) Incorporation Documents - to determine powers and share structure of the corporation and any restrictions on the sale of its shares and all other share provisions.

(b) Company Minutes - to determine shareholders of record, directors, signing officers, etc.


Saskatchewan: Bar Admission Program 41 Corporate Commercial - Purchase and Sale of a Business (c) Unanimous Shareholders Agreement (d) Contract Documents - to determine the corporation's title to all contracts in respect to

the business being indirectly acquired and obligations being assumed. (e) Financial Statements/Documents - for review by your client's accountants and/or auditor. (f) Income Tax Act Declaration - obtain Statutory Declaration a to residence of vendor

(s. 116 of the ITA). (g) Debentures 3. Legal Considerations

(a) Investment Canada Approval - Does the agreement require approval under the Investment Canada Act?

(b) Securities Regulation - Is the sale subject to securities regulation? (c) Stock Exchange Requirements - In the case of a public company listed on a stock

exchange you must determine the requirements of the appropriate stock exchange. (d) Licenses - If the business is one regulated by statute or requiring municipal, provincial or

federal licenses, (i.e., undertakers, liquor lounges, marketing board quotas, etc.) you will have to determine that the appropriate licenses/quotas have been issued.

(e) Regulatory Agency Approval - Does the change in control require approval of some

regulatory agency (i.e., Canadian Radio-Television and Telecommunications Commission approval)?

(f) Approval of Shareholders and Directors - Is approval by directors or shareholders

required? (g) Competition - If a competitor is being acquired, it is wise to consider whether or not the

transaction is affected by the Competition Act. (h) Tax Implications - Has the client been properly advised? (Refer to section "VI. Tax

Considerations" of this paper.)



4. Drafting of Agreement

(a) General - The aforementioned search results and legal considerations should be considered when drafting the agreement and timing the closing.

(b) Shares - description and number of shares being purchased, and of the share structure

and number of issued shares and current shareholders (where privately held). (c) Purchase and Sale (d) Purchase Price (e) Insurance (f) Payment of Purchase Price - manner of payment (including deposit and interest on

deposit). (g) Security for Payment (h) Prepayment Rights (i) Assignability (j) Closing - time and place of closing. (k) Time - Time of the essence. (l) Financial Statements - The financial condition of the vendor is the most important factor

in a purchase and therefore the most recently audited statements should be attached as a schedule to the agreement.

(m) Representations, Warranties and Covenants of the Vendor

(i) the due incorporation and compliance with all necessary corporate filings in all jurisdictions where the company carries on business;

(ii) the jurisdictions in which the company carries on business;

(iii) the amount of its authorized and issued capital;

(iv) that the vendor's shares are not subject to any encumbrances or unanimous shareholder agreements (other than as disclosed) or would give rise to any breach of an agreement with other and the vendor has the right and authority to enter into the agreement and transfer the shares to the purchaser;

(v) there are no agreements with nor options given to anyone to purchase the shares;


Saskatchewan: Bar Admission Program 43 Corporate Commercial - Purchase and Sale of a Business (vi) that the financial statements have been prepared in accordance with generally

accepted accounting principles consistently applied and fairly represent the financial position of the company and that there have been no material changes since date of statement and to closing;

(vii) there are no liabilities, contingent or otherwise, of the company except those disclosed and the company has not guaranteed, or agreed to guarantee, any debt, liability or other obligation of anyone;

(viii) the company is not indebted to the vendor or any affiliate, director or officer of the company;

(ix) no dividends or other distribution on any shares in the capital of the company have been made, declared or authorized since the date of the last financial statement:

(x) since the date of the last financial statement, no payments have been made or authorized to or on behalf of the vendor or officers, directors, shareholders or employees of the company or under any management agreement with the company save and except in the ordinary course and at the regular rates of salary or management fees payable;

(xi) since the date of the last financial statements:

• there has not been any ;material adverse change in the financial position of the company or any damage, loss or other change in circumstances materially affecting the business or property of the company or its right or capacity to carry on business;

• the company has not waived or surrendered any right or material value;

• the company has not discharged or satisfied or paid any lien or encumbrance or obligation or liability other than current liabilities in the ordinary course of business;

• the business of the company has been carried on in the ordinary course; and

• no capital expenditures exceeding a certain amount have been authorized or made;

(xii) the Articles of Incorporation of the company have not been altered since

incorporation; (xiii) the company does not have any contracts, agreements, pension plans, profit-sharing

plans, bonus plans, undertakings or arrangements (oral, written or implied) with employees, lessees, licenses, managers, accountants, suppliers, agents, distributors, officers, directors, lawyers or others which cannot be terminated on no more than one month's notice (other than disclosed);



(xiv) that the vendor is not in default in respect to any agreements (i.e., leases or mortgages) and no dispute arising out of them;

(xv) there is no basis for and there are no actions, suits, judgments, investigations or proceedings outstanding or pending to the knowledge of the company or the vendor;

(xvi) the business has been carried on in compliance with all applicable laws and all necessary licenses and permits have been obtained;

(xvii) the company is not a party to any collective agreement with any labour union or other association or employees and no attempt has been made to organize or certify the employees of the company as a bargaining unit;

(xviii) there are no pensions, profit sharing, group insurance or similar plans or other deferred compensation plans affecting the company (other than those disclosed);

(xix) that the company has good title to all its assets subject only to such encumbrances as are disclosed in the financial statements or agreement;

(xx) that all accounts receivable are bona fide, good and collectible without set-off or counterclaim (except as disclosed);

(xxi) that appropriate director and shareholder approval of the sale have been given;

(xxii) the vendor is a Canadian resident (s. 116 of the ITA);

(xxiii) the agreement does not put the vendor in default under any contract;

(xxiv) names and shareholdings of all directors, officers and shareholders;

(xxv) all tax returns and reports of the company have been filed and the company has made all elections required to be made under the ITA;

(xxvi) details of any trademarks or patents owned by the company; and

(xxii) warranties to survive closing. (n) Warranties and Representations by Purchaser

(i) that the purchaser has the necessary power and authority to enter into the agreement; and

(ii) the purchaser is a Canadian as in the meaning under the Investment Canada Act.


Saskatchewan: Bar Admission Program 45 Corporate Commercial - Purchase and Sale of a Business (o) Default

(i) as breaches of warranties give rise to a claim for damages only, accordingly, with respect to certain critical warranties they should also be made conditions precedent to closing so that if not satisfied or waived by the purchaser before closing he would be entitled to repudiate the agreement. Warranties that probably deserve this treatment are those that relate to title, material changes before closing, failure to obtain appropriate consents and resignations, failure to obtain release of guarantees, approval under Investment Canada Act and failure of purchaser to be able to obtain a necessary license;

(ii) ability of purchaser to waive;

(iii) liquidated damages;

(iv) limit to liability;

(v) shares in escrow until full payment; and

(vi) escrow agreement to provide for voting, dividends and other corporate activities. (p) Access Prior to Closing - The purchaser should have access to the business premises and

records before closing to examine the assets and make appropriate investigations. (q) Novation by Purchaser - The vendor shareholder ceases to be a party to the unanimous

shareholders agreement and novation of purchaser to the unanimous shareholders agreement.

(r) Guarantees - If there are any vendor's guarantees outstanding, it may be necessary to

make releases a condition of closing. (s) Non-Competition - Depending upon the nature of business, it may be desirable from

purchaser's point of view to include non-competition clause. The clause must be reasonable in scope, time, geographical area.

(t) Confidentiality - i.e., customer lists. (u) Shareholders Loans - shareholder loans forgiven, assigned or otherwise dealt with. (v) Employee Pension Plans - employee pension plans fully funded.



5. Closing

(a) Agenda - including certificates of officers, transfer of documents and shares, resignations and releases of officers and directors.

(b) Searches repeated.

(c) Updating corporate registration.

(d) Appointment of new directors and officers with notice filings at Corporations Branch.

6. Income Tax Considerations - Purchaser

(a) Loss Carried Forward

(i) Non-capital losses are deductible by the purchaser after a change in control only if the business is carried on throughout the year in which control changed with a reasonable expectation of profit and only to the extent that the income to which the non-capital losses will be applied was earned from the sale of property or rendering of services which are similar to those of the business which gave rise to the loss (see s. 111(5) of the ITA);

(ii) The deduction of capital cost allowance is restricted pursuant to s. 111(5.1) of the ITA where control has changed and the undepreciated capital cost of a class of assets exceeds the fair market value of such assets at the time of change of control. Any excess would be treated as a non-capital loss and accordingly subject to the rules relating to the deduction of non-capital losses; and

(iii) Net capital losses cannot be carried forward to be deducted against future capital gains after a change of control. Consideration should be given to triggering capital gains in order to offset any existing capital losses prior to the change in control occurring.

(b) Associated Corporations - Consideration should be given as to whether or not the

acquisition will result in the corporation being "associated" with other Canadian controlled private corporations and result in a sharing of the "annual business limit" and "total business limit" for the purpose of small business deduction. For rules pertaining to an association see s. 256 and s. 245 of the ITA (General Anti-Avoidance provision).

(c) Timing of Share Purchase - The timing of an acquisition may affect a corporation's

ability to claim the small business deduction, obtain a refund of tax out of its "refundable dividend tax on hand" or pay tax on dividends out of its "capital dividend account". Consideration should be given to timing of the acquisition and the advisability of declaring dividends prior to the acquisition.


Saskatchewan: Bar Admission Program 47 Corporate Commercial - Purchase and Sale of a Business (d) Non-Resident Purchaser

(i) Consideration should be given to the "thin capitalization" rules found in s. 18(4), s. 18(5) and s. 18(6) of the ITA which would result in a denial of deduction of interest paid on outstanding debts to "specified non-residents"; and

(ii) For non-resident purchasers acquiring shares that are "taxable Canadian property" from a non-resident vendor, the appropriate certificate is required under s. 116 of ITA.

7. Income Tax Considerations - Vendor

(a) TimingConsiderations - See considerations referred to in the checklist in paragraph 6(c) of the ITA above.

(b) Capital Gains Tax Liability

(i) Sale of shares will result in the capital gain or capital loss to the vendor unless the vendor is a trader in securities or the disposition can be characterized as an adventure in the nature of trade; and

(ii) Shares in a purchaser corporation received by a vendor in consideration for shares will be proceeds of a disposition and will result in a capital gain or capital loss unless one of the rollover provisions is utilized.

(c) Reserves - The vendor is entitled to claim reserve with respect to proceeds not

receivable, however there may be limitations on the reserve. (d) Earnouts - If the purchase price is dependent on future profitability of the corporation,

consideration should be taken to ensure the vendor's capital gain is not converted into ordinary income pursuant to s. 12(1)(g) of the ITA.

(e) Option - Consideration received by the vendor for granting an option will result in a

capital gain in the year it is granted if the option is not exercised. If the option is exercised, the consideration received for the option will be added to the vendor's proceeds of disposition, and if the option is exercised in a subsequent year then an amended return should be filed for the previous year's inclusion.

(f) Non-Resident Vendor - A non-resident vendor disposing of shares of a private

corporation resident in Canada should obtain an appropriate certificate under s. 116 of the ITA so as to avoid a withholding of the purchaser price by the purchaser.

(g) Anti-Avoidance Provisions - Consideration should be given to the anti-avoidance

provisions contained in s. 245 of the ITA which could result in an increase in the amount of the vendor's income.


APPENDICES


Saskatchewan: Bar Admission Program AA - 1 Corporate Commercial - Purchase and Sale of a Business Appendix AA – Allocation of Economic Risk Between a Purchaser and Vendor in a Transaction Involving the Purchase and Sale of a Business or Shares

ALLOCATION OF ECONOMIC RISK BETWEEN A PURCHASER AND VENDOR IN A TRANSACTION INVOLVING THE PURCHASE AND

SALE OF A BUSINESS OR SHARES

A sale agreement for the assets of a business or the shares of a company will apportion economic

risk in the transaction between a vendor and a purchaser and there are various techniques and

methods by which the economic risk a vendor will be required to assume in such a transaction

can be increased or decreased, which will result in a corresponding decrease or increase in such

risk for the purchaser. This is often done by qualifying or "watering down" the representations

and warranties in a sale agreement and by using other techniques listed below. Care must be

taken in determining to what extent the vendor's obligations under a sale agreement are to be

"watered down" as this may affect the price a purchaser is prepared to pay since the purchaser

will then be assuming greater economic risk in proceeding with the transaction. The following

are matters which should be considered when drafting sale agreements:

1. Use of Co-Covenantors

If the purchaser does not have significant assets because it is a newly formed company, a

company without significant assets or capital or a direct or indirect subsidiary of a major

company, the parent company or shareholders of such purchaser or someone with ability to pay

may be added as a co-covenantor to the sale agreement so that if the purchaser defaults in its

obligations thereunder, the vendor will have recourse against a "deep pocket". This is important

since the purchaser will undoubtedly be required to assume certain liabilities of the vendor

following the closing of the transaction and the vendor will want to ensure that if the purchaser is

unable to fulfill those obligations, someone else will do so in its place and stead. Examples of

obligations that a purchaser might be required to assume include obligations under contracts,

assumed accounts payable and accrued liabilities and obligations in respect of employees.

Similarly, it is not uncommon for a purchaser to require a co-covenantor of the vendor's

obligations and representations and warranties under a sale agreement, especially where the

vendor is a company which may be wound-up with its remaining assets including cash proceeds

May 2002 Not to be used or reproduced without permission – Saskatchewan Legal Education Society Inc.

AA - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix AA – Allocation of Economic Risk Between a Purchaser and Vendor in a Transaction Involving the Purchase and Sale of a Business or Shares

from the sale being distributed following the completion of the sale. Generally, the shareholders

or parent company of the vendor would be required to act as co-covenantor.

2. Execution of Sale Agreement

If a sale agreement is executed before closing, there will be an interim period where a

"material change" in the business and affairs of the business being sold may arise or where a

misrepresentation of a representation or warranty may occur. This may give rise to liability on

the part of the vendor to the purchaser, depending on the cause of the material change or

misrepresentation. In order to avoid an interim period and liability which may arise during such

period, the sale agreement could be executed on the closing or as near to closing as possible so

that if a material change or misrepresentation arises prior to execution of the sale agreement and

before closing, the transaction will simply not proceed and the vendor will not incur liability to

the purchaser. In some circumstances, where regulatory, contractual or other approvals are

required, it may not be possible to avoid an interim period.

3. Liability Under Representations and Warranties

The liability of the vendor under representations and warranties in a sale agreement can

either be absolute and unqualified giving rise to significant liability even where no knowledge of

a misrepresentation exists or can be qualified to reduce liability by the use of the words

"material" and "best of knowledge". The purchaser will generally want to restrict the use of such

qualifying language to avoid having the vendor escape too much liability under the sale

agreement. Using a fair approach in such qualifying language will generally expedite

negotiations in finalizing a sale agreement. The number of representations and warranties given

by a vendor in a sale transaction should also be closely examined as many precedent agreements

contain in excess of 40 vendor representations and warranties. The more representations and

warranties contained, the greater the risk to the vendor that a claim for misrepresentation may

arise. Limiting the number of representations and warranties to be given by a vendor in a

transaction may therefore greatly reduce the prospect of a claim being made for breach of a


Saskatchewan: Bar Admission Program AA - 3 Corporate Commercial - Purchase and Sale of a Business Appendix AA – Allocation of Economic Risk Between a Purchaser and Vendor in a Transaction Involving the Purchase and Sale of a Business or Shares representation and warranty. In many cases, where the purchaser is actively involved in the

same business as the vendor and competing in the same market place, it may be possible to

reduce the number of representations and warranties given by the vendor as the purchaser will

have some comfort from its knowledge of the industry. On the other hand, if the purchaser is a

new entrant in the business or new to the market place, greater representations and warranties

may be required. The purchaser's representations and warranties in a sale agreement are

generally limited and unqualified. An exception would arise where the vendor is providing some

or all of the financing to the purchaser to acquire the assets or shares being sold. In such

circumstances, the vendor may require the purchaser to provide extensive representations and

warranties similar to the representations and warranties being provided by the vendor in return

for accepting the risks associated with financing.

4. "Material"

It is useful to define "material" in a sale agreement in terms of a monetary amount.

"Material" is often used in a sale agreement with such words as "change", "default", "breach",

"effect", "affect", etc. and then referenced to a condition which will have an adverse impact on

the financial condition of the business or the ability of the vendor to perform its obligations

under the sale agreement or relate to the condition of the property, business operations or

liabilities of the business. Defining "material" in a sale agreement lends certainty to the level of

disclosure to be provided by the vendor to the purchaser under the sale agreement and when a

claim for a breach will arise.

5. "Best of Knowledge"

It is also useful from a vendor's perspective to define "best of knowledge" in a sale

agreement when used to qualify a vendor's representations and warranties. From the vendor's

perspective, "best of knowledge" is best restricted to the actual knowledge of designated senior

officers so that the knowledge of the vendor is not deemed to include the knowledge of all

employees or knowledge that such officers would have if they had conducted a diligent inquiry.




From a purchaser's perspective, qualifying representations and warranties by "best of

knowledge" should be resisted and where used, compelling the designated representatives of the

vendor to conduct diligent inquiries into the relevant subject matter.

6. Schedules

Schedules are used in sale agreements as a tool to give disclosure to a purchaser of

detailed particulars which are not practical to put into the sale agreement itself or as a tool to

limit or qualify a representation and warranty. For example, it would be a common

representation and warranty in a sale agreement to state that the purchased assets are free and

clear of all liens and encumbrances. If there are numerous encumbrances, rather than listing

them in the representation and warranty paragraph of a sale agreement directly, it would

normally be the practice to list them in a disclosure schedule. From the vendor's perspective, it

is useful to disclose as many problems with the business as possible in the schedules to a sale

agreement to reduce the risk of a claim for a breach of a representation and warranty arising after

the closing. Purchasers are also generally more forgiving of and willing to accept problems

disclosed prior to closing, than in respect of particulars discovered by them after closing.

7. Non-Competition Agreement

The purchaser will expect the vendor not to compete with it in the business being

acquired. It is also common in sale agreements for the purchaser to also ask the vendor not to

solicit employees of the business after closing. The length of non-competition and non-

solicitation periods generally range from one to five years and must be restricted to the type of

business currently conducted by the vendor and to the territory the business is presently

operating in.


Saskatchewan: Bar Admission Program AA - 5 Corporate Commercial - Purchase and Sale of a Business Appendix AA – Allocation of Economic Risk Between a Purchaser and Vendor in a Transaction Involving the Purchase and Sale of a Business or Shares 8. Deposit on Purchase Price

A deposit is useful in circumstances where the purchaser does not have "deep pockets"

and no co-covenantor with "deep pockets" is a party to the sale agreement. It is also useful for

the purpose of "committing" a purchaser to a transaction. If the purchaser improperly fails to

complete the transaction, the deposit can then be used to offset the vendor's damages, or in the

alternative, depending on the size of the deposit, can be accepted in full and final satisfaction of

all damages suffered by the vendor as a result of a breach by the purchaser. Deposits vary but

can be as high as 10% of the purchase price.

9. Allocation of Purchase Price Among Purchased Assets

In an asset sale agreement, it is useful to allocate the purchase price among the various

categories of assets. From a vendor's perspective, there are tax advantages to allocating a larger

part of the purchase price in an asset sale to land and goodwill as opposed to depreciable

property like buildings and equipment. There may also be tax advantages to attributing part of

the purchase price to the consideration for entering into a non-competition agreement.

10. Accounts Receivable

Accounts receivable can be dealt with in one of two ways. The accounts receivable can

be sold at their full face value and then in respect of those accounts receivable which are not

collected by the purchaser within a reasonable time (e.g., 90 days) they can be resold to the

vendor for collection. Alternatively, the accounts receivable can be sold to the purchaser at a

discount to take into account historical write-offs and an appropriate election under s. 22 of the

Income Tax Act would then be filed. Care must be taken under the second approach to ensure

that the vendor does not open itself up to claims from the purchaser if write-offs on the accounts

receivable sold exceed historical levels.




11. Environmental Matters

Several approaches in respect of environmental matters can be used. One approach is to

have the vendor conduct Phase I and, where appropriate, Phase II or Phase III environmental site

assessments and remediation of the applicable properties. The vendor would then make no

representation or warranty in respect of the environmental condition of such properties as the

purchaser would by relying on the results of these assessments and remediations undertaken.

There will generally not be enough time prior to completion of a transaction for such a thorough

investigation to be completed and remediation undertaken. There is also the issue of who will

pay for the cost of the site assessments and whether the vendor would be obligated to remediate

the sites in accordance with the recommendation of the environmental site assessment or whether

the vendor would be able to walk away from the transaction in the event environmental

contamination is found. A more customary approach is to have the vendor provide

environmental representations and warranties, but have the purchaser conduct and pay for an

environmental site assessment to corroborate the representations and warranties and to share the

results with the vendor. If the environmental site assessment indicates contamination, the vendor

would then have the option of terminating the sale agreement, but upon such termination would

be obligated to reimburse the purchaser for the cost of conducting the environmental site

assessment. In some circumstances, the vendor's right to terminate will only arise if the cost of

remediation exceeds a certain monetary amount. Otherwise, the vendor must remediate and

close the transaction. Another approach is for the vendor to make environmental representations

and warranties and not require the purchaser to conduct any environmental site assessment and

not conduct one on its own. This could open up the vendor to liability going forward because if

contamination is found after closing, which may or may not have occurred before the closing, the

purchaser may sue the vendor and the vendor will have difficulty defending such a claim because

it will not be clear when the contamination arose. Environmental site assessments for a Phase I

site assessment usually range from $800 to $1,200 while Phase II site assessments generally cost

in the higher range of $5,000 to $10,000. A Phase III site assessment includes remediation of the

site and the cost depends on the level of contamination.


Saskatchewan: Bar Admission Program AA - 7 Corporate Commercial - Purchase and Sale of a Business Appendix AA – Allocation of Economic Risk Between a Purchaser and Vendor in a Transaction Involving the Purchase and Sale of a Business or Shares 12. Condition of Equipment

The buildings, machinery and equipment can either be sold "as is" with all faults and

defects or in good working order free of defect, normal wear and tear excepted given age and

use. If the purchaser is allowed to make a full inspection of the equipment used in a business

prior to actually acquiring the business, then the "as is" representation and warranty would be

appropriate. If the purchaser is not given an opportunity to do a full inspection, then such

representation and warranty will be inappropriate.

13. Software Licenses

It is not unusual for a software supplier to prohibit an assignment of the license to a

purchaser of a business altogether or only allowing it if the purchaser pays an additional

licensing fee which may or may not be equal to the original fee paid. Since licensing fees are

often significant, it would be appropriate to provide in the sale agreement that if any fee is

payable on an assignment of any software license agreement, those fees would be payable by the

purchaser.

14. "Basket" Representation and Warranty

It is common for the representations and warranties of a seller to contain a "basket"

clause which provides that the seller has provided the purchaser with full disclosure of any

material matters affecting the business and has not omitted to state a material fact necessary to

make any statement contained in the representations and warranties not misleading. Such

clauses in sale agreements are usually unavoidable, but should be limited to "best of knowledge"

and where disclosure given in the sale agreement may involve assumptions, conclusions, or

exercise of judgment (e.g., business plans, financial projections, etc.) reference to such

disclosure should be excepted from such a provision. It may also be appropriate not to share

such information with the purchaser if it is unreliable.




15. Survival of Representations and Warranties

It is usual for representations and warranties to survive the closing of a transaction. The

survival period can vary depending upon the nature of the business. The range is generally

between one year and five years with two years being the standard. Representations and

warranties in respect of environmental matters and payment of taxes are generally required to

survive for a longer period than other representations and warranties and certain representations

and warranties survive forever (i.e., title to the purchased assets or shares or cases where fraud is

involved). It is usual for the purchaser's representations and warranties to survive indefinitely as

they are generally limited in scope unless there is vendor financing in which case some of the

"additional" representations and warranties would survive for the period such financing is

outstanding. 16. Survival of Indemnity

An indemnity in a sale agreement will require the vendor to indemnify and save harmless

the purchaser in respect of any breach of any covenant or other obligation of the vendor in the

sale agreement. In order for the vendor to avoid being liable for breach of covenants or

obligations under a sale agreement for an indefinite period after closing, it may be appropriate to

limit the survival of the indemnity for a period similar to the survival of representations and

warranties. On the other hand, the covenants and obligations of the purchaser will generally

survive closing indefinitely since the purchaser's obligations for assumed liabilities such as for

employees or assumed contracts will be ongoing. 17. No Ambush

A sale agreement can require the purchaser to advise the vendor of any matter which

comes to its attention before closing which would make any representation or warranty or

covenant of the vendor untrue in the sale agreement. Such a provision would provide that if the

purchaser closes the transaction knowing of the misstatement or breach, then the purchaser will


Saskatchewan: Bar Admission Program AA - 9 Corporate Commercial - Purchase and Sale of a Business Appendix AA – Allocation of Economic Risk Between a Purchaser and Vendor in a Transaction Involving the Purchase and Sale of a Business or Shares be unable to sue the vendor (by closing, the purchaser is required to waive such

misrepresentation or breach). From the purchaser's perspective, the purchaser would like the

opportunity to close notwithstanding such breach and still be able to sue, especially where the

breach is not too significant and the purchaser still wants the benefit of the bargain.

18. Limitation on Warranty Claims

In order to avoid nuisance claims, it is possible to build in a threshold that must be

exceeded before the purchaser can claim for a breach of a representation or warranty or covenant

of the vendor. The claim may be net of any recovery by the purchaser from other parties or from

insurance or from tax write-offs. The amount can vary, but would generally not exceed 5% of

the purchase price. Two approaches to the threshold exist. One is that once the threshold is met,

a claim can be made for all losses from the first dollar of loss, or alternatively, the threshold can

be treated as a deductible and only claims over and above the threshold amount can be

recovered. It is also possible to cap damages at a certain limit which most commonly is the

purchase price received by the vendor.

19. Employees

In asset purchase agreements, the vendor will demand that the purchaser offer all non-

union employees employment on substantially the same terms and conditions as the vendor and

acknowledge that it is the successor employer. In this way, the vendor can avoid paying

damages for wrongful dismissal claims from employees who do not accept the purchaser's offer

of employment or who are fired by the purchaser after closing. Under the Trade Union Act,

union employees are automatically transferred on the same terms and conditions as their

employment with the vendor. It should be a condition of the closing of the transaction for the

vendor's benefit that the employees accept the purchaser's offer of employment so that in the

event that a significant number of employees do not accept such offer of employment, the vendor

can refuse to close and is not left with wrongful dismissal claims to resolve (although if an

employee does not accept the offer of employment from a purchaser, such employee may




arguably not have taken reasonable steps to mitigate). Sometimes when a purchaser acquires a

business, the purchaser may not want all employees because they are not all required, especially

where the purchaser is already in the same business. If the business being sold falls into this

category, the vendor may be required to participate in some of the employment termination

costs. Sometimes the purchaser will want key employees to be included in the sale and make it a

condition of closing the transaction that such employees accept the purchaser's offer of

employment.

20. Covenant to Use Best Efforts

Parties to a sale agreement are often required to covenant to take all actions within their

power and control and to use "best efforts" to cause others to take all actions that are not within

its power and control so as to ensure all covenants, agreements, obligations, representations and

warranties of a party to the sale agreement and all conditions for the benefit of the other party of

the agreement are fulfilled or complied with by the closing or as otherwise provided for in the

sale agreement. From the vendor's perspective, replacing "best efforts" with "reasonable

commercial efforts" will reduce the effort and financial responsibility on the part of the vendor to

perform a covenant or an obligation under the sale agreement or to comply with a representation

and warranty thereof or cause others to perform such covenant or obligation or to comply with a

representation and warranty thereof. It is generally accepted that by using "reasonable

commercial efforts", the vendor will not be required to make extraordinary expenditures or go to

extraordinary efforts to comply. If "best efforts" is used in a sale agreement, then from the

vendor's perspective, it may be useful to define it so as to exclude extraordinary expenditures and

effort.

21. Due Diligence

It is not uncommon for the purchaser to continue doing due diligence in respect of the

vendor or the vendor's business from the time of signing the sale agreement to the time of

closing. From the purchaser's perspective, the purchaser would like to the ability to investigate


Saskatchewan: Bar Admission Program AA - 11 Corporate Commercial - Purchase and Sale of a Business Appendix AA – Allocation of Economic Risk Between a Purchaser and Vendor in a Transaction Involving the Purchase and Sale of a Business or Shares all matters and things, whether or not there are representations or warranties or covenants in

respect of them in the sale agreement so that if something material is discovered, the purchaser

can refuse to close by making it a condition of closing that it be satisfied with its due diligence

investigation. From the vendor's perspective, the vendor would like further due diligence

conducted by the purchaser after signing of the sale agreement to be limited to confirming the

truthfulness of the representations, warranties and covenants in the sale agreement. In this way,

the purchaser is prevented from uncovering something new or wrong about the business and

thereby creating a reason not to close the transaction. Generally, if the representations and

warranties are limited in scope so that a purchaser is assuming greater economic risk in the

transaction and will have difficulty suing a vendor if something is wrong with the business after

closing and therefore must rely on its due diligence to understand the financial condition,

business and operations of the vendor or the vendor's business, then a broader investigation than

merely verifying representations and warranties may be merited. The risk to the vendor in such

a circumstance is that the purchaser may discover a problem with the business and would

therefore have the right to refuse to close.

22. Unassignable Contracts and Novations

Often times, it is difficult to obtain all third consents necessary to allow for the

assignment of contracts being assigned by the vendor to the purchaser. In such a circumstance, it

is not unusual for there to be a provision in a sale agreement providing that the vendor will hold

such contracts in trust for the benefit of the purchaser after closing until they are properly

assigned to the purchaser and will account to the purchaser for all benefits thereunder provided

the purchaser indemnifies and saves harmless the vendor in respect of actions taken thereunder.

Such a clause may require the purchaser to close the transaction without a prior consent to

assignment being procured for a significant contract of the business. Since it may not be possible

to obtain the consent to such assignment after closing, the purchaser might lose a significant

benefit for the business and the purchaser may want to restrict the use of this type of clause to

exclude certain material contracts so that the purchaser would not be required to close if




third party consent to assignment is not obtained prior to closing. From a vendor's perspective, it

is better for the sale agreement to provide that there will be a novation rather than a simple

assignment of contracts from the vendor to the purchaser so that the vendor will not have

ongoing liability under those contracts after the closing. Depending upon the financial and other

abilities of the purchaser, third parties to contracts with the vendor may refuse to agree to a

novation. This is particularly so for assignments of real property leases or other significant

contracts where the third party will want to pursue as many remedies as possible, including

claims against the vendor, in the event of a default by the purchaser.

23. Conditions of Closing and Failure to Satisfy Conditions of Closing

A condition of closing for the benefit of a purchaser will generally include a condition

that the vendor's representations and warranties in the sale agreement are true at closing and

covenants which are required to be performed prior to the closing have been performed. The

vendor will not want the purchaser to be able to walk away if there is a minor breach of this

condition of closing. It is therefore common for this condition to be modified so that as long as

the vendor has complied with all representations, warranties and covenants in "all material

respects", the purchaser will be obligated to close. Again, "material" can be defined monetarily

to add some certainty as to the magnitude of the problem before the purchaser is free to walk

away from the transaction. The amount could correspond with the threshold that may be

negotiated before the purchaser can bring a claim against the vendor for a breach of a

representation, warranty or covenant after the closing. The parties will need to negotiate whether

by closing the transaction, the purchaser is waiving the breach which would have the effect

of the purchaser not being able to use the financial cost as a credit against threshold for bringing

a claim after closing. If the conditions of closing for the benefit of the purchaser have not been

fulfilled, then it is usual to allow the purchaser to rescind the agreement without any liability to

the vendor. The question then arises as to what liability the vendor will have to the purchaser

upon such rescission, particularly if the transaction does not close because a representation and

warranty on the part of the vendor untrue at closing or a covenant has not been performed. The


Saskatchewan: Bar Admission Program AA - 13 Corporate Commercial - Purchase and Sale of a Business Appendix AA – Allocation of Economic Risk Between a Purchaser and Vendor in a Transaction Involving the Purchase and Sale of a Business or Shares vendor will want to be released of liability if the transaction does not close unless the condition

which has not been fulfilled is reasonably capable of being fulfilled or caused to be fulfilled by

the vendor. For example, there may be a representation and warranty in the sale agreement that

none of the top 10 customers of the vendor have terminated their relationship with the vendor.

After signing the sale agreement, but before closing, one of the 10 top customers of the vendor

sends out a tender for its next order and the vendor is not successful in obtaining it. In this

circumstance, the vendor's representation and warranty would not be true at closing and would

entitle the purchaser to refuse to close. The purchaser could then sue the vendor for damages

arising out of the breach of the sale agreement unless qualifying language is included to protect

the vendor from liability for circumstances beyond its reasonable control, which loss of a

customer would constitute if the customer is lost not due to negligence on the part of the vendor,

but because of the vendor being unsuccessful in retaining the customer as a result of the

tendering process.




(This page has been intentionally left blank.)


Saskatchewan: Bar Admission Program A - 1 Corporate Commercial - Purchase and Sale of a Business Appendix A – Checklist

PURCHASE AND SALE OF A BUSINESS

I. INTRODUCTION

(1) The objective in a purchase and sale of a business is to achieve full, true and plain disclosure of the business being acquired.

II. THE NEGOTIATIONS - A TEAM EFFORT

(1) A business perspective (2) The accounting (3) The legal III. ACQUISITION, MERGER AND AMALGAMATION

(1) Acquisition (2) Merger (3) Amalgamation IV. SELECTING THE BUSINESS VEHICLE

A. PARTNERSHIP (i) Contribution of Assets (ii) Depreciation at Partnership B. CO-TENANCY OR JOINT VENTURE (i) Joint Venture Parties Own Assets (ii) Depreciation taken by Individual with the Joint Venture Parties C. SOLE PROPRIETORSHIP (i) Write Off of Losses Against Other Income D. THE CORPORATION (i) Separate Legal Entity


A - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix A – Checklist V. THE METHODS OF ACQUIRING OR MERGING BUSINESSES

(1) Acquisition of Shares (2) Purchase of Assets (3) Statutory Amalgamation or Formation of Partnership (4) Joint Venture VI. INCOME TAX CONSIDERATIONS

A. PURCHASE OF ASSETS - Tax Implications

1. Allocation of Purchase Price 2. Accounts Receivable 3. Inventory 4. Eligible Capital Property 5. Vendor's Considerations (i) Capital Gains (ii) Recapture of Capital Cost Allowance 6. Purchaser's Considerations (i) Capital Cost Allowance (ii) Withholding Taxes if Vendor is Non-Resident B. SALE OF SHARES - Tax Implications

1. Capital Gains

2. $500,000 Capital Gain Exemption

3. Acquisition of Control and Triggering of New Year End C. DEDUCTIBILITY OF INTEREST

1. Interest Deductible for Money Borrowed to Purchase Assets or Shares



D. GENERAL

1. The Purchase Price paid for an Asset Deal may be higher than for a Share Deal VII. LETTER OF INTENT

(1) Non-binding simple description of transaction (2) Negotiate in good faith (3) Purchaser to conduct an investigation of business (4) Purchaser to maintain confidentiality of information received (5) No shopping of business during negotiation VIII. DUE DILIGENCE

(1) What is due diligence? (2) Why is due diligence conducted? (3) When does due diligence occur?

(4) Who is responsible for due diligence?

(5) What is done in the due diligence process? (6) Legal due diligence (i) Real Property - Civic address - Legal description - Surveyor's certificate - Title document - Liens and encumbrances - Zoning - As-built plans and specifications - Land Registry search



Appendix A – Checklist - Municipal search for taxes - Utility searches - Farm ownership considerations

(ii) Personal Property - PPSA search - Bank of Canada

- List of plant, fixtures, equipment and vehicles and serial numbers, if applicable

(iii) Intellectual Property - Copyrights - Patents - Trade marks - Business names

- Search applicable registries

(iv) Employment Matters - Determine if there is a union

- Review employment contracts - Workers' Compensation Act Clearance Certificate - Labour Standards Act Certificate - Saskatchewan Human Rights Commission

- Pension Benefits Branch

(v) Health, Safety and Environmental - Fire Commissioner

- Occupational Health - Gas defects - Environment and public safety - the Boiler and Pressure Vessel Act - the Passenger and Freight Elevator Act - the Electrical Licensing Act - the Gas Licensing Act



(vi) Other Public Searches

- Registrar of the Court of Queen's Bench - Registrar of the Court of Appeal - Sheriff's Office - Registrar of Bankruptcy - Department of Finance (provincial sales tax) - Canada Revenue Agency (income taxes and employee deductions) - District Excise (Goods and Services Tax)

(7) Additional Searches for Share Transaction - Corporate Matters - Certificate of Good Standing - Articles of Incorporation - Authorized and Issued Capital - Bylaws - Minute Book - Unanimous Shareholders Agreement (8) Business due diligence - material contracts - leases of real property - customer lists - supplier lists - inventory - review and appraisal of assets - environmental surveys - employee relations - financial review - accounts receivable - banking - licenses - tax considerations - business review generally - operating manuals - key employees - budgets and business plans



Appendix A – Checklist

IX. THE CONTRACT

(1) Basic Conceptual Difference Between the Asset and Share Techniques

- if shares purchased, purchaser acquires entire corporation

- if assets purchased, purchaser selects specific assets to acquire (2) Acquisition of Assets Involving Third Parties

- advantage of share purchase over asset purchase in respect of franchises and distributorships and other material contracts

(3) Transfer Costs

- land transfer taxes and sales tax on equipment. A. SALE/PURCHASE OF ASSETS

1. Prepare Outline of Document - Identification of parties - Recitals - Interpretation - Property being sold (acquired) and purchase (sale) price - Security for vendor in vendor-financed transactions - Representations and warranties - Survival and limitations of representations and warranties - Covenants - Conditions - Closing - Indemnification - General provisions - Schedules

2. Identification of Parties - If vendor is a limited corporation, principal(s) should be added as covenantors

3. Recitals - General statement of the business carried on by vendor



4. Interpretation - Definitions - Best of knowledge qualification - List of schedules - General provisions 5. The Assets Being Purchased - Accounts Receivable - Purchase Orders - Personal Property Leases - Real Property Leases - Customer Contracts - Supply Contracts - Other Material Contracts - Inventories - Fixed Assets, Machinery and Equipment - Computer Equipment - Land, Buildings and Improvements - Intellectual Property - Customer Lists - Business Records - Prepaid and Sundry Amounts - Warranty Rights - Permits - Records - the Owned Lands - all other rights, assets, privileges, benefits and property (other than excluded assets) 6. Assets Being Excluded - Inventory sold in the ordinary course of business - Cash on hand - Income tax refunds - Specific contracts or rights - Minute book



Appendix A – Checklist 7. Assumption of Liabilities - Liabilities and obligations of the vendor relating to the business: (i) Accounts Payable (ii) Vacation Pay (iii) Rebates to customers - Liabilities under contracts

- Liabilities in respect of non-union and unionized employees 8. Purchase Price - Fixed sum - Sum arrived at by way of formula

- Tax treatment 9. Payment of Purchase Price - On closing - Payment by instalments 10. Allocation of Purchase Price 11. Goods and Services Election 12. Security for Vendor Financed Transaction

- Security agreements - Mortgages and real estate - Guarantees

- Unanimous Shareholders Agreement 13. Representations and Warranties by Vendor

- Contain statements of the condition of the business and assets

- Often attach schedules which contain information that help the vendor investigate the business

- Cover three time periods over which there is to be no change in the condition of the

business: - the date of the financial statements - to the signing of the agreement - to the time of closing



- A list of the usual representations and warranties found in a purchase agreement include the following:

- Corporate authority and binding obligation - No other purchase agreements - Contractual and regulatory approval - Status of government licenses - Compliance with constating documents, agreements and laws - Title to the Assets - Books and Records - Financial Statements - Material Change - Litigation - Liabilities - Absence of Changes - Forward Commitments - Terms of Employment - Material Contracts - No Defaults - Assets Comprised in the Vendor's Business; - Taxes - Environmental Compliance - Accounts Receivable - Inventory - Real Properties - Leased Premises - Work Orders and Deficiencies - Condition of Properties and Equipment - Goodstanding of Agreements - Restrictions on doing Business - Intellectual Property - Warranties and Discounts - Employment Matters - Insurance - Non-arm's Length Matters - Complete Conveyance - Disclosure of all Relevant Facts - Accuracy of Representations - Canadian Resident - Registrant for GST




14. Representations and Warranties by Purchaser

- Generally very brief unless the vendor will be financing part or all of the purchase price for the business and assets

- A list of the usual representations and warranties found in a purchase agreement

include the following: - Corporate Authority and Binding Obligation - Contractual and Regulatory Approval - Compliance with Constating Documents, Agreements and Laws - Registrant for GST - Investment Canada Act 15. Survival of Representations and Warranties.

- Consider sunset date after which warranty claims cannot be made - Exempt certain warranties from sunset clause: - Title to assets - Intentional misrepresentation or fraud - Environmental matters

- Consider using a deductible before making a warranty claim or putting a cap on the liability for a claim.

16. Covenants of the Vendor

- Constitutes a promise by vendor to do certain things before and sometimes after closing - Examples include: - Conduct of the Business in the Ordinary Course - Change of Name - Access by Purchaser to Conduct Due Diligence - Insurance - Procure Consents - Covenant of Indemnity - Non-competition - Termination of Employees - Transfer Purchased Assets



- Assignment of Contracts - Deliver Clearance Certificates under Workers' Compensation and Revenue and

Financial Services - Delivery of all Closing Documentation - Take all actions to satisfy Conditions to Obligations 17. Covenants by the Purchaser

- Offer Employment - Transfer Fees - Keep information confidential - Consents - Competition Act approval, if applicable - Investment Canada Act approval, if applicable - Other regulatory approvals 18. Conditions

- Conditions to Obligations of Purchaser: - Accuracy of representations and warranties and performance of covenants - No material adverse changes - No restraining proceedings - Consents obtained - Estoppel certificates from landlords - Employees have accepted offer of employment (if applicable) - Delivery of opinion of vendor's counsel

- Waiver or Termination by Purchaser

- Conditions to the Obligations of Vendor: - Accuracy of representations and warranties and performance of covenants - No restraining proceedings - Consents obtained - Delivery of opinion of purchaser's counsel - Waiver or Termination by Vendor and Principal(s)




19. Closing

- Closing Arrangements - Documents to be Delivered 20. Indemnification and Set-Off

- Grant of Indemnity by Vendor and Covenantors - Grant of Indemnity by Purchaser - Procedures for Settling Claims - Right of Set-Off

B. DISTINGUISHING FEATURES OF SHARE PURCHASE AGREEMENT

1. Documents to be Examined

- Corporate structure of the corporation being acquired - Minute books - Unanimous shareholders agreement

2. Employer/Employee Relations

- All employees, whether in-scope or out-of-scope, will be included in the transaction 3. Legal Considerations

- Is the company listed on a Stock Exchange or is it a reporting issuer? - Will transaction trigger a default under any material contract or loan agreement? - Is transaction exempted under the Securities Act? - What are the income tax considerations?

- Additional representations and warranties applicable to a share sale are as follows: - accuracy of financial statements - authorized and issued capital - due incorporation and compliance - list of shareholders and directors


Saskatchewan: Bar Admission Program A - 13 Corporate Commercial - Purchase and Sale of a Business Appendix A – Checklist - shares free and clear of all encumbrances or unanimous shareholders agreements - no options - no undisclosed liabilities - proper filing of tax returns - no dividends or other distributions - no loans or guarantees to shareholders, etc. - financial and corporate records complete - company in good standing with regulatory and taxing bodies - subsidiaries - shareholder loans 4. Drafting

- Assets do not need to be listed in schedules

- No requirement for separate assignments, transfers or bills of sale

- Resignation of officers and directors

- If vendor financing, shares should be held in escrow and be pledged as security and unanimous shareholders agreement entered into to protect vendor.

C. CLOSING ARRANGEMENTS

1. Asset Purchase

(a) Matters Completed Prior to Closing

- Purchase Agreement executed and delivered - Purchaser's investigation of the vendor and the business completed - The vendor shall continue to maintain in full force and effect all policies of insurance - Prepare draft Closing Agenda - Prepare necessary documentation for closing - Obtain Assignment of Contracts - Obtain Third Party and Regulatory Consents



Appendix A – Checklist - Obtain Releases of Encumbrances - Obtain Corporate Resolutions - Prepare updated Financial Statements - Prepare Statement of Adjustments (b) Matters to be Completed at Closing

- Certified copy of vendor's corporate proceedings authorizing the sale of the Purchased Assets and the execution of the Purchase Agreement and other documents

- Certified copy of purchaser's corporate proceedings authorizing the purchase of the Assets and the execution of the Purchase Agreement and other documents

- Non-Competition Agreement

- Escrow Agreement

- Certificate of the vendor confirming representations, warranties and performance of covenants

- Certificate of the purchaser confirming representations, warranties and performance of covenants

- Assignment of Intellectual Property

- Assumption Agreements for Liabilities

- Conveyancing documents for Transfer of Land

- Bill of Sales for Chattels

- Legal Opinion of Vendor's Counsel

- Legal Opinion of Purchaser's Counsel

- Statement of Adjustments

- Transfer of Land

- General Conveyance

- Cheque or bank draft of the purchaser payable to the vendor


Saskatchewan: Bar Admission Program A - 15 Corporate Commercial - Purchase and Sale of a Business Appendix A – Checklist - Receipt of Vendor of Purchase Price - GST Form 44 - Income Tax Elections - Farmland ownership certificate - Assignment of vehicle lease - Transfer of business name (c) Matters to be Completed After Closing

- Registration of Transfer of Land - Retail Sales Tax Clearance Certificate - Workers' Compensation Clearance Certificate - Transfer of Operating Licenses - Registration of discharges of encumbrances - Registration of the transfer of business name 2. Share Purchase

(a) Matters Completed Before Closing

- Letter of Intent executed and delivered - Purchase Agreement executed and delivered - Vendor shall continue to maintain in full force and effect all policies of insurance - Prepare draft Closing Agenda - Prepare necessary documentation for closing - Obtain Third Party and Regulatory Consents - Obtain Releases of Encumbrances - Obtain Corporate Resolutions - Prepare updated Financial Statements



Appendix A – Checklist - Prepare Statement of Adjustments - Purchaser's investigation of the corporation and the business was completed (b) Matters to be Completed at Closing

- Certified copy of each of the corporate vendors' corporate proceedings authorizing the sale of the Purchased Shares and the execution of the Purchase Agreement and other documents

- Certified copies of the constating documents and bylaws of the corporate vendors

- Certificate of Status for each of the corporate vendors

- Certified copy of purchaser's corporate proceedings authorizing the purchase of the Purchased Shares and the execution of the Purchase Agreement and other documents

- Certified copy of a resolution of the Board of Directors of the corporation authorizing the transfer of the Purchased Shares from the vendors to the purchaser and the issuance of a new share certificate in the name of the purchaser (please ensure legend respecting Unanimous Shareholders Agreement appears on the Certificate)

- Certified copies of the constating documents and bylaws of the corporation

- Certificate of status of the corporation

- Certificate of each of the corporation and vendors confirming representations, warranties and performance of covenants

- Certificate of the purchaser confirming representations, warranties and performance of covenants

- Non-Competition Agreement

- Share Certificates representing the Purchased Shares duly endorsed for transfer or duly executed Transfer and Power of Attorney for such shares

- Releases from the corporate vendors' financial institutions of any and all security held with respect to the Purchased Shares

- Certified cheques of the purchaser payable to the vendors

- Receipt of the vendors


Saskatchewan: Bar Admission Program A - 17 Corporate Commercial - Purchase and Sale of a Business Appendix A – Checklist - Resignations of the vendors' nominees as Directors and Officers of the corporation - Certified copy of Resolution of the Directors of the corporation accepting the

resignations of directors of the corporation - Releases executed by the vendors and co-covenantors in favour of the corporation and

others - Release by resigning directors of the corporation and by corporation of resigning

directors - Legal Opinion of Corporation's Counsel - Unanimous Shareholders' Agreement - Obtaining all books and records and corporate seal of the corporation (c) Matters to be Completed After Closing

- Meeting of the Shareholders of the corporation to pass Resolution(s) appointing purchaser's nominees for the Board of the corporation

- Meeting of the new Board of the corporation to appoint its Officers - Registration of the transfer of the Purchased Shares on the books of the corporation - Release of purchase price to the vendors for the Purchased Shares and repayment of

shareholders' loan upon receipt of satisfactory results from the post closing Personal Property Registry searches






Saskatchewan: Bar Admission Program B - 1 Corporate Commercial - Purchase and Sale of a Business Appendix B – Letter of Intent

LETTER OF INTENT THIS LETTER OF INTENT is executed by AAA Corporation Inc. ("AAA"), BBB Company Inc. ("BBB") and CCC of Canada Ltd. ("CCC") on the • day of •, 200•, for the purpose of outlining certain fundamental conditions under which they would proceed with the business venture of operating a steel fabrication mill at Regina, Saskatchewan (the "Project"). 1. PURPOSE: The parties shall, prior to proceeding with the Project, negotiate in good faith the terms and conditions of the following agreements and shall take the following action or cause the following events to occur:

(a) Government Requirements: Obtain all governmental approvals (including federal, provincial or municipal) required prior to the Project construction commencing including any environmental impact studies.

(b) Shareholders Agreement which shall, among other things, provide for the incorporation of a corporation to be called BLUE STEEL FABRICATORS LTD. (the "Corporation") to own and operate the Project.

(c) Supply Agreement between the Corporation and CCC; and such other agreements as the parties deem necessary. The term "Closing" as used herein shall mean that date when all parties hereto are ready to proceed with the Project and execute all agreements and consummate all transactions contemplated by such agreements.

2. ALLOCATION OF SHARES: The 100 percent interest in the shares of the Corporation to be acquired by the parties in the following proportions:

AAA 56 percent BBB 22 percent CCC 22 percent

3. CAPITAL REQUIRED FOR THE PROJECT: (a) Equity Capital: The parties shall pay for their shares in the Corporation as follows:

(i) AAA shall contribute the sum of $6.2 million, consisting of $1.5 million cash and by causing its assets and obligations to be transferred to the Corporation in a manner acceptable to all parties for the consideration of $4.7 million;

(ii) BBB shall contribute $2.2 million;

(iii) CCC shall contribute the sum of $3 million.


B - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix B – Letter of Intent (b) Promotional and Development Expenses: Upon the execution of this Letter of Intent,

AAA shall have contributed $250,000 and BBB shall have contributed $140,000 for promotional and development expenses incurred to this time. After the execution of this Letter of Intent, CCC shall contribute $140,00 toward the promotional and development expenses against invoices referable to the Project. The contributions by BBB and CCC shall be credited to them upon the Closing toward the equity payment each is required to inject as provided in paragraph 3(a) hereof;

(c) Additional Capital: In addition to the equity capital contributed by the Shareholders, it

shall be a pre-condition to entering into any agreement that the parties obtain a loan in the amount of $8.8 million for the Project. The parties will use their best efforts to negotiate the terms of such loan.

4. USE OF FUNDS: The Shareholders Agreement shall provide that the funds shall be used for the following purposes:

(a) Steel Fabrication Plant: A steel fabrication plant shall be constructed by the Corporation for a capital cost of $20.2 million. CCC shall provide management start-up services for the Project for which it shall be reimbursed at rates to be negotiated.

5. SUPPLY AGREEMENT: Conditions precedent to the parties entering into agreements will be that the following Supply Agreement is entered into on Closing:

(a) The Corporation and CCC: The agreement shall provide that CCC shall have the right to supply steel for the Project, provided that it is able to do so on terms and conditions that are competitive with other suppliers.

6. GOVERNANCE: (a) The parties agree to vote their shares in the Corporation so as to establish and maintain a

Board of Directors of that size which will permit the Shareholders to appoint one director for each 10 percent of the equity owned in the Corporation.

(b) The parties shall enter into a Shareholders Agreement which will provide for the appointment of the Board of Directors, as provided for in paragraph 9(a) hereof, and other terms as may be negotiated to the satisfaction of the parties including the right of first refusal on the sale of shares of the Corporation, minority shareholders' rights and other provisions that the parties might deem in their interest to be necessary.


Saskatchewan: Bar Admission Program B - 3 Corporate Commercial - Purchase and Sale of a Business Appendix B – Letter of Intent 7. INTENTION OF THE PARTIES: The purpose of this Letter of Intent is to provide a framework or terms of reference which may be used by the parties in negotiating binding agreements in respect of the Project herein contemplated. It is not intended to be an exhaustive list of the terms and conditions of the parties' agreements or to create a binding obligation on the part of any party. It is agreed that the agreements contemplated herein and other agreements that the parties may in their negotiations determine to be necessary will not be binding on the parties until the execution thereof after their respective Boards of Directors have approved the same, and that any party may abandon negotiations at any time without liability to the others before that time. IN WITNESS WHEREOF, the undersigned have executed this Letter of Intent as of the date and year first above written. AAA CORPORATION INC. Per: ___________________________ Per: ___________________________ BBB COMPANY INC. Per: ___________________________ Per: ___________________________ CCC OF CANADA LTD. Per: ___________________________ Per: ___________________________


B - 4 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix B – Letter of Intent



Saskatchewan: Bar Admission Program C - 1 Corporate Commercial - Purchase and Sale of a Business Appendix C – Assignment of Letter of Intent

[Letterhead of •]

Date: • To: • Dear Sirs: Re: Sale by • (the "Vendor") to • - Contract • As you may be aware, the Vendor has entered into a letter of intent with • in respect of the sale by the Vendor of its • (the "Business"). We understand that • is to be a corporation to be incorporated by • or affiliates thereof (the "Purchaser"). As part of the transaction, the Vendor will be assigning its interest in the above-captioned Contract to the Purchaser and the Purchaser will be assuming the Vendor's obligations under the Contract. This assignment and assumption will be effective upon the closing of the purchase and sale. The Vendor is hereby requesting your consent to the assignment of the Contract to the Purchaser and your acknowledgment that upon the assumption by the Purchaser of all of the Vendor's obligations under the Contract, the Vendor will be released from the obligations under the Contract. Would you kindly indicate your consent to the assignment by signing the duplicate copy of this letter and returning it in the self-addressed stamped envelope to our solicitors, •. Yours truly, • Per: ____________________ CONSENT The undersigned consents and agrees to the assignment of the Contract in accordance with the terms hereof this • day of •, 200•. • Per: ________________________


C - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix C – Assignment of Letter of Intent



Saskatchewan: Bar Admission Program D - 1 Corporate Commercial - Purchase and Sale of a Business Appendix D – Confidentiality Agreement

CONFIDENTIALITY AGREEMENT THIS AGREEMENT made the _________ day of ___________, 200__. BETWEEN •, a corporation incorporated under the laws of • (hereinafter called the "Corporation")

OF THE FIRST PART

AND: • (hereinafter called the "Examiner")

OF THE SECOND PART

WHEREAS the Examiner and the Corporation have agreed in principle to the investigation by the Examiner of the Business (as hereinafter defined) and Assets (as hereinafter defined) used to carry on the Business of the Corporation for the purpose of: • (the "Project"); AND WHEREAS the Corporation has agreed to permit the Examiner access to its premises and records for the purpose of carrying out a due diligence investigation of the Assets and Business; AND WHEREAS during the course of such due diligence investigation, the Examiner will have access to and will be entrusted with Confidential Information (as hereinafter defined) concerning the Business and Assets, which Confidential Information constitutes a proprietary right of the Corporation that the Corporation is entitled to protect;


D - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix D – Confidentiality Agreement AND WHEREAS a disclosure of any of the aforementioned Confidential Information to competitors of the Corporation or to the general public would be highly detrimental to the Corporation; AND WHEREAS the Examiner has agreed to enter into a confidentiality agreement with the Corporation on terms agreeable to both in consideration for the Corporation agreeing to permit the Examiner access to the Confidentiality Information; NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants and agreements of the parties herein contained and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged by each of the parties hereto), it is agreed by and between the parties as follows: 1. As used in this agreement: (a) "Assets" means substantially all of the assets used in the Business; (b) "Business" means which the Corporation is conducting and comprised of •; and

(c) the expression "Confidential Information", without limiting the generality of the generally accepted meaning of the term, shall include all information relating to the Business, including its operations, method of operating, customers, affairs, processes, personnel and including financial, production, scientific and technical data and information, whether written, graphic or oral, as well as samples and specimens thereof, howsoever or whensoever obtained by the Examiner, whether from the Corporation or otherwise, and whether directly or indirectly, with the exception only of the following:

(i) information in the public domain at the time of the Examiner's receipt

thereof from the Corporation;

(ii) information that, after the Examiner's receipt thereof from the Corporation, becomes a part of the public domain through no act or omission of the Examiner or its officers, employees, agents, advisors or other representatives;

(iii) information that the Examiner can show was lawfully within its

possession prior to its receipt thereof from the Corporation;


Saskatchewan: Bar Admission Program D - 3 Corporate Commercial - Purchase and Sale of a Business Appendix D – Confidentiality Agreement

(iv) information received in good faith by the Examiner from a third party, who was lawfully in possession of, and had the right to disclose, the same; and

(v) information that the parties agree in writing to release from the terms of this agreement.

2. The Corporation agrees to disclose to the Examiner certain of the Confidential Information for the purpose of permitting the Examiner to carry out a due diligence investigation of the Business and the Assets to determine whether and how to proceed with the Project. The Examiner shall be entitled to conduct such investigation for the period commencing on the date hereof and terminating on the earlier of and the date a final determination is made to discontinue negotiations concerning the Project. 3. The Examiner agrees that it will hold all Confidential Information in confidence and will not disclose any Confidential Information to any individual or entity other than those employees, agents, advisors or other representatives of the Examiner (collectively, "Examiner's Representatives") who need to know the Confidential Information for the purposes of the Project, provided that:

(a) the Examiner shall notify each such Examiner's Representative of the obligations contained herein with respect to the confidentiality of Confidential Information and restrictions on use; and

(b) the Examiner shall direct each such Examiner's Representative to exercise a level of care sufficient to preserve the confidentiality of the Confidential Information and shall direct each such person to abide by the terms and conditions of this agreement, and will take all reasonable steps, including the obtaining of suitable undertakings, to ensure that Confidential Information is not disclosed by any of such persons to any other party or used in a manner contrary to this agreement.

