cei_8k.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): April 1, 2025

 

CAMBER ENERGY, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

001-32508

20-2660243

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

 

12 Greenway Plaza, Suite 1100, Houston, Texas

 

77046

(Address of principal executive offices)

 

(Zip Code)

 

(Registrant’s telephone number, including area code): (281) 404-4387

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: None.

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

    

Item 1.01. Entry into a Material Definitive Agreement.

 

On April 1, 2025, Viking Energy Group, Inc. (“Viking”), a wholly-owned subsidiary of Camber Energy, Inc. (“Camber” or the “Company”), entered into a Share Subscription Agreement (the “SSA”) with T&T Power Group Inc. (“T&T”), Remora EQ LP (“Remora”), Simmax Corp. (“Simmax”), and Simson-Maxwell Ltd. (“Simson”), a Canadian federal corporation. The SSA relates to a restructuring of the ownership of Simson that results in Camber ceasing to have a controlling interest in Simson. As such, Camber will deconsolidate Simson from its consolidated financial statements effective April 1, 2025.

  

Under the SSA, T&T agreed to (i) subscribe for 952 Class A Common Shares of Simson (the “Subscription Shares”) for an aggregate subscription price of approximately CAD $2.28 million; (ii) purchase 903 Class A Common Shares from Remora (the “Remora Shares”) for an agreed purchase price; and (iii) purchase 681 Class A Common Shares from Simmax (the “Simmax Shares”) for an agreed purchase price.  T&T also agreed to provide up to CAD $3.0 million in additional working capital to Simson on closing or at such time as is reasonably required to meet the cash requirements of Simson, and to repay on or within a reasonable period following the closing amounts owing under Simson’s then outstanding senior secured credit facilities.

 

T&T acquired the Subscription Shares by paying the subscription price in cash. T&T acquired the Remora Shares by paying approximately 3.5% of the purchase price in cash and issuing a promissory note for the remaining balance, maturing on December 1, 2025. T&T acquired the Simmax Shares by issuing a promissory note to Simmax, also maturing on December 1, 2025.

 

Following the closing of the transactions described above (collectively, the “Simson Share Transactions”), T&T and Viking are the only remaining shareholders of Simson. T&T owns 51% of Simson’s issued and outstanding Class A Common Shares, and Viking owns the remaining 49%. Viking did not sell or purchase any shares in connection with the Simson Share Transactions; however, Viking’s ownership decreased from approximately 60.5% to 49%.

 

As a result of the reduction in Viking’s ownership interest and ceasing to have control over Simson, Camber will no longer consolidate Simson’s financial results in its consolidated financial statements. Beginning April 1, 2025, the Company will instead account for its investment in Simson under the equity method of accounting.

 

In connection with the closing of the Simson Share Transactions, Viking also entered into a Unanimous Shareholders Agreement (the “USA”) with T&T and Simson. The USA governs the ownership and management of Simson and provides that T&T is entitled to nominate two members to Simson’s board of directors, and Viking is entitled to nominate one member.

 

The foregoing descriptions of the SSA and USA do not purport to be complete and are qualified in their entirety by reference to the full text of the SSA and USA, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 7.01. Regulation FD Disclosure.

 

On April 1, 2025, the Company issued a press release regarding the Simson Share Transactions described in this Current Report on Form 8-K. A copy of the press release is furnished as Exhibit 99.1 hereto.

 

The information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit

No.

 

Description

10.1

 

Share Subscription Agreement, dated April 1, 2025, by and among Viking Energy Group, Inc., T&T Power Group Inc., Simson-Maxwell Ltd., Remora EQ LP, and Simmax Corp.

10.2

 

Unanimous Shareholders Agreement, dated April 1, 2025, by and among Simson-Maxwell Ltd., Viking Energy Group, Inc., and T&T Power Group Inc.

99.1

 

Press release dated April 1, 2025.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 
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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

CAMBER ENERGY, INC. 

 

 

Date: April 1, 2025

By:

/s/ James A. Doris 

 

 

Name:

James A. Doris

 

Title:

Chief Executive Officer

 

 
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EX-10.1 2 cei_ex101.htm SHARE SUBSCRIPTION AGREEMENT cei_ex101.htm

EXHIBIT 10.1

 

T&T POWER GROUP INC.

 

- and -

 

SIMSON-MAXWELL LTD.

 

 

SHARE SUBCRIPTION AGREEMENT

 

 

 

 

 

SHARE SUBSCRIPTION AGREEMENT

 

THIS AGREEMENT is dated {{closingdate}} (the “Effective Date”), and made between:

 

T&T POWER GROUP INC., a corporation incorporated under the laws of the Province of Ontario (the “Subscriber”)

 

- and -

 

SIMSON-MAXWELL LTD., a corporation incorporated under the laws of Canada (the “Corporation”)

 

- and -

 

VIKING ENERGY GROUP, INC., a corporation incorporated under the laws of the State of Nevada (“Viking”)

 

- and -

 

SIMMAX CORP., a corporation incorporated under the laws of the Province of Alberta (“Simmax”)

 

- and -

 

REMORA EQ LP., a limited partnership formed under the laws of the Province of Ontario (“Remora”)

 

WHEREAS:

(A)

the Shareholders are the registered and beneficial owners of all the issued and outstanding shares in the capital of the Corporation;

 

 

(B)

the Corporation is in the business of selling, servicing, maintaining, repairing, renting and testing of generators and industrial engines in the Provinces of Alberta, British Columbia, Ontario and elsewhere in Canada (the “Business”);

 

 

(C)

upon the terms and conditions set out in this Agreement, the Subscriber has agreed to subscribe for 952 Class A Common Shares in the capital of the Corporation for the aggregate subscription price set out in Section 2.1 (the “Subscription”);

 

 

(D)

upon the terms and conditions set out in this Agreement, the Subscriber has agreed to purchase from Simmax its 681 Class A Common Shares of the Corporation and to purchase from Remora its 903 Class A Common Shares of the Corporation (the “Purchases”),

 

 

(E)

in connection with the Subscription and the Purchases, the Corporation’s Indebtedness to Simmax and its Affiliates and related parties, and to Remora GP, and to Viking will be restructured as more particularly described herein (the “Repayment”, and together with the Purchases, the “Purchases and Repayment”);

 

 

(F)

concurrent with the transactions contemplated in this Agreement, Viking and the Subscriber shall enter into the Post-Closing Shareholder’s Agreement (as defined below); and

 

 

(G)

as consideration for the Subscriber’s agreement to complete the Subscription and the Purchases and Repayment, the Corporation and the Shareholders have agreed to provide certain representations, warranties, and covenants to the Subscriber regarding the Corporation, the Business, and other matters as set out in this Agreement.

 

 
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NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are acknowledged), the Parties agree as follows:

 

ARTICLE 1

INTERPRETATION

 

1.1 Definitions

 

In this Agreement, the following terms have the following meanings:

 

Affiliate means, with respect to any Person, (a) any other Person directly or indirectly controlling, controlled by or under common control with that Person, (b) any other Person that owns or controls 50% or more of any class of equity securities (including any equity securities issuable upon the exercise of any option or convertible security) or partnership units of that Person or any of its affiliates, or (c) any director, partner, officer, agent, principal, employee or relative of such Person. For the purposes of this definition, "control" (including with correlative meanings, the terms "controlling", "controlled by", and "under common control with") as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through ownership of voting securities, by contract or otherwise.

 

Agreement means this share subscription agreement, the Schedules attached to it or otherwise forming part of it, and the words Article and Section followed by a number or letter mean and refer to the specified Article or Section of this share subscription agreement.

 

Ancillary Agreements means the Remora Releases, Simmax Releases, Viking Release, the Non-Compete and Non-Solicitation Agreements, the Required Consents, the Guarantees, the Intercreditor Agreement and the New Notes.

 

Authorization means, with respect to any Person, any order, permit, approval, consent, waiver, licence or other authorization issued, granted, given or authorized by, or made applicable under the authority of, any Governmental Authority having jurisdiction over the Person.

 

Balance Sheet Date means December 31, 2024.

 

Books and Records means all books of account, Tax Returns and other tax records, personnel records, documents relating to current Employee Plans, sale and purchase records, customer and supplier lists, lease and rental records, referral sources, research and development reports and records, production reports and records, equipment logs, operating guides and manuals, business reports, plans and projections and all other documents, files, correspondence and other information of the Corporation (whether in written, electronic or other form) other than the Corporate Records in the possession of the Corporation.

 

 
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Business has the meaning set out in the Recitals.

 

Business Authorizations has the meaning specified in Section 4.15.

 

Business Day means any day, other than a Saturday, Sunday or statutory or civic holiday in the Province of Alberta.

 

Closing means the completion of the subscription transaction contemplated in this Agreement.

 

Closing Date means {{closingdate}}, or such other earlier or later date as the Parties may agree in writing.

 

Commercially Reasonable Efforts means the efforts that a reasonable person who desires to achieve a result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible but do not include extraordinary or unreasonable measures, including the payment of amounts in excess of normal and usual filing fees and processing fees or any other significant and unusual payments, and provided, that this obligation does not require a Person to take any action or actions which could materially and adversely affect the benefits to such Person of this Agreement and the transactions contemplated in this Agreement.

 

Consent means any consent, approval, waiver or other authorization required under a Contract.

 

Contracts means all agreements, arrangements, understandings, commitments and undertakings (whether written, electronic or oral), to which a Person is a party or a beneficiary or pursuant to which any of its property or assets are or may be affected.

 

Corporate Records means the corporate records of the Corporation, the Shareholders, or the Subscriber, as applicable, including (a) all constating documents, articles and by-laws, (b) all minutes of meetings and resolutions of shareholders, directors and partners, and (c) the share certificates, securities register, register of transfers and register of directors.

 

Corporation has the meaning set out in the Recitals.

 

Corporation Assets means all property and assets of the Corporation of every nature and kind and wherever located, including but not limited to all (a) machinery, equipment, furniture, accessories and supplies of all kinds, (b) all trucks, cars and other vehicles, (c) all Inventory, (d) all accounts receivable, (e) all IP Rights of the Corporation, (f) all Authorizations issued to the Corporation, (g) the Real Property Leases, (h) all other Contracts binding on or benefiting the Corporation, (i) the Books and Records, and (j) the Corporate Records.

 

Damages has the meaning specified in Section 10.1.

 

Edmonton Rent Arrears means any rent arrears owed by the Corporation to Simmax in connection with the Real Property Lease for the Premises located in Edmonton, Alberta.

 

Effective Date has the meaning specified in the recitals to this Agreement.

 

 
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Employee means any full-time or part-time employee of the Corporation, including any such employee on disability (long-term or short-term), workplace safety and insurance, workers' compensation, pregnancy or parental or other statutory or approved leave.

 

Employee Bonus Releases has the meaning specified in Section 6.5.

 

Employee Plans has the meaning specified in Section 4.37(a).

 

Employee Material Contracts has the meaning specified in Section 4.36(a).

 

Environmental Authorization means all Authorizations issued pursuant to any Environmental Laws in connection with the operation of the Business or the ownership and use by the Corporation or by any other Person of the Corporation Assets and any other property and assets used by the Corporation (including the Premises).

 

Environmental Laws mean all Laws relating to environmental matters or occupational health and safety, including any Laws having as a purpose or effect the protection of the environment, the prevention or reduction to acceptable levels of pollution or the provision of remedies in respect of damage arising therefrom.

 

Environmental Notice means any written directive or notice of infraction or written notice respecting any claim, investigation, proceeding or judgment from any Governmental Authority relating to non-compliance with, or breach of, any Environmental Laws or Environmental Authorizations by the Corporation or any predecessor in title.

 

Environmental Release means any emission, discharge, release, deposit, issuance, spray, injection, abandonment, escape, spill, leak, seepage, disposal or exhaust (other than exhaust from a vehicle) of an Environmentally Hazardous Substance, or other occurrence or event defined as such in any Environmental Laws.

 

Environmentally Hazardous Substance means any material or substance that could reasonably be expected to impair the quality of the environment or that causes or could reasonably be expected to cause an adverse effect on the environment for any use which can be made of it and as to which. liabilities or standards of conduct are imposed pursuant to Environmental Laws, including any material or substance that is deemed pursuant to any Environmental Law to be "hazardous", "toxic", "deleterious", "caustic", "dangerous", a "contaminant", a "hazardous waste", a "source of contaminant" or a "pollutant".

 

Governmental Authority means any (a)federal, provincial, territorial, state, municipal, local or other governmental or public department, central bank, court, commission, board, tribunal, bureau or agency, domestic or foreign, (b) any subdivision or authority of any of the above, or (c) any quasi-governmental or private body exercising any regulatory, expropriation or tax authority under or for the account of any of the above.

 

Guarantees has the meaning specified in Section 2.8.

 

 
5

 

 

Indebtedness means, with respect to any Person and without duplication: (a) any (i) indebtedness for borrowed money (including the current portion thereof); (ii) obligation relating to a letter of credit, bankers' acceptance, note, purchase facility or similar instruments in each case to the extent drawn; (iii) obligation evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation); (iv) obligation for the payment of money relating to any lease that is required to be classified as a capitalized lease obligation; (v) obligation for all or any part of the deferred purchase price of property or services, including any "earn-out" or similar payments or any non-compete payments; (vi) obligation under interest rate swap, hedging or similar agreements; (vii) obligation for all bonuses/commissions, including the employer portion of any employment, payroll, unemployment or withholding Taxes related to such bonuses/commissions due and payable on or before December 31, 2024, (viii) obligation for any customer deposits; (ix) obligation for any severance obligations to any Person (including the employer portion of any employment, payroll, unemployment or withholding Taxes related to such severance obligations) due and payable on or before December 31, 2024; or (x) obligation for any deferred rent liabilities other than the Edmonton Rent Arrears; or (b) any obligation of others described in Section (a) of this definition that such Person has guaranteed, that is recourse to such Person or any of its assets or that is otherwise its legal liability or that is secured in whole or in part by the assets of such Person. For clarity, "Indebtedness" includes (a) any and all accrued interest, success fees, prepayment premiums, make whole premiums or penalties and fees or expenses actually incurred (including legal fees) with respect to the prepayment of any Indebtedness; and (b) any and all amounts owed by Corporation to any of its Affiliates or Shareholders;

 

Information Technology means all computer systems, communications systems, software (other than software that has been generally and commercially released and that was not specifically developed by or for the Corporation) and hardware, whether owned, used or licenced.

 

Intercreditor Agreement has the meaning specified in Section 2.7.

 

Inventory means all inventories of raw materials, work-in-progress and finished goods and merchandise of the Corporation and all parts and packaging materials used or consumed by the Corporation.

 

IP Rights means (a) all patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice), and including all provisional applications, substitutions, continuations, continuations-in-part, patents of addition, improvement patents, divisions, renewals, reissues, confirmations, counterparts, re-examinations and extensions thereof, (b) all trademarks, service marks, trade dress, trade names, logos, domain names and corporate names, whether registered or existing at common law, (c) all registered and unregistered statutory and common law copyrights and industrial designs, (d) all registrations, applications and renewals for any of the foregoing, (e) all trade secrets, confidential information, ideas, formulae, compositions, know-how, improvements, innovations, discoveries, designs, manufacturing and production processes and techniques, and (f) all other intellectual property rights owned, licensed, controlled or used by a Person, in any and all relevant jurisdictions in the world.

 

Laws means any and all (a) laws, constitutions, treaties, statutes, codes, ordinances, orders, decrees, rules, regulations and municipal by-laws, (b) judicial, arbitral, administrative, ministerial, departmental or regulatory judgments, orders, decisions, rulings or awards of any Governmental Authority, and (c) policies, guidelines and protocols to the extent they have force of law.

 

Lien means (a) any mortgage, charge, pledge, hypothec, security interest, assignment, lien (statutory or otherwise), privilege, easement, servitude, pre-emptive right or right of first refusal, ownership or title retention agreement, restrictive covenant or conditional sale agreement, and (b) any other encumbrance of any nature or any arrangement or condition which, in substance, secures payment or performance of an obligation.

 

 
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Lift Payment has the meaning specified in Section 2.2.

 

Mann Payment has the meaning specified in Section 2.2.

 

Material Adverse Effect means, with respect to any Person, any effect or effects that, individually or in the aggregate, are materially adverse to the Business, results of operation, properties, assets, prospects or financial or other condition of such Person; provided that with respect to the Corporation, “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Corporation operates; (iii) any changes in financial, banking or securities markets in general, including any disruption thereof and any decline in the price of any security or any market index or any change in prevailing interest rates; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action required or permitted by this Agreement or any action taken (or omitted to be taken) with the written consent of or at the written request of Subscriber; (vi) any changes in applicable Laws or accounting rules (including ASPE); (vii) any natural or man-made disaster or acts of God; or (viii) general outbreaks of illness or similar public health emergencies.

 

Material Contracts has the meaning specified in Section 4.23.

 

New Notes has the meaning specified in 2.8.

 

New Remora Notes has the meaning specified in 2.4(c).

 

New Simmax Notes has the meaning specified in 2.5(d).

 

New Viking Notes has the meaning specified in 2.6(b).

 

Non-Compete and Non-Solicitation Agreements has the meaning specified in Section 6.2.

 

Ordinary Course means, with respect to an action taken by a Person, that such action (a) is consistent with the past practices of the Person or its business, as the case may be, and is taken in the ordinary course of the normal day-to-day operations of the Person or its business, and (b) would be similar in nature to actions customarily taken in the ordinary course of the day-to-day operations of other Persons that are in the same line of business as such Person.

 

Parties means the Subscriber, the Corporation, and the Shareholders, and “Party” means any one of them.

 

Permitted Encumbrances means the Liens summarized in Schedule 4.17.

 

Person means a natural person, partnership, limited partnership, limited liability partnership, syndicate, sole proprietorship, corporation or company (with or without share capital), limited liability company, trust, unincorporated association, joint venture or other entity or Governmental Authority.