4. The Examiner agrees that all Confidential Information, however acquired by the Examiner, shall be held by the Examiner in confidence at all times and shall not, directly or indirectly, be used by the Examiner for any purpose whatsoever other than to enable it to make an informed evaluation and decision with respect to the Project, and, without limiting the generality of the foregoing, the Examiner agrees that it will not use any Confidential Information for any improper corporate purpose. 5. The Examiner agrees that all Confidential Information in written or other tangible form, shall remain the property of the Corporation and shall forthwith be returned to the Corporation upon the request of the Corporation or in the event that the Examiner elects not to proceed with the Project and no copies, extracts or other reproductions, in whole or in part, or summaries of


D - 4 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix D – Confidentiality Agreement such Confidential Information shall be retained, and the Examiner further agrees that, upon request that, upon request, all documents, memoranda, notes and other writings whatsoever prepared by the Examiner or by the Examiner's Representatives based on the Confidential Information will be destroyed, such destruction to be certified in writing to the Corporation upon request by the Corporation. 6. If any provision of this agreement is determined to be void or unenforceable, in whole or in part, it shall be severable from all other provisions hereof and shall not be deemed to affect or impair the validity of any other provisions, and each such provision is deemed to be separate and distinct. 7. The Examiner hereby agrees that all covenants contained herein are reasonable and valid and waives all defences to the strict enforcement thereof. 8. The Examiner acknowledges that a breach of any of the provisions of this agreement will result in immediate and irreparable damage to the Corporation and that money damages would not be a sufficient remedy for any breach and agrees that in the event of such breach, the Corporation shall, in addition to any other right of relief, be entitled to equitable relief including, without limitation, relief by way of temporary or permanent injunction and to such other relief that any court of competent jurisdiction may deem just and proper. 9. This agreement shall be construed in accordance with the laws of the Province of Saskatchewan, and each of the parties hereto irrevocably attorns to the jurisdiction of the courts of the Province of Saskatchewan. 10. The provisions hereof, where the context so permits, shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. IN WITNESS WHEREOF the parties hereto have executed this agreement. •

Per: _____________________________

Per: _____________________________ •

Per: _____________________________

Per: _____________________________


Saskatchewan: Bar Admission Program E - 1 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form)

PURCHASE AND SALE AGREEMENT

THIS AGREEMENT dated as of the • day of •, 200• BETWEEN:

• (the "Vendor")

- and -

• (the "Purchaser") WHEREAS the Vendor carries on the Business; and WHEREAS the Vendor desires to sell and the Purchaser desires to purchase as a going concern the Purchased Assets. NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows:

ARTICLE I INTERPRETATION

1.1 Definitions. In this Agreement, unless the context otherwise requires, the following terms shall have the following respective meanings:

(a) "Accounts Payable" means any and all accounts payable owing or accruing due by the Vendor in connection with the Business to Persons (other than the accounts payable owing or accruing due in connection with the Business or other business of the Vendor or any direct or indirect wholly-owned Affiliate of the Vendor);

(b) "Accounts Receivable" means any and all accounts receivable and other amounts due, owing or accruing due to the Vendor in connection with the Business (other than the Excluded Assets and without deduction or reserve for uncollectible amounts);

(c) "Accrued Liabilities" means any and all accrued liabilities of the Business including, without limitation, accruals in respect of vacation pay and accruals in respect of rebates granted to customers of the Business (other than warranty obligations or allowance for product returns relating to products manufactured or sold in respect of the Business prior to the Closing Date);


E - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix E – Purchase and Sale Agreement (Long Form)

(d) "Affiliate" and "Associate" means an "affiliate" and "associate", respectively, as those terms are defined in the Business Corporations Act (Saskatchewan), as amended on the date hereof;

(e) "Facilities" means lands and premises located in • as described in Schedule l.l(e);

(f) "Agreement" means this agreement and all schedules and exhibits attached hereto and all amendments made hereto by written agreement between the Parties;

(g) "Ancillary Agreements" means all documents, agreements and instruments (including, without limitation, those referred to in section 5.9) to be executed and delivered by the Vendor and the Purchaser, as the case may be, pursuant to this Agreement;

(h) "Assignment Agreement" means the agreement to be made between the Vendor and the Purchaser, substantially in the form annexed as Exhibit l.l(h), in connection with the assignment by the Vendor to the Purchaser of the:

(i) Accounts Receivable, Purchase Orders, Inventory Purchase Orders, Leases and Contracts; and

(ii) other applicable Purchased Assets,

except where the same are required to be otherwise assigned to the Purchaser pursuant to other provisions contained in this Agreement;

(i) "Assignments of Intellectual Property" means:

(i) Assignments of Patents; and

(ii) Assignments of Trade marks; (j) "Assignments of Patents" means the agreements to be made between the Vendor, as

applicable, and the Purchaser in connection with the assignment by the Vendor to the Purchaser of the Patents, substantially in the form annexed as Exhibit l.l(j);

(k) "Assignments of Real Property Lease" means the agreements to be made between the Vendor and the Purchaser in connection with the assignment by the Vendor to the Purchaser of the Real Property Leases, substantially in the forms annexed as Exhibit l.l(k);

(l) "Assignments of Trade marks" means the agreements to be made between the Vendor and the Purchaser in connection with the assignment by the Vendor to the Purchaser of the Trade marks, substantially in the form annexed as Exhibit 1.1(l);

(m) "Assumed Liabilities" means:

(A) the liabilities and obligations of the Vendor relating to the Business:

(i) in connection with the Current Liabilities;


Saskatchewan: Bar Admission Program E - 3 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) (ii) accruing or due after the opening of business on the Closing Date under

the Purchased Contracts and Permits; and (iii) in connection with the Transferred Employees accruing or due after the

opening of business on the Closing Date, other than liabilities and obligations relating to the Vendor's Benefits Plans and Vendor's Pension Plans; and

(B) the liabilities and obligations incurred on or after the Closing Date by the Purchaser under the Purchased Contracts and Permits;

(n) "Assumption Agreement" means the assumption and indemnity agreement to be made between the Vendor and the Purchaser pursuant to which the Purchaser assumes the Assumed Liabilities and indemnifies the Vendor in connection therewith, substantially in the form set forth in Exhibit l.l(n);

(o) "Authorized Representatives" means employees, agents, counsel, accountants and other representatives;

(p) "Buildings and Improvements" means all of the right, title and interest of the Vendor in all plant, buildings, structures, erections, improvements, fixtures and appurtenances situated on or forming part of any of the Owned Lands or Leased Premises;

(q) "Business Day" means any day other than a Saturday, Sunday or statutory holiday in the Province of Saskatchewan;

(r) "Business Information" means all factual information contained in books, records, files and all technical business and financial records and documentation and information in writing provided by the Vendor to the Purchaser in connection with the negotiation and completion of the transactions contemplated herein and, for greater certainty, does not include any expression of opinions, estimates or forecasts;

(s) "Capital Expenditures" means expenditures which, in accordance with generally accepted accounting principles consistently applied, are chargeable to capital or fixed asset accounts and includes expenditures in connection with the acquisition by purchase, erection or construction of lands, fixed assets, plant, machinery and/or equipment, whether fixed or moveable;

(t) "Claims" means claims, demands, actions, causes of action, damages, losses, costs, fines, penalties, interest, liabilities and expenses, including, without limitation, reasonable legal fees;

(u) "Closing" means the completion of the sale to and purchase by the Purchaser of the Purchased Assets pursuant to this Agreement;

(v) "Closing Date" means: (i) the later of • and the eleventh Business Day immediately following the

Purchaser's receipt of Investment Canada Approval and Competition Act Approval; or



Appendix E – Purchase and Sale Agreement (Long Form) (ii) such other date as the Parties may agree in writing as the date upon which the

Closing shall take place;

(w) "Closing Events" has the meaning ascribed thereto in subsection 4.3(a);

(x) "Closing Statement" means the statement of the Working Capital Amount as at the Closing Date and substantially in the form of Schedule l.l(x), prepared in accordance with the accounting principles set forth therein;

(y) "Closing Time" means 11:00 a.m. (Regina time) on the Closing Date or such other time on the Closing Date as may be agreed by the Parties;

(z) "Collective Agreements" means the collective bargaining agreements relating to the Business set forth in Schedule l.l(z);

(aa) "Competition Act Approval" means that the Purchaser shall have been advised in writing by the Director of Investigation and Research appointed under the Competition Act (Canada), on terms satisfactory to the Purchaser, acting reasonably, that the Director shall not oppose or threaten to oppose the transactions contemplated by this Agreement nor make or threaten to make an application under Part VIII of the Competition Act in respect of the same;

(bb) "Confidentiality Agreement" means the confidentiality agreement dated • delivered by the Purchaser to the Vendor in connection with the purchase and sale contemplated herein;

(cc) "Confidentiality Agreement Termination Agreement" means an agreement to be made between the Purchaser and the Vendor relating to the termination of the Confidentiality Agreement, substantially in the form annexed as Exhibit l.l(cc);

(dd) "Contracts" means all contracts, agreements and commitments relating primarily to the Business (other than the Excluded Assets); provided that the term "Contracts" shall not include Leases, Real Property Leases, Purchase Orders and Inventory Purchase Orders;

(ee) "Conveyance Documents" means any and all bills of sale, assignments, instruments of transfer, assurances, consents, registered user applications, cancellation of registered users and other documents as shall be necessary to effectively transfer to the Purchaser all of the Purchased Assets;

(ff) "Copyright" means any copyright, whether registered or not, (other than Excluded Assets) owned by the Vendor and relating primarily to the Business, including, without limitation, the copyright registrations and applications set forth in Schedule l.l(ff);

(gg) "Crucial Contracts" means the contracts, agreements, commitments and leases set forth in Schedule l.l(gg);

(hh) "Current Liabilities" means the Accounts Payable and Accrued Liabilities;

(ii) "Damage Notice" has the meaning ascribed thereto in section 5.8;


Saskatchewan: Bar Admission Program E - 5 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) (jj) "Designated Executives of the Vendor" means either of • and •;

(kk) "Directions and Authorizations" means the directions and authorizations to appropriate municipal taxation authorities relating to the payment and delivery of tax refunds in respect of periods prior to the Closing Date, substantially in the form annexed as Exhibit 1.1(kk);

(ll) "Business" means the •;

(mm) "Employees" means the personnel employed or engaged by the Vendor primarily in connection with the Business;

(nn) "Encumbrances" means any mortgage, charge, pledge, hypothec, lien, encumbrance, restriction, option, right of others or security interest of any kind;

(oo) "Environmental Approvals" means all applicable permits, licenses, authorizations, consents, directions or approvals required by Governmental Authorities under Environmental Laws in respect of the Leased Premises or Owned Lands, the equipment, structures or activities thereon or therein or the operation of the Business;

(pp) "Environmental Laws" means all:

(i) statutes, codes, ordinances, decrees, rules, regulations, bylaws of any Governmental Authority, and principles of common and civil law and equity of any court, having jurisdiction in respect of the Owned Lands, the Leased Premises or the Business or the Vendor;

(ii) judgments, orders, decisions, rulings or awards of any court or any administrative board or tribunal;

(iii) ministerial or departmental orders, decisions, policies or guidelines pertaining to groundwater and soil decontamination and ministerial or departmental orders, decisions, policies or guidelines of which the Vendor have received notice; and

(iv) treaties, or any provisions of the foregoing, which are binding on the Vendor in respect of the

Owned Lands, the Leased Premises or the Business and relating to the environment, health safety matters or conditions, Hazardous Substances, pollution or protection of the environment, including, without limitation, on-site or off-site contamination, occupational health and safety and regulation of chemical substances or products, Releases of pollutants, contaminants, chemicals or industrial, toxic, radioactive or Hazardous Substances into the environment or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, transport or handling of Hazardous Substances;




(qq) "Environmental Notice" means any Claim, citation, directive, request for information, notice of investigation, letter or other material communication in writing from any Person pursuant to any Environmental Laws;

(rr) "Excluded Assets" means:

(i) (A) all cash, bank balances, moneys in possession of banks and other depositories, term or time deposits and similar cash items of, owned or held by or for the account of the Vendor (other than any holdback amounts in connection with any Purchased Contract or all moneys on deposit with any brokerage firm or financial institution together with any and all forms of investments thereof, which have been deposited in connection with margin requirements relative to hedging arrangements for any of the Purchased Assets);

(B) the Retained Trade-Marks;

(C) the accounts receivable and other amounts due, owing or accruing due to the Vendor in connection with the Business, other business of the Vendor or any direct or indirect wholly-owned Affiliate of the Vendor;

(D) the contracts, agreements, commitments and leases entered into by the Vendor during the Interim Period in breach of section 5.1 of this Agreement;

(E) all rights, benefits and interests of the Vendor relating to tax appeals and any and all refunds in connection therewith including, without limitation, tax appeals listed on Schedule l.l(rr);

(F) Purchased Contracts which are not capable of assignment in accordance with their respective terms and for which consents or approvals of appropriate third parties for the assignment have not been obtained on or before Closing;

(G) loans owed by employees to the Vendor other than the loans disclosed in Schedule 4.1(x); and

(H) the Excluded Inventory and all proceeds from the sale of the Excluded Inventory and any interest and other payments received in connection therewith;

(ii) for greater certainty: (A) the trade names and trade marks • and the Excluded Trade-Marks or any

variation thereof together with all logos, design marks and other proprietary rights relating thereto;

(B) the Insurance Policies and prepaid expenses relating thereto;


Saskatchewan: Bar Admission Program E - 7 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) (C) the Vendor's Benefit Plans and the Vendor's Pension Plans or any assets

from such plans; (D) all the corporate, financial and other records of the Vendor not relating

primarily to the Business; (E) the agreement dated • between the Vendor and relating to •; (F) the lease agreement dated • between the Vendor and •;

(ss) "Excluded Inventory" means the inventory of • located at • under contract for sale to • for • delivery;

(tt) "Excluded Trade-Marks" means the trade-marks and trade-names described in Schedule l.l(tt);

(uu) "Financial Statements" means in respect of the Business and the audited financial statements for:

(i) the fiscal years ended •; and (ii) the • month period ended •, attached as Schedule l.l(uu); (vv) "Fixed Assets and Equipment" means all fixed assets, machines, machinery, equipment

(including, without limitation, the Motor Vehicles and all manufacturing and quality control equipment and office equipment including computer equipment), boilers, fixtures, furniture, furnishings, vehicles, equipment, implements, inventories of maintenance and spare parts, tools and tooling supplies, accessories and all other tangible or corporeal property of whatever nature or kind used or held for use primarily in or in respect of the Business (other than Buildings and Improvements, Inventories, the Records and Excluded Assets) whether located in or on the premises of the Vendor or elsewhere and all rights, privileges, licenses and entitlements to use same in the same manner as are and have been used by the Vendor including, without limitation, those listed in Schedule l.l(vv) and the boilers, refrigeration equipment and machinery and electrical substations located at the Montreal Facility;

(ww) "Goodwill" means the goodwill of the Business including, without limitation, all right, title and interest of the Vendor in, to and in respect of all elements in connection with the operation of the Business which contribute to the goodwill of the Business including, without limitation, the goodwill represented by the trade marks, trade names, packaging, labelling, advertising, marketing and promotional materials, customer and supplier lists, contracts, other agreements and arrangements with customers and suppliers and the logo set forth in Schedule 1.1(ww) (other than goodwill relating to the Excluded Assets);

(xx) "Governmental Authorities" means any applicable Canadian or non-Canadian federal, provincial and municipal agency, ministry, crown corporation, department, inspector and official;




(yy) "Hazardous Substance" means any substance, waste, liquid, gaseous or solid matter, fuel, micro-organism, sound, vibration, ray, heat, odour, radiation, energy vector, plasma, organic or inorganic matter which is, or is deemed to be, alone or in any combination, hazardous, hazardous waste, solid or liquid waste, toxic, a pollutant, a deleterious substance, a contaminant or a source of pollution or contamination under any Environmental Laws;

(zz) "Indemnity Agreement" means the agreement to be made between the Purchaser and the Vendor providing for the indemnification of the Purchaser by the Vendor and the Vendor by the Purchaser, substantially in the form annexed as Exhibit l.l(zz);

(aaa) "Insurance Policies" means the insurance policies maintained by the Vendor in respect of the Business;

(bbb) "Intellectual Property" means all Trade-Marks, Copyright, Goodwill, Patents and Technology;

(ccc) "Interval Period" means the period commencing on the date of this Agreement and ending immediately before the opening of business on the Closing Date;

(ddd) "Inventories" means the inventories of raw materials, packaging materials, work-in-progress and finished goods of or used or held by the Business wherever located (other than the Excluded Assets and inventories of maintenance and spare parts);

(eee) "Inventory Purchase Orders" means the outstanding orders or contracts relating to the Business for the purchase or sale of Inventories;

(fff) "Investment Canada Approval" means the allowance or deemed allowance by the Minister of Regional Industrial Expansion, pursuant to the Investment Canada Act, of the purchase of the Purchased Assets by the Purchaser under this Agreement on terms satisfactory to the Purchaser;

(ggg) "Knowledge of the Vendor" means to the knowledge of the Designated Executives of the Vendor after having made and caused to be made such enquiries of the records and management employees who are reasonably likely to have knowledge of the relevant matter, as may be necessary to obtain informed knowledge;

(hhh) "Leased Premises" means the buildings, structures, premises and lands which are leased by the Vendor in connection with the Business (exclusive of •) including, without limitation, •;

(iii) "Leases" means the leases relating primarily to the Business, other than the Real Property Leases and Excluded Assets;

(jjj) "Licensed Trade-Marks" means the trade marks and trade names "•", "•" and "•" which are assigned to the Purchaser pursuant to the Assignments of Trade-Marks and licensed to the Vendor pursuant to the Trade-Mark Licenses;



(kkk) "Motor Vehicles" means all motor vehicles, power units, mobile homes, tractors and trailers owned or used by the Vendor or held by them for use primarily in, or primarily in respect of the operation of the Business;

(lll) "Non-Competition Agreement" means the agreement to be made between the Vendor and the Purchaser, substantially in the form annexed as Exhibit l.l(lll);

(mmm) "Non-Union Employees" has the meaning ascribed thereto in subsection 6.1(a);

(nnn) "Objection Notice" has the meaning ascribed thereto in subsection 3.5(a);

(ooo) "Owned Lands" means the lands or interests in lands forming part of the • Facility, • Facility and • Facility;

(ppp) "Parties" means the Vendor and the Purchaser, collectively, and "Party" means any one of them;

(qqq) "Patents" means all patents, inventions, patent applications, designs or any improvement, modification or alteration conceived, developed or owned by the Vendor relating primarily to the Business (other than Excluded Assets), including without limitation those patents and patent applications and industrial design registrations listed in Schedule l.l(qqq) and all divisions, reissues, reexaminations, continuations, renewals and extensions thereof as applicable;

(rrr) "Permits" means the authorizations, registrations, permits, approvals, grants, licenses, quotas, consents, commitments, rights or privileges (other than those relating to the Intellectual Property) issued or granted by any Governmental Authorities to the Vendor in respect of the Business, as set forth in Schedule l.l(rrr);

(sss) "Permitted Exceptions" means:

(i) unregistered liens for municipal taxes, assessments or similar charges incurred in the ordinary course of business that are not yet due and payable or, if due and payable, are to be adjusted between the Vendor and the Purchaser on Closing;

(ii) inchoate mechanic's, construction and carrier's liens and other similar liens arising by operation of law or statute in the ordinary course of the business of the Business for obligations which form part of the Assumed Liabilities, are not delinquent and will be paid or discharged in the ordinary course of the Business;

(iii) unregistered liens, charges, adverse claims, security interests or other encumbrances of any nature claimed or held by Her Majesty the Queen in right of Canada, Her Majesty in right of any province of Canada in which the Owned Lands or Leased Premises are located or by any Governmental Authority under or pursuant to any applicable legislation, statute or regulation, save and except for unregistered liens for unpaid realty taxes, assessments and public utilities;




(iv) title defects which are of a minor nature and in the aggregate do not materially impair the value of the Owned Lands or Leased Premises;

(v) any right of expropriation conferred upon, reserved to or vested in Her Majesty The Queen in Right of Canada, Ontario or other provinces;

(vi) the exceptions contained in the registry or land titles legislation applicable in the jurisdiction where the Owned Lands and Leased Premises are located;

(vii) Encumbrances created by others upon other lands over which there are easements, rights-of-way, licenses or other rights of user in favour of the Owned Lands or Leased Premises and which do not materially impede the use of such easements, rights-of-way, licenses or other rights of user for the purposes for which they are held;

(viii) any Encumbrance which the Purchaser has expressly agreed to assume or accept pursuant to this Agreement;

(ix) the reservations, limitations, provisos, conditions, restrictions and exceptions in the letters patent or grant, as the case may be, from the Crown;

(x) the Assumed Liabilities as they relate to the Owned Lands and the Leased Premises and any Encumbrances relating thereto;

(xi) easements for the supply of utilities, registered or unregistered;

(xii) the Encumbrances registered on title to the Owned Lands or Leased Premises; and

(xiii) any defects in title shown on a survey of the Owned Lands; (ttt) "Person" includes an individual, body corporate, partnership, trustee or trust or

unincorporated association, executor, administrator or legal representative;

(uuu) "Prepaid and Sundry Amounts" means all prepaid expenses, other current assets of ongoing benefit to the Purchaser, and deposits relating to the Business including, without limitation, all prepaid taxes and water charges, all prepaid purchases of gas, oil and hydro, all prepaid lease payments, deferred foreign exchange accounts relative to hedging arrangements for any of the Purchased Assets and all moneys on deposit with any brokerage firm or financial institution together with any and all forms of investments thereof, which have been deposited in connection with margin requirements relative to hedging arrangements for any of the Purchased Assets, other than prepaid expenses and deposits which relate to Excluded Assets;

(vvv) "Provincial Jurisdictions" means each of the Provinces of Canada;

(www) "Purchase Orders" means the outstanding orders or contracts (other than Excluded Assets) for the purchase or sale of personal property (other than Inventories) relating to the Business;



(xxx) "Purchase Price" has the meaning ascribed thereto in section 3.1;

(yyy) "Purchased Assets" means:

(i) all of the rights, assets, privileges, benefits and property of whatever nature or kind and wherever situated (other than the Excluded Assets) owned or used by the Vendor or held by it for use primarily in, or primarily in respect of the operation of, the Business including, without limitation, the following properties, assets and rights:

(A) Accounts Receivable;

(B) Purchase Orders;

(C) Inventory Purchase Orders;

(D) Leases;

(E) Real Property Leases;

(F) Contracts;

(G) Inventories;

(H) Fixed Assets and Equipment;

(I) Buildings and Improvements;

(J) Intellectual Property;

(K) Prepaid and Sundry Amounts;

(L) Warranty Rights;

(M) Permits;

(N) Records; and

(O) the Owned Lands (zzz) "Purchased Contracts" means the Contracts, Leases, Real Property Leases, Purchase

Orders, Inventory Purchase Orders, Warranty Rights and Prepaid Amounts;

(aaaa) "Purchaser's Benefit Plan" and "Purchaser's Pension Plans" have the meanings ascribed thereto in section 6.2;

(bbbb) "Purchaser's Savings Plans" means the registered retirement savings plans and the employees profit sharing plan established or maintained by the Purchaser;

(cccc) "Real Property Leases" means the leases relating to the Leased Premises and the Owned Lands (other than the Excluded Assets):




(dddd) "Records" means all books, records, files and all technical, business and financial records and documentation and information in any form whatsoever relating primarily to the Business whether in writing or stored in any retrieval system or data base (other than those referred to in the definition of Excluded Assets) including, without limitation, all production, inventory, sales, supplier and customer records;

(eeee) "Release" includes, without limitation, releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, depositing, injecting, escaping, leaching, disposing or dumping;

(ffff) "Remedial Order" means any remedial order including, without limitation, any notice of non-compliance, work order, control order, stop order or other complaint, direction, order or sanction issued, filed or imposed by any Governmental Authorities pursuant to the Environmental Laws in respect of the existence on, in or under the Leased Premises and Owned Lands or neighbouring or adjoining properties of Hazardous Substances or the Release from, at or on the Leased Premises and Owned Lands or such neighbouring or adjoining properties of Hazardous Substances, or in respect of any failure or neglect to comply with the Environmental Laws or Environmental Approvals;

(gggg) "Retained Trade-Mark" means the trade marks and trade names described in Schedule l.l(gggg), all designs, styles or logos (and all applications and registrations in connection therewith) relating thereto and all copyrights subsisting in all such designs, styles or logos;

(hhhh) "Technology" means all patterns, plans, designs, research and other compilations of data, trade secrets and other proprietary know-how and show-how, processes, product formulations, drawings, blue prints, flow sheets, equipment and parts list and descriptions and related instructions, manuals, data, records and procedures, computer software and computer support documentation (other than Excluded Assets) owned by the Vendor primarily for use in the Business, and all licenses, permissions, agreements and other contracts and commitments relating to any of the foregoing to which the Vendor is a party including those described in Schedule 1.1(hhhh);

(iiii) "Third Party Consent" and "Third Party Consents" have the meaning ascribed thereto in section 2.2 and subsection 4.1(q), respectively;

(jjjj) "Trade-Mark License" means the trade-mark license agreement dated • made between •, as licensor, and the Vendor, as licensee, relating to the licensing to the Vendor of, among other things, the trade mark "•", attached as Schedule 1.1(jjjj);

(kkkk) "Trade-Marks" means all registered and unregistered trade marks, trade names and registered user rights owned by the Vendor relating primarily to the Business (other than Excluded Assets), including without limitation those trade marks, trade names, registrations and applications listed in Schedule l.l(kkkk) and all renewals, modifications and extensions thereof as applicable;



(llll) "Trade-Mark Licenses" means the trade-mark and trade name license agreements to be made between the Vendor and Purchaser relating to the license for use by the Purchaser of the Retained Trade-Marks and the license for use by the Vendor of the Licensed Trade-Marks, substantially in the forms annexed as Exhibit l.l(llll);

(mmmm)"Transferred Employees" means the Employees who are offered and accept employment with the Purchaser as contemplated in subsection 6.1(a) and all Union Employees;

(nnnn) "Union Employees" means the Employees who are represented by a trade union within the meaning of applicable provincial labour relations legislation;

(oooo) "Vendor's Benefit Plans" and "Vendor's Pension Plans" have the meanings ascribed thereto in section 4.1(x);

(pppp) "Warranty Rights" means the full benefit of all warranties, warranty rights, performance bonds and indemnities (implied, express or otherwise) against manufacturers, sellers or contractors which apply to any of the Purchased Assets to the extent the same are capable of being assigned;

(qqqq) "Working Capital Amount" means for the Business the aggregate amount of Accounts Receivable, Inventories and Prepaid and Sundry Amounts less the Current Liabilities, as determined according to the Closing Statement.

1.2 Material Contracts, etc. For the purposes of this Agreement, a contract, agreement, commitment or lease is "Material" if:

(a) it involves or may result in the payment of money by or to the Vendor in relation to the Business in an amount in excess of $•:

(b) it has an unexpired term of more than one year; or (c) it cannot be terminated by the Vendor without penalty upon not more than 90 days'

notice. 1.3 Entire Agreement. This Agreement, together with the agreements and other documents to be delivered pursuant to this Agreement, constitute the entire agreement between the Parties pertaining to the purchase and sale of the Purchased Assets and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties hereto, other than the provisions of the Confidentiality Agreement and there are no warranties, representations and other agreements between the parties hereto in connection with the subject matter hereof except as specifically set forth in this Agreement or any other agreement or document to be delivered pursuant to this Agreement. 1.4 Extended Meanings. In this Agreement, words importing the singular number include the plural and vice versa; words importing the masculine gender include the feminine and neuter genders.



Appendix E – Purchase and Sale Agreement (Long Form) 1.5 Headings. The division of this Agreement into articles, sections, subsections and paragraphs and the insertion of headings and a table of contents are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. 1.6 Accounting Principles. Wherever in this Agreement reference is made to a calculation to be made in accordance with generally accepted accounting principles, such reference shall be deemed to be to the generally accepted accounting principles from time to time approved by the Canadian Institute of Chartered Accountants, or any successor institute, applicable as at the date on which such calculation is made or required to be made in accordance with generally accepted accounting principles. 1.7 References. References to an article, section, subsection, paragraph, schedule or exhibit shall be construed as references to an article, section, subsection, paragraph of or schedule or exhibit to this Agreement unless the context otherwise requires. 1.8 Time Periods. Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences and including the day which ends the period and by extending the period to the next Business Day following if the last day of the period is not a Business Day. 1.9 Business Day. Whenever any payment to be made or action to be taken under this Agreement is required to be made or taken on a day other than a Business Day, such payment shall be made or action taken on the next Business Day following. 1.10 Approval or Consent of a Party. Whenever a provision of this Agreement or a Schedule requires an approval or consent by a Party to this Agreement and notification of such approval or consent is not delivered within the applicable time limit, then, unless otherwise specified, the Party whose consent or approval is required shall be conclusively deemed to have withheld its consent or approval. 1.11 Governing Law. This Agreement shall be governed and construed in accordance with the laws of Saskatchewan and the laws of Canada applicable therein. 1.12 Payments and Currency. Unless otherwise specified:

(a) any money to be paid or tendered by one Party to the other Party pursuant to this Agreement shall be paid by either wire transfer of immediately available funds to an account designated by the other Party or by the delivery to the other Party of a bank draft or certified cheque payable to the other Party: and

(b) the word "dollar" and "$" sign refer to Canadian currency.


Saskatchewan: Bar Admission Program E - 15 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) 1.13 Schedules and Exhibits. The following is a list of exhibits and schedules attached to and incorporated into this Agreement by reference and deemed to be a part of this Agreement:

EXHIBIT SUBJECT MATTER REFERENCE

Assignment Agreement 1.1(h) Assignments of Patents 1.1(j) Assignments of Real Property Lease 1.1(k) Assignments of Trade-Marks 1.1(l) Assumption Agreement 1.1(n) Confidentiality Agreement Termination Agreement 1.1(cc) Directions and Authorizations 1.1(kk) Indemnity Agreement 1.1(zz) Non-Competition Agreement 1.1(lll) Trade Mark License 1.1(jjj) Trade-Mark License Agreement 1.1(llll) Opinion of Counsel for the Vendor 7.1(d) Opinion of Counsel for the Purchaser 7.1(e)

SCHEDULE SUBJECT MATTER REFERENCE

Facilities 1.1(e) Closing Statement 1.1(x) Collective Agreements 1.1(z) Copyright 1.1(ff) Crucial Contracts 1.1(gg) Excluded Assets 1.1(rr) Excluded Trade-Marks 1.1(tt) Financial Statements 1.1(uu) Fixed Assets and Equipment 1.1(vv) Goodwill 1.1(ww) Patents 1.1(qqq) Permits 1.1(rrr)



Appendix E – Purchase and Sale Agreement (Long Form) SCHEDULE SUBJECT MATTER REFERENCE

Retained Trade-Mark 1.1(gggg) Technology 1.1(hhhh) Trade-Mark License 1.1(jjjj) Trade-Marks 1.1(kkkk) Non-Assigned Contracts 4.1(g) Records and Business Information 4.1(k) Financial Information 4.1(l) Contracts, etc. 4.1(p) Intellectual Property 4.1(t) Employees and Employment Contracts 4.1(v) Benefit Plans and Pension Plans 4.1(x) Unions 4.1(y) Environmental Conditions 4.1(z) Litigation 4.1(aa) Owned Lands 4.1(bb) Leased Premises 4.1(cc) Intellectual Property 4.1(t) Environmental Reports 4.2(i) Survey Reimbursements 5.27

ARTICLE II 2.1 Agreement to Purchase. Upon the terms and subject to the conditions herein contained, the Vendor shall sell, transfer and assign and the Purchaser shall purchase and accept the assignment of, as of and with effect from • on the Closing Date, the Purchased Assets. 2.2 Non-Assignable Contracts and Permits. Notwithstanding any other provision hereof, if any of the Purchased Contracts and Permits shall not be assignable or shall only be assignable with the consent or approval of a third party (hereinafter in this section 2.2 referred to as a "Third Party Consent"), the Vendor shall not be considered to be in breach of any of its obligations hereunder or to be in breach of any representation or warranty made with respect thereto provided that in such event the Vendor shall:



(a) during a period of not less than 30 days following the Closing Date, use its reasonable efforts, in co-operation with the Purchaser, to secure any Third Party Consent required in connection with the assignment thereof; and

(b) pending the effective transfer thereof, hold all rights or entitlements that the Vendor has thereto in trust for the exclusive benefit of the Purchaser, provided that the Purchaser shall pay, perform and discharge all obligations arising or accruing with respect thereto during such period.

Nothing in this Agreement shall be construed as an assignment of, or an attempt to assign to the Purchaser any Purchased Contracts or Permits which, as a matter of law or by the terms thereof, is (i) not assignable or (ii) not assignable without the consent or approval of a third party, without first obtaining such approval or consent. 2.3 Non-Assumption of Obligations. Effective as of • on the Closing Date, the Purchaser shall assume, pay when due, perform and discharge the Assumed Liabilities and no other liabilities or obligations of the Vendor.

ARTICLE III PAYMENT OF PURCHASE PRICE

3.1 Amount of Purchase Price. The purchase price (the "Purchase Price") payable by the Purchaser to the Vendor for the Purchased Assets, subject to the adjustments pursuant to this Article III, shall be an amount equal to the aggregate of:

(a) the Current Liabilities; (b) $• [Purchased Assets less Current Liabilities and Working Capital Amount]; (c) $• [Estimated Working Capital Amount] (the amount referred to in sections 3.1(b) and 3.1(c) being herein referred to as the "Closing Cash Payment"). 3.2 Payment of Purchase Price. The Purchase Price shall be paid and satisfied by the Purchaser at the Closing by:

(a) wire transfer of immediately available funds to an account designated by the Vendor in writing at least two Business Days prior to the Closing Date or, in the absence of such designation, by delivery by the Purchaser on the Closing Date to the Vendor of a certified cheque or bank draft in an amount equal to the Closing Cash Payment payable to or to the order of the Vendor; and

(b) the assumption by the Purchaser of the Current Liabilities pursuant to the Assumption Agreement.



Appendix E – Purchase and Sale Agreement (Long Form) 3.3 Delivery of Closing Statement.

(a) As soon as reasonably practicable after the Closing Date and in any event not later than the • day thereafter, the Vendor shall prepare and deliver to the Purchaser the Closing Statement audited by the Vendor's auditors.

(b) The Purchaser and the Vendor shall cooperate fully with each other in the preparation of the Closing Statement. The Purchaser shall have access to the Closing Statement working papers and the files of the auditor designated to prepare the Closing Statement. Representatives of the Purchaser may accompany the auditor in connection with the review, analysis and count of the components of the Working Capital Amount. The Vendor shall make available, in connection with the preparation of the Closing Statement, its employees who are knowledgeable about the Business and the components of the Working Capital Amount. Subject to the following sentences in this subsection 3.3(b), each of the Vendor and the Purchaser shall bear the cost and expenses of their respective auditors in the preparation of the Closing Statement. The Purchaser shall bear, to a maximum of $•, the cost and expenses of the Vendor's auditors associated solely with the work necessary to ensure that the Closing Statement has been prepared on a basis consistent with the accounting principles used in the preparation of the Financial Statements of the Business as at • and •, as contemplated in Note 2 of the Closing Statement. With respect to the Vendor's auditor's necessary work to ensure such consistency, the Parties shall jointly develop instructions to the Vendor's auditors.

(c) Before the delivery of the Closing Statement in final form pursuant to subsection 3.3(a), the Vendor shall deliver no later than the • day after the Closing Date final drafts of the Closing Statement to the Purchaser and the Purchaser's auditors for consideration and comment. The Purchaser and the Purchaser's auditors shall comment promptly on such final drafts and, in any event, no later than the • day after the Closing Date.

(d) The Vendor shall amend the final draft of the Closing Statement to the extent it considers appropriate in light of the comments of the Purchaser and the Purchaser's auditors contemplated in subsection 3.3(c).

3.4 Payment of Adjustment Amount. Subject to sections 3.5 and 3.6:

(a) on or before the • day after the Closing Date the Parties shall calculate the amount (the "Adjustment Amount") which shall be equal to:

1. the Working Capital Amount; less 2. $• [the Estimated Working Capital Amount];

(b) if the Adjustment Amount is a positive amount, the Purchaser shall pay the Vendor the Adjustment Amount and if the Adjustment Amount is a negative amount, the Vendor shall pay the Purchaser such amount;

(c) the Purchase Price shall be adjusted by the amount determined under this section 3.4.


Saskatchewan: Bar Admission Program E - 19 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) 3.5 Objection to Closing Statement.

(a) Delivery of Objection Notice - In the event that the Purchaser objects in good faith to any aspect of the Closing Statement after receipt thereof from the Vendor's auditor, the Purchaser shall so advise the Vendor by delivery to the Vendor of a written notice (the "Objection Notice") no later than the • day after the Closing Date. The Objection Notice shall set out the reasons for the Purchaser's objection as well as the amount under dispute and reasonable details of the calculation of such amount.

(b) Agreement of Parties - Subject to section 3.6, in the event that the Parties agree on a resolution of the dispute set out in the Objection Notice on or prior to the • day after the Closing Date, the Parties shall confirm this resolution in writing and shall thereafter be bound by such resolution, and the appropriate Party shall pay to the other Party the Adjustment Amount no later than the • day after the Closing Date.

(c) Resolution of Disputes

(i) In the event that the Parties are unable to settle the dispute set out in the Objection Notice on or prior to the • day after the Closing Date, then:

(A) subject to section 3.6, the appropriate Party shall pay, no later than the • day after the Closing Date, to the other Party, to the extent determinable, the Adjustment Amount calculated pursuant to section 3.4 without reference to the amounts in dispute in the Objection Notice; and

(B) the dispute shall forthwith, be referred to the firm of •, Chartered Accountants for final determination. • shall determine all procedures applicable to the resolution of the dispute.

(ii) The Purchaser and the Vendor shall cooperate in completing any resolution of a dispute that is the subject of an Objection Notice as expeditiously as possible. • may hire such experts-as in their opinion appear to be necessary. The costs and expenses of • shall be borne by the Vendor and the Purchaser in the same proportions that each Party's proposed amount differs from the amount determined by •. The resolution of a dispute between the parties under this section 3.5 shall be in substitution for and precludes the bringing of an action in any court in connection with any objection by the Purchaser.

(d) Determination of Arbitrator - The determination of • shall be made no later than the • day after the Closing Date and the determination of • shall be final and binding on all Parties and not subject to any right of appeal. The Closing Statement and the Purchase Price shall be adjusted in accordance with the determination of •.

(e) Payment in Accordance with Determination - Subject to section 3.6, the Vendor or the Purchaser, as the case may be, shall pay, no later than the • day after the Closing Date, to the other the amount found owing as a result of the resolution or final determination by • in accordance with section 3.4 together with interest thereon from the Closing Date up to and including the date of payment at the rate of •% per annum.



Appendix E – Purchase and Sale Agreement (Long Form) 3.6 Excess Working Capital Amount.

(a) If the Working Capital Amount determined pursuant to ections 3.3 and 3.5, as applicable, is greater than $•, then, prior to the payment by the Purchaser of any adjustment in respect of the Purchase Price, the Purchaser shall have the right to reduce the Working Capital Amount by an amount up to the excess over $• by requiring the Vendor to repurchase and re-assume (as the case may be), concurrent with the payment by the Purchaser of the Adjustment Amount, those Accounts Receivable that comprise the Working Capital Amount and which are designated by the Purchaser. The right of the Purchaser pursuant to this subsection 3.6(a) must be exercised by notice in writing to the Vendor within 15 days of the determination of the Working Capital Amount.

Notwithstanding any terms contained in this Agreement, the reduced Working Capital Amount shall be used for the determination of the amount required to be paid by the Purchaser as an adjustment to the Purchase Price.

(b) If the Purchaser fails to provide the notice of exercise to the Vendor pursuant to subsection 3.6(a), the Purchaser shall pay the Adjustment Amount in respect of the Purchase Price without reference to this section 3.6.

3.7 Allocation of Purchase Price.

(a) During the Interim Period, the Vendor and the Purchaser shall use reasonable efforts to allocate the Purchase Price amongst the Purchased Assets. If the Vendor and the Purchaser agree, during the Interim Period, on the allocation of the Purchase Price, the Vendor and the Purchaser shall, subject to subsection 3.7(b), report the purchase and sale of the Purchased Assets in accordance with such allocation in any returns required to be filed under the Income Tax Act (Canada) and other taxation statutes as required by law.

(b) Any adjustment made to the Purchase Price pursuant to Article III shall be reflected in the allocation of the Purchase Price determined pursuant to subsection 3.7(a) so that, if any adjustment is made in respect of a specific asset, the Purchase Price allocated to such asset shall also be adjusted in like manner.

ARTICLE IV REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties of the Vendor. The Vendor represents and warrants to the Purchaser as follows and acknowledges that the Purchaser is relying on these representations and warranties in connection with the purchase by the Purchaser of the Purchased Assets:

(a) Incorporation of the Vendor - The Vendor is a corporation duly incorporated and validly existing under the laws of •.



(b) Capacity to own Purchased Assets - The Vendor has all necessary power, authority and capacity, corporate or otherwise, to own its Purchased Assets and to carry on the Business.

(c) Capacity to Enter Agreement - The Vendor has all necessary power and authority, corporate or otherwise, to enter into this Agreement and the Ancillary Agreements and to perform its obligations hereunder and thereunder.

(d) Due Authorization - The execution and delivery of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereunder and thereunder have been duly authorized by all necessary action, corporate or otherwise, on the part of the Vendor.

(e) Binding Obligation - This Agreement has been duly executed and delivered by the Vendor and constitutes valid and binding obligations of the Vendor, enforceable against it in accordance with the terms hereof.

(f) Absence of Conflict

(i) Except for any Purchased Contracts or Permits which are not assignable in accordance with their respective terms or for which consent or approval of any third party (hereinafter referred to as "Third Party Consents") are required in connection with the completion of the transactions contemplated hereby, the Vendor is not a party to, bound or affected by or subject to any indenture, mortgage, lease, agreement, option, instrument, charter or bylaw provision, judgment, decree, order, regulation or rule of any Governmental Authorities, domestic or foreign, which would be violated, contravened or breached by, or which would result in the creation or imposition of any Encumbrance upon any of the Purchased Assets as a consequence of, the execution and delivery of this Agreement or the consummation of any of the transactions provided for herein.

(ii) Schedule 4.1(g) contains a complete and accurate listing of all Material Purchased Contracts and Permits that are assignable and for which the Vendor has been advised that a necessary Third Party Consent shall not be provided prior to the Closing Date.

(g) Regulatory Approvals - No governmental or regulatory authorization, approval, order,

consent or filing is required (other than Competition Act Approval and Investment Canada Approval and authorizations, approvals, orders, consents or filings in respect of the transfer or issuance of Permits) on the part of the Vendor, in connection with the execution, delivery and performance of this Agreement by the Vendor and the Ancillary Agreements or the performance of the Vendor's obligations under this Agreement and the Ancillary Agreements.



Appendix E – Purchase and Sale Agreement (Long Form) (h) Compliance with Laws

(i) Except as disclosed in Schedule 4.1(z), the Vendor is conducting that portion of Business carried on by it in compliance in all material respects with all applicable laws, rules, regulations, notices, approvals and orders of Canada and of the Provincial Jurisdictions and all municipalities thereof in which that portion of Business is carried on and of the countries that the Vendor imports to or exports from products and is not in breach of any such laws, rules, regulations, notices, approvals or orders except for breaches which in the aggregate are not material.

(ii) The Permits are the only material authorizations, registrations, permits, approvals, grants, licenses, quotas, consents, commitments, rights or privileges issued or granted by Governmental Authorities to enable the Business to be carried on as now conducted and to enable the Vendor to own, lease and operate the Purchased Assets. The Permits (other than the Permissions) are valid, subsisting, in good standing and unamended and, except for any Permits which are not assignable in accordance with their terms or which require the consent or approval of any third party to effect a valid assignment; none of them contains any term, provision, condition or limitation which may be materially adversely affected by the completion of the transactions contemplated hereby.

(i) Jurisdiction - The Vendor is not conducting the Business in any jurisdiction other than:

(i) the Provincial Jurisdictions; (ii) the •, •, • and • with respect to the export of products; and (iii) the •, •, • and • with respect to the import of products.

(j) Title to Purchased Assets - The Vendor is the sole legal and beneficial owners of the Purchased Assets (other than the Owned Lands, the Leased Premises, Purchased Contracts, Permits and Intellectual Property) with good and marketable title thereto, free and clear of any Encumbrances or other interests, claims or any rights of others to acquire any ownership or other interest in such Purchased Assets and are exclusively entitled to possess and dispose of the same to the Purchaser.

(k) Records and Business Information

(i) Except as set forth in Schedule 4.1(1), the Business Information is true and correct in all material respects as of the date to which it relates, as the same may be amended or corrected by or in such Business Information.

(ii) The books of account and accounting records that comprise the Records present fairly and disclose in all material respects the results and financial position of the Business.



(iii) All material financial transactions of the Vendor relating to the Business have been accurately recorded in all material respects in the books of account and accounting records which comprise the Records and Business Information.

(l) Financial Information

(i) The Financial Statements fairly reflect (in all material respects) the actual results of the Business for the reporting periods covered thereby. The Financial Statements are prepared in accordance with generally accepted accounting principles. The Financial Statements are prepared on a basis consistent with the financial statements of the Business for the years ended •, • and •.

(ii) Except as set forth in Schedule 4.1(l) or as part of the Business information, since the date of the most recent Financial Statements there has been no material adverse change in the financial condition, operations, results of operations or business of the Business other than changes occasioned by general economic or other conditions affecting all industry participants.

(m) Absence of Amendments to Material Agreements, etc.

(i) Except as set forth in Schedule 4.1(p), since • there has not been any amendment to any material contract, agreement, commitment, lease or license to which the Vendor is a party or is bound directly or indirectly affecting the business or operations of the Business.

(ii) Except for the transactions contemplated by this Agreement, since •, there has not been:

(A) any incurring or guaranteeing of any debt, obligation, or liability by or on behalf of the Vendor (whether or not currently due and payable) in connection with the business or operations of the Business other than in the ordinary course of business; or

(B) any entry by the Vendor into any transaction directly or indirectly affecting the Business in any material respect other than in the ordinary course of business or as specifically provided in this Agreement.

(n) Major Suppliers and Customers

(i) The Vendor has provided to the Purchaser a comprehensive listing of each supplier of goods and services to it to whom it paid in excess of $• for the • month period ending •;

(ii) To the Knowledge of the Vendor, no suppliers have expressed an intention not to deal with the Purchaser or to negotiate its relationship with the Purchaser on terms different from and less attractive than those with the Vendor as a result of the transfer of the Purchased Assets as contemplated in this Agreement or the completion of the transactions contemplated in this Agreement.



Appendix E – Purchase and Sale Agreement (Long Form) (o) Accounts Receivable - The Accounts Receivable were created in the ordinary and

customary course of the Business and are valid and enforceable and are good and collectible in full within • days after the date that they arose, without any right of set-off or counterclaim or any reduction for any credit or allowance made or given except to the extent of any allowance for doubtful accounts in the Books and Records.

(p) Contracts, etc.

(i) Schedule 4.1(p) contains a complete and accurate listing of all Material Contracts and Material Leases. Except to the extent disclosed in such schedules, the Material Contracts and Material Leases are unamended.

(ii) The Purchased Contracts are all the contracts, agreements, commitments and leases that are required to enable the Business to be carried on as now conducted.

(iii) The Vendor is the sole legal and beneficial owner of the Vendor's right, title and interest in, to and under the Purchased Contracts, with good and marketable title thereto, free and clear of any Encumbrances (other than restrictions contained in any of the Purchased Contracts relating to the assignment of such Purchased Contracts).

(iv) Except as set forth in Schedule 4.1(p), all Contracts, Leases, Real Property Leases, Permits and Warranty Rights are in full force and effect and to the Knowledge of the Vendor, the other party or parties thereto are not in breach in any material respect thereunder, to the Knowledge of the Vendor, under no threat of cancellation by any party thereto and subject to the need, as applicable, to obtain a Third Party Consent, are assignable to the Purchaser. The Business has the capacity, including the necessary personnel, equipment and supplies (either on hand, on order or available by means of future contractual arrangements), to enable the Vendor to perform its obligations under the Purchased Contracts.

(v) Except for this Agreement or as otherwise disclosed in this Agreement, the Purchased Contracts and the Assumed Liabilities, the Vendor is not a party to or subject to any of the following, whether written or oral, relating to the Business:

(A) any contracts, agreements or commitments for Capital Expenditures (other than as agreed to by the Purchaser);

(B) any contract or agreement not made in the ordinary course of business; (C) any Material Contract, agreement or commitment extending beyond the

Closing Date; (D) any contract, agreement or commitment containing covenants not to

compete in any line of business with any Person; (E) any license, franchise, distributorship, dealer, manufacturer's

representative, sales agency or advertising agreement; or (F) any Material Lease (as lessee or lessor) of personal or real property.



(vi) Except for contracts between or among the Vendor and its Affiliates as disclosed in Schedule 4.1(p), all of the Purchased Contracts and Current Liabilities were entered into on an arm's length basis, on normal market and commercial terms (having regard to the industry) and in the ordinary and normal course of business.

(vii) The Vendor does not retain any holdbacks under any of the Purchased Contracts.

(q) Inventory Purchase Orders and Purchase Orders - Each Inventory Purchase Order and Purchase Order is in full force and effect and to the Knowledge of the Vendor, the other party or parties thereto are not in breach thereunder to the Knowledge of the Vendor, under no threat of cancellation by any party thereto and is assignable to the Purchaser without penalty or loss of economic benefit thereunder. The Vendor has received no deposits, prepayments or payments in respect of any of the Inventory Purchase Orders and Purchase Orders.

(r) Inventories

(i) The Inventories have been accumulated in the ordinary course and are in good and marketable condition. The inventories of raw materials and finished goods (assuming normal market conditions and operating and marketing practices consistent with past practices) are usable or saleable in the ordinary course of the Business within three months of the Closing Date.

(ii) The range of $• to $• for the Working Capital Amount contemplated in Article III is normal and consistent with the historical levels for the Working Capital Amount of the Vendor and is adequate to operate the Business in the ordinary course.

(s) Copies of Agreements, etc. - True, current, correct and complete copies of the Material Purchased Contracts have been made available to the Purchaser and there are no ongoing negotiations, other than in the ordinary course or other than as the Purchaser may be aware, with respect to the renewal, repudiation or amendment of any such contract, agreement, commitment or lease.

(t) Intellectual Property

(i) To the Knowledge of the Vendor, the Vendor is the sole legal and beneficial owner of the Intellectual Property including the registrations and applications listed on Schedule l.l(rrr). Such ownership rights of the Vendor is free and clear of any mortgage, charge, pledge, hypothec, lien or security interest of any kind, or, to the Knowledge of the Vendor and except as set out in Schedule 4.1(t), other interests, claims or any rights of others to acquire any ownership or other interest thereto. To the Knowledge of the Vendor, the Vendor is exclusively entitled to possess and dispose of such ownership rights to the Purchaser (except as set forth in Schedule 4.1(t)). Except as disclosed in Schedule 4.1(t), such registrations and




applications are current and the Vendor has not received any notice challenging the validity or ownership of the Intellectual Property or of such registrations and applications.

(ii) To the Knowledge of the Vendor, the conduct of the Business and any dealing in or the use of the Intellectual Property does not infringe upon the trade marks, trade names, copyrights, registered user rights, patents, patent applications and industrial design registrations, domestic or foreign, of any other Person.

(iii) Except for those trade names comprised within the Intellectual Property and listed in Schedule l.l(kkkk), the Vendor operates the Business under its own name.

(v) Condition of Purchased Assets - All of the Purchased Assets which are of tangible character and are necessary to operate the Business as currently conducted by the Vendor are in an insurable condition and, subject to normal repair and maintenance requirements, are in good operating condition and repair having regard to the nature and age of such assets and the effects of normal wear and tear.

(u) Purchased Assets - The Purchased Assets (together with the Excluded Assets) constitute

all of the assets, properties and rights reasonably necessary to operate the Business as currently conducted by the Vendor.

(v) Employees and Employment Contracts

(i) There are set forth in Schedule 4.1(v) the names and titles of all Union Employees as at • and Non-Union Employees as at • including present rates of remuneration, years of service and present positions held.

(ii) The Vendor has no written employment, non-competition or confidentiality agreement relating to the Business with any Person except pursuant to this Agreement or the contracts or commitments listed in Schedule 4.1(v).

(iii) Except as set forth in Schedule 4.1(v), the Vendor is not a party to any oral employment agreement relating to the Business with any Employee which provides for or results in costs, in connection with the termination of the employment of the Employee, which are greater than the costs associated with the termination of such Employee under applicable legislation or at common law.

(iv) There are no grievances, assessments, charges, actions, proceedings or outstanding orders, awards, rulings or inspections relating to the Employees of the Business (including, without limitation, any made under or by applicable provincial occupational health and safety legislation, workers' compensation boards or applicable pay equity act legislation in those jurisdictions in which the Employees are located) which are pending, or (to the Knowledge of the Vendor) threatened and adversely affect the Vendor, the Business or Purchased Assets, except as listed in Schedule 4.1(v).



(v) Except for those Employees identified on Schedule 4.1(v) and except by reason of short-term absence arising from illness, short-term disability, vacation, bereavement or other similar leave:

(A) all of the Employees are at work performing the usual and ordinary functions of their respective positions;

(B) none of the Employees is receiving benefits under any long-term disability plan of the Vendor or under applicable workers' compensation legislation,; and

(C) none of the Employees has received any such benefits within the past six months.

(vi) All payments under:

(A) any pay equity plans, if any, in effect for the Employees; and (B) any pay equity legislation applicable to the Employees,

have been made and no payments under such pay equity plans and legislation is required on or after the Closing Date.

(w) Collective Agreements

(i) The Vendor is not bound by or a party to, either directly or by operation of law, any collective bargaining agreement with any trade union or association which might qualify as a trade union and relating to the Business, except such agreements and plans as are listed in Schedule 1.1(z).

(ii) The Vendor is bound by any policies or practices instituted by the Vendor, in relation to the Business, which exceed those obligations set forth under the agreements and plans listed in Schedules l.l(z) and 4.1(x).

(iii) Except as disclosed in Schedules l.l(z) and 4.1(v), there is no current request to re-negotiate any Collective Agreement, there are no current negotiations towards any collective bargaining agreement nor is there any such agreement negotiated but unsigned and relating to any of the Employees employed in the Business.

(x) Benefit and Pension Plans

(i) Except for the benefit plans (the "Vendor's Benefit Plans") and the pension plans (the "Vendor's Pension Plans") listed in Schedule 4.1(x), there are no pension or group or individual employment benefit plans or arrangements including, without limitation, any pension plan, pay equity plan, deferred profit sharing plan or any plan or arrangement providing for medical services or coverage, dental care, life insurance or disability insurance or ongoing incentive compensation arrangements established for or by the Vendor for or in respect of Employees.



Appendix E – Purchase and Sale Agreement (Long Form) (ii) All benefit and pension plans listed in Schedule 4.1(x) have been duly registered

where required by, and are in good standing under, all applicable legislation including, without limitation, the Income Tax Act (Canada) and applicable provincial pension benefits legislation.

(y) Unions - Except as disclosed in Schedule l.l(z) and 4.1(y), no trade union, council of

trade unions, employee bargaining agency or affiliated bargaining agent (in each case with respect to the Business):

(i) holds bargaining rights with respect to any of the Employees or independent contractors by way of certification, interim certification, voluntary recognition, designation or successor rights;

(ii) to the Knowledge of the Vendor, has applied to be certified as the bargaining agent of any of the Employees;

(iii) to the Knowledge of the Vendor, has applied to have the Vendor declared a related or successor employer pursuant to applicable provincial labour or employment legislation; or

(iv) to the Knowledge of the Vendor, has filed a complaint under applicable provincial labour or employment legislation.

(z) Environmental Conditions

(i) Except as disclosed in Schedule 4.1(z):

(A) the Vendor's use of, and the conduct of the Business on the Owned Lands and Leased Premises have complied in all material respects and are currently in material compliance with all Environmental Laws and Environmental Approvals and the Vendor is not in violation of and has not violated any Environmental Laws or Environmental Approvals, in connection therewith, except for violations which are not individually or in the aggregate material;

(B) the Vendor possesses all material Environmental Approvals required for:

i. the Business carried on by it; ii. the Leased Premises and the Owned Lands to enable the Business

to be carried on as now conducted and operated, and such Environmental Approvals are valid, subsisting and in good

standing and, where permitted under Environmental Laws or by the terms of the Environmental Approvals, are transferable by the Vendor to the Purchaser on the Closing Date;

(C) the Vendor has not used or operated the Leased Premises or the Owned Lands or the buildings, equipment or structures thereon, or permitted them



to be used or operated, to generate, receive, manufacture, refine, treat, transport, store, handle, recycle, dispose of, deposit, transfer, produce or process Hazardous Substances, except in material compliance with Environmental Laws and Environmental Approvals;

(D) there are no Hazardous Substances existing on, in or under: i. the Owned Lands; or ii. to the Knowledge of the Vendor, any other lands or bodies of

water which have originated or migrated from the Owned Lands, except in material compliance with Environmental Laws or Environmental

Approvals;

(E) i. the Vendor has not caused or knowingly permitted or otherwise acquiesced or participated in, the Release from, at, on or under, the Owned Lands of any Hazardous Substances; and

ii. to the Knowledge of the Vendor, there has been no Release from, at, on or under any other lands or bodies of water of any Hazardous Substances which have migrated onto, into or under the Owned Lands,

except in material compliance with Environmental Laws and Environmental Approvals;

(F) during the period of • years immediately preceding the Closing Date there have not been, nor are there currently, any urea formaldehyde foam insulation, asbestos, building materials containing asbestos, PCB waste or PCB related waste, radioactive substances and underground storage vessels (active or abandoned) at, on or under the Leased Premises or Owned Lands, except in material compliance with Environmental Laws and Environmental Approvals;

(G) the Vendor has not received any Environmental Notice raising concerns in respect of, any Environmental Laws nor is subject to any directions, judgments, decrees, injunctions, rulings or other orders of any court in respect of the Business, the Leased Premises or Owned Lands or any buildings, equipment, structure or activity thereon or therein and, to the Knowledge of the Vendor, there are no material facts which could reasonably be expected to give rise to the need for or issuance of any such Environmental Notice or any such direction, judgment, decree, injunction, ruling or order;




(H) the Vendor has not received any Environmental Notice in respect of, nor to the Knowledge of the Vendor is there, any evaluation, assessment, investigation, review, study, test, proceeding, action or investigation being conducted, pending or threatened:

i. to suspend, amend, revoke, cancel, terminate or limit any Environmental Approvals; or

ii. under or pursuant to any Environmental Laws in respect of the Business, the Leased Premises or Owned Lands or the buildings, equipment or structures thereon, by, at the request of, or on behalf of any third party or Governmental Authority;

(I) during the period of • years immediately preceding the Closing Date, the Vendor has not received and is not subject to any Remedial Order or written complaint made by any third party, judicial authority, Governmental Authority under or pursuant to any Environmental Laws, and, to the Knowledge of the Vendor, there are no material facts which could reasonably be expected to give rise to any such complaint, proceeding, review, action or investigation, in respect of:

i. the existence on, in or under, (i) the Leased Premises and Owned Lands of any Hazardous Substance, or (ii) any other lands or bodies of water of Hazardous Substances originating or migrating from the Premises or Owned Lands; or

ii. the Release from, at, on or under, (iii) the Leased Premises and Owned Lands of any Hazardous Substance, or (iv) any other lands or bodies of water of Hazardous Substances onto, into or under the Leased Premises or Owned Lands; or

iii. any failure or neglect to comply with any Environmental Laws or Environmental Approvals in respect of the Business, the Leased Premises or the Owned Lands; and

(J) to the Knowledge of the Vendor, there is no pending or threatened matter or act or fact which is material and which could reasonably be expected to cause any material aspect of the Business, the Leased Premises or Owned Lands (or any part thereof) or the buildings, equipment or structures thereon to no longer be in material compliance with Environmental Laws or Environmental Approvals.

(ii) The representations and warranties of the Vendor made in this subsection 4.1(z) (other than clause 4.1(z)(i)(B)), shall be deemed to be restated, mutatis mutandis, to the same extent and in the same manner as if the terms "tenants and sub-tenants of the Vendor" and "business of the tenants and subtenants of the Vendor" were substituted for the terms "Vendor" and "Business", respectively, contained in such subsection.


Saskatchewan: Bar Admission Program E - 31 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) (aa) Litigation - There are no judgments, decrees, injunctions, rulings or orders of any court,

Governmental Authority or arbitrator of which the Vendor has been given notice, or any actions, suits, grievances or proceedings (whether or not purportedly on behalf of the Vendor) pending, or threatened (to the Knowledge of the Vendor) by or against either of the Vendor or in respect of any of the Purchased Assets which:

(i) materially adversely affect the ability of the Vendor to enter into this Agreement or the transactions contemplated hereby or which could materially adversely affect, the Business or Purchased Assets; or

(ii) might involve the possibility of any Encumbrance against the Purchased Assets,

except such actions, suits, grievances or proceedings as are disclosed in Schedule 4.1(aa) attached hereto.

(bb) Owned Lands

(i) The Owned Lands are the only lands or interests in lands of which the Vendor is registered owner or of which a third party is a registered owner as bare trustee for the Vendor and which are used or held for use primarily in or primarily in respect of the Business. Schedule 4.1(bb) contains a complete and accurate listing of Owned Lands.

(ii) Subject to Schedule • and the Permitted Exceptions, the Vendor is collectively the legal and beneficial owner in fee simple with good and marketable title to all the Owned Lands, free and clear of any Encumbrances or other interests, claims or any rights of others to acquire any ownership or other interest thereto and are exclusively entitled to possess and dispose of the same to the Purchaser.

(iii) The Vendor and the tenants and sub-tenants of the Vendor have such rights of ingress and egress to and from the Owned Lands necessary to carry on the Business or other business presently carried thereon, respectively, upon the Owned Lands in the manner in which the Business and other business are currently carried on upon the Owned Lands.

(iv) Except pursuant to any Permitted Exceptions:

(A) no Person has any option or right of any kind to purchase all or any part of the Owned Lands; and

(B) to the Knowledge of the Vendor, no Person, other than the Vendor and tenants under the Real Property Leases, is using or has any right to use or is in or has any right to possession or occupancy of any part of the Owned Lands.

(v) The Vendor has delivered to the Purchaser the surveys listed in Schedule 4.1(bb) which are the most up-to-date surveys relating to the Owned Lands which are in the possession or under the control of the Vendor.




(vi) The Vendor has not received any notification in writing of nor is it aware of any outstanding deficiency notice or work order nor is it aware of any pending deficiency notice or work order in respect of any of the Buildings and Improvements or of any current noncompliance of a material nature with applicable statutes and regulations or building and zoning bylaws and which would have a material adverse effect on the operation of the Business or other present use of the Owned Lands.

(vii) (A) none of the Vendor has made application for a rezoning of any of the Owned Lands or any part thereof; and

(B) to the Knowledge of the Vendor, there is no proposed or pending change to any zoning affecting the Owned Lands or any part thereof.

(viii) To the Knowledge of the Vendor, no expropriation, condemnation or similar proceedings are pending or threatened against the Owned Lands or any part of the Owned Lands.

(ix) Other than the Permitted Exceptions, there are no matters affecting the right, title and interest of the Vendor in and to the Owned Lands, which in the aggregate, would materially adversely affect the ability to carry on the Business upon the Owned Lands in the manner in which the Business is currently being carried on upon the Owned Lands or, to the Knowledge of the Vendor, materially adversely affect the ability to carry on any other business presently carried on upon the Owned Lands.

(x) To the Knowledge of the Vendor:

(A) no part of the Owned Lands is subject to any building or use restrictions that would restrict or prevent their present use and operation; and

(B) the Owned Lands are properly and duly zoned for their current uses and such current uses are in all respects conforming uses.

(xi) All of the tangible personal property located on the Owned Lands and Leased Premises is collectively owned by the Vendor other than those items of tangible personal property: (i) leased under the Leases, (ii) owned by tenants or subtenants of the Vendor, (iii) owned by customers of the Vendor which are in the nature of • and (iv) •. All of the tangible personal property comprised in the Purchased Assets (other than Motor Vehicles and Inventories in transit) is located on the Owned Lands or on the Leased Premises.