 

Personal Information means information that is protected by any Privacy Laws.

 

 
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Post-Closing Shareholders’ Agreement means the shareholder’s agreement to be entered into between the Corporation, Viking and the Subscriber, effective upon the repurchase and cancellation of the Remora Shares and the Simmax Shares.

 

PPR means Personal Property Registry of Alberta, British Columbia and Ontario.

 

Premises means all real property leased, subleased, licensed or otherwise occupied by the Corporation pursuant to the Real Property Leases, along with their respective municipal addresses and legal descriptions.

 

Purchases and Repayment has the meaning set out in the Recitals.

 

Privacy Laws means the Personal Information Protection and Electronic Documents Act (Canada) and any similar Laws governing the protection of personal information.

 

Real Property Leases has the meaning specified in Section 4.21(b).

 

Remora has the meaning set out in the Recitals.

 

Remora Closing Payment has the meaning specified in Section 2.4(a).

 

Remora GP means Remora EQ General Partner Inc.

 

Remora GP Note has the meaning specified in Section 2.4(c).

 

Remora LP Note has the meaning specified in Section 2.4(a).

 

Remora Promissory Notes has the meaning specified in Section 2.4(c).

 

Remora Releases has the meaning specified in Section 2.4(f).

 

Remora Shares means the 903 Class A Common Shares of the Corporation owned by Remora, being all of the issued and outstanding shares of the Corporation owned by Remora.

 

Required Consents has the meaning specified in Section 4.6.

 

Shareholders means Viking, Simmax, and Remora, and Shareholder means any one of them.

 

Shareholders Agreement means the unanimous shareholders agreement of the Corporation dated as of August 6, 2021.

 

Shares has the meaning specified in Section 2.1.

 

Simmax has the meaning set out in the Recitals.

 

Simmax Releases has the meaning specified in Section 2.5(f).

 

Simmax Shares means the 681 Class A Common Shares of the Corporation owned by Simmax, being all of the issued and outstanding shares of the Corporation owned by Simmax.

 

 
8

 

 

Subscriber Indemnified Persons has the meaning specified in Section 10.1.

 

Subscription has the meaning specified in the recitals to this Agreement.

 

Subscription Payment has the meaning specified in Section 2.2.

 

Subscription Price has the meaning specified in Section 2.1.

 

Subsidiary or Subsidiaries means, with respect to any Person, any corporation, partnership, association or other business entity of which (a) if a corporation, a majority of the total voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (b) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For these purposes, a Person or Persons are deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons are allocated a majority of partnership, association or other business entity gains or losses or control the managing director, managing member, general partner or other managing Person of such partnership, association or other business entity.

 

Tax Act means the Income Tax Act (Canada).

 

Tax Authority means the Canada Revenue Agency and any other Governmental Authority having taxing authority and their respective successors, if any.

 

Tax Liabilities means all liabilities and obligations of the Corporation for Taxes together with all costs and expenses relating thereto (including professional fees and expenses).

 

Tax Returns means all returns, reports, declarations, elections, notices, filings, forms, statements and other documents (whether in written, electronic or other form) and any amendments, schedules, attachments, supplements, appendices and exhibits thereto, which have been prepared or filed or required to be prepared or filed in respect of Taxes.

 

Taxes includes any taxes, duties, assessments, imposts, fees, duties, withholdings, levies and other charges of any nature (including all interest, penalties, fines, additions to tax or other additional amounts) imposed by any Tax Authority, including, without limitation, those levied on, or measured by, or referred to as, income, gross receipts, profits, capital, transfer, land transfer, sales, goods and services, harmonized sales, use, value-added, excise, withholding, business, property, occupancy, employer health, payroll, employment, health, social services, education and social security taxes, all surtaxes, all customs duties and import and export taxes, countervailing and anti-dumping and all employment insurance, health insurance and Canada, Quebec and other government pension plan and other employer plan premiums, contributions or withholdings and all other taxes and similar government charges of any kind imposed by any Governmental Authority.

 

Transaction Documents means the Ancillary Agreements, and all other agreements, certificates and other instruments or documents delivered or given pursuant to this Agreement.

 

Transition Period has the meaning specified in Section 6.4.

 

 
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Unaudited Financial Statements means the unaudited financial statements of the Corporation as at and for the twelve months ended on the Balance Sheet Date.

 

Viking has the meaning set out in the Recitals.

 

Viking Release has the meaning specified in Section 2.6(c).

 

Viking Shares means the 2,436 Class A Common Shares of the Corporation owned by Viking, being all of the issued and outstanding shares of the Corporation owned by Viking.

 

Working Capital Contribution means the sum of up to $3,000,000.00 to be advanced at the reasonable discretion of the Subscriber, having regard for the operating cash requirements of the Corporation, as a non-interest-bearing shareholder loan, to be used by the Corporation as required for general working capital purposes, including but not limited to operational expenses, Inventory purchases, and other business expenditures in the Ordinary Course. The Working Capital Contribution shall not be treated as equity or as part of the Subscription Price and shall be repayable only in accordance with the terms and conditions to be mutually agreed upon by the Subscriber, Viking and the Corporation, which shall include, among other things, subordination and postponement to the New Remora Notes, the Simmax Note, the New Simmax Notes and the New Viking Notes.

 

1.2 Gender and Number

 

Any reference in this Agreement to gender includes all genders and words importing the singular, including the plural, and vice versa.

 

1.3 Certain Phrases and Calculation of Time

 

 

(a)

In this Agreement: (i) the words "including" and "includes" mean "including (or includes) without limitation"; and (ii) in the computation of periods of time from a specified date to a later specified date, unless otherwise expressly stated, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding". If the last day of any such period is not a Business Day, such period will end on the next Business Day.

 

 

 

 

(b)

When calculating the period of time "within" “which” or "following" which any act or event is required or permitted to be done, notice given or steps taken, the date which is the reference date in calculating such period is to be excluded from the calculation. If the last day of any such period is not a Business Day, such period will end on the next Business Day.

 

1.4 Headings, etc.

 

The inclusion of a table of contents, the division of this Agreement into Articles and Sections and the insertion of headings are for convenient reference only and are not to affect or be used in the construction or interpretation of this Agreement.

 

 
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1.5 References to the Schedules and Exhibits

 

 

(a)

 

Notwithstanding anything to the contrary contained in this Agreement, if a matter is said to be set out, disclosed, listed, described or reflected in this Agreement, it is deemed to have been sufficiently disclosed to the Parties where the relevance of such matter is or should be reasonably apparent.

 

 

 

 

(b)

The Schedules form an integral part of this Agreement.

 

1.6 Currency

 

All monetary amounts in this Agreement, unless otherwise specifically indicated, are stated in Canadian currency, and all transactions referred to in this Agreement will be made in immediately available funds by way of certified cheque, bank draft or wire transfer.

 

1.7 Accounting Terms

 

All accounting and financial terms and references not defined in this Agreement are to be interpreted in accordance with ASPE, and all calculations made or referred to in this Agreement will be made in accordance with ASPE.

 

1.8 Statutory References

 

Unless otherwise specifically indicated, any reference to a statute in this Agreement refers to that statute and to the regulations made under that statute as at the date of this Agreement and the Closing Date.

 

1.9 No Presumption

 

The Parties and their counsel have participated jointly in the negotiation and drafting of this Agreement and each of the Transaction Documents. If an ambiguity or a question of intent or interpretation arises, this Agreement and each of the Transaction Documents are to be construed as if drafted jointly by the Parties. No presumption or burden of proof should arise in favour of any Party by virtue of the authorship of any provision of this Agreement or any of the Transaction Documents.

 

1.10 Governing Law

 

 

(a)

This Agreement is governed by and is to be interpreted, construed and enforced in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein, without regard to conflict of law principles.

 

 

 

 

(b)

Each of the Parties irrevocably attorns and submits to the exclusive jurisdiction of the courts of Alberta in any action or proceeding arising out of or relating to this Agreement. Each of the Parties waives objection to the venue of any action or proceeding in such court or any argument that such court provides an inconvenient forum.

 

 
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1.11 Knowledge

 

Where any representation, warranty or other statements in this Agreement is qualified by reference to the knowledge of Remora, the Shareholders or the Corporation, such knowledge will be deemed to mean:

 

 

(a)

knowledge of Remora is the actual knowledge of Stephan May and Candace Enman;

 

 

 

 

(b)

knowledge of the Shareholders is (i) in the case of Simmax, the actual knowledge of Brad Kruper and Daryl Kruper; and (ii) in the case of Viking, the actual knowledge of Jim Doris and John McVicar, and the knowledge each of such Persons could reasonably be expected to possess having made due inquiry with the Corporation’s executive management team including, but not limited to, Aaron Dowler and Tom Jackson, and having reviewed the Corporation’s Books and Records and Corporate Records including, but not limited to, the documentation in the data room created by the Shareholders as part of the due diligence for this transaction; and

 

 

 

 

(c)

knowledge of the Corporation is the actual knowledge of the officers of the Corporation, and the knowledge each of such Persons could reasonably be expected to possess had they conducted a reasonable inquiry into the Corporation’s Books and Records and Corporate Records.

 

Simmax, Viking and the Corporation confirm that they have made inquiries as they consider necessary as to the matters that are the subject of the representations, warranties and agreements contained in this Agreement.

 

1.12 Materiality

 

Notwithstanding anything in this Agreement to the contrary, for purposes of the Shareholders indemnification obligations in this Agreement, the representations and warranties of the Shareholders in this Agreement that are qualified as to "material", “materiality" or similar phrasing shall be deemed to have been made without any such qualification for the purpose of determining the amount of any damages or other losses resulting from or arising out of any breach of any such representation or warranty, but shall not be deemed to have been made without such qualification for the purpose of determining whether such damages or other losses occurred.

 

ARTICLE 2

PURCHASED SHARES AND SUBSCRIPTION PRICE

 

2.1 Subscription

 

Subject to the terms and conditions of this Agreement, the Subscriber hereby subscribes for and agrees to purchase 952 Class A Common Shares (the “Shares”) in the capital of the Corporation for the aggregate subscription price of $2,284,239.10 (the “Subscription Price”).

 

2.2 Payment of Subscription Price

 

The Subscriber shall satisfy the Subscription Price by payment of the sum of $77,537.31 on Closing by wire transfer of immediately available funds to Mann Lawyers LLP, in trust (the “Mann Payment”), and the payout of $2,206,701.79 to Lift Legal, in trust (the “Lift Payment” and together with the Mann Payment “Subscription Payment”), to be allocated in accordance with Section 2.3 below.

 

 
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2.3 Allocation of Subscription Price; Use of Proceeds

 

The Parties acknowledge and agree that the Subscription Payment shall be allocated and used as follows:

 

 

(a)

 

two million two hundred six thousand seven hundred one dollars and seventy-nine cents ($2,206,701.79) of the Subscription Payment shall be used for general working capital purposes of the Corporation; and

 

 

 

 

(b)

 

seventy-seven thousand five hundred thirty-seven dollars and thirty-one cents ($77,537.31) of the Subscription Payment shall be used in connection with the Repayment transactions set forth in Sections 2.4, 2.5, and 2.6 of this Agreement, respectively.

 

Schedule 2.3 sets out allocation of the Subscription Payment with respect to the Repayment transactions.

 

2.4 Purchase of Remora Shares and Repayment Transactions

 

 

(a)

The Subscriber agrees to purchase and Remora agrees to transfer to the Subscriber the Remora Shares for the sum of $650,083.39. The Subscriber shall pay for such shares by way of a delivering a closing payment of $22,462.69 (the “Remora Closing Payment”) by wire transfer of immediately available funds to Gowling WLG (Canada) LLP and a promissory note of $627,620.70 in the form attached as Schedule 2.4(a) (the “Remora LP Note”).

 

 

 

 

(b)

As a result of the share purchase contemplated by this Section 2.4(a), Remora shall not retain any equity interest in the Corporation following Closing.

 

 

 

 

(c)

In exchange for the retirement and termination of all existing promissory notes and other Indebtedness in favour of or otherwise owing to Remora or Remora GP by the Corporation (the "Remora Promissory Notes") the Corporation shall issue a promissory note to Remora GP in the amount of $153,956.62 (the "Remora GP Note" and together with the Remora LP Note “New Remora Notes”)

 

 

 

 

(d)

Remora hereby represents that the only Affiliate of Remora that the Corporation is indebted to is Remora GP.

 

 

 

 

(e)

To the extent the amount received by Remora GP is less than the amount owing under the Remora Promissory Notes, it irrevocably agrees to forgive the remaining balance of the Remora Promissory Notes and shall execute an acknowledgment and release in favour of the Corporation;

 

 

 

 

(f)

as a condition of the transactions set out in this Section 2.4, the Corporation, Remora, Remora GP and each of their respective directors, officers, shareholders, and related Parties shall execute and deliver a full and final mutual release, in the form attached hereto as Schedule 2.4(f) (the “Remora Releases”).

 

2.5 Purchase of Simmax Shares and Repayment Transactions

 

 

(a)

The Subscriber agrees to purchase and Simmax agrees to transfer to the Subscriber the Simmax Shares for the sum of $465,677.51. The Subscriber shall pay for such shares by way of a Promissory Note of $465,677.51 in the form attached as Schedule 2.5(a) (the “Simmax Note”).

 

 

 

 

(b)

As a result of the share purchase contemplated by Section 2.5(a), Simmax shall not retain any equity interest in the Corporation following Closing.

 

 

 

 

(c)

In exchange for the retirement and termination of all existing promissory notes and other Indebtedness owing to Simmax and its Affiliates by the Corporation, (the “Simmax Promissory Notes”) the Corporation shall:

 

 
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(i) 

from the Mann Payment, pay to Simmax the sum of $16,940.30 by wire transfer of immediately available funds to McCuaig Desrochers LLP, in trust,  

 

 

 

 

(ii) 

issue one or more promissory notes in form and substance acceptable to the Shareholders in the aggregate principal amount of $1,113,342.18 in favour of Simmax and/or its Affiliates, including but not limited to Brad Kruper and Daryl Kruper (the “New Simmax Notes”),  

 

 

(d) 

The Simmax Note and the New Simmax Notes shall be allocated as set out and as allocated in Schedule 2.5 herein.  

 

 

 

 

(e) 

To the extent the amount received by Simmax and/or its Affiliates is less than the amount owing under the Simmax Promissory Notes, each such Party irrevocably agrees to forgive the remaining balance of its respective portion of the Simmax Promissory Notes and shall execute an acknowledgment and release in favour of the Corporation.  

 

 

 

 

(f) 

As a condition of the transactions set out in this Section 2.5, the Corporation and Simmax, and each of their respective directors, officers, shareholders, and related Parties shall execute and deliver a full and final mutual release, in the form attached hereto as Schedule 2.5(f) (the “Simmax Releases”); and (2) the Corporation and Subscriber shall exercise best commercial efforts to cause TD Canada to release Simmax and/or its Affiliates (including, without limitation, Daryl Kruper) from any prior guarantees or pledged collateral in respect of any existing loan or credit facilities of the Corporation (collectively, the “Simmax Guarantees”) and deliver evidence of same on Closing (the “TD Release”). In the event the TD Release cannot be obtained by Closing, the Corporation and Subscriber shall deliver on Closing an undertaking in form and substance acceptable to Simmax and/or its Affiliates to deliver the TD Release within a reasonable time post-Closing and shall jointly and severally indemnify such Parties in respect of the Simmax Guarantees and any and all Damages arising from or relating to the Simmax Guarantees pursuant to the terms of this Agreement unless and until the TD Release has been delivered.  

 

2.6 Viking Repayment Transaction

 

Immediately following the Subscription, the Corporation shall restructure the Viking Promissory Notes as follows:

 

 

(a) 

from the Mann Payment, the Corporation shall pay to Viking the sum of $60,597.01 to Mann Lawyers LLP, in trust, by wire transfer of immediately available funds; and 

 

 

 

 

(b) 

the Corporation shall issue one or more promissory notes in form and substance acceptable to the Shareholders in the aggregate principal amount of $939,402.99 in favour of Viking and/or its Affiliates (the “New Viking Note”) in exchange for the retirement and termination of all existing promissory notes and other Indebtedness in favour of or otherwise owing to Viking and its Affiliates by the Corporation as set out in Schedule 2.6 (the “Viking Promissory Notes”). To the extent the amount received by Viking and/or its Affiliates is less than the amount owing under the Viking Promissory Notes, each such Party irrevocably agrees to forgive the remaining balance of its respective portion of the Viking Promissory Notes and shall execute an acknowledgment and release in favour of the Corporation; and 

 

 
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(c) 

as a condition of the transactions set out in this Section 2.6, (1) the Corporation and Viking, and each of their respective directors, officers, shareholders, and related Parties shall execute and deliver a full and final mutual release, in the form attached hereto as Schedule 2.6(c) (the “Viking Releases”); and (2) the Corporation and Subscriber shall exercise best commercial efforts to cause TD Canada to release Viking and/or its Affiliates from any guarantees or pledged collateral in respect of any existing loan or credit facilities of the Corporation (collectively, the “Viking Guarantees”) and deliver evidence of same on Closing (the “TD Release”). In the event the TD Release cannot be obtained by Closing, the Corporation and Subscriber shall deliver on Closing an undertaking in form and substance acceptable to Viking and/or its Affiliates to deliver the TD Release within a reasonable time post-Closing and shall jointly and severally indemnify such Parties in respect of the Viking Guarantees and any and all Damages arising from or relating to the Viking Guarantees pursuant to the terms of this Agreement unless and until the TD Release has been delivered.  

 

2.7 Intercreditor Agreement

 

On Closing, the Corporation, the Subscriber, Viking, Remora, Remora GP, Simmax and each of the holders of the New Simmax Notes shall enter into an intercreditor agreement in form and substance acceptable to the Parties providing for the pari passu repayment of the debt evidenced by the Remora GP Note, the New Simmax Notes and the New Viking Notes by the Corporation and the pari passu repayment of the debt evidenced by Remora LP Note and the Simmax Note by the Subscriber, and the manner in which repayment shall occur for all such notes in the event of borrower default (the “Intercreditor Agreement”).