(cc) Leased Premises

(i) Subject to the Permitted Exceptions, the Vendor has a good and marketable leasehold interest in the Leased Premises, free and clear of any Encumbrances or other interests, claims or any rights of others to acquire any ownership or other interest thereto (other than interests, claims and any rights of landlords) and are



exclusively entitled to possess and dispose of the same to the Purchaser (subject to any required landlord consent). Schedule 4.1(cc) contains a complete and accurate listing of Real Property Leases. Except to the extent disclosed in Schedule 4.1(cc), the Real Property Leases are unamended. The Vendor is not a party to or bound by any leases or subleases of real property connected with the Business other than the Real Property Leases. All interests held by the Vendor as lessee under the Real Property Leases are free and clear of any and all Encumbrances other than Encumbrances created pursuant to the Real Property Leases.

(ii) All rental and other payments required to be paid by the Vendor pursuant to the Real Property Leases have been duly paid to date and the Vendor is not otherwise in default in any material respect under any of the Real Property Leases.

(iii) To the Knowledge of the Vendor:

(A) none of the other parties in respect of the Real Property Leases is in default in any material respect under any Real Property Lease;

(B) no event exists which, but for the passing of time or the giving of notice, or both, would constitute such a default by any of the other parties to any Real Property Lease and no other party to any Real Property Lease is claiming any such default or taking any action purportedly based upon any such default; and

(C) no expropriation, condemnation or similar proceedings are pending or threatened against the Leased Premises or any part of the Leased Premises.

(iv) The Vendor has not waived or omitted to take any action in respect of any material matters under any Real Property Leases.

(v) With respect to those Real Property Leases to which the Vendor is a party as lessor, Schedule 4.1(cc) sets out the name of the tenant, term of the lease and current rental payments. Such Real Property Leases accurately disclose rents fully enforceable at law against each of the tenants under such Real Property Leases and no such Real Property Lease has been terminated or surrendered nor has the Vendor received prepaid rents or rental deposits except in the ordinary and usual course as required by the express terms of the Real Property Leases, which amounts have been recorded in the Financial Statements.

(dd) Residence of the Vendor - The Vendor is not non-resident persons for the purposes of section 116 of the Income Tax Act (Canada).

(ee) Nature of Purchased Assets - The Vendor is a registrant for the goods and services tax within the meaning of subsection 167(1) of the Excise Tax Act (Canada) and the Purchased Assets constitute all or substantially all of the assets and property owned and primarily used by the Vendor in respect of the operation of the Business.




(ff) Disclosure - The representations and warranties of the Vendor in the Agreement are true, complete and correct and do not contain any untrue or misleading statement of a material fact.

4.2 Representations and Warranties of the Purchaser. The Purchaser represents and warrants to the Vendor as follows and acknowledges that the Vendor is relying on these representations and warranties in connection with the sale by the Vendor of the Purchased Assets:

(a) Formation of Corporation - The Purchaser is a corporation duly formed and validly existing under the laws of the province of •.

(b) Capacity to enter Agreement - The Purchaser has all necessary corporate power, authority and capacity to enter into this Agreement and the Ancillary Agreements and to perform its obligations hereunder and thereunder.

(c) Due Authorization - The execution and delivery of this Agreement and the Ancillary Agreements and the completion of the transactions contemplated hereunder and thereunder have been duly authorized by all necessary corporate action on the part of the Purchaser.

(d) Binding Obligation - This Agreement has been duly executed and delivered by the Purchaser and constitutes valid and binding obligations of the Purchaser, enforceable against it in accordance with the terms hereof, subject however, to applicable bankruptcy, insolvency and other laws of general application limiting the enforcement of creditor's rights generally and to the fact that equitable remedies (including specific performance) are discretionary and may not be ordered in respect of certain defaults.

(e) Absence of Conflict - The Purchaser is not a party to, bound or affected by or subject to any indenture, mortgage, lease, agreement, instrument, charter or bylaw provision, order, judgment or decree which would be violated, contravened or breached by the execution and delivery of this Agreement or the consummation of any of the transactions provided for herein.

(f) GST Registration - The Purchaser is a "registrant" for the goods and services tax within the meaning of subsection 167(1) of the Excise Tax Act (Canada).

(g) Regulatory Approvals - No governmental or regulatory authorization, approval, order, consent or filing is required (other than Competition Act Approval and Investment Canada Approval) on the part of the Purchaser, in connection with the execution, delivery and performance of this Agreement or the performance of any of the Purchaser's obligations under this Agreement.

(h) Litigation - There are no actions, suits or proceedings pending or threatened against or affecting the Purchaser at law or in equity or before any Governmental Authority which would prevent the Purchaser from completing the transactions required to be completed under this Agreement.



(i) Environmental Reports - The Purchaser has no information relating to the condition or status of the Owned Lands or Leased Premises under Environmental Laws other than (i) information provided to the Purchaser by the Vendor; (ii) the environmental reports listed in Schedule 4.2(i) (the "Environmental Reports"); and (iii) information obtained as a result of enquiries to Governmental Authorities. Schedule 4.2(i) lists all environmental reports prepared by environmental consultants for the Purchaser in connection with the Owned Lands and Leased Premises for the purposes of completing the transactions contemplated in this Agreement, copies of which have been provided to the Vendor's counsel.

4.3 Nature and Survival of Representations and Warranties. (a) Subject to subsections 4.3(b) and 4.3 (c) and except for the representations and

warranties in subsection 4.1(k) and clause 4.1(bb)(ii) which shall survive indefinitely, all representations and warranties contained in this Agreement on the part of each of the Parties shall survive the Closing, the execution and delivery of the Conveyance Documents and the payment of the Purchase Price (collectively, the "Closing Events") for a period of two years from the Closing Date, after which time, if no claim shall have been made against a party with respect to any incorrectness in or breach of any representation or warranty, that party shall have no further liability under this Agreement with respect to the representation or warranty.

(b) The representations and warranties of the Vendor contained in subsection 4.1(z) shall survive the Closing Events for a period of five years from the Closing Date, after which time, if no claim shall have been made against a Vendor with respect to any incorrectness in or breach of any representation or warranty, that party shall have no further liability under this Agreement with respect to the representation and warranty.

(c) All statements contained in any certificate or other instrument delivered by or on behalf of a Party pursuant to or in connection with the transactions contemplated by this Agreement shall be deemed to be made by such Party under this Agreement.

(d) Each Party's rights to Claims arising from any breach or non-fulfillment of or any misrepresentation or incorrectness of any covenant, agreement, representation and warranty contained in this Agreement or in any document furnished pursuant to this Agreement shall be limited to those arising under the Indemnity Agreement and subject to the restrictions and limitations contained therein.

ARTICLE V COVENANTS

5.1 Conduct of Business Prior to Closing. During the Interim Period, the Vendor shall: (a) Conduct Business in Ordinary Course - Except as otherwise contemplated or permitted

by this Agreement, conduct the Business diligently (in the ordinary and normal course, consistent with past operating practice) and shall not, without the prior written consent of




the Purchaser, enter into any contracts, agreements, commitments or leases, or undertake any activity pertaining to the Business except in the ordinary course of business. Without limiting the generality of the foregoing, the Vendor shall, with respect to the Business:

(i) use its reasonable efforts to preserve intact its respective relationship with suppliers, customers, distributors and others having business dealings with it;

(ii) maintain the Purchased Assets (which are of a tangible character) in the same operating condition and repair as on the date of execution of this Agreement, reasonable wear and tear, damage by fire or other unavoidable casualty excepted;

(iii) maintain the Records in the usual and regular manner; (iv) promptly advise the Purchaser of any material changes in the financial condition,

business or affairs of the Business including any changes which would cause the Working Capital Amount to be either less than $• or greater than $•; and

(v) maintain Inventory levels consistent with normal business practices of the Business;

(b) Continue Insurance - continue in full force the Insurance Policies;

(c) Comply with Laws - comply in all material respects with all laws applicable to the Business, where failure to comply with such laws would have a material adverse effect on the operation of the Business;

(d) Maintain Permits - apply for, maintain in good standing and renew all Permits (other than Permissions), licenses, registrations and permits necessary to enable the Vendor to carry on the Business as now conducted;

(e) Capital Expenditures - not, without the prior written approval of the Purchaser, enter into any agreements relating to the Business during the Interim Period providing for Capital Expenditures by the Vendor;

(f) Consultation with Purchaser - consult with and obtain the prior written approval of the Purchaser with respect to any material acts, transactions or decisions not in the ordinary course relating to the Business, such approval not to be unreasonably withheld or delayed;

(g) Update Operating Information - provide to the Purchaser current customary monthly operating statements for the Business; and

(h) Non-Assigned Contracts - forthwith inform the Purchaser of any contracts, agreements, commitments and leases forming part of the Purchased Assets for which the Vendor has been advised that a necessary consent or approval of a third party to the assignment thereof to the Purchaser shall not be provided prior to the Closing Date.

5.2 Access for Investigation. (a) The Vendor shall permit the Purchaser and its Authorized Representatives, until the

Closing Date, to have reasonable access during normal business hours to the Leased Premises (provided that such access would not contravene the terms of the leases relating



to the Leased Premises) and Owned Lands, and to the Business Information for the purposes set forth in this section 5.2. Except for the disclosure of customer lists governed by the provisions of section 5.24, the Vendor shall also furnish to the Purchaser such financial and operating data and other information with respect to the Business as the Purchaser shall from time to time reasonably request (to the extent available to or in the possession of Vendor) to enable confirmation of the accuracy of the Business Information and the matters represented and warranted in section 4.1. The Purchaser shall be afforded ample opportunity to:

(i) during regular business hours, inspect the Purchased Assets and make a full investigation of all aspects of the financial affairs of the Vendor pertaining to the Business; and

(ii) conduct, at its sole expense, an environmental assessment of the Leased Premises and the Owned Lands, and review all Permits, provided that such assessment is conducted in a manner which will not materially adversely interfere with the Vendor's operations conducted thereon.

Until the Closing Date and, in the event of the termination of this Agreement without the completion of the transactions contemplated hereby, the Purchaser shall thereafter, subject to subsection 5.2(c), keep confidential and not use for its own purpose (other than as contemplated by this Agreement) any information obtained from the Vendor with respect to the Business including information obtained by the Purchaser from Governmental Authorities pursuant to the provisions of subsection 5.2(b). If this Agreement is terminated, all documents, working papers and other written material obtained by the Purchaser from the Vendor in connection with this Agreement and not previously made public (and all copies thereof) shall be returned to the Vendor promptly after such termination.

(b) The Vendor hereby authorizes all Governmental Authorities having jurisdiction to release any and all information in their possession respecting the Division Business, Leased Premises, the Owned Lands and any other Purchased Assets to the Purchaser and further hereby authorizes each of them to carry out inspections of the Leased Premises and the Owned Lands upon the request of the Purchaser; provided that the Purchaser first consults with the Vendor regarding any proposed inspection. The Vendor shall execute any specific authorization pursuant to this subsection 5.2(b) within three (3) Business Days of being requested to do so by the Purchaser.

(c) The obligation of the Purchaser under subsection 5.2(a) to keep confidential and not use any information shall not apply to information which:

(i) becomes generally available to the public other than as a result of a disclosure by the Purchaser or its representatives in violation of this Agreement;

(ii) was available to the Purchaser on a non-confidential basis prior to its disclosure by the Vendor or its representatives;




(iii) becomes available to the Purchaser on a non-confidential basis from a source other than the Vendor or its representatives, provided that such source is not bound by a confidentiality agreement with the Vendor or a duty of confidentiality to or in respect of the Vendor; or

(iv) the Purchaser is required by law to disclose, provided that the Purchaser first notifies Maple Leaf that it believes it is required to disclose such information and it allows Maple Leaf a reasonable period of time to contest the disclosure of such information.

5.3 Bulk Sales Compliance. The Purchaser shall not require the Vendor to comply, or assist the Purchaser to comply, with the requirements of applicable provincial bulk sales legislation in connection with the completion of the transactions contemplated hereby. 5.4 Retention and Preservation of Records.

(a) On the Closing Date, the Vendor shall deliver to the Purchaser the Records not already in the Purchaser's possession except that where the Vendor is required by law to retain a particular Record, it shall retain such Record and provide the Purchaser with all reasonable access thereto.

(b) The Purchaser shall preserve the Records for a period of six years from the Closing Date, or for such other period as is required by any applicable law, and shall permit the Vendor and its Authorized Representatives reasonable access thereto in connection with the affairs of the Vendor, provided that the Purchaser shall not be responsible or liable to the Vendor for or as a result of any loss or destruction of or damage to any such Records.

5.5 Assignment of Contracts. Subject to subsection 2.2(b), the Vendor shall use all reasonable efforts and the Purchaser shall assist in all reasonable ways to procure, on or before the Closing Date, assignments of all Purchased Contracts to the extent such contracts are assignable, duly accompanied by all necessary consents of the other parties thereto, as and if required. 5.6 Permit Assignment and Applications. The Purchaser shall use all reasonable efforts to obtain for the Closing Date transfers to the Purchaser or replacements in the name of the Purchaser of the Permits, as the case may be, and shall be responsible for all costs, fees and expenses relating thereto. The Vendor shall co-operate with the Purchaser in obtaining and doing all things reasonably necessary to obtain such transfers or replacements. 5.7 Actions to Satisfy Closing Conditions. Each Party shall take all such actions as are within its power to control, and shall use its best efforts to cause other actions to be taken which are not within its power to control, so as to ensure compliance with any conditions set forth in Article VII which are for the benefit of any other Party.


Saskatchewan: Bar Admission Program E - 39 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) 5.8 Risk of Loss. All of the Purchased Assets shall be and remain at the risk of the Vendor until the Closing Time, and the Vendor shall continue in full force and effect all Insurance Policies and give all notices and present all claims under all Insurance Policies in due and timely fashion. If the Purchased Assets or any substantial part thereof should be damaged or destroyed prior to the Closing Time, the Vendor shall forthwith give notice thereof (the "Damage Notice") to the Purchaser and the Purchaser shall have the option, exercisable by notice given within ten Business Days of receipt of the Damage Notice:

(a) to reduce the Purchase Price by an amount equal to the cost of repair or, if destroyed or damaged beyond repair, by an amount equal to the replacement cost of the assets forming part of the Purchased Assets so damaged or destroyed and to complete the purchase;

(b) to complete the purchase of the Purchased Assets without reduction of the Purchase Price, in which event all proceeds of Insurance Policies shall be payable to the Purchaser together with a sum equal to the deductible amount required to be paid under the applicable Insurance Policies, and all right and claim of the Vendor to any such amounts not paid by the Closing Date shall be assigned to the Purchaser; or

(c) to rescind this Agreement and not complete the purchase if, in the reasonable opinion of the Purchaser, such destruction or damage is material and in such event the Vendor and the Purchaser shall, subject to the Purchaser's confidentiality obligations under subsection 5.2(a), be released from all obligations hereunder.

If the Vendor gives the Damage Notice within ten Business Days prior to Closing Date, the Closing Date shall be postponed until ten Business Days after the giving of the Damage Notice. 5.9 Closing Documents. The following agreements shall be executed and delivered by the parties thereto at the Closing Time:

(a) Assignment Agreement;

(b) Assignment of Patents;

(c) Assignment of Trade-Marks;

(d) Assignment of Trade-Mark License;

(e) Trade-Mark Licenses;

(f) Assumption Agreement;

(g) Assignment of Real Property Leases;

(h) Non-Competition Agreement;

(i) Indemnity Agreement; and

(j) Directions and Authorizations.




the Purchaser, as the case may be, of this Agreement and each of the agreements, documents, certificates, assignments and other instruments of conveyance and transfer required to be delivered hereunder. 5.10 Residency Certificate. At the Time of Closing, the Vendor shall provide the Purchaser with a satisfactory declaration of a duly authorized officer of the Vendor to the effect that the Vendor is not a non-resident of Canada within the meaning of the Income Tax Act (Canada), in form satisfactory to the Purchaser's counsel. 5.11 Corporate Proceedings. On or before the Closing Date, the Vendor and the Purchaser shall provide to the other party certified copies of all necessary proceedings and resolutions, corporate or otherwise, and all other necessary actions, corporate or otherwise, authorizing the execution and delivery by the Vendor and the Purchaser, as the case may be, of this Agreement and each of the agreements, documents, certificates, assignments and other instruments of conveyance and transfer required to be delivered hereunder. 5.12 Competition Act. The Purchaser and the Vendor shall file or cause to be filed all notifications, applications or filings required under the Competition Act (Canada) with respect to the transactions contemplated herein. The Purchaser and the Vendor shall use all reasonable efforts to comply with all requests or requirements which applicable law or governmental officials may impose on them with respect to such notices, application or filings. 5.13 Investment Canada Act. In the event that the Investment Canada Act (Canada) is applicable to the transactions contemplated herein, the Purchaser shall promptly file or cause to be filed all notifications, applications or filings required under the Investment Canada Act (Canada) with respect to the transactions contemplated herein. 5.14 Governmental Approvals. The Purchaser and the Vendor shall file or cause to be filed all necessary notifications, applications or filings to obtain the governmental consent, approvals, orders and authorizations referred to in subsection 7.1(j). 5.15 Capital Expenditures. (a) Subject to subsection 5.15(b), the Vendor shall deliver to the Purchaser on or before

Closing a list of the Capital Expenditures (together with detailed costs and expenses) approved by the Purchaser and incurred and paid for by the Vendor since • and the Purchaser shall on Closing reimburse the Vendor for such Capital Expenditures by delivery to the Vendor of a certified cheque or bank draft payable to the Vendor in an amount equal to the costs and expenses of such Capital Expenditures.

(b) The list of the Capital Expenditures (together with detailed costs and expenses) referred to in subsection 5.15(a) shall be audited by the Vendor's auditors and shall be subject to the same review, adjustment and payment processes applicable to the Closing Statement set forth in Article III.


Saskatchewan: Bar Admission Program E - 41 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) 5.16 Goods and Services Tax Election. The Vendor and the Purchaser shall execute and jointly elect at or prior to Closing Time and the Vendor shall file, within the prescribed time period, elections pursuant to subsection 167(1) of the Excise Tax Act (Canada) in respect of the purchase by the Purchaser of the Purchased Assets. 5.17 Transfer Taxes. Subject to the provisions of section 5.16, the Purchaser shall be liable for and shall pay all sales and transfer taxes, federal taxes and all other taxes, duties or other like charges (including registration fees or charges) including the Goods and Services Tax properly payable by it upon and in connection with the conveyance and transfer of the Assets by the Vendor to the Purchaser save and except any income or corporation taxes payable by the Vendor. The Vendor and the Purchaser shall jointly prepare and file any elections necessary or desirable or provide information to tax authorities, as may be required by tax authorities, to minimize the amount of any transfer taxes payable under any prevailing provincial legislation provided the Vendor is not adversely affected and are reimbursed for any costs and expenses associated with such election or filings and provided that the Parties will not be required to acquiesce or agree to any allocation of the Purchase Price except as agreed pursuant to section 3.7. 5.18 Repurchase of Accounts Receivable. Any moneys received by the Purchaser on or after the Closing Date from any Person pursuant to an Account Receivable shall be applied first against such Person's longest outstanding obligation unless such Person requests in writing such moneys to be applied against another Account Receivable as a result of a disputed invoice. Any time during the period commencing 90 days after the Closing Date and ending 120 days after the Closing Date, the Purchaser shall have the right to require a Vendor to acquire all or any part of the Accounts Receivable which were acquired from that Vendor and which then remain uncollected provided that: (a) the Purchaser must re-assign all such Accounts Receivable at one time; and (b) such uncollected Accounts Receivable are not subject to any set-off or counterclaim by

the account debtor for matters arising subsequent to the Closing Date. In connection with any such re-assignment, the Purchaser shall deliver to the Vendor any supporting invoices and documents required for collection purposes together with an assignment of the Accounts Receivable which are the subject of the re-assignment and any security or securities in connection therewith, and the Vendor shall pay to the Purchaser the face amount of such Accounts Receivable.

The Purchaser shall use its normal collection practices in the ordinary course of business to collect the Accounts Receivable. If, after re-assignment by the Purchaser to the Vendor of one or more Accounts Receivable owing by a customer, the Purchaser receives from such customer payment of an account invoiced by the Purchaser to such customer, the Purchaser shall pay such amount over to the Vendor until the re-assigned Accounts Receivable owing by such customer have been paid in full, unless:



Appendix E – Purchase and Sale Agreement (Long Form) (a) the Purchaser has imposed "C.O.D." delivery terms on such customer: or (b) the customer has made a bona fide claim in writing that the re-assigned Accounts

Receivable are not payable by it. The Purchaser shall assist the Vendor in all reasonable ways (but at no additional cost to the Purchaser) in collecting any Accounts Receivable re-assigned to the Vendor, including, upon reasonable notice to the Purchaser, providing the Vendor with reasonable periodic access during normal business hours to the documentation that the Vendor reasonably require in order to collect the Accounts Receivable re-assigned to it. 5.19 Product Liability and Warranties.

(a) Subject to subsection 5.19(c), all liability to third persons and warranty obligations respecting products manufactured and sold in respect of the Business prior to the Closing Date shall remain the sole responsibility of the Vendor.

(b) Subject to subsection 5.19(c), all liability to third persons and warranty obligations respecting products manufactured and sold in respect of the Business from and after the Closing Date shall be the sole responsibility of the Purchaser.

(c) All liability to third persons and warranty obligations respecting products manufactured by the Vendor prior to the Closing Date and sold by the Purchaser on or after the Closing Date shall be allocated between the Vendor and the Purchaser to the extent that the liabilities and obligations arise from the acts or omissions of the Vendor and the Purchaser, as the case may be.

(d) The Vendor shall, at its own cost, maintain for a period of six months after the Closing Date comprehensive general liability insurance, including contractual liability and product liability insurance in respect of the Vendor's third persons and warranty obligations contemplated in section 5.19 in amounts considered by the Vendor to be commercially reasonable in the circumstances and the Vendor shall provide the Purchaser with evidence of such coverage. The Vendor and Purchaser shall use reasonable efforts to co-ordinate their insurance coverage in respect of the contractual liability and product liability referred to herein under one insurance policy.

(e) Prior to the Closing Date, the Vendor and the Purchaser will co-operate in formulating and implementing, to the extent commercially practicable, a method to mark or otherwise identify products of the Business so as to distinguish between products manufactured prior to and following the Closing Date.

5.20 Removal of Names. The Purchaser shall, as soon as practicable after the Closing Date, remove the names or identifying marks "•", "•", "•", "•" and all variations, logos or designs relating to such names or marks (the "Names") from the Purchased Assets reasonably determined by the Purchaser and the Vendor that are displayed, presented or sold to the public. The Vendor shall on or before the Closing Date remove the Names from the exterior of those Purchased Assets reasonably determined by the Purchaser and Maple Leaf. If the Vendor fails to fulfill its


Saskatchewan: Bar Admission Program E - 43 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) obligation to remove the Names hereunder, the Purchaser shall be entitled to so remove the Names and be reimbursed for its reasonable costs and expenses incurred in connection therewith. 5.21 Change of Vendor's Name. Forthwith after the Closing Date, the Vendor shall discontinue further use of the Trade-Marks, except where otherwise contemplated in this Agreement or where reasonably required to collect the Accounts Receivable re-assigned to the Vendor pursuant to section 5.18. 5.22 Customer Lists. The Vendor shall make available to the Purchaser, no later than two weeks prior to the Closing Date, a comprehensive listing of their respective customers in respect of the Business for the year •. 5.23 Removal of Obsolete Inventory. The Vendor shall reimburse the Purchaser for costs in excess of $• incurred by the Purchaser within three months following the Closing Date for the removal and disposal off-site of obsolete Inventory. 5.24 Closing Delivery of Working Capital Summaries. The Vendor shall deliver to the Purchaser on the Closing Date a summary statement of the Accounts Receivable, Inventories, Prepaid Amounts and Current Liabilities included in the financial records of the Business reflecting information as current as is commercially practical to be produced. 5.25 Provincial Clearance Certificates. The Vendor shall use reasonable efforts to obtain for the Purchaser on or before the Closing Date certificates pursuant to applicable provincial statutes which indicate that the Vendor has paid all taxes, assessments or other monies due under those statutes in respect of the Business up to the Closing Date or have entered into satisfactory arrangements for the payment of such taxes, assessments or other monies. 5.26 Material Inventory Purchase Orders and Material Purchase Orders. The Vendor shall deliver to the Purchaser on the Closing Date a listing of the Material Inventory Purchase Orders and Material Purchase Orders (all of which will be unadjusted) in effect on the Friday that is not less than seven days prior to the Closing Date. 5.27 Vendor Reimbursement of Survey Costs. On the Closing Date, the Vendor shall reimburse the Purchaser, to a maximum of $•, for the costs and expenses incurred by the Purchaser in connection with the surveys listed in Schedule 5.27 against the delivery by the Purchaser to the Vendor of copies of invoices relating to such costs and expenses. 5.28 Transition. The Parties shall co-operate and use reasonable efforts to ensure the orderly transition of the Business from the Vendor to the Purchaser. 5.29 Excluded Inventory. If the Purchaser receives any proceeds of the sale of the Excluded Inventory, the Purchaser shall receive such proceeds in trust and shall transfer such proceeds to the Vendor.




ARTICLE VI EMPLOYEES

6.1 Offer of Employment.

(a) Offer to Non-Unionized Employees - As of • a.m. on the Closing Date, the Purchaser shall offer employment to all Employees who are not represented by a trade union within the meaning of applicable provincial labour relations legislation (the "Non-Union Employees") on terms and conditions of employment which are in the aggregate no less favourable then those in effect on the Closing Date, provided that, for any Employee on an authorized leave of absence on the day following the Closing Date, the Purchaser may provide as a condition of continued employment and subject to applicable laws with respect thereto, that the Employee return to work on the later of six months after the Closing Date and expiry of any statutory period which authorizes such leave of absence.

(b) Joint Liability for Terminated Employees - The Vendor and the Purchaser shall be equally responsible and liable and shall reimburse the other Party for one-half of any amounts due and payable by either the Vendor or the Purchaser to or in respect of any Employee arising from a determination by a court or other authority of competent jurisdiction that the terms and conditions of employment offered by the Purchaser in respect of pension benefits to the Employee pursuant to subsection 6.1(a) are not substantially the same terms and conditions of employment of the Employee by the Vendor on the Closing Date provided that the Vendor shall have no responsibility or liability for such amounts if the Purchaser fails to comply with the provisions of subsections 6.1(a) or 6.2(b), as the case may be.

(c) Terms of Employment Offers - Subject to section 6.2, the Purchaser shall treat the period of employment with the Vendor of the Transferred Employees as employment with the Purchaser for all purposes, except that, with respect to the terms of any pension plan or plans to be offered to the employees by the Purchaser, such period of employment with the Vendor shall be treated as employment with the Purchaser only to the extent required by applicable provincial pension benefits legislation.

(d) Responsibilities of Vendor and Purchaser on Offers of Employment - The Purchaser's obligations under subsection 6.1(a) shall be solely to make an offer of employment as of • a.m. on the Closing Date to the Non-Union Employees referred to therein. Provided that the Purchaser has complied with its obligation to make an offer of employment pursuant to the provisions of subsection 6.1(a) and subject to subsection 6.1(b), the Purchaser shall not be obligated to any such Non-Union Employee who refuses such offer. The Vendor shall provide to the Purchaser all reasonable opportunities to discuss with the Non-Union Employees, during the Interim Period, the terms upon which such offers will be made by the Purchaser. The Vendor shall render all reasonable assistance to encourage the Non-Union Employees to accept the said offers in accordance with their terms and conditions.



(e) Vendor Termination Program - If the Purchaser terminates the employment of any Non-Union Employee during the • (the "Terminated Non-Union Employee"), the Purchaser shall be responsible and liable to the Terminated Non-Union Employee for the benefits due and payable to the Terminated Non-Union Employee pursuant to the Vendor Termination Program.

(f) Vendor's Severance Obligations - The Purchaser shall provide the Vendor with a statement of the severance costs actually incurred by the Purchaser (together with supporting documentation) relating to the Employees (including, without limitation, the Terminated Non-Union Employees, as defined in subsection 6.1(e)); and the Vendor shall pay forthwith upon receipt of such statement and supporting documentation to the Purchaser the lesser of • of such severance costs and $•.

(g) Vendor and Purchaser Co-operation - The Vendor and the Purchaser shall use their best efforts and fully co-operate to ensure that all prior consultation and similar procedures which may be legally required or desirable in connection with the transfer of Employees to the Purchaser shall be implemented.

6.2 Pension Plans and Benefits Plans. (a) Vendor's Obligations - The Vendor shall retain responsibility for and satisfy their

obligations with respect to all pension and ancillary benefits provided in the Vendor's Pension Plans accrued up to the close of business on the Closing Date in respect of the Employees, based on:

(i) their actual pensionable service and employment earnings in effect on the Closing Date, and

(ii) the flat dollar benefit rate agreed to by the Vendor under the Collective Agreements prior to or on the Closing Date whether or not such flat dollar benefit rate is in effect on the Closing Date,

in accordance with the terms of the Vendor's Pension Plans and all applicable federal and provincial law existing and in effect on the day following the Closing Date having jurisdiction over the Vendor's Pension Plans.

Effective as of • a.m. on the Closing Date and except as specifically provided in paragraph 6.2 (a)(ii), all benefits under the Vendor's Pension Plans shall cease to accrue to the credit of Transferred Employees and the Vendor shall have no liability for benefits accrued in respect of employment of the Transferred Employees on and after the day following the Closing Date. Each Transferred Employee shall, in accordance with and subject to applicable law, be entitled to credit in the Vendor's Pension Plans for the period of employment with the Purchaser for the purpose of determining entitlement to benefits under the Vendor's Pension Plans but not for the purposes of accrual of benefits thereunder.



Appendix E – Purchase and Sale Agreement (Long Form) (b) Purchasers Obligations - Effective as of • a.m. on the Closing Date, the Transferred

Employees shall commence participation in the pension plans registered under applicable provincial pension benefits legislation (the "Purchaser's Pension Plans) and in the Purchaser's Savings Plans, all administered by the Purchaser as of the day following the Closing Date in accordance with the terms thereof and applicable law. The Purchaser's Pension Plans and the Purchaser's Savings Plans shall provide, subject to the Collective Agreements, benefits to the Transferred Employees which are in the aggregate no less favourable than those pension benefits provided under the Vendor's Pension Plans and which, subject to paragraph 6.2(a)(ii), were in effect on the Closing Date in respect of the Transferred Employees. The Purchaser shall be responsible for all pension benefits of such Employees accrued on and after the day following the Closing Date pursuant to the terms of the applicable Purchaser's Pension Plan. The Purchaser shall amend the Purchaser's Pension Plans and Purchaser's Savings Plans or take whatever other steps are necessary to ensure that each such Transferred Employee shall be entitled to credit in the Purchaser's Pension Plans and in the Purchaser's Savings Plans for the period of employment with the Vendor for the purposes of determining eligibility for membership, vesting and eligibility for pension and retirement savings benefits under the Purchaser's Pension Plans and in the Purchaser's Savings Plans, as applicable, but not for the purposes of accrual of benefits thereunder.

(c) Sharing of Responsibility between Vendor's Benefit Plans and Purchaser's Benefit Plans (i) A Transferred Employee who participates in the Vendor's Benefit Plans according

to the terms thereof shall cease to participate in and accrue benefits under the Vendor's Benefit Plans effective on and as of • a.m. on the Closing Date and shall commence, without interruption, participation in the Purchaser's Benefit Plans. Transferred Employees who are not participants in the Vendor's Benefit Plans on the Closing Date shall become participants in the Purchasers' Benefit Plans on the day following the Closing Date in accordance with, and subject to, the membership, eligibility and coverage requirements thereof, the provisions of this section 6.2(c) and the Collective Agreements, as applicable. Each Transferred Employee shall be entitled to credit in the Purchaser's Benefit Plans for the period of employment with the Vendor for the purposes of determining eligibility for participation and eligibility for benefits under the Purchaser's Benefit Plans.

(ii) The Vendor shall retain responsibility under the Vendor's Benefit Plans for all amounts payable by reason of or in connection with any and all claims by an Employee arising prior to • a.m. on the Closing Date, where applicable, provided such claims are payable in accordance with the terms of the Vendor's Benefit Plans, and the terms and conditions of the Collective Agreements.

(iii) Effective as of • a.m. on the Closing Date, the Purchaser shall establish or cause to be established, or shall have established, at its own expense, benefits plans (the "Purchaser's Benefit Plans") to provide life, health care, dental care, accidental death and dismemberment insurance and disability benefits for the Transferred Employees. The Purchaser shall be responsible for any and all claims of a



Transferred Employee under all the Purchaser's Benefit Plans which arise on and after the day following the Closing Date.

(iv) Notwithstanding the above, effective on and as of • a.m. on the Closing Date, the Transferred Employees who are Union Employees shall be provided, by the Purchaser, with the health, welfare and other employee benefits in respect of employment on and after the Closing Date as are required to be provided under the Collective Agreements.

(v) For the purposes of this subsection 6.2(c), a claim shall be deemed to have arisen:

(A) with respect to all death or dismemberment claims, on the actual date of death or of dismemberment;

(B) with respect to all disability claims, other than short term disability or salary continuance benefits, on the date the claimant became disabled and was unable to perform the usual and ordinary functions of his position, provided that, where the disability arose from the same illness, injury or diagnosis for which the claimant was entitled to short term disability or salary continuance benefits, the date of the disability shall be deemed to be the same date as that on which the claim for short term disability or salary continuance benefits arose, unless the claimant has, in the intervening period since such claim, been actively employed by the Purchaser for more than five working days;

(C) with respect to short term disability or salary continuance claims, on the first day of a claim period for which income benefits are continuously payable to the claimant, provided that the claim period shall be deemed to continue until such time as the claimant has been actively employed by the Purchaser for more than five working days; and

(D) with respect to all hospital, medical, drug or dental claims, on the date of occurrence of the injury, illness, diagnosis or other event which gives rise to such a claim or series of related claims, whichever is first.

ARTICLE VII CLOSING CONDITIONS

7.1 Conditions for the Benefit of the Purchaser. The obligation of the Purchaser to complete the purchase of the Purchased Assets pursuant to this Agreement is subject to the satisfaction of, or compliance with, at or before the Closing Time, each of the following conditions (each of which is acknowledged by the Vendor to be for the exclusive benefit of the Purchaser and may be waived by the Purchaser in writing, in whole or in part):



Appendix E – Purchase and Sale Agreement (Long Form) (a) Accuracy of Representations (i) The representations and warranties of the Vendor set forth in section 4.1 shall be

true and correct in all material respects at the Closing, except as those representations and warranties may be affected by the occurrence of events or transactions expressly contemplated and permitted by this Agreement, including, without limitation, those in the ordinary course of business, and the Purchaser shall have received a certificate from each of the Vendor confirming the foregoing; and

(ii) The Purchaser shall have received from the Vendor a certificate which sets forth the names and titles of Employees as at the Closing Date together with the information contemplated in paragraph 4.1(v)(i).

(b) Performance of Obligations - The Vendor shall have performed all of the obligations hereunder to be performed by it at or prior to the Closing and the Vendor shall not be in breach of any agreement on its part contained herein and the Purchaser shall have received a certificate from the Vendor confirming the foregoing.

(c) Deliveries - The Vendor shall have delivered or caused to be delivered to the Purchaser the Ancillary Agreements and Conveyance Documents, and shall deliver up to the Purchaser possession of the Purchased Assets. The Vendor shall co-operate with the Purchaser (at the Purchaser's expense), at such time or thereafter, in effecting such registrations, recordings and filings with public authorities as may be required in connection with the transfer of ownership to the Purchaser of the Purchased Assets.

(d) Opinion of Counsel for the Vendor - The Purchaser shall have received an opinion dated the Closing Date from counsel for the Vendor substantially in the form of Exhibit 7.1(d).

(e) Consents to Assignment - All consents or approvals from or notifications to any landlord, lessor or other Person required under the terms of Crucial Contracts with respect to the assignment of the same to the Purchaser, shall have been obtained or given, as the case may be, on or before the Closing Time.

(f) Completion of Investigations - The investigations contemplated in section 5.2 shall have been completed and the Purchaser shall be satisfied with the results of such investigations including, without limitation, the accuracy of the Business Information and matters represented and warranted in section 4.1, as contemplated in section 5.2.

(g) Consents, Authorizations and Registrations - All consents, approvals, orders and authorizations of, from or notifications to any Persons or Governmental Authorities including, without limitation, Investment Canada Approval and Competition Act Approval, required in connection with the completion of any of the transactions contemplated by this Agreement, the execution of this Agreement, the Closing or the performance of any of the terms and conditions of this Agreement shall have been obtained on or before the Closing Date and there shall be no injunction or restraining order issued preventing, and no pending or threatened claim, action, litigation or proceeding, judicial or administrative, or investigation against any Party by any



Governmental Authority for the purpose of enjoining or preventing the consummation of this Agreement, or otherwise claiming that this Agreement or the consummation thereof is improper or would give rise to proceedings under any statute or rule of law, which would have a material adverse impact on the Business, as the case may be.

(h) Minimum Working Capital Amount - The estimated Working Capital Amount on the Closing Date is not less than $•.

7.2 Conditions for the Benefit of the Vendor. The obligation of the Vendor to complete the sale of the Purchased Assets pursuant to this Agreement is subject to the satisfaction of, or compliance with, at or before the Closing Time, each of the following conditions (each of which is acknowledged by the Purchaser to be for the exclusive benefit of the Vendor and may be waived by the Vendor in writing, in whole or in part): (a) Accuracy of Representations - The representations and warranties of the Purchaser set

forth herein shall be true and correct in all material respects at the Closing, except as those representations and warranties may be affected by the occurrence of events or transactions expressly contemplated and permitted by this Agreement including, without limitation, those in the ordinary course of business, and the Vendor shall have received a certificate from the Purchaser confirming the foregoing.

(b) Performance of Obligations - The Purchaser shall have performed all of the obligations hereunder to be performed by it at or prior to the Closing including, without limitation the delivery to the Vendor of the Ancillary Agreements, and the Purchaser shall not be in breach of any agreement on its part contained herein, and the Vendor shall have received a certificate from the Purchaser confirming the foregoing.

(c) Opinion of Counsel for the Purchaser - The Vendor shall have received an opinion dated the Closing Date from counsel for the Purchaser substantially in the form of Exhibit 7.2(c).

(d) Capital Expenditure Reimbursement - The Vendor shall have received from the Purchaser a certified cheque or bank draft in an amount equal to the Capital Expenditures referred to in section 5.15.

(e) Deliveries - The Purchaser shall deliver or cause to be delivered to the Vendor the Ancillary Agreements and Conveyance Documents and have paid the amount referred to in subsection 3.2(a).

(f) Consents, Authorizations and Registrations - All consents, approvals, orders and authorizations of, from or notifications to any Persons or Governmental Authorities required on the part of the Purchaser in connection with the completion of any of the transactions contemplated by this Agreement, the execution of this Agreement, the Closing or the performance of any of the terms and conditions of this Agreement shall have been obtained on or before the Closing Date and there shall be no injunction or restraining order issued preventing, no pending or threatened claim, action, litigation or proceeding, judicial or administrative, or investigation against any Party by any




Governmental Authority for the purpose of enjoining or preventing the consummation of this Agreement, or otherwise claiming that this Agreement or the consummation thereof is improper or would give rise to proceedings under any statute or rule of law, which would have a material adverse impact on the Business, as the case may be.

ARTICLE VIII CLOSING ARRANGEMENTS

8.1 Closing. The Closing shall take place at the Closing Time on the Closing Date at the offices of •. 8.2 Closing Procedures. At the Closing Time: (a) the Vendor shall sell and the Purchaser shall purchase the Purchased Assets for the

Purchase Price as herein provided;

(b) the Vendor shall deliver or cause to be delivered to the Purchaser all documents referred to in subsection 7.1(d) and shall deliver up to the Purchaser possession of the Purchased Assets;

(c) the Purchaser shall deliver or cause to be delivered to the Vendor all documents referred to in section 7.2;

(d) the Purchaser shall have wired, delivered or caused to be wired or delivered to the Vendor pursuant to section 3.2 the Purchase Price; and

(e) the Vendor and the Purchaser shall take or shall have taken, as the case may be, the other actions contemplated to be taken by them at or before the Closing as specified in sections 7.1 and 7.2.

8.3 No Broker. Each of the Parties represents and warrants to the other that all negotiations relating to this Agreement and the transactions contemplated by this Agreement have been carried on between them directly, without the intervention of any other party, except for • acting on behalf of •, in such manner as to give rise to any valid claim against any of the Parties for a brokerage commission, finder's fee or other like payment. Any commission owing to • shall be the responsibility of •. 8.4 Non-Waiver. Except as expressly noted in subsection 4.2(j) and the Environmental Reports identified in Notes 10 and 11 of Schedule 4.1(z), no investigations made by or on behalf of the Purchaser at any time shall have the effect of waiving or diminishing the scope of or otherwise affecting any representation, warranty or indemnity made by or imposed upon the Vendor in or pursuant to this Agreement.

No waiver by a party of any condition, in whole or in part, shall operate as a waiver of any other condition.



ARTICLE IX GENERAL

9.1 Termination.

(a) This Agreement may be terminated at any time prior to the Closing Date:

(i) by the mutual agreement of the Vendor and the Purchaser; and

(ii) by the Purchaser or the Vendor if: (A) the purchase and sale of the Purchased Assets hereby shall not have been

completed by • (or such other date, if any, as the Vendor and the Purchaser shall have agreed in writing), if the failure to complete such purchase and sale on or before such date is not caused by any breach of this Agreement by the party electing to terminate pursuant to this section 10.1; or

(B) the purchase and sale of the Purchased Assets would violate any non-appealable final order, decree or judgment of any court or governmental body having competent jurisdiction.

(b) If this Agreement is terminated by the Vendor or the Purchaser as permitted under subsection 9.1(a), such termination shall be without liability of either Party to the other Party or to any of their shareholders, directors, officers, employees, agents, consultants or representatives provided that if such termination shall result from the wilful failure of a Party to fulfill a condition to the performance of the other Party or to perform a covenant of this Agreement or from a wilful breach by a Party to this Agreement, such Party shall be fully liable for any and all damages, costs and expenses (including, but not limited to, reasonable counsel fees and disbursements) sustained or incurred by the other Party, provided that neither Party shall be liable to the other for any breach of the Agreement which was known to the other Party at or prior to the date of this Agreement.

(c) Irrespective of the termination of this Agreement, all confidentiality obligations of the Purchaser, its Affiliates, representatives and other persons referred to in the Confidentiality Agreements shall remain in full force and effect.

9.2 Expenses. Except as otherwise specified herein, all costs and expenses (including the fees and disbursements of accountants and legal counsel) incurred in connection with this Agreement and completion of the transactions contemplated by this Agreement shall be paid by the party incurring those expenses. 9.3 Time of Essence. Time shall be of the essence in all respects of this Agreement.



Appendix E – Purchase and Sale Agreement (Long Form) 9.4 Notices. Any notice or other communication which is required or permitted to be given or made by one Party to the other hereunder shall be in writing and shall be either:

(a) personally delivered to such Party; or

(b) sent by telex, facsimile or similar method of recorded communication, charges prepaid.

Any notice shall be sent to the intended recipient at its address as follows:

(i) to the Vendor at:

• Attention: • Facsimile No.: •

with a copy to:


(ii) to the Purchaser at:


or at such other address as any Party may from time to time advise the other by notice in writing. Any notice given by personal delivery shall be deemed to be received on the date of delivery. Any notice sent by telex, facsimile or similar method of recorded communication shall be deemed to have been received on the next Business Day following the date of its transmission. 9.5 Provincial Planning Acts. If the provisions of the Planning and Development Act, 1983 (Saskatchewan) and similar subdivision control provisions contained in real property planning legislation in the provinces where the Owned Lands or Leased Premises are located (the "Planning Act Requirements") apply to this Agreement, this Agreement shall be effective to create an interest in the Owned Lands and Leased Premises only if the Planning Act Requirements are complied with by the Vendor on or before Closing. The Vendor shall proceed diligently at its expense to obtain any necessary consent on or before Closing pursuant to the Planning Act Requirements. 9.6 Further Assurances. The Parties shall with reasonable diligence do all things and provide all reasonable assurances as may be required to complete the transactions contemplated by this Agreement, and each Party shall provide such further documents or instruments required by any other Party as may be reasonably necessary or desirable to give effect to this Agreement and carry out its provisions, whether before or after the Closing.


Saskatchewan: Bar Admission Program E - 53 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) 9.7 Public Notice. Except as required by law or the bylaws and rules of any applicable stock exchange (in which case each Party shall use its reasonable efforts to deliver to the other Party a copy of same before such public announcement is made), no disclosure, including disclosure to either Party's employees, generally or public announcement with respect to this Agreement or any of the transactions contemplated hereby shall be made by any Party with the prior written consent of the other Party. 9.8 Amendment and Waiver. No supplement, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the party to be bound. No waiver of any of the provisions of this Agreement shall constitute a waiver of any other provision (whether or not similar) nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 9.9 Assignment. (a) Subject to subsections 9.9(b), (c) and (d), this Agreement, the Ancillary Agreements and

the rights or obligations hereunder and thereunder are not assignable by either Party without the prior written consent of the other Party (which consent shall not be unreasonably withheld). This Agreement shall enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

(b) This Agreement and the Ancillary Agreements and the rights and obligations of the Purchaser hereunder and thereunder are assignable by the Purchaser to any one or more of the following Persons without the consent of the Vendor:

(i) the present shareholders of the Purchaser, and (ii) the Affiliates of such present partners, provided that the Persons become subject to all of the obligations of the Purchaser under

this Agreement or the Ancillary Agreements, as the case may be, by means of an agreement in writing delivered to the Vendor, and provided further that the Purchaser will continue to be bound by the terms of this Agreement or the Ancillary Agreements, as the case may be.

(c) This Agreement and the Ancillary Agreements and the rights and obligations of the Vendor hereunder and thereunder are assignable by the Vendor (without the consent of the Purchaser) to any Affiliate of the Vendor provided that the Affiliate becomes subject to all of the obligations of the Vendor under this Agreement or the Ancillary Agreements, as the case may be, by means of an agreement in writing delivered to the Purchaser and provided further that the Vendor will continue to be bound by the terms of this Agreement or the Ancillary Agreements, as the case may be.

(d) The Agreement, the Ancillary Agreements and the rights of the Purchaser hereunder and thereunder are assignable (without the consent of the Vendor) to arm's length lenders as security for the bona fides indebtedness of the Purchaser.



Appendix E – Purchase and Sale Agreement (Long Form) 9.10 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof and any such invalid or unenforceable provision shall be deemed to be severed. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 9.11 On-going Assistance. The Purchaser shall provide reasonable assistance to assist the Vendor in the defence or prosecution of any litigation relating to the Business or the Purchased Assets upon the reasonable request of the Vendor. The Vendor shall reimburse the Purchaser for all costs and expenses incurred by the Purchaser in connection with such assistance. 9.12 Paramountcy of Agreement. In the event of any conflict between the terms of this Agreement and any Ancillary Agreements, this Agreement shall prevail to the extent of the conflict. 9.13 Counterparts. This Agreement may be executed by the parties in one or more counterparts, each of which when so executed and delivered shall be an original and such counterparts shall together institute one and the same instrument. IN WITNESS WHEREOF the parties hereto have duly executed this Agreement as of the date first above written.



EXHIBIT 1.1(h)

ASSIGNMENT AGREEMENT

THIS AGREEMENT dated the • day of •, 200•, is made

BETWEEN:

•, a corporation incorporated under the laws of • (hereinafter called "Assignor")

- and -

•, a corporation incorporated under the laws of • (hereinafter called the "Assignee"). WHEREAS, pursuant to a purchase and sale agreement dated •, 200• (the "Purchase Agreement"), between the Assignor, as vendor, and the Assignee, a purchaser, the Assignee agreed to purchase and the Assignor agreed to sell as a going concern the Purchased Assets; and

WHEREAS, pursuant to the Purchase Agreement, it is a condition precedent to the completion of the transactions contemplated thereby that the Assignors deliver this agreement.

NOW THEREFORE in consideration of the completion of the transactions contemplated by the Purchase Agreement and other good and valuable consideration (the receipt and adequacy of which is hereby acknowledged), the parties hereto agree as follows:

ARTICLE I ASSIGNMENT

1.1 Assignment.

(a) Subject to subsection 1.1(b), effective as of the opening of business on the date hereof, the Assignor hereby assigns, sells and transfers unto the Assignee and the Assignee hereby purchases and accepts the assignment and transfer of all of the Assignor's right, title and interest in and to the Purchased Assets.

(b) Notwithstanding subsection 1.1(a), this agreement shall not assign any of the Purchased Assets specifically assigned, sold and transferred by the Assignor and purchased and accepted by the Assignee pursuant to any other Conveyance Documents.




ARTICLE II GENERAL

2.1 Definitions. In this agreement, unless the context otherwise requires, all capitalized terms used and not otherwise defined herein and defined in the Purchase Agreement shall have the respective meanings ascribed thereto in the Purchase Agreement. 2.2 Governing Laws. This agreement shall be governed and construed in accordance with the laws of • and the laws of Canada applicable therein. 2.3 Successors and Assigns. This agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. 2.4 Further Assurances. The parties hereto shall with reasonable diligence do all things and provide all reasonable assurances as may be required to complete the transactions contemplated by this agreement, and each party hereto shall provide such further documents or instruments required by any other party hereto as may be reasonably necessary or desirable to give effect to this agreement and carry out its provisions. 2.5 Subject to Purchase Agreement. This agreement is made subject to and pursuant to the terms and conditions contained in the Purchase Agreement.

IN WITNESS WHEREOF the parties hereto have duly executed this agreement as of the date first above written.

• By: _____________________________ c/s By: _____________________________ • By: _____________________________ c/s By: _____________________________



EXHIBIT 1.1(j)

ASSIGNMENT OF PATENTS

THIS AGREEMENT dated the • day of •, 200•, is made BETWEEN: •, a corporation incorporated under the laws of • (hereinafter called "Assignor") - and - •, a corporation incorporated under the laws of • (hereinafter called the "Assignee"). WHEREAS the Assignee has agreed to purchase and the Assignor has agreed to sell the patents listed in Schedule A annexed hereto (the "Patents").

NOW THEREFORE for good and valuable consideration (the receipt and adequacy of which is hereby acknowledged), the parties hereto agree as follows:


1.1 Assignment. Effective as of the opening of business on the date hereof, the Assignor hereby assigns, sells and transfers unto the Assignee and the Assignee hereby purchases and accepts the assignment and transfer of all of the Assignor's right, title and interest throughout the world in and to the Patents, to have and to hold for the Assignee's own use, as fully and entirely as the same might be enjoyed by the Assignor if the assignment contained herein had not been made.




ARTICLE II GENERAL

2.1 Authorization. The Assignor hereby authorizes and requests the Commissioner of Patents to issue the Patents to the Assignee. 2.2 Registration of Assignment. The Assignee alone shall attend to the registration of this agreement with the relevant Patent Offices, including, without limitation, the • Patent Office. 2.3 Governing Laws. This agreement shall be governed and construed in accordance with the laws of • and the laws of Canada applicable therein. 2.4 Successors and Assigns. This agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. 2.5 Further Assurances. The parties hereto shall with reasonable diligence do all things and provide all reasonable assurances as may be required to complete the transactions contemplated by this agreement, and each party hereto shall provide such further documents or instruments required by any other party hereto as may be reasonably necessary or desirable to give effect to this agreement and carry out its provisions.

IN WITNESS WHEREOF the parties hereto have duly executed this agreement as of the date first above written. • By: _____________________________ c/s By: _____________________________ • By: _____________________________ c/s By: _____________________________



AFFIDAVIT OF EXECUTION On the • day of •, 200•, before me, a Notary Public, personally appeared • to me known, and known to me to be the person described in and executing the foregoing agreement and who duly acknowledged to me that [he/she]: (1) is the • of • (the "Corporation"); (2) knows (a) the seal of the Corporation, (b) the seal affixed to the foregoing agreement is

the seal of the Corporation, and (c) the seal was affixed by order of the Board of Directors of the Corporation; and

(3) signed [his/her] name to the foregoing agreement. ________________________________ A Notary Public









EXHIBIT 1.1(k)

ASSIGNMENT OF REAL PROPERTY LEASE THIS AGREEMENT dated the • day of •, 200•, is made

BETWEEN:

•, a corporation incorporated under the laws of • (hereinafter called "•")

- and -

•, a corporation incorporated under the laws of • (hereinafter called the "Assignee"). WHEREAS, pursuant to a purchase and sale agreement dated •, 200• (the "Purchase Agreement"), between the Assignor, as vendor, and the Assignee, as purchaser, the Assignee agreed to purchase and the Assignor agreed to sell as a going concern the Purchased Assets; and WHEREAS, pursuant to the leases described in Schedule A attached hereto (together, the "Leases"), the Assignor, as tenant, leased certain lands and premises more particularly described in the Leases (together, the "Premises"); and WHEREAS, pursuant to the Purchase Agreement, it is a condition precedent to the completion of the transactions contemplated thereby that the Assignor deliver this agreement. NOW THEREFORE in consideration of the completion of the transactions contemplated by the Purchase Agreement and other good and valuable consideration (the receipt and adequacy of which is acknowledged), the parties hereto agree as follows:


1.1 Assignment. Effective as of the opening of business on the date hereof (the "Effective Time"), the Assignor hereby assigns, sells and transfers to the Assignee and the Assignee hereby purchases and accepts the assignment and transfer of all of the Assignor's right, title and interest in and to the Leases.

1.2 Quiet Enjoyment. Subject to the performance by the Assignee of its obligations under the Leases, the Assignee shall enjoy the Premises for the residue of the term under the Leases and any renewal thereof, without interruption by the Assignor or any person claiming through the Assignor.



Appendix E – Purchase and Sale Agreement (Long Form) 1.3 Covenant of Assignee. The Assignee shall, throughout the residue of the term under the Leases and any renewal thereof, pay the rent reserved at the times and in the manner provided in the Leases and observe and perform the covenants, obligations, agreements, provisos and conditions on the part of the tenant therein set forth (including, without limitation, covenants in respect of use).

ARTICLE II GENERAL

2.1 Definitions. In this agreement, unless the context otherwise requires, all capitalized terms used and not otherwise defined herein and defined in the Purchase Agreement shall have the respective meanings ascribed thereto in the Purchase Agreement.

2.2 Governing Laws. This agreement shall be governed and construed in accordance with the laws of • and the laws of Canada applicable therein.

2.3 Successors and Assigns. This agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

2.4 Further Assurances. The parties hereto shall with reasonable diligence do all things and provide all reasonable assurances as may be required to complete the transactions contemplated by this agreement, and each party hereto shall provide such further documents or instruments required by any other party hereto as may be reasonably necessary or desirable to give effect to this agreement and carry out its provisions.

2.5 Severability. Any provision of this agreement which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof and any such invalid or unenforceable provision shall be deemed to be severed. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

2.6 Subject to Purchase Agreement. This agreement is made subject to and pursuant to the terms and conditions contained in the Purchase Agreement.

IN WITNESS WHEREOF the parties hereto have duly executed this agreement as of the date first above written.

•

By: _____________________________ c/s By: _____________________________ •

By: _____________________________ c/s By: _____________________________



EXHIBIT 1.1(l)

ASSIGNMENT OF TRADE-MARKS

THIS AGREEMENT dated the • day of •, 200•, is made BETWEEN: •, a corporation incorporated under the laws of • (hereinafter called the "Assignor")

- and - •, a corporation incorporated under the laws of • (hereinafter called the "Assignee"). WHEREAS the Assignee has agreed to purchase and the Assignor has agreed to sell the trade-marks listed in Schedule A annexed hereto (the "Trade-Marks"). NOW THEREFORE for good and valuable consideration (the receipt and adequacy of which is hereby acknowledged), the parties hereto agree as follows:


1.1 Assignment. Effective as of the opening of business on the date hereof, the Assignor hereby assigns, sells and transfers unto the Assignee and the Assignee hereby purchases and accepts the assignment and transfer of all of the Assignor's right, title and interest in and to the Trade-Marks together with the goodwill associated therewith, to have and to hold for the Assignee's own use, as fully and entirely as the same might be enjoyed by the Assignor if the assignment contained herein had not been made.




ARTICLE II GENERAL

2.1 Service of Process. The Assignee appoints •, whose full post office address in Canada is •, as the firm to whom any notice in respect of the applications or registrations assigned herein may be sent, and upon whom service of any proceedings in respect of the application or registration may be given or served with the same effect as if they had been given to or served upon the applicant or registrant. 2.2 Governing Laws. This agreement shall be governed and construed in accordance with the laws of • and the laws of Canada applicable therein. 2.3 Successors and Assigns. This agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. 2.4 Further Assurances. The parties hereto shall with reasonable diligence do all things and provide all reasonable assurances as may be required to complete the transactions contemplated by this agreement, and each party hereto shall provide such further documents or instruments required by any other party hereto as may be reasonably necessary or desirable to give effect to this agreement and carry out its provisions. • By: _____________________________ c/s By: _____________________________ • By: _____________________________ c/s By: _____________________________














EXHIBIT 1.1(n)

ASSUMPTION AGREEMENT

THIS AGREEMENT dated the • day of •, 200•, is made BETWEEN: •, a corporation incorporated under the laws of • (hereinafter called the "Vendor")

- and -

•, a corporation incorporated under the laws of • (hereinafter called the "Purchaser"). WHEREAS, pursuant to a purchase and sale agreement dated •, 200• (the "Purchase Agreement"), between the Vendor and the Purchaser, the Purchaser agreed to purchase and the Vendor agreed to sell as a going concern the Purchased Assets; and WHEREAS, pursuant to the Purchase Agreement, it is a condition precedent to the completion of the transactions contemplated thereby that the Purchaser deliver this agreement. NOW THEREFORE in consideration of the completion of the transactions contemplated by the Purchase Agreement and other good an valuable consideration (the receipt and adequacy of which is hereby acknowledged), the parties hereto agree as follows:

ARTICLE I ASSUMPTION OF LIABILITIES

1.1 Assumption of Liabilities. Effective as of the opening of business on the date hereof, the Purchaser hereby assumes, and shall pay when due, perform, observe and discharge, the Assumed Liabilities.




ARTICLE II GENERAL

2.1 Definitions. In this agreement, unless the context otherwise requires, all capitalized terms used and not otherwise defined herein and defined in the Purchase Agreement shall have the respective meaning ascribed thereto in the Purchase Agreement. 2.2 Governing Laws. This agreement shall be governed and construed in accordance with the laws of • and the laws of Canada applicable therein. 2.3 Successors and Assigns. This agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. 2.4 Further Assurances. The parties hereto shall with reasonable diligence do all things and provide all reasonable assurances as may be required to complete the transactions contemplated by this agreement, and each party hereto shall provide such further documents or instruments required by any other party hereto as may be reasonably necessary or desirable to give effect to this agreement and carry out its provisions. 2.5 Subject to Purchase Agreement. This agreement is made pursuant to and subject to the terms and conditions contained in the Purchase Agreement. • By: _____________________________ c/s By: _____________________________ • By: _____________________________ c/s By: _____________________________



EXHIBIT 1.1(cc)

CONFIDENTIALITY AGREEMENT TERMINATION AGREEMENT

THIS AGREEMENT dated the • day of •, 200• is made BETWEEN: • (hereinafter called "Vendor")

- and - • (hereinafter called "Purchaser") WHEREAS, pursuant to a purchase and sale agreement dated as of • (the "Purchase Agreement") between the Vendor and the Purchaser, the Purchaser agreed to purchase and the Vendor agreed to sell as a going concern the Purchased Assets (as defined in the Purchase Agreement"); and WHEREAS, pursuant to the confidentiality agreement dated • delivered by the Purchaser in favour of the Vendor (the "Confidentiality Agreements"), the Purchaser agreed, in connection with its negotiations with the Vendor for the purchase of the Purchased Assets to keep certain information confidential; and WHEREAS the Vendor and the Purchaser have agreed to terminate the Confidentiality Agreement in the manner provided herein concurrent with the completion of the transactions contemplated in the Purchase Agreement (the "Closing Transaction"). NOW THEREFORE in consideration of the completion of the Closing Transactions and other good and valuable consideration (the receipt and adequacy of which is hereby acknowledged), the parties hereto agree as follows:

1. The Confidentiality Agreement is hereby terminated and of no further force and effect.

2. This agreement shall be governed by and construed in accordance with the laws of the Province of • and the laws of Canada applicable therein.



Appendix E – Purchase and Sale Agreement (Long Form) 3. This agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. • By: _____________________________ c/s By: _____________________________ • By: _____________________________ c/s By: _____________________________



EXHIBIT 1.1(kk)

DIRECTION AND AUTHORIZATION

TO: Municipal District of • RE: • You are hereby directed and authorized to make payment of any amounts owing by way of refund or otherwise in respect of the following taxes for the above-referenced property to the order of • at •: Property Tax Year Roll No. • • • • DATED as of •, 200•. • Per: _________________________ Per: _________________________







EXHIBIT 1.1(zz)

INDEMNITY AGREEMENT


BETWEEN:

•, a corporation incorporated under the laws of • (hereinafter called "Vendor")

- and -

•, a corporation incorporated under the laws of • (hereinafter called "Purchaser") WHEREAS the Vendor and the Purchaser entered into a purchase and sale agreement dated • (the "Purchase Agreement") pursuant to which the Purchaser agreed to purchase and the Vendor agreed to sell, as a going concern, the Purchased Assets effective as of the commencement of business on the Closing Date; and

WHEREAS, pursuant to section 5.9 of the Purchase Agreement, the parties hereto have agreed to enter into this agreement to indemnify each other in the manner set forth herein.