 

2.8 Subscriber Guarantee

 

On Closing, the Subscriber shall enter into a guarantee agreement with Viking and each of the holders of the Remora GP Note and the New Simmax Notes in form and substance acceptable to the Parties (the “Guarantees”), providing irrevocable and unconditional guarantees for the full payment and performance of all amounts owing under the Remora GP Note, the New Simmax Notes and the New Viking Note (the “New Notes”).

 

2.9 Working Capital Contribution

 

The Subscriber shall make the Working Capital Contribution on Closing or at such time as is reasonably required to meet the cash requirements of the Corporation.

 

2.10 Set-Off

 

 

(a) 

Upon a final and binding determination of a Claim pursuant to Article 10 or written agreement between the Parties with respect to any Damages that the Subscriber and/or Corporation is entitled to be indemnified by the Shareholders, the Corporation may from time to time set-off against or deduct from any amount due and payable by the Corporation to the Shareholders, or any one of them, hereunder, including any amounts payable under the New Notes, provided that any such set-off or deduction from: i) the New Remora Notes shall be limited to the Remora LP Note; and (ii) New Simmax Notes shall be limited to the portion of such notes that has been allocated to the purchase of the Simmax Shares (as set out in Schedule 2.5).  

 

 
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(b) 

If, prior to the maturity date of the principal amount payable under the New Notes, a Claim has been made pursuant to Section 10.3 (Claims Procedure) and remains unresolved as of such maturity date, the portion of such principal repayment for the respective New Note that is subject to the possible right of set-off shall be paid into escrow with the Subscriber’s solicitor and, in the case of Remora subject to Section 6.7(a), held in trust pending resolution of the Claim. The escrowed funds shall only be released upon the final determination of the Claim in accordance with Section 10.3, or upon written agreement by the Parties. Any portion of the escrowed funds not required to satisfy the Claim, if applicable, shall be promptly released to the Person entitled to payment upon resolution of the Claim. For clarity, the payment of any amount into escrow in accordance with this Section shall not constitute an Event of Default as defined in the applicable New Note, nor shall it trigger any acceleration of obligations thereunder. Additionally, provided that the principal of the respective New Note is paid into escrow in full on or before its maturity date in accordance with this Section, all Interest owing under such New Note shall be waived in accordance with its terms, and no Interest shall accrue or become due and owing on the escrowed amount while it remains in escrow. 

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES RELATING TO THE SHAREHOLDERS

 

Each of the Shareholders severally (and not jointly) represent and warrant as follows to the Subscriber and acknowledge and confirm that the Subscriber is relying upon the representations and warranties in entering into this Agreement and subscribing for the Shares:

 

3.1 No Other Agreements to Purchase

 

Except for the Subscriber's rights under this Agreement, no Person has any written or oral agreement, option, warrant or commitment or any right or privilege (whether by law, contractual or otherwise) capable of becoming such for: (i) the purchase or acquisition from Remora of any of the Remora Shares; (ii) the purchase or acquisition from Simmax of any of the Simmax Shares; (iii) the purchase or acquisition from Viking of any of the Viking Shares; (iv) the purchase, subscription, allotment or issuance of any of the unissued shares or other securities of the Corporation.

 

3.2 Power and Authority

 

Each of the Shareholders have full right, power, and authority to enter into and perform their obligations under this Agreement and the other Transaction Documents to which such Shareholder is a party and to consummate the transaction contemplated in this Agreement. The Shareholders are corporations and/or limited partnerships duly formed and validly existing under the laws of their jurisdiction of formation. The Shareholders have taken all necessary corporate action to approve and authorize, validly and effectively, the execution, delivery and performance by such Shareholders of this Agreement and the other Transaction Documents to which such Shareholder is a party and the consummation by it of the transaction contemplated in this Agreement.

 

3.3 Execution and Binding Obligation

 

This Agreement and the Transaction Documents to which a Shareholder or their Affiliates is a party have been (or will be) duly executed and delivered by each Shareholder or their Affiliate, and constitute (or will constitute) legal, valid and binding obligations of such Shareholder or their Affiliate, enforceable against such Person in accordance with their respective terms.

 

 
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3.4 No Conflict with Authorizations, Laws, etc.

 

To the knowledge of the Shareholders, the execution, delivery and performance by each Shareholder of this Agreement and the Transaction Documents to which it is a party do not (or would not with the giving of notice, the passage of time or the happening of any other event or circumstance):

 

 

(a) 

result in a breach or a violation of or default under, conflict with, or cause the termination or revocation of, any Business Authorization held by the Shareholders or the Corporation, the use of the Corporation Assets, or the operation of the Business; 

 

 

 

 

(b) 

result in or require the creation of any Lien upon any of the Corporation Assets; 

 

 

 

 

(c) 

result in a breach or a violation of, or conflict with, any judgement, order or decree of any Governmental Authority;  

 

 

 

 

(d) 

result in a breach or a violation of, or conflict with, any Law applicable to the Shareholders or the Corporation; or 

 

 

 

 

(e) 

result in a breach or a violation of, or conflict with, or allow any other Person to exercise any rights under, any of the Corporation's or the Shareholders constating documents, shareholders' agreements, by-laws or resolutions of its board of directors or shareholders. 

 

3.5 Residency

 

None of Remora, Simmax or the Corporation are a “non-resident” of Canada for the purposes of the Tax Act.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES RELATING TO THE CORPORATION

 

The Shareholders jointly and severally represent and warrant as follows to the Subscriber and acknowledge and confirm that the Subscriber is relying upon the representations and warranties in entering into this Agreement and subscribing for the Shares. With respect to Remora, all such representations and warranties in this Article 4 are given to the Knowledge of Remora.

 

4.1 Incorporation and Corporate Power

 

The Corporation is incorporated and existing under the laws of Canada and extra provincially registered in Alberta, British Columbia and Ontario. The Corporation has the corporate power, authority and capacity to own and operate its property and assets and carry on the Business as now being conducted by it and is registered, licensed or otherwise qualified to carry on the Business in the Provinces of Alberta, British Columbia and Ontario, being the only jurisdictions in which the nature of the Business or the property or assets owned or used by the Corporation makes such qualification and registration necessary. No proceedings have been taken or authorized by the Corporation, the Shareholders or by any other Person with respect to the bankruptcy, insolvency, liquidation, dissolution or winding up of the Corporation or with respect to any amalgamation, merger, consolidation, arrangement or reorganization of, or relating to, the Corporation nor, to the knowledge of the Shareholders, have any such proceedings been threatened by any other Person.

 

 
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4.2 Power and Authority

 

The Corporation has the full right, power, and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents to which such the Corporation, is a party and to consummate the transaction contemplated in this Agreement. The Corporation has taken all necessary corporate action to approve and authorize, validly and effectively, the execution, delivery and performance by the Corporation of this Agreement and the other Transaction Documents to which the Corporation is a party and the consummation by it of the transaction contemplated in this Agreement.

 

4.3 Litigation – No Actions Affecting Closing

 

Except as set out in Schedule 4.3, there are no actions, suits or proceedings, at law or in equity, by any Person (including the Corporation), nor any arbitration, administrative or other proceeding by or before any Governmental Authority, current or pending, or to the knowledge of the Shareholders, threatened against or affecting the Shareholders or the Corporation which prevents or could reasonably be expected to prevent the consummation of the of the transactions contemplated by this Agreement.

 

4.4 Litigation – General

 

 Except as set out in Schedule 4.3, to the knowledge of the Shareholders, there are no actions, suits or proceedings, at law or in equity, by any Person (including the Corporation), nor any arbitration, administrative or other proceeding by or before any Governmental Authority, current or pending, or to the knowledge of the Shareholders, threatened against or affecting the Corporation or the Shareholders, or any of their officers or directors (in their capacity as such), the Business, any of the Corporation Assets or any other property or assets used by the Corporation, including the Premises. To the knowledge of the Shareholders, no event has occurred or circumstance exists which may give rise to, or serve as a valid basis for, the commencement of any action, suit, proceeding, arbitration or investigation by or against the Corporation, any of its officers or directors (in their capacity as such), the Business, any of the Corporation Assets or any other property or assets used by the Corporation including the Premises. Except as set out in Schedule 4.3 or in the Unaudited Financial Statements, there is no outstanding Indebtedness in connection with prior judgements against the Corporation or with respect to prior litigation matters settled by the Corporation following the receipt of an Statement of Claim (or equivalent) issued by a court and served upon the Corporation.

 

4.5 Required Authorizations

 

There is no requirement for the Corporation to make any filing with, give any notice to, or obtain any Authorization of, any Governmental Authority as a result of, or in connection with, or as a condition to the lawful completion of, the transactions contemplated by this Agreement or any of the Transaction Documents.

 

4.6 Required Consents

 

Except for the Required Consents set forth in Schedule 4.6, no other consents, approvals, or authorizations are required in connection with the transactions contemplated by this Agreement or any of the Transaction Documents. The Shareholders shall use Commercially Reasonable Efforts to obtain, prior to Closing, all Consents required under the Material Contracts (the “Required Consents”). The Required Consents shall be on such terms as are acceptable to the Subscriber, acting reasonably. The Subscriber will cooperate with the Shareholders and will use Commercially Reasonable Efforts to assist the Shareholders in obtaining the Required Consents.

 

 
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4.7 Execution and Binding Obligations

 

All of the Transaction Documents to which the Corporation is a party have been (or will be) duly executed and delivered by the Corporation and constitute (or will constitute) legal, valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their respective terms.

 

4.8 Subsidiaries

 

The Corporation has no Subsidiaries and currently holds no securities or other ownership, equity or proprietary interests in any other Person.

 

4.9 Dividends and Other Distributions

 

Except as described in the Unaudited Financial Statements of the Corporation, since the Balance Sheet Date, the Corporation has not declared or paid any dividends or declared or made any other distribution on any of its shares or other securities and has not, directly or indirectly, redeemed, purchased or otherwise acquired any of its shares or other securities or agreed to do any of the foregoing.

 

4.10 Officers and Directors

 

A true and complete list of all of the directors and officers of the Corporation as at the Effective Date set out in Schedule 4.10 of this Agreement.

 

4.11 Unanimous Shareholders Agreement

 

Except for the Shareholders Agreement, which has been terminated at or prior to Closing, there are no investor rights agreements, shareholder agreements, pooling agreements, voting trusts, share options, or other similar agreements with respect to the ownership or voting of any issued and outstanding shares in the Corporation.

 

4.12 Corporate Records

 

The Corporation has provided true and complete copies of the Corporate Records of the Corporation to the Subscriber, and such documents, records and minute book have been maintained in material compliance with applicable Law and are complete and accurate in all material respects. All corporate proceedings and actions reflected in such Corporate Records (including all meetings and resolutions of directors and shareholders) have been conducted or taken in compliance with applicable Laws and the constating documents of the Corporation in all material respects.

 

 
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4.13 Conduct of Business in Ordinary Course

 

Since the Balance Sheet Date and except as disclosed in this Agreement, the Business has been carried on in the Ordinary Course. Without limiting the generality of the foregoing, the Corporation has not since the Balance Sheet Date, other than in the Ordinary Course or as disclosed in Schedule 4.13:

 

 

(a)

sold, transferred or otherwise disposed of any Corporation Assets except:

 

 

(i)

assets which are obsolete or which, individually or in the aggregate, do not exceed $50,000.00 in book value; and

 

 

 

 

(ii)

Inventory sold in the Ordinary Course;

 

 

(b)

except for the Permitted Encumbrances, granted or suffered any Lien upon any of the Corporation Assets;

 

 

 

 

(c)

issued or sold any shares, bonds or other securities of the Corporation;

 

 

 

 

(d)

made any capital expenditures which individually or in the aggregate exceeded $100,000.00;

 

 

 

 

(e)

paid any secured or unsecured obligation or liability (whether accrued, absolute, contingent or otherwise) which, individually or in the aggregate, exceeded $50,000.00 per month, excluding monthly payments under Material Contracts;

 

 

 

 

(f)

increased its Indebtedness for borrowed money or made any loan or advance to any Person, or assumed, guaranteed or otherwise became liable with respect to the obligation of any Person;

 

 

 

 

(g)

cancelled any debts or claims owed to it or amended, terminated or waived any rights of value to the Corporation;

 

 

 

 

(h)

made any bonus or profit sharing distribution or similar payment of any kind other than in accordance with the Employee Plans;

 

 

 

 

(i)

made any payment to an officer, director, former director, Employee or related party other than at the regular rates payable by way of salary or other remuneration or for the reimbursement of expenses incurred in the Ordinary Course;

 

 

 

 

(j)

removed or appointed any auditor or director or terminated or hired any officer or other senior Person;

 

 

 

 

(k)

made any change in the compensation paid or payable to any officer or director of the Corporation or granted any general increase in the rate of wages, salaries, bonuses or other remuneration of any Employees;

 

 

 

 

(l)

suffered any extraordinary loss, damage or destruction, whether or not covered by insurance;

 

 

 

 

(m)

terminated or suffered the termination of any Material Contract other than due to its expiration in accordance with its terms and not as a result of the potential completion of the transactions contemplated by this Agreement;

 

 

 

 

(n)

written down the value of any property or assets owned or used by the Corporation, including Inventory and capital lease assets, except on account of depreciation and amortization in the Ordinary Course;

 

 

 

 

(o)

entered into any Contract or any other transaction that was not in the Ordinary Course of business;

 

 
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(p)

waived, cancelled or written off, or agreed or become bound to waive, cancel or write off, any rights, claims or accounts receivable relating to the Business, other than in the Ordinary Course of business and none of which are material;

 

 

 

 

(q)

increased its reserves for contingent liabilities;

 

 

 

 

(r)

suffered any material shortage or any cessation or material interruption of Inventory shipments, supplies or ordinary services other than in connection with the non-payment of suppliers as disclosed under this Agreement;

 

 

 

 

(s)

made any forward purchase commitments either in excess of the requirements of the Corporation for normal operating purposes or at prices higher than the current market prices;

 

 

 

 

(t)

compromised or settled any litigation or governmental action relating to the Corporation Assets, other property or assets used by the Corporation (including the Premises) or the Business;

 

 

 

 

(u)

cancelled or reduced any insurance coverage;

 

 

 

 

(v)

permitted any of its facilities located at the Premises to be shut down for any period of time in excess of 12 hours on a Business Day;

 

 

 

 

(w)

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

 

 

 

 

(x)

made any change in any method of accounting or auditing practice;

 

 

 

 

(y)

except as contemplated in the Corporate Records, amended its organizational documents or structure; or

 

 

 

 

(z)

authorized, agreed or otherwise committed, whether or not in writing, to do any of the foregoing.

 

4.14 Compliance with Laws

 

The Corporation has complied with, and the Business has been and is being conducted in compliance with, all applicable Laws in all material respects. None of the Corporation or the Shareholders has received any notice or other communication from any Governmental Authority or other Person alleging or relating to any violation of or failure to comply with any applicable Law, and to the knowledge of the Shareholders, none of the Corporation or the Shareholders are under investigation or review by any Governmental Authority with respect to, nor have been threatened to be charged with, any violation of any applicable Law.

 

4.15 Business Authorizations

 

The Corporation owns, possesses or lawfully uses in the operation of the Business, all Authorizations which are necessary for it to conduct the Business or for the ownership and use of the Corporation Assets and the other property and assets used by the Corporation (including the Premises). All material Authorizations have been disclosed by the Corporation to the Subscriber (the “Business Authorizations”), and the Corporation is not in default or breach of such Business Authorizations, and no proceedings are pending or threatened to revoke or limit any Business Authorization.

 

 
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4.16 Sufficiency of Assets

 

The Business is the only business operation carried on by the Corporation and the Corporation Assets include all rights, assets and property necessary for the conduct after Closing of the Business substantially in the same manner as it was conducted prior to Closing. All of the Corporation Assets and any other property or assets used or leased by the Corporation are situated at the Premises except to the extent they are situated at third party locations in the Ordinary Course.

 

4.17 Title to the Assets

 

The Corporation owns and has good title over all of the properties and assets (whether real, personal or mixed and whether tangible or intangible) that it purports to own, including all the properties and assets reflected as being owned by the Corporation on the balance sheet forming part of the Unaudited Financial Statements or otherwise in its Books and Records. Except as disclosed in Schedule 4.17, the Corporation has legal and beneficial ownership of the Corporation Assets, and the Corporation Assets are free and clear of all Liens, other than the Permitted Encumbrances.

 

4.18 Performance of Services

 

The Corporation has performed all services for the maintenance, repair, and testing of customer products and equipment in a good and workmanlike manner consistent with industry standards, using personnel with the requisite skill and experience to perform the services.

 

4.19 No Options, etc.

 

No Person has any written or oral agreement, option, or commitment, or any right or privilege (whether by law, contractual or otherwise) capable of becoming such for the purchase or other acquisition from the Corporation of any of the Corporation Assets.

 

4.20 Owned Real Property

 

The Corporation does not own and has never owned any real property or any interest in real property.

 

4.21 Leased Real Property

 

 

(a) 

Except for the Real Property Leases, the Corporation is not party to any agreement, option, or right to own or lease, any real property or any interest in any real property.  

 

 

 

 

(b) 

Schedule 4.21 sets out all real property leases, subleases, license agreements or other similar agreements under which the Corporation leases any real property (the "Real Property Leases"), including all assignments and amendments thereto and the municipal addresses and legal land descriptions of the Premises. True and complete copies of the Real Property Leases have been provided to the Subscriber. 