NOW THEREFORE, in consideration of the completion of the transactions contemplated in the Purchase Agreement and other good and valuable consideration (the receipt and adequacy of which is hereby mutually acknowledged), the parties hereto agree as follows:


1.1 Definitions. In this agreement, unless the context otherwise requires:

(a) the following terms shall have the following respective meanings ascribed thereto:

(i) "Assignment Documents" means the: (A) (I) Assignment Agreement; (II) Assumption Agreements; (III) Assignment of Real Property Leases;

as defined in both the Purchase Agreement; and

(B) Assignment of • Trade-Mark License;



Appendix E – Purchase and Sale Agreement (Long Form) (ii) "Claims" means claims, demands, actions, causes of action, damages,

losses, costs, fines, penalties, interest, liabilities and expenses including, without limitation, reasonable legal fees;

(iii) "Indemnified Party" means the party or parties that are to be indemnified pursuant to sections 2.1, 2.3 or 2.4, as the case may be;

(iv) "Indemnifying Party" means the party or parties that covenant and agree to indemnify another party or parties pursuant to sections 2.1, 2.3 or 2.4, the case may be;

(v) "Ongoing Contracts" means the Trade-Mark Licenses;

(b) all capitalized terms used in this agreement and not otherwise defined herein and defined in the Purchase Agreement shall have the respective meanings ascribed thereto in the Purchase Agreement.

1.2 Entire Agreement. This agreement, the Purchase Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and supersede all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written of the parties and there are no warranties, representations and other agreements between the parties in connection with the subject matter hereof except as specifically set forth in this agreement, the Purchase Agreement. 1.3 Extending Meanings. In this agreement, words importing the singular number include the plural and vice versa; words importing the masculine gender include the feminine and neuter genders. 1.4 Headings. The division of this agreement into articles, sections, subsections and paragraphs and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this agreement. 1.5 References. References to an article, section, subsection or paragraph shall be construed as references to an article, section, subsection or paragraph of this agreement, unless the context otherwise requires. 1.6 Business Day. In the event that any action to be taken under this agreement falls on a day which is not a Business Day, the such action shall be taken on the next succeeding Business Day. 1.7 Governing Laws. This agreement shall be governed by and construed in accordance with the laws of Ontario and the laws of Canada applicable therein.



ARTICLE II

INDEMNITY

2.1 Mutual Indemnifications for Breaches of Warranty, etc. Subject to section 2.2: (a) Purchase Agreement (i) The Vendor hereby covenants and agrees with the Purchaser to indemnify

and save harmless the Purchaser, effective as and from the Closing Time, from and against any Claims which may be made or brought against the Purchaser and/or which it may suffer or incur as a result of, in respect of, or arising out of any non-fulfillment of any covenant or agreement on the part of the Vendor under the Purchase Agreement or in any certificate, agreement or other document furnished by the Vendor pursuant thereto (other than the Ongoing Contracts) or any incorrectness in or breach of any representation or warranty of the Vendor contained in the Purchase Agreement or in any certificate, agreement or other document (other than the Ongoing Contracts) furnished by the Vendor pursuant to the Purchase Agreement; and

(ii) the Purchaser hereby covenants and agrees with the Vendor to indemnify and save harmless the Vendor, effective as and from the Closing Time, from and against any Claims which may be made or brought against the Vendor and/or which any them may suffer or incur as a result of, in respect of, or arising out of any non-fulfillment of any covenant or agreement on the part of the Purchaser under the Purchase Agreement or in any certificate, agreement or other document furnished by the Purchaser pursuant thereto (other than the Ongoing Contracts) or any incorrectness in or breach of any representation or warranty of the Purchaser contained in the Purchase Agreement or in any certificate, agreement or other document (other than the Ongoing Contracts) furnished by the Purchaser pursuant to the Purchase Agreement.

2.2 Limitation on Mutual Indemnification. The indemnification obligations of each of the Vendor and the Purchaser pursuant to section 2.1 shall: (a) in respect of any incorrectness in or breach of any representation or warranty of

the parties hereto, be subject to the applicable survival limitation mentioned in section 4.3 of the Purchase Agreement, after which time, if no Claims have been made against a party with respect to any incorrectness in or breach of any representation or warranty, that party shall have no further liability hereunder or under the Purchase Agreement, as the case may be with respect to the representation or warranty;

(b) not be applicable to indemnify an Indemnified Party until the aggregate Claims sustained by that Indemnified Party pursuant to subsection 2.1(a) exceed a value of $•, in which case, the Indemnifying Party shall be obligated to the Indemnified




Party only for and in respect of that portion of the aggregate Claims that exceeds $•;

(c) the indemnity obligations of the Indemnifying Party pursuant to subsection 2.1(a) shall be limited to $•;

(d) in respect of the indemnification obligations of the Vendor arising from any incorrectness in or breach of the representation and warranty set forth in subsection 4.1(o) of the Purchase Agreement, be limited to those arising under section 5.18 of the Purchase Agreement;

(e) in respect of the indemnification obligations of the Vendor arising from any incorrectness in or breach of the representation and warranty set forth in the second sentence of paragraph 4.1(r)(i) of the Purchase Agreement, be limited to the aggregate value placed on any Inventories determined not usable or saleable less any reserves taken in respect o such Inventories, all as determined on the Closing Statement; and

(f) in respect of the indemnification obligations of the Vendor arising from any incorrectness in or breach of the representation and warranty set forth in clause 4.1(zz)(i)(E) of the Purchase Agreement, be limited to Claims arising from the existence of Hazardous Substances under Environmental Laws for or in respect of the use of the property by the Purchaser for the existing use at the date of this agreement or other heavy industrial purposes.

2.3 Vendor's Indemnities. Notwithstanding section 2.1, without limiting the generality of section 2.1 and without regard to the limitations in section 2.2, the Vendor shall indemnify and save harmless the Purchaser from and against all Claims which may be made or brought against the Purchaser:

(a) relating to any indebtedness or financial liabilities of the Business existing or incurred prior to the Closing Date which are not Assumed Liabilities;

(b) relating to or arising from any non-fulfillment of any covenant on the part of the Vendor under sections 6.1 and 6.2 of the Purchase Agreement;

(c) by reason of the non-compliance of the Vendor with applicable provincial bulk sales legislation in connection with the completion of the transactions contemplated in the Purchase Agreement;

(d) incurred by the Purchaser by reason of the failure of the Vendor to obtain on or before the Closing Date certificates pursuant to applicable provincial statutes which indicate that the Vendor has paid all taxes, assessments or other monies due under those statutes in respect of the Business up to the Closing Date or has entered into satisfactory arrangements for the payment of such taxes, assessments or other monies;


Saskatchewan: Bar Admission Program E - 77 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) 2.4 Purchaser's Indemnities. Notwithstanding section 2.1, without limiting the generality of section 2.1 and without regard to the limitations set out in section 2.2, the Purchaser shall indemnify and save harmless the Vendor from and against all Claims:

(a) relating to the non-payment or performance after the Closing Date by the Purchaser of the Assumed Liabilities;

(b) incurred by the Vendor relating to or arising from any non-fulfillment of any covenant on the part of the Purchaser under sections 6.1 and 6.2 of the Purchase Agreement;

(c) incurred by the Vendor by reason of the failure by the Purchaser to comply with its obligations to pay the taxes under section 5.17 of the Purchase Agreement;

(d) relating to a breach or violation by the Purchaser of a Purchased Contract or Permit (as defined in the Purchase Agreement) after the Closing Date;

(e) arising from the enforcement by the Vendor of the non-assignable rights contemplated in sections 2.2 of the Purchase Agreement; and

(f) relating to a breach or violation by the Purchaser of the Assignment Documents. 2.5 Survival of Certain Indemnities. Notwithstanding any other provision in this Agreement, obligations to indemnify which arise under sections 2.3 and 2.4 shall survive the Closing without limit as to time and amounts. 2.6 Procedure for Indemnification. The following provisions shall apply to any Claims made or brought by a third party for which an Indemnifying Party may be obligated to indemnify an Indemnified Party pursuant to this Agreement:

(a) promptly upon receipt by the Indemnified Party of any notice of Claims in respect of which the Indemnified Party proposes to demand indemnification from the Indemnifying Party, the Indemnified Party shall give notice to that effect to the Indemnifying Party with reasonable promptness, provided that failure to give such notice shall not relieve the Indemnifying Party from any liability it may have to the Indemnified Party except to the extent that the Indemnifying Party is prejudiced thereby;

(b) the Indemnifying Party shall have the right by notice to the Indemnified Party not later than 30 days after receipt of the notice described in subsection 2.6(a) to assume control of the defence, compromise or settlement of the Claims, provided that:

(i) the Indemnifying Party shall agree and acknowledge that such claims are Claims for which the Indemnifying Party has agreed to indemnify the Indemnified Party to this Agreement; and




(ii) such assumption shall, by its terms, be without costs, expenses or liabilities to the Indemnified Party;

(c) upon the assumption of control of the Claims by the Indemnifying Party as aforesaid, the Indemnifying Party shall:

(i) diligently proceed with the defence, compromise or settlement of the Claims at its sole expense, including employment of counsel reasonably satisfactory to the Indemnified Party and, in connection therewith, the Indemnified Party shall co-operate fully, but at the expense of the Indemnifying Party, to make available to the Indemnifying Party all pertinent information and witnesses under the Indemnified Party's control, make such assignments and take such other steps as in the opinion of counsel for the Indemnifying Party are necessary to enable the Indemnifying Party to conduct such defence; and

(ii) throughout the course thereof, provide copies of all relevant documentation to the Indemnified Party, keep the Indemnified Party advised of the progress thereof and discuss with the Indemnified Party all significant actions proposed. If the Indemnifying Party assumes control of the defence, compromise or settlement of any Claim, the Indemnifying Party shall not, without the prior written consent of the Indemnified Party, such consent not to be unreasonably withheld, agree to any settlement or compromise of such Claim, provided that if the consent is withheld and the ultimate settlement or compromise is greater than the Indemnifying Party's proposed settlement or compromise, the Indemnified Party shall be responsible for the difference between the ultimate and proposed settlement or compromise and the additional costs and expenses attributable solely to the withholding of the consent;

(d) the final determination of any such Claims, including all related costs and expenses, will be binding and conclusive upon the parties thereto as to the validity or invalidity, as the case may be, of such Claims against the Indemnifying Party hereunder; and

(e) should the Indemnifying Party fail to give notice to the Indemnified Party as provided in subsection 2.7(b), the Indemnified Party shall be entitled to take such steps in connection with the settlement, compromise or defence of the Claims as in its sole discretion it determines advisable, and, subject to the right of the Indemnifying Party to deny that the Claim is a matter in respect of which the Indemnifying Party has agreed to indemnify the Indemnified Party pursuant to this Agreement, such settlement or any other final determination of the Claims shall be binding upon the Indemnifying Party.



ARTICLE III GENERAL

3.1 Assignment. (a) Subject to subsection 3.1(b), this agreement and the rights or obligations

hereunder are not assignable by any party hereto: (i) without the prior written consent of the other parties; and (ii) unless, the persons accepting such assignment become subject to all of the obligations of the assignor under this agreement by means of an agreement in writing delivered to the other parties. Notwithstanding any assignment of this agreement, the assignor will continue to be bound by the terms of this Agreement. This agreement shall enure to the benefit of and be binding upon each party and their respective successors and permitted assigns.

(b) This agreement and the rights of the Purchaser under this Agreement are assignable to arm's length lenders (without the consent of the other parties hereto) as security for the bona fides indebtedness of the Purchaser provided that the lenders become subject to all of the obligations of the Purchaser under this agreement by means of an agreement in writing delivered to the other parties.

3.2 Time of Essence. Time shall be of the essence in all respects of this agreement. 3.3 Notices. Any notice or other communication which is required or permitted to be given or made by one party to the other parties hereunder shall be in writing and shall be either: (a) personally delivered to the other parties; or (b) sent by telex, facsimile or similar method of recorded communication, charges

prepaid.


(i) Vendor at: • with a copy to: •

(ii) Purchaser at: •

(iii) • at: •

or at such other address as any party may from time to time advise the other by notice in writing. Any notice given by personal delivery shall be deemed to be received on the date of delivery.




Any notice sent by telex, facsimile or similar method of recorded communication shall be deemed to have been received on the next Business Day following the date of its transmission. 3.4 Amendment and Waiver. No supplement, modification, amendment or waiver of this agreement shall be binding unless executed in writing by the party to be bound. No waiver of any of the provisions of this agreement shall constitute a waiver of any other provision (whether or not similar) nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 3.5 Further Assurances. The parties shall, with reasonable diligence, do all things and provide all reasonable assurances as may be required to complete the transactions contemplated by this agreement, and each party shall provide such further documents or instruments required by any other party as may be reasonably necessary or desirable to give effect to this agreement and carry out its provisions. 3.6 Counterparts. This agreement may be executed by the parties in one or more counterparts, each of which when so executed and delivered shall be an original and such counterparts shall together constitute one and the same instrument. 3.7 Severability. Any provision of this agreement which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof and any such invalid or unenforceable provision shall be deemed to be severed. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. IN WITNESS WHEREOF the parties have duly executed this agreement as of the date first above written.

• By: _____________________________ c/s By: _____________________________ • By: _____________________________ c/s By: _____________________________



EXHIBIT 1.1 (lll)

NON-COMPETITION AGREEMENT

THIS AGREEMENT is made effective the ____ day of _______________, 200__

BETWEEN:

•, a corporation incorporated under the laws of •

(hereinafter referred to as the "Principal")

- and -


(hereinafter referred to as the "Vendor")

- and -


(hereinafter referred to as the "Purchaser") WHEREAS:

A. Pursuant to an asset purchase agreement dated effective •, (the "Asset Purchase Agreement") between the Vendor and the Purchaser, the Purchaser agreed to purchase from the Vendor, as a going concern, substantially all of the undertaking, property and assets of the business carried on by the Vendor at •, consisting of • (the "Business"), all on the terms and conditions therein set out;

B. The Principal has been actively involved in the development and operations of the Business;

C. The obligations of the Purchaser under the Asset Purchase Agreement are expressly subject to the satisfaction of certain conditions therein set out, including the entering into of this Agreement by the Vendor and the Principal (hereinafter collectively referred to as the "Covenantors"); NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the entering into by the Purchaser of the Asset Purchase Agreement and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each party), the parties agree as follows:




1. CONFIDENTIALITY AND NON-COMPETITION The Covenantors acknowledge that the Vendor has heretofore carried on the Business that shall hereafter be carried on by the Purchaser. The Covenantors further acknowledge that they have been entrusted with information relating to the Business that has not been disclosed to third parties (the "Confidential Information") including, without limitation, trade secrets and know-how, the names and addresses of suppliers and customers of the Business and their particular business requirements, the disclosure of which Confidential Information to competitors of the Purchaser, or to the general public would be highly detrimental to the best interests of the Purchaser. The Covenantors further acknowledge and agree that the right to maintain confidential the Confidential Information constitutes a proprietary right that the Purchaser is entitled to protect. Accordingly, the Covenantors covenant and agree with the Purchaser that: (a) they will not disclose any Confidential Information to any person nor will they use the

same for any purposes other than those of the Purchaser, at any time during the period from the date hereof to • years from the date hereof;

(b) they will not, without the prior written consent of the Purchaser, at any time during the period from the date hereof to • years from the date hereof, either individually or in partnership or jointly or in conjunction with any person as principal, agent, shareholder or in any other manner whatsoever, carry on or be engaged in or be concerned with or interested in or advise, lend money to, guarantee the debts or obligations of or permit any of their names or any part thereof to be used or employed by any person engaged in or concerned with or interested in any business the same or similar to or competitive with the Business.

2. SEVERABILITY If any covenant or provision herein is determined to be void or unenforceable in whole or in part, it shall not be deemed to affect or impair the validity of any other covenant or provision, and subsections 1(a) and (b) are each declared to be separate and distinct covenants. The Covenantors hereby agree that all restrictions in section 1 are reasonable and valid and all defences to the strict enforcement thereof by the Purchaser are hereby waived by the Covenantors. The Covenantors acknowledge that a violation of any of the provisions of section 1 will result in immediate and irreparable damage to the Purchaser, and agree that, in the event of such violation, the Purchaser shall, in addition to any other rights to relief, be entitled to equitable relief by way of temporary or permanent injunction and to such other relief as any court of competent jurisdiction may deem just and proper. If either of the Covenantors is in breach of any of such restrictions, the running of the period of prohibition shall be stayed and shall recommence upon the date such Covenantor ceases to be in breach thereof, whether voluntarily or by injunction. 3. JOINT AND SEVERAL OBLIGATIONS The obligations of the Covenantors hereunder shall be deemed to be joint and several obligations of the Covenantors and each of them.


Saskatchewan: Bar Admission Program E - 83 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) 4. APPLICABLE LAW This Agreement shall be construed, interpreted and enforced in accordance with, and the respective rights and obligations of the parties shall be governed by, the laws of the Province of • and the federal laws of Canada applicable therein and each party hereby irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of such province and all courts competent to hear appeals therefrom. 5. NUMBER, GENDER AND PERSONS In this Agreement, words importing the singular number only shall include the plural and vice versa, words importing gender shall include all genders and words importing persons shall include individuals, corporations, partnerships, associations, trusts, unincorporated organizations, governmental bodies and other legal or business entities of any kind whatsoever. 6. SUCCESSORS AND ASSIGNS This Agreement shall enure to the benefit of and be binding on the parties hereto and their respective heirs, legal personal representatives, successors and assigns. IN WITNESS WHEREOF the parties hereto have executed this Agreement on the date first above written. •

By: _____________________________ c/s By: _____________________________ •

By: _____________________________ c/s By: _____________________________ •

By: _____________________________ c/s By: _____________________________







EXHIBIT 1.1(jjj)

ASSIGNMENT OF • TRADE-MARK LICENSE


BETWEEN:

•, a corporation incorporated under the laws of • (hereinafter called the "Assignor")

- and -

•, a corporation incorporated under the laws of • (hereinafter called the "Assignee"). WHEREAS, pursuant to a purchase and sale agreement dated •, 200• (the "Purchase Agreement"), between the Assignor, as vendor, and the Assignee, as purchaser, the Assignee agreed to purchase and the Assignor agreed to sell as a going concern the Purchased Assets: and WHEREAS pursuant to the Purchase Agreement, it is a condition precedent to the completion of the transactions contemplated thereby that the Assignor deliver this agreement; and WHEREAS • has by notice dated •, consented to the assignment herein contained. NOW THEREFORE in consideration of the completion of the transactions contemplated by the Purchase Agreement and other good and valuable consideration (the receipt and adequacy of which is hereby acknowledged), the parties hereto agree as follows:


1.1 Assignment. Effective as of the opening of business on the date hereof, the Assignor hereby assigns, sells and transfers unto the Assignee and the Assignee hereby purchases and accepts the assignment and transfer of all of the Assignor's right, title and interest in and to the • Trade-Mark License.




ARTICLE II GENERAL

2.1 Definitions. In this agreement, unless the context otherwise requires:

(a) the following term shall have the following meaning ascribed thereto:

"Trade-Mark License" means the trade-mark license agreement dated • made between •, as licensor, and the Assignor, as licensee, relating to the licensing to the Assignor of, among other things, the trade-mark "•"; and

(b) all capitalized terms used and not otherwise defined herein and defined in the Purchase Agreement shall have the respective meanings ascribed thereto in the Purchase Agreement.

2.2 Governing Laws. This agreement shall be governed and construed in accordance with the laws of Ontario and the laws of Canada applicable therein. 2.3 Successors and Assigns. This agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. 2.4 Further Assurances. The parties hereto shall with reasonable diligence do all things and provide all reasonable assurances as may be required to complete the transactions contemplated by this agreement, and each party hereto shall provide such further documents or instruments required by any other party hereto as may be reasonably necessary or desirable to give effect to this agreement and carry out its provisions. 2.5 Subject to Purchase Agreement. This agreement is made pursuant to and subject to the terms and conditions contained in the Purchase Agreement. IN WITNESS WHEREOF the parties hereto have duly executed this agreement as of the date first above written. •

By: _____________________________ c/s By: _____________________________

•

By: _____________________________ c/s By: _____________________________



EXHIBIT 1.1(llll)

TRADE-MARK LICENSE AGREEMENT THIS AGREEMENT dated the • day of • is made

BETWEEN:


(hereinafter called the "Licensor")

- and -


(hereinafter called the "Licensee"). WHEREAS, the Licensor, the Licensee and • ("•") entered into a purchase and sale agreement dated • (the "Purchase Agreement") pursuant to which the Licensee agreed to purchase and the Licensor and • agreed to sell as a going concern the Purchased Assets effective as of the commencement of business on the date hereof; and AND WHEREAS the Licensor is the registered owner of the Trade-Marks; and AND WHEREAS, pursuant to the Purchase Agreement, the Licensor has agreed to grant to the Licensee the right and license to use the Trade-Marks pursuant to the terms of this agreement. NOW THEREFORE, in consideration of the completion of the transactions contemplated in the Purchase Agreement and other good and valuable consideration (the receipt and adequacy of which is hereby acknowledged), the parties hereto agree as follows:


1.1 Definitions. In this agreement, unless the context otherwise requires: (a) the following terms shall have the following respective meanings ascribed thereto: (i) "Affiliate" means an "affiliate" as that term is defined in the Business

Corporations Act (•), as amended on the date hereof;




(ii) "Claims" means claims, demands, actions, causes of action, damage, loss, costs, fines, penalties, interest, liability and expense, including, without limitation, reasonable legal fees;

(iii) "Event of Default" has the meaning ascribed thereto in section 7.1;

(iv) "Indemnified Party" and "Indemnifying Party" have the meanings ascribed thereto in section 9.1;

(v) "Industrial Users" means users who will use the Registered Wares and Services in food processes or services in connection with the further processing of or the incorporation into other products for the sale to Institutional Users or Retail Customers;

(vi) "Institutional Users" means users who will use the Registered Wares and Services in food processes or services in connection with the preparing of food for and serving of food to consumers at the retail level, including, without limitation, restaurants, cafeterias, hospitals, "fast food" outlets, governmental departments and food service distributors;

(vii) "Licence" has the meaning ascribed thereto in subsection 2.1 (a);

(viii) "Licensee's Business" means the business carried on by the Licensee of manufacturing, marketing, packaging, distributing and selling the Registered Wares and Services in association with the Trade-Marks;

(ix) "New Wares and Service" has the meaning ascribed thereto in subsection 4.1(b);

(x) "Parties" means the Licensor and Licensee, collectively, and "Party" means any one of them;

(xi) "Person" includes an individual, body corporate, partnership, trustee or trust or unincorporated association, executor, administrator or legal representative;

(xii) "Proposed Territory" has the meaning ascribed thereto in section 4.9;

(xiv) "Proposed Ware and Services" has the meaning ascribed thereto in section 4.9;

(xv) "Registered Wares and Services" means the wares and services set forth in Schedules "A" and "B", as amended from time to time pursuant to this agreement, and such other wares and services as may be agreed to in writing by the Parties;

(xvi) "Retail Customers" means retail stores which distribute the Registered Wares and Services bearing the Trade-Marks principally to consumers at the retail level, including, without limitation, •;

(xvii) "Subject Trade-Marks" has the meaning ascribed thereto in subsection 6.1(a);

(xviii) "Territory" means the territories set forth in Schedules "A" and "B", as amended from time to time pursuant to this agreement;



(xix) "Third Party Offeree" has the meaning ascribed thereto in subsection 6.1(a);

(xx) "Third Party Offer" has the meaning ascribed thereto in subsection 6.1(a);

(xxi) "Third Party Notice" has the meaning ascribed thereto in subsection 6.1(b);

(xxii) "Third Party Notice Period" has the meaning ascribed thereto in subsection 6.1(b);

(xxiii) "Trade-Marks" means the trade marks described in Schedules "A" and "B" and such other trade marks as may be agreed to in writing by the Parties; and

(xxiv) "Unrelated Third Party" means any person other than an Affiliate or Associate of the Licensor; and

(b) all capitalized terms used in this agreement and not otherwise defined herein and defined in the Purchase Agreement shall have the respective meanings ascribed thereto in the Purchase Agreement. 1.2 Entire Agreement. This agreement and the Purchase Agreement constitute the entire agreement between the Parties pertaining to the subject matter hereof and supersede all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the Parties and there are no warranties, representations and other agreements between the Parties in connection with the subject matter hereof except as specifically set forth in this agreement and the Purchase Agreement. 1.3 Extended Meanings. In this agreement, words importing the singular number include the plural and vice versa; words importing the masculine gender include the feminine and neuter genders. 1.4 Headings. The division of this agreement into articles, sections, subsections and paragraphs and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this agreement. 1.5 References. References to an article, section, subsection, paragraph or schedule shall be construed as references to an article, section, subsection, paragraph of or schedule to this agreement unless the context otherwise requires. 1.6 Business Day. In the event that any action to be taken under this agreement falls on a day which is not a Business Day, then such action shall be taken on the next succeeding Business Day. 1.7 Governing Laws. This agreement shall be governed by and construed in accordance with the laws of • and the laws of Canada applicable therein. 1.8 Schedules. Schedules "A", "B" and "C" attached to this agreement are incorporated into this agreement by reference and deemed to be a part of this agreement.




ARTICLE II GRANT OF LICENSE

2.1 Grant of License. (a) The Licensor hereby grants to the Licensee: (i) a non-exclusive and royalty-free license to use the trade marks listed in Schedule

"A" in association with the wares and services listed in Schedule "A" for manufacturing, marketing, packaging, distribution and sale to Institutional Users in the Territory;

(ii) an exclusive and royalty-free license to use the trade marks listed in Schedule "A" in association with the wares and services listed in Schedule "A" for manufacturing, marketing, packaging, distribution and sale to Industrial Users in the Territory; and

(iii) an exclusive and royalty-free license to use the trade marks listed in Schedule "B" in association with the wares and services listed in Schedule "B" for manufacturing, marketing, packaging, distribution and sale to Industrial Users and Institutional Users in the Territory,

(together, the "License"). The Licensee may not sublicense its rights under the License.

(b) The Licensee acknowledges and confirms the continuing right of the Licensor to use and exploit the Trade-Marks.

(c) The Licensee recognizes the exclusive right of the Licensor in and to the Trade-Marks and that the Licensee's use of the Trade-Marks and any goodwill associated therewith shall enure to the sole benefit of the Licensor.

(d) The Licensee shall not, at any time during the term of the License or thereafter, represent that it has any ownership interest in the Trade-Marks, or do or cause to be done any act or thing (directly or indirectly) contesting or in any way attacking the validity of the Trade-Marks and/or impairing the right, title or interest of the Licensor in and to the Trade-Marks. 2.2 Term of License. Unless terminated in accordance with the provisions contained in Article VII, the License shall be for a perpetual term without limitation as to time. 2.3 Filings and Registrations. (a) Where required by applicable trade mark legislation, the Licensor and Licensee shall execute and file all necessary and desirable documents to effect the registration of the Licensee as a permitted user of the Trade-Marks anywhere in the Territory including, without limitation, the Canadian registered user application in favour of the Licensee, substantially in the form of Schedule "C". The Licensee shall have registered user status in respect of the Trade-Marks for so long as the License shall be in effect. The costs and expenses for the preparation and filing of the documents shall be borne by the Licensee.



(b) During the term of the License, the Licensor shall maintain the registrations for the Trade-Marks in respect of the Registered Wares and Services unless any such registration is cancelled or any such ware or service is deleted as a result of any action or claim described in subsection 5.1(d).

ARTICLE III REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Licensor. The Licensor represents and warrants to the Licensee that:

(a) Schedule "A" contains a complete and accurate listing of all trade-mark registrations and applications pertaining to the Trade-Marks; and

(b) to the best of the Licensor's knowledge, the Licensor is the sole legal and beneficial owner of the Trade-Marks (including the registrations and applications listed on Schedule "A"). Such ownership of the Trade-Marks by the Licensor is free and clear of any mortgage, charge, pledge, hypothec, lien or security interest of any kind. Except as disclosed in Schedule "A", such registrations and applications are current and the Licensor has not received any notice challenging the validity or ownership of the Trade-Marks or of such registrations and applications.

ARTICLE IV USE OF TRADE-MARKS

4.1 Permitted Use.

(a) Subject to subsection 4.1(b), the Licensee shall only use the Trade-Marks in association with the Registered Wares and Services.

(b) If the Licensee intends to use any of the Trade-Marks in association with wares and services related to the Business but not set out in the then trade mark registrations relating to the Trade-Marks (the "New Wares and Services"), then: (i) the Licensee and Licensor shall co-operate in the filing of all necessary and

desirable documents to extend the use by the Licensee of the Trade-Marks to the New Wares and Services:

(ii) the Licensee shall pay all costs and expenses associated with the preparation and filing of the necessary and desirable documents;

(iii) the Licensee shall not use the Trade-Marks in association with the New Wares and Services until such time as the necessary and desirable documents to extend the Trade-Marks and the related registered user registrations or applications have been filed in the appropriate government offices; and

(iv) the New Wares and Services shall be added to the Registered Wares and Services.




(c) Notwithstanding any other term in this agreement, if the Licensor obtains an opinion from the Licensor's legal counsel to the effect that the Trade-Marks are not available for use in association with the New Wares and Services or that such proposed use may infringe the rights of other persons, the Licensor shall so advise the Licensee and the Licensee shall not use the Trade-Marks for the New Wares and services .

(d) In the event of any conflict between the terms of this agreement and any other document, agreement, registered user application or registration, this agreement shall prevail to the extent of the conflict. 4.2 Quality of Wares and Services.

(a) The wares sold and the services offered by the Licensee in association with the Trade-Marks shall meet the Licensor's reasonable standards of quality, which shall be specified from time to time by the Licensor, be commercially reasonable and be acceptable to the Licensee, acting reasonably. The Licensor acknowledges that the Licensee's present standards of quality meet the Licensor's current standards.

(b) The Licensee shall permit the Licensor and its authorized representatives during business hours and on:

(i) not less than • days prior written notice; or

(ii) • hours prior written notice in circumstances where the wares being manufactured and sold and the services being offered by the Licensee materially and adversely affect the quality and integrity of the Trade-Marks,

reasonable access to the premises of the Licensee to inspect the wares being manufactured and sold and the services being offered by the Licensee in association with the Trade-Marks to ensure that the standard of quality specified in subsection 4.2(a) is being maintained. 4.3 Distinctiveness. The Trade-Marks shall only be used by the Licensee in accordance with good trade-mark practices and in such a manner so as to preserve the distinctiveness of the Trade-Marks. 4.4 Proper Use of Trade-Marks and Indication of Ownership.

(a) The Licensee shall ensure that such ownership and user notices as the Licensor may, from time to time reasonably require, are displayed on all packaging and advertising used by the Licensee in association with the Registered Wares and Services.

(b) The Licensee shall not modify or vary the Trade-Marks in any way whatsoever from the way in which they are registered, and shall use the Trade-Marks in a prominent and distinctive typeface on all packaging, advertising and other related materials in association with the Registered Wares and Services.


Saskatchewan: Bar Admission Program E - 93 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) 4.5 Compliance with Laws and Business Ethics. (a) The Licensee shall comply in all material respects with the laws and regulations applicable to the Licensee's Business including, without limitation, those relating to labeling, advertising and pricing.

(b) The Licensee shall conduct the Licensee's Business in material compliance with the highest standards of fair trade, fair competition and business ethics. 4.6 Taxes. The Licensee shall be liable for and shall pay all sales and transfer taxes, federal taxes and all other taxes, duties or other like charges properly payable by it in connection with the Licensee's Business. 4.7 Advertising and Promotion. The Licensee shall be responsible for arranging all advertising and promotion in connection with the Licensee's Business and all associated costs and expenses. 4.8 Defects in Registered Wares and Services. (a) The Licensee shall forthwith notify the Licensor of any notice or proceeding alleging that the Licensee has negligently manufactured its Registered Wares and Services or that the Licensee's Registered Wares and Services are defective.

(b) The Licensee may, in its sole discretion, take any action in respect of such allegations and shall pay all costs and expenses associated with such action. The Licensee shall not enter into any agreement regarding such notice or proceeding without the prior approval of the Licensor (which approval shall not be unreasonably withheld or delayed). 4.9 Expansion of Territory. (a) If the Licensee intends to use any of the Trade-Marks in association with wares and services (the "Proposed Wares and Services") related to the Business in the United States or Mexico (the "Proposed Territory") and the Trade-Mark is not then registered for use in association with the Proposed Wares and Services in the Proposed Territory, then: (i) the Licensee and the Licensor shall co-operate in the filing of all necessary and

desirable documents to register the Trade-Mark and the use by the Licensee of the Trade-Mark with respect to the Proposed Wares and Services in the Proposed Territory;

(ii) the Licensee shall pay all costs and expenses associated with the preparation and filing of the necessary and desirable documents and shall be responsible for the prosecution of the application including registration thereof;

(iii) the Licensee shall not use the Trade-Mark in association with the Proposed Wares and Services in the Proposed Territory until such time as the necessary and desirable documents have been filed in the appropriate government offices; and




(iv) the License shall be extended to include the use of the Trade-Mark for the Proposed Wares and Services in the Proposed Territory and the Proposed Wares and Services and the Proposed Territory shall be added to Schedule "A" or "B", as the case may be.

(b) Notwithstanding subsection 4.9(a), if the Licensor obtains an opinion from the Licensor's legal counsel to the effect that the Trade-Mark cannot be registered for use in the Proposed Territory in association with the Proposed Wares and Services or that such registration shall infringe the rights of other persons, the Licensor may so advise the Licensee and the Licensee shall not use the Trade-Marks in the Proposed Territory for the Proposed Wares and Services.

(c) If the Licensor files an application to register any Trade-Mark in the United States or Mexico for wares and services which relate to the Business, the License shall be extended to include the use of the Trade-Mark for such wares and services in such country and such wares and services and country shall be added to Schedule "A" or "B", as the case may be.

ARTICLE V INFRINGEMENT

5.1 Infringement. (a) The Licensee shall forthwith inform the Licensor of any act of infringement, unfair competition or restrictive or misleading trade practices ("Acts of Infringement") affecting the Trade-Marks which come to the Licensee's attention.

(b) The Licensor may take any action in connection with any Acts of Infringement and shall pay all costs and expenses of such action and retain the proceeds including any award of damages and accounting of profits and costs of any such action. The Licensee shall co-operate fully with the Licensor in any action the Licensor may take with respect to the Acts of Infringement and, at the request and sole expense of the Licensor, give all reasonable assistance to the Licensor in any such action.

(c) (i) In the event that the Licensor fails to take any such action within • Business Days after notification by the Licensee, the Licensee may, with the consent of the Licensor, which consent shall not be unreasonably withheld, take any appropriate action against the Acts of Infringement but shall not enter into any agreement regarding such action without the prior approval of the Licensor (which approval shall not be unreasonably withheld or delayed).

(ii) If the Licensee commences an action in connection with the Acts of Infringement, it may join the Licensor as a party to the action and all of the costs and expenses of such action shall be borne by the Licensee, who shall also retain all proceeds, including any award of damages and accounting of profits and costs granted by a court. The Licensor shall co-operate fully with the Licensee in any such action and, at the request and sole expense of the Licensee, give all reasonable assistance



to the Licensee in any such action. The Licensee shall regularly inform the Licensor of significant developments regarding such action.

(d) The Licensor may defend any allegation or claim that the use of the Trade-Marks violates the rights of any other person. The Licensor shall pay all costs and expenses associated with such actions if the Licensee's use of the Trade-Marks is in compliance with this agreement. Otherwise, the Licensee shall pay the portion of the costs and expenses which are attributable solely to the Licensee's failure to comply with this agreement. The rights and obligations of the Licensor and Licensee set forth in subsections 5.1(b) and (c) shall apply equally to such allegations and claims.

ARTICLE VI RIGHT OF LAST REFUSAL

6.1 Right of Last Refusal. Subject to subsection 6.1(h):

(a) Sale of Trade-Marks - If at any time during the term of the License the Licensor desires to sell one or more of the Trade-Marks (the "Subject Trade-Marks") to an Unrelated Third Party, it shall first obtain from an Unrelated Third Party (the "Third Party Offeree") a bona fide written offer (the "Third Party Offer") for the purchase of the Subject Trade-Marks".

(b) Notice of Third Party Offer - The Third Party Offer shall not be accepted by the Licensor without first giving the Licensee notice (the "Third Party Notice") of the Third Party Offer and the terms thereof and offering to sell the Subject Trade-Marks to the Licensee on the same terms as are contained in the Third Party Offer. The Licensee shall have thirty days from the date of delivery of the Third Party Notice (the "Third Party Notice Period") to agree by written notice to the Licensor that it will purchase the Subject Trade-Marks in accordance with the terms of the Third Party Offer. If no notice agreeing to purchase the Subject Trade-Marks is received by the Licensor from the Licensee within the Third Party Notice Period, the Licensee shall be deemed to have rejected the Third Party Notice.

(c) Acceptance of the Third Party Offer - If the Licensee accepts the Third Party Offer within the Third Party Notice Period, the Licensor shall sell the Subject Trade-Marks to the Licensee on the terms of the Third Party Offer.

(d) Rejection of the Third Party Offer - If the Licensee does not accept the Third Party Offer within the Third Party Notice Period, the Licensor shall be entitled to sell the Subject Trade-Marks to the Third Party Offeree in accordance with the terms of the Third Party Offer.

(e) Re-application of Right of Last Refusal - If the Licensor does not sell the Subject Trade-Marks pursuant to the Third Party Offer within the 60 day period following the expiry of the Third Party Notice Period, then the provisions of this section 6.1 shall once again apply and so on from time to time.




(f) Closing Mechanics - Any transaction for the purchase and sale of the Subject Trade-Marks by the Licensee pursuant to subsection 6.1(c), shall be governed by the following: (i) the purchase and sale of the Subject Trade-Marks shall be completed, in

accordance with the terms contained in the Third Party Offer, by: (A) the delivery by the Licensee to the Licensor of the purchase price for the

Subject Trade-Marks, and (B) the delivery by the Licensor to the Licensee of the instruments of transfer

necessary to effectively transfer to the Licensee the Subject Trade-Marks; (ii) the purchase and sale shall take place at the time determined by the Parties and at

the offices of the counsel for the Licensor.

(g) Default in Payment of Purchase Price - If the Licensee defaults in payment of the full purchase price for the Subject Trade-Marks to be sold by the Licensor pursuant to subsection 6.1(c), the Licensor, in addition to any other rights which it may have, may by notice given at any time thereafter to the Licensee terminate the agreement for the sale of the Subject Trade-Marks and shall be entitled to sell the Subject Trade-Marks in accordance with the terms of the Third Party Offer, provided such sale is completed within • days following the date of the Licensee's default in payment.

(h) Exceptions - Notwithstanding the other subsections of this section 6.1, the Licensor shall be permitted to:

(i) assign the Trade-Marks as security for the bona fide indebtedness of the Licensor to its arm's length lenders;

(ii) sell, transfer or assign the Trade-Marks as part of the sale of all or substantially all of the assets of the Consumer Products Division or Food Services Division of the Licensor; and

(iii) sell, transfer or assign the Trade-Marks to an Affiliate of the Licensor for the purposes of a bona fide corporate reorganization,

so long as such assignee (except the arm's length lenders) agrees to be bound by the terms of this agreement and maintains the License in favour of the Licensee on terms which are the same as those contained in this agreement.

ARTICLE VII TERMINATION

7.1 Termination.

(a) Upon the occurrence of any one or more of the following events (each such event being herein referred to as an "Event of Default"), the non-defaulting Party shall (so long as it has not


Saskatchewan: Bar Admission Program E - 97 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) itself failed to observe or perform a material term, covenant, condition or agreement contained herein so as to cause an Event of Default) have the sole right, upon notice in writing to the defaulting Party, to terminate the License:

(i) if one Party shall default in the payment to the other Party of any payment due to it under this agreement and such payment remains outstanding for period of thirty days after notice to that effect from the non-defaulting party to the defaulting party; or

(ii) if one Party fails to observe or perform any term or condition contained in this agreement and the failure continues for more than 30 days after notice to that effect from the non-defaulting Party to the defaulting Party.

(b) Licensor may terminate this License, upon notice to the Licensee, in the event the Licensee discontinues its business operations, makes an assignment for the benefit of its creditors, or becomes bankrupt or insolvent or an encumbrancer should take possession or a receiver or administrator should be appointed in respect of a substantial part of the assets of the Licensee or the Licensee should enter into or propose any composition or arrangement with its creditors generally.

(c) If the Licensee fails to use any one of the Trade-Marks pursuant to the License for a continuous period of two years or more, the Licensor may delete such Trade-Mark from Schedule "A" or "B", as the case may be, and this License shall terminate with respect to such Trade-Mark only.

(d) The Licensee shall have the right, upon 30 days notice in writing to the Licensor, to terminate the License. 7.2 Obligations Upon Termination.

(a) Upon termination of the License:

(i) each Party shall execute and deliver all documents reasonably required by the other Party to accomplish and evidence the termination of the License;

(ii) the Licensee shall immediately refrain from any and all use of the Trade-Marks and, at the cost and expense of the Party in default, if applicable, or otherwise at the expense of the Licensee, the Licensee shall discontinue the display of the Trade-Marks including, without limitation, the removal of the Trade-Marks from all signs, stationery and other such materials, and notification of the cessation of use of the Trade-Marks as necessary for recordal at the appropriate government offices;

(iii) the Licensee shall agree to the cancellation of its registration as a registered user and appoint the Licensor as its attorney to cancel the registration on its behalf when the License is terminated; and




(iv) neither Party shall be released from any obligations to pay a sum which may be owing to the other Party pursuant to this agreement, which sum shall immediately become due, nor shall termination release a Party from any obligation incurred by it pursuant to this agreement prior to such termination.

(b) Notwithstanding the termination of the License, the representations, warranties, terms and conditions contained in Articles III, VIII, IX and X shall remain in full force and effect.

ARTICLE VIII CONFIDENTIALITY

8.1 Confidentiality. Any and all information learned by either Party concerning the business or affairs of the other shall be treated as confidential both during the term of the License and after its termination. Any such information shall not be disclosed by a Party to any other Person without the express written consent of the other Party. 8.2 Exceptions. The confidentiality requirement described in section 8.1 shall not apply to information which: (a) becomes generally available to the public other than as a result of a disclosure by a Party or its representatives in violation of this agreement; (b) was available to a Party on a non-confidential basis prior to its disclosure by the other Party or its representatives; (c) becomes available to a Party on a non-confidential basis from a source other than the other Party or its representatives provided that such source is not bound by a confidentiality agreement with the other Party or a duty of confidentiality to or in respect of the other Party; or (d) the Party is required by law to disclose, provided that the Party first notifies the other Party that it believes it is required to disclose such information and it allows the other Party a reasonable period of time to contest the disclosure of such information.

ARTICLE IX INDEMNIFICATION

9.1 General Indemnity. The Licensor hereby covenants and agrees with the Licensee and the Licensee hereby covenants and agrees with the Licensor (the Party so covenanting and agreeing to indemnify another Party being hereinafter in this section 9.1 referred to as the "Indemnifying Party" and the Party so to be indemnified being hereinafter called the "Indemnified Party") to indemnify and save harmless the Indemnified Party, effective as and from the date hereof, from and against any Claims which may be made or brought against the Indemnified Party and/or which it may suffer or incur as a result of, in respect of, or arising out of, any non-fulfillment of any covenant or agreement on the part of the Indemnifying Party under this agreement or in any


Saskatchewan: Bar Admission Program E - 99 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) certificate, agreement or other document furnished by the Indemnifying Party pursuant hereto, or any incorrectness in or breach of representation or warranty of the Indemnifying Party contained under this agreement or in any certificate, agreement or other document furnished by the Indemnifying Party pursuant hereto. 9.2 Specific Indemnity. Notwithstanding section 9.1 and without limiting the generality of section 9.1, the Licensor or Licensee, as applicable, shall indemnify and save harmless the other Party from and against the following:

(a) all Claims which may be made or brought against the Licensee and/or which it may suffer or incur by reason that the License, or any dealing in or the use of the Trade-Marks in accordance with the terms of this License violates, breaches or infringes upon the rights of any other Person;

(b) all Claims which may be made or brought against the Licensor and/or which it may suffer or incur by reason that any dealing in or the use of the Trade-Marks by the Licensee in breach of the terms of this License violates the right of any other Person;

(c) all Claims which may be made or brought against the Licensor and/or which it may suffer or incur by reason of the negligent manufacture of or defect in the Registered Wares and Services of the Licensee; and

(d) all Claims which may be made or brought against the Licensor and/or which it may suffer or incur as a result of, in respect of, or arising out of, any non-fulfillment of any covenant or agreement by, or any incorrectness in or breach of any representation or warranty of, the Licensee pursuant to any agreement entered into by the Licensee with a person (other than the Licensor or any Affiliate or Associate thereof) in connection with the Trade-Marks.

ARTICLE X GENERAL

10.1 Relationship of the Parties. Nothing herein contained shall constitute either Party the agent, partner or joint venturer of the other. Neither Party shall have any right to bind the other, to transact any business or make any promises or representations on behalf of the other. 10.2 Assignment. (a) Subject to subsections 10.2(b), (c) and (d) neither this agreement nor any rights or obligations hereunder shall be assignable by either Party without the prior written consent of the other Party hereto which consent shall not be unreasonably withheld. This agreement shall enure to the benefit of and be binding upon each Party and their respective successors and permitted assigns.

(b) This agreement and the rights and obligations of the Licensee hereunder are assignable to any one or more of the following persons without the consent of the Licensor:




(i) the present partners who comprise the Licensee, (ii) the Affiliates of such present partners, and (iii) any joint venture or partnership comprised of any two or more of such present

partners and their respective Affiliates,

provided that the persons become subject to all of the obligations of the Licensee under this agreement by means of an agreement in writing delivered to the Licensor and provided further that the Licensee will continue to be bound by the terms of this agreement.

(c) This agreement and the rights and obligations of the Licensee and the Licensor hereunder are assignable (without the consent of the other Party) to arm's length lenders as security for the bona fide indebtedness of the Licensee or Licensor, as the case may be.

(d) This agreement and the rights and obligations of the Licensor hereunder are assignable, without the consent of the Licensee, to an Affiliate of the Licensor provided that the Affiliate becomes subject to all of the obligations of the Licensor under this agreement by means of an agreement in writing delivered to the Licensee and provided further that the Licensor will continue to be bound by the terms of this agreement. 10.3 Time of Essence. Time shall be of the essence in all respects of this agreement. 10.4 Notices. Any notice or other communication which is required or permitted to be given or made by one Party to the other hereunder shall in writing and shall be either:

(a) personally delivered to such Party, or (b) sent by telex, facsimile or similar method of recorded communication, charges prepaid.


(i) to the Licensor at: • Attention: • Facsimile No.: •

(ii) with a copy to: • Attention: • Facsimile No.: •

(iii) to the Licensee at: • Attention: • Facsimile No.: •


Saskatchewan: Bar Admission Program E - 101 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) or at such other address as any Party may from time to time advise the other by notice in writing. Any notice given by personal delivery shall be deemed to be received on the date of delivery. Any notice sent by telex, facsimile or similar method of recorded communication shall be deemed to have been received on the next Business Day following the date of its transmission. 10.5 Amendment and Waiver. No supplement, modification, amendment or waiver of this agreement shall be binding unless executed in writing by the Party to be bound. No waiver of any of the provisions of this agreement shall constitute a waiver of any other provision (whether or not similar) nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 10.6 Further Assurances. The Parties shall, with reasonable diligence, do all things and provide all reasonable assurances as may be required to complete the transactions contemplated by this agreement, and each Party shall provide such further documents or instruments required by any other Party as may be reasonably necessary or desirable to give effect to this agreement and carry out its provisions. 10.7 Counterparts. This agreement may be executed by the Parties in one or more counterparts, each of which when so executed and delivered shall be an original and such counterparts shall together constitute one and the same instrument. 10.8 Severability. Any provision of this agreement which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof and any such invalid or unenforceable provision shall be deemed to be severed. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. IN WITNESS WHEREOF the Parties have duly executed this agreement as of the date first above written.

•

Per: ________________________

Per: ________________________

•

Per: ________________________

Per: ________________________




SCHEDULE "A"

Non-Exclusive Rights

Trade-Marks Registration/Application No. Wares Territory



SCHEDULE "B"

Exclusive Rights

Trade-Marks Registration/Application No. Wares Territory




Schedule "C"

APPLICATION FOR REGISTRATION OF A REGISTERED USER

TO The Registrar of Trade-Marks Ottawa-Hull, Canada

The undersigned, •, the owner of the trade marks identified in the attached Schedule • (hereinafter the "Trade-Marks"), and the full post office address of whose principal office or place of business is in •, hereby apply for the registration or the latter as a registered user of the Trade-Marks in respect of the wares in association with which the same are or become registered as provided in the Agreement, subject to the maintenance of the relationship and the observance of the conditions and restrictions set out below

The relationship between the said owner of the Trade-Marks and the proposed registered user and any conditions or restrictions with respect to the permitted use are as follows: 1. The proposed registered user shall use the Trade-Marks on the terms and conditions agreed

upon between the owner or the Trade-Marks and the proposed registered user as set out in a licensor agreement dated •, or in any subsequent amendment thereto (the "Agreement").

2. The wares sold by the proposed registered user in association with the Trade-Marks shall be of a quality approved by the owner and set out in the Agreement.

3. The proposed registered user shall permit the trade mark owner and its authorized representative to approve and inspect the wares on its business premises in accordance with the terms of the Agreement.

4. The proposed permitted user is without definite period of time, but may terminate in accordance with the terms of the Agreement. The proposed registered user hereby consents to the cancellation of its registration as a registered user and appoints the owner of the Trade-Marks as its attorney to cancel this registration on its behalf in the event the permitted use is terminated.

The proposed registered user appoints •, whose full post office address in Canada is •, as its agents and as the firm to whom any notice in respect of the application or registration may be sent, and upon whom service of any proceedings in respect of the application or registration may be given or served with the same effect as if they had been given to or served upon the applicant or registrant.

EXECUTED at • this • day of •, 200•.

•

Per: ________________________

Per: ________________________

•

Per: ________________________

Per: ________________________



EXHIBIT 7.1(d)

OPINION OF COUNSEL FOR THE VENDOR

[Letterhead of •]

•, 200• •

- and - • Dear Sirs:

Re: Sale of the Business and the • Business

We have acted as counsel for • (the "Vendor") in connection with the purchase and sale agreement dated as of • (the "Purchase Agreement"), between the Vendor and • (the "Purchaser"). This opinion is being delivered pursuant to subsection 7.1(d) of the Purchase Agreement. All capitalized terms used and not otherwise defined herein and defined in the Purchase Agreement shall have the respective meanings ascribed thereto in the Purchase Agreement. For the purposes of our opinions expressed herein, we have examined originals or copies, certified or otherwise identified to our satisfaction, as the case may be, of the following:

(a) the Purchase Agreement, the Ancillary Agreements and the Conveyance Documents (together, the "Agreements");

(b) the articles and bylaws of the Vendor;

(c) the shareholder agreement dated •, between •, • and • and the unanimous shareholder agreement dated •, between • and •;

(d) certificate of compliance dated •, issued by the Director appointed under the Canada Business Corporations Act (the "Director") in respect of the Vendor;

(e) a resolution passed by the directors and shareholders of the Vendor, authorizing, among other things, the transactions contemplated by the Agreements and the Purchase Agreement; and

(f) a certificate of an officer of the Vendor of even date, as to certain matters of fact relating to the Vendor, a copy of which is annexed hereto as Schedule "A".



Appendix E – Purchase and Sale Agreement (Long Form) We have also examined originals or copies, certified or otherwise identified to our satisfaction, as the case may be, of such public records, other documents and considered such questions of fact and law as we have deemed appropriate and necessary as a basis for our opinions expressed herein. Our opinions expressed herein are subject to the following qualifications, assumptions and reservations:

(a) We have assumed, without inquiry, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as certified, conformed or photostatic copies or facsimiles.

(b) We have assumed, without inquiry, that statements made by government officials in certificates provided by them are true and correct as at the time at which they were made and continue to be true and correct from such time to the time of delivery of this opinion.

(c) We have assumed, without inquiry, that the Purchaser has the power, authority and capacity to enter into the Agreements, has duly authorized, executed and delivered them, and that the Agreements constitute legal, valid and binding obligations of the Purchaser, enforceable against it in accordance with the terms thereof.

(d) The enforceability of the Agreements is subject to applicable bankruptcy, insolvency and other laws and relevant jurisprudence affecting creditors' rights generally.

(e) We express no opinion as to the availability of any particular remedy to enforce the Agreements, and without limiting the generality of the foregoing, the enforceability of the Agreements may be subject to or affected by general principles of equity and we express no opinion as to any particular remedy that may be granted, imposed or rendered by a court of equity, including remedies such as specific performance and injunction.

(f) We express no opinion as to the: (i) right, title or interest of the Vendor in and to its Purchased Assets; (ii) enforceability of the indemnity provisions of the Indemnity Agreement;

and (iii) enforceability of the Non-Competition Agreement.

(g) This opinion is rendered only as to the laws of the Province of • with respect to the Vendor and the laws of • applicable therein.


Saskatchewan: Bar Admission Program E - 107 Corporate Commercial - Purchase and Sale of a Business Appendix E – Purchase and Sale Agreement (Long Form) Based on and relying upon the foregoing, and subject to the qualifications, assumptions and reservations herein contained, we are of the opinion that: 1. The Vendor is a corporation duly amalgamated and validly subsisting under the laws of •. 2. The Vendor has all necessary corporate power, authority and capacity to own the

Purchased Assets, to carry on the Business and to enter into the Agreements and perform its obligations thereunder.

3. The execution, delivery and performance by the Vendor of the Agreements and the

consummation of the transactions contemplated thereunder have been duly authorized by all necessary action, corporate or otherwise and the Agreements have been duly executed and delivered by the Vendor and constitutes legal, valid and binding obligations of the Vendor enforceable against it in accordance with the terms thereof.

4. No governmental or regulatory authorization, approval, order, consent or filing is

required (other than Competition Act Approval and Investment Canada Approval and authorizations, approvals, orders, consents or filings in respect of the transfer or issuance of Permits) on the part of the Vendor, in connection with the execution, delivery and performance of the Agreements by the Vendor.

5. The execution, delivery and performance by the Vendor of the Agreements and the

consummation of the transactions contemplated thereunder, do not and will not result in a breach of, or conflict with any term or provision or condition of, or constitute a default under, the articles or bylaws of the Vendor.

This opinion letter is intended solely for the use of the parties to whom it is addressed and is being delivered in connection with the transactions described herein and may not be relied upon by any other person or in connection with any other transaction, nor quoted from or referred to in any other documents, without our prior written consent. Yours truly,







EXHIBIT 7.1(e)

OPINION OF COUNSEL FOR THE PURCHASER

[Letterhead of •] •, 200• •

Dear Sirs:

Re: Purchase of • (the "Business")

We have acted as counsel for • (the "Purchaser") in connection with the purchase and sale agreement dated as of • (the "Purchase Agreement") between the Purchaser and • (the "Vendor"). This opinion is being delivered pursuant to subsection • of the Purchase Agreement. All capitalized terms used and not otherwise defined herein and defined in the Purchase Agreement shall have the respective meanings ascribed thereto in the Purchase Agreement. For the purposes of our opinions expressed herein, we have examined originals or copies, certified or otherwise identified to our satisfaction, as the case may be, of the following:

(a) (i) the Purchase Agreement; (ii) the Ancillary Agreements and the Conveyance Documents, (together, the "Agreements");

(b) the articles and bylaws of the Purchaser;

(c) the unanimous shareholder agreement dated as of • between • and •;

(d) a certificate of compliance dated • issued by the Director appointed under the Canada Business Corporations Act in respect of the Purchaser;

(e) a resolution passed by the directors of the Purchaser on • authorizing, among other things, the execution and delivery by •, as general partner for and on behalf of the Purchaser, of the Agreements; and

(f) a certificate of an officer of • of even date, as to certain matters of fact relating to •, a copy of which is annexed hereto as Schedule A.

We have also examined originals or copies, certified or otherwise identified to our satisfaction, as the case may be, of such other documents and considered such questions of fact and law as we have deemed appropriate and necessary as a basis for our opinions expressed herein.




Our opinions expressed herein are subject to the following qualifications, assumptions and reservations:

(a) We have assumed, without inquiry, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as certified, conformed or photostatic copies or facsimiles.

(b) We have assumed, without inquiry, that statements made by government officials in certificates provided by them are true and correct as at the time at which they were made and continue to be true and correct from such time to the time of delivery of this opinion.

(c) We have assumed, without inquiry, that the Vendor has the power, authority and capacity to enter into the Agreements (to which it is a party), has duly authorized, executed and delivered them, and that the Agreements (to which it is a party) constitute legal, valid and binding obligations of each of them, enforceable against each of them in accordance with the terms thereof.

(d) The enforceability of the Agreements is subject to applicable bankruptcy, insolvency and other laws of general application limiting the enforcement of creditor's rights generally and to the fact that equitable remedies, including specific performance, are discretionary and may not be ordered in respect of certain defaults.

(e) We express no opinion as to the: (i) enforceability of the indemnity provisions of the Indemnity Agreement; and (ii) enforceability of the Non-Competition Agreement. Based on and relying upon the foregoing, and subject to the qualifications, assumptions and reservations herein contained, we are of the opinion that:

1. • is a corporation duly incorporated and validly subsisting under the laws of •.

2. The Purchaser is a limited partnership duly formed and validly existing under the laws of the Province of • and is duly qualified as an • to carry on business in •.

3. The Purchaser has all necessary power, authority and capacity to enter into the Agreements and perform its obligations thereunder.

4. The execution, delivery and performance by the Purchaser of the Agreements and the consummation of the transactions contemplated thereunder have been duly authorized by all necessary action by the Purchaser and the Agreements have been duly executed and delivered by the Purchaser and constitute legal, valid and binding obligations of the Purchaser enforceable against the it in accordance with the terms thereof.



5. No governmental or regulatory authorization, approval, order, consent or filing is required (other than Competition Act Approval and Investment Canada Approval and authorizations, approvals, orders, consents or filings in respect of the transfer or issuance of any authorizations, registrations, permits, approvals, grants, licenses, quotas, consents, commitments, rights or privileges required by the Purchaser to carry on the Business) on the part of the Purchaser and •, as general partner for and on behalf of the Purchaser, in connection with the execution, delivery and performance of the Agreements by the Purchaser.

6. The execution, delivery and performance by the Purchaser of the Agreements and the consummation of the transactions contemplated thereunder, do not and will not result in a breach of, or conflict with any term or provision or condition of, or constitute a default under, the articles or bylaws of the Purchaser.

This opinion letter is intended solely for the use of the party to whom it is addressed and is being delivered in connection with the transactions described herein and may not be relied upon by any other person or in connection with any other transaction, nor quoted from or referred to in any other documents, without our prior written consent. Yours truly,






Saskatchewan: Bar Admission Program F - 1 Corporate Commercial - Purchase and Sale of a Business Appendix F – Asset Purchase Agreement (Short Form)

ASSET PURCHASE AGREEMENT THIS AGREEMENT made the day of , BETWEEN:

ABC CO. LTD., a corporation incorporated underthe laws of Saskatchewan, having its registered office at , Saskatchewan, (hereinafter called the "Vendor")

- and -

XYZ LTD., a corporation incorporated under the laws of Canada, having its head office at , Saskatchewan (hereinafter called the "Purchaser"),

- and -

and , both of , Saskatchewan, (hereinafter collectively called the "Covenantors"), WHEREAS:

A. The Vendor carries on the business of selling furniture at retail from stores situated in the cities of Regina, Saskatoon and Prince Albert (the "Vendor's Business");

B. The Vendor has agreed to sell, and the Purchaser has agreed to purchase, subject to certain exceptions hereinafter enumerated, all the property, assets and undertaking of the Vendor's Business, as a going concern, on the terms and subject to the conditions hereinafter provided;

C. The Covenantors are principal shareholders of the Vendor, and have become party to this Agreement for the purpose of jointly and severally covenanting with the Vendor to indemnify the Purchaser in the manner hereinafter provided.