 

 
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(c)

Except as set forth in Schedule 4.21, (i) the Real Property Leases are valid, legally binding, enforceable and in full force and effect and the Corporation is not in breach of or default, in any material respect, under any of the Real Property Leases, nor, to the knowledge of the Shareholders, is any counterparty to the Real Property Leases in breach or default, in any material respect, thereunder; (ii) there are no disputes between the Corporation and any third parties under any of the Real Property Leases, nor has any third party repudiated, terminated or threatened to terminate any of the Real Property Leases; and (iii) the terms and conditions of the Real Property Leases will not be affected by the completion of the Transaction.

 

 

 

 

(d)

Other than the Edmonton Rent Arrears, all rental and other payments and other material obligations required to be paid and performed by the Corporation pursuant to the Real Property Leases have been performed and duly paid. All tenant's work to be performed in accordance with each Premises has been completed, and all material deficiencies (if any) which any landlord has brought to the Corporation's attention, have been corrected.

 

 

 

 

(e)

Except as set forth in Schedule 4.21, the Corporation has not sublet, assigned, licensed or otherwise conveyed any rights or interest in the Premises or the Real Property Leases to any Person.

 

 

 

 

(f)

The current use of the Premises by the Corporation complies with applicable Laws in all material respects. The Premises are reasonably adequate for the purpose for which it is presently used by the Corporation, and the Corporation has reasonably adequate rights of ingress and egress thereto for the operation of the Business in the Ordinary Course.

 

 

 

 

(g)

To the knowledge of the Shareholders, there are no existing, proposed or threatened expropriation proceedings that would result in the taking of all or any part of the Premises or that would adversely affect the current use of the Premises or any part of them.

 

 

 

 

(a)

Except for reasonable wear and tear, the Premises are in good operating condition and in a state of good maintenance and repair, having regard for their age and character, and are reasonably adequate for the purposes for which they are currently being used. To the knowledge of the Shareholders, none of such buildings, structures, improvements or appurtenances within which the Premises are situated, nor the operating or maintenance thereof, violates any restrictive covenant or any provision of any applicable Law, or encroaches on any property owned by other Persons.

 

4.22 No Restrictions on Business Activities

 

Except as disclosed in Schedule 4.22, the Corporation is not a party to or bound or affect by any Contract, judgment, injunction, order, decree or document binding upon the Corporation containing any covenant prohibiting, restricting or limiting its freedom or ability to: (i) compete in any line of business or geographic region; (ii) transfer or move any of the Corporation Assets or operations within Canada; (iii) conduct any business practice of the Corporation as now conducted; or (iv) effect any acquisition of property (including following this transaction).

 

 
23

 

 

4.23 Material Contracts

 

Except for the Contracts set out in Schedule 4.23 (the “Material Contracts”), and the Employee Plans, the Corporation is not a party to or bound by:

 

 

(a)

any Contract for the purchase or sale of materials, supplies, equipment or services (i) involving, in the case of any such Contract, the payment by the Corporation of more than $100,000.00 in aggregate in any 12-month period, or (ii) which contains minimum purchase commitments or requirements or other terms that restrict or limit the purchasing or selling ability of the Corporation;

 

 

 

 

(b)

any Contract that expires, or may be renewed at the option of a Person other than the Corporation so as to expire, more than one year after the date of this Agreement;

 

 

 

 

(c)

any rental agreement between the Corporation and its customers and clients;

 

 

 

 

(d)

any financing or loan Contract pursuant to which the Corporation has extended a loan or other financing to any customer or client of the Corporation or any other third party;

 

 

 

 

(e)

any promissory note, loan agreement or other Contract for the borrowing of money, any currency exchange, commodities or other hedging or swap arrangement or any leasing transaction of the type required to be capitalized in accordance with ASPE;

 

 

 

 

(f)

any shareholder loan agreements or other Contracts pursuant to which the Shareholders, their Affiliates, or any employees of the Corporation have loaned money to the Corporation, including any loans made by the Shareholders, their Affiliates, or employees of Corporation for the benefit of the Corporation;

 

 

 

 

(g)

any line of credit, credit card, or financing agreements, including any type of short-term or long-term financing facilities provided to the Corporation by any financial institution or other lenders;

 

 

 

 

(h)

any Contract for capital expenditures in excess of $10,000.00 in the aggregate;

 

 

 

 

(i)

any confidentiality or non-disclosure Contract entered into other than in the Ordinary Course or any Contract limiting the freedom of the Corporation to engage in any line of business, compete with any Person, solicit any Person, operate its assets at maximum production capacity or otherwise restrict its ability to carry on the Business;

 

 

 

 

(j)

any Contract pursuant to which the Corporation is a lessor or lessee of any of the Corporation’s assets including, without limitation, machinery, equipment, motor vehicles, office furniture, fixtures or other personal or real property outside the Ordinary Course of the Business;

 

 

 

 

(k)

any Contract pursuant to which the Corporation is a lessor or lessee of any machinery, equipment, motor vehicles, office furniture, fixtures or other personal or real property;

 

 

 

 

(l)

any Contract with an Affiliate of the Corporation or the Shareholders or any other Person with whom the Corporation or the Shareholders do not deal at arm’s length within the meaning of the Tax Act;

 

 

 

 

(m)

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

 

 
24

 

 

 

(n)

any partnership, joint venture, or other similar Contract, any Contract involving a sharing of profits with any Person or any Contract relating to the acquisition or disposition of any business (whether by merger, sale of shares, sale of assets or otherwise);

 

 

 

 

(o)

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

 

 

 

 

(p)

any Contract material to the Business or any of the Corporation Assets or any Contract made outside of the Ordinary Course.

 

True, correct and complete copies of all Material Contracts have been provided to the Subscriber.

 

4.24 No Breach of Material Contracts

 

Except in respect of the Edmonton Lease Agreement, non-payment breaches or as disclosed in Schedule 4.24, the Corporation has performed all of the material obligations required to be performed by it and is entitled to all benefits under, and is not alleged to be in default or breach of, any Material Contract in any material respect. Each of the Material Contracts is in full force and effect, unamended, and to the knowledge of the Shareholders, no party is in breach in any material respect of any of its covenants thereunder and there exists no default or event of default or event, occurrence, condition or act which, with the giving of notice, the lapse of time or the happening of any other event or circumstance, would become a material breach of, or a material default or event of default under, any Material Contract.

 

4.25 No Breach of Other Contract

 

To the knowledge of the Shareholders and except as disclosed in Schedule 4.24, the Corporation has not violated or breached in any material respect any of the terms or conditions of any Contract (other than breaches with respect to non-payment), and all the covenants to be performed and the obligations to be fulfilled by any other party to such Contract have been fully performed and fulfilled in all material respects.

 

4.26 No Related Party Transactions

 

Except as disclosed in the Unaudited Financial Statements, all Contracts binding upon or affecting the Corporation have been entered into on an arm's-length basis within the meaning of the Tax Act. Any amounts due and payable by the Corporation to the Shareholders are recorded on the Books and Records at their fair market value.

 

4.27 Intellectual Property

 

 

(a)

Schedule 4.27 sets out a true, correct and complete list, and, where appropriate, a description of:

 

 

(i)

all of the IP Rights owned or used by the Corporation;

 

 

 

 

(ii)

all licenses or similar agreements or arrangements to which the Corporation is a party, either as licensee or licensor, with respect to IP Rights.

 

 
25

 

 

 

(b)

The Corporation is the exclusive owner of all right, title and interest in and to, or possesses the exclusive right to use, the IP Rights listed in Schedule 4.27, free and clear of all Liens, except for the Permitted Encumbrances. The Corporation has not assigned, licensed or otherwise conveyed any of its IP Rights.

 

 

 

 

(c)

The Corporation's IP Rights are valid and in good standing, with no pending or threatened claims of infringement, passing off, invalidity, or conflict. The Corporation has not received any notice of infringement or misappropriation and has not infringed upon the IP Rights of any third party in the past five years.

 

 

 

 

(d)

The Corporation has the right to use its IP Rights in the conduct of the Business, and such use does not infringe the rights of any third party. All licenses to which the Corporation is a party relating to IP Rights are in good standing and enforceable.

 

 

 

 

(e)

No royalty or other fee is required to be paid by the Corporation to any other Person in respect of the use of any IP Rights, and there are no restrictions on the ability of the Corporation or any successor to, or assignee from, the Corporation to use and exploit all rights in such IP Rights.

 

4.28 Information Technology

 

 

(a)

Schedule 4.28 sets out a true, correct and complete list of all Information Technology owned, licensed, used or held for use in connection with the Business and all Contracts relating to the maintenance and support, security, disaster recovery management and utilization of such Information Technology.

 

 

 

 

(b)

Such Information Technology is sufficient for the conduct of the Business in the Ordinary Course after Closing. The Corporation uses reasonable means, consistent with industry practice, to protect the security and integrity of all such Information Technology. The use of any Information Technology by the Corporation does not exceed the scope of the rights granted to the Corporation with respect thereto, including any applicable limitation upon the usage, type or number of licenses, users, hardware, time, services or systems.

 

 

 

 

(c)

In the past five years, no notice of a material defect or default has been sent or received by the Corporation in respect of any license or lease under which the Corporation receives Information Technology.

 

4.29 Books and Records

 

All accounting and financial Books and Records have been fully, properly and accurately kept and are complete in all material respects. The Books and Records are not recorded, stored, maintained, operated or otherwise wholly or partly dependent upon or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which are not or will not be available to the Corporation in the Ordinary Course prior to and after Closing.

 

4.30 Financial Statements

 

The Unaudited Financial Statements have been prepared from and using the Books and Records in accordance with ASPE applied on a basis consistent with those of previous fiscal years, are complete and accurate and present completely and accurately in all material respects:

 

 

(a) 

the assets, liabilities, sales, income, losses, retained earnings, accruals, reserves, adjustments and financial condition of the Corporation; 

 

 

 

 

(b) 

the results of operations of the Corporation; and 

 

 

 

 

(c) 

the changes in financial position of the Corporation, 

 

all as at the date and for the period specified in such statements.

 

 
26

 

 

4.31 No Undisclosed Liabilities

 

Except as disclosed in Schedule 4.31 and as set forth in Section 4.40, or otherwise reflected or reserved against in the balance sheet forming part of the Unaudited Financial Statements, or incurred or accrued since the Balance Sheet Date in the Ordinary Course, the Corporation has no material liabilities or material obligations (whether absolute, accrued, contingent or otherwise).

 

4.32 Customers and Suppliers

 

To the knowledge of the Shareholders, none of the customers or suppliers of the Corporation intend, as a result of the transactions contemplated by this Agreement, to terminate their commercial relationship with the Corporation.

 

4.33 Insurance

 

The Corporation Assets (except those which are uninsurable), the Premises and all other property and assets used in the Business are insured against loss or damage by all insurable hazards and risks on a replacement cost basis. True copies of all insurance policies which are maintained by or on behalf of the Corporation, as set out in Schedule 4.33, have been delivered or otherwise made available to Subscriber, and except as disclosed in Schedule 4.33, there are no pending claims with respect to any policy. The Corporation is not in default with respect to any of the provisions contained in the insurance policies and has not failed to give any notice or to present any claim under any insurance policy in a due and timely fashion. Except as disclosed in Schedule 4.33, in the past five (5) years, there has been no change in the relationship of the Corporation with its insurers, the availability of coverage, or the premiums payable pursuant to the policies. All insurance claims made by or on behalf of the Corporation within the past five (5) years have been disclosed in Schedule 4.33 . Particulars of any claims made under any policies of insurance maintained by or for the benefit of the Corporation in the past five years have been provided to the Subscriber. True, correct and complete copies of all insurance policies held by or on behalf of the Corporation and the most recent inspection reports received from insurance underwriters have been delivered to the Subscriber.

 

4.34 Taxes

 

 

(a)

The Corporation has: (A) duly and timely filed, or caused to be filed, all Tax Returns required to be filed by it prior to the date hereof (taking into account any valid extension of the due date for filing), and all such Tax Returns are true, complete and correct in all material respects; (B) paid on a timely basis, all Taxes and all assessments and reassessments of Taxes due on or before the date hereof, other than Taxes which are being or have been contested in good faith and for which adequate accruals have been provided in the Unaudited Financial Statements and the collection of which (or enforcement of any Liens securing such Taxes) is effectively prevented by such contest; (C) duly and timely withheld, or caused to be withheld, all Taxes required or permitted by applicable Laws to be withheld by it (including Taxes and other amounts required or permitted to be withheld by it in respect of any amount paid or credited or deemed to be paid or credited by it to or for the account of any Person, including any present or former employees, officers or directors and any Persons who are non-residents of Canada for the purpose of the Tax Act) and duly and timely remitted, or caused to be remitted to the appropriate Governmental Authority such Taxes required by applicable Laws to be remitted by it; and (D) duly and timely collected, or caused to be collected, any sales or transfer Taxes, including GST, harmonized sales and provincial or territorial sales Taxes, required by applicable Laws to be collected by it and duly and timely remitted to the appropriate Governmental Authority any such amounts required by Applicable Laws to be remitted by it.

 

 
27

 

 

 

(b)

There are no audits, investigations, proceedings, assessments or reassessments in progress, pending or, to the knowledge of the Shareholders, threatened by any Governmental Authority with respect to Taxes against or with respect to the Corporation or the Corporation Assets.

 

 

 

 

(c)

There are no currently effective elections, agreements or waivers extending the statutory period or providing for an extension of time with respect to the assessment or reassessment of any material amount of Taxes of, or the filing of any Tax Return or any payment of any material amount of Taxes by, the Corporation.

 

 

 

 

(d)

No written Claim has been made in the preceding five years by any Governmental Authority in a jurisdiction where the Corporation does not file Tax Returns that the Corporation is or may be subject to taxation by, or required to file any Tax Return in, that jurisdiction.

 

 

 

 

(e)

There are no Liens for Taxes upon any of the Corporation Assets.

 

 

 

 

(f)

The Corporation is not party to any indemnification, allocation or sharing agreement with respect to Taxes that could give rise to a payment or indemnification obligation after Closing.

 

 

 

 

(g)

No material amount in respect of any outlay or expense that is deductible for the purposes of computing the income of the Corporation for Tax purposes has been owing by the Corporation for longer than two years to a Person not dealing at arm's length (for the purposes of the Tax Act) with the Corporation at the time the outlay or expense was incurred.

 

 

 

 

(h)

To the knowledge of the Shareholders, other than in relation to or as a result of the transactions contemplated in this Agreement, there are no circumstances which exist and would result in, or which have existed and resulted in, sections 17, 78 and 79 to 80.04 of the Tax Act applying with adverse consequences to the Corporation.

 

 

 

 

(i)

The Corporation has not, either directly or indirectly, transferred any material property to or supplied any material services to or acquired any material property or material services from a Person with whom it was not dealing at arm's length (for the purposes of the Tax Act) for consideration other than consideration equal to the fair market value of the property or services at the time of the transfer, supply or acquisition of the property or services.

 

 
28

 

 

 

(j)

The Corporation is duly registered under GST Legislation for the purpose of GST and its registration number is BN 866621261RT0001. All input tax credits claimed by the Corporation for GST purposes were calculated in accordance with applicable Laws in all material respects and the Corporation has complied in all material respects with all registration, reporting, payment, collection and remittance requirements in respect of GST and provincial sales Tax and harmonized Tax legislation.

 

 

 

 

(k)

Except as set out in Schedule 4.34, the Corporation has not claimed or received an amount in respect of a Tax credit, refund, rebate overpayment or similar adjustment of Taxes, including any governmental assistance or subsidy, in each case to which the Corporation is not fully entitled, and the Corporation has retained all documentation prescribed by applicable Laws and in accordance with applicable Laws to support any claims for such amounts.

 

4.35 Environmental Matters

 

 

(a)

In the past five years, the Corporation has not received any Environmental Notice with respect to a matter which has not been remedied, corrected or cured and has not received any written claim or demand from any Person regarding breach or alleged breach of any Environmental Laws or costs of clean-up of any Environmental Hazardous Substance or any notice of any such claim or demand.

 

 

 

 

(b)

To the knowledge of the Shareholders, no Environmental Authorization will become void or voidable as a result of the completion of the transactions contemplated by this Agreement nor is any Consent or Authorization required in connection with the transactions contemplated by this Agreement in order to maintain any Environmental Authorization in full force and effect.

 

 

 

 

(c)

No order, direction or notice or other mandatory communication from a Government Authority related to compliance with Environmental Laws has been issued in respect of the Business, the Corporation Assets or any other property or assets used by the Corporation (including the Premises) which have not been complied with, nor has the Corporation been charged with or convicted of an offence for non-compliance with any applicable Environmental Laws.

 

 

 

 

(d)

The Corporation is not in default in filing any report or information with any Governmental Authority in respect of the Corporation Assets, the Premises or the Business as required pursuant to any applicable Environmental Laws.

 

 

 

 

(e)

Except as set out in Schedule 4.35, the Corporation has not caused or permitted any Environmental Release and there is no Environmental Release nor any presence of any Environmentally Hazardous Substance at, on, from or under the Premises or any other real property at the relevant time owned, operated, occupied or otherwise used by the Corporation, except in compliance with Environmental Laws in all material respects.

 

 

 

 

(f)

Except as set out in Schedule 4.35, no work or expenditure is required or planned in relation to the Business, the Corporation Assets, or any other property or assets used by the Corporation (including the Premises) to ensure compliance with applicable Environmental Laws, Environmental Authorizations or the terms of the applicable Real Property Lease.

 

 
29

 

 

 

(g)

Except as set out in Schedule 4.35, the Corporation does not have any environmental reports, surveys, assessments or investigations or budgeted work or expenditures concerning the Business, the Corporation Assets, and any other property or assets used by the Corporation (including the Premises) that relate to compliance with Environmental Laws or Environmental Authorizations.

 

 

 

 

(h)

The Corporation has not agreed to indemnify or hold harmless any Person for any material liability or material obligation arising under Environmental Laws that is reasonably likely to form the basis of any material claims against the Corporation.

 

 

 

 

(i)

The Corporation has not transported, removed or disposed of any Environmental Hazardous Substance to a location outside of Canada.

 

4.36 Employee Matters

 

 

(a) 

Except for the Contracts described in Schedule 4.36 (the “Employee Material Contracts”) and the Employee Plans, the Corporation is not a party to, subject to, or affected by:  

 

 

(i)

any verbal employment Contract that is not terminable upon providing reasonable notice at common law;

 

 

 

 

(ii)

any Contract with a Person acting as an agent, independent contractor or dependent contractor providing services to the Corporation;

 

 

 

 

(iii)

any certification orders;

 

 

 

 

(iv)

any collective agreement; or

 

 

 

 

(v)

any policies, procedures, practices or programs, whether written or otherwise, that set out terms and conditions of employment or engagement.

 

True, correct and complete copies of the Employee Material Contracts have been provided by the Corporation to the Subscriber.

 

 

(b) 

Schedule 4.36 includes a complete list of all Employees, agents, independent contractors, and other contractors of the Corporation. The list includes, to the extent applicable, each Person's: 

 

 

(i)

position or title with the Corporation;

 

 

 

 

(ii)

the current wage or salary or hourly rate of pay;

 

 

 

 

(iii)

the date upon which such Person was first hired or engaged;

 

 

 

 

(iv)

the Premises at which such Person is employed;

 

 

 

 

(v)

status with respect to leaves of absence, whether approved, pending approval, or unapproved; and

 

 

 

 

(vi)

annual vacation.

 

 

(b)

Except as set out in Schedule 4.36, no Employee is on a leave of absence or performing services pursuant to a work permit or similar authorization.

 

 
30

 

 

 

(c)

To the knowledge of the Shareholders, each Employee of the Corporation was authorized to work in Canada as of the date such individual’s employment with the Corporation commenced, and all employees of the Corporation are currently authorized to work in Canada. The Corporation has complied in all material respects with applicable Law regarding the verification of whether its employees are authorized to work in Canada and whether its independent contractors of the Business are authorized to provide services in Canada.

 

 

 

 

(d)

There are no ongoing union certification drives. There are no pending proceedings for certifying a union for the Corporation, and the Corporation is not unionized and does not have an employee association.

 

 

 

 

(e)

Except as set out in Schedule 4.36, no complaint, grievance, claim, proceeding, civil action, work order or investigation has been filed, made or commenced against the Corporation in respect of, concerning or affecting any of their Employees.

 

 

 

 

(f)

The Corporation has observed and complied with in all material respects the provisions of all applicable Laws respecting employment, including employment standards Laws as well as Laws relating to human rights, occupational health and safety, workplace safety and insurance, labour relations and pay equity.

 

 

 

 

(g)

Except as set out in Schedule 4.36, there are no actions, suits or proceedings, at law or in equity, by any Person (including the Corporation), nor any action, suit, investigation, arbitration, administrative proceeding or other proceeding by or before any Governmental Authority, pending, or to the knowledge of the Shareholders, threatened against or affecting the Corporation in respect of employment matters. To the knowledge of the Shareholders, no event has occurred or circumstance exists which would give rise to or serve as a valid basis for the commencement of any such action, suit, investigation, arbitration, administrative proceeding or other proceedings by or against the Corporation in respect of employment matters. The Corporation is not subject to any judgment, order or decree entered in any lawsuit or proceeding nor has the Corporation settled any claim prior to being sued or prosecuted in respect of employment matters.

 

 

 

 

(h)

Except as set out in Schedule 4.36, there are no outstanding decisions or settlements or pending settlements under any applicable employment Laws which place any obligation upon the Corporation to do or refrain from doing any act, or which place a financial obligation upon the Corporation.

 

 

 

 

(i)

The Corporation is not subject to any surcharge, penalty or other increase in premium (for which it has received written notice) under any applicable provincial or territorial workers' compensation scheme other than generic premium increases imposed by the relevant Government Authority from time to time.

 

 

 

 

(j)

All assessments which are due or overdue and payable under the Workers’ Compensation Act (Alberta) in relation to the Business have been paid and there are no outstanding assessments which are due or overdue and payable but unpaid.

 

 

 

 

(k)

No current Employee has provided notice of his or her intention to terminate his or her employment in connection with the transaction contemplated by this Agreement.

 

 

 

 

(l)

Aaron Dowler and Tom Jackson are the only employees that are entitled to transaction bonuses.

 

 
31

 

  

4.37 Employee Benefit Plans

 

 

(a) 

Schedule 4.37 sets out a true, correct and complete list and, where applicable, a description of all retirement, pension, supplemental pension, savings, retirement savings, retiring allowance, stock purchase, stock option, phantom stock, share appreciation rights, life insurance, medical, hospital, dental care, vision care, drug, sick leave, short term or long term disability, unemployment benefits, vacation, compensation or other similar employee benefit plan, program, arrangement, policy or practice whether written or oral, formal or informal, funded or unfunded, registered or unregistered, insured or self-insured that is maintained or otherwise contributed to, or required to be contributed to, by or on behalf of the Corporation for the benefit of current or former employees, directors, officers, shareholders, independent contractors or agents of the Corporation other than government mandated entitlements or government sponsored pension, employment insurance, workers compensation and health insurance plans (collectively, the “Employee Plan”). 

 

 

 

 

(b) 

The Employee Plan: 

 

 

(i) 

has been maintained and administered in material compliance with its terms and with the requirements of all applicable Laws; and 

 

 

 

 

(ii) 

is in good standing in respect of such requirements and Laws. 

 

Each Employee Plan that is required to be registered under applicable Laws, if any, is duly registered with the appropriate Governmental Authorities.

 

 

(c) 

No promises or commitments have been made by the Corporation to amend the Employee Plan, to provide increased benefits or to establish any new benefit plan. 

 

 

 

 

(d) 

The transactions contemplated in this Agreement and in each of the Transaction Documents will not, alone or together with any additional or subsequent event, result in or require any payment or severance, or the acceleration, vesting or increase in benefits under any Employee Plan. 

 

4.38 Privacy Laws

 

The Corporation has conducted and is conducting the Business in compliance with all applicable Privacy Laws, including in connection with its collection, use and disclosure of Personal Information, except for such non-compliance, which would not reasonably be expected to result in a Material Adverse Effect. The Corporation has not received any written complaint or notice of any breach or violation by it of any such Privacy Laws. To the knowledge of the Shareholders, all Personal Information of the Corporation:

 

 

(a)

has been collected, used or disclosed with the consent of each individual to which such Personal Information relates (if such consent was required under applicable Privacy Laws);

 

 

 

 

(b)

has been used only for the purposes for which the Personal Information was initially collected or for a subsequent purpose for which consent was subsequently obtained; or

 

 

 

 

(c)

has been collected, used or disclosed for a purpose in respect of which consent may, under applicable Privacy Laws, be implied.

 

 
32

 

 

4.39 No Brokers’ Fee, etc.

 

Neither the Shareholders nor the Corporation has incurred any obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with this Agreement or any of the Transaction Documents.

 

4.40 Outstanding Indebtedness

 

Immediately prior to the Closing, the Corporation shall not have any outstanding Indebtedness (but not including items (a)(iv), (v), (vi), (viii), and (x) of the definition of Indebtedness), whether accrued, absolute, contingent or otherwise, except as set forth on the Unaudited Financial Statements and as follows:

 

 

(a) 

the Remora Promissory Notes, the Simmax Promissory Notes and the Viking Promissory Notes; 

 

 

 

 

(b) 

a promissory note in favour of Tom Jackson in the principal amount of $180,000.00; 

 

 

 

 

(c) 

a promissory note in favour of Dal Bath in the principal amount of $80,000; 

 

 

 

 

(d) 

related party payable to Simmax in the amount of $851,754 to be fully satisfied on the Closing Date by the issuance of the New Simmax Notes;  

 

 

 

 

(e) 

a term loan in favour of TD Canada Trust in an amount not exceeding $1,722,222.20;  

 

 

 

 

(f) 

a line of credit extended by TD Canada Trust with a borrowing limit of up to $4,000,000; and 

 

 

 

 

(g) 

amounts owing under the TD Visa Business Cards issued by TD to or in respect of the Corporation under TD’s Ancillary Facilities arrangement 

 

4.41 Warranties, Guarantees, etc.

 

 

(a) 

There are no warranties or guarantees given by the Corporation in respect of any of the Corporation’s products or equipment rented, sold, or services provided by it other than in the Ordinary Course.  

 

 

 

 

(b) 

To the knowledge of the Shareholders, there are no pending or threatened warranty claims against the Corporation that could be reasonably expected to have a Material Adverse Effect.  

 

 

 

 

(c) 

The Corporation is not subject to any Contract which would require it to adjust any price or grant any refund, discount or other concession to customers other than in the Ordinary Course.  

 

 

 

 

(d) 

The Corporation is not required to provide any letter of credit, bonds, or other financial security arrangements in connection with any transactions with its suppliers or customers except in connection with Ordinary Course project bids.  

 

4.42 Trade Names

 

Except as disclosed in Schedule 4.42, the Corporation has no, and has not used any, trade names, fictitious names, assumed names, or “doing business as” names under which it conducts the Business.

 

 
33

 

 

4.43 Full Disclosure

 

Neither this Agreement nor any Transaction Document to which the Shareholders or the Corporation is a party:

 

 

(a) 

contains or will contain any material untrue statement of a fact; or 

 

 

 

 

(b) 

omits or will omit any material fact necessary in order to make the statements contained herein or therein not misleading. 

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER

 

The Subscriber represents and warrants as follows to the Shareholders and acknowledges and confirms that the Shareholders are relying on the representations and warranties in entering into this Agreement and selling the Purchased Shares to the Subscriber:

 

5.1 Incorporation and Corporate Power

 

The Subscriber is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and has the corporate power and authority to own and operate its property and assets, carry on its business and enter into and perform its obligations under this Agreement and each of the Transaction Documents to which it is a party.

 

5.2 Corporate Authorization

 

 

(a) 

The execution, delivery and performance by the Subscriber of this Agreement and each of the Transaction Documents to which it is a party: 

 

 

(i) 

have been duly authorized by all necessary corporate action on the part of the Subscriber; and 

 

 

 

 

(ii) 

do not (or would not with the giving of notice, the passage of time or the happening of any other event or circumstance) result in a breach or a violation of, or conflict with, or allow any other Person to exercise any rights under, any of its constating documents, shareholders' agreements, by-laws or resolutions of its board of directors or shareholders. 

 

5.3 No Conflict with Authorizations, Laws, etc.

 

 

(a) 

The execution, delivery and performance by the Subscriber of this Agreement and each of the Transaction Documents to which it is a party do not (or would not with the giving of notice, the passage of time or the happening of any other event or circumstance): 

 

 

(i)

result in a breach or a violation of, conflict with, or cause the termination or revocation of, any Authorization held by the Subscriber;

 

 

 

 

(ii)

result in a breach or a violation of, or conflict with, any judgement, judicial order or decree of any Governmental Authority; or

 

 

 

 

(iii)

result in a breach or a violation of, or conflict with, any Law applicable to the Subscriber.

 

 
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5.4 Execution and Binding Obligation

 

This Agreement and each of the Transaction Documents to which the Subscriber is a party have been (or will be) duly executed and delivered by the Subscriber, and constitute (or will constitute) legal, valid and binding obligations of the Subscriber, enforceable against it in accordance with their respective terms.

 

5.5 No Brokers’ Fees, etc.

 

There is no investment banker, broker, finder or other intermediary or advisor that has been retained by or is authorized to act on behalf of the Subscriber who might be entitled to any fee, commission or reimbursement from the Shareholders.

 

ARTICLE 6

COVENANTS OF THE PARTIES

 

6.1 Subscription for the Shares

 

The Corporation shall take all necessary steps and corporate proceedings to duly and validly issue and allot the Shares to the Subscriber at Closing, free of all Liens, except for the Permitted Encumbrances.

 

6.2 Non-Compete and Non-Solicitation

 

The Shareholders acknowledge that the Subscriber is agreeing to subscribe to the Shares on the basis that each of the Shareholders and their directors, officers, and related parties enter into a non-competition and non-solicitation agreement, in the form attached hereto as Schedule 6.2 (the “Non-Competition and Non-Solicitation Agreement”).

 

6.3 Cooperation

 

The Parties shall cooperate reasonably and in good faith with each other and their respective representatives in connection with any steps required to be taken as part of their respective obligations under this Agreement.

 

6.4 Transition of Business

 

Simmax, Viking and their representatives, principals, and affiliates agree to be reasonably available during Business hours to support and assist the Subscriber with the transition of the Business for one month after the Closing (the “Transition Period”). Simmax and Viking acknowledge and agree that they will not be compensated for any support or assistance provided to the Subscriber during the Transition Period.

 

6.5 Employee Bonus Releases

 

The Corporation shall obtain and deliver to the Subscriber and the Shareholders, on or prior to Closing, a duly executed release from Tom Jackson with respect to the transaction bonus plan that was outlined in a memo from the Corporation to Tom Jackson and acknowledged and agreed to by Tom Jackson on April 23, 2024 (the “Employee Bonus Release”). The Employee Bonus Release shall be in a form satisfactory to the Subscriber and the Shareholders and shall provide a full and final release of any claims Aaron Dowler or Tom Jackson may have against the Corporation and the Shareholders in respect of transaction bonuses.

 

 
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6.6 Use of the SIMMAX Name

 

The Corporation obtained the legal right to use the trademark “SIMMAX” on August 5, 2021. On or within a reasonable period of time following the Closing, Simmax agrees to assist the Subscriber and the Corporation in the update of the registrations related to such mark to reflect the Corporation’s ownership of same. Within ten (10) Business Days of Closing, Simmax agrees to change its legal name and cease all use of the name “Simmax”.

 

6.7 Survival of Representations and Warranties

 

 

(a) 

In the case of Remora, the representations and warranties and covenants contained in this Agreement, which for certainty include the representations and warranties given in Article 4, and in any other any certificate, affidavit, statutory declaration or other agreement or document delivered or given in order to carry out the transaction contemplated in this Agreement will survive the Closing and will continue in full force and effect until December 1, 2025. Claims arising from fraud shall survive indefinitely. Any claims asserted in good faith with reasonable specificity by written notice from the non-breaching Party to the breaching Party pursuant to the provisions of Article 10, prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of the survival period and such claims shall survive until December 1, 2026 at which point Remora will be released from all indemnity obligations and liabilities related to such claims. 

 

 

 

 

(b) 

In the case of the other Parties to this Agreement, the representations and warranties contained in this Agreement and in any other any certificate, affidavit, statutory declaration or other agreement or document delivered or given in order to carry out the transaction contemplated in this Agreement will survive the Closing and will continue in full force and effect for a period of 24 months after the Closing Date and the indemnity in respect of Tax Liabilities will survive for a period of ninety (90) days after the relevant authorities shall no longer be entitled to assess liability against the Corporation for the applicable fiscal period(s), having regard, without limitation, to any waivers given by the Corporation in respect of any such taxation year. Notwithstanding the foregoing, claims for breaches of covenants and agreements to be performed after Closing shall survive in accordance with their respective terms until performance thereof. Claims arising from fraud shall survive indefinitely. Any claims asserted in good faith with reasonable specificity by written notice from the non-breaching Party to the breaching Party pursuant to the provisions of Article 10, prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of the survival period and such claims shall survive until finally resolved, but only for the purposes of the resolution of the matter covered by such notice.  

 

6.8 Restrictive Covenants—ITA 56.4

 

The Parties to the Non-Competition and Non-Solicitation Agreements confirm that no portion of proceeds from the Repayment and Repurchase Transaction is received by Remora or Simmax for entering into a Non-Competition and Non-Solicitation Agreement, and that and covenants and undertakings granted under the Non-Competition and Non-Solicitation Agreements are granted to maintain or preserve the fair market value of the Remora Shares and Simmax Shares. At the request of the Remora and/or Simmax, the Corporation and the Subscriber agree to execute on a timely basis and in the prescribed manner an election under subsection 56.4(7) of the ITA (and such corresponding provisions of applicable provincial Laws) provided that the content of each election is satisfactory to the Corporation and the Subscriber acting reasonably.

 

 
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ARTICLE 7

EMPLOYEES

 

7.1 Employees

 

Upon the Closing Date, the Corporation shall continue the employment of all Employees in accordance with their existing employment contracts. The Subscriber acknowledges that the Corporation shall remain responsible for all obligations related to Employees, including but not limited to vacation pay, sick leave, termination and severance pay. If, after the Closing Date, the Corporation elects to terminate the employment of any Employee, the Corporation shall be solely responsible for all liabilities arising from such termination.

 

7.2 Acknowledgements of the Shareholders

 

 

(a) 

The Shareholders acknowledge that they are solely responsible for and shall satisfy: 

 

 

(i) 

any liability or claim by any Employee or prior employee based upon or arising out of his or her employment with the Corporation prior to the Closing Date, other than the obligations that the Subscriber has acknowledged to be the responsibility of the Corporation under Section 7.1; 

 

 

 

 

(ii) 

any obligation owing to any Employee or prior employee relating to any period prior to the Closing Date, other than the obligations that the Subscriber has acknowledged to be the responsibility of the Corporation under Section 7.1; and 

 

 

 

 

(iii) 

any liability or claim by any Employee or prior employee relating to or arising out of the conduct of the Shareholders prior to the Closing Date. 

 

ARTICLE 8

CLOSING

 

8.1 Closing Procedures

 

Subject to satisfaction or waiver by the relevant Party of the conditions of closing, at the Closing:

 

 

(a) 

the Corporation shall deliver actual possession of the Shares to the Subscriber and the Subscriber shall pay or satisfy the Subscription Price in accordance with Section 2.2; 

 

 

 

 

(b) 

the Corporation shall deliver the payments and New Notes in accordance with Sections 2.4, 2.5 and 2.6; 

 

 

 

 

(c) 

Remora shall deliver the Remora Shares duly endorsed for transfer to the Subscriber; 

 

 
37

 

 

 

(d) 

the Subscriber shall deliver the Remora Closing Payment and the Remora LP Note to Remora; 

 

 

 

 

(e) 

Simmax shall deliver the Simmax Shares duly endorsed for transfer to the Subscriber; and  

 

 

 

 

(f) 

the Subscriber shall deliver the Simmax Note. 