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises and the covenants, agreements, representations, warranties and payments herein contained, the parties hereto covenant and agree as follows:


F - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix F – Asset Purchase Agreement (Short Form) 1. PURCHASE AND SALE OF ASSETS

1.01 Description of Assets. Upon the terms and subject to the conditions hereof, the Vendor agrees to sell, assign and transfer to the Purchaser, and the Purchaser agrees to purchase from the Vendor, as a going concern at the time of closing, the undertaking and all the property and assets of the Vendor's Business of every kind and description wheresoever situate (except as provided in Section 1.02), including, without limiting the foregoing:

(a) the fee simple lands (collectively the "Lands") described in the attached Schedule of Lands;

(b) the buildings and improvements (collectively, the "Buildings and Improvements") described in the attached Schedule of Buildings and Improvements;

(c) the leasehold property, interests therein and the improvements, appurtenances and fixtures thereon (collectively the "Leasehold Property") described in the attached Schedule of Leasehold Property;

(d) the machinery, equipment, trucks, cars and other vehicles (collectively the "Machinery, Equipment and Vehicles") described in the attached Schedule of Machinery, Equipment and Vehicles;

(e) all inventories of the Vendors Business (collectively the "Inventories");

(f) the accounts receivable, trade accounts, notes receivable and other debts owing to the Vendor, and the full benefit of all securities for such accounts, notes or debts (collectively the "Receivables");

(g) the benefit of all unfilled orders received by the Vendor and forward commitments to purchase made by the Vendor in connection with the Vendor's Business, and all other contracts, engagements or commitments, whether written or oral, to which the Vendor is entitled in connection with the Vendor's Business, and in particular all right, title and interest of the Vendor in, to and under the material agreements and contracts (collectively the "Material Contracts") described in the attached Schedule of Material Contracts;

(h) all right, title and interest of the Vendor to all registered and unregistered trade marks, trade or brand names, copyrights, designs, restrictive covenants and other industrial or intellectual property used in connection with the Vendor's Business (collectively the "Intangible Property"), including the Intangible property described in the attached Schedule of Intangible Property;

(i) all prepaid expenses of the Vendor's Business (collectively the "Prepaid Expenses");


Saskatchewan: Bar Admission Program F - 3 Corporate Commercial - Purchase and Sale of a Business Appendix F – Asset Purchase Agreement (Short Form) (j) the goodwill of the Vendor's Business and the right of the Purchaser to represent

itself as carrying on the Vendor's Business in continuation of and in succession to the Vendor and the right to use the name "ABC Co." or any variation thereof as part of or in connection with the Vendor's Business (collectively the "Goodwill").

all of which, but excluding the Excluded Assets defined in Section 1.02, are hereinafter collectively called the "Assets". 1.02 Exclusions. There shall be specifically excluded from the purchase and sale herein, and from the Assets hereinbefore described, the following: (a) cash on hand or on deposit; (b) a guarantee of the indebtedness of • dated the • day of •, 200•; (c) •

(collectively the "Excluded Assets"). 2. PURCHASE PRICE AND ALLOCATION

2.01 The purchase price payable by the Purchaser to the Vendor for the Assets shall be the sum of $•, plus the net book value of the Receivables, Inventories and Prepaids determined pursuant to Section 6.01 and shall be allocated as follows:

(a) to the Lands, the sum of $•;

(b) to the Buildings and Improvements, the sum of $•;

(c) to the Leasehold Property and the Machinery, Equipment and Vehicles, the sum of $•;

(d) to the Inventories, the Receivables and the Prepaids, the net book value thereof as at the time of closing determined in accordance with Section 6.01 hereof;

(e) to the Intangible Property, and the Material Contracts, the sum of $•;

(f) to the Goodwill and any other of the Assets purchased hereunder, the sum of $ •; 3. PAYMENT OF THE PURCHASE PRICE

3.01 The purchase price shall be paid and satisfied as follows: (a) as to an amount equal to the Assumed Indebtedness, by the assumption and

payment of such Assumed Indebtedness; and (b) as to the balance of the purchase price, by certified cheque or bankers draft

payable at par in Regina to or to the order of the Vendor and delivered at the time of closing.



Appendix F – Asset Purchase Agreement (Short Form) 4. ASSUMPTION OF LIABILITIES

4.01 Assumed Indebtedness. On and after the time of closing the Purchaser will assume and pay: (a) the amount of current liabilities of the Vendor incurred in respect of periods prior

to the time of closing and specified at the time of closing by the Vendor in writing setting forth the name and address of each creditor and the amount to be assumed;

(b) the balances owing as of the time of closing under the mortgages, conditional sales contracts and other instruments of indebtedness described in the attached Schedule of Assumed Indebtedness;

(collectively the "Assumed Indebtedness") and the Purchaser will indemnify and save the Vendor harmless of and from all claims, demands, suits and actions in respect thereof. 4.02 Other Obligations. On and after the time of closing the Purchaser will assume, perform and discharge all obligations arising under the Material Contracts described in the attached Schedule of Material Contracts and all other contracts, commitments or engagements which are entered into by the Vendor between the date hereof and the time of closing in the ordinary course of the Vendor's Business and which are not prohibited by this Agreement or are consented to in writing by the Purchaser, and the Purchaser will indemnify and save the Vendor harmless of and from all claims, demands, suits and actions thereunder in respect of events after the time of closing. 4.03 Release of Vendor. At or before the time of closing the Purchaser shall execute and deliver all such covenants and assurances with respect to the Assumed Indebtedness and with respect to the obligations assumed under Section 4.02 as may reasonably be required as a condition to the release of the Vendor from any liability in respect thereof. 5. REPRESENTATIONS AND WARRANTIES OF THE VENDOR The Vendor represents and warrants to the Purchaser as follows, with the intent that the Purchaser shall rely thereon in entering into this Agreement, and in concluding the purchase and sale contemplated herein. 5.01 Status of Vendor. The Vendor is a corporation duly incorporated, validly existing and in good standing under the laws of Saskatchewan, and has the power and capacity to own and dispose of the Assets and to carry on the Vendor's Business as now being conducted by it, and to enter into this Agreement and carry out its terms to the full extent. 5.02 Authority to Sell. The execution and delivery of this Agreement and the completion of the transaction contemplated hereby has been duly and validly authorized by all necessary corporate action on the part of the Vendor, and this Agreement constitutes a legal, valid and binding obligation of the Vendor enforceable against the Vendor in accordance with its terms except as may be limited by laws of general application affecting the rights of creditors.


Saskatchewan: Bar Admission Program F - 5 Corporate Commercial - Purchase and Sale of a Business Appendix F – Asset Purchase Agreement (Short Form) 5.03 Sale Will Not Cause Default. Neither the execution and delivery of this Agreement nor the completion of the purchase and sale contemplated herein will: (a) violate any of the terms and provisions of the constating documents or bylaws or

articles of the Vendor, or any order, decree, statute, bylaw, regulation, covenant or restriction applicable to the Vendor or any of the Assets;

(b) give any person the right to terminate, cancel or remove any of the Assets, save to the extent that the consent of third parties is required to assign the Leasehold Property and the Material Contracts; or

(c) result in any fees, duties, taxes, assessments or other amounts relating to any of the Assets becoming due or payable other than the Goods and Services Tax ("GST") pursuant to the Excise Tax Act of Canada which may be payable by the Purchaser in connection with the purchase and sale of the Assets other than as a result of any default on the part of the Vendor.

5.04 Assets. The Vendor owns and possesses and has a good and marketable title to the Assets free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances or other claims whatsoever, except as described in the attached Schedule of Material Contracts. 5.05 Books and Records. The books and records of the Vendor fairly and correctly set out and disclose in all material respects, in accordance with generally accepted accounting principles, the financial position of the Vendor and all material financial transactions of the Vendor relating to the Vendor's Business have been accurately recorded in such books and records. 5.06 Financial Statements. The audited financial statements (collectively, the "Statements") of the Vendor for the fiscal year ended •, copies of which are attached as Schedule "A" - Audited Financial Statements, have been prepared in accordance with generally accepted accounting principles in Canada applied on a basis consistent with those of previous fiscal years and present fairly and correctly the assets, liabilities (whether accrued, absolute, contingent or otherwise) and the financial condition of the Vendor as of the date of the Statements, and the sales and earnings of the operations of the Vendor during the period covered by such Statements. 5.07 Material Change. Since the date of the balance sheet included in the Statements there has not been: (a) any material change in the financial condition of the Vendor's Business, its

liabilities or the Assets other than changes in the ordinary course of business, none of which has been materially adverse;

(b) any damage, destruction, loss or other event (whether or not covered by insurance) materially and adversely affecting the Assets or the Vendor's Business,



Appendix F – Asset Purchase Agreement (Short Form)

(c) any material increase in the compensation payable or to become payable by the Vendor to any of its officers, employees or agents or any bonus, payment or arrangement made to or with any of them save and except increases agreed to in writing by the Purchaser.

5.08 Litigation. There is no litigation or administrative or governmental proceeding or inquiry pending, or to the knowledge of the Vendor, threatened against or relating to the Vendor, the Vendor's Business or any of the Assets, nor does the Vendor know of or have reasonable grounds for believing that there is any basis for any such action, proceeding or inquiry. 5.09 Conformity with Laws. All governmental licenses and permits required for the conduct in the ordinary course of the operations of the Vendor's Business and the uses to which the Assets have been put, have been obtained and are in good standing and such conduct and uses are not in breach of any statute, bylaw, regulation, covenant, restriction, plan or permit. 5.10 Forward Commitments. All outstanding forward commitments by or on behalf of the Vendor for the purchase or sale of the Inventories have been made in accordance with established price lists of the Vendor or its suppliers or, if otherwise, then in accordance with the Vendor's normal business custom in varying therefrom. 5.11 Terms of Employment. The Vendor is not a party to any collective agreement relating to the Vendor's Business with any labour union or other association of employees, no part of the Vendor's Business has been certified as a unit appropriate for collective bargaining and there is no employee who cannot be dismissed on not more than one year's notice without further liability. 5.12 Material Contracts. The attached Schedule of Material Contracts contains a true and correct listing of each written or oral contract of the following types to be acquired or assumed by the Purchaser:

(a) contracts or commitments out of the ordinary course of business;

(b) contracts or commitments involving an obligation to pay in the aggregate $1,000 or more or of a duration greater than one year;

(c) contracts or commitments affecting ownership of, or title to, or any interest in real estate or in personal property;

(d) contracts or commitments in respect of the Intangible Property;

(e) except as required by statute or regulation, contracts or commitments in respect of bonuses, incentive compensation, pensions, group insurance or employee welfare plans, all of which are fully funded as determined by an independent and reputable firm of actuaries employed by the Vendor;



(f) employment contracts or commitments other than unwritten employment contracts of indefinite duration entered into in the ordinary course of the Vendor's Business.

5.13 No Defaults. Except as otherwise expressly disclosed herein or in any Schedule attached hereto there has not been any default in any obligation to be performed under any Material Contract or Assumed Indebtedness, each of which is in good standing and in full force and effect, unamended, except as set forth in the attached Schedule of Material Contracts or in the attached Schedule of Assumed Indebtedness. 5.14 Assets Comprised in the Vendor's Business. The Assets and Excluded Assets constitute substantially all of the assets currently being utilized in the Vendor's Business and that have been so utilized since the end of the fiscal year reported on in the Statements, and no other asset of any nature would be required for the Purchaser to carry on the Vendor's Business in the ordinary course in the manner currently carried on by the Vendor. 5.15 Taxes. The Vendor has, in a due and timely manner, filed all reports and returns respecting taxes, duties, royalties and other fees, charges and levies of every nature and kind, and all information and data in connection therewith required to be filed by it with any taxing or regulatory authority to whose jurisdiction the Vendor is subject in connection with the Vendor's Business, and it has duly paid or remitted all such duties, taxes, royalties and other fees, charges and levies and any interest, penalties and fines in connection therewith, properly due and payable, and has paid, remitted or provided for all of same in connection with all known or probable assessments and reassessments, and no other such taxes, duties, royalties or other fees, charges or levies nor any interest, penalties and fines have been claimed by any government or department, commission, board, agency or other instrumentality thereof or are known to the Vendor to be due and owing or by reason of the transactions herein contemplated will become due and owing by the Purchaser after the time of closing in connection with the Vendor's Business or the ownership or operation thereof or the Assets (except such PST and GST as may be payable by the Purchaser other than as a result of any default by the Vendor). The Vendor has withheld all amounts required to be withheld by it under the Income Tax Act of Canada for Employment Insurance and for the Canada Pension Plan and any other amounts required by law to be withheld from any payments made to any of its officers, directors and employees, and has paid the same to the proper taxing authority or receiving offices. 5.16 Environmental Compliance. No hazardous materials, wastes, pollutants or similar substances, as those terms are defined by current applicable environmental laws and regulations ("hazardous materials"), and no other materials intended for use or generated in the Vendor's Business have been or are used, stored, treated or otherwise disposed of in violation of current applicable environmental laws and regulations. All hazardous materials removed or emitted from properties comprised in the Assets were and are documented, transported and disposed of in compliance with all current applicable environmental laws and regulations. No materials, including, without limitation, effluents, leachates, emissions or hazardous materials, generated or emitted from the Lands or the Leasehold Property have caused or will cause, in whole or in part,



Appendix F – Asset Purchase Agreement (Short Form) any environmental contamination or injury to any air, soil, subsoil, ground water, surface water, property or persons, including adjacent property or property through or to which such materials were shipped. Other than as disclosed in Schedule "B", the Lands, Buildings and Improvements and Leasehold Property are free of environmental contamination and have been and are operated and used by the Vendor in compliance with all applicable environmental laws and regulations. There have been no orders issued, investigations conducted or other proceedings taken or threatened pursuant to any environmental assessment, management and protection laws or regulations in effect and applicable to the Vendor's Business or the Assets 5.17 Accuracy of Representations. No certificate furnished by or on behalf of the Vendor to the Purchaser at the time of closing in respect of the representations, warranties or covenants of the Vendor herein will contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading. 5.18 Canadian Resident. The Vendor is a resident in Canada within the meaning of the Income Tax Act. 5.19 Registrant. The Vendor is a registrant within the meaning of the Excise Tax Act. 6. COVENANTS OF THE VENDOR

6.01 Determination of Net Book Values. The Vendor shall cause its auditors, Messrs. •, chartered accountants, of •, Saskatchewan, to determine as of the day immediately preceding the time of closing, the net book value of the Receivables, Inventories and Prepaids in accordance with the accounting principles set forth in the attached Schedule of Accounting Principles, and furnish to each of the Vendor and Purchaser a certificate of such determination in the form described in such Schedule. 6.02 Conduct of the Business. Until the time of closing, the Vendor shall conduct the Vendor's Business diligently and only in the ordinary course and will use its best efforts to preserve the Assets intact, to keep available to the Purchaser its present employees and to preserve for the Purchaser its relationship with its suppliers, customers and others having business relations with it. 6.03 Change of Name. The Vendor shall, within 30 days after the time of closing, change its name to a name that does not include any of the words "ABC". 6.04 Access by Purchaser. The Vendor will give to the Purchaser and Purchaser's counsel, accountants and other representatives full access during normal business hours throughout the period prior to the time of closing, to all of the properties, books, contracts, commitments and records of the Vendor relating to the Vendor's Business and the Assets, and will furnish to the Purchaser during such period all such information as the Purchaser may reasonably request.


Saskatchewan: Bar Admission Program F - 9 Corporate Commercial - Purchase and Sale of a Business Appendix F – Asset Purchase Agreement (Short Form) 6.05 Insurance. From the date hereof until the time of closing the Vendor will maintain in full force and effect the policies of insurance more particularly described in the attached Schedule of Insurance hereto in respect of the Assets and shall forthwith cause the Purchaser to be added as a named insured under all such policies and to remain as a named insured until the time of closing. 6.06 Procure Consents. The Vendor shall diligently take all reasonable steps required to obtain, prior to the time of closing, all consents or other authorizations required to the assignment of the Leasehold Properties, the Material Contracts, and any other of the Assets for which a consent or other authorization is required. 6.07 Covenant of Indemnity. The Vendor and the Covenantors will jointly and severally indemnify and hold harmless the Purchaser from and against: (a) any and all liabilities, whether accrued, absolute, contingent or otherwise, existing

at the time of closing and which are not agreed to be assumed by the Purchaser pursuant to this Agreement;

(b) any and all damage or deficiencies resulting from any misrepresentation, breach of warranty or non-fulfillment of any covenant on the part of the Vendor under this Agreement or from any misrepresentation in or omission from any certificate or other instrument furnished or to be furnished to the Purchaser hereunder; and

(c) any and all actions, suits, proceedings, demands, assessments, judgments, costs and legal and other expenses incident to any of the foregoing.

6.08 Termination of Employees. The Vendor will at the time of closing terminate the employment of all employees to whom the Purchaser has made an offer of employment pursuant to Section 8.01, as well as those specifically named in Section 8.01 as employees to whom the Purchaser is not obliged to offer employment, and will indemnify and save harmless the Purchaser from and against all claims by any employee of the Vendor for wages, salaries, bonuses, pension or other benefits, severance pay, notice or pay in lieu of notice and holiday pay in respect of any period prior to the time of closing. 7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to the Vendor as follows, with the intent that the Vendor shall rely thereon in entering into this Agreement, and in concluding the purchase and sale contemplated herein. 7.01 Status of Purchaser. The Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of Canada, has the power and capacity to enter into this Agreement and carry out its terms, and at the time of closing will be duly registered as an extra-provincial corporation under the Business Corporations Act of Saskatchewan.



Appendix F – Asset Purchase Agreement (Short Form) 7.02 Authority to Purchase. The execution and delivery of this Agreement and the completion of the transactions contemplated hereby has been duly and validly authorized by all necessary corporate action on the part of the Purchaser, and this Agreement constitutes a legal, valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms except as limited by laws of general application affecting the rights of creditors. 7.03 Registrant. The Purchaser is a registrant within the meaning of the Excise Tax Act. 8. COVENANTS OF THE PURCHASER

8.01 Offer Employment. The Purchaser covenants with the Vendor to offer employment at the time of closing on terms and conditions then in effect to all employees of the Vendor then employed in connection with the Vendor's Business, save and except •. 8.02 Transfer Fees. The Purchaser shall be liable for and shall duly pay all transfer, filing and registration fees and charges and all GST (if any) properly payable upon and in connection with the sale and transfer of the Assets by the Vendor to the Purchaser. 8.03 Application under the Investment Canada Act. The Purchaser shall forthwith prepare and file all necessary notices and applications under and in accordance with the Investment Canada Act to obtain approval for the purchase of the Assets and shall diligently comply with all requirements thereunder for the purpose of obtaining such approval, provided that nothing herein contained shall require the Purchaser to enter into any covenant or undertaking that, in the opinion of the Purchaser, would be materially adverse to it or to its conduct of the Vendor's Business. 8.04 Consents. The Purchaser will at the request of the Vendor execute and deliver such applications for consent or other authorization and such assumption agreements, and provide such information as may be necessary to obtain the consents or other authorizations referred to in Section 6.06 and will assist and co-operate with the Vendor in obtaining the same. 9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

9.01 Vendor's Representations, Warranties and Covenants. All statements contained in any certificate or other instrument delivered by or on behalf of the Vendor pursuant hereto or in connection with the transaction contemplated hereby shall be deemed to be representations and warranties by the Vendor hereunder. All representations, warranties, covenants and agreements made by the Vendor in this Agreement or pursuant hereto shall, unless otherwise expressly stated, survive the time of closing and any investigation at any time made by or on behalf of the Purchaser and, subject to Section 9.02, shall continue in full force and effect for the benefit of the Purchaser.


Saskatchewan: Bar Admission Program F - 11 Corporate Commercial - Purchase and Sale of a Business Appendix F – Asset Purchase Agreement (Short Form) 9.02 Limitation on Vendor's Indemnity. No claim by the Purchaser under the covenant of indemnity contained in Section 6.07 or for damages or other relief in respect of breach of warranty or breach of covenant by the Vendor under this Agreement will be valid unless: (a) written notice of such claim is given by the Purchaser to the Vendor before the

expiration of thirty (30) months after the time of closing; and (b) the aggregate amount of all such claims exceeds $•. 9.03 Purchaser's Representations, Warranties and Covenants. All representations, warranties, covenants and agreements made by the Purchaser in this Agreement or pursuant hereto shall, unless otherwise expressly stated, survive the time of closing and any investigation at any time made by or on behalf of the Purchaser and shall continue in full force and effect for the benefit of the Vendor. 10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER

All obligations of the Purchaser under this Agreement are subject to the fulfillment at or prior to the time of closing of the conditions hereinafter enumerated. 10.01 Vendor's Representations and Warranties. The Vendor's representations and warranties contained in this Agreement and in any certificate or document delivered pursuant to the provisions hereof or in connection with the transactions contemplated hereby shall be true at and as of the time of closing as if such representations and warranties were made at and as of such time. 10.02 Vendor's Covenants. The Vendor shall have performed and complied with all agreements, covenants and conditions required by this Agreement to be performed or complied with by it prior to or at the time of closing. 10.03 Vendor's Certificate. The Vendor shall have delivered to the Purchaser a certificate of the President and Secretary of the Vendor, dated the time of closing, certifying in such detail as the Purchaser may specify to the fulfillment of the conditions set forth in Sections 10.01 and 10.02. 10.04 Opinion of Purchaser's Counsel. The Purchaser shall have received from its counsel, Messrs. •, an opinion dated the time of closing to the effect that the Purchaser has acquired a good and marketable title to the Assets to the extent contemplated by this Agreement. 10.05 Approval under the Investment Canada Act. The Purchaser's acquisition of the Assets shall have been approved under the Investment Canada Act or deemed thereby to have been approved thereunder, without any conditions or restrictions which in the reasonable opinion of the Purchaser will adversely affect the Purchaser or the conduct by the Purchaser of the Vendor's Business.



Appendix F – Asset Purchase Agreement (Short Form) 10.06 Consents. The Purchaser shall have received duly executed copies of the consents and authorizations referred to in Section 6.06.

The foregoing conditions are for the exclusive benefit of the Purchaser and any such condition may be waived in whole or in part by the Purchaser at or prior to the time of closing by delivering to the Vendor a written waiver to that effect signed by the Purchaser. 11. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE VENDOR

All obligations of the Vendor under this Agreement are subject to the fulfillment, prior to or at the time of closing, of the conditions hereinafter enumerated. 11.01 Purchaser's Representations and Warranties. The Purchaser's representations and warranties contained in this Agreement shall be true at and as of the time of closing as though such representations and warranties were made at and as of such time. 11.02 Purchaser's Covenants. The Purchaser shall have performed and complied with all covenants, agreements and conditions required by this Agreement to be performed or complied with by it at or prior to the time of closing. 11.03 Consents of Third Parties. All consents or authorizations required to be obtained by the Vendor for the purpose of selling, assigning or transferring the Assets have been obtained, provided that this condition may only be relied upon by the Vendor if the Vendor has diligently exercised its best efforts to procure all such consents or authorizations and the Purchaser has not waived the need for all such consents or authorizations.

Each of the foregoing conditions are for the exclusive benefit of the Vendor and any such condition may be waived in whole or in part by the Vendor at or prior to the time of closing by delivering to the Purchaser a written waiver to that effect signed by the Vendor. 12. CLOSING

12.01 Time of Closing. Subject to the terms and conditions hereof, the purchase and sale of the Assets shall be completed at a closing to be held at 11:00 a.m., local time in the city of Regina, on the • day of •, 200•, or at such other time and date as shall be agreed upon in writing between the parties hereto ("the time of closing"). 12.02 Place of Closing. The closing shall take place at the offices of the Purchaser's solicitors, Messrs. •, at •, Saskatchewan. 12.03 Documents to be Delivered by the Vendor. At the closing the Vendor shall deliver or cause to be delivered to the Purchaser:


Saskatchewan: Bar Admission Program F - 13 Corporate Commercial - Purchase and Sale of a Business Appendix F – Asset Purchase Agreement (Short Form) (a) all deeds of conveyance, bills of sale, assignments, duplicate certificates of title,

transfers and all necessary affidavits and other accompanying documents in form and content satisfactory to the Purchaser's counsel, appropriate to effectively vest a good and marketable title to the Assets in the Purchaser to the extent contemplated by this Agreement, and immediately registrable in all places where registration of such instruments is required;

(b) all consents or authorizations required to be obtained by the Vendor for the purpose of validly assigning any of the Assets;

(c) possession of the Assets; (d) the certificate of the President and Secretary of the Vendor to be given under

Section 10.03; (e) such statutory declarations, consents or waivers as required in order for full

compliance with the Bulk Sales Act of Saskatchewan; (f) duly executed releases of, or evidence to the reasonable satisfaction of the

Purchaser as to the discharge of any and all liabilities which the Purchaser has not agreed to assume and which may be enforceable against any of the Assets being purchased hereunder;

(g) certified copies of such resolutions of the shareholders and directors of the Vendor as are required to be passed to authorize the execution, delivery and implementation of this Agreement and of all documents to be delivered by the Vendor pursuant hereto;

(h) the certificate of the Vendor's auditors prepared pursuant to Section 6.01: (i) a statement of the Assumed Indebtedness signed by the Vendor; (j) a status letter from the relevant minister (pending receipt after the time of closing

of the certificate contemplated under section 18 hereof) stating that all taxes, as defined in the Revenue and Financial Services Act of Saskatchewan, collected by the Vendor or for which it has become liable to account have been paid as of the nearest date to the time of closing at which such status letter is available:

(k) a status letter from the Workers' Compensation Board (pending receipt after the time of closing of the certificate contemplated by section 18 hereof) to the effect that all payments required to be made under the Workers' Compensation Act of Saskatchewan have been made in respect of employees of the Vendor's Business as of the nearest date to the time of closing at which such status letter is available;

(1) a status letter from Revenue Canada stating that all amounts determined under section 227(10.3) of the Income Tax Act of Canada relative to source deductions have been duly deducted or withheld and remitted in accordance with that Act and that no certificate in respect of any amount assessed under that Act relative to the Vendor has been registered in the Federal Court.



Appendix F – Asset Purchase Agreement (Short Form) 12.04 Documents to be Delivered by the Purchaser. At the closing the Purchaser shall deliver or cause to be delivered: (a) a covenant of the Purchaser in favour of the Vendor agreeing to assume and pay

or perform and indemnify the Vendor against the Assumed Liabilities and other obligations agreed to be assumed hereunder by the Purchaser in the manner and to the extent herein provided;

(b) a certified cheque or banker's draft payable to the Vendor for that portion of the Purchase Price payable in cash;

(c) a duly completed and executed election made jointly by the Purchaser with the Vendor in prescribed form pursuant to section 167(1) of the Excise Tax Act of Canada, together with all other necessary accompanying documents to be filed together therewith, all in form and substance satisfactory to the Vendor and its legal counsel; and

(d) an acknowledgment signed by the Purchaser that it has received the opinion of its counsel in compliance with Section 10.04 and the requisite approval under the Investment Canada Act in compliance with Section 10.05.

13. ESCROW ARRANGEMENTS

13.01 All of the documents and the Purchase Price delivered at the time of closing shall be delivered to counsel for the Purchaser, who shall hold and deal with all such documents and funds in trust upon the following terms: (a) the transfers, deeds of conveyance, bills of sale and assignments shall be

registered, filed or recorded in all appropriate offices or registries. (b) the funds contemplated in Section 2.01 shall be deposited in an interest bearing

account at Bank of Montreal, Main Branch, Regina, Saskatchewan. (c) upon release to the Purchaser of its counsel's opinion referred to in Section 10.04,

all documents and funds in trust (together with interest accrued thereon) shall be released from trust, such funds and interest shall be paid to the Vendor and the transactions contemplated hereunder shall otherwise be completed.

(d) If the release of the opinion referred to in subparagraph (c) has not occurred within 14 days after the time of closing, the Purchaser shall be entitled, by notice to the Vendor within 48 hours after the expiry of such 14 day period:

(i) to terminate this Agreement effective as of the date of the notice; or (ii) to proceed with the closing and the release of the documents and funds

from trust and to accept title to the Assets subject to such deficiencies as to title or otherwise as may have then been identified, notwithstanding the inability of the Purchaser's counsel to release its opinion referred to in Section 10.04 except subject to such deficiencies.



(e) in the event of termination pursuant to Section 13.01(d)(i): (i) the Purchaser shall reconvey and deliver to the Vendor the Assets, and

upon such reconveyance, the costs of which shall be for the account of the Vendor, counsel for the Purchaser shall cause all of the documents received in trust pursuant to this Section 13.01 to be redelivered to the parties or to be destroyed, as the parties may agree; and upon such redelivery or destruction, the funds in trust (together with interest accrued thereon) shall be repaid to the Purchaser.

(ii) the Purchaser shall, from the time of closing until such reconveyance and redelivery, be deemed to have held and operated the Vendor's Business as agent for and on behalf of the Vendor. The Purchaser shall account to the Vendor for any profits earned, and all costs, expenses and operational losses incurred by the Purchaser in connection with the operation of the Vendor's Business during such period shall be for the account of the Vendor. Such accounts shall be settled promptly after the determination thereof between the parties.

(f) in either of the events described in Section 13.01(d), the Purchaser shall have the remedies contemplated in Section 14.04.

14. CLOSING RIGHTS AND REMEDIES

14.01 If any of the conditions for the exclusive benefit of the Vendor, as set forth in Article 11, shall not have been fulfilled or satisfactorily performed at or prior to the time of closing, the Vendor shall be entitled, by notice to the Purchaser within 48 hours from the time of closing:

(a) to adjourn the closing to another date, to be specified in the notice and to be not later •, in which event the time of closing shall be on such adjourned date and the Purchaser shall fulfill and perform its obligations on or by such adjourned closing date;

(b) to terminate this agreement effective as of the earlier of the date of the notice or •; or

(c) to elect to proceed with the closing as contemplated by Articles 12 and 13.

If no such notice is given within 48 hours from the time of closing, the Vendor shall be deemed to have elected to proceed with the closing as contemplated by Articles 12 and 13. 14.02 If any of the conditions for the exclusive benefit of the Purchaser, as set forth in Article 10, shall not have been fulfilled or satisfactorily performed at or prior to the time of closing, the Purchaser shall be entitled, by notice to the Vendor within 48 hours from the time of closing:




(a) to adjourn the closing to another date, to be specified in the notice and to be not later •, in which event the time of closing shall be on such adjourned date and the parties shall fulfill and perform their respective obligations on or by such adjourned closing date; or

(b) to terminate this Agreement effective as of the earlier of the date of the notice or •; or

(c) to elect to proceed with the closing as contemplated by Articles 12 and 13.

If no such notice is given within 48 hours from the time of closing, the Purchaser shall be deemed to have elected to proceed with the closing as contemplated by Articles 12 and 13. 14.03 If the Vendor terminates this Agreement pursuant to Section 14.01(b) by reason of the non-fulfillment or non-performance of a condition over which the Purchaser has control, or if the Vendor proceeds with the closing pursuant to Section 14.01 notwithstanding the non-fulfillment or non-performance of any such condition, the Vendor shall, notwithstanding such termination or closing, have and retain its right to damages and all other rights and remedies, at law or in equity, arising by reason of such non-fulfillment or non-performance or by reason of any breach of representation, warranty, covenant or agreement of the Purchaser, including the right to damages arising from the loss of the benefits of the transaction contemplated by this Agreement. 14.04 If the Purchaser terminates this Agreement pursuant to Section 13.01(d)(i) or Section 14.02(b) by reason of the non-fulfillment or non-performance of a condition over which the Vendor has control, or if the Purchaser proceeds with the closing pursuant to Section 13.01(d)(ii) or Section 14.02 notwithstanding any identified deficiencies or the non-fulfillment or non-performance of any such condition over which the Vendor has control, the Purchaser shall, notwithstanding such termination or closing, have and retain its rights to damages and all other rights and remedies, at law or in equity, arising by reason of such deficiencies, non-fulfillment or non-performance or by reason of any breach of representation, warranty, covenant or agreement by the Vendor, including the right to damages arising from the loss of the benefits of the transactions contemplated by this Agreement. 15. RISK OF LOSS

15.01 From the date hereto to the time of closing, the Assets shall be and remain at the risk of the Vendor. If any of the Assets shall be lost, damaged, destroyed, expropriated or seized prior to the time of closing, the Purchaser shall have the option, by giving written notice to the Vendor within 10 days (but in any event prior to the time of closing) of the Purchaser learning of such loss, damage, destruction, expropriation or seizure: (a) to adjust the Purchase Price by an amount equal to the cost of repair of the

affected Assets, or if lost, expropriated, seized or damaged or destroyed beyond repair, by an amount equal to the replacement cost of the affected Assets, and to complete the purchase;



(b) to complete the purchase to the extent possible without reduction of the purchaser price, in which event all proceeds of any insurance or compensation in respect of such loss, damage or destruction shall be payable to the Purchaser and all right and claim of the Vendor to any such amounts not paid by the time of closing shall be assigned to the Purchaser, or

(c) where all or any material part of the Assets are lost, expropriated, seized or damaged or destroyed, to terminate this Agreement.

16. UNCOLLECTED RECEIVABLES

16.01 If any part of the Receivables sold hereunder are not collected by the Purchaser in full within 180 days after the time of closing, the Vendor shall pay to the Purchaser an amount equal to the excess of the uncollected amounts over the provisions for doubtful accounts reflected in the auditor's determination of the net book value thereof, upon receipt of a re-assignment by the Purchaser of the uncollected part of those accounts. Payment on account not appropriated by the payor will be applied to the oldest account owing by the payor. 17. SCHEDULES

17.01 The following are the schedules attached to and incorporated in this Agreement by reference to their headings as given below and which are deemed to be part hereof:

1. Schedule of Lands 2. Schedule of Buildings and Improvements 3. Schedule of Leasehold Property 4. Schedule of Machinery, Equipment and Vehicles 5. Schedule of Material Contracts 6. Schedule of Intangible Property 7. Schedule of Accounting Principles 8. Schedule "A" - Audited Financial Statements 9. Schedule "B" - Environmental Matters 18. FURTHER ASSURANCES

18.01 The parties hereto shall execute such further and other documents and do such further and other things as may be necessary to carry out and give effect to the intent of this Agreement.



Appendix F – Asset Purchase Agreement (Short Form) 19. SET-OFF

19.01 If under this Agreement or any document delivered pursuant hereto the Vendor becomes obligated to pay any sum of money to the Purchaser, then such sum may at the election of the Purchaser, and without limiting or waiving any right or remedy of the Purchaser under this Agreement, be set-off against and shall apply to any sum of money or security owed by the Purchaser to the Vendor until such amount has been completely set-off. 20. POST-CLOSING CERTIFICATES

20.01 As soon after the time of closing as they are available, the Vendor shall deliver to the Purchaser certificates under section 51 of the Revenue and Financial Services Act and under Section 155(1) of the Workers' Compensation Act, 1979, both of Saskatchewan, certifying respectively that all taxes collected by the Vendor or for which it has become liable to account have been paid as of the time of closing under the first-mentioned Act, and that all payments required to be made in respect of employees of the Vendor's Business as of the time of closing have been made under the second-mentioned Act. 21. NOTICE

21.01 All notices required or permitted to be given hereunder shall be in writing and personally delivered to the address of the intended recipient set forth on the first page hereof or at such other address as may from time to time be notified by any of the parties hereto in the manner herein provided. 22. ENTIRE AGREEMENT

22.01 This Agreement (including the schedules attached hereto) constitutes the entire agreement between the parties and there are no representations or warranties, express or implied, statutory or otherwise and no agreements collateral hereto other than as expressly set forth or referred to herein. 23. TIME OF THE ESSENCE

23.01 Time shall be of the essence of this Agreement. 24. APPLICABLE LAW

24.01 This Agreement shall be governed by and interpreted in accordance with the laws of the Province of Saskatchewan.


Saskatchewan: Bar Admission Program F - 19 Corporate Commercial - Purchase and Sale of a Business Appendix F – Asset Purchase Agreement (Short Form) 25. SUCCESSORS AND ASSIGNS

25.01 This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns provided that no party hereto may assign its interest herein or hereunder, in whole or in part, without the prior written consent of all other parties, which consent may be withheld by any such party at its absolute and unfettered discretion. 26. CAPTIONS

26.01 The captions appearing in this Agreement are inserted for convenience of reference only and shall not affect the interpretation of this Agreement. IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written. ABC CO. LTD.

Per: _______________________

c/s Per: _______________________ XYZ LTD.

Per: _______________________

c/s Per: _______________________ SIGNED, SEALED and DELIVERED ) by the Covenantors in the ) presence of: ) _______________________________ ) ) _______________________________ ) Witness






Saskatchewan: Bar Admission Program G - 1 Corporate Commercial - Purchase and Sale of a Business Appendix G – Share Purchase Agreement (Long Form)

SHARE PURCHASE AGREEMENT

THIS AGREEMENT made as of the ____ day of __________________, ______.

BETWEEN:

a corporation incorporated under the laws of Saskatchewan (the "Purchaser"),

- and -

(collectively, the "Vendors")

- and -

a corporation incorporated under the laws of Saskatchewan; a corporation incorporated under the laws of Saskatchewan; a corporation incorporated under the laws of Saskatchewan; a corporation incorporated under the laws of Saskatchewan; a corporation incorporated under the laws of ; (collectively, the " ")

- and -

(the "Co-Covenantor") WHEREAS A. The following parties are the registered or beneficial owners of the following shares in

the following companies comprising the (being all of the issued and outstanding securities of each of the companies comprising the ):

Name

(Class "A" Common

Voting Shares)

(Class "A" Shares)

(Class "A"

Common Shares)


G - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix G – Share Purchase Agreement (long form) B. wishes to sell and the Purchaser wishes to purchase, at Closing Time #2, all of the

issued and outstanding shares in the capital stock of , and , owned by on the terms and conditions hereinafter contained;

C. wishes to sell and the Purchaser wishes to purchase, at Closing Time #2, all of the issued and outstanding shares in the capital stock of , owned by on the terms and conditions hereinafter contained;

D. wishes to sell and the Purchaser wishes to purchase, at Closing Time #2, all of the issued and outstanding shares in the capital stock of , owned by on the terms and conditions hereinafter contained;

E. The Corporations wish to assign and transfer, and and wish to accept, at Closing Time #1, the Excluded Assets, on the terms and conditions hereinafter contained;

NOW THEREFORE in consideration of the premises and the mutual agreements and covenants herein contained, the parties hereto hereby covenant and agree as follows:

ARTICLE 1 INTERPRETATION AND DEFINITIONS

1.01 DEFINED TERMS. In this agreement and in the Schedules hereto, unless there is something in the subject matter or context inconsistent therewith, the following terms and expressions will have the following meanings:

"Affiliate" means an affiliate as defined in the Business Corporations Act (Saskatchewan);

"arm’s length" will have the meaning ascribed to such term under the Income Tax Act (Canada);

"Business" means the businesses carried on by the Corporations which includes the operation of services;

"Business Day" means any day other than a Saturday, a Sunday or a statutory holiday in Regina, Saskatchewan;

"Closing Date" means the later of three days following the receipt of approval to proceed with this transaction under the Investment Canada Act or , provided however in the event that the said approval is obtained after , but before , the closing shall occur on , or such other date as the parties hereto may agree upon;

"Closing Time #1" means 9:00 a.m. in Regina, Saskatchewan, on the Closing Date or such other time on the Closing Date as the parties hereto may agree upon but which shall, in any event, occur prior in time to Closing Time #2;



"Closing Time #2" means 10:00 a.m. in Regina, Saskatchewan, on the Closing Date or such other time on the Closing Date as the parties hereto may agree upon but which shall, in any event, occur after Closing Time #1;

"Condition" of the Corporations means the condition of the assets, liabilities, operations, activities, customer or supplier relations, earnings, prospects, affairs and financial position of the Corporations;

"Control" means, with respect to any corporation, the ownership of more than 50% of the voting shares of that corporation, including any shares which are voting only upon the occurrence of a contingency where such contingency has occurred and is continuing;

"Corporations" means the together with the direct and indirect subsidiaries under the Control of the listed in Schedule "X";

"Encumbrances" means mortgages, charges, pledges, security interests, liens, encumbrances, actions, claims, demands and equities of any nature whatsoever or howsoever arising and any rights or privileges capable of becoming any of the foregoing;

"Environmental Laws" means all applicable federal, provincial, municipal and local laws, regulations and orders issued by any governmental or regulatory agency relating to the environment, occupational health and safety, product safety, product liability and storage and transportation of goods;

"Excluded Assets" means the assets owned by the Corporations listed in Schedule "Z" which will be transferred at Closing Time #1 to the Vendors pursuant to the provisions of paragraph 2.01 hereof;

"GAAP" means the generally accepted accounting principles described and promulgated by the Canadian Institute of Chartered Accountants which are applicable as at the date on which any calculation made hereunder is to be effective or as at the date of any financial statements referred to herein, as the case may be;

"Governmental Charges" means and includes all taxes, customs duties, rates, levies, assessments, reassessments and other charges, together with all penalties, interest and fines with respect thereto, payable to any federal, provincial, municipal, local or other government or governmental agency, authority, board, bureau or commission, domestic or foreign;

"Hazardous Substances" means any waste, pollutant, contaminant, material or substance which is or may be dangerous, hazardous, toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic or mutagenic or which could otherwise pose a risk to health, safety or the environment or the value of the properties owned by the Corporations or which is the subject of any Environmental Laws governing its Release, use, storage or identification including, without limitation, any substance which contains polychlorinated biphenyls (PCBs), asbestos, lead, urea formaldehyde or radon gas;

" Group" means, collectively, ;



Appendix G – Share Purchase Agreement (long form)

"Intellectual Property" means: (a) all patents, patent applications and registrations, trade marks, trade mark

applications and registrations, copyrights, copyright applications and registrations, trade names and industrial designs, domestic or foreign, owned or used by the Corporations or relating to the operation of the Business;

(b) all trade secrets, know-how, inventions and other intellectual property owned or used by the Corporations or relating to the Business; and

(c) all computer systems and application software, including without limitation all documentation relating thereto and the latest revisions of all related object and source codes therefor, owned or used by the Corporations or relating to the Business;

listed in Schedule "O"; "Interim Financial Statements" means the Unaudited Financial Statements of the

Corporations as at and for the nine month period ended , copies of which are attached hereto as Schedule "B";

"Interim Financial Statements Date" means ;

"Interim Period" means the period from and including the date of this agreement to and including the Closing Date;

"Leased Premises" means all premises leased by the Corporations under the Leases;

"Leases" means the leases and the agreements to lease under which the Corporations lease any real property, as listed in Schedule "C" attached hereto;

"Licenses" means all of the licenses, registrations and qualifications to do business held by the Corporations;

"Non-Owned Assets" means that real and personal property used by the Corporations in the Business which are neither owned by nor leased or licensed to the Corporations and which are more particularly set forth in the attached Schedule "AA";

"Permitted Encumbrances" means: (a) liens for taxes, assessments and governmental charges due and being contested in

good faith and diligently by appropriate proceedings (and for the payment of which adequate provisions has been made);

(b) servitudes, easements, restrictions, rights-of-way and other similar rights in real property or any interest therein, provided the same are not of such nature as to adversely affect the use of the property subject thereto by the Corporations;

(c) liens for taxes either not due and payable or due but for which notice of assessment has not been given;



(d) undetermined or inchoate liens, charges and privileges incidental to current construction or current operations and statutory liens, charges, adverse claims, security interests or encumbrances of any nature whatsoever claimed or held by any governmental authority that have not at the time been filed or registered against the title to the asset or served upon the Corporations pursuant to law or that relate to obligations not due or delinquent;

(e) assignments or insurance provided to landlords (or their mortgagees) pursuant to the terms of any lease and liens or rights reserved in any lease for rent or for compliance with the terms of such lease;

(f) security given in the ordinary course of the Business to any public utility, municipality or government or to any statutory or public authority in connection with the operations of the Business, other than security for borrowed money;

(g) the reservations in any original grants from the Crown of any real property or interest therein and statutory exceptions to title that do not detract from the value of the real property concerned or impair its use in the operation of the Business; and

(h) the Permitted Encumbrances described in Schedule "L"; "person" means and includes any individual, corporation, partnership, firm, joint

venture, syndicate, association, trust, government, governmental agency or board or commission or authority, and any other form of entity or organization;

"Purchase Price" means the sum which is payable by the Purchaser to the Vendors for all of the Purchased Shares, as provided for in paragraph 2.03;

"Purchased Shares" means all of the issued and outstanding shares in the capital of the entities comprising the Group being sold by the Vendors and purchased by the Purchaser hereunder at Closing Time #2;

"Purchaser" means ; "Real Properties" means the real properties owned by the Corporations which are

described in Schedule "D" attached hereto; "Release" means any release, spill, leak, emission, discharge, leach, dumping, emission,

escape or other disposal; "Settlement Amount" means the total amount paid to satisfy the Corporations' liabilities

and obligations set forth in paragraph 2.06; "Unaudited Financial Statements" means the Unaudited Financial Statements of the

Corporations as at and for the fiscal years ended on in each of the years , inclusive, and referred to in paragraph 3.01(i);

"Vendors" means, collectively, ;



Appendix G – Share Purchase Agreement (long form) "Warrantors" means, collectively, the Group and the Vendors; "Warranty Claim" means a claim made by either the Purchaser or the Vendors based on

or with respect to the inaccuracy or non-performance or non-fulfillment or breach of any representation or warranty made by the other party contained in this agreement or contained in any document or certificate given in order to carry out the transactions contemplated hereby.

1.02 SCHEDULES AND EXHIBITS. The following schedules and exhibits are attached to this agreement and incorporated into this agreement by reference and are deemed to be part hereof.

1.02(a) Schedules: Schedule "A" Unaudited Financial Statements (paragraph 3.01(i)(i)) Schedule "B" Interim Financial Statements (paragraph 3.01(i)(ii)) Schedule "C" Leased Premises (paragraph 3.01(x)) Schedule "D" Real Properties (paragraphs 3.01(w)(i); 3.01(w)(ii)) Schedule "E" Directors and Officers (paragraph 3.01(xx)) Schedule "F" Contractual and regulatory approvals of the Corporations and the

Vendors and conflicting agreements (paragraphs 3.01(c); 3.01(e); 3.01(e)(ii); 3.01(e)(iii))

Schedule "G" Constating documents (paragraphs 3.01(d)(ii)) Schedule "H" Licenses (paragraph 3.01(d)) Schedule "I" Tax matters (paragraph 3.01(p)(vi)) Schedule "J" Litigation (paragraph 3.01(q)) Schedule "K" Environmental matters (paragraphs 3.01(r)(i) to (iv); 5.01(p)) Schedule "L" Encumbrances (paragraphs 3.01(s); 3.01(w)(ii)(A); 3.01(bb)(i)) Schedule "M" Bank accounts (paragraph 3.01(t)) Schedule "N" Leases of personal properties (paragraph 3.01(aa)) Schedule "O" Intellectual property (paragraph 3.01(bb)) Schedule "P" Guarantees, warranties and discounts (paragraph 3.01(gg)) Schedule "Q" Licenses, agency and distribution agreements (paragraph 3.01(hh)) Schedule "R" Material contracts (paragraph 3.01(ii)) Schedule "S" Employees (paragraphs 3.01(kk); 3.01(ll); 3.01(mm)) Schedule "T" Employee benefit and pension plans (paragraphs 3.01(nn)) Schedule "U" Insurance (paragraph 3.01(oo)) Schedule "V" Government assistance (paragraph 3.01(qq)) Schedule "W" Purchaser’s contractual and regulatory approvals (paragraphs

3.01(b); 3.02(c); 6.01(c); 6.03(c)) Schedule "X" Subsidiaries (paragraph 3.01(cc)) Schedule "Y" Shareholders and shareholdings of the Corporations (paragraphs

1.08; 3.01(b)(ii); 3.01(g)) Schedule "Z" Excluded Assets (Definition paragraph) Schedule "AA" Non-Owned Assets (Definition paragraph) Schedule "BB" Non-arms' length matters (paragraphs 3.01(h); 3.01(pp))


Saskatchewan: Bar Admission Program G - 7 Corporate Commercial - Purchase and Sale of a Business Appendix G – Share Purchase Agreement (Long Form) Schedule "CC" Liabilities assumed by the Vendors (paragraph 2.09) Schedule "DD" revised combined balance sheets (paragraph 3.01(i)(iii)) Schedule "EE" Vehicles of the Corporations (paragraphs 3.01(s); 3.01(z)) Schedule "FF" Powers of Attorney (paragraph 3.01(yy)) Schedule "GG" Undisclosed liabilities (paragraph 3.01(k)) Schedule "HH" Corporate records (paragraph 3.01(f))) Schedule "II" Financial condition (paragraph 3.01(i)(vi)) Schedule "JJ" Restrictions on doing business (paragraph 3.01(ff)) Schedule "KK" Shareholder and related-party payments (paragraphs 2.06(a);

3.01(m)(ii)(D); 3.01(o); 3.01(pp)) Schedule "LL" Supporting guarantees (paragraph 3.01(jj)) Schedule "MM" Capital expenditures (paragraph 3.01(n)) Schedule "NN" Lost and won customers (paragraph 3.01(ee)) Schedule "OO" Loan prepayment penalties (paragraph 3.01(vv)) 1.02 (b) Exhibits: Exhibit "1" Asset Transfer Agreements (paragraphs 2.01 and 5.01(d)) Exhibit "2" Non-Competition Agreement (paragraph 5.01(e)) Exhibit "3" Confirming certificate of Corporations and Vendors (paragraphs

6.01(a)) Exhibit "4" Opinion of counsel for Warrantors (paragraph 6.01(g)) Exhibit "5" Confirming certificate of Purchaser (paragraph 6.03(a)) Exhibit "6" Opinion of counsel for Purchaser (paragraph 6.03(d)) Exhibit "7” Escrow Agreement (paragraphs 5.01(u); 6.01(f)) Exhibit "8" Releases (paragraph 5.01(g)) Exhibit "9" Employment Agreement with (paragraph 5.01(i)) Exhibit "10" Assumption and Indemnity Agreement (paragraph 5.01(j)) Exhibit "11" Lease (paragraph 5.01(s)) Exhibit "12" Indemnity for guarantees Exhibit "13" Restrictive Covenant Agreement (paragraph 5.01(t)) Exhibit "14" Surrender of Trust (paragraph 5.01(f)) Exhibit "15" Assignment, Assumption and Indemnity Agreement 1.03 CURRENCY. Unless otherwise indicated, all dollar amounts referred to in this agreement are in lawful money of Canada. 1.04 CHOICE OF LAW AND ATTORNMENT.

1.04(a) This agreement shall be governed by and construed in accordance with the laws of the Province of Saskatchewan and the laws of Canada applicable therein.

1.04(b) The parties agree that the courts of that province will have exclusive jurisdiction to determine all disputes and claims arising between the parties.



Appendix G – Share Purchase Agreement (long form) 1.05 INTERPRETATION NOT AFFECTED BY HEADINGS OR PARTY DRAFTING. The division of this agreement into articles and paragraphs, and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this agreement. The terms "this agreement", "hereof", "herein", "hereunder" and similar expressions refer to this agreement and the Schedules and Exhibits hereto and not to any particular article, paragraph or other portion hereof and include any agreement or instrument supplementary or ancillary hereto. Each party hereto acknowledges that it and its legal counsel have reviewed and participated in settling the terms of this agreement, and the parties hereby agree that any rule of construction to the effect that any ambiguity is to be resolved against the drafting party shall not be applicable in the interpretation of this agreement. 1.06 NUMBER AND GENDER. In this agreement, unless there is something in the subject matter or context inconsistent therewith:

1.06(a) words in the singular number include the plural and such words shall be construed as if the plural had been used;

1.06(b) words in the plural include the singular and such words shall be construed as if the singular had been used; and

1.06(c) words importing the use of any gender shall include all genders where the context or party referred to so requires, and the rest of the sentence shall be construed as if the necessary grammatical and terminological changes had been made.

1.07 TIME OF ESSENCE. Time shall be of the essence hereof. 1.08 SEVERAL OBLIGATIONS. Except where an obligation, covenant, representation or warranty of the Warrantors, or any of them, to the Purchaser under this agreement is expressly stated to be joint and several, or as set forth below, if the Warrantors, or any of them, are liable under the terms of this agreement to the Purchaser, their obligations shall be several and distinct. Prior to the closing of the transactions contemplated by this agreement the following parties' obligations, covenants, representations and warranties are joint and several, whether or not expressly stated so elsewhere in this agreement:

1.08(a) , and all of the aforesaid companies' direct or indirect subsidiaries listed in Schedule "X" attached hereto;

1.08(b) , and all of the aforesaid company's direct and indirect subsidiaries listed in Schedule "X" attached hereto;

1.08(c) , but only in respect of , and all of the direct and indirect subsidiaries of , as listed in Schedule "X" attached hereto.


Saskatchewan: Bar Admission Program G - 9 Corporate Commercial - Purchase and Sale of a Business Appendix G – Share Purchase Agreement (Long Form) Following the closing of the transactions contemplated by this agreement:

1.08(d) shall be solely obligated to perform the covenants of the Corporations referred to in paragraph 1.08(a) of this agreement and shall further be solely responsible to indemnify and save harmless the Purchaser in respect of Indemnity Claims against any of such Corporations arising under Article 8 of this agreement;

1.08(e) shall be solely obligated to perform the covenants of the Corporations referred to in paragraph 1.08(b) of this agreement and shall further indemnify and save harmless the Purchaser in respect of Indemnity Claims against any of such Corporations arising under Article 8 of this agreement;

1.08(f) and shall jointly and severally be obligated to perform the covenants of the Corporations described in paragraph 1.08(c) of this agreement and they shall jointly and severally shall further indemnify and save harmless the Purchaser in respect of Indemnity Claims against such Corporations arising under Article 8 of this agreement;

without any recourse against or contribution by any of such Corporations. 1.09 OTHER DEFINED TERMS. In some Articles or paragraphs of this agreement, certain terms have been specifically defined for convenience of reference. Such defined terms are defined solely for the purpose of the Article or paragraph in which they are so defined and may not have the defined meaning if used elsewhere herein. 1.10 STATUTES AND REGULATIONS. Any reference in this agreement to all or any part of any statute or regulation shall, unless otherwise expressly stated, be a reference to that statute or regulation or the relevant part thereof, as amended, substituted, replaced, or re-enacted from time to time.

ARTICLE 2 PURCHASE AND SALE

2.01 CORPORATIONS ASSET PURCHASE AND SALE. By way of a dividend and on the terms and subject to the fulfillment of the conditions set forth in the Asset Transfer Agreements attached as Exhibit "1", hereby agree to assign and transfer to the Vendors , respectively, and the Vendors hereby agree to accept from , respectively, the Excluded Assets. The completion of the transactions contemplated by the Asset Transfer Agreements attached as Exhibit "1" shall take place at Closing Time #1. 2.02 PURCHASED SHARES. On the terms and subject to the fulfillment of the conditions hereof, the Vendors hereby agree to sell, assign and transfer to the Purchaser, and the Purchaser hereby agrees to purchase and accept from the Vendors, the Purchased Shares for the Purchase Price.



Appendix G – Share Purchase Agreement (long form) 2.03 PURCHASE PRICE. The price payable by the Purchaser to the Vendors for the Purchased Shares will be the sum of $ , as adjusted pursuant to paragraph 2.07 (the "Purchase Price"). 2.04 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated among the Vendors as follows: (i) $ (ii) $ (iii) $ ___________

TOTAL: $ 2.05 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid at Closing Time #2 by solicitor's trust cheque, bank draft or wire transfer to the following persons: (i) $ (ii) $ (iii) $ ___________

TOTAL: $ The $ payable to comprises a holdback from the Purchase Price and shall be held in trust by on the terms and subject to the conditions of the Escrow Agreement attached hereto as Exhibit "7" and shall serve as security for payment of indemnity claims against the Vendors pursuant to Article 8 of this agreement, as security for payment of post-closing adjustments in favour of the Purchaser pursuant to paragraph 2.07 hereof and as security for remediation of Hazardous Substances and compliance with Environmental Laws of properties pursuant to paragraph 5.01(p) hereof. 2.06 SETTLEMENT AMOUNT. 2.06(a) The Corporations shall pay the sum of $ to the Vendors and related parties at or

before Closing Time #2 (the "Settlement Amount") as set forth in Schedule "KK" attached hereto:

2.06(b) The Purchaser shall, at or before Closing Time #2, loan to the Corporations an amount equal to the Settlement Amount which the Corporations shall use to pay the amounts owing as set forth in paragraph 2.06(a).

2.07 POST-CLOSING ADJUSTMENTS. 2.07(a) Failure to Obtain Consent of . In the event that the Vendor, , does not obtain the

consent of to a change in control of , pursuant to 's contract to provide to exclusive service or in the event that refuses to give such consent, and in either case terminates such contract before expiry of the full term thereof, then upon such

event, the Purchase Price for the Purchased Shares payable to shall be reduced by



$ , which sum shall forthwith be paid out of escrow by to the Purchaser in accordance with the provisions of the Escrow Agreement attached hereto as Exhibit "7". In the event that the Purchase Price for the Purchased Shares of is not reduced as aforesaid, then the $ shall forthwith be paid out of escrow by to the Vendor, , in accordance with the provisions of the Escrow Agreement attached hereto as Exhibit "7".

2.07(b) Failure by Vendor to Remain Employed by Purchaser after Closing. In the event that the employment of the Vendor by the Purchaser or its nominee terminates for any reason whatsoever before the expiration of one year from the Closing Date, except for termination by the Purchaser or its nominee without cause or in the event of termination arising from 's death or disability or disability of an immediate family member which would reasonably be expected to prevent from performing his employment duties as more particularly set forth in the Employment Agreement with attached hereto as Exhibit "9", then the Purchase Price for the Purchased Shares

payable to shall be reduced by $ which shall forthwith be paid out of escrow by to the Purchaser in accordance with the provisions of the Escrow Agreement attached hereto as Exhibit "7". In the event that the Purchase Price for the Purchased Shares of is not reduced as aforesaid, then the $ shall forthwith be paid out of escrow by to the Vendor, , in accordance with the provisions of the Escrow Agreement attached hereto as Exhibit "7".

2.07(c) Real Property Environmental Remediation. In the event that the Vendors are required to conduct or cause to be conducted, a phase III environmental site assessment and clean up or remediation of Real Properties as provided for in paragraph 5.01(p) of this agreement (the "Work"), then any and all costs, fees, charges and other expenses associated with the Work shall constitute a reduction of the Purchase Price for the Purchased Shares payable to the Vendors. The Vendors shall forthwith provide the Purchaser and with full particulars including invoices of all costs, fees, charges and other expenses associated with the Work. Upon receipt by of such invoices, shall forthwith pay to the issuer of such invoices out of funds

held by it in escrow pursuant to the Escrow Agreement attached hereto as Exhibit "7" the amount required to pay such invoices. In the event that there are insufficient funds in escrow to pay for the Work then the Vendors shall pay directly all costs, fees, charges and other expenses in respect of the Work.

2.08 ASSUMPTION OF LIABILITIES OF THE CORPORATIONS. Subject to paragraph 1.08, the Vendors hereby agree to assume and shall be liable for and indemnify the Purchaser and the applicable Corporations from and against the obligations, commitments, liabilities of and claims against the Corporations arising up to Closing Time #2 in respect of environmental matters and legal claims, actions and suits referred to in Schedule "CC" in accordance with the provisions of the Assumption and Indemnity Agreement attached hereto as Exhibit "10".




2.09 ASSIGNMENT OF CLAIM AND ASSUMPTION OF LIABILITIES IN RESPECT OF . The Corporation shall assign to the Vendor all right title and interest in and to a claim or cause of action against ( being referred to together in this paragraph as the "Defendants") arising from the Defendants, in accordance with the provisions of the Assignment, Assumption and Indemnity Agreement attached hereto as Exhibit "15". The Vendor agrees to assume and shall pay when due, perform, satisfy, observe, fulfil and discharge all obligations, liabilities, damages, costs and expenses related to any claim, action, cause of action, demand, loss, cost, liabilities and expense incurred, suffered or sustained by the Corporation at the suit of the Defendants, their heirs, executors, administrators, successors and assigns as a counterclaim to the said claim or cause of action against the Defendants or in any way related to, arising from or arising in respect of the provision of , in accordance with the provisions of the Assignment, Assumption and Indemnity Agreement attached hereto as Exhibit "15" and the Vendor shall indemnify and save harmless the Corporation in respect of the foregoing in accordance with the provisions of the Assignment, Assumption and Indemnity Agreement attached hereto as Exhibit "15". The Vendor shall not, however, without the prior written approval of the Purchaser make any claim or commence directly or indirectly any action against in connection with the foregoing.

2.10 DECLARATION OF A DIVIDEND. Immediately prior to Closing Time #1, the Corporation shall declare and pay a dividend to the Corporation in the amount of $ and the directors of the Corporation shall pass all resolutions and do all acts and things required in order to declare and pay such dividend as aforesaid. The Corporation shall immediately prior to Closing Time #1 declare and pay a dividend to the Corporation in the amount of $ and the Corporation shall immediately upon receipt of such dividend and immediately before Closing Time #1, declare and pay a dividend to the Corporation in the amount of $ . The directors of each of the Corporations shall pass all necessary resolutions and do all other acts and things as required in order to declare and pay the dividends as aforesaid.

ARTICLE 3 REPRESENTATIONS AND WARRANTIES

3.01 REPRESENTATIONS AND WARRANTIES BY THE WARRANTORS. The Warrantors each represent and warrant to the Purchaser as follows, and confirm that the Purchaser is relying upon the accuracy of each of such representation and warranty in connection with the purchase of the Purchased Shares and the completion of the other transactions hereunder:

3.01(a) Corporate Authority and Binding Obligation. The Vendors have good right, full power and absolute authority to enter into this agreement and to sell, assign and transfer the Purchased Shares to the Purchaser in the manner contemplated herein and to perform all of the their obligations under this agreement. The Group has good right, full corporate power and authority to enter into this agreement and to perform all of its obligations under this agreement. Each of the Corporations and their respective shareholders and boards of directors have taken all necessary or desirable



actions, steps and corporate and other proceedings to approve or authorize, validly and effectively, the entering into, and the execution, delivery and performance of, this agreement and the sale and transfer of the Purchased Shares by the Vendors to the Purchaser and the completion of the other transactions contemplated herein. This agreement is a legal, valid and binding obligation of the Warrantors, enforceable against each of them in accordance with its terms subject to:

(i) bankruptcy, insolvency, moratorium, reorganization and other laws relating to or affecting the enforcement of creditors' rights generally; and

(ii) the fact that equitable remedies including the remedies of specific performance and injunction, may only be granted in the discretion of a court.