 

8.2 Non-Merger

 

Except as otherwise expressly provided in this Agreement, including, without limitation, Section 6.5, the covenants, representations, warranties and other provisions of this Agreement will not merge on Closing but will survive (a) the execution, delivery and performance of this Agreement and any related transfer or conveyance documents, (b) the Closing, and (c) the payment of the Subscription Price. Notwithstanding such Closing or any investigation made by or on behalf of any Party, this Agreement will continue in full force and effect. Except as otherwise expressly provided in this Agreement, Closing will not prejudice any right of one Party against any other Party in respect of anything done or omitted under this Agreement or in respect of any right to Damages or other remedies.

 

ARTICLE 9

CONDITIONS OF CLOSING

 

9.1 Place of Closing

 

Subject to the terms and conditions hereof, the Closing shall take place on the Closing Date and shall take place via the electronic exchange of execution version of the agreements and documents contemplated by this Agreement and the signed signature pages thereto in PDF format via email or in such other manner as the Parties may agree in writing.

 

9.2 Conditions in Favour of the Subscriber

 

The obligation of the Subscriber to complete the transactions contemplated by this Agreement is subject to the following conditions to be fulfilled or performed at or prior to Closing, unless stated otherwise, which conditions are for the exclusive benefit of the Subscriber and may be waived, in whole or in part, by the Subscriber in its sole discretion:

 

 

(a) 

Truth of Representations and Warranties. The representations and warranties given by the Shareholders in this Agreement shall be true and correct as of the Closing Date, in all material respects with the same force and effect as if such representations and warranties had been made on and as of such date and each of the Shareholders shall have executed and delivered a certificate to that effect.  

 

 

 

 

(b) 

Performance of Covenants. The Shareholders and Corporation shall have fulfilled, performed or complied in all material respects with all covenants contained in this Agreement and in any Transaction Documents to which it is a party to be fulfilled, performed or complied with by it at or prior to Closing. 

 

 

 

 

(c) 

Consents. All Required Consents shall have been obtained on terms acceptable to the Subscriber, acting reasonably. 

 

 

 

 

(d) 

No Legal Action. No action or proceeding shall be pending or threatened by any Person in any jurisdiction, to enjoin, restrict or prohibit: 

 

 
38

 

 

 

(i) 

any of the transactions contemplated by this Agreement or any of the Transaction Documents; 

 

 

 

 

(ii) 

the right of the Subscriber to acquire or own the Shares; or 

 

 

 

 

(iii) 

the right of the Corporation to operate the Business after Closing on substantially the same basis as currently operated. 

 

 

(e) 

Deliveries. The Shareholders and the Corporation, as applicable, shall have delivered or caused to be delivered to the Subscriber the following: 

 

 

(i) 

confirmation of receipt of the Mann Payment from Mann Lawyers LLP; 

 

 

 

 

(ii) 

copies of the Corporate Records for the Corporation; 

 

 

 

 

(iii) 

certified copies of (i) the articles, by-laws and other constating documents of the Corporation; and (ii) all necessary directors and the shareholders resolutions, corporate authorizations and proceedings of the Corporation and each of the Shareholders that are required in order to approve the completion of the transactions contemplated in this Agreement, including the issuance of the Shares to the Subscriber, repurchase and cancellation of the Remora Shares and Simmax Shares, cancellation of the Remora Promissory Notes and Simmax Promissory Notes, termination of the Shareholders’ Agreement, and authorizing the Corporation and the Shareholders to enter into this Agreement and each of the other Transaction Documents; 

 

 

 

 

(iv) 

a certificate of status, compliance, good standing or like certificate with respect to the Corporation issued by the appropriate Government Authority in their respective jurisdictions of incorporation; 

 

 

 

 

(v) 

all Required Consents set forth in Schedule 4.6, to be delivered at Closing or within a reasonable period of time following Closing; 

 

 

 

 

(vi) 

such share certificates, subscriptions, transfer, endorsements and registers as may be necessary to effectively issue and allot the Shares to the Subscriber in accordance with this Agreement and applicable Laws; 

 

 

 

 

(vii) 

a duly executed termination agreement in respect of the Shareholder Agreement, effective immediately prior to Closing and waiver of rights; 

 

 

 

 

(viii) 

duly executed resignations from each director of the Corporation; 

 

 

 

 

(ix) 

counterparts to the Non-Compete and Non-Solicitation Agreements, duly executed by each of the Shareholders and such other Persons as the Subscriber may reasonably request; 

 

 

 

 

(x) 

counterpart to the Post-Closing Shareholders’ Agreement, in a form satisfactory to the Subscriber, duly executed by Viking; 

 

 

 

 

(xi) 

counterparts to the Intercreditor Agreement, duly executed by each party thereto;  

 

 

 

 

(xii) 

confirmation that the Real Property Lease for the Premises located in Terrace, British Columbia, has been converted to a month-to-month lease or has otherwise been terminated on terms and conditions satisfactory to the Subscriber, acting reasonably;  

 

 
39

 

 

 

(xiii) 

confirmation from the landlord of the Premises located in Edmonton, Alberta, of the ongoing monthly rental obligations for the remainder of the terms of the Real Property Lease;  

 

 

 

 

(xiv) 

cancelled Remora Promissory Notes; 

 

 

 

 

(xv) 

cancelled Simmax Promissory Notes; 

 

 

 

 

(xvi) 

cancelled Viking Promissory Notes; 

 

 

 

 

(xvii) 

duly executed Remora Releases; 

 

 

 

 

(xviii) 

duly executed Simmax Releases; 

 

 

 

 

(xix) 

duly executed Viking Releases; 

 

 

 

 

(xx) 

the Employee Bonus Release, duly executed by Tom Jackson to whom bonuses may be currently due and owing, or will become due and owing in the current or future financial years of the Corporation; 

 

 

 

 

(xxi) 

the Books and Records;  

 

 

 

 

(xxii) 

evidence of the termination of any and all Viking Ozone Technology, LLC related contracts, including, but not limited to, two distribution agreements and one licensing agreement; and 

 

 

 

 

(xxiii) 

all such other documents, instruments, records, conveyances, assignments, assurances, consents and certificates which, in the opinion of the Subscriber acting reasonably, are necessary to effect and evidence the transactions contemplated herein. 

 

9.3 Conditions in Favour of the Shareholders

 

The obligation of the Shareholders to complete the transactions contemplated in this Agreement is subject to the following conditions to be fulfilled or performed at or prior to Closing, which conditions are for the exclusive benefit of the Shareholders and may be waived, in whole or in part, by the Shareholders in their sole discretion:

 

 

(a) 

Truth of Representations and Warranties. The representations and warranties of the Subscriber contained in this Agreement shall be true and correct as of the Closing Date, in all material respects. 

 

 

 

 

(b) 

Performance of Covenants. The Subscriber shall have fulfilled, performed or complied in all material respects with all covenants contained in this Agreement and in any Transaction Documents to which it is a party to be fulfilled, performed or complied with by it at or prior to Closing. 

 

 

 

 

(c) 

No Legal Action. No action or proceeding shall be pending or to the knowledge of the Subscriber threatened by any Person in any jurisdiction to enjoin, restrict or prohibit any of the transactions contemplated by this Agreement or any of the Transaction Documents. 

 

 
40

 

 

 

(d) 

Deliveries. The Subscriber shall have delivered or caused to be delivered to the Corporation and/or the Shareholders the following: 

 

 

(i) 

the Subscription Payment; 

 

 

 

 

(ii) 

the Remora Closing Payment; 

 

 

 

 

(iii) 

certified copies of the resolutions of the board of directors of the Subscriber approving the entering into and completion of the transactions contemplated by this Agreement and the Transaction Documents;  

 

 

 

 

(iv) 

the New Remora Notes, the New Simmax Notes and the New Viking Notes; 

 

 

 

 

(v) 

a duly executed Intercreditor Agreement, executed by the Corporation and the Subscriber; 

 

 

 

 

(vi) 

the Guarantees, duly executed by the Subscriber; 

 

 

 

 

(vii) 

counterpart to the Post-Closing Shareholders’ Agreement, duly executed by the Subscriber;  

 

 

 

 

(viii) 

duly executed Remora Releases; 

 

 

 

 

(ix) 

duly executed Simmax Releases; 

 

 

 

 

(x) 

duly executed Viking Releases;  

 

 

 

 

(xi) 

the TD Release or an undertaking of the Corporation and Subscriber, in form and substance acceptable to the Shareholders, regarding the delivery of same post-Closing together with an indemnity agreement in favour of Simmax and Viking and their respective Affiliates; and 

 

 

 

 

(xii) 

all such other documents, instruments, records, conveyances, assignments, assurances, consents and certificates which, in the opinion of the Shareholders acting reasonably, are necessary to effect and evidence the transactions contemplated herein. 

 

9.4 Frustration

 

Neither the Subscriber nor the Shareholders may rely on the failure of any condition set forth in this Article 9 to be satisfied if such failure was caused by such party's breach of its obligations under this Agreement or failure to act in good faith or use Commercially Reasonable Efforts to cause the Closing to occur.

 

9.5 Waiver of Conditions

 

If any of the conditions set forth in Section 9.2 have not been satisfied, the Subscriber may elect in writing to waive the condition and proceed with the completion of the transactions contemplated by this Agreement and, if any of the conditions set forth in Section 9.3 have not been satisfied, the Shareholders may elect in writing to waive the condition and proceed with the completion of the transactions contemplated by this Agreement. Any such waiver and election by the Subscriber or the Shareholders, as the case may be, will only serve as a waiver of the specific closing condition, and the Party which has not been able to satisfy the waived condition will have no liability with respect to that specifically waived condition.

 

 
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ARTICLE 10

INDEMNIFICATION AND REMEDIES

 

10.1 Indemnification by the Shareholders: General Matters

 

 

(a) 

Subject to Section 6.7, Section 10.1(c) and 10.5, Viking agrees to jointly and severally indemnify, defend and hold harmless the Subscriber, the Corporation and their respective Affiliates (collectively, the “Subscriber Indemnified Persons”), from and against any loss, liability, obligation, claim, damages, fines and other penalties, costs, charges or expenses (including reasonable costs of investigation and defence and all reasonable legal fees and other professional fees) (collectively, “Damages”), suffered by, imposed upon or asserted against, the Subscriber Indemnified Persons as a result of, in respect of, connected with, or arising out of and on the basis noted below: 

 

 

(i) 

any misrepresentation, inaccuracy, incorrectness or breach of any representation or warranty made by the Shareholders (or any one of them) in this Agreement or any other agreement or document including, but not limited to, the Transaction Documents, delivered or given by them in order to carry out the transaction; or 

 

 

 

 

(ii) 

any breach or non-performance of any material covenant, condition, agreement, or obligation on the part of the Shareholders (or any one of them) contained in this Agreement or any other agreement or document including, but not limited to, the Transaction Documents, delivered or given by them in order to carry out the transaction;  

 

 

 

 

(iii) 

any and all Tax Liabilities arising with respect to the Corporation’s taxation years or periods that end or are deemed to have ended prior to or as a result of: (a) the transaction contemplated by this Agreement; and (b) any transactions or events that occur prior to the Closing (including, for greater certainty, any and all Tax Liabilities which become liabilities or obligations of the Subscriber or any of its Affiliates or any successor Person by one or more windings-up, amalgamations or other reorganizations);  

 

 

 

 

(iv) 

all claims and costs associated with respect to any claim by any Employee with respect to the matters set out in Section 7.2;  

 

 

 

 

(v) 

any settlement or judgment amounts payable in respect of litigation claims addressed by Section 4.4 which do not relate to, or include as a cause of action, the non-payment of the Corporation’s accounts or the collection thereof; 

 

 
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(vi) 

compliance with an Environmental Law Order or the exercise of a contractual right under a Real Property Lease requiring the remediation of an Environmental Release at, on or under any of the Premises, but only to the extent such Environmental Release is identified in an independent expert assessment as relating to the period prior to Closing;  

 

 

 

 

(vii) 

restoration of the Premises located at 1605 Kebet Way, Port Coquitlam, British Columbia (the “Port Coquitlam Premises”) in accordance with the terms of the Real Property Lease in respect thereof; provided that (a) the $250,000 tenant improvement allowance available in respect of the Port Coquitlam Premises shall be directed to such restoration work and for no other purpose; and (b) all costs associated with the restoration of post-Closing alterations, renovations or other modifications to the Port Coquitlam Premises shall be excluded from the value of any such claim; or 

 

 

 

 

(viii) 

matters pertaining directly to Aarron Dowler’s employment with the Corporation, including, without limitation, the circumstances surrounding his resignation or termination of employment, provided that (a) Viking, Remora and Simmax shall handle all communications with Aarron Dowler and/or his advisors, with input from the Corporation as required, (b) this Section 10.1(a)(viii) shall not apply to in-house costs incurred by the Subscriber Indemnified Persons, and (c) any Damages arising out of this Section 10.1(a)(viii) shall not be subject to the Basket set out in Section 10.5(a). 

 

 

(b) 

Subject to Section 6.7, Section 10.1(c) and 10.5, each of Remora and Simmax agrees to severally indemnify, defend and hold harmless the Subscriber Indemnified Persons from and against any Damages, suffered by, imposed upon or asserted against, the Subscriber Indemnified Persons as a result of, in respect of, connected with, or arising out of and on the basis noted below: 

 

 

(i) 

any misrepresentation, inaccuracy, incorrectness or breach of any representation or warranty made by the Shareholders in this Agreement or any other agreement or document including, but not limited to, the Transaction Documents, delivered or given by them in order to carry out the transaction; or 

 

 

 

 

(ii) 

any breach or non-performance of any material covenant, condition, agreement, or obligation on the part of the Shareholders contained in this Agreement or any other agreement or document delivered by them in order to carry out the transaction;  

 

 

 

 

(iii) 

any and all Tax Liabilities arising with respect to the Corporation’s taxation years or periods that end or are deemed to have ended prior to or as a result of: (a) the transaction contemplated by this Agreement; and (b) any transactions or events that occur prior to the Closing (including, for greater certainty, any and all Tax Liabilities which become liabilities or obligations of the Subscriber or any of its Affiliates or any successor Person by one or more windings-up, amalgamations or other reorganizations);  

 

 

 

 

(iv) 

all claims and costs associated with respect to any claim by any Employee with respect to the matters set out in Section 7.2; or 

 

 

 

 

(v) 

matters pertaining directly to Aarron Dowler’s employment with the Corporation, including, without limitation, the circumstances surrounding his resignation or termination of employment, provided that (a) Viking, Remora and Simmax shall handle all communications with Aarron Dowler and/or his advisors, with input from the Corporation as required, (b) this Section 10.1(b)(v) shall not apply to in-house costs incurred by the Subscriber Indemnified Persons, and (c) any Damages arising out of this Section 10.1(b)(v) shall not be subject to the Basket set out in Section 10.5(a). 

 

 
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on the basis that the liability of Remora shall not exceed 22.5% of such aggregate Damages and the liability of Simmax shall not exceed 16.9% of such aggregate Damages. For clarity, Viking shall be jointly and severally liable for the full amount of such aggregate Damages.

 

 

(c) 

Each of the Shareholders agrees to severally (and not jointly) indemnify, defend and hold harmless the Subscriber Indemnified Persons from and against any and all losses suffered or incurred by any of them, directly or indirectly, as a result of, in respect of or arising out of any misrepresentation, inaccuracy, incorrectness or breach of any representation or warranty made by such Shareholder in Sections 3.1 to and including 3.5. 

 

10.2 Indemnification by the Subscriber: General Matters

 

 

(a) 

The Subscriber agrees to indemnify and hold the Shareholders harmless and be liable to the Shareholders with respect to all losses to which the Shareholders may be put or suffer by or as a direct or indirect result of or arising out of or in connection with the following: 

 

 

(i) 

any misrepresentation, inaccuracy, incorrectness or breach of any representation or warranty made by the Subscriber in this Agreement or any other agreement or document including, but not limited to, the Transaction Documents, delivered or given by them in order to carry out the transaction;  

 

 

 

 

(ii) 

any breach or non-performance of any material covenant, condition, agreement, or obligation on the part of the contained in this Agreement or any other agreement or document delivered by it in order to carry out the transaction; or 

 

 

 

 

(iii) 

any claim by any Person for brokerage or finder's fees, commissions or similar payments based upon any agreement or understanding made or alleged to have been made by such Person with the Subscriber (or any Person acting on its behalf) in connection with any of the transactions contemplated in this Agreement. 

 

10.3 Claims Procedure

 

 

(a) 

In the case of any indemnity claims (in this Section, “Claims”) made by a third party with respect to which any Party is entitled to seek indemnification pursuant to this Agreement, and indemnification is sought by either the Subscriber or the Shareholders, the Party seeking indemnification (in this Section, the “Indemnified Party”) shall give prompt notice, and in any event within forty-five (45) days, to the Subscriber or the Shareholders, as the case may be, (in this Section, the “Indemnifying Parties”) of any such Claims made upon it. If the Indemnified Party fails to give such notice, such failure shall not preclude the Indemnified Party from obtaining such indemnification but its right to indemnification may be reduced if and to the extent only that such delay prejudiced the defence of the Claim or increased the amount of liability or cost of defense and provided that no claim for indemnity in respect of the breach of any representation or warranty contained in this Agreement may be made unless notice of such Claim has been given prior to the expiry of the survival period applicable to such representation and warranty pursuant to Section 6.5. 