3.01(b) No Other Purchase Agreements. No person has any agreement, option, understanding or commitment, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, option or commitment, including convertible securities, warrants or convertible obligations of any nature, for:

(i) the purchase, subscription, allotment or issuance of, or conversion into, any of the unissued shares in the capital of the Corporations or any securities of the Corporations;

(ii) the purchase from the Vendors of any of the Purchased Shares or for the purchase of any of the issued shares of Corporations listed in Schedule "X" attached hereto; or

(iii) the purchase or other acquisition from the Corporations of any of their undertaking, property or assets, other than in the ordinary course of the Business;

except for the transactions contemplated by Article 2 hereof or except as disclosed elsewhere in this agreement.

3.01(c) Contractual and Regulatory Approvals. Except as specified in Schedule "F"

attached hereto, none of the Corporations nor the Vendors is under any obligation, contractual or otherwise, to request or obtain the consent of any person; and no permits, licenses, certifications, registrations, authorizations or approvals of, or notifications to, any federal, provincial, municipal or local government or governmental agency, board, commission or authority are required to be obtained by the Corporations or the Vendors:

(i) in connection with the execution, delivery or performance by the Vendors of this agreement or the completion of any of the transactions contemplated herein;

(ii) to avoid the loss of any permit, license, certification or other authorization;




(iii) in order that the authority of the Corporations to carry on the Business in the ordinary course and in the same manner as presently conducted remains in good standing and in full force and effect as of and following the closing of the transactions contemplated hereunder; or

(iv) to enable the Purchaser to wind-up, dissolve, merge, amalgamate or otherwise reorganize the Corporations following the completion of the transactions contemplated herein.

Complete and correct copies of any agreements under which the Corporations or the Vendors are obligated to request or obtain any such consent have been provided to the Purchaser.

3.01(d) Status, Constating Documents and Licenses. (i) Each of the Corporations: (A) is a corporation duly incorporated and validly subsisting in all

respects under the laws of their respective jurisdictions of incorporation;

(B) is a "private company", as defined in the Securities Act, (Saskatchewan); and

(C) has all necessary corporate power to own its properties and to carry on its business as it is now being conducted.

(ii) The articles, bylaws and other constating documents of the Corporations, as amended to the date hereof, are attached hereto in Schedule "G";

(iii) The Corporations are duly licensed, registered and qualified as corporations to do business; are up to date in the filing of all required corporate returns and other notices and filings; and are otherwise in good standing in all respects, in each jurisdiction in which:

(A) they own or lease property; or (B) the nature or conduct of their business or any part thereof, or the

nature of the property of the Corporations or any part thereof, makes such qualification necessary or desirable to enable the Business to be carried on as now conducted or to enable the property and assets of the Corporations to be owned, leased and operated by them.

All of the Corporations' Licenses are listed in Schedule "H" attached hereto and are valid and subsisting. Complete and correct copies of the Licenses have been delivered to the Purchaser. The Corporations are in compliance with all terms and conditions of the Licenses. There are no proceedings in progress, pending or threatened which could result in the revocation, cancellation or suspension of any of the Licenses.



3.01(e) Compliance with Constating Documents, Agreements and Laws. The execution, delivery and performance of this agreement and each of the other agreements contemplated or referred to herein by the Warrantors, and the completion of the transactions contemplated hereby, will not constitute or result in a violation or breach of or default under, or cause the acceleration of any obligations of the Corporations under:

(i) any term or provision of any of the articles, bylaws or other constating documents of the Corporations;

(ii) subject to obtaining the contractual consents or approvals referred to in Schedule "F" hereof, the terms of any agreement (written or oral), indenture, instrument or understanding or other obligation or restriction to which the Corporations or the Vendors are a party or by which any of them is bound; or

(iii) subject to obtaining the regulatory consents or approvals referred to in Schedule "F" hereof, any term or provision of any of the Licenses or any order of any court, governmental authority or regulatory body or any law or regulation of any jurisdiction in which the Business is carried on.

3.01(f) Corporate Records. Except as disclosed in Schedule "HH" attached hereto, the

corporate records and minute books of the Corporations, all of which have been provided to the Purchaser, contain complete and accurate minutes of all meetings of the directors and shareholders of the Corporations held since their incorporation and original signed copies of all resolutions and bylaws duly passed or confirmed by the directors or shareholders of the Corporations other than at a meeting. All such meetings were duly called and held. The share certificate books, register of security holders, register of transfers and register of directors and any similar corporate records of the Corporations are complete and accurate. All exigible security transfer tax or similar tax payable in connection with the transfer of any securities of the Corporations has been duly paid. None of the disclosures in Schedule "HH" attached hereto are materially adverse to the Condition of the Corporations or would impair, following Closing Time #2, the Purchaser's 100% ownership interest held either directly or indirectly in the Corporations, or might reasonably be expected to diminish the Purchaser's evaluation of the Purchased Shares or which might conceivably be expected to deter the Purchaser from completing the transactions contemplated by this agreement on the terms hereof.

3.01(g) Authorized and Issued Capital. The authorized capital of the Corporations and the

number of shares which have been duly and validly issued and are outstanding as fully paid and non-assessable shares, and the registered and beneficial ownership of such shares, is set forth in Schedule "Y". No shares or other securities of the Corporations have been issued in violation of any laws, the articles of incorporation, bylaws or other constating documents of the Corporations or the terms of any




shareholders' agreement or any agreement to which the Corporations are a party or by which they are bound. The Vendors own all of the issued and outstanding shares of the Group as set forth in Schedule "Y" attached hereto as the shareholders of record and as the beneficial owners, with good and marketable title thereto, free and clear of any and all Encumbrances. The Corporations disclosed in Schedule "Y" attached hereto own all of the issued and outstanding shares in other of the Corporations in the manner disclosed in Schedule "Y" attached hereto and will, as shareholders of record and as the beneficial owners, with good and marketable title thereto, free and clear of any and all Encumbrances.

3.01(h) Shareholders' Agreements, etc. There are no shareholders' agreements, pooling

agreements, voting trusts, proxies or other similar agreements with respect to the ownership or voting of any of the shares of the Corporations except as disclosed in Schedule "BB".

3.01(i) Financial Statements. (i) The Unaudited Financial Statements consisting of balance sheets, income

statements, statements of cash flow and statements of retained earnings and deficit together with notes to each such financial statement, copies of which are attached hereto as Schedule "A", have been prepared in accordance with GAAP applied on a basis consistent with that of the previous fiscal year except as disclosed in Schedule "A", are true, correct and complete in all respects and present fairly the financial condition of the Corporations as of except for which is as of in each of , including the assets and liabilities of the Corporations as of except for which is as of in each of , and the revenues, expenses and results of the operations of the Corporations for the fiscal years ended on except for which is as of in each of .

(ii) The Interim Financial Statements consisting of balance sheets and income statements, copies of which are annexed hereto as Schedule "B", have been prepared in accordance with GAAP applied on a basis consistent with the Unaudited Financial Statements except as disclosed in Schedule "B", are true, correct and complete in all respects and present fairly the financial condition of the Corporations as of , including the assets and liabilities of the Corporations as of , and the revenues, expenses and results of the operations of the Corporations for the nine-month period ended on .

(iii) The Corporations' revised combined balance sheets attached hereto as Schedule "DD" have been prepared in accordance with GAAP, applied on a basis consistent with the Unaudited Financial Statements except as disclosed in Schedule "DD", are true, correct and complete in all respects and present fairly the consolidated assets and liabilities of the Corporations as at .



(iv) Except as noted in Schedule "II" attached hereto, the financial condition of the Corporations is now at least as good in all material respects as the financial condition reflected in the Interim Financial Statements in the case of and at least as good in all material respects as the financial condition reflected in the draft Annual Financial Statements for the balance of the Corporations for the fiscal year ended .

3.01(j) Financial Records. All financial transactions of the Corporations have been recorded

in the financial books and records of the Corporations in accordance with good business practice, and such financial books and records:

(i) accurately reflect the basis for the financial condition and the revenues, expenses and results of operations of the Corporations shown in the Unaudited Financial Statements and the Interim Financial Statements; and

(ii) together with all disclosures made in this agreement or in the Schedules hereto, present fairly the financial condition and the revenues, expenses and results of the operations of the Corporations as of and to the date hereof.

No information, records or systems pertaining to the operation or administration of the Business are in the possession of, recorded, stored, maintained by or otherwise dependent on any other person.

3.01(k) Liabilities of the Corporations. Except as disclosed in Schedule "GG", there are no

liabilities (contingent or otherwise) of the Corporations of any kind whatsoever, and, to the best of the knowledge of the Warrantors, after making a diligent inquiry, there is no basis for assertion against the Corporations of any liabilities of any kind, other than:

(i) liabilities disclosed or reflected in or provided for in the Unaudited Financial Statements or the Interim Financial Statements;

(ii) liabilities incurred since the Interim Financial Statements Date which were incurred in the ordinary course of the routine daily affairs of the Business and, in the aggregate, are not adverse to the Business; and

(iii) other liabilities disclosed in this agreement or in the other schedules attached hereto.

3.01(l) Indebtedness. Except as disclosed in the draft Unaudited Financial Statements of the

Corporations for the fiscal year ended in , the Schedules attached hereto and conditional sales contracts entered into by since the Interim Financial Statements Date, which shall be delivered to the Purchasers prior to the Closing Date, the Corporations have no bonds, debentures, mortgages, promissory notes or other indebtedness maturing more than one year after the date of their original creation or issuance, and are not under any obligation to create or issue any bonds, debentures, mortgages, promissory notes or other indebtedness maturing more than one year after the date of their original creation or issuance.



Appendix G – Share Purchase Agreement (long form) 3.01(m) Absence of Certain Changes or Events. Since the Interim Financial Statements

Date, the Corporations have not: (i) incurred any obligation or liability (fixed or contingent), except normal

trade or business obligations incurred in the ordinary course of the Business, none of which is adverse to the Corporations;

(ii) paid or satisfied any obligation or liability (fixed or contingent), except: (A) current liabilities included in the Interim Financial Statements

which have been paid, when due; (B) current liabilities incurred since the Interim Financial Statements

Date in the ordinary course of the Business which have been paid, when due;

(C) scheduled payments pursuant to obligations under loan agreements or other contracts or commitments described in this agreement or in the Schedules hereto; and

(D) shareholders and related-party loans described in Schedule "KK" attached hereto;

(iii) created any Encumbrance other than a Permitted Encumbrance upon any of its properties or assets, except as described in this agreement or in the Schedules hereto;

(iv) sold, assigned, transferred, leased or otherwise disposed of any of its properties or assets, except in the ordinary course of the Business, except as provided for in paragraph 2.01 hereof, and except for real property located at ;

(v) purchased, leased or otherwise acquired any properties or assets, except in the ordinary course of the Business;

(vi) waived, cancelled or written off any rights, claims, accounts receivable or any amounts payable to the Corporations, except in the ordinary course of the Business;

(vii) entered into any transaction, contract, agreement or commitment, except in the ordinary course of the Business;

(viii) terminated, discontinued, closed or disposed of any plant, facility or business operation except as disclosed in paragraph 3.01(m)(iv);

(ix) had any supplier terminate, or communicate to the Corporations the intention or threat to terminate, its relationship with the Corporations, or the intention to substantially reduce the quantity of products or services it sells to the Corporations or its dissatisfaction with its relationship with the Corporations;



(x) had any customer terminate, or communicate to the Corporations the intention or threat to terminate, its relationship with the Corporations or the intention to substantially reduce the quantity of products or services it purchases from the Corporations or its dissatisfaction with the products or services sold by the Corporations or its dissatisfaction with its relationship with the Corporations except for ;

(xii) made any change in the method of billing customers or the credit terms made available by the Corporations to its customers;

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

(xiv) suffered any damage, destruction or loss (whether or not covered by insurance) which has affected or could affect the Business or the Condition of the Corporations;

(xv) increased any form of compensation or other benefits payable or to become payable to any of the directors, officers and employees of the Corporations, except for normal increases for employee compensation effective , consistent with past practice;

(xvi) suffered any extraordinary loss relating to the Business; (xvii) made or incurred any adverse change in, or become aware of any event or

condition which is likely to result in an adverse change in, the Business or the Condition of the Corporations or its relationships with its customers, suppliers or employees other than the loss of the contract to provide exclusive service to ;

(xviii) paid any bonus, fee, distribution, remuneration or other compensation to any person other than regular salaries and wages paid to employees of the Corporations in the ordinary course of business in accordance with current compensation levels other than as disclosed in Schedule "KK" or in paragraph 3.01(o) hereof; or

(xix) authorized, agreed or otherwise become committed to do any of the foregoing.

3.01(n) Commitments for Capital Expenditures. The Corporations are not committed to

make any capital expenditures nor have any capital expenditures been authorized by the Corporations at any time since the Interim Financial Statements Date, except for capital expenditures made in the ordinary course of the routine daily affairs of the Business which, in the aggregate, do not exceed $ , particulars of which are set forth in Schedule "MM".



Appendix G – Share Purchase Agreement (long form) 3.01(o) Dividends and Distributions. Since the Interim Financial Statements Date, the

Corporations have not declared or paid any bonus or dividend or made any other distribution on any of their shares of any class, or redeemed or purchased or otherwise acquired any of their shares of any class, or reduced their authorized capital or issued capital, or agreed to do any of the foregoing, except for a capital dividend in the amount of $ paid to the shareholders of , and except for dividend in the amount of $ paid to the shareholder of and except as disclosed in Schedule "KK" hereof.

3.01(p) Tax Matters. (i) The Corporations have duly and on a timely basis prepared and filed all tax

returns and other documents required to be filed by them in respect of all Governmental Charges and such returns and documents are complete and correct. Complete and correct copies of all such returns and other documents filed in respect of the three fiscal years of the Corporations ending prior to the date hereof have been provided to the Purchaser.

(ii) The Corporations have paid all Governmental Charges which are due and payable by them on or before the date hereof except for installment payments for fiscal year ended in . Adequate provision was made in the Unaudited Financial Statements and Interim Financial Statements for all Governmental Charges for the periods covered by the Unaudited Financial Statements and Interim Financial Statements, respectively. The Corporations have no liability for Governmental Charges other than those provided for in the Unaudited Financial Statements and those arising in the ordinary course of the operation of the Business since the Interim Financial Statements Date.

(iii) Canadian federal and provincial income tax assessments have been issued to the Corporations covering all past periods up to and including the fiscal year ended . There are no actions, suits, proceedings, investigations, inquiries or claims now pending or made or threatened against the Corporations in respect of Governmental Charges.

(iv) There are no agreements, waivers or other arrangements providing for any extension of time with respect to the filing of any tax return or other document or the payment of any Governmental Charges by the Corporations or the period for any assessment or reassessment of Governmental Charges. Only the fiscal years of the Corporations subsequent to remain open for reassessment for additional taxes.

(v) The Corporations have withheld from each amount paid or credited to any person the amount of Governmental Charges required to be withheld therefrom and have remitted such Governmental Charges to the proper tax or other receiving authorities within the time required under applicable legislation.


Saskatchewan: Bar Admission Program G - 21 Corporate Commercial - Purchase and Sale of a Business Appendix G – Share Purchase Agreement (Long Form) (vi) Schedule "I" attached hereto accurately sets out, for purposes of the Income

Tax Act (Canada), the following: (A) the paid-up capital of all issued and outstanding shares in the

capital of the Corporations; (B) the adjusted cost base of the Corporations' capital properties; and (C) the cost of the Corporations' depreciable properties, the capital cost

allowance taken in respect of each class of such properties and the undepreciated capital cost of each class of such properties.

(vii) the Corporations are Canadian-controlled private Corporations, as defined in the Income Tax Act (Canada), and have been since incorporation.

3.01(q) Litigation. Except for the matters referred to in Schedule "J" attached hereto, there

are no actions, suits or proceedings, judicial or administrative pending or threatened, by or against or affecting the Corporations or the Vendors, at law or in equity, or before or by any court or any federal, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, including, without limitation, actions, suits or proceedings involving sexual molestation. Except for the matters referred to in Schedule "J", to the best of the knowledge of the Warrantors, after making a diligent inquiry, there are no grounds on which any such action, suit or proceeding might be commenced with any reasonable likelihood of success.

3.01(r) Environmental Matters. (i) Except as disclosed in Schedule "K" attached hereto, the Corporations, the

operation of the Business, the property and assets owned or used by the Corporations and the use, maintenance and operation thereof have been and are in compliance with all Environmental Laws. The Corporations have complied with all reporting and monitoring requirements under all Environmental Laws. The Corporations have not received any other notice of any non-compliance with any Environmental Laws.

(ii) The Corporations have obtained all permits, certificates, approvals, registrations and licenses necessary to conduct the Business and to own, use and operate the properties and assets of the Corporations in compliance with all Environmental Laws. All such permits, certificates, approvals, registrations and licenses are listed in Schedule "K" and complete and correct copies thereof have been provided to the Purchaser.

(iii) Except as disclosed in Schedule "K", to the best of the knowledge of the Warrantors, after diligent inquiry, there are no Hazardous Substances located on or in any of the properties or assets owned or used by the Corporations, and no Release of any Hazardous Substances has occurred on or from the properties and assets of the Corporations or has resulted from the




operation of the Business and the conduct of all other activities of the Corporations. Except as disclosed in Schedule "K", the Corporations have not used any of their properties or assets to produce, generate, store, handle, transport or dispose of any Hazardous Substances and none of the Real Properties or Leased Premises has been or is being used as a landfill or waste disposal site.

(iv) Without limiting the generality of the foregoing, except as disclosed in Schedule "K", to the best of the knowledge of the Warrantors, after diligent inquiry there are no underground or surface storage tanks, urea formaldehyde foam insulation, asbestos, polychlorinated biphenyls (PCBs), or radioactive substances located on or in any of the properties or assets owned or used by the Corporations. Except as disclosed in Schedule "K", to the best of the knowledge of the Warrantors, after diligent inquiry the Corporations are not, and there is no basis upon which the Corporations could become, responsible for any clean-up or corrective action under any Environmental Laws.

(v) The Warrantors have delivered to the Purchaser true and complete copies of all environmental audits, evaluations, assessments, studies or tests relating to the Corporations and the Business and any of the properties or assets owned or used by the Corporations.

3.01(s) Title to Assets. The Corporations are the owners of and have good and marketable

title to all of their properties and assets, including, without limitation, the vehicles listed in Schedule "EE" and all properties and assets reflected in the Unaudited Financial Statements and Interim Financial Statements and all properties and assets acquired by the Corporations after the Interim Financial Statements Date, free and clear of all Encumbrances whatsoever, except for:

(i) the properties and assets disposed of, utilized or consumed by the Corporations since the Interim Financial Statements Date in the ordinary course of the Business or as disclosed elsewhere in this agreement;

(ii) the Encumbrances disclosed or reflected in the Interim Financial Statements;

(iii) the Permitted Encumbrances; and (iv) the Encumbrances described in Schedule "L" attached hereto.

No other person owns any assets which are being used in the Business, except for the Leased Premises, the Non-Owned Assets listed in Schedule "AA" and personal property leased by the Corporations. There are no agreements or commitments to purchase property or assets by the Corporations, other than in the ordinary course of the Business and except as disclosed elsewhere in this agreement. The Business is the only business operation carried on by the Corporations, and the property and assets owned or leased by the Corporations are sufficient to carry on the Business. During



the two years preceding the date of this agreement, there has not been any significant interruptions of operations (more than seven days) of the Business due to inadequate maintenance on any property or assets owned and used by the Corporation.

3.01(t) Deposit Accounts and Safe Deposit Boxes of the Corporations. The name and

address of each bank, trust company or similar institution with which the Corporations have one or more accounts or one or more safe deposit boxes, the number of each such account and safe deposit box and the names of all persons authorized to draw thereon or to have access thereto are as set forth in Schedule "M" attached hereto.

3.01(u) Accounts Receivable. The accounts receivable of the Corporations reflected in the

Interim Financial Statements and all accounts receivable of the Corporations arising since the date of the Interim Financial Statements arose from bona fide transactions in the ordinary course of the Business and are valid, enforceable and fully collectible accounts (subject to a reasonable allowance, consistent with past practice, for doubtful accounts as reflected in the Interim Financial Statements or as previously disclosed in writing to the Purchaser). Such accounts receivable are not subject to any set-off or counterclaim.

3.01(v) Inventory. The current inventories of the Corporations, subject to a reasonable

allowance for obsolete inventories (consistent with the allowances reflected in the Unaudited Financial Statements and the Interim Financial Statements), are good and usable in the ordinary course of the Business.

3.01(w) Real Properties.

(i) Schedule "D" attached hereto lists all Real Properties owned by the Corporations and sets forth the legal description thereof. There are no agreements, options, contracts or commitments to sell, transfer or otherwise dispose of the Real Properties or which would restrict the ability of the Corporations to transfer the Real Properties, except as provided for in paragraph 2.01 hereof and except for the sale of the real property at .

(ii) The Corporations are the absolute beneficial owners of, have good and marketable title in fee simple to, and the exclusive right to possess, use and occupy the Real Properties, free and clear of any and all Encumbrances, except for:

(A) the Encumbrances described in Schedule "L" attached hereto; and (B) the Permitted Encumbrances. Complete and correct copies of all documents creating the Encumbrances

described in Schedule "L" attached hereto have been provided to the Purchaser.




(iii) The Real Properties described in Schedule "D" and all buildings and structures located thereon and the conduct of the Business as presently conducted do not violate, and the use thereof in the manner in which presently used is not adversely affected by, any zoning or building laws, ordinances, regulations, covenants or official plans. The Corporations have not received any notification alleging any such violation. Such buildings and structures do not encroach upon any lands not owned by the Corporations. There are no expropriation, condemnation or similar proceedings pending or threatened with respect to any of the Real Properties or any part thereof.

(iv) The Real Properties comply with all agreements entered into with municipal and other governmental authorities, and all easements or rights-of-way granted to municipal and governmental authorities, or the suppliers of utility services, and the construction of all buildings and structures on the Real Properties and the occupancy and use thereof are in accordance with validly issued building permits and occupancy permits.

3.01(x) Leased Premises. Schedule "C" attached hereto describes all leases or agreements to

lease under which the Corporations lease any real property. Complete and correct copies of the Leases have been provided to the Purchaser. The Corporations are exclusively entitled to all rights and benefits as lessee under the Leases and the Corporations have not sublet, assigned, licensed or otherwise conveyed any rights in the Leased Premises or in the Leases to any other person. The names of the other parties to the Leases, the description of the Leased Premises, the term, rent and other amounts payable under the Leases and all renewal options available under the Leases are accurately described in Schedule "C". All rental and other payments and other obligations required to be paid and performed by the Corporations pursuant to the Leases have been duly paid and performed; the Corporations are not in default of any of their obligations under the Leases; and none of the landlords or other parties to the Leases are in default of any of their obligations under the Leases. The terms and conditions of the Leases will not be affected by, nor will any of the Leases be in default as a result of, the completion of the transactions contemplated hereunder. The use by the Corporations of the Leased Premises is not in breach of any building, zoning or other statute, bylaw, ordinance, regulation, covenant, restriction or official plan. The Corporations has adequate rights of ingress to and egress from the Leased Premises for the operation of the Business in the ordinary course.

3.01(y) Work Orders and Deficiencies. There are no outstanding work orders, non-

compliance orders, deficiency notices or other such notices relative to the Real Properties, the Leased Premises, the other properties and assets of the Corporations or the Business which have been issued by any regulatory authority, police or fire department, sanitation, environment, labour, health or other governmental authorities or agencies. There are no matters under discussion with any such department or



authority relating to work orders, non-compliance orders, deficiency notices or other such notices. The Business is not being carried on, and none of the Real Properties, the Leased Premises or the other properties or assets of the Corporations are being operated, in a manner which is in contravention of any statute, regulation, rule, code, standard or policy. No amounts are owing by the Corporations in respect of the Real Properties or the Leased Premises to any governmental authority or public utility, other than current accounts which are not in arrears. All licenses and permits necessary to operate the buildings and improvements on the Real Properties and Leased Premises have been obtained and are in good standing.

3.01(z) Condition of Properties and Equipment. The buildings and structures, including,

without limitation, the roofs, exterior walls, doors and windows, foundations, footings, loading docks, parking areas, access roads and driveways located on the Real Properties and the Leased Premises are free of any structural defect. The heating, ventilating, plumbing, drainage, electrical and air-conditioning systems and all other systems used in the said improvements to the Real Properties and the Leased Premises and all machinery, equipment, tools, vehicles (except for "surplus" buses offered for sale, as disclosed in Schedule "EE"), furnishings and materials used in the Business are in good working order, fully operational and free of any major defect requiring a repair in excess of $5,000, except for normal wear and tear given their age and use. Without limiting the generality of the foregoing, all vehicles and related equipment used in the Business:

(A) are roadworthy, in good and operable condition (subject to normal wear and tear given their age and use) and fit for the intended uses made thereof;

(B) strictly comply with all provincial and territorial inspection requirements in those provinces or territories in which the particular vehicle and related equipment is operated, and all other provincial, territorial and federal laws and regulations applicable to the Business;

(C) have no sheet metal or structural damage, broken or damaged components, broken glass, corrosion, ripped or torn upholstery, damaged mirrors or other major defects requiring repair in excess of $5,000 which would impair normal daily operations; and

(D) all engines, transmissions and power trains are in a roadworthy and operable condition.

No material preventive maintenance has been unnecessarily deferred or postponed for any of the vehicles, and each vehicle is in a state of maintenance and repair consistent with good business practice and complying with all federal, provincial, territorial and local laws, statutes, regulations or standards including, but not limited to, those imposed, promulgated or enforced by the Department of Transportation or similar department in any province or territory in which the equipment is operated and the Canadian Department of Transportation and all other provincial, territorial and federal laws and regulations applicable to the Business.



Appendix G – Share Purchase Agreement (long form) 3.01(aa) Leases of Personal Property. Except as set out in Schedule "N" attached hereto, the

Corporations are not the lessee under any lease of personal property in respect of which the annual financial obligation exceeds $ . Complete and correct copies of each of the leases referred to in Schedule "N" have been provided to the Purchaser.

3.01(bb) Intellectual Property: (i) The Corporations have good and marketable title to all of the Intellectual

Property, free and clear of any and all Encumbrances, except as disclosed in Schedule "L", and except for Permitted Encumbrances and except in the case of any Intellectual Property licensed to the Corporations, as disclosed in Schedule "O". Complete and correct copies of all agreements whereby any rights in any of the Intellectual Property have been granted or licensed to the Corporations have been provided to the Purchaser. No royalty or other fee is required to be paid by the Corporations to any other person in respect of the use of any of the Intellectual Property, except as provided in such agreements delivered to the Purchaser. The Corporations have protected their rights in the Intellectual Property in the manner and to the extent described in Schedule "O". Except as indicated in Schedule "O", the Corporations have the exclusive right to use all of the Intellectual Property and have not granted any license or other rights to any other person in respect of the Intellectual Property. Complete and correct copies of all agreements whereby any rights in any of the Intellectual Property have been granted or licensed by the Corporations to any other person have been provided to the Purchaser.

(ii) Except as disclosed in Schedule "O", there are no restrictions on the ability of the Corporations or any successors to or assignees from the Corporations to use and exploit all rights in the Intellectual Property. All statements contained in all applications for registration of the Intellectual Property were true and correct as of the date of such applications. Each of the trade marks and trade names included in the Intellectual Property is in use. None of the rights of the Corporations in the Intellectual Property will be impaired or affected in any way by the transactions contemplated by this agreement.

(iii) The conduct of the Business and the use of the Intellectual Property does not infringe, and the Corporations have not received any notice, complaint, threat or claim alleging infringement of, any patent, trade mark, trade name, copyright, industrial design, trade secret or other Intellectual Property or proprietary right of any other person, and the conduct of the Business does not include any activity which may constitute passing-off.


Saskatchewan: Bar Admission Program G - 27 Corporate Commercial - Purchase and Sale of a Business Appendix G – Share Purchase Agreement (Long Form) 3.01(cc) Subsidiaries and Other lnterests. The Corporations have no direct or indirect

subsidiaries and do not own any securities issued by, or any equity or ownership interest in, any other person except as disclosed in Schedule "X". The Corporations are not subject to any obligation to make any investment in or to provide funds by way of loan, capital contribution or otherwise to any person.

3.01(dd) Partnerships or Joint Ventures. The Corporations are not partners or participants in

any partnership, joint venture, profit-sharing arrangement or other association of any kind and are not parties to any agreement under which the Corporations agree to carry on any part of the Business or any other activity in such manner or by which the Corporations agree to share any revenue or profit with any other person.

3.01(ee) Customers. The Warrantors have previously delivered to the Purchaser a true and

complete list of all customers of the Business as of the date hereof. The Corporations are the sole and exclusive owner of, and have the unrestricted right to use, such customer list. Neither the customer list nor any information relating to the customers of the Business have, within three years prior to the date of this agreement, been made available to any person other than the Purchaser, except pursuant to confidentiality agreements which protect the Corporations' proprietary interests and rights therein and which prohibits the use thereof by third parties for improper purposes. The Warrantors do not have any knowledge of any facts which could reasonably be expected to result in the loss of any customers or sources of revenue of the Business which, in the aggregate, would be material to the Business or the Condition of the Corporations except for the contract to supply service to . Attached hereto as Schedule "NN" is a list of all customers of the Corporations, other than , which have been lost or won since , the number of routes involved, and the reason, if known, why such customers were lost or won.

3.01(ff) Restrictions on Doing Business. Except as disclosed in Schedule "JJ" attached

hereto, the Corporations are not parties to or bound by any agreement which would restrict or limit their right to carry on any business or activity or to solicit business from any person or in any geographical area or otherwise to conduct the Business as the Corporations may determine. The Corporations are not subject to any legislation or any judgment, order or requirement of any court or governmental authority which is not of general application to persons carrying on a business similar to the Business. There are no facts or circumstances which could adversely affect the ability of the Corporations to continue to operate the Business as presently conducted following the completion of the transactions contemplated by this agreement.

3.01(gg) Guarantees, Warranties and Discounts. Except as described in Schedule "P"

attached hereto:




(i) the Corporations are not parties to or bound by any agreement of guarantee, indemnification, assumption or endorsement or any other like commitment of the obligations, liabilities (contingent or otherwise) or indebtedness of any person;

(ii) the Corporations have not given any guarantee or warranty in respect of any of the products sold or the services provided by them, except warranties made in the ordinary course of the Business and in the form of the Corporations' standard written warranty, copies of which have been provided to the Purchaser, and except for warranties implied by law;

(iii) during each of the three fiscal years of the Corporations ended immediately preceding the date hereof, no claims have been made against the Corporations for breach of warranty or contract requirement or negligence or for a price adjustment or other concession in respect of any defect in or failure to perform or deliver any products, services or work;

(iv) there are no repair contracts or maintenance obligations of the Corporations in favour of the customers or users of products of the Business, except obligations incurred in the ordinary course of the Business and in accordance with the Corporations' standard terms, copies of which has been provided to the Purchaser;

(v) the Corporations are not now subject to any agreement or commitment, and the Corporations have not, within three years prior to the date hereof, entered into any agreement with or made any commitment to any customer of the Business which would require the Corporations to re-purchase any products sold to such customers or to adjust any price or grant any refund, discount or other concession to such customer; and

(vi) the Corporations are not required to provide any letters of credit, bonds or other financial security arrangements in connection with any transactions with its suppliers or customers.

3.01(hh) Licenses, Agency and Distribution Agreements. Schedule "Q" attached hereto lists

all agreements to which the Corporations are parties or by which they are bound under which the right to use or market any product, service, technology, information, data, computer hardware or software or other property has been granted, licensed or otherwise provided to the Corporations or by the Corporations to any other person, or under which the Corporations have been appointed or any person has been appointed by the Corporations as an agent, distributor, licensee or franchisee for any of the foregoing. Complete and correct copies of all of the agreements listed in Schedule "Q" have been provided to the Purchaser. None of the agreements listed in Schedule "Q" grant to any person any authority to incur any liability or obligation or to enter into any agreement on behalf of the Corporations.


Saskatchewan: Bar Admission Program G - 29 Corporate Commercial - Purchase and Sale of a Business Appendix G – Share Purchase Agreement (Long Form) 3.01(ii) Outstanding Agreements. The Corporations are not parties to or bound by any

outstanding or executory agreement, contract or commitment, whether written or oral, except for:

(i) any contract, lease or agreement described or referred to in this agreement or in the Schedules hereto;

(ii) any contract, lease or agreement made in the ordinary course of the routine daily affairs of the Business under which the Corporations have a financial obligation of less than $10,000 over the entire term and which can be terminated by the Corporations without payment of any damages, penalty or other amount by giving notice; and

(iii) the contracts, leases and agreements described in Schedule "R" attached hereto.

Complete and correct copies of each of the contracts, leases and agreements described in Schedule "R" have been provided to the Purchaser.

3.01(jj) Good Standing of Agreements. The Corporations are not in default or breach of any

of their obligations under any one or more contracts, agreements (written or oral), commitments, indentures or other instruments to which they are parties or by which they are bound; and there exists no state of facts which, after notice or lapse of time or both, would constitute such a default or breach. All such contracts, agreements, commitments, indentures and other instruments are now in good standing and in full force and effect without amendment thereto; the Corporations are entitled to all benefits thereunder; and the other parties to such contracts, agreements, commitments, indentures and other instruments are not in default or breach of any of their obligations thereunder. There are no contracts, agreements, commitments, indentures or other instruments under which the Corporations' rights or the performance of their obligations are dependent on or supported by the guarantee of or any security provided by any other person, except for the guarantees listed in Schedule "LL".

3.01(kk) Employees. Schedule "S" attached hereto sets forth the name, job title, duration of

employment, vacation entitlement, employee benefit entitlement and rate of remuneration (including bonus and commission entitlement) of each employee of the Corporations other than and part-time employees; but, notwithstanding the foregoing, including all employees who have special or unusual employment terms, remuneration, entitlements or benefits. Schedule "S" also sets forth the names of all employees of the Corporations who are now on disability, maternity or other authorized leave or who are receiving workers' compensation or short-term or long-term disability benefits. No employees of the Corporations have any outstanding vacation entitlements or other benefits exceeding entitlements and benefits accruing in the present fiscal year of the Corporations.



Appendix G – Share Purchase Agreement (long form) 3.01(ll) Employment Agreements. The Corporations are not parties to any written or oral

employment, service or consulting agreement relating to any one or more persons, except for oral employment agreements which are of indefinite term and without any special arrangements or commitments with respect to the continuation of employment or payment of any particular amount on termination of employment except as disclosed in Schedule "S". The Corporations do not have any employee who cannot be dismissed on such period of notice as is required by law, except as disclosed in Schedule "S".

3.01(mm) Labour Matters and Employment Standards. Except as disclosed in Schedule "S": (i) the Corporations are not subject to any agreement with any labour union or

employee association and have not made any commitment to or conducted negotiations with any labour union or employee association with respect to any future agreement and, during the period of five years preceding the date of this agreement, there has been no formal attempt to organize, certify or establish any labour union or employee association in relation to any of the employees of the Corporations;

(ii) there are no existing or threatened, labour strikes or labour disputes, organized or formal grievances, controversies or other labour troubles affecting the Corporations or the Business; and

(iii) the Corporations have complied with all laws, rules, regulations and orders applicable to them relating to employment, including those relating to wages, hours, collective bargaining, occupational health and safety, workers' hazardous materials, employment standards, pay equity and workers' compensation. There are no outstanding charges or complaints against the Corporations relating to unfair labour practices or discrimination or under any legislation relating to employees. The Corporations have paid in full all amounts owing under the Workers' Compensation Act (Saskatchewan and ) and the workers' compensation claims experience of the Corporations would not permit a penalty reassessment under such legislation.

3.01(nn) Employee Benefit and Pension Plans. (i) Except as listed in Schedule "T" attached hereto, the Corporations do not

have, and are not subject to any present or future obligation or liability under, any pension plan, deferred compensation plan, retirement compensation arrangement, retirement income plan, stock option or stock purchase plan, profit sharing plan, bonus plan or policy, employee group insurance plan, hospitalization plan, disability plan or other employee benefit plan, program, policy or practice, formal or informal, with respect to any of its employees, other than the Canada Pension Plan and the Saskatchewan Hospital Services Plan and the Hospital Services Plan and



other similar health plans established pursuant to statute. Schedule "T" also lists the general policies, procedures and work-related rules in effect with respect to employees of the Corporations, whether written or oral, including but not limited to policies regarding holidays, sick leave, vacation, disability and death benefits, termination and severance pay, automobile allowances and rights to company-provided automobiles and expense reimbursements. (The plans, programs, policies, practices and procedures listed in Schedule "T" are collectively called the "Benefit Plans".) Complete and correct copies of all documentation establishing or relating to the Benefit Plans listed in Schedule "T" or, where such Benefit Plans are oral commitments, written summaries of the terms thereof, and the most recent financial statements and actuarial reports related thereto and all reports and returns in respect thereof filed with any regulatory agency within three years prior to the date hereof have been provided to the Purchaser.

(ii) The pension plans included in the Benefit Plans are registered under and are in compliance with all applicable federal and provincial legislation and all reports, returns and filings required to be made thereunder have been made. Such pension plans have been administered in accordance with their terms and the provisions of applicable law. Each pension plan has been funded in accordance with the requirements of such plans and based on actuarial assumptions which are appropriate to the employees of the Corporations and the Business. Based on such assumptions, there is no unfunded liability under any such pension plan. No changes have occurred since the date of the most recent actuarial report provided to the Purchaser in respect of such pension plans which makes such report misleading in any respect and, since the date of such report, the Corporations have not made or granted or committed to make or grant any benefit improvements to which members of the pension plans are or may become entitled which are not reflected in such actuarial report. No funds have been withdrawn by the Corporations from any such pension plan or other Benefit Plans.

(iii) There are no pending claims by any employee covered under the Benefit Plans or by any other person which allege a breach of fiduciary duties or violation of governing law or which may result in liability to the Corporations and there is no basis for such a claim. There are no employees or former employees of the Corporations who are receiving from the Corporations any pension or retirement payments or who are entitled to receive any such payments not covered by a pension plan to which the Corporations are parties.

3.01(oo) lnsurance. Schedule "U" attached hereto contains a true and complete list of all

insurance policies maintained by the Corporations or under which the Corporations are covered in respect of their properties, assets, business or personnel as of the date hereof. Complete and correct copies of all such insurance policies have been




provided to the Purchaser. Such insurance policies are in full force and effect and the Corporations are not in default with respect to the payment of any premium or compliance with any of the provisions contained in any such insurance policy.There are no circumstances under which the Corporations would be required to or, in order to maintain their coverage, should give any notice to the insurers under any such insurance policies which has not been given. The Corporations have not received notice from any of the insurers regarding cancellation of such insurance policies. The Corporations have not failed to present any claim under any such insurance policy in due and timely fashion. The Corporations have not received notice from any of the insurers denying any claims. The Corporations carry insurance against such risks, casualties and contingencies, and in such amounts, types and forms, as would be carried by a reasonably prudent person carrying on a business similar to the Business.

3.01(pp) Non-Arm's Length Matters. Except as disclosed in Schedules "BB" and "KK", the

Corporations are not parties to or bound by any agreement with, are not indebted to, and no amount is owing to any of the Corporations by the Vendors or any of the other Corporations or any of the corporate Vendors' Affiliates or any officers, former officers, directors, former directors, shareholders, former shareholders, employees (except for oral employment agreements with employees) or former employees of the Corporations or any person not dealing at arm's length with any of the foregoing. Except as disclosed in Schedules "BB" and "KK", since the Interim Financial Statements Date, the Corporations have not made or authorized any payments to the Vendors or any officers, former officers, directors, former directors, shareholders, former shareholders, employees or former employees of the Corporations or to any person not dealing at arm's length with any of the foregoing, except for salaries and other employment compensation payable to employees of the Corporations in the ordinary course of the routine daily affairs of the Business and at the regular rates payable to them.

3.01(qq) Government Assistance. Schedule "V" attached hereto describes all agreements,

loans, other funding arrangements and assistance programs (collectively called "Government Assistance Programs") which are outstanding in favour of the Corporations from any federal, provincial, municipal or other government or governmental agency, board, commission or authority, domestic or foreign (collectively called "Government Agencies"). Complete and correct copies of all documents relating to the Government Assistance Programs have been delivered to the Purchaser. The Corporations have performed all of their obligations under the Government Assistance Programs, and no basis exists for any Government Agencies to seek payment or repayment by the Corporations of any amount or benefit received by them under any Government Assistance Programs.


Saskatchewan: Bar Admission Program G - 33 Corporate Commercial - Purchase and Sale of a Business Appendix G – Share Purchase Agreement (Long Form) 3.01(rr) Compliance with Laws. The Corporations are not in violation of any federal,

provincial, municipal or other law, regulation or order of any government or governmental or regulatory authority, domestic or foreign, including, without limitation, any law, regulation or order relating to services, including, without limitation, the Motor Carrier Act, the Highway Traffic Act, the Motor Dealers Act and the Motor Vehicle Transportation Act (Canada) applicable in the jurisdictions where the Corporations carry on the Business.

3.01(ss) Residency of Vendors and Co-Covenantors. The Vendors are not non-residents of

Canada within the meaning of the lncome Tax Act (Canada). 3.01(tt) Copies of Documents. Complete and correct copies (including all amendments) of

all contracts, leases and other documents referred to in this agreement or any Schedule hereto or required to be disclosed hereby have been delivered to the Purchaser.

3.01(uu) Statutory Liens. (i) The Corporations have paid in full all amounts owing to employees under

the the Labour Standards Act (Saskatchewan or , as applicable), and there are no claims or potential claims against the Corporations by former employees for wrongful dismissal.

(ii) The Corporations have paid all amounts owing for the supply of utilities or telephone services.

(iii) The Corporations have deducted and paid to the appropriate governmental authorities all payroll source deductions, as required, including workers' compensation, unemployment insurance, Canada Pension Plan and income tax.

(iv) The Corporations have has collected and remitted all amounts required by all governmental authorities as provincial sales tax, education and health tax, goods and services tax, income tax, and other taxes of similar nature.

(v) There are no land taxes or local improvement levies owing with respect to the Real Properties, except as otherwise permitted under this Agreement.

3.01(vv) Loan Prepayment Penalties. Except as disclosed in Schedule "OO" attached hereto,

none of the Corporations have loans which cannot be paid out at any time without incurring a prepayment penalty.

3.01(ww) Bankruptcy. None of the Corporations, other than for , is insolvent, within the

meaning of the Bankruptcy and Insolvency Act (Canada). None of the Corporations have made assignments in favor of their creditors nor a proposal in bankruptcy to their creditors or class thereof nor had any petitions or receiving order presented in




respect of them. None of the Corporations have initiated proceedings with respect to a compromise or arrangement with its creditors or for their winding-up, liquidation or dissolution. No receiver has been appointed in respect of any of the Corporations or any of their assets and no execution or distress has been levied upon any of their assets.

3.01(xx) Directors and Officers. Schedule "E" attached hereto sets forth the names, titles,

rates of remuneration and benefit entitlements of all directors and officers of the Corporations.

3.01(yy) Powers of Attorney. Schedule "FF" attached hereto sets forth a list of the individuals

who have been granted powers of attorney by the Corporations, including a description of or copy of such powers of attorney.

3.01(zz) Driver Qualifications and Vehicle Registrations. All persons operating vehicles in

the Business are duly and validly licensed or registered with applicable regulatory or governmental authorities or agencies to operate such vehicles, and all vehicles used or operated in the Business are duly and validly licensed with all applicable regulatory and governmental authorities or agencies.

3.01(aaa) Disclosure. No representation or warranty contained in this paragraph 3.01; no

document furnished by or on behalf of the Warrantors in connection with the negotiation of the transactions contemplated by this agreement; and no statement contained in any Schedule, certificate, list, summary or other disclosure document provided or to be provided to the Purchaser pursuant hereto or in connection with the transactions contemplated hereby contains or will contain any untrue statement of a fact, or omits or will omit to state any fact which is necessary in order to make the statements contained therein not misleading to a prospective purchaser of the Purchased shares seeking full information as to the Corporations and the Business. There has been no failure to disclose facts in this agreement which would adversely affect or could reasonably be expected to adversely affect the Condition of the Corporations or might reasonably be expected to diminish the Purchaser's evaluation of the value of the Purchased Shares or which might reasonably be expected to deter the Purchaser from completing the transactions contemplated by this agreement on the terms hereof.

3.02 REPRESENTATIONS AND WARRANTIES BY THE PURCHASER. The Purchaser hereby represents and warrants to the Vendors as follows, and confirms that the Vendors are relying on the accuracy of each of such representations and warranties in connection with the sale of the Purchased Shares and the completion of the other transactions hereunder: 3.02(a) Corporate Authority and Binding Obligation. The Purchaser is a corporation duly

incorporated and validly subsisting in all respects under the laws of its jurisdiction of incorporation. The Purchaser has good right, full corporate power and absolute



authority to enter into this agreement and to purchase the Purchased Shares from the Vendors in the manner contemplated herein and to perform all of the Purchaser's obligations under this agreement. The Purchaser and its shareholders and board of directors have taken all necessary or desirable actions, steps and corporate and other proceedings to approve or authorize, validly and effectively, the entering into of, and the execution, delivery and performance of, this agreement and the purchase of the Purchased Shares by the Purchaser from the Vendors. This agreement is a legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms subject to:

(i) bankruptcy, insolvency, moratorium, reorganization and other laws relating to or affecting the enforcement of creditors' rights generally; and

(ii) the fact that equitable remedies, including the remedies of specific performance and injunction, may only be granted in the discretion of a court.

3.02(b) Contractual and Regulatory Approvals. Except as specified in Schedule "W"

attached hereto, the Purchaser is not under any obligation, contractual or otherwise, to request or obtain the consent of any person, and no permits, licenses certifications, authorizations or approvals of, or notifications to, any federal, provincial, municipal or local government or governmental agency, board, commission or authority are required to be obtained by the Purchaser in connection with the execution, delivery or performance by the Purchaser of this agreement or the completion of any of the transactions contemplated herein. Complete and correct copies of any agreements under which the Purchaser is obligated to request or obtain any such consent have been provided to the Vendors.

3.02(c) Compliance with Constating Documents, Agreements and Laws. The execution,

delivery and performance of this agreement and each of the other agreements contemplated or referred to herein by the Purchaser, and the completion of the transactions contemplated hereby, will not constitute or result in a violation or breach of or default under:

(i) any term or provision of any of the articles, bylaws or other constating documents of the Purchaser;

(ii) subject to obtaining the contractual consents referred to in Schedule "W" hereof, the terms of any indenture, agreement (written or oral), instrument or understanding or other obligation or restriction to which the Purchaser is a party or by which it is bound; or

(iii) subject to obtaining the regulatory consents referred to in Schedule "W" hereof, any term or provision of any licenses, registrations or qualification of the Purchaser or any order of any court, governmental authority or regulatory body or any applicable law or regulation of any jurisdiction.



Appendix G – Share Purchase Agreement (long form) 3.02(d) lnvestment Canada Act. The Purchaser is a "non-Canadian" for purposes of and

within the meaning of the Investment Canada Act (Canada).

ARTICLE 4 SURVIVAL OF WARRANTIES

4.01 SURVIVAL OF WARRANTIES BY THE WARRANTORS. The representations and warranties made by the Warrantors and contained in this agreement, or contained in any document or certificate given in order to carry out the transactions contemplated hereby, will survive the closing of the purchase of the Purchased Shares by the Purchaser provided for herein and, notwithstanding such closing or any investigation made by or on behalf of the Purchaser or any other person or any knowledge of the Purchaser or any other person, shall continue in full force and effect for the benefit of the Purchaser, subject to the following provisions of this paragraph. 4.01(a) Except as provided in paragraphs 4.01(b) and 4.01(c) of this agreement, no Warranty

Claim may be made or brought by the Purchaser after the date which is three years following the Closing Date.

4.01(b) Any Warranty Claim which is based on or relates to the tax liability of the

Corporations for a particular taxation year may be made or brought by the Purchaser at any time prior to the expiration of the period (if any) during which an assessment, reassessment or other form of recognized document assessing liability for tax, interest or penalties in respect of such taxation year under applicable tax legislation could be issued, assuming that the Corporations do not file any waiver or similar document extending such period as otherwise determined and any Warranty Claim relating to environmental matters may be made or brought by the Purchaser at or prior to the expiration of five years following the Closing Date.

4.01(c) Any Warranty Claim which is based on or relates to the title to the Purchased Shares

or which is based on intentional misrepresentation or fraud by the Warrantors or which is based on or relates to a misrepresentation in paragraphs 3.01(f) or 3.01(g) may be made or brought by the Purchaser at any time.

After the expiration of the period of time referred to in paragraph 4.02(a), the Vendors will be released from all obligations and liabilities in respect of the representations and warranties made by the Warrantors and contained in this agreement or in any document or certificate given in order to carry out the transactions contemplated hereby, except with respect to any Warranty Claims made by the Purchaser in writing prior to the expiration of such period and subject to the rights of the Purchaser to make any claim permitted by paragraph (b) or paragraph (c) of this paragraph.


Saskatchewan: Bar Admission Program G - 37 Corporate Commercial - Purchase and Sale of a Business Appendix G – Share Purchase Agreement (Long Form) 4.02 SURVIVAL OF WARRANTIES BY PURCHASER. The representations and warranties made by the Purchaser and contained in this agreement or contained in any document or certificate given in order to carry out the transactions contemplated hereby will survive the closing of the sale of the Purchased Shares by the Vendors provided for herein and, notwithstanding such closing or any investigation made by or on behalf of the Vendors or any other person or any knowledge of the Vendors or any other person, shall continue in full force and effect for the benefit of the Vendors for a period of three years following the Closing Date.

ARTICLE 5 COVENANTS

5.01 COVENANTS BY THE VENDOR. The Vendors covenant to the Purchaser that they will do or cause to be done the following: 5.01(a) lnvestigation of Business and Examination of Documents. (i) During the Interim Period, the Vendors will provide and will cause the

Corporations to provide access to, and will permit the Purchaser, through its representatives, to make such investigation of, the operations, properties, assets and records of the Corporations and of their financial and legal condition as the Purchaser deems necessary or advisable to familiarize itself with such operations, properties, assets, records and other matters. Without limiting the generality of the foregoing, during the Interim Period the Vendors will permit the Purchaser and its representatives to have access to the premises used in connection with the Business and will produce for inspection and provide copies to the Purchaser of:

A. all agreements and other documents referred to in paragraph 3.01 hereof or in any of the Schedules attached hereto; and all other contracts, leases, licenses, title documents, title opinions, insurance policies, pension plans, information relating to employees of the Corporations, customer lists, information relating to customers and suppliers of the Corporations; documents relating to all indebtedness and credit facilities of the Corporations; documents relating to legal or administrative proceedings and all other documents of or in the possession of the Corporations or relating to the Business;

B. all minute books, share certificate books, registers of security holders, registers of transfers of securities, registers of directors and other corporate documents of the Corporations;

C. all books, records, accounts, tax returns and financial statements of the Corporations; and




D. all other information which, in the reasonable opinion of the Purchaser's representatives, is required in order to make an examination of the Corporations and the Business.

(ii) At the request of the Purchaser, the Vendors shall execute or cause to be executed by the Corporations such consents, authorizations and directions as may be necessary to permit any inspection of the Business and any property of the Corporations to enable the Purchaser, or its authorized representatives, to obtain full access to all files and records relating to any of the assets of the Corporations maintained by governmental or other public authorities. At the Purchaser's request, the Vendors shall co-operate with the Purchaser in arranging any such meetings as the Purchaser should reasonably request with:

A. employees of the Corporations; B. customers, suppliers, distributors or others who have or have had a

business relationship with the Corporations after the closing of the transactions contemplated by this agreement; and

C. external accountants, solicitors or any other persons engaged or previously engaged to provide services to the Corporations who have knowledge of matters relating to the Corporations and the Business;

In particular, but without limitation, the Vendors shall permit the Purchaser's representatives or consultants to conduct all such testing and inspection in respect of environmental matters at such locations of the Business as the Purchaser may determine, in its sole discretion, as may be required to satisfy the Purchaser in respect of such matters, and the Vendors shall cause the Corporations to co-operate with and assist representatives or consultants of the Purchaser, with such physical review of the machinery, equipment, tools and vehicles of the Business as is necessary so as to enable the confirmation of the values carried on the respective balance sheets of the Corporations in respect of such assets, to the reasonable satisfaction of the Purchaser.

The exercise of any rights of inspection and investigation by or on behalf of the Purchaser under this paragraph 5.01(a) shall not mitigate or otherwise affect the representations and warranties of the Warrantors hereunder, which shall continue in full force and effect.

5.01(b) Conduct of Business. Except as contemplated by this agreement or with the prior

written consent of the Purchaser, during the Interim Period the Vendors will, and will cause the Corporations to:

(i) operate the Business only in the ordinary course thereof, consistent with past practices;



(ii) take all actions within their control to ensure that the representations and warranties in paragraph 3.01 hereof remain true and correct at Closing Time #2, with the same force and effect as if such representations and warranties were made at and as of Closing Time #2, and to satisfy or cause to be satisfied the conditions in paragraph 6.01 hereof;

(iii) promptly advise the Purchaser of any facts that come to their attention which would cause any of the representations and warranties of the Warrantors herein contained to be untrue in any respect;

(iv) take all action to preserve the Business and the goodwill of the Corporations and their relationships with customers, suppliers and others having business dealings with them; to keep available the services of their present officers and employees and to maintain in full force and effect all agreements to which the Corporations are parties; and take all other action reasonably requested by the Purchaser in order that the Business and the Condition of the Corporations will not be impaired during the Interim Period;

(v) promptly advise the Purchaser in writing of any adverse change in the Business or the Condition of the Corporations during the Interim Period;

(vi) maintain all of the Corporations' tangible properties and assets in the same condition as they now exist, ordinary wear and tear excepted;

(vii) maintain the books, records and accounts of the Corporations in the ordinary course and record all transactions on a basis consistent with past practice;

(viii) ensure that the Corporations do not create, incur or assume any long-term debt (including obligations in respect of leases) or create any Encumbrance other than a Permitted Encumbrance upon any of their properties or assets or guarantee or otherwise become liable for the obligations of any other person or make any loans or advances to any person;

(ix) ensure that the Corporations do not sell or otherwise dispose of any of their properties or assets except in the ordinary course of the Business except as provided in paragraph 2.01 hereof;

(x) ensure that the Corporations do not terminate or waive any right of substantial value of the Business;

(xi) ensure that the Corporations do not make any capital expenditure; (xii) maintain the inventories of the Business in accordance with past practice; (xiii) keep in full force all of the Corporations' current insurance policies; (xiv) take all actions within their control to ensure that the Corporations perform

all of their obligations falling due during the Interim Period under all agreements to which the Corporations are parties or by which they are bound and that the Corporations pay and discharge the liabilities of the




Corporations in the ordinary course in accordance and consistent with the previous practice of the Corporations;

(xv) ensure that the Corporations do not enter into any agreements other than agreements made in the ordinary course of the Business consistent with past practice (other than agreements for capital expenditures as provided for in paragraph 5.01(b)(xi) hereof) and which do not involve obligations of more than $10,000;

(xvi) not take any action to amend the articles of incorporation or bylaws of the Corporations;

(xvii) ensure that the Corporations do not declare or pay any dividends, redeem or repurchase any shares in the capital of the Corporations or make any other distributions in respect of the shares of the Corporations;

(xviii) ensure that the Corporations do not increase, in any manner, the compensation or employee benefits of any of their directors, officers or employees, or pay or agree to pay to any of their directors, officers or employees any pension, severance or termination amount or other employee benefit not required by any of the employee benefit plans and programs referred to in the Schedules attached hereto excepting payments to the Vendors pursuant to Article 2 hereof; and

(xix) take all actions within their control to give or obtain, or cause the Corporations to give or obtain and the Corporations shall take all action within their control to obtain, the consents, permits, licenses, certificates, registrations, authorizations, approvals or notifications described in Schedule "F".

5.01(c) Corporate Action. The Group shall take all necessary corporate action, steps and

proceedings to approve or authorize, validly and effectively, the execution and delivery of this agreement and all other agreements, documents and certificates contemplated hereby; and to complete, without limiting the generality of the foregoing, the transfer of the Purchased Shares to the Purchaser and to cause all necessary meetings of directors and shareholders of the Group to be held for such purpose.

5.01(d) The Corporations' Asset Purchase Agreement. At or before Closing Time #1, the

Corporations, , and the Vendors respectively will execute, deliver and complete all transactions contemplated by the applicable Asset Purchase Agreements in the form of the draft agreements which are attached hereto as Exhibit "1", and they shall deliver to the said Vendors all necessary transfers, assignments and other documentation required to transfer the Excluded Assets to such Vendors with good and marketable title thereto, free and clear of all Encumbrances.


Saskatchewan: Bar Admission Program G - 41 Corporate Commercial - Purchase and Sale of a Business Appendix G – Share Purchase Agreement (Long Form) 5.01(e) Non-Competition Agreement. At Closing Time #2, the Vendors will execute and

deliver to the Corporations and the Purchaser non-competition agreements in the form of the draft agreement attached hereto as Exhibit "2".

5.01(f) Resignation by Trustees and Declaration of Trust Termination Agreement. At or

before Closing Time #2, the Vendors shall cause all bare trustees of shares in the capital stock of the Corporations to resign as trustees and deliver up to the Vendors and Purchaser all share certificates issued in their names, duly endorsed for transfer in blank; and shall forthwith cause such bare trustees to execute and deliver termination agreements with a full release in respect of any trust agreements pursuant to which they held such shares in trust in the form of the Surrender of Trust attached hereto as Exhibit "14".

5.01(g) Releases by the Vendors. At Closing Time #2, the Vendors as shareholders of the

Group, and as directors and officers of the Corporations will, or will cause, all directors and officers to execute and deliver to the applicable Corporations and the Purchaser releases in the form of the draft release attached hereto as Exhibit "8".

5.01(h) Resignation of Officers and Directors. At or before the Closing Time #2, the

Vendors will cause each person who is a director or officer of the Corporations, other than such persons as may be designated in writing by the Purchaser, to submit his written resignation to the Corporations which will be effective at the Closing Time #2.

5.01(i) Employment Agreement with . At Closing Time #2, the Co-Covenantor shall

enter into an employment agreement with the Purchaser, or the Purchaser's nominee, in the form of the draft employment agreement attached hereto as Exhibit "9".

5.01(j) Assumption and Indemnity Agreement. At Closing Time #2, the Vendors shall enter

into an assumption and indemnity agreement with the applicable Corporations in the form of the draft assumption agreement attached hereto as Exhibit "10".

5.01(k) Transfer of Purchased Shares to Purchaser. At or before Closing Time #2, the

Vendors shall deliver to the Purchaser all necessary transfers, assignments and other documentation reasonably required to transfer the Purchased Shares to the Purchaser with good and marketable title thereto, free and clear of all Encumbrances.

5.01(l) Satisfying Conditions of Closing. At or before Closing Time #2, the Vendors shall

take all actions within their control to satisfy the conditions of closing contained in paragraph 6.01.

5.01(m) Delivery of Books and Records. At Closing Time #2, there shall be delivered to the

Purchaser by the Vendors, all books, corporate seals and records of and relating to the Corporations and the Business not located at the premises of the Corporations.



Appendix G – Share Purchase Agreement (long form) 5.01(n) Delivery of Closing Documentation. At or before Closing Time #2, the Vendors

shall execute and deliver, or cause to be executed and delivered, to the Purchasers, all other agreements, documents, resolutions or certificates relevant to the closing of the transactions contemplated by this agreement or as the Purchaser, acting reasonably, may request.

5.01(o) Payments Under Article 2. At Closing Time #2, the Vendors shall or shall cause the

Corporations to make the payments required of the Vendors or the Corporations pursuant to any provision in Article 2.

5.01(p) Environmental Matters. In respect of properties located in described in 's Phase I

Environmental Site Assessments dated and referred to in Schedule "K", the Vendors shall at the request of the Purchaser, upon completion of a phase II environmental site assessment to be arranged by the Purchaser in respect of such properties pursuant to paragraph 5.02(g) hereof, conduct, or cause to be conducted, a phase III environmental site assessment and clean-up or remediation of the applicable properties which will cause all Environmental Laws in respect of such properties to be complied with and which shall further cause all Hazardous Substances to be removed or remediated therefrom and from adjoining properties if necessary, by excavation, where underground tanks exist and where no underground tanks exist, by excavation or, where permitted by Environmental Laws and subject to the remediation plan being approved by the Purchaser's environmental consultant, acting reasonably, by other recognized and generally accepted and recommended practices and procedures. The said phase III environmental site assessment and clean up or remediation must be completed, in the cases where excavation is required, by and in all other cases, before the expiry of the third anniversary of the Closing Date. All costs in respect of the said phase III environmental site assessment and clean up or remuneration shall constitute a reduction of the Purchase Price for the Purchased Shares of the Vendors which shall be paid for and adjusted after the Closing Date as provided for in paragraph 2.07(d) of this agreement.

5.01(q) Post-Closing Severance Cost of Employees. In the event the aggregate cost to the

Corporations or the Purchaser of terminating the employment of specified employees of the Corporations, as agreed upon by the Warrantors and the Purchaser prior to the date hereof during a period commencing on the date hereof and ending 12 months from the Closing Date exceeds $ , the Vendors shall pay to the Purchaser, forthwith on demand, all costs incurred by the Corporations or the Purchaser in respect of such terminations over and above $ .

5.01(r) Bank Statements. At Closing Time #2, the Vendors shall cause to be delivered to the

Purchaser statements from the Corporations' bankers and other lenders and secured creditors which show the aggregate indebtedness of the Corporations to such parties and the amount of money on deposit with such parties together with a bank



reconciliation for outstanding cheques with the Corporation's bankers or such other evidence satisfactory to the Purchaser of the liabilities arising from or outstanding under cheques of the Corporations which have not been negotiated.

5.01(s) Lease of . At Closing Time #2, the Vendors shall lease and enter into a lease

agreement with the applicable Corporation of premises having a civic address of , Regina, Saskatchewan, in the form of the draft lease attached hereto as Exhibit "11".

5.01(t) Restrictive Covenant Agreement: At or before Closing Time #1, the Vendors shall

execute and deliver to and the Purchaser, a restrictive covenant agreement in respect of the , Regina, Saskatchewan property in the form of the draft agreement attached hereto as Exhibit "13".

5.01(u) Escrow Agreement. At Closing Time #2, the Vendors , will execute and deliver to

the Purchaser and an escrow agreement in the form of the draft attached hereto as Exhibit "7".

5.01(v) Encumbrances. The Vendors shall, on or before Closing Time #2, pay out and

discharge all Encumbrances of the Corporations, other than the Permitted Encumbrances.

5.01(w) Corporations' Asset Transfer Agreement Tax Cost. The Vendors shall indemnify

and save harmless , their successors and assigns, for any and all tax costs to , their successors and assigns, over and above $ arising from the transfer of the Excluded Assets to such Vendors pursuant to the Asset Transfer Agreements attached hereto as Exhibit "1". For the purposes of this paragraph, tax costs shall include current income taxes payable by the applicable Corporations and the loss of future income tax deductions.

5.01(x) Integration Plans. At or before Closing Time #2, the Vendor shall prepare and

deliver to the Purchaser, for consideration by the Purchaser, an integration plan for the integration and consolidation of the Business and the Corporations.

5.01(y) Guarantees. The Vendors shall not take any steps, measures or actions prior to or

following the Closing Date, to terminate, cancel, or become released from or void guarantees given by them in support of the obligations of the Corporations without the Purchaser's prior written consent.

5.01(z) Investment Canada Act Approval: Prior to Closing Time #2, the Vendors shall

provide the Purchaser with information required in respect of the Vendors or the Corporations which is necessary to complete an application under the Investment Canada Act (Canada) for approval to enable the Purchaser to purchase the Purchased Shares from the Vendors and the Vendors shall further provide the Purchaser with assistance in completing such application as the Purchaser may reasonably determine to be necessary or advisable.



Appendix G – Share Purchase Agreement (long form) 5.01(aa) Excluded Assets Indemnity in Respect of Environmental Claims. The Vendors

shall indemnify and save harmless , their successors and assigns for any and all claims for remediation of Hazardous Substances and compliance with Environmental Laws in respect of the Excluded Assets.

5.01(bb) Assignment, Assumption and Indemnity Agreement. At or before Closing Time #2,

the Vendors shall execute and deliver and shall cause the Corporation to execute and deliver to the Purchaser an Assignment, Assumption and Indemnity Agreement in the form of the draft attached hereto as Exhibit "15".

5.01(cc) Payment of Dividend. Immediately before Closing Time #1, the Vendors shall

cause the dividends provided for in paragraphs 2.10 to be declared and paid by the applicable Corporations.

5.02 COVENANTS BY THE PURCHASER. The Purchaser covenants to the Warrantors that it will do or cause to be done the following: 5.02(a) Confidentiality of Information. Prior to the Closing Date and, if the transactions

contemplated hereby are not completed, at all times after the Closing Time #2, the Purchaser will keep confidential all information obtained by it relating to the Corporations and the Business, except such information which:

(i) prior to the date hereof was already in the possession of the Purchaser, as demonstrated by written records;

(ii) is generally available to the public, other than as a result of a disclosure by the Purchaser; or

(iii) is made available to the Purchaser on a non-confidential basis from a source other than the Warrantors or their representatives.

The Purchaser further agrees that such information will be disclosed only to those of its employees and representatives of its advisors who need to know such information for the purposes of evaluating and implementing the transactions contemplated hereby. Notwithstanding the foregoing provisions of this paragraph, the obligation to maintain the confidentiality of such information will not apply to the extent that disclosure of such information is required in connection with governmental or other applicable filings relating to the transactions hereunder, provided that, in such case, unless the Vendors otherwise agree, the Purchaser will, if possible, request confidentiality in respect of such governmental or other filings. If the transactions contemplated hereby are not consummated for any reason, the Purchaser will return forthwith, without retaining any copies thereof, all information and documents obtained from the Vendors and the Corporations.


Saskatchewan: Bar Admission Program G - 45 Corporate Commercial - Purchase and Sale of a Business Appendix G – Share Purchase Agreement (Long Form) 5.02(b) Corporate Action. The Purchaser shall take all necessary corporate actions, steps and

proceedings to approve or authorize, validly and effectively, the execution and delivery of this agreement and the other agreements, documents or certificates contemplated hereby, and to complete the transfer of the Purchased Shares to the Purchaser and to cause all necessary meetings of its directors and shareholders to be held for such purpose.

5.02(c) Compliance. The Purchaser shall satisfy the conditions of closing applicable to it

contained in Article 6 and it shall comply with the provisions of Article 2 applicable to it including payment of the Purchase Price and providing loans to the Corporations to enable the Corporations to pay the Settlement Amount.

5.02(d) Delivery of Closing Documentation. The Purchaser shall execute and deliver, or

cause to be executed and delivered, to the Warrantors all other agreements, documents, resolutions or certificates relevant to the closing of the transactions contemplated by this agreement or as the Vendors, acting reasonably, may request.

5.02(f) Access to Records. The Purchaser shall, from and after the Closing Date, for a period

of six years, or such other period as required by any applicable law, make the Corporations' business and financial records in existence on the Closing Date available to the Vendors for inspection and, if required by the Vendors, to make copies thereof, on reasonable notice and during the usual hours of operation of the Corporations in connection with the affairs of the Vendors.

5.02(g) Environmental Matters. The Purchaser shall cause a phase II environmental site

assessment to be conducted on the following Real Properties on or before : (i) ; (ii) ; (iii) ; (iv) ;

to investigate non-compliance with Environmental Laws or the existence or Release of Hazardous Substances and shall forthwith advise the Vendors of the results thereof.

5.02(h) Indemnity for Guarantees. On or before Closing Time #2, the Purchaser shall

execute and deliver to the Vendors and certain third parties listed in Schedule "LL" attached hereto an indemnity agreement in the form of the indemnity for guarantees attached hereto as Exhibit "12" in respect of certain guarantees provided by such parties in support of or on behalf of the obligations of the Corporations, and the Purchaser shall have such parties unconditionally released from guarantees given to lending institutions on or before 90 days from the Closing Date, and the Purchaser shall use reasonable efforts to have such parties unconditionally released from other guarantees on or before 90 days from the Closing Date.




5.02(i) Investment Canada Act Approval. At or before Closing Time #2, the Purchaser shall complete and file an application under the Investment Canada Act (Canada) to obtain approval thereunder to purchase the Purchased Shares from the Vendors and in respect of such application, the Purchaser shall use all reasonable efforts to comply with all requests or requirements which applicable law or governmental officials may impose upon it in respect of such application.

5.02(j) Discharge of Encumbrances Against Excluded Assets. At or before 90 days from the Closing Date, the Purchaser shall cause all Encumbrances against the Excluded Assets to be discharged as provided for in the Asset Purchase Agreements.

5.03 Covenants of the Co-Covenantor. The Co-Covenantor hereby covenants and agrees with the Warrantors to be jointly and severally liable with the Purchaser under the terms of this agreement to the same extent as the Purchaser and any reference in this agreement to the Purchaser shall be deemed to refer equally to the Co-Covenantor. It is a true condition precedent to the performance of obligations of the Co-Covenantor under this paragraph 5.03 and this agreement, which condition is inserted for the sole benefit of the Co-Covenantor, that the Co-Covenantor receive or obtain all necessary corporate and other approvals, to approve, authorize and ratify, validly and effectively, the execution and delivery of this agreement, by the Co-Covenantor, failing which the Co-Covenantor's obligations under this paragraph 5.03 and this agreement shall be null and void and of no effect. The Co-Covenantor shall forthwith notify the Vendors in writing once this condition precedent has been satisfied and thereafter deliver a copy of all such necessary corporate and other approvals to the Vendors.

ARTICLE 6 CONDITIONS

6.01 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. Notwithstanding anything herein contained, the obligation of the Purchaser to complete the transactions provided for herein will be subject to the fulfillment of the following conditions at or prior to Closing Time #2. 6.01(a) Accuracy of Representations and Warranties and Performance of Covenants. The

representations and warranties of the Warrantors contained in this agreement or in any documents delivered in order to carry out the transactions contemplated hereby shall be true and accurate on the date hereof and at Closing Time #2 with the same force and effect as though such representations and warranties had been made as at the Closing Time #2, regardless of the date as of which the information in this agreement or in any Schedule or other document made pursuant hereto is given. In addition, the Warrantors shall have complied with all covenants and agreements herein agreed to be performed or caused to be performed by them at or prior to Closing Time #2. In addition, the Warrantors shall have delivered to the Purchaser a certificate in the form



of Exhibit "3" attached hereto confirming that the facts with respect to each of such representations and warranties by the Warrantors are as set out herein at Closing Time #2, and that the Warrantors have performed all covenants required to be performed by them hereunder.

6.01(b) Adverse Changes. During the Interim Period, there will have been no change in the

Business or the Condition of the Corporations, howsoever arising, except changes which have occurred in the ordinary course of the Business or in accordance with the transactions authorized pursuant to Article 2 hereof and which, individually or in the aggregate, have not affected and may not affect the Business or the Condition of the Corporations in any material adverse respect. Without limiting the generality of the foregoing, during the Interim Period: (i) no damage to or destruction of any part of the property or assets of the Corporations shall have occurred, whether or not covered by insurance; and (ii) neither shall have resigned or have indicated their intention to resign from employment with the Corporations. For greater certainty, the following events or circumstances shall not constitute a material change in the Business or Condition of the Corporations: (i) a loss of a contract; (ii) unforeseen price increases in supplies; and (iii) attempts by a union to organize any of the employees of the Corporations.

6.01(c) Legal Matters. All actions, proceedings, instruments and documents required to

implement this agreement, or instrumental hereto, and all legal matters relating to the purchase of the Purchased Shares by the Purchaser, including title of the Vendors to the Purchased Shares, shall have been approved as to form and legality by , counsel for the Purchaser, acting reasonably.

6.01(d) No Restraining Proceedings. No order, decision or ruling of any court, tribunal or

regulatory authority having jurisdiction shall have been made, and no action or proceeding shall be pending or threatened which, in the opinion of counsel to the Purchaser, is likely to result in an order, decision or ruling,

(i) to disallow, enjoin, prohibit or impose any limitations or conditions on the purchase and sale of the Purchased Shares contemplated hereby or the right of the Purchaser to own the Purchased Shares; or

(ii) to impose any limitations or conditions which may, in the absolute discretion of the Purchaser, have an adverse affect on the Business or the Condition of the Corporations.

6.01(e) Regulatory and Contractual Consents. All consents, permits, licenses, certificates,

registrations, authorizations, approval or notifications required to be obtained or done in order to carry out the transactions contemplated hereby in compliance with all laws and agreements binding on the parties hereto shall have been obtained, including the consents referred to in Schedules "F" and "W" attached hereto and under the Investment Canada Act, but not including the change in control consent required from .




6.01(f) Escrow Agreement. At Closing Time #2, the Vendors and shall have executed and delivered to the Purchaser an escrow agreement in the form of the draft agreement attached hereto as Exhibit "7".

6.01(g) Opinion of Vendors' Counsel. At Closing Time #2, the Purchaser shall have received an opinion of legal counsel for the Vendors and the Corporations in the form of the draft opinion attached hereto as Exhibit "4", which opinion may rely on certificates of one or more senior officers of the corporate Vendors and the Corporations as to factual matters and may rely on opinions of local counsel with respect to matters governed by laws other than the laws of Saskatchewan and the federal laws of Canada applicable in Saskatchewan.

6.02 WAIVER OR TERMINATION BY PURCHASER. The conditions contained in paragraph 6.01 hereof are inserted for the exclusive benefit of the Purchaser and may be waived in whole or in part by the Purchaser at any time. The Warrantors acknowledge that the waiver by the Purchaser of any condition or any part of any condition shall constitute a waiver only of such condition or such part of such condition, as the case may be, and shall not constitute a waiver of any covenant, agreement, representation or warranty made by the Warrantors herein that corresponds or is related to such condition or such part of such condition, as the case may be. Any such condition may be waived in whole or in part by the Purchaser without prejudice to any claims for indemnification it may have against the Vendors for breach of covenants, representations or warranties after the closing of the transactions hereby contemplated pursuant to Article 8 hereof. If any of the conditions contained in paragraph 6.01 hereof are not fulfilled or complied with as herein provided, the Purchaser may, at or prior to Closing Time #2 at its option, rescind this agreement by notice in writing to the Warrantors and, in such event, the Purchaser shall be released from all obligations hereunder; provided, however, that the Purchaser may also bring an action against the Warrantors for all losses, damages, costs and expenses suffered by the Purchaser where the non-performance or non-fulfillment of the relevant condition is as a result of a breach of covenant, representation or warranty by the Warrantors.

6.03 CONDITIONS TO THE OBLIGATIONS OF THE VENDORS. Notwithstanding anything herein contained, the obligations of the Warrantors to complete the transactions provided for herein will be subject to the fulfillment of the following conditions at or prior to Closing Time #2:

6.03(a) Accuracy of Representations and Warranties and Performance of Covenants. The representations and warranties of the Purchaser contained in this agreement or in any documents delivered in order to carry out the transactions contemplated hereby will be true and accurate on the date hereof and at Closing Time #2 with the same force and effect as though such representations and warranties had been made as of Closing Time #2 (regardless of the date as of which the information in this agreement or any such schedule or other document made pursuant hereto is given). In addition, the Purchaser shall have complied with all covenants and agreements herein agreed to be performed or caused to be performed by it at or prior to Closing Time #2. In addition,



the Purchaser shall have delivered to the Vendors a certificate in the form of Exhibit "5" attached hereto confirming that the facts with respect to each of the representations and warranties of the Purchaser are as set out herein at Closing Time #2 and that the Purchaser has performed each of the covenants required to be performed by it hereunder.

6.03(b) No Restraining Proceedings. No order, decision or ruling of any court, tribunal or

regulatory authority having jurisdiction shall have been made, and no action or proceeding shall be pending or threatened which, in the opinion of counsel to the Warrantors is likely to result in an order, decision or ruling, to disallow, enjoin or prohibit the purchase and sale of the Purchased Shares contemplated hereby.

6.03(c) Regulatory and Contractual Consents. All consents, permits, licenses, certificates,

registrations, authorizations, approvals or notifications required to be obtained or done in order to carry out the transactions contemplated hereby in compliance with all laws and agreements binding on the parties hereto shall have been obtained, including the consents referred to in Schedules "F" and "W" attached hereto.

6.03(d) Opinion of Purchaser's Counsel. At the Closing Time #2, the Warrantors shall have

received an opinion of the Purchaser's counsel in the form of the draft opinion attached hereto as Exhibit "6", which opinion may rely on certificates of senior officers of the Purchaser as to factual matters and may rely upon opinions of local counsel with respect to matters governed by laws other than the laws of Saskatchewan and the federal laws of Canada applicable in Saskatchewan.

6.03(e) Opinion of Co-Covenantor's Counsel. At Closing Time #2, the Co-Covenantor shall

have received an opinion of the Co-Covenantor's counsel in a form acceptable to counsel for both the Co-Covenantor and the Vendors, acting reasonably, which opinion may rely on certificates of senior officers of the Co-Covenantor as to factual matters and may rely upon opinions of local counsel with respect to matters governed by laws other than laws of Saskatchewan and the Federal laws of Canada applicable in Saskatchewan.

6.03(f) Legal Matters. All actions, proceedings, instruments and documents required to

implement this agreement, or instrumental hereto, and all legal matters relating to the sale of the Purchased Shares to the Purchaser shall have been approved as to form and legality by counsel for the Vendors, acting reasonably.

6.04 WAIVER OF TERMINATION BY WARRANTORS. The conditions contained in paragraph 6.03 hereof are inserted for the exclusive benefit of the Warrantors and may be waived in whole or in part by the Warrantors any time. The Purchaser acknowledges that waiver by the Warrantors of any condition or any part of any condition shall constitute a waiver only of such condition or such part of such condition, as the case may be, and shall not constitute a waiver of any covenant, agreement, representation or warranty made by the Purchaser herein that



Appendix G – Share Purchase Agreement (long form) corresponds or is related to such condition or such part of such condition, as the case may be. Any such condition may be waived in whole or in part by the Warrantors without prejudice to any claims for indemnification the Vendors may have against the Purchaser for breach of covenants, representations or warranties after the closing of the transactions hereby contemplated. If any of the conditions contained in paragraph 6.03 hereof are not fulfilled or complied with as herein provided, the Warrantors may, at or prior to Closing Time #2 at their option, rescind this agreement by notice in writing to the Purchaser; provided, however, that the Warrantors may also bring an action against the Purchaser for all losses, damages, costs and expenses suffered by the Warrantors where the non-performance or non-fulfillment of the relevant conditions is as a result of a breach of the covenants, representations or warranties by the Purchaser.

ARTICLE 7 CLOSING

7.01 CLOSING ARRANGEMENTS. Subject to the terms and conditions hereof, the transactions contemplated herein shall be closed on the Closing Date at the offices of Balfour Moss, 700 - 2103 - 11th Avenue, Regina, Saskatchewan, or at such other place or places as may be mutually agreed on by the Vendors and the Purchaser. 7.02 DOCUMENTS TO BE DELIVERED. At or before Closing Time #2, the Vendors shall execute, or cause to be executed, and shall deliver, or cause to be delivered, to the Purchaser all documents, instruments and things which are to be delivered by the Vendors or the Corporations pursuant to the provisions of this agreement, and the Purchaser shall execute, or cause to be executed, and shall deliver, or cause to be delivered, to the Vendors all cheques or bank drafts and all documents, instruments and things which the Purchaser is to deliver or to cause to be delivered pursuant to the provisions of this agreement.

ARTICLE 8 INDEMNIFICATION AND SET-OFF

8.01 INDEMNITY BY THE VENDORS.

8.01(a) The Vendors hereby agree to indemnify and save the Purchaser harmless from and against any claims, demands, actions, causes of action, damages, losses, deficiencies, costs, liabilities and expenses which may be made or brought against the Purchaser or which the Purchaser may suffer or incur as a result of, in respect of or arising out of:

(i) the non-performance or non-fulfillment of any covenant or agreement on the part of the Vendors or the Corporations contained in this agreement or in any document given in order to carry out the transactions contemplated hereby;



(ii) any misrepresentation, inaccuracy, incorrectness or breach of any representation or warranty made by the Vendors and the Corporations contained in this agreement or contained in any document or certificate given in order to carry out the transactions contemplated hereby; and

(iii) all costs and expenses including, without limitation, legal fees on a solicitor and own-client basis, incidental to, arising from or in respect of the foregoing.

8.01(b) The obligations of indemnification by the Vendors pursuant to paragraph 8.01(a) will be: (i) subject to the limitations referred to in paragraph 4.01 hereof with respect to

the survival of the representations and warranties by the Warrantors; and (ii) subject to the provisions of paragraph 8.02 hereof. 8.02 PROVISIONS RELATION TO INDEMNITY CLAIMS. The following provisions will apply to any claim by the Purchaser for indemnification by the Vendors pursuant to paragraph 8.01 hereof (an "Indemnity Claim"). 8.02(a) Promptly after becoming aware of any matter that may give rise to an Indemnity

Claim, the Purchaser will provide to the Vendors written notice of the Indemnity Claim specifying (to the extent that information is available) the factual basis for the Indemnity Claim and the amount of the Indemnity Claim or, if an amount is not then determinable, an estimate of the amount of the Indemnity Claim, if an estimate is feasible in the circumstances.

8.02(b) If an Indemnity Claim relates to an alleged liability of the Corporations to any other

person (a "Third Party Liability"), including without limitation any governmental or regulatory body or any taxing authority, which is of a nature such that the Corporations is required by applicable law to make a payment to a third party before the relevant procedure for challenging the existence or quantum of the alleged liability can be implemented or completed, then the Purchaser may, notwithstanding the provisions of paragraphs 8.02(c) and 8.02(d), make such payment or cause the Corporations to make such payment and forthwith demand reimbursement for such payment from the Vendors in accordance with this agreement; provided that, if the alleged Third Party Liability as finally determined on completion of settlement negotiations or related legal proceedings is less than the amount paid by the Vendors in respect of the related Indemnity Claim, then the Corporations or the Purchaser, as the case may be, shall forthwith following the final determination pay to the Vendors the amount by which the amount of the Third Party Liability as finally determined is less than the amount so paid by the Vendors.



Appendix G – Share Purchase Agreement (long form) 8.02(c) The Purchaser shall not negotiate, settle, compromise or pay (except in the case of

payment of a judgment) any Third Party Liability as to which it proposes to assert an Indemnity Claim, except with the prior consent of the Vendors (which consent shall not be unreasonably withheld or delayed), unless there is a reasonable possibility that such Third Party Liability may adversely affect the Business, the Condition of the Corporations or the Purchaser, in which case the Purchaser shall have the right, after notifying the Vendors, to negotiate, settle, compromise or pay such Third Party Liability without prejudice to its rights of indemnification hereunder.

8.02(d) With respect to any Third Party Liability, provided the Vendors first admit the

Purchaser's right to indemnification for the amount of such Third Party Liability which may at any time be determined or settled, then, in any legal, administrative or other proceedings in connection with the matters forming the basis of the Third Party Liability, the following procedures will apply:

(i) except as contemplated by subparagraph (iii) of this paragraph, the Vendors will have the right to assume carriage of the compromise or settlement of the Third Party Liability and the conduct of any related legal, administrative or other proceedings, but the Purchaser and the Corporations shall have the right and shall be given the opportunity to participate in the defence of the Third Party Liability, to consult with the Vendors in the settlement of the Third Party Liability and the conduct of related legal, administrative and other proceedings (including consultation with counsel) and to disagree on reasonable grounds with the selection and retention of counsel, in which case counsel satisfactory to the Vendors shall be retained by the Vendors;

(ii) the Vendors will co-operate with the Purchaser in relation to the Third Party Liability, will keep it fully advised with respect thereto, will provide it with copies of all relevant documentation as it becomes available, will provide it with access to all records and files relating to the defence of the Third Party Liability and will meet with representatives of the Purchaser at all reasonable times to discuss the Third Party Liability; and

(iii) notwithstanding subparagraphs (i) and (ii) of this paragraph, the Vendors will not settle the Third Party Liability or conduct any legal, administrative or other proceedings in any manner which could, in the reasonable opinion of the Purchaser, have an adverse affect on the Business, the Condition of the Corporations or the Purchaser, except with the prior written consent of the Purchaser.

8.02(e) If, with respect to any Third Party Liability, the Vendors do not admit the Purchaser's

right to indemnification or decline to assume carriage of the settlement or of any legal, administrative or other proceedings relating to the Third Party Liability, then the following provisions will apply:



(i) the Purchaser, at its discretion, may assume carriage of the settlement or of any legal, administrative or other proceedings relating to the Third Party Liability and may defend or settle the Third Party Liability on such terms as the Purchaser, acting in good faith, considers advisable; and

(ii) any cost, loss, damage or expense incurred or suffered by the Purchaser and the Corporations in the settlement or defence of such Third Party Liability or the conduct of any legal, administrative or other proceedings shall be added to the amount of the Indemnity Claim.

8.03 RIGHT OF SET-OFF. Each of the Purchaser and the Corporations shall have the right to satisfy any amount from time to time owing by it to the Vendors including, without limitation, the Purchase Price holdback held in escrow pursuant to the escrow agreement referred to in paragraphs 5.01(u) and 6.02(f) by way of set-off against any amount from time to time owing by the Vendors to the Purchaser or the Corporations, including any amount owing to the Purchaser pursuant to the Vendors covenants contained in Articles 2 and 5 hereof or pursuant to the Vendors indemnification pursuant to Article 8 hereof.

ARTICLE 9 GENERAL PROVISIONS

9.01 FURTHER ASSURANCES. The Vendors and the Purchaser each hereby covenant and agree that at any time and from time to time after the Closing Date they will, on the request of the others, do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, assignments, transfers, conveyances and assurances as may be required for the better carrying out and performance of all the terms of this agreement. 9.02 NOTICES.

9.02(a) Any notice, designation, communication, request, demand or other document, required or permitted to be given or sent or delivered hereunder to any party hereto shall be in writing and shall be sufficiently given or sent or delivered if it is:

(i) delivered personally to an officer or director of such party; (ii) sent to the party entitled to receive it by registered mail, postage prepaid,

mailed in Canada; or (iii) sent by telecopy machine. 9.02(b) Notices shall be sent to the following addresses or telecopy numbers:

(i) in the case of the Vendors, A.

B.




(ii) in the case of the Group A. B. (iii) in the case of the Purchaser: or to such other address or telecopier number as the party entitled to or receiving such

notice, designation, communication, request, demand or other document shall, by a notice given in accordance with this paragraph, have communicated to the party giving or sending or delivering such notice, designation, communication, request, demand or other document.

9.02(c) Any notice, designation, communication, request, demand or other document given or

sent or delivered as aforesaid shall: (i) if delivered personally, as aforesaid, be deemed to have been given, sent,

delivered and received on the date of delivery; (ii) if sent by mail, as aforesaid, be deemed to have been given, sent, delivered

and received (but not actually received) on the fourth Business Day following the date of mailing, unless at any time between the date of mailing and the fourth Business Day thereafter there is a discontinuance or interruption of regular postal service, whether due to strike or lockout or work slowdown, affecting postal service at the point of dispatch or delivery or any intermediate point, in which case the same shall be deemed to have been given, sent, delivered and received in the ordinary course of the mails, allowing for such discontinuance or interruption of regular postal service; and

(iii) if sent by telecopy machine, as aforesaid, be deemed to have been given, sent, delivered and received on the date the sender receives the telecopy answer back confirming receipt by the recipient.

9.03 COUNTERPARTS. This agreement may be executed in several counterparts, each of which so executed shall be deemed to be an original, and such counterparts together shall constitute but one and the same instrument. 9.04 TRANSMISSION BY FACSIMILE. The parties hereto agree that this agreement may be transmitted by facsimile or such similar device and that the reproduction of signatures by facsimile or such similar device will be treated as binding as if originals and each party hereto undertakes to provide the other parties with a copy of this agreement bearing original signatures forthwith by courier.


Saskatchewan: Bar Admission Program G - 55 Corporate Commercial - Purchase and Sale of a Business Appendix G – Share Purchase Agreement (Long Form) 9.05 EXPENSES OF PARTIES. Each of the parties hereto shall bear all expenses incurred by it in connection with this agreement including, without limitation, the charges of their respective counsel, accountants, financial advisors and finders. 9.06 BROKERAGE AND FINDER'S FEES. The Vendors agree to indemnify the Purchaser and the Corporations and hold each of them harmless in respect of any claim for brokerage or other commissions relative to this agreement or the transactions contemplated hereby which is caused by actions of the Vendors or any of their Affiliates. The Purchaser will indemnify the Vendors and hold them harmless in respect of any claim for brokerage or other commissions relative to this agreement or to the transactions contemplated hereby which is caused by actions of the Purchaser or any of its Affiliates. 9.07 ANNOUNCEMENTS. No announcement with respect to this agreement will be made by any party hereto without the prior approval of the other parties. The foregoing will not apply to any announcement by any party required in order to comply with laws pertaining to timely disclosure, provided that such party consults with the other parties before making any such announcement. 9.08 ASSIGNMENT. The rights of the Warrantors hereunder shall not be assignable without the written consent of the Purchaser. 9.09 SUCCESSORS AND ASSIGNS. This agreement shall be binding on and enure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns. Nothing herein, express or implied, is intended to confer on any person, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this agreement. 9.10 ENTIRE AGREEMENT. This agreement and the schedules referred to herein constitute the entire agreement between the parties hereto and supersede all prior agreements, representations, warranties, statements, promises, information, arrangements and understandings, whether oral or written, express or implied, with respect to the subject matter hereof. None of the parties hereto shall be bound or charged with any oral or written agreements, representations, warranties, statements, promises, information, arrangements or understandings not specifically set forth or referred to in this agreement or in the Schedules, documents and instruments to be delivered on or before the Closing Date pursuant to this agreement. The parties hereto further acknowledge and agree that, in entering into this agreement and in delivering the Schedules, documents and instruments to be delivered on or before the Closing Date, they have not in any way relied, and will not in any way rely, on any oral or written agreements, representations, warranties, statements, promises, information, arrangements or understandings, express or implied, not specifically set forth or referred to in this agreement or in such schedules, documents or instruments.



Appendix G – Share Purchase Agreement (long form) 9.11 WAIVER. Any party hereto which is entitled to the benefits of this agreement may, and has the right to, waive any term or condition hereof at any time on or prior to Closing Time #2; provided, however, that such waiver shall be evidenced by written instrument duly executed on behalf of such party. 9.12 AMENDMENTS. No modification or amendment to this agreement may be made unless agreed to by the parties hereto in writing. 9.13 NON-MERGER. Each party hereby agrees that all provisions of this agreement, other than the representations and warranties contained in Article 3 (which shall survive for the period referred to in Article 3) shall forever survive the execution, delivery, performance and closing of the transactions contemplated by this agreement, and the execution, delivery and performance of any and all documents delivered in connection with this agreement. IN WITNESS WHEREOF the parties hereto have duly executed this agreement under seal as of the day and year first above written. Per: ___________________________________ Per: ___________________________________ SIGNED, SEALED AND DELIVERED ) By in the presence of: ) __________________________________ ) Witness ) ) ____________________________ SIGNED, SEALED AND DELIVERED ) By in the presence of: ) __________________________________ ) Witness ) ) ____________________________ Per: ___________________________________ Per: ___________________________________


Saskatchewan: Bar Admission Program H - 1 Corporate Commercial – Purchase and Sale of a Business Appendix H – Share Purchase Agreement (Short Form)

OF THE FIRST PART

- and -

QUICK-PRINT SERVICES CORPORATION (hereinafter called the "Purchaser")

OF THE SECOND PART

WHEREAS the Purchaser has agreed to purchase from the Vendor, and the Vendor has agreed to sell to the Purchaser, all of the Vendor's common shares in the capital stock of Dole Printing Corporation:

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the

covenants, agreements, warranties, indemnities and consideration herein contained, the parties hereto covenant and agree as follows: ARTICLE 1: INTERPRETATION

1.01 Defined Terms

SHARE PURCHASE AGREEMENT THIS AGREEMENT made as of the ___ day of ______________, 20__. BETWEEN:

ABC MANAGEMENT INC. (hereinafter called the "Vendor")

. Where used herein or in any schedule hereto, the following terms shall have the following meanings respectively:

(a) "Business" means the business presently carried on by Corporation, including instant print, business forms, printing of base stock for cheques and computer generated reserve seat ticketing;

(b) "Closing Date" means the ____ day of ______ , 20__ or such other date as may be mutually agreed upon by the parties hereto;

(c) "Corporation" means Dole Printing Corporation, a body corporate incorporated under the laws of the Province of Saskatchewan:

(d) "Financial Statements" means the audited financial statements of Corporation as at December 31, 20__ for the year then ended comprising of the balance sheets of Corporation and accompanying statements of earnings and retained earnings and of changes in financial position and the report of the auditor thereon, all as attached hereto as Schedule l;


H - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix H – Share Purchase Agreement (Short Form)

(e) "Note" means the promissory note delivered by the Purchaser to the Vendor in the principal amount of $500,000 in satisfaction of part of the Purchase Price as set out in Section 2.01 hereof which promissory note shall be substantially in the form annexed hereto as Schedule 9;

(f) "Purchased Shares" means the 10,000 common shares in the capital of the Corporation sold hereunder by the Vendor, as defined in Section 2.01;

(g) "Time of Closing" means 2 p.m. Central Standard Time on the Closing Date; 1.02 Schedules. The following are the Schedules attached to and incorporated in this Agreement by reference and deemed to be part hereof:

Schedules: 1. Financial Statements (Sections 1.01(e) and 3.07) 2. Collective Agreements, Employment, Service and Pension Agreements (Section 3.12

and 3.24) 3. Bonds, Debentures, Mortgages, etc. (Section 3.25) 4. Real Property and Real Property Leases (Section 3.26 and 3.27) 5. Conditional Sales Contracts (Section 3.29) 6. Insurance Policies (Section 3.14) 7. Contracts and Agreements (Section 3.28, 3.30 and 3.31) 8. Bank Accounts, Signing Officers and Powers of Attorney (Section 3.32) 9. Note (Section 2.01) 10. Release (Section 4.03) 11. Guarantees (Section 3.18) 12. Litigation (Section 3.10) 1.03 Headings and Table of Contents. The division of this Agreement into articles, sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in the construction or interpretation hereof. 1.04 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws in force in the Province of Saskatchewan. 1.05 Currency. All references in this Agreement to dollars are expressed in Canadian currency. 1.06 Amendment. This Agreement shall not be varied, modified, amended, supplemented or replaced except by written agreement executed by the parties hereto. 1.07 Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto relating to the purchase and sale of the Purchased Shares, and supercedes and cancels any and all pre-existing agreements and understandings relating thereto, and any and all prior and contemporaneous negotiations, prior memoranda of understanding or position; and preliminary


Saskatchewan: Bar Admission Program H - 3 Corporate Commercial – Purchase and Sale of a Business Appendix H – Share Purchase Agreement (Short Form) drafts and prior versions of this Agreement whether signed or unsigned, shall not be used by any party to construe the terms or affect the validity or interpretation of this Agreement. No representation, inducement, promise, understanding, condition or warranty not set forth herein has been made or relied upon by any party. ARTICLE 2: PURCHASE AND SALE 2.01 Purchase of Shares of Corporation. Subject to the terms and conditions hereof, the Vendor covenants and agrees to sell, assign and transfer to the Purchaser, and the Purchaser covenants and agrees with the Vendor to purchase, all of the Vendor's 10,000 common shares in the capital stock of Corporation, being all of the issued and outstanding shares in the capital stock of Corporation (the "Purchased Shares") for a purchase price (the "Purchase Price") of $1,500,000 payable at the Time of Closing by way of a promissory note issued by the Purchaser in favour of the Vendor in the principal amount of $500,000 in the form as set out in Schedule 9 (the "Note") with the balance of $1,000,000 payable by certified cheque or banker's draft payable to the Vendor or its order. ARTICLE 3: REPRESENTATIONS AND WARRANTIES OF THE VENDOR

The Vendor hereby covenants, represents and warrants as follows and acknowledges that the Purchaser is relying upon such covenants, representations and warranties in connection with the purchase by the Purchaser of the Purchased Shares:

3.01 Corporate Status. Each of Corporation and the Vendor has been duly incorporated and organized and is validly subsisting and in good standing under the laws under which it was incorporated; Corporation has the corporate power to own or lease its property and to carry on the Business as now being conducted by it and is duly qualified as a corporation to do business and is in good standing in each jurisdiction in which the nature of the Business now being conducted by it or the property owned or leased by it makes such qualification necessary.

3.02 Corporation's Authorized Capital. The authorized capital of Corporation consists of an unlimited number of common shares and preference shares of which 10,000 common shares (and no more) have been duly issued and are outstanding as fully paid and non-assessable shares with no preference shares having been issued.

3.03 Title to Shares. The Purchased Shares are owned by the Vendor as the legal and beneficial owner of record, with good and marketable title to its said shares free and clear of all mortgages, liens, charges, security interests, adverse claims, pledges, encumbrances and demands whatsoever.

3.04 Authority for Transactions. The Vendor has all requisite entitlement, right and the necessary power and authority, corporate or otherwise, to execute and deliver this Agreement and to sell the Purchased Shares to the Purchaser in accordance with the terms hereof and this Agreement constitutes a valid and binding obligation of the Vendor enforceable against the Vendor in accordance with its terms.




3.05 Options from Vendor. No person, firm, corporation or governmental body has any written or oral agreement or option or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase from the Vendor of any of the Purchased Shares.

3.06 Options from Corporation. No person, firm, corporation or governmental body has any written or oral agreement or option or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, including convertible securities, warrants or convertible obligations of any nature, for the purchase, subscription, allotment or issuance of any of the unissued shares in the capital of Corporation or of any securities of Corporation.

3.07 Financial Statements. The Financial Statements have been prepared in accordance with generally accepted accounting principles (except as disclosed in the auditor's comments therein) applied on a basis consistent with those of previous years and present fairly (i) the assets, liabilities (whether accrued, absolute, contingent or otherwise) and the financial condition of Corporation for the period covered; and (ii) the sales, earnings and results of the operations of Corporation during the period covered.

3.08 Material Changes. Since December 31, 20__ there has been no material change in the business, operations, affairs or condition of Corporation, financial or otherwise howsoever arising which has materially adversely affected, or will materially adversely affect, the organization, business, properties, prospects or financial condition of Corporation.

3.09 Binding Obligations. The entering into of this Agreement and completion of the transactions contemplated hereby will not result in: (a) the violation of any of the terms and provisions of the constating documents or

bylaws of Corporation or of the Vendor or of any indenture or other agreement, written or oral, to which Corporation or the Vendor is a party or may be bound; or

(b) the violation of any judgment, decree, order, rule, statute law or regulation applicable to Corporation or to the Vendor.

3.10 Litigation. Except as disclosed in Schedule 12, there are no actions, suits or proceedings (whether or not purportedly on behalf of Corporation), threatened against or affecting Corporation or the Vendor, at law or in equity, or before or by any federal, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, involving the possibility of any judgment against or liability of Corporation not fully covered by insurance; and the Vendor is not now aware of any existing ground on which any such action, suit or proceeding might be commenced with any reasonable likelihood of success.

3.11 Compliance with Laws. Corporation is conducting its Business in compliance with all applicable laws, rules and regulations of each jurisdiction in which the Business is carried on, is not in breach of any such laws, rules or regulations and is duly licensed, registered or qualified in each jurisdiction in which Corporation owns or leases property or carries on the Business, to enable the Business to be carried on as now conducted and its property and assets to be owned,


Saskatchewan: Bar Admission Program H - 5 Corporate Commercial – Purchase and Sale of a Business Appendix H – Share Purchase Agreement (Short Form) leased and operated, and all such licenses, registrations and qualifications are valid and subsisting and in good standing and none of the same contains any burdensome term, provision, condition or limitation which has or may have an adverse effect on the operation of the Business.

3.12 Labour Matters. Except as set out in Schedule 2, Corporation has not made any agreements with any labour union or employee association nor made commitments to or conducted negotiations with any labour union or employee association with respect to any future agreements other than in connection with the negotiation of a new or revised collective bargaining agreement to replace or amend those set out in Schedule 2. There is no grievance or complaint, action or other proceeding by or against Corporation filed, pending or threatened which involves or alleges any breach or violation of any law with respect to industrial relations, employment, employment practices, terms and conditions of employment or wrongful dismissal.

3.13 Income Tax Status. The Vendor is resident in Canada within the meaning of the Income Tax Act (Canada).

3.14 Insurance. Corporation has its property and business insured against loss or damage as disclosed in Schedule 6 and such insurance coverage will be continued in full force and effect to and including the Closing Date; that annexed hereto as Schedule 6 is a true and complete schedule setting out all insurance policies (specifying the insurer, the amount of the coverage, the type of insurance, the policy number and any pending claims thereunder) maintained by Corporation on its properties, assets, businesses or personnel; as of the date hereof, Corporation is not in default with respect to any of the provisions contained in any such insurance policy and has not failed to give any notice or present any claim under any such insurance policy in due and timely fashion.

3.15 Taxes Paid. Corporation has duly and timely filed all tax returns required to be filed by it and has paid all taxes which are due and payable, including, without limitation, all federal, provincial, sales, excise, income, corporate or any other taxes of Corporation, and has paid all assessments and reassessments, and all other governmental charges, penalties, interest and fines due and payable by it on or before the date hereof; a notice of assessment by Revenue Canada has been issued for all fiscal years up to the fiscal year ended December 31, 20__ and no notice of reassessment by Revenue Canada has been received by Corporation; adequate provision has been made in the Financial Statements for taxes payable in respect of the period reported on and adequate provision has been made for payment of taxes since December 31, 20__; there are no agreements, waivers or other arrangements providing for an extension of time with respect to the filing of any tax return by, or payment of any tax, governmental charge or deficiency against Corporation; there are no actions, suits, proceedings, investigations or claims now threatened against Corporation in respect of taxes, governmental charges or assessments, or any matters under discussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority; Corporation has withheld from each payment made to any of its officers, directors, former directors, and employees the amount of all taxes, including but not limited to income tax, and all other deductions required to be withheld therefrom and has paid the same to the proper tax or other receiving officers within the time required under any applicable tax legislation.




3.16 Assets and Condition of Assets. Based on due inquiry and to the best of the Vendor's information, knowledge and belief, all personal property and other assets of Corporation currently used in the Business are in good, working and usable condition.

3.17 Subsidiaries. Corporation has no subsidiaries or agreements of any nature to acquire any subsidiary or to acquire or lease any other business operations and will not prior to the Time of Closing acquire, or agree to acquire, any subsidiary or business without the prior written consent of the Purchaser.

3.18 Guarantees. Corporation is not a party to or bound by any agreement of guarantee, indemnification, assumption or endorsement or any other like commitment of the obligations, liabilities (contingent or otherwise) or indebtedness of any other person, firm or corporation except as referred to in Schedule 11.

3.19 Books and Records. The books and records of Corporation fairly and correctly set out and disclose in all material respects, in accordance with generally accepted accounting principles, (except as disclosed in the auditor's comments thereon) the financial position of Corporation as at the date hereof and all material financial transactions of Corporation relating to the Business have been accurately recorded in such books and records.

3.20 Corporate Minutes. The corporate records and minute books of Corporation contain complete and accurate minutes of all meetings of the directors and shareholders of Corporation held since May, 1979, all such meetings were duly called and held, the share certificate books, register of shareholders, register of transfers, and register of directors of Corporation are complete and accurate.

3.21 Dividends or Distributions. Since December 31, 1991, Corporation has not directly or indirectly declared or paid any dividends or declared or made any other distribution on any of its shares of any class and has not directly or indirectly redeemed, purchased or otherwise acquired any of its shares of any class or agreed to do so.

3.22 Payments by Corporation. Other than repayment of any loans between Corporation and the Vendor which loans were disclosed in the Financial Statements, no payments have been made or authorized by Corporation since December 31, 1991 to its officers, directors, former directors, shareholders or employees or to any person or company not dealing at arm's length (as such term is defined under the Income Tax Act (Canada)) with any of the foregoing, except in the ordinary course of business and at the regular rates payable to them of salary, pension, bonuses, rents or other remuneration of any nature.

3.23 Capital Expenditures. No capital expenditures except in the ordinary course of business have been made or authorized by Corporation since December 31, 1991, and no capital expenditures will be made or authorized by Corporation after the date hereof and up to the Time of Closing without the prior written consent of the Purchaser.

3.24 Employment, Pension Agreements. Corporation is not a party to any written or oral employment, service or pension agreement, except as set out and described in Schedule 2.



3.25 Bonds, Debentures, Mortgages. Except as set out in Schedule 3 hereto, Corporation does not have outstanding any bonds, debentures, mortgages, notes or other indebtedness payable on demand or maturing more than one year after the date of their creation or issuance and Corporation is not under any agreement to create or issue any bonds, debentures, mortgages, notes or other indebtedness maturing more than one year after the date of their creation or issuance.

3.26 Leases of Real Property. Corporation is not a lessee under any lease or agreement in the nature of a lease of real property except those leases set out and described in Schedule 4 hereto (in which is specified the parties to each of such leases, their dates of execution and expiry dates, any options to renew, the locations of any leased lands and premises and the rental payable thereunder), and each of such leases is in good standing and in full force and effect without amendment thereto and Corporation is not in material breach of any of the covenants, conditions or agreements contained in such lease.

3.27 Real Property. Except as set out and described in Schedule 4 Corporation is not the owner of or a party under any agreement to purchase or option to acquire any real property.

3.28 Status of Contracts. Corporation is not knowingly materially in default or breach of any contracts, agreements, written or oral, indentures or other instruments to which it is a party and to the best of the Vendor's knowledge, information and belief each of the contracts and agreements listed in Schedule 7 is in full force and effect without amendment (except as noted in the said schedule); is enforceable against the parties thereto in accordance with its terms, no party to any of them is materially in default thereunder or in breach thereof or would, after the giving of notice or the lapse of time or both, be in such default or breach; and each is subject only to such security interests or other encumbrances as specified in Schedule 7.

3.29 Title to Assets. Except as set out and described in Schedule 5 hereto, Corporation is not a purchaser or lessee under any conditional sales contract, equipment lease, agreement or other title retention agreement and, except as set out and described in Schedules 3, 5 and 7 hereto, Corporation owns, possesses and has a good and marketable title to its undertaking, property and assets, free and clear of any and all mortgages, liens, pledges, charges, security interests, encumbrances, actions, claims or demands of any nature whatsoever or howsoever arising.

3.30 Agreements. Corporation does not have any outstanding material agreement, contract or commitment, whether written or oral, of any nature or kind whatsoever, except the contracts and agreements referred to in Schedules 2, 3, 4, 5, 6, 7, 8 and 11 hereto and except contracts requiring payments which on an annual basis are less than $6,000. and which can be terminated without penalty on less than 3 months notice.

3.31 Patents and Infringement. There has been no claim asserted against Corporation that the conduct of the Business infringes upon the patents, trade marks, trade names, copyrights, or other proprietory right, domestic or foreign, of any other person, firm or corporation, and to the best of the Vendor's information, knowledge and belief no such infringement is occurring or has occurred in connection with the conduct of the Business. Except as disclosed in Schedule 7, Corporation does not use any patent, trade mark, trade name, copyright or other proprietary right not owned by or registered in the name of Corporation.



Appendix H – Share Purchase Agreement (Short Form) 3.32 Bank Accounts, Signing Officers. Annexed hereto as Schedule 8 is a true and complete list showing:

(a) the name of each bank, trust company or similar institution in which Corporation has accounts or safety deposit boxes and the names of all persons authorized to draw thereon or to have access thereto; and

(b) the name of each person, firm or corporation or business organization holding a general or special power of attorney from Corporation and a summary of the terms thereof.

3.33 Non-Arm's Length Loans. Corporation has no loans or indebtedness outstanding which have been made to directors, former directors, officers, shareholders and/or employees of Corporation or to any person or corporation not dealing at arm's length (as such term is defined in the Income Tax Act (Canada)) with any of the foregoing and which are not fully disclosed in the Financial Statements. 3.34 Vacation Pay. All vacation pay, bonuses, commissions and other emoluments are reflected and have been accrued in the books of account of Corporation. 3.35 Deterrence Factors. The Vendor has no information or knowledge of any fact relating to the Business or to the Purchased Shares which, if known to the Purchaser, might reasonably be expected to deter the Purchaser from completing the transaction of Purchase and sale herein contemplated. 3.36 Material Liabilities. There are no material liabilities of Corporation of any kind whatsoever, whether or not accrued and whether or not determined or determinable, in respect of which Corporation or the Purchaser may become liable on or after the consummation of the transaction contemplated by this agreement other than: (a) liabilities disclosed on, reflected in or provided for in the Financial Statements; (b) liabilities disclosed or referred to in this Agreement or in the Schedules attached

hereto; and (c) liabilities incurred in the ordinary course of business none of which has been

materially adverse to the nature of the Business, results of operations, assets, financial condition or manner of conducting the Business.

3.37 Particulars of Schedules. None of the particulars set out in the schedules hereto are misleading in any material respect and all such particulars are, to the best information, knowledge and belief of the Vendor, after due inquiry, true and accurate. 3.38 Finders Fee. Neither the Vendor nor Corporation has incurred any obligation or liability, contingent or otherwise for brokers' or finders' fees in respect of this transaction for which the Purchaser or Corporation shall have any obligation or liability.


Saskatchewan: Bar Admission Program H - 9 Corporate Commercial – Purchase and Sale of a Business Appendix H – Share Purchase Agreement (Short Form) ARTICLE 4: COVENANTS AND AGREEMENTS OF THE VENDOR

The Vendor covenants and agrees with the Purchaser that on or before the Closing Date it will do or will cause to be done the following. 4.01 Access to Books, Records and Contracts. Permit the Purchaser, prior to the Closing Date, through its representatives, to make such investigation of the properties and assets of Corporation and of its financial and legal condition as the Purchaser deems necessary or advisable to familiarize itself with such properties, assets and other matters; such investigation shall not, however, affect or mitigate Vendor's covenants, representations and warranties hereunder which shall continue in full force and effect as provided in Article 7. The Vendor agrees to permit the Purchaser and its representatives to have, after the date of execution hereof, full access to the Business premises and agrees to produce the following documents of Corporation for inspection by the Purchaser's representatives:

all leases, licenses, contracts, title documents, insurance policies, pension plans, guarantees, lists of salaries (management and others), employee agreements, management contracts, documents relating to pending law suits, if any, deeds and title papers, all minute books, share certificate books, share registers and other corporate documents, including the constating documents of the Corporation, and all books, records, accounts, financial statements and all other data which in the opinion of the Purchaser's representatives are required to make an examination of Corporation and the Business.

4.02 Resignation of Directors. Cause such directors and officers of Corporation as the Purchaser may specify to resign in favour of nominees of the Purchaser, such resignations to be effective as at the Time of Closing and conditional upon closing taking place. 4.03 Releases. Execute and deliver, and cause such officers and directors of Corporation as the Purchaser may specify to execute and deliver, at the Time of Closing, a release in the form of the unexecuted release annexed hereto as Schedule 10. 4.04 Banking Agreements. Cause Corporation not to make any changes affecting the banking and safety deposit arrangements and powers of attorney referred to in Section 3.32 and not to open any new bank accounts or safety deposit boxes or grant any new powers of attorney. 4.05 Further Assurances. The Vendor shall itself and shall cause Corporation to do all such things, perform all such acts, execute all such documents and hold all such meetings as may be necessary or required to give effect to the terms and provisions of this Agreement and the transactions herein contemplated, including the execution and delivery of all instruments and documents herein required to be executed and delivered by it, and the taking of every proceeding, action or other step within its control to cause the conditions of closing for the benefit of the Purchaser to be fulfilled and/or satisfactorily performed at or prior to the Time of Closing.




ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF THE PURCHASER The Purchaser covenants, represents and warrants as follows and acknowledges that the Vendor is relying on such covenants, representations, and warranties in connection with the sale by the Vendor of the Purchased Share. 5.01 Corporate Status and Authority: The Purchaser is a corporation duly incorporated under the laws of the Province of Saskatchewan and has the necessary power and authority, corporate or otherwise, to execute, perform and deliver this Agreement and to execute and deliver the Note and issue the Common Shares in accordance with the terms hereof and to perform all of its obligations hereunder and the execution, delivery and performance of this Agreement and each certificate or document to be delivered by Purchaser hereunder has been duly authorized by all necessary corporate action on behalf of Purchaser. 5.02 Enforceability. The transactions contemplated hereby will not result in the violation of any of the terms and provisions in the constating documents or bylaws of the Purchaser or any agreement to which it may be a party or by which it may be bound and, upon execution and delivery, this Agreement will be duly executed and delivered and will be a valid and binding obligation of the Purchaser enforceable against it in accordance with its terms. 5.03 Income Tax Status. The Purchaser is a resident of Canada. 5.04 No Business or Agreements. The Purchaser has not carried on business since its date of incorporation and nor will it carry on business prior to the Time of Closing nor has it entered into any agreement. 5.05 Deterrence Factors. Purchaser has no information or knowledge of any fact relating to the within transaction which, if known by Vendor, might reasonably be expected to deter Vendor from completing the transaction of purchase and sale herein contemplated. ARTICLE 6: COVENANTS AND AGREEMENTS OF THE PURCHASER The Purchaser covenants and agrees with the Vendor that it will do or cause to be done the following.

6.01 Confidentiality. In the event that the purchase and sale of the Purchased Shares herein provided for is not consummated, the Purchaser agrees that it will not, directly or indirectly, use for any purpose any information, trade secrets or confidential data relating to Corporation or the Business (including the customers of the Business, its operations or the methods of conducting the Business) discovered or acquired by the Purchaser or its representatives or any of them, as a result of the Vendor or Corporation making available to the Purchaser or its representatives any information, books, accounts, records or other data and information relating to Corporation or the Business and the Purchaser agrees that it will not disclose, divulge or communicate orally, in writing or otherwise, any such information, trade secrets or confidential data so discovered or acquired to any other person, firm or corporation.



6.02 Indemnity. From and after the Time of Closing, the Purchaser shall indemnify the Vendor with respect to all liabilities incurred pursuant to any personal guarantee heretofore given by the Vendor with respect to any liability of Corporation, it being acknowledged by Purchaser that this indemnity shall forever survive closing of the transactions herein provided for.

6.03 Further Assurances. The Purchaser shall do all such things, perform all such acts, execute all such documents and hold all such meetings as may be necessary or required to give effect to the terms and provisions of this Agreement and the transactions herein contemplated, including the execution and delivery of all other instruments and documents herein required to be executed and delivered by the Purchaser, and the taking of every proceeding, action or other step within the control of the Purchaser to cause the conditions of Closing for the benefit of Vendor to be fulfilled and/or satisfactorily performed at or prior to the Time of Closing. ARTICLE 7: SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES 7.01 To Survive Closing. The covenants, agreements, representations and warranties contained in this Agreement and contained in any document or certificate given pursuant hereto shall survive the closing of the purchase and sale herein provided for and, notwithstanding the closing or any documents delivered or investigation made in connection therewith, shall continue in full force and effect for the benefit of the Purchaser or Vendor, as the case may be; provided, however, that the representations and warranties of each of the parties shall survive and continue in full force and effect only until the expiration of two years from the Closing Date. ARTICLE 8: CONDITIONS OF CLOSING FOR THE BENEFIT OF PURCHASER The sale and purchase of the Purchased Shares is subject to the following conditions for the exclusive benefit of the Purchaser to be fulfilled and/or performed at or prior to the Time of Closing.

8.01 Representations and Warranties. The covenants, representations and warranties of the Vendor contained in this Agreement or in any Schedule hereto or certificate or other document delivered to the Purchaser pursuant hereto shall be true and correct on and as of the Closing Date with the same force and effect as though such covenants, representations and warranties had been made on and as of such date, regardless of the date as of which the information in this Agreement or any such Schedule or certificate or document is given, and the Purchaser shall have received at the Time of Closing on the Closing Date a certificate dated the Closing Date, in form satisfactory to counsel for the Purchaser, signed under seal by the Vendor to the effect that such covenants, representations and warranties referred to above are true and correct on and as of the Closing Date with the same force and effect as though made on and as of such date provided that the acceptance of such certificate and the closing of the transaction herein provided for shall not be a waiver of the covenants, representations and warranties contained in Article 3 or in any Schedule hereto or in any certificate or document given pursuant to this agreement or in the certificate under this Section 8.01, which covenants, representations and warranties shall continue in full force and effect as provided in Article 7.




8.02 Compliance with Agreement. All of the terms, covenants, agreements and conditions of this Agreement to be complied with by the Vendor at or before the Time of Closing shall have been satisfactorily complied with or performed.

8.03 No Restrictions. No action or proceeding by law or in equity shall be pending or threatened by any person, company, firm, governmental authority, regulatory body or agency to enjoin or prohibit: (a) the purchase and sale of the Purchased Shares contemplated hereby or the right of

the Purchaser to acquire and own the Purchased Shares; or (b) the right of Corporation to conduct its operations and carry on the Business in the

normal course as the Business and its operations have been carried on in the past.

8.04 No Adverse Change. At the Closing Date, there shall have been no materially adverse change in the affairs, assets, liabilities, financial condition or business (financial or otherwise) of Corporation from that shown on or reflected in the Financial Statements.

8.05 Governmental Approvals. At or before the Time of Closing there shall have been obtained from all appropriate federal, provincial, state, municipal or other governmental or administrative bodies all such approvals and consents in form and terms satisfactory to counsel for the Purchaser as may be required (if any) in order to permit the change of ownership of the Purchased Shares herein provided for to be completed without affecting the Business of Corporation or affecting or resulting in the cancellation or termination of any license, permit or authority of Corporation.

8.06 No Change of Laws. No legislation (whether by statute, bylaw, regulation or otherwise) shall have been enacted or introduced which, in the opinion of Purchaser, materially adversely affects or may materially adversely affect the operations and Business of Corporation.

8.07 Opinion of Counsel. The delivery at the Time of Closing of a favourable opinion of the Vendor's counsel addressed to Purchaser's counsel and the Purchaser, in form satisfactory to counsel for the Purchaser that: (a) the authorized capital of Corporation consists of an unlimited number of common

shares and preference shares of which 10,000 common shares have been duly issued and are outstanding as fully paid and non-assessable shares with no preference shares having been issued;

(b) the Vendor is the registered owner of the Purchased Shares represented by share certificate number 1 and which comprise all of the issued and outstanding shares of Corporation;

(c) the Purchased Shares are free and clear of all perfected mortgages, liens, charges, security interests, pledges and encumbrances whatsoever;

(d) each of Corporation and the Vendor has been duly incorporated and organized, is validly subsisting and in good standing under the laws under which it was incorporated; Corporation has the corporate power to own or lease its property



and to carry on the Business as now being conducted by it and is duly qualified as a corporation to do business and is in good standing under the laws of each jurisdiction in which the nature of the Business conducted by it or the property owned or leased by it makes such qualification necessary;

(e) the execution, delivery and performance of this Agreement and each certificate or document to be delivered by the Vendor or Corporation hereunder has been duly authorized by all necessary corporate action on behalf of the Vendor or Corporation, as the case may be; this Agreement constitutes a valid and binding agreement enforceable against the Vendor in accordance with its terms; and, all necessary corporate action and proceedings of Corporation and the Vendor have been taken at the Time of Closing to permit the due and valid transfer of the Purchased Shares from the Vendor to the Purchaser and recording of such transfer in the books and records of Corporation;

(f) the consummation of the transaction of purchase and sale and of all other matters contemplated by this Agreement will not result in a breach of any term or provision of or constitute a default under (i) the constating documents, bylaws or resolutions of Corporation or the Vendor, or (ii) to the best of the knowledge of such counsel, any indenture, agreement, instrument, license or permit to which Corporation or the Vendor is a party or by which it is bound, nor to the best of the knowledge of such counsel, will the consummation of such transaction accelerate any commitment or obligation of Corporation or the Vendor or result in the creation of any lien or encumbrance upon any of the assets or property of Corporation or of the Vendor;

(g) Corporation does not have outstanding any options, convertible securities, warrants or other convertible obligations, written or oral agreements or other commitments to allot, reserve, set aside, create, issue or sell any securities or any of its unissued share capital;

(h) Corporation is not engaged in and to the best of the knowledge of such counsel, has not been threatened with, any legal action or other proceedings, and has not been charged with or to the best of the knowledge of such counsel, incurred, any violation of any federal, provincial or local law or administrative regulation, which could materially adversely affect or impair its financial position, business, operations, prospects, properties or assets;

(i) no consent, authorization, license, franchise, permit, approval or order of any court or governmental agency or regulatory body is required for the sale by the Vendor of the Purchased Shares;

(j) the Vendor does not have outstanding any written or oral agreement or option or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase from the Vendor of any of the Purchased Shares;




In rendering such opinion, such counsel may, with respect to subclauses (f)(ii), (h), (i) and (j), to the extent that such counsel do not have knowledge of any facts to the contrary, may rely upon a certificate of an officer of Corporation or the Vendor, as the case may be. 8.08 Truth of Facts. The Vendor shall furnish the Purchaser with a certificate made by a senior officer of Corporation, under seal, certifying that as of the Time of Closing each of the facts with respect to each of the matters dealt with in each of the Sections of Article 3 and relating to Corporation are true and correct as set out therein, provided that the receipt of such evidence and the closing of the transaction of purchase and sale herein provided for shall not be a waiver of the covenants, representations and warranties of Vendor contained in Article 3, which covenants, representations and warranties shall continue in full force and effect as provided in Article 7. ARTICLE 9: CONDITIONS OF CLOSING FOR THE BENEFIT OF THE VENDOR The sale and purchase of the Purchased Shares is subject to the following conditions for the exclusive benefit of the Vendor to be fulfilled and/or performed by the Purchaser at or prior to the Time of Closing.