 

 
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(b) 

The Indemnifying Parties shall have the right, by notice to the Indemnified Party given not later than thirty (30) days after receipt of the notice described in Section 10.3(a), to assume the control of the defence, compromise or settlement of the Claim, provided that (i) such assumption shall, by its terms, be without cost to the Indemnified Party; (ii) the Indemnifying Parties acknowledge in writing their obligation to indemnify the Indemnified Party in accordance with the terms contained in this Section in respect of that Claim; (iii) the Indemnifying Parties shall first deliver to the Indemnified Party their written consent to be joined as a party to any action or proceeding related thereto; and (iv) the Indemnifying Parties shall, at the Indemnified Party’s request, furnish it with reasonable security against any costs or other liabilities to which it may be or become exposed by reason of such defence, compromise or settlement. 

 

 

 

 

(c) 

Upon the assumption of control of any Claim by the Indemnifying Parties as set out in Section 10.3(b), the Indemnifying Parties shall diligently proceed with the defence, compromise or settlement of the Claim at their sole expense, including if necessary, employment of counsel reasonably satisfactory to the Indemnified Party and, in connection therewith, the Indemnified Party shall cooperate fully, but at the expense of the Indemnifying Parties, to make available to the Indemnifying Parties all pertinent information and witnesses under the Indemnified Party’s control and take such other steps as in the opinion of counsel for the Indemnifying Parties are reasonably necessary to enable the Indemnifying Parties to conduct such defence, provided always that the Indemnified Party shall be entitled to reasonable security from the Indemnifying Parties for any expense, costs or other liabilities to which it may be or may become exposed by reason of such cooperation. The Indemnified Party shall also have the right to participate in the negotiation, settlement or defence of any Claim at its own expense. 

 

 

 

 

(d) 

The final determination of any Claim made pursuant to this Section 10.3, including all related costs and expenses, shall be binding and conclusive upon the Parties as to the validity or invalidity, as the case may be, of such Claim against the Indemnifying Party. 

 

 

 

 

(e) 

If the Indemnifying Parties do not assume control of a Claim as permitted in Section 10.3(b), the Indemnified Party shall be entitled to make such settlement of the Claim as in its sole discretion may appear advisable, and such settlement or any other final determination of the Claim shall be binding upon the Indemnifying Parties. 

 

10.4 Indemnification

 

The rights and remedies that a Party may have against the other Party for a breach of any representation, warranty, covenant or obligation under this Agreement or any Transaction Document, except for any Damages that are the result of fraudulent conduct, wilful misconduct or intentional misrepresentation or omission are exclusively governed by this Agreement and the applicable Transaction Documents. Notwithstanding the foregoing, and subject to the terms of this Agreement and the Transaction Documents, any indemnification payable by the Shareholders to the Corporation or the Subscriber under this Agreement shall be subject to the Corporation’s right of set-off as set out in Section 2.10. Viking acknowledges and agrees that its indemnification obligations are not limited to the provisions of this Agreement and shall be as agreed upon between Viking, the Corporation, and the Subscriber. Nothing in this Section 10.4 shall limit, modify, or restrict any additional indemnification obligations of Viking set forth in such separate agreements. To the extent permitted by applicable Law, and subject to the terms of this Agreement and the Transaction Documents, any further claims and remedies (other than claims for specific performance, injunctive relief or other equitable remedy which do not include claims for monetary damages), irrespective of the nature, amount or legal basis, are hereby expressly waived and excluded. For certainty, nothing in this Agreement or any Transaction Document is intended to confer upon the Corporation and the Subscriber the right to both be indemnified for the same Damage arising out of the same set of facts, events or circumstances.

 

 
45

 

 

10.5 Limitation on Liability of Damages.

 

 

(a) 

Subject to Sections 10.1(a)(viii) and 10.1(b)(v), no party subject to indemnification obligations hereunder (an “Indemnifying Party”) shall be liable to an indemnified party (an “Indemnified Party”) for indemnification under Section 10.1 or Section 10.2, as the case may be, until the total Damages in respect of any and all indemnification claims to which such party is entitled thereunder exceeds $100,000 in the aggregate (the “Basket”), after such time the Indemnifying Party shall be liable for all Damages and not only the Damages exceeding the Basket. Except in the event of fraud, which shall remain unlimited by this provision, the Shareholders shall not be liable for Damages under this Article 10 or any other Transaction Document in excess of:  

 

 

(i) 

in the case of Remora and Remora GP, any and all amounts paid or payable to Remora or Remora GP pursuant to Section 2.4(a) of this Agreement; 

 

 

 

 

(ii) 

in the case of Simmax and its Affiliates, any and all amounts paid or payable to Simmax or its Affiliates pursuant to Section 2.5(a) of this Agreement; and 

 

 

 

 

(iii) 

in the case of Viking and its Affiliates, any and all amounts paid or payable under this Agreement and the value of all consideration paid or payable to Viking pursuant to the Post-Closing Shareholders’ Agreement, whether such consideration is cash or otherwise. 

 

 

(b) 

In no event shall any Indemnifying Party be liable to any Indemnified Party for any: (i) punitive, exemplary, incidental, consequential or special damages except in the event of fraud; or (ii) indirect damages, including indirect damages for loss of future revenue or income, loss of business reputation or opportunity, relating to the breach or alleged breach of this Agreement.  

 

 

 

 

(c) 

For the purpose of this Article 10, any claim for Damages that is subject to indemnification hereunder shall be determined net of any insurance proceeds or taxes recovered or recoverable by the Indemnified Party.  

 

10.6 Details of Claims

 

With respect to any indemnity claim provided for under Sections 10.1 or 10.2, no indemnity under this Agreement shall be sought unless written notice is provided to either of the Subscriber or the Shareholders, as the case may be, before the expiration of the limitation dates provided for in Sections 6.7.

 

 
46

 

 

ARTICLE 11

MISCELLANEOUS

 

11.1 Notices

 

Any notice, consent, waiver or other communication given under this Agreement or any Transaction Documents must be in writing and given by delivering it (personally or by courier) or sending it by email, if the Party has provided an email address:

 

 

(a)

to the Corporation at:

 

with a copy (which does not constitute notice to the Subscriber) to:

c/o McCuaig Desrochers LLP

Suite 1801, 10088 – 102 Avenue NW

Edmonton, AB, T5J 2Z1

Attention: Pierre Desrochers

Email: pdesrochers@mccuaig.com

 

 

(b)

to the Subscriber at:

   

T&T Power Group Inc.

1430 Hutchinson Road

Wellesley, Ontario N0B 2T0

Attention: Tyler Van Dyke

Email: tyler.vandyke@ttpowergroup.com

 

with a copy (which does not constitute notice to the Subscriber) to:

 

Lift Legal LLP

Suite 605, 1 Tache Street

St. Albert, Alberta T8N 1B4

Attention: Rebecca Garbe

Email: rgarbe@liftlegal.ca

 

 

(c)

to the Shareholders at:

  

Viking Energy Group, Inc.

Suite 1100, 12 Greenway Plaza

Houston, Texas 77046

Attention: James Doris

Email: jdoris@vikingenergygroup.com

 

Simmax Corp.

8750-58 Avenue

Edmonton, Alberta T6E 6G6

Attention: Brad Kruper

Email: brad.kruper@simmax.com

 

Remora EQ LP

350 Albert Street, Suite 700

Ottawa, ON  K1R 1A4

Attention: Candace Enman

Email: cenman@welchcapitalpartners.com

 

 
47

 

 

with a copy (which does not constitute notice to the Subscriber) to:

 

Gowling WLG (Canada) LLP

160 Elgin Street, Suite 2600

Ottawa, ON  K1P 1C3

Attention: Connor McGarry

Email: connor.mcgarry@gowling.com

 

Any such communication is deemed to have been delivered and received on the date of delivery or transmission by email, if the day is a Business Day and delivery or transmission was received by the recipient Party prior to 5:00 p.m. (local time, as the case may be) and otherwise on the next Business Day. A Person may change its address for service by notice given in accordance with the foregoing and any subsequent communication must be sent to such Person at its changed address.

 

11.2 Entire Agreement

 

This Agreement together with the Transaction Documents and all other Transaction Documents delivered at Closing constitute the entire agreement between the Parties and supersedes all prior agreements, understandings, negotiations and discussions relating to the subject matter thereof, whether oral or written. There are no representations, warranties, covenants, conditions or other agreements, express or implied, collateral, statutory or otherwise, between the Parties relating to the subject matter hereof except as specifically set forth in this Agreement, the Transaction Documents and the other Transaction Documents delivered at Closing. The Parties have not relied nor is relying on any other information, discussions or understandings in entering into and completing the transactions contemplated in this Agreement. If there is any conflict or inconsistency between the provisions of this Agreement and the provisions of any Transaction Document, the provisions of this Agreement will govern.

 

11.3 Amendments

 

This Agreement may only be amended, supplemented or otherwise modified by written agreement of the Parties.

 

11.4 Waiver

 

The failure or delay by a Party in enforcing, or insisting upon strict performance of, any provision of this Agreement does not constitute a waiver of such provision or in any way affect the enforceability of this Agreement (or any provisions thereof) or deprive a Party of the right, at any time or from time to time, to enforce or insist upon strict performance of that provision or any other provision of this Agreement. Any waiver by a Party of any provision of this Agreement is effective only if in writing and signed by a duly authorized representative of such Party.

 

11.5 Severability

 

If any provision of this Agreement is determined by a court of competent jurisdiction to be illegal, invalid or unenforceable, that provision will be severed from this Agreement and the remaining provisions will continue in full force and effect, without amendment.

 

 
48

 

 

11.6 Assignments

 

 

(a) 

This Agreement will become effective when executed by the Parties and thereafter will be binding upon and enure to the benefit of the Parties and their respective successors and permitted assigns. 

 

 

 

 

(b) 

Neither this Agreement nor any of the rights, duties or obligations under this Agreement are assignable or transferable by a Party without the prior written consent of the other Parties. Any attempt to assign any of the rights, duties or obligations in this Agreement without such prior written consent is void. 

 

11.7 Third Party Beneficiaries

 

Except as otherwise expressly provided in this Agreement, the Parties do not intend that this Agreement benefit or create any legal or equitable right, remedy or cause of action in, or on behalf of, any Person other than a Party and no Person, other than a Party, is entitled to rely on the provisions of this Agreement in any proceeding. Without limiting the generality of the foregoing, the consent of the Corporation, a Shareholder or a Subscriber Indemnified Person is not required for any amendment or waiver of, or other modification to, this Agreement or any Transaction Document including any rights of indemnification to which such Person may be entitled.

 

11.8 Time of the Essence

 

Time is of the essence in this Agreement.

 

11.9 Expenses

 

All costs and expenses (including the fees and disbursements of legal counsel, brokers, investment advisers, consultants and accountants) incurred in connection with this Agreement and the transactions contemplated herein are to be paid by the Party incurring such expenses. For certainty, only those fees, disbursements and expenses directly incurred by the Corporation for legal or accounting services provided directly to the Corporation necessary to facilitate the Closing on behalf of the Corporation will be borne by the Corporation.

 

11.10 Further Assurances

 

From time to time after the Closing, each Party will, at the request and cost of the other Party, execute and deliver such additional conveyances, transfers and other assurances and perform or cause to be performed such further and other acts or things as may be reasonably required to give effect to, and carry out the intent of, this Agreement and each of the Transaction Documents.

 

11.11 Public Announcements

 

Until the Closing Date, no press release or other public announcement with respect to this Agreement or any of the Transaction Documents or any transaction contemplated therein is to be made by a Party unless and until the text of the announcement and the time and manner of its release have been approved in writing by the other Party.

 

 
49

 

 

11.12 Independent Advice

 

The Parties acknowledge and confirm that they have been independently advised by legal counsel and tax advisors in respect of the provisions of this Agreement prior to executing the same and that they have negotiated the provisions hereof with equal bargaining power.

 

11.13 Counterparts

 

This Agreement may be executed in any number of separate counterparts (including by electronic means) and all such signed counterparts will together constitute one and the same agreement. To evidence its execution of an original counterpart of this Agreement, a Party may send a copy of its original signature on the execution page hereof to the other Parties by way of recorded electronic transmission and such transmission (including in PDF form) shall constitute delivery of an executed copy of this Agreement to the receiving Party.

 

[Remainder of the page intentionally left blank – Signature page to follow]

 

 
50

 

 

TO EVIDENCE THEIR AGREEMENT, the Parties have executed and delivered this Agreement as of the Effective Date.

 

BY THE SUBSCRIBER:

 

T&T POWER GROUP INC.     

 

 

 

 

 

 

Per:

 

 

 

 

Name: Tyler Van Dyke

 

 

 

Title: Authorized Signatory

 

 

BY THE CORPORATION: 

 

 

SIMSON-MAXWELL LTD.     

 

 

 

 

 

 

Per:

 

 

 

 

Name: James Doris

 

 

 

Title: Authorized Signatory

 

 

BY THE SHAREHOLDERS: 

 

 

VIKING ENERGY GROUP, INC.     

 

 

 

 

 

 

Per:

 

 

 

 

Name: James Doris

 

 

 

Title: Authorized Signatory

 

 

 

 

 

 

REMORA EQ LP  By its managing partner, Remora EQ General Partner Inc.     

 

 

 

 

 

 

Per:

 

 

 

 

Name: Candace Enman

 

 

 

Title: Authorized Signatory

 

 

 

 

 

 

SIMMAX CORP.     

 

 

 

 

 

 

Per:

 

 

 

 

Name: Brad Kruper

 

 

 

Title: Authorized Signatory

 

 

 
51

 
EX-10.2 3 cei_ex102.htm UNANIMOUS SHAREHOLDERS AGREEMENT cei_ex102.htm

EXHIBIT 10.2

 

 

 

 

 

 

 

SHAREHOLDERS AGREEMENT

 

 

SIMSON-MAXWELL LTD.

 

 

 

April ___, 2025

 

 

 

 

 

 

 

 

 

 
1

 

 

SIMSON-MAXWELL LTD.

UNANIMOUS SHAREHOLDERS AGREEMENT

 

THIS AGREEMENT is made as of the ____ day of April, 2025 (the “Effective Date”)

 

BETWEEN:

 

SIMSON-MAXWELL LTD., a corporation incorporated under the laws of Canada

 

– and –

 

Each Shareholder and Principal (as such terms are defined below) listed in Schedule A attached hereto, as amended from time to time, and any person who becomes a party to this Agreement by executing the Acknowledgement in the form attached hereto as Schedule B.

 

RECITALS

 

A.

In these recitals, all capitalized terms, unless otherwise defined, shall have the meanings given to them in Section 1.1;

 

 

B.

The Corporation was incorporated in the Province of Alberta on October 13, 1998 and was subsequently continued under the Act pursuant to Articles of Continuance dated November 4, 2002;

 

 

C.

Those parties to this Agreement, who are Shareholders, are the registered and beneficial owners of the number and class of shares in the capital of the Corporation set out opposite such Shareholder’s name in Schedule A;

 

 

D.

The parties to this Agreement desire to enter into certain agreements relating, among other things, to their shareholdings in the Corporation, their rights and duties as Shareholders of the Corporation, and the management and operation of the Corporation;

 

 

 

NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement, the sum of one dollar and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

 

 
2

 

 

ARTICLE 1

INTERPRETATION

 

1.1 Defined Terms. In addition to the terms otherwise defined in this Agreement, the following terms shall have the meanings set out below:

 

 

(a)

“Act” means the Canada Business Corporations Act, as amended or re-enacted from time to time, and any term defined in the Act and not otherwise defined herein is used in this Agreement with the meaning defined in the Act;

 

 

 

 

(b)

“Affiliate” shall have the meaning ascribed to it in the Act;

 

 

 

 

(c)

“Agreement” means this unanimous shareholders agreement and all schedules attached to this agreement, all as may be supplemented or amended from time to time;

 

 

 

 

(d)

“Arm’s Length” shall have the meaning as it is given in the Income Tax Act (Canada) and any question as to whether an arm’s length relationship exists shall be determined in accordance with Article 251 of said legislation as of the date hereof;

 

 

 

 

(e)

“Articles” means the Articles of Continuance of the Corporation dated November 4, 2002, as may be amended from time to time;

 

 

 

 

(f)

“Board” means the board of directors of the Corporation;

 

 

 

 

(g)

“Business” has the meaning given to such term in Section 2.1;

 

 

 

 

(h)

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

 

 

 

 

(i)

“By-law” means any by-law of the Corporation, including without limitation, general By-law No. 1 in the form enacted on November 4, 2002 (collectively the “By-laws”);

 

 

 

 

(j)

“Control” means:

 

 

(i)

with respect to a corporation, the ownership of more than fifty percent (50%) of the voting rights attached to all shares of the corporation, including any shares which are voting only upon the occurrence of a contingency where such contingency has occurred and is continuing, where the exercise of such voting rights entitles the holder of such voting shares to elect a majority of the directors of the corporation;

 

 

 

 

(ii)

with respect to a partnership (other than a limited partnership), the ownership of more than fifty percent (50%) of the interests in the partnership;

 

 

 

 

(iii)

with respect to a limited partnership, the limited partnership is controlled by each of its general partners; and

 

 

 

 

(iv)

with respect to a trust, the trust is considered controlled by each of its trustees who has actual power or authority to manage and direct the affairs of such trust;

 

and “controlled, “controlling” and “controls” shall have like meaning;

 

 
3

 

 

 

(k)

“Corporation” means Simson-Maxwell Ltd. and any successor resulting from any amalgamation, merger, arrangement or other re-organization of or including the Corporation or any continuance of the Corporation under the laws of another jurisdiction;

 

 

 

 

(l)

“Directors” means the directors of the Corporation and a “Director” means any one of them;

 

 

 

 

(m)

“Fair Market Value” has the meaning set out in Schedule C;

 

 

 

 

(n)

“Financial Statements” means the annual financial statements of the Corporation, prepared on a review engagement basis, consisting of consolidated balance sheets of the Corporation, statements of income, retained earnings, and changes in cashflow of the Corporation and its subsidiaries, if any, and unaudited quarterly interest financial statements of the Corporation, prepared in accordance with generally accepted accounting principles (subject to normal year- end adjustments and without footnote disclosure for quarterlies), setting forth the comparative form the corresponding figures for the corresponding quarter or full year of the previous financial year;

 

 

 

 

(o)

“Permanent Incapacity” means, with respect to any person, the condition that will be deemed to exist where:

 

 

(i)

such person has been declared by a court of competent jurisdiction to be mentally incompetent and such declaration has not, at the relevant time, been revoked; or

 

 

 

 

(ii)

such person becomes unable, by reason of illness, mental or physical disability or incapacity or otherwise, to perform his or her normal duties as a director or officer of the Corporation or as a full-time employee of the Corporation:

 

 

A.

for a period of 180 consecutive days; or

 

 

 

 

B.

for 270 days in aggregate during a period of 365 days,

 

provided that if a qualified medical doctor certifies that a person’s illness, disability or incapacity is not permanent but merely temporary and that the person will be fully recovered and able to perform his or her normal duties as a director, officer, or full-time employee of the Corporation within 180 days of the date of the certificate, then such illness, disability, or incapacity shall not be deemed to constitute “Permanent Incapacity”;

 

 
4

 

 

 

(p)

 “Permitted Indebtedness” means items (a)(iv), (v), (vi), (viii), within the definition of Indebtedness in the Subscription Agreement and the aggregate total of the items described in subsections (a) through (g) in Section 4.40 of the Subscription Agreement.