9.01 Representations and Warranties. The representations and warranties of the Purchaser contained in this Agreement shall be true and correct at the Time of Closing with the same force and effect as if they were made or given at such time.

9.02 Compliance with Agreement. All of the terms, covenants, agreements and conditions of this Agreement to be complied with by the Purchaser at or before the Time of Closing shall have been satisfactorily complied with or performed.

9.03 Opinion of Purchaser's Counsel. The delivery to the Vendor at the Time of Closing of a favourable opinion of the Purchaser's counsel addressed to the Vendor's counsel and the Vendor, in form satisfactory to counsel for the Vendor that: (a) the Purchaser has been duly incorporated and organized, is validly subsisting and

in good standing under the laws of the Province of Saskatchewan; (b) the execution, delivery and performance of this Agreement and each certificate or

document to be delivered by Purchaser hereunder has been duly authorized by all necessary corporate action on behalf of Purchaser and this Agreement constitutes a valid and binding agreement enforceable against Purchaser in accordance with its terms;

(c) the issuance of the Note has been duly authorized by all necessary corporate action on behalf of Purchaser;

(d) the consummation of the transaction of purchase and sale and of all other matters contemplated by this Agreement will not result in a breach of any term or provision of or constitute a default under the constating documents, bylaws or resolutions of Purchaser or any indenture, agreement or instrument to which the Purchaser is a party or by which it is bound;



(e) the Purchaser is not engaged in and to the best of the knowledge of such counsel, has not been threatened with any legal action or other proceedings which could affect or impair its ability to perform, fulfill or otherwise satisfy any of its obligations hereunder.

In rendering such opinion, such counsel may with respect to subclause (e) to the extent that such counsel do not have knowledge of any facts to the contrary, may rely upon a certificate of an officer of Purchaser. ARTICLE 10: RIGHTS OF RESCISSION

10.01 Nonfulfilled Conditions. In the event that any of the conditions contained in Articles 8 or 9 hereof shall not be fulfilled and/or performed by the Vendor or the Purchaser, as the case may be, at or before the Closing Date to the satisfaction of the other, then the obligations of the parties hereto shall be terminated and no party shall have any right or cause of action against any other party with respect to any matter provided for or contemplated herein except only that the covenant of Purchaser contained in Section 6.01 shall survive such termination. ARTICLE 11: INDEMNIFICATION BY THE VENDOR

11.01 Indemnity. The Vendor covenants and agrees to indemnify and save harmless the Purchaser and/or Corporation of and from any loss whatsoever arising out of, under or pursuant to the following: (a) any reassessment for income or corporate tax, interest and/or penalties for any

period up to December 31, 20__ for which no adequate reserve has been provided for and disclosed in the Financial Statements and which did not arise as a result of a refiling of returns of Corporation by the Purchaser;

(b) any loss suffered by the Purchaser and/or the Corporation as a result of any breach of representation, warranty or covenant contained in this Agreement;

(c) all claims, demands, costs and expenses in respect of the foregoing;

provided the aggregate of any such loss or losses hereunder, exceeds $50,000. 11.02 Purchaser's Obligations. The Purchaser shall forthwith notify the Vendor of any loss or potential loss to Purchaser under subclauses (b) or (c) above for which the Vendor may be liable under Section 11.01 and the Vendor shall have the right to participate in any negotiations with respect thereto. If Corporation receives an assessment or reassessment in respect of which the indemnity given by the Vendor hereunder may extend or relate, the Purchaser shall cause Corporation forthwith after receipt thereof to deliver to the Vendor a copy of such assessment or reassessment and the Purchaser shall notify the Vendor of its claim, if any, against the Vendor under the within indemnity within 45 days after receipt of such assessment or reassessment and shall take all action necessary to preserve Corporation's right to object to the assessment or



Appendix H – Share Purchase Agreement (Short Form) reassessment. Unless the Purchaser shall have complied with the provisions of the immediately preceding sentence, the liability of the Vendor to indemnify it or Corporation with respect to such assessment or reassessment shall cease. 11.03 Vendor's Rights. The Vendor shall at all times have the right at its sole and only expense to dispute and contest in the name of Corporation reassessments for which the Vendor may be liable under Section 11.01 provided, however, the Vendor's right to so contest shall only apply after the payment of any such reassessment or the posting of security as required under the Income Tax Act. The payment of any such reassessment by the Vendor on behalf of Corporation shall be repaid to the Vendor if repaid by the taxing authority. The Purchaser will fully co-operate and will cause Corporation to fully co-operate with the Vendor and its counsel in any proceedings with respect to any such reassessments. ARTICLE 12: CLOSING ARRANGEMENTS

12.01 Place of Closing. The closing shall take place at the Time of Closing on the Closing Date at the offices of counsel for the Vendor at ____________, Regina, Saskatchewan. 12.02 Delivery of Documents by Vendor. The Vendor shall deliver to the Purchaser the following documents duly completed and executed by the Vendor or such other third parties as contemplated therein, as the case may be:

(a) a certificate made by a senior officer of the Vendor under seal, certifying that as of the Time of Closing the representations and warranties of the Vendor contained in Article 3 hereof are true and correct, that the conditions to be performed by the Vendor and set forth in Article 8 have been fully performed and satisfied and that all of the covenants and agreements of the Vendor to be fulfilled or performed by it at or before the Time of Closing including, without limitation, those contained in Article 4, have been fulfilled or performed;

(b) such certificates, searches, comfort letters or other clearances as may reasonably be required by the Purchaser from any governmental body;

(c) the opinion of counsel referred to in Section 8.07;

(d) all other documents to be executed and/or delivered by the Vendor as contemplated hereunder including, without limitation, the certificate referred to in Section 8.08, the resignations referred to in Section 4.02 and the releases referred to in Section 4.03; and

(e) share certificates respecting the Purchased Shares duly endorsed for transfer to the Purchaser and recorded in the records of Corporation in the name of the Purchaser.



12.03 Delivery of Documents by the Purchaser. The Purchaser shall deliver to the Vendor the following documents duly completed and executed by the Purchaser or such other third parties as contemplated therein, as the case may be: (a) a certificate made by a senior officer of the Purchaser under seal, certifying that

as of the Time of Closing the representations and warranties of the Purchaser contained in Article 5 hereof are true and correct, that the conditions to be performed by the Purchaser and set forth in Article 9 have been fully performed and satisfied and that all of the covenants and agreements of the Purchaser to be fulfilled or performed by it at or before the Time of Closing including, without limitation, those contained in Article 6, have been fulfilled or performed;

(b) the opinion of counsel referred to in Section 9.03; (c) the duly executed Note; and (d) a certified cheque or bank draft payable to the Vendor or its order in the amount

of $1,000,000. ARTICLE 13: MISCELLANEOUS

13.01 Further Assurances. From time to time subsequent to the Closing Date, each of the parties hereto shall, upon the request and at the expense of any other party requesting, execute and deliver such additional documents or assurances that may, in the opinion of counsel for such requesting party, be reasonably required to carry out effectively the intent of this Agreement.

13.02 Time. Time shall be of the essence of this Agreement.

13.03 Press Releases. Each of the parties represents and warrants that prior to execution of this Agreement it has made no public announcement or press release without the consent and approval of the other party hereto. No further public announcement or press release concerning the purchase and sale of the Purchased Shares shall be made by either of the parties without the consent and approval of the other party hereto, provided that the parties hereby consent to such announcements or press releases as may be required by law and agree that each party will be given the opportunity to announce the execution of this Agreement to its employees immediately prior to any public announcement or press release.

13.04 Counterparts. This Agreement and any agreement or document to be delivered hereunder may be executed by either party hereto by signing a counterpart hereof each of which counterparts so executed shall be deemed to be an original and such counterparts together shall constitute a single instrument.

13.05 Notices. Any notices, requests, demands and other communications hereunder shall be in writing and shall be furnished to the parties at the addresses given below. Such notices and other communications shall be deemed to have been duly given if delivered personally, by telex (answerback received) or telecopier (confirmation of receipt received by return telex) or mailed by registered mail, prepaid, return receipt requested, to:




Vendor: ABC Management Inc. 123 Bond Street Regina, Saskatchewan S4P 0J0 Attention: President Telecopier (306) Purchaser: Quick-Print Services Corporation 456 Aikins Street Regina, Saskatchewan SOJ 2B2 Attention: Vice-President Finance Telecopier (306)

Such notices and other communications duly given shall be deemed to be effective if given by personal delivery, upon such delivery; if given by telex (answerback received) or telecopy, (confirmation of receipt as aforesaid) upon the next business day after the sending thereof; and if given by registered mail, upon receipt by the addressee; provided that any notice required to be given to more than one party shall be effective only upon the effective date of the notice last given.

13.06 Enurement. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors but shall not be assignable by either party hereto.

IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of the day and year first above written.

ABC MANAGEMENT INC. (corporate seal) Per: __________________________

Position: ________________________ QUICK-PRINT SERVICES CORPORATION (corporate seal) Per: __________________________

Position: ________________________


Saskatchewan: Bar Admission Program I - 1 Corporate Commercial - Purchase and Sale of a Business Appendix I – Certified Copy of Resolution of Shareholders Authorizing Sale of Assets

RESOLUTION IN WRITING OF THE SHAREHOLDERS OF • (the "Corporation")

AUTHORIZING SALE OF ASSETS BE IT RESOLVED THAT as a special resolution, that the sale by the Corporation to •

(the "Purchaser") of certain of the undertaking property and assets of the Corporation at a

purchase price of and on the terms and conditions set forth in a purchase and sale agreement (the

"Agreement") between the Corporation and the Purchaser, a draft of which Agreement is

annexed hereto as Schedule "A", be and the same is hereby approved.

AND FURTHER BE IT RESOLVED THAT the • and • of the Corporation are hereby

authorized and directed for and on behalf of the Corporation to execute (whether under the seal

of the Corporation or otherwise) and deliver the Agreement substantially in the form of the draft

annexed hereto as Schedule "A", subject to such amendments or variations from the draft

Agreement annexed hereto as may be approved by such officers, whose execution of the

Agreement in its final form shall be conclusive evidence of such approval;

DATED the •day of •, 20•.

THE UNDERSIGNED, •, Secretary of the Corporation hereby certifies that the foregoing

is a true and complete copy of a special resolution in writing of all of the shareholders of the

Corporation, and that the said resolution is in full force and effect, unamended, as of the date

hereof.

_______________________________ • Secretary


I - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix I – Certified Copy of Resolution of Shareholders Authorizing Sale of Assets



Saskatchewan: Bar Admission Program J - 1 Corporate Commercial - Purchase and Sale of a Business Appendix J – Certified Copy of Resolution of Directors Authorizing Sale of Assets

RESOLUTION IN WRITING OF THE DIRECTORS

OF • (the "Corporation") AUTHORIZING THE SALE OF ASSETS TO •

WHEREAS: 1. The Corporation wishes to sell to • (the "Purchaser"), certain of its undertaking property, and assets (the "Purchased Assets") pursuant to the terms of a purchase and sale agreement (the "Agreement") to be made between the Corporation and the Purchaser, a draft of which Agreement is attached hereto as Schedule "A"; and

2. Pursuant to the terms of the Agreement, the Corporation will be required to execute and deliver certain ancillary agreements, documents, deeds and instruments in connection with its sale of the Purchased Assets (the "Related Agreements"); BE IT RESOLVED THAT: 1. The sale by the Corporation to the Purchaser of the Purchased Assets at the purchase price and pursuant to the terms and conditions set out in the Agreement are hereby approved;

2. The execution and delivery by the Corporation of the Agreement, the Related Agreements and all other agreements, documents, deeds and instruments that are necessary to complete the purchase and sale transaction contemplated by the Agreement is hereby approved.

3. The • and • of the Corporation are hereby authorized and directed for and on behalf of the Corporation to execute (whether under the seal of the Corporation or otherwise) and deliver the Agreement substantially in the form of the draft annexed hereto as Schedule "A", subject to such amendments or variations from the draft Agreement annexed hereto as may be approved by such officers, whose execution of the Agreement in its final form shall be conclusive evidence of such approval;

4. The • and • of the Corporation are hereby authorized and directed for and on behalf of the Corporation to execute (whether under the seal of the Corporation or otherwise) and deliver the Related Agreements;

5. All agreements, documents, deeds, instruments, writings, acts or proceedings connected with or pertaining to the purchase and sale transaction contemplated by the Agreement which may heretofore have been executed, made, done or performed by the Corporation or by any officer or officers of the Corporation are hereby approved, ratified and confirmed; and


J - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix J – Certified Copy of Resolution of Directors Authorizing Sale of Assets 6. The officers of the Corporation are hereby authorized to do such further acts and things and to execute and deliver such other agreements, documents, deeds and instruments as may be necessary or desirable in connection with the purchase and sale transaction contemplated by the Agreement and in order to give effect to the foregoing provisions of this resolution. DATED the ____ day of ____________________, 20__. ________________________________ _________________________________ • • THE UNDERSIGNED, •, • of the Corporation, hereby certifies that the foregoing is a true and complete copy of a resolution in writing of the Board of Directors of the Corporation and that the said resolution is in full force and effect, unamended, as of the date hereof. DATED the ___ day of _____________________, 20__. __________________________________ • •


Saskatchewan: Bar Admission Program K - 1 Corporate Commercial - Purchase and Sale of a Business Appendix K – Certified Copy of Resolution of Directors Authorizing Purchase of Assets

RESOLUTION IN WRITING OF THE DIRECTORS

OF • (the "Corporation") AUTHORIZING THE PURCHASE OF ASSETS TO •

WHEREAS:

1. The Corporation wishes to purchase from • (the "Vendor"), certain of the undertaking, property, and assets of the Corporation located at • (the "Purchased Assets") pursuant to the terms of a purchase and sale agreement (the "Agreement") to be made between the Corporation and the Vendor, a draft of which Agreement is attached hereto as Schedule "A"; and

2. Pursuant to the terms of the Agreement, the Corporation will be required to execute and deliver certain ancillary agreements, documents, deeds and instruments in connection with its sale of the Purchased Assets (the "Related Agreements"); BE IT RESOLVED THAT:

1. The purchase by the Corporation of the Purchased Assets at the purchase price and pursuant to the terms and conditions set out in the Agreement are hereby approved;

2. The execution and delivery by the Corporation of the Agreement, the Related Agreements and all other agreements, documents, deeds and instruments that are necessary to complete the purchase and sale transaction contemplated by the Agreement is hereby approved.

3. The • and • of the Corporation are hereby authorized and directed for and on behalf of the Corporation to execute (whether under the seal of the Corporation or otherwise) and deliver the Agreement substantially in the form of the draft annexed hereto as Schedule "A", subject to such amendments or variations from the draft Agreement annexed hereto as may be approved by such officers, whose execution of the Agreement in its final form shall be conclusive evidence of such approval;

4. The • and • of the Corporation are hereby authorized and directed for and on behalf of the Corporation to execute (whether under the seal of the Corporation or otherwise) and deliver the Related Agreements;

5. All agreements, documents, deeds, instruments, writings, acts or proceedings connected with or pertaining to the purchase and sale transaction contemplated by the Agreement which may heretofore have been executed, made, done or performed by the Corporation or by any officer or officers of the Corporation are hereby approved, ratified and confirmed; and


K - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix K – Certified Copy of Resolution of Directors Authorizing Purchase of Assets 6. The officers of the Corporation are hereby authorized to do such further acts and things and to execute and deliver such other agreements, documents, deeds and instruments as may be necessary or desirable in connection with the purchase and sale transaction contemplated by the Agreement and in order to give effect to the foregoing provisions of this resolution. DATED the ____ day of ____________________, 20__. ________________________________ _________________________________ • • THE UNDERSIGNED, •, Secretary of the Corporation, hereby certifies that the foregoing is a true and complete copy of a resolution in writing of the Board of Directors of the Corporation and that the said resolution is in full force and effect, unamended, as of the date hereof. DATED the ___ day of _____________________, 20__. __________________________________ • Secretary


Saskatchewan: Bar Admission Program L - 1 Corporate Commercial - Purchase and Sale of a Business Appendix L – Certified Copy of Resolution of Directors - Transfer of Shares by Corporation

CERTIFIED COPY OF A RESOLUTION OF THE DIRECTORS OF *A

WHEREAS by an agreement dated •, 20•, among the Corporation, *B and *C (the "Share Purchase Agreement"), the Corporation agreed to transfer all of the issued and outstanding common shares in the capital of *B to *C; AND WHEREAS it is in the best interests of the Corporation to have entered into this Share Purchase Agreement for the consideration and on the terms and conditions specified therein; NOW THEREFORE BE IT RESOLVED:

1. That the entering into and the completion of the transaction contemplated by the Share Purchase Agreement by the Corporation on the terms and conditions contained in the said Agreement be and hereby is ratified and approved; and

2. That either the President or the Secretary of the Corporation be and hereby is authorized and directed to do all such acts and things and to execute or cause to be executed, whether under the corporate seal of the Corporation or otherwise, and deliver or cause to be delivered, all such deeds, transfers, assignments, agreements and other documents as in the opinion of such person may be necessary or desirable in connection with the completion of the transaction contemplated in the Share Purchase Agreement. Certified to be a true and accurate copy of resolutions consented to by all of the directors, which resolutions are dated the • day of •, 20• and are now in full force and effect, unamended. DATED this • day of •, 20•. __________________________ •, Secretary


L - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix L – Certified Copy of Resolution of Directors – Transfer of Shares by Corporation



Saskatchewan: Bar Admission Program M - 1 Corporate Commercial - Purchase and Sale of a Business Appendix M – Certified Copy of Resolution of Directors – Transfer of Shares by Director

CERTIFIED COPY OF A RESOLUTION

OF THE DIRECTORS OF *B

WHEREAS by an agreement dated •, 20•, among *A, the Corporation and *C (the "Share Purchase Agreement"), *A agreed to transfer all of the issued and outstanding common shares in the capital of the Corporation to *C; AND WHEREAS it is in the best interests of the Corporation to have entered into this Share Purchase Agreement for the consideration and on the terms and conditions specified therein; NOW THEREFORE BE IT RESOLVED:

1. That the entering into and the completion of the transaction contemplated by the Share Purchase Agreement by the Corporation on the terms and conditions contained in the said Agreement be and hereby is ratified and approved; and 2. That either the President or the Secretary of the Corporation be and hereby is authorized and directed to do all such acts and things and to execute or cause to be executed, whether under the corporate seal of the Corporation or otherwise, and deliver or cause to be delivered, all such deeds, transfers, assignments, agreements and other documents as in the opinion of such person may be necessary or desirable in connection with the completion of the transaction contemplated in the Share Purchase Agreement. Certified to be a true and accurate copy of resolutions consented to by all of the directors, which resolutions are dated the • day of •, 20• and are now in full force and effect, unamended. DATED this • day of •, 20•. __________________________ •, Secretary


M - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix M – Certified Copy of Resolution of Directors – Transfer of Shares by Director



Saskatchewan: Bar Admission Program N - 1 Corporate Commercial - Purchase and Sale of a Business Appendix N – Certified Copy of Resolution of Directors – Corporation Authorizing Transfer of Shares

CERTIFIED COPY OF A RESOLUTION OF THE DIRECTORS OF *C

WHEREAS by an agreement dated •, 20•, among *A, *B and the Corporation (the "Share Purchase Agreement"), the Corporation agreed to purchase all of the common shares in the capital of *B from *A; AND WHEREAS it is in the best interests of the Corporation to have entered into this Share Purchase Agreement for the consideration and on the terms and conditions specified therein; NOW THEREFORE BE IT RESOLVED:

1. That the entering into and the completion of the transaction contemplated by the Share Purchase Agreement by the Corporation on the terms and conditions contained in the said Agreement be and hereby is ratified and approved; and

2. That either the President or the Secretary of the Corporation be and hereby is authorized and directed to do all such acts and things and to execute or cause to be executed, whether under the corporate seal of the Corporation or otherwise, and deliver or cause to be delivered, all such deeds, transfers, assignments, agreements and other documents as in the opinion of such person may be necessary or desirable in connection with the completion of the transaction contemplated in the Share Purchase Agreement. Certified to be a true and accurate copy of resolutions consented to by all of the directors, which resolutions are dated the • day of •, 200• and are now in full force and effect, unamended. DATED this • day of •, 20•. __________________________ •, Secretary


N - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix N – Certified Copy of Resolution of Directors – Corporation Authorizing Transfer of Shares



Saskatchewan: Bar Admission Program O - 1 Corporate Commercial - Purchase and Sale of a Business Appendix O – Certified Copy of Resolution – Transfer of Common Shares

CERTIFIED COPY OF A RESOLUTION

OF THE DIRECTORS OF *B

TRANSFER OF COMMON SHARES BE IT RESOLVED:

That the transfer of • (•) common shares in the capital of the Corporation from *A to *C be and is hereby consented to. Certified to be a true and accurate copy of resolutions consented to by all of the directors, which resolutions are dated the • day of •, 20• and are now in full force and effect, unamended. DATED this • day of •, 20•. __________________________ •, Secretary


O - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix O – Certified Copy of Resolution – Transfer of Common Shares



Saskatchewan: Bar Admission Program P - 1 Corporate Commercial - Purchase and Sale of a Business Appendix P – Certificate as to Corporate Documents

CERTIFICATE AS TO CORPORATE DOCUMENTS TO: • AND TO: • RE: Purchase by • of • I, •, Secretary of • (the "Corporation") hereby certify for and on behalf of the Corporation that: (a) attached to this Certificate as Schedule "A" is a correct and complete copy of all

of the constating documents of the Corporation and such constating documents have not been amended and are in full force and effect as at the date hereof; and

(b) attached to this Certificate as Schedule "B" is a correct and complete copy of all

bylaws of the Corporation and such bylaws have not been amended and are in full force and effect as at the date hereof.

DATED the ___ day of ________, 20__. _______________________________________ • Secretary


P - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix P – Certificate as to Corporate Documents



Saskatchewan: Bar Admission Program Q - 1 Corporate Commercial - Purchase and Sale of a Business Appendix Q – Resignation of Officer and Director

RESIGNATION OF OFFICER AND DIRECTOR TO: • AND ITS SHAREHOLDER(S)

I, •, DO HEREBY RESIGN AS AN OFFICER AND DIRECTOR OF • EFFECTIVE •. _______________________________ Signature


Q - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix Q – Resignation of Officer and Director



Saskatchewan: Bar Admission Program R - 1 Corporate Commercial - Purchase and Sale of a Business Appendix R – Release of Director by Corporation

RELEASE OF DIRECTOR BY CORPORATION

TO: • The undersigned (the "Releasor", which term includes the undersigned's successors and assigns), in consideration of the sum of $1.00 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby remises, releases and forever discharges • (the "Releasee", which term includes his respective heirs, executors, personal representatives and administrators) of and from all judgments, executions, actions, causes of actions, suits, debts, dues, liabilities, accounts, bonds, covenants, contracts, agreements, claims and demands whatsoever (collectively, the "Claims") which the Releasor ever had, now has or may hereafter have against the Releasee, for or by reason of, or in any way arising out of any cause, matter or thing existing up to the date hereof relating to, or arising directly or indirectly by reason of or as a consequence of, the Releasee having been a director and/or officer of the Releasor. DATED this • day of •, 20•. • Per: ________________________ • Per: ________________________


R - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix R – Release of Director by Corporation



Saskatchewan: Bar Admission Program S - 1 Corporate Commercial - Purchase and Sale of a Business Appendix S – Release of Corporation by Director

RELEASE OF CORPORATION BY DIRECTOR

TO: • The undersigned (the "Releasor", which term includes the undersigned's heirs, executors, personal representatives and administrators), in consideration of the sum of $1.00 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby remises, releases and forever discharges • (the "Corporation") and its present and former directors, officers, agents, servants and employees (the "Releasees", which term includes their respective successors, assigns, heirs, executors, personal representatives and administrators) of and from all judgments, executions, actions, causes of actions, suits, debts, dues, liabilities, accounts, bonds, covenants, contracts, agreements, claims and demands whatsoever (collectively, the "Claims") which the Releasor ever had, now has or may hereafter have against the Corporation or the Releasees, or any of them, for or by reason of, or in any way arising out of any cause, matter or thing existing up to the date hereof relating to, or arising directly or indirectly by reason of or as a consequence of, the Releasor having been a director and/or officer of the Corporation. DATED this • day of •, 20•. • Per: ________________________ • Per: ________________________


S - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix S – Release of Corporation by Director



Saskatchewan: Bar Admission Program T - 1 Corporate Commercial - Purchase and Sale of a Business Appendix T – Release of Shareholder by Corporation

RELEASE OF SHAREHOLDER BY CORPORATION

TO: • The undersigned (the "Releasor", which term includes the undersigned's successors and assigns), in consideration of the sum of $1.00 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby remises, releases and forever discharges • (the "Vendor") and its present and former directors, officers, agents, servants and employees (the "Releasees", which term includes their respective successors, assigns, heirs, executors, personal representatives and administrators) of and from all judgments, executions, actions, causes of actions, suits, debts, dues, liabilities, accounts, bonds, covenants, contracts, agreements, claims and demands whatsoever (collectively, the "Claims") which the Releasor ever had, now has or may hereafter have against the Vendor or the Releasees, or any of them, for or by reason of, or in any way arising out of any cause, matter or thing existing up to the date hereof relating to, or arising directly or indirectly by reason of or as a consequence of, the Vendor having been the shareholder of the Releasor. DATED this • day of •, 20•. • Per: ________________________ • Per: ________________________


T - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix T – Release of Shareholder by Corporation



Saskatchewan: Bar Admission Program U - 1 Corporate Commercial - Purchase and Sale of a Business Appendix U – Release of Corporation by Shareholder

RELEASE OF CORPORATION BY SHAREHOLDER

TO: • The undersigned (the "Releasor", which term includes the undersigned's successors and assigns), in consideration of the sum of $1.00 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby remises, releases and forever discharges • (the "Corporation") and its present and former directors, officers, agents, servants and employees (the "Releasees", which term includes their respective successors, assigns, heirs, executors, personal representatives and administrators) of and from all judgments, executions, actions, causes of actions, suits, debts, dues, liabilities, accounts, bonds, covenants, contracts, agreements, claims and demands whatsoever (collectively, the "Claims") which the Releasor ever had, now has or may hereafter have against the Corporation or the Releasees, or any of them, for or by reason of, or in any way arising out of any cause, matter or thing existing up to the date hereof relating to, or arising directly or indirectly by reason of or as a consequence of, the Releasor having been the shareholder of the Corporation. DATED this • day of •, 20•. • Per: ________________________ • Per: ________________________


U - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix U – Release of Corporation by Shareholder



Saskatchewan: Bar Admission Program V - 1 Corporate Commercial - Purchase and Sale of a Business Appendix V – Certificate as to Representations, Warranties and Performance

CERTIFICATE AS TO REPRESENTATIONS, WARRANTIES AND PERFORMANCE

TO: • AND TO: • (Purchaser's Counsel) RE: Sale of Assets by • to • pursuant to a Purchase and Sale Agreement dated •, 1995 (the "Purchase Agreement") made between • and • WE, •, • and •, • of • (the "Corporation"), hereby certify for and on behalf of the Corporation that: (a) all of the representations and warranties of the Corporation contained in the

Purchase Agreement are true and correct at the Closing Time (as defined in the

Purchase Agreement) with the same force and effect as if such representations

and warranties had been made at the Closing Time, regardless of the date as of

which any information in the Purchase Agreement or in the Schedules thereto is

given;

(b) the covenants contained in the Purchase Agreement to be performed by the

Corporation at or prior to the Closing Time have been performed; and

(c) the Corporation is not in breach of any of its obligations under the Purchase

Agreement.

DATED the ___ day of ___________, 20__. ____________________________________ • • ____________________________________ • •


V - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix V – Certificate as to Representations, Warranties and Performance



Saskatchewan: Bar Admission Program W - 1 Corporate Commercial - Purchase and Sale of a Business Appendix W – Incumbency Certificate

INCUMBENCY CERTIFICATE I, •, hereby certify that I am the duly appointed • of • (the "Corporation") and I hereby further certify for and on behalf of the Corporation that the persons whose names appear below are, as of the date of this Certificate, duly appointed officers of the Corporation holding the offices set forth opposite their respective names below and that the signatures of the said officers set forth opposite their respective names below are their genuine signatures:

Name Office Signature

• • • • • • • • •

DATED the ___ day of _____, 20__. ________________________________ • • I, •, hereby certify that I am the duly appointed • of the Corporation and I hereby further certify for and on behalf of the Corporation that • is the duly appointed • of the Corporation and that the signature appearing above is his genuine signature. DATED the ___ day of _____, 20__. ________________________________ • •


W - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix W – Incumbency Certificate



Saskatchewan: Bar Admission Program X - 1 Corporate Commercial - Purchase and Sale of a Business Appendix X – Officers' Certificates

OFFICER'S CERTIFICATE

TO: Vendor's Solicitor The undersigned, •, the Secretary of • (the "Corporation"), hereby certifies for and on behalf of the Corporation (and not in his personal capacity) as follows: 1. The minute books and corporate records of the Corporation made available to you, for the period from the incorporation of the Corporation to the date hereof, are the original minute books and corporate records of the Corporation and contain the originals or true and complete copies of all constating documents and bylaws of the corporation and all resolutions and minutes (or certified copies thereof) of all proceedings of the shareholders and the board of directors (or any committees thereof) of the Corporation to the date thereof, and there have been no other meetings, resolutions or proceedings of the shareholders or of the board of directors (or any committee thereof) of the Corporation not reflected in such minutes books and corporate records. Such minute books and corporate records are true, correct and complete in all respects and, since they have been made available to you, there have been no additions, deletions or alterations thereto. 2. None of the Corporation, its shareholders or directors has taken any steps to terminate the Corporation's existence, to amalgamate the Corporation, to continue it into any other jurisdiction or to change its corporate existence in any way. The Corporation is not insolvent and no acts or proceedings have been taken by or against the Corporation in connection with, and the Corporation is not in the course of, liquidation, winding-up, dissolution or bankruptcy. 3. The Corporation is up-to-date in the filing of all returns required by governmental authorities, including under corporations, securities and tax legislation. The Corporation has not received any notice or other communication from any person or governmental authority of any proceedings to cancel its certificate of incorporation or otherwise to terminate its existence or of any situation that, unless remedied, could result in such cancellation or termination. 4. The Corporation is not a party to or bound by any unanimous shareholder agreement or any shareholder agreement for the purposes of the Canada Business Corporations Act. 5. The directors of the Corporation are: • • There are no other directors of the Corporation and there have been no challenges to the authority of the foregoing to act as a director of the Corporation and there have been no claims, demands, actions, suits or challenges by any person claiming to be a director of the Corporation.

The undersigned acknowledges that this certificate is to be relied upon by you in connection with your opinion to be rendered to • and •.

DATED at ____________, Saskatchewan, this __ day of _________, 20__.

_________________________________ • Secretary


X - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix X – Officers' Certificates

OFFICER'S CERTIFICATE

TO: Purchaser's Solicitor

The undersigned, •, the Secretary of • (the "Corporation"), hereby certifies for and on behalf of the Corporation (and not in his personal capacity) as follows:

1. The minute books and corporate records of the Corporation made available to you, for the period from the incorporation of the Corporation to the date hereof, are the original minute books and corporate records of the Corporation and contain the originals or true and complete copies of all constating documents and bylaws of the corporation and all resolutions and minutes (or certified copies thereof) of all proceedings of the shareholders and the board of directors (or any committees thereof) of the Corporation to the date thereof, and there have been no other meetings, resolutions or proceedings of the shareholders or of the board of directors (or any committee thereof) of the Corporation not reflected in such minutes books and corporate records. Such minute books and corporate records are true, correct and complete in all respects and, since they have been made available to you, there have been no additions, deletions or alterations thereto.

2. None of the Corporation, its shareholders or directors has taken any steps to terminate the Corporation's existence, to amalgamate the Corporation, to continue it into any other jurisdiction or to change its corporate existence in any way. The Corporation is not insolvent and no acts or proceedings have been taken by or against the Corporation in connection with, and the Corporation is not in the course of, liquidation, winding-up, dissolution or bankruptcy.

3. The Corporation is up-to-date in the filing of all returns required by governmental authorities, including under corporations, securities and tax legislation. The Corporation has not received any notice or other communication from any person or governmental authority of any proceedings to cancel its certificate of incorporation or otherwise to terminate its existence or of any situation that, unless remedied, could result in such cancellation or termination.

4. The Corporation is not a party to or bound by any unanimous shareholder agreement or any shareholder agreement for the purposes of the Canada Business Corporations Act.

5. The directors of the Corporation are: • • There are no other directors of the Corporation and there have been no challenges to the authority of the foregoing to act as a director of the Corporation and there have been no claims, demands, actions, suits or challenges by any person claiming to be a director of the Corporation.

The undersigned acknowledges that this certificate is to be relied upon by you in connection with your opinion to be rendered to • and •.

DATED at _________, Saskatchewan, this ___ day of _________, 20__.

_________________________________ • Secretary


Saskatchewan: Bar Admission Program Y - 1 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 Director Corporations Branch 1871 Smith Street Regina, Saskatchewan S4P 3V7 Dear Sirs Re: Shoe King Ltd. Our File: Please prepare a certificate of status for the above-captioned company. We are enclosing $15 to cover your fees in this regard. Yours truly,


Y - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 Bank of Canada 2220 - 12th Avenue Regina, Saskatchewan Dear Sirs: Re: Shoe King Ltd. Our File: Please provide our office with a search under section 427 of the Bank Act (Canada) with respect to the above-captioned corporate name. We enclose $8 to cover your fees in this regard. Yours truly,


Saskatchewan: Bar Admission Program Y - 3 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 The Local Registrar Court of Queen's Bench Court House 2425 Victoria Avenue Regina, Saskatchewan S4P 3V7 Dear Sir: Re: Shoe King Ltd. Our File: Please conduct a search of your records respecting the above-captioned corporate name for the past 10 years. Please provide us with your certificate evidencing any actions where the company is either named as plaintiff or defendant in any Court of Queen's Bench action. Please deduct your fees in this regard from our deposit account. Yours truly,



Appendix Y – Standard Search Letters for Sale or Purchase of a Business

CERTIFICATE

I, , Local Registrar of the Court of Queen's Bench, Judicial Centre of Regina, advise that

I have caused a search to be made of the Court of Queen's Bench records of this Honourable Court from March 31, 1983 to the date of the taking of this Certificate and certify that there are actions whereby Shoe King Ltd. is named as Plaintiff and the said action(s) are as follows:

and there are actions where Shoe King Ltd. is named as Defendant and the said action(s) are as follows: DATED at Regina, Saskatchewan, this day of March, 1993. _____________________________ DEPUTY LOCAL REGISTRAR


Saskatchewan: Bar Admission Program Y - 5 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business The Registrar VIA HAND Court of Appeal Court House 2425 Victoria Avenue Regina, Saskatchewan S4P 3V7 Dear Sir: Re: Searches Our File: Please conduct a search of your records respecting the following business and corporate names for the past five years: Shoe King Ltd. SK Holdings Ltd. Please provide us with your certificates evidencing any actions wherein the respective company is either cited as appellant or respondent in any action in the Saskatchewan Court of Appeal. We enclose our certificate forms for your use. Please deduct your fees in this regard from our deposit account. Yours truly,




IN THE COURT OF APPEAL

FOR THE PROVINCE OF SASKATCHEWAN I, , of Regina, Saskatchewan, Deputy Director of the Court of Appeal for the Province of Saskatchewan, DO HEREBY CERTIFY that a search has been made of the records of the Court of Appeal for the Province of Saskatchewan and appeals have been commenced in the said Court by or against SHOE KING LTD. from to . GIVEN under my hand and seal of the aforesaid Court, at Regina, Saskatchewan, this day of , 20 . ____________________________ DEPUTY REGISTRAR


Saskatchewan: Bar Admission Program Y - 7 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business April 2, 1993 The Sheriff Judicial Centre of Regina Court House 2425 Victoria Avenue Regina, Saskatchewan Dear Sir: Re: Shoe King Ltd. Our File: Please conduct a search of your records respecting the above-captioned corporate name. Please provide us with your certificates evidencing any writs of execution that have been registered against it. Please deduct your fees in this regard from our deposit account. Yours truly,




NOTE: Insolvency searches may be conducted by telephone (613) 941-2863. March 31, 1993 Consumer and Commercial Affairs Canada Office of the Superintendent of Bankruptcy Place du Portage Phase II, Commercial 165 Hotel de Ville Hull, Quebec K2A 0C9 Dear Sirs: Re: Insolvency Searches Our File: Please conduct a search of your records and provide our office with your certificate evidencing any petitions or assignments or other proceedings in bankruptcy that have been entered in relation to each of the following business and corporate names: Shoe King Ltd. SK Holdings Ltd. Please deduct your fees in this regard from our deposit account. Yours truly,


Saskatchewan: Bar Admission Program Y - 9 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 City Hall Treasury Department 2476 Victoria Avenue Regina, Saskatchewan Dear Sirs: Re: Shoe King Ltd., 2400 Toronto Street, Regina, Saskatchewan Lot 3, Block 4, Regina, Saskatchewan, Plan 84R30365 Our File: Please provide our office with a business tax certificate and property tax certificate with respect to the above-noted property. Please debit your fees from our deposit account. Yours truly,



Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 The Workers' Compensation Board 200 - 1881 Scarth Street Regina, Saskatchewan Dear Sirs: Re: Searches Our File: Please conduct a search of your records respecting each of the following business and corporate names: 1. Shoe King Ltd. 2. SK Holdings Ltd. Please provide our office with a letter respecting the status of all payments required to be made by each company under the Workers' Compensation Act (Saskatchewan). Yours truly,


Saskatchewan: Bar Admission Program Y - 11 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 R.M. of Dear Sirs: Re: Shoe King Ltd. Lot 3, Block 4, Regina, Saskatchewan Plan No. 84R30365 2400 Toronto Street, Regina, Saskatchewan Our File: Please provide our office with a zoning certificate with respect to the above-captioned property. - or - Please provide our office with written confirmation that the above subject property is correctly zoned for the purposes of [building an elevator, etc.]. Yours truly,



Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 Revenue Division VIA COURIER Department of Finance 3rd Floor - 2350 Albert Street Regina, Saskatchewan S4P 4A6 Dear Sirs Re: Searches Our File: Please conduct a search of your records respecting "Shoe King Ltd". The location of the company's business operations is as follows: Lot 3, Block 4, Regina, Saskatchewan, Plan 84R30365 (legal), 2400 Toronto Street, Regina, Saskatchewan (municipal). Please provide us with a letter advising as to the status of the company's accounts with your department under the Revenue and Financial Services Act (Saskatchewan) in relation to each and every "revenue Act" as defined in the Revenue and Financial Services Act. We herewith enclose your written authority to provide us with the above information. We understand that this matter is urgent and accordingly we would be most appreciative if you could provide the status letter on a rush basis. Yours truly,


Saskatchewan: Bar Admission Program Y - 13 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business

[LETTERHEAD OF SHOE KING LTD.]

March 31, 1993 Revenue Division Department of Finance 3rd Floor 2350 Albert Street Regina, Saskatchewan S4P 4A6 Dear Sirs: Re: Shoe King Ltd. By this letter we hereby authorize you to disclose to Balfour Moss, Barristers and Solicitors, 700, 2103 - 11th Avenue, Regina, Saskatchewan, or any representative thereof, any information requested by Balfour Moss, to be given by you orally or in writing respecting the above-captioned company in relation to the Revenue and Financial Services Act, including the status of the company's obligations and liabilities thereunder. Yours truly, SHOE KING LTD.

Per: __________________________



Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 Revenue Canada VIA COURIER Taxation Department Source Deductions 1955 Smith Street Regina, Saskatchewan S4P 2N9 Dear Sirs: Re: Searches Our File: Please conduct a search of your records respecting "Shoe King Ltd.". The location of the company's business operations is as follows: Lot 3, Block 4, Regina, Saskatchewan, Plan 84R30365 (legal); 2400 Toronto Street, Regina, Saskatchewan (municipal). Please provide us with a letter advising whether or not the company is in good standing with Revenue Canada in relation to all source deductions of whatsoever nature (including without limitation, unemployment insurance and Canada pension plan) for which the company is responsible, and as to whether or not the company is otherwise in good standing with Revenue Canada. We herewith enclose your written authority to provide us with the above information. We understand that this matter is urgent and accordingly we would be most appreciative if you could provide the status letter on a rush basis. Yours truly.




March 31, 1993 Revenue Division Revenue Canada Taxation District Office Source Deductions 1955 Smith Street Regina, Saskatchewan S4P 2N9 Dear Sirs: Re: Shoe King Ltd. By this letter we hereby authorize you to disclose to Balfour Moss, Barristers and Solicitors, 700, 2103 - 11th Avenue, Regina, Saskatchewan, or any representative thereof, any information requested by Balfour Moss, to be given by you orally or in writing respecting the above-captioned company in relation to source deductions of whatsoever nature for which the said company is responsible (including, without limitation, for unemployment insurance and Canada Pension Plan), and as to whether or not the said company is otherwise in good standing with Revenue Canada. Yours truly, SHOE KING LTD.

Per: ___________________________



Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 The District Excise Office 5th Floor, Avord Tower 2002 Victoria Avenue Regina, Saskatchewan S4P 3A4 Dear Sirs: Re: Shoe King Ltd. Our File: Please conduct a search of your records respecting "Shoe King Ltd.". The location of the company's business operations is as follows: Lot 3, Block 4, Regina, Saskatchewan, Plan 84R30365 (legal); 2400 Toronto Street, Regina, Saskatchewan (municipal). Please provide our office with a status letter advising as to the amount of any tax remittances presently due or outstanding under the Excise Tax Act for which the company is responsible, and advise as to whether or not the company is otherwise in good standing with Excise Canada. Enclosed herewith is your written authority to provide us with the above information. Yours truly,




March 31, 1993 The District Excise Office 5th Floor, Avord Tower 2002 Victoria Avenue Regina, Saskatchewan S4P 3A4 Dear Sirs: Re: Shoe King Ltd. By this letter we hereby authorize you to disclose to Balfour Moss, Barristers and Solicitors, 700, 2103 - 11th Avenue, Regina, Saskatchewan, or any representative thereof, any information requested by Balfour Moss, to be given by you orally or in writing respecting the above-captioned company in relation to goods and services tax for which the said company is responsible and as to whether or not the said company is otherwise in good standing with Excise Canada. The applicable GST registration number is as follows: . Yours truly, SHOE KING LTD.

Per: ________________________________



Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 Environment Canada VIA HAND Environmental Protection 300 - 2365 Albert Street Regina, Saskatchewan S4P 4K1 Dear Sirs: Re: Searches Our File Please conduct a search of your records respecting "Shoe King Ltd.". The location of the company's business operations is as follows: Lot 3, Block 4, Regina, Saskatchewan, Plan 84R30365 (legal); 2400 Toronto Street, Regina, Saskatchewan (municipal). Please provide us with a letter advising whether or not there are any outstanding notices of contravention, complaints, investigations, work orders or proceedings of any nature in relation to the company which have been filed or submitted to or are otherwise on record with your office. Without limiting the generality of the foregoing searches hereby requested, please include in your said status letter, particulars as to the status of any license, permit, authorization, approval, right of user or registration issued or granted to or for the benefit of the company under any federal legislation within the purview of your jurisdiction. We would appreciate receiving your written response to our above request as soon as possible. Yours truly,


Saskatchewan: Bar Admission Program Y - 19 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 Environment Canada Environmental Protection Western and Northern Region Twin Atria, #2 - 2nd Floor 4999 - 98th Avenue Edmonton, Alberta T6B 2X3 Dear Sirs: Re: Searches Our File: Please conduct a search of your records respecting "Shoe King Ltd.". The location of the company's business operations is as follows: Lot 3, Block 4, Regina, Saskatchewan, Plan 84R30365 (legal); 2400 Toronto Street, Regina, Saskatchewan (municipal). Please provide us with a status letter advising whether or not there are any outstanding notices of contravention, complaints, investigations, work orders or proceedings of any nature in relation to the company which have been filed or submitted to or are otherwise on record with your office. Without limiting the generality of the foregoing searches hereby requested, please include in your said status letter, particulars as to the status of any license, permit, authorization, approval, right of user or registration issued or granted to or for the benefit of the company under any federal legislation within the purview of your jurisdiction. We herewith enclose your written authority to provide us with the above information. We would appreciate receiving your written response to our above request as soon as possible. Yours truly,





March 31, 1993 Environment Canada Environmental Protection Western and Northern Region Twin Atria, #2 - 2nd Floor 4999 - 98th Avenue Edmonton, Alberta T6B 2X3 Dear Sirs: Re: Shoe King Ltd. By this letter we hereby authorize you to disclose to Balfour Moss, Barristers and Solicitors, 700, 2103 - 11th Avenue, Regina, Saskatchewan, or any representative thereof, any information requested by Balfour Moss, to be given by you orally or in writing respecting the above-captioned company relative to the status of any of its obligations under any federal legislation within the purview of your jurisdiction. Without limiting the generality of the foregoing, we hereby authorize you to disclose, orally or in writing, such information as Balfour Moss may request in relation to outstanding notices of contravention, complaints, investigations, work orders or the like which may have been filed or submitted to or otherwise on record with your office relative to the above captioned company; and as to the status of nay license, permit, authorization, approval, right of user or registration issued or granted to or for the benefit of the above-captioned company under any federal legislation within your jurisdiction. Yours truly, SHOE KING LTD.

Per _______________________


Saskatchewan: Bar Admission Program Y - 21 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 Saskatchewan Environment and Public Safety Public Safety Division 1855 Victoria Avenue Regina, Saskatchewan Dear Sirs: Re: Searches Our File Please conduct a search of your records respecting "Shoe King Ltd.". The location of the company's business operations is as follows: Lot 3, Block 4, Regina, Saskatchewan, Plan 84R30365 (legal); 2400 Toronto Street, Regina, Saskatchewan (municipal). Please provide us with a status letter advising as to whether or not there are any outstanding notices of contravention, complaints, investigations, work orders or proceedings of any nature in relation to the company which have been filed or submitted to or are otherwise on record with the Department of Environment and Public Safety, Public Safety Division. Without limiting the generality of the foregoing searches hereby requested, please include in your said status letter, particulars as to the status of any license, permit, authorization, approval, right of user or registration issued or granted under any of the following Acts: (a) the Boiler and Pressure Vessel Act; (b) the Passenger and Freight Elevator Act; (c) the Electrical Licensing Act; (d) the Gas Licensing Act. We would appreciate receiving your written response to our within request as soon as possible. Yours truly,



Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 SaskPower 2025 Victoria Avenue Regina, Saskatchewan S4P 0S1 Attention: Gas Inspection Division Dear Sirs: Re: Searches Our File: Please conduct a search of your records respecting "Shoe King Ltd.". The location of the company's business operations is as follows: Lot 3, Block 4, Regina, Saskatchewan,\ Plan 84R30365 (legal); 2400 Toronto Street, Regina, Saskatchewan (municipal). Please provide us with a status letter advising as to whether or not there are any outstanding notices of contravention, complaints, investigations, work orders or proceedings of any nature in relation to each respective company which have been filed or submitted to or are otherwise on record with the Department of Environment and Public Safety, Environmental Protection Division. Without limiting the generality of the foregoing searches hereby requested, please include in your said status letter, particulars as to the status of any license, permit, authorization, approval, right of user or registration issued or granted under the following Act: (a) the Gas Inspection Act. We would appreciate receiving your written response to our within request as soon as possible. Yours truly,


Saskatchewan: Bar Admission Program Y - 23 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 SaskPower 2025 Victoria Avenue Regina, Saskatchewan S4P OS1 Attention: Electrical Inspection Division Dear Sirs: Re: Searches Our File: Please conduct a search of your records respecting "Shoe King Ltd.". The location of the company's business operations is as follows: Lot 3, Block 4, Regina, Saskatchewan, Plan 84R30365 (legal); 2400 Toronto Street, Regina, Saskatchewan (municipal). Please provide us with a status letter advising as to whether or not there are any outstanding notices of contravention, complaints, investigations, work orders or proceedings of any nature in relation to each respective company which have been filed or submitted to or are otherwise on record with the Department of Environment and Public Safety, Environmental Protection Division. Without limiting the generality of the foregoing searches hereby requested, please include in your said status letter, particulars as to the status of any license, permit, authorization, approval, right of user or registration issued or granted under the following Act: (a) the Electrical Inspection Act. We would appreciate receiving your written response to our within request as soon as possible. Yours truly,



Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 SaskPower Accounts Receivable Department 2025 Victoria Avenue Regina, Saskatchewan S4P OS1 Dear Sirs: Re: Searches Our File: Please conduct a search of your records respecting "Shoe King Ltd.". The location of the company's business operations is as follows: Lot 3, Block 4, Regina, Saskatchewan, Plan 84R30365 (legal); 2400 Toronto Street, Regina, Saskatchewan (municipal). Please provide our office with a status letter advising if there are any outstanding utility accounts. If you need more information, please do not hesitate to call. Yours truly,


Saskatchewan: Bar Admission Program Y - 25 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 SaskEnergy Billings Department 445 Hoffer Drive Regina, Saskatchewan S4P 3R8 Dear Sirs: Re: Searches Our File: Please conduct a search of your records respecting "Shoe King Ltd.". The location of the company's business operations is as follows: Lot 3, Block 4, Regina, Saskatchewan, Plan 84R30365 (legal); 2400 Toronto Street, Regina, Saskatchewan (municipal). Please provide our office with a status letter advising if there are any outstanding utility accounts. If you need more information, please do not hesitate to call. Yours truly,



Appendix Y – Standard Search Letters for Sale or Purchase of a Business Saskatchewan Labour Relations Board VIA HAND 652 - 1914 Hamilton Street Regina, Saskatchewan S4P 4V4 Dear Sirs: Re: Our File: Please conduct a search of your records respecting the above-captioned company. Please provide our office with a status letter advising whether or not there are any outstanding notices of contravention, allegations of unfair labour practices, complaints, investigations, work orders or proceedings of any nature in relation to the company which have been filed or submitted to or are otherwise on record with your office. We would appreciate receiving your written response to our above request as soon as possible. Yours truly,


Saskatchewan: Bar Admission Program Y - 27 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 Saskatchewan Human Rights Commission 1942 Hamilton Street Regina, Saskatchewan S4P 2C4 Dear Sirs: Re: Shoe King Ltd. Our File: Please conduct a search of your records respecting the above-captioned company. Please provide our office with a status letter advising whether or not there are any outstanding notices of contravention, allegations of unfair labour practices, complaints, investigations, work orders or proceedings of any nature in relation to the company which have been filed or submitted to or are otherwise on record with your office. We would appreciate receiving your written response to our above request as soon as possible. Yours truly,



Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 Superintendent of Pensions, Pensions Benefits Branch 1871 Smith Street Regina, Saskatchewan Dear Sirs: Re: Shoe King Ltd. Our File: Please conduct a search of your records respecting the above-captioned company. Please provide our office with a status letter advising whether or not there are any outstanding notices of contravention, unfunded liabilities, investigations, work orders or proceedings of any nature in relation to the above-captioned company which have been filed or submitted to or are otherwise on record with your office. We would appreciate receiving your written response to our above request as soon as possible. Yours truly,


Saskatchewan: Bar Admission Program Y - 29 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 Executive Director, Occupational Health & Safety Branch 6th Floor, 1870 Albert Street Regina, Saskatchewan S4P 3V7 Dear Sirs: Re: Shoe King Ltd. Our File: Please conduct a search of your records respecting the above-captioned company. Please provide our office with a status letter advising whether or not there are any outstanding notices of contravention, complaints, investigations, work orders or proceedings of any nature in relation to the above-captioned company which have been filed or submitted to or are otherwise on record with your office. We would appreciate receiving your written response to our above request as soon as Possible. Yours truly,



Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 Director, Labour Standards Branch 4th Floor, 1870 Albert Street Regina, Saskatchewan S4P 3V7 Dear Sirs: Re: Shoe King Ltd. Our File Please conduct a search of your records respecting the above-captioned company. Please provide our office with a status letter advising whether or not there are any outstanding notices of contravention, allegations of unpaid wages, complaints, investigations, work orders or proceedings of any nature in relation to the above-captioned company which have been filed or submitted to or are otherwise on record with your office. We would appreciate receiving your written response to our above request as soon as possible. Yours truly,


Saskatchewan: Bar Admission Program Y - 31 Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 City of Regina, Regina Fire Department Inspection Branch 1205 Ross Avenue P.O. Box 1790 Regina, Saskatchewan S4P 3C8 Dear Sirs: Re: Shoe King Ltd. 2400 Toronto Street, Regina, Saskatchewan Lot 3, Block 4, Regina, Saskatchewan, Plan 84R30365 Our File: We are solicitors for ABC Co. Ltd. and we would request the following information: (a) Has the building(s) been inspected by your department? (b) Has your department issued a certificate to the owners of the subject building(s)

confirming such inspection? (c) Does the subject building(s) currently meet safety standards and regulations? We would appreciate receiving a letter or certificate from you certifying that the building(s) fully comply with current fire and safety standards and regulations. Yours truly,



Appendix Y – Standard Search Letters for Sale or Purchase of a Business March 31, 1993 Department of Energy and Mines Petroleum and Lands Division 10th Floor 1914 Hamilton Street Regina, Saskatchewan Dear Sirs: Re: GPN 4985 and GPN 1565 Our File: 12 45 BMW This is to confirm your conversation with my secretary this morning to order to searches on the above noted leases. Please include your statement of fees to cover the cost. We thank you for your assistance in this regard. Yours truly, Note: Searches are $11 each



ENVIRONMENTAL SEARCH APPLICATION To: Saskatchewan Environment and Resource Management Room 334, 3211 Albert Street Regina, SK S4S 5W6 The following information will be required to conduct an Environmental File Search. Note: The completeness of information supplied will affect the accuracy of the file search. A. SEARCH CRITERIA: 1. Current Business Name: ___________________________________________________ 2. Current Property Owner’s Name: ____________________________________________ 3. Business Mailing Address: _________________________________________________ 4. Location of property: (Complete either Section A OR Section B) (A) Urban Property: (B) Rural Property:

Civic Address ____________________ City or Town _____________________ Legal Land Description ___________________ ________________________________ Rural Municipality _______________________

5. Other Information to assist search (eg. Previous owners, Previous Business Name, Current and Past Property uses, Correspondence with department, etc.)

B. ACKNOWLEDGEMENTS:

1. The search response is compiled by the department from a combination of manual and computerized file searches, the response is subject to the accuracy of information and material supplied by outside parties and the Department makes no representations or warranties as to the accuracy or sufficiency of it.

2. The integrity of the data supplied by outside parties diminishes with the age of the reported information.

Revised May 2004 Not to be used or reproduced without permission - Saskatchewan Legal Education Society Inc.

Y - 34 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business Appendix Y – Standard Search Letters for Sale or Purchase of a Business 3. The search response will be site specific and may not reflect contamination or the existence of a pollutant from an off site source. 4. The Department makes no representations or warranties as to whether or not the party being searched is in compliance with any provincial or federal Act, Regulation, Approval, License or Permit or as to the relevance of the search response. 5. The Department makes no representations or warranties whether or not there are any environmental concerns as to the land being searched nor as to the environmental status of the land. It is recommended that an environmental audit or site assessment be conducted by an independent third party consultant. I, ______________________________, acknowledge that I have read and understood the above. Name: Company Name: Address: Phone: Date:

Revised May 2004 Not to be used or reproduced without permission - Saskatchewan Legal Education Society Inc.

Saskatchewan: Bar Admission Program Z - 1 Corporate Commercial - Purchase and Sale of a Business Appendix Z – Closing Agenda

ABC CO.

Purchase of Assets and Real Property of

XYZ LTD.

________________________________________

CLOSING AGENDA ________________________________________

Date: November 15, 1996 Time: 8:00 a.m. (Winnipeg time) Place: Winnipeg, Manitoba Parties: ABC Co. (the "Purchaser") XYZ Ltd. (the “Vendor”) (“Purchaser’s Counsel”) (“Vendor’s Counsel”) 1. Purpose

The Purchaser and the Vendor entered into an agreement as of (the “Purchase Agreement) pursuant to which the Purchaser agreed to purchase and the Vendor agreed to sell its assets with respect of its farm supply business. This closing agenda sets out the procedures for closing the transactions contemplated by the Purchase Agreement. 2. Escrow Arrangements

Each of the documents listed in Part II below, including cheques or other instruments representing payment, will be delivered in escrow until: (a) all such deliveries have been completed to the satisfaction of the parties to whom

such deliveries are to be made; and

(b) all parties have agreed that all acts required to be performed to complete the closing have been performed.


Z - 2 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix Z – Closing Agenda

When all of the parties are satisfied as aforesaid, each of the parties shall indicate its agreement that the escrow be terminated, whereupon each of the documents so delivered shall be released from escrow to the party or parties entitled thereto and the closing shall terminate. Termination of the closing without protest that all deliveries or payments have not been completed will be deemed to be conclusive evidence that the same have been completed. 3. Definitions

Capitalized terms defined the Purchase Agreement and not otherwise defined in this closing agenda will have the same meanings herein as in the Purchase Agreement. All references in this closing agenda to sections are references to sections of the Purchase Agreement unless otherwise indicated. 4. Deliveries

In this closing agenda, "Standard Delivery" means delivery of one executed copy of the relevant document to each of the Vendor, Vendor's Counsel and Purchaser's Counsel. If a document is not to be delivered by Standard Delivery, then one originally executed copy of the relevant document will be delivered to the party designated to receive it and a photocopy of such document will be provided to the other party and to the Vendor's Counsel and the Purchaser's Counsel. I. MATTERS COMPLETED PRIOR TO CLOSING

1. The Purchase Agreement was executed and delivered by all parties thereto.

2. Purchaser's investigation of the Vendor and the Business was completed.

3. The Purchaser shall have received from the Vendor a certificate from the President of the Vendor, confirming, to the best of his knowledge, information and belief (after due inquiry), the truth and correctness in all material respects of the representations and warranties set forth in the Purchase Agreement.

4. The Vendor shall have performed, or complied with, in all respects, each of its obligations, covenants and agreements, and all instruments of conveyance and other documentation relating to the sale and purchase of the Purchased Assets including, without limitation, bills of sale, transfers, documentation relating to the authorization and completion of the sale and purchase of the Purchased Assets and the taking of all actions and proceedings on or prior to the Closing in connection with the performance by the Vendor of its obligations under this Agreement shall be satisfactory to the Purchaser and its counsel and the Purchaser shall have received copies of all other documentation or evidence as the Purchaser may reasonably request in order to establish the consummation of the transactions contemplated and the taking by the Vendor of all corporate proceedings in connection with this Agreement in compliance with the terms, warranties and conditions, in form (as to certification and otherwise) and substance satisfactory to the Purchaser and its counsel.


Saskatchewan: Bar Admission Program Z - 3 Corporate Commercial - Purchase and Sale of a Business Appendix Z – Closing Agenda

5. All consents, approvals, orders and authorizations of Persons or any governmental authorities in Canada or any province (or registrations, declarations, filings or recordings with any of those authorities) including, without limitation, all clearance certificates required pursuant to any applicable retail sales tax legislation or workers compensation legislation which are required to be obtained in connection with the completion of any of the transactions contemplated by the Purchase Agreement, the execution of the Purchase Agreement, the Closing or the performance of any of the terms and conditions (other than any which are the responsibility, under applicable law, of the Purchaser to obtain) shall have been obtained by the Vendor.

6. The Vendor shall continue to maintain in full force and effect all policies of insurance now in effect or renewals in respect of the Purchased Assets.

II. MATTERS TO BE COMPLETED AT CLOSING No. Description of Document Delivered By Delivered To 1. Certified copy of Vendor's corporate

proceedings authorizing the sale of the Purchased Assets and the execution of the Purchase Agreement and other documents

Vendor Standard Delivery

2. Certified copy of Purchaser's corporate

proceedings authorizing the purchase of the Assets and the execution of the Purchase Agreement and other documents

Purchaser Standard Delivery

3. Non-Competition Agreement Vendor Standard

Delivery 4. Escrow Agreement Vendor Standard

Delivery 5. Certificate of the Vendor confirming

representations, warranties and performance

Vendor Standard Delivery

6. Certificate of the Purchaser confirming

representations, warranties and performance

Purchaser Standard Delivery


Z - 4 Saskatchewan: Bar Admission Program Corporate Commercial - Purchase and Sale of a Business

Appendix Z – Closing Agenda No. Description of Document Delivered By Delivered To 7. Releases Vendor Purchaser 8. Legal opinion of Vendor's Counsel Vendor's

Counsel Purchaser

9. Legal opinion of Purchaser's Counsel Purchaser's

Counsel Vendor

10. Statement of Adjustments Vendor Standard

Delivery 11. Transfer of Land Vendor Purchaser 12. General Conveyance Vendor Standard

Delivery 13. Cheque or bank draft of the Purchaser

payable to the Vendor Purchaser Vendor

14. Receipt of Vendor for item #13 Vendor Purchaser 15. GST Form 44 Vendor Purchaser 16. Farmland ownership certificate Vendor Purchaser 17. Assignment of vehicle lease Vendor Purchaser 18. Transfer of business name Vendor Purchaser III. MATTERS TO BE COMPLETED AFTER CLOSING

1. Registration of Transfer of Land.

2. Retail Sales Tax Clearance Certificate.

3. Workers Compensation Clearance Certificate.

4. Transfer of Operating Licenses.

5. Registration of Transfer of Business Name.