 

 

 

 

(q)

“Person” means and includes any individual, corporation, body corporate, partnership, firm, joint venture, syndicate, association, trust, trustee, government, governmental agency or board or commission or authority or other form of entity or organization, whether or not legal entities;

 

 

 

 

(r)

“Principal” means Tyler Van Dyke, with respect to T&T Power Group, and any other Person who is or who Controls a Shareholder other than in the case of Viking;

 

 

 

 

(s)

“Shareholder” means any of the Persons listed on Schedule A hereof or any Person that from time to time holds Shares in the Corporation and becomes bound by the provisions of this Agreement;

 

 

 

 

(t)

“Shareholder Loan” means an outstanding amount loaned or advanced by a Shareholder to the Corporation at any time including but not limited to a shareholder loan in the amount of $3,000,000 that may be advanced by T&T to the Corporation on or around the Effective Date;

 

 

 

 

(u)

“Shares” means in respect of the Corporation and/or any Subsidiary, as the context dictates: (a) all shares currently authorized; (b) any additional shares which may be subsequently authorized; (c) any shares into which Shares of the Corporation and/or any Subsidiary may be converted, subdivided, consolidated or otherwise changed from time to time, and (d) any shares of the Corporation and/or any Subsidiary or any successor or other corporation, as the case may be, which may be received by the holders of such shares on an amalgamation, arrangement, continuance, merger, consolidation or other reorganization (statutory or otherwise) of or including the Corporation and/or any Subsidiary;

 

 

 

 

(v)

“Subscription Agreement” means the Subscription Agreement dated on or about the date hereof amongst the Corporation, T&T, Remora EQ LP, Simmax Corp. and Viking, pursuant to which T&T subscribed for Class A Common Shares of the Corporation;

 

 

 

 

(w)

“Subscription Transaction” means the subscription by T&T for 2536 Class A Common Shares of the Corporation pursuant to the Subscription Agreement;

 

 

 

 

(x)

“T&T” mean T&T Power Group Inc.;

 

 
5

 

 

 

(y)

 “Valuator” has the meaning set out in Schedule C;

 

 

 

 

(z)

 “Viking” means Viking Energy Group, Inc.;

 

 

 

 

(aa)

 “Voting Shareholder” means a Shareholder who owns Voting Shares;

 

 

 

 

(bb)

 “Voting Shares” means the Class A Common Shares in the capital of the Corporation; and

 

 

 

 

(cc)

 “Written Notice” means notice in writing either in a hard copy paper format or by electronic means in an e-mail and “instrument in writing” and “in writing” shall have a corresponding meaning.

 

1.2 Currency. All amounts referred to in this Agreement are intended to be in lawful currency of Canada unless otherwise specified in this Agreement.

 

1.3 Computation of Time Periods. In this Agreement, in the computation of periods of time from a specified date to a later specified date, unless otherwise expressly stated, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding” and all references to “day” or “days” shall mean calendar days unless designated as “Business Days”.

 

1.4 Schedules. The following schedules are attached to and incorporated in this Agreement by reference:

 

Schedule A – Shareholders and Addresses

Schedule B – Form of Acknowledgement

Schedule C – Share Valuation

Schedule D – TD Subordination and Postponement Agreement

 

1.5 Miscellaneous. In this Agreement:

 

 

(a)

unless the context otherwise requires, the singular shall include the plural and vice versa, and in particular the definitions of words and expressions set forth in Section 1.1 shall be applied to such words and expressions when used in either the singular or the plural form;

 

 

 

 

(b)

unless the context otherwise requires, words importing a particular gender shall include the other gender;

 

 

 

 

(c)

unless otherwise indicated, references to Articles, Sections, and Schedules should be construed as references to the applicable Articles, Sections, or Schedules of this Agreement;

 

 
6

 

 

 

(d)

the division of this Agreement into Articles and Sections, the insertion of headings and the provision of a table of contents are for convenience of reference only and are not to affect the construction or interpretation of this Agreement;

 

 

 

 

(e)

any reference to a statutory provision shall include that provision as from time-to-time modified or re-enacted providing that in the case of modifications or re-enactments made after the date of this Agreement the same shall not have effective substantive change to that provision;

 

 

 

 

(f)

references to, or to any particular provision of, a document shall be construed as references to that document as amended to the extent permitted by this Agreement and in force at any time; and

 

 

 

 

(g)

“in writing” or “written” mean and include printing, typewriting or any electronic means of communication capable of being permanently reproduced in alphanumeric characters at the point of reception.

 

ARTICLE 2

GOVERNANCE AND AFFAIRS OF THE BUSINESS

 

2.1 Business of the Corporation. The Corporation is engaged in the business of servicing, maintaining, repairing, renting and testing of generators and industrial engines and providing power solutions to customers, in the Provinces of Alberta, British Columbia, Ontario and elsewhere in Canada (the “Business”).

 

2.2 Unanimous Shareholder Agreement. This Agreement is deemed to be a unanimous shareholders’ agreement within the meaning of the Act, and the power of the Board to manage or supervise the management of the business and affairs of the Corporation is restricted in accordance with the terms of this Agreement.

 

2.3 Corporation to be Bound. The Corporation covenants and agrees to act in accordance with the provisions of this Agreement and to take no action which would constitute a contravention of any of the terms or provisions hereof. Notwithstanding anything contained in this Agreement, the Corporation shall so conduct its business and affairs as to comply with all applicable laws. 

 

2.4 Board Composition. The Corporation shall have a Board of Directors consisting of three (3) directors, comprised as follows:

 

 

(a)

two (2) directors shall be nominated by T&T; and

 

 

 

 

(b)

one (1) director shall be nominated by Viking (the “Viking Nominee”).

 

2.5 Board of Directors. The following individuals have been appointed as Directors of the Board of Directors and the Voting Shareholders hereby approve such appointments:

 

 

(a)

T&T nominates Tyler Van Dyke and Daniel Rochester to serve as Directors of the Board of Directors so long as they are living and have not suffered Permanent Incapacity; and

 

 

 

 

(b)

Viking nominates James Doris to serve as Director of the Board so long as they are living and have not suffered Permanent Incapacity.

 

 
7

 

 

2.6 Filling Director Vacancies and Replacement of Nominees. Subject to Subsection 2.4, if any vacancy occurs in the Board, such vacancy shall be filled by a person nominated by the Shareholder who originally nominated the vacating Director. Subject to Subsection 2.4, a Director may be replaced at any time by the Shareholder who nominated such Director, and in each case such replacement Director shall be approved by the other Shareholders.

 

2.7 Election of Directors. The Shareholders shall vote their Shares, otherwise exercise their influence in respect of the Corporation and take all other action that may be required to ensure that the Board shall be constituted at all times with the persons nominated from time to time in accordance with this Agreement.

 

2.8 Notice of Meeting of Directors. Any meeting of the Directors may be called by any Director on not less than fourteen (14) days’ Written Notice given to all the other Directors, which notice shall contain or be accompanied by an agenda of the business to be considered at the meeting and a reasonably detailed description of each item of business, provided that all the Directors may, by an instrument in writing delivered before or after the meeting or by participating at the meeting, waive notice of any meeting of the Directors, in which event any such meeting shall be considered to be duly constituted notwithstanding the absence of notice in respect thereof provided the requirement for quorum set out in Section 2.9 has been met.

 

2.9 Place and Frequency of Directors’ Meetings. Meetings of Directors shall be held quarterly at any place within or outside of the Province of Alberta. All meetings shall permit the Directors to participate in the meeting of Directors by means of such telephone, electronic, or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and a Director participating in such a meeting by such means is deemed for the purposes of the Agreement to be present at that meeting.

 

2.10 Quorum for Directors’ Meetings. A quorum for meetings of the Directors shall be two (2) Directors then in office, present in person or by means of conference telephone or other communications equipment as permits all persons participating in the meeting to communicate with each other simultaneously and instantaneously (and, for greater certainty, a meeting of the Directors may be constituted at which some Directors are present in person and other Directors are present by means of such communication facilities), provided that the Viking Nominee must be present to form a quorum. If: (i) no such quorum is present within thirty (30) minutes following the time at which the meeting is scheduled to take place, the meeting shall stand adjourned to the same day in the immediately following week (or, if that day is not a Business Day, the next following Business Day) at the same time and place; (ii) no such quorum is present within thirty (30) minutes following the time at which the adjourned meeting is scheduled to take place, the meeting may proceed despite the absence of a quorum.

 

 
8

 

 

2.11 Decisions of Directors. Any resolution of the Directors shall only be validly passed and effective if:

 

 

(a)

at a duly constituted meeting of the Directors, such resolution receives the affirmative vote of a majority of the Directors participating in the meeting (each Director having only one vote); or

 

 

 

 

(b)

all the Directors consent in writing to such resolution.

 

2.12 Casting Vote. The chairperson of any meeting of the Directors shall not have a second, double, or casting vote if there is a tie in the votes cast at any meeting of the Directors.

 

2.13 Notice of Meeting of Shareholders. Any meeting of the Shareholders may be called by resolution of the Directors or by any Shareholder who owns not less than five percent (5%) of the outstanding Voting Shares entitled to vote at such meeting, on not less than fourteen (14) days’ Written Notice given to all the Shareholders of the Corporation who are entitled to vote, which notice shall set out the matters to be raised at such meeting, provided that all the Voting Shareholders of the Corporation may, by an instrument in writing delivered before or after the meeting or by participation at the meeting, waive notice of any meeting of Shareholders, in which event any such meeting shall be considered to be duly constituted notwithstanding the absence of notice in respect thereof.

 

2.14 Place and Frequency of Shareholders’ Meetings. Meetings of Shareholders may be held at any place within or outside of the Province of Alberta. The meetings shall permit all the Shareholders of the Corporation to participate in a meeting of Shareholders by means of such telephone, electronic, or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and a Shareholder participating in such a meeting by such means is deemed for the purposes of the Agreement to be present at that meeting.

 

2.15 Quorum for Shareholders’ Meetings. A quorum for meetings of the Shareholders shall be at least two (2) Shareholders who together hold not less than two-thirds (66.67%) of the Voting Shares and one of whom must be a representative of Viking, present in person or by means of conference telephone or other communications equipment as permits all persons participating in the meeting to communicate with each other simultaneously and instantaneously (and, for greater certainty, a meeting of the Shareholders may be constituted at which some Shareholders are present in person and other Shareholders are present by means of such communication facilities). If: (i) no such quorum is present within thirty (30) minutes following the time at which the meeting is scheduled to take place, the meeting shall stand adjourned to the same day in the immediately following week (or, if that day is not a Business Day, the next following Business Day) at the same time and place; (ii) no such quorum is present within thirty (30) minutes following the time at which the adjourned meeting is scheduled to take place, the meeting may proceed despite the absence of a quorum.

 

 
9

 

 

2.16 Decisions at Shareholders’ Meetings. Subject to Section 2.18 below, any resolution of the Shareholders of the Corporation shall only be validly passed and effective if:

 

 

(a)

such resolution is voted on at a duly constituted meeting of the Shareholders entitled to vote thereon and the votes in favour of such resolution constitute at least fifty one percent (51%) of the total number of votes attached to all the then issued Shares for the time being enjoying voting rights at such meeting; or

 

 

 

 

(b)

all the Shareholders entitled to vote thereon consent in writing to such resolution.

 

2.17 Casting Vote. The chairperson of any meeting of the Shareholders shall not have a second, double, or casting vote if there is a tie in the votes cast at any meeting of the shareholders.

 

2.18 Special Approvals. No action shall be taken in regard to any of the following matters except with the prior express approval of the Shareholders who hold not less than two-thirds (66.67%) of the then issued and outstanding Voting Shares expressed by a resolution passed at a meeting of the Shareholders or signed in writing by all such Shareholders and any other consent or consents required by law by the holders of a class of shares voting separately and as a class:

 

 

(a)

any amalgamation of the Corporation with any other legal entity including but not limited to T&T;

 

 

 

 

(b)

any decision involving the restoration, renovation, sub-letting or termination of the lease with respect to the premises located at 1605 Kebet Way, Port Coquitlam British Columbia, the consent of Viking not to be unreasonably withheld; and

 

 

 

 

(c)

any dissolution, liquidation, or winding-up of the Corporation or other distribution of the assets of the Corporation for the purpose of winding-up its affairs, whether voluntary or involuntary, except where such dissolution, liquidation, or winding-up or other distribution is done voluntarily by the Corporation in order to reorganize its corporate structure, provided that the Board determines (without inquiring into or giving effect to the personal circumstances of any individual Shareholder) that the interests of no one Shareholder shall be disproportionately adversely affected vis-à-vis the interests of any other Shareholder by such reorganization.

 

2.19 Dividends. It is hereby acknowledged by Viking that dividends are declared at the discretion of the Board of Directors and there is no expectation on Viking’s part that dividends will be declared by the Board of Directors and paid by the Corporation in the first twenty six months following the date hereof, and there are no assurances dividends will be declared thereafter.

 

 
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2.20 Officers. The officers of the Corporation shall be appointed by the majority of the Directors from time to time.

 

2.21 Books and Records. The Corporation shall maintain books of account at its head office which shall contain accurate and complete records of all transactions, receipts, expenses, assets, and liabilities of the Corporation. The Corporation shall provide all Shareholders with reasonable access to such books and records. Proper books of account and entries shall be made therein of all matters, transactions, and things as are usually written and entered in books of account kept by Corporations engaged in concerns of a similar nature together with all books, securities, letters and other things belonging to or concerning how the Corporation's business is being carried on and each of the Shareholders shall have free access at all times to examine and copy them and shall at all times furnish to the other Shareholders correct information, accounts, and statements of and concerning all transactions pertaining to the Corporation without any concealment or suppression. Each Shareholder shall also be entitled from time to time, during usual business hours on reasonable notice to the Corporation, to examine (or cause its representatives to examine): (i) the Articles and the By-laws; and (ii) the minute books of the Corporation.

 

2.22 Information to be Provided to Shareholders. The Corporation shall maintain proper, complete, and accurate books and accounts in accordance with generally accepted accounting principles consistently applied and in effect from time to time. The Corporation shall supply on a timely basis all necessary financial and other information to the Shareholders as of the end of their respective fiscal and/or tax accounting quarters and years in order to permit each Shareholder to comply on a timely basis with his/its respective reporting, tax, and other requirements imposed by law or otherwise. Each Shareholder shall also be entitled to receive from the President of the Corporation:

 

 

(a)

as soon as practicable but in any event within (i) twenty-one (21) days after fiscal quarter-end of the Corporation, internally prepared financials based on best available information at the applicable time; and (ii) thirty (30) days after the end of each of the first three (3) fiscal quarters of each fiscal year, a copy of the Corporation’s Financial Statements for such fiscal quarter and year to date;

 

 

 

 

(b)

as soon as practical but in any event within (i) twenty-one (21) days after fiscal year-end of the Corporation, internally prepared annual financials based on best available information at the applicable time; and (ii) thirty (30) days following the end of each fiscal year of the Corporation, a copy of the Corporation’s Financial Statements for such fiscal year, including a balance sheet as at the end of such fiscal year and statements of changes in financial position and profit and loss for such fiscal year, together with notes to such financial statements, management’s discussion and analysis of financial condition and results of operation, and comparative statements for the prior fiscal year;

 

 
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(c)

upon becoming aware that the same may be threatened or pending, and in any case immediately after the commencement thereof, a notice of any dispute, litigation or arbitration or other proceedings (including any regulatory investigations or alleged misconduct) before or of any government authority or any other person which might have a material adverse effect on the business, assets, liabilities, financial condition, results of operations or business prospects of the Corporation; and

 

 

 

 

(d)

a copy of any notice or statement given by the Corporation to the lenders, or received by the Corporation from the lenders, in connection with a breach of, or failure to perform, any covenant in relation to indebtedness of the Corporation for borrowed money, which copy shall be given contemporaneously with the giving of such notice or statement to the lenders.

 

In addition to the above, T&T shall cause the Corporation to deliver to Viking any additional information reasonably requested from time to time by Viking’s independent auditor.

 

2.23 Bankers, Banking and other Documents. Until changed by a resolution of the Directors, The Toronto Dominion Bank shall be the bankers of the Corporation (the “Bank”). The Corporation shall maintain such bank accounts as the Corporation may from time to time require, at the Bank or at such other bank or trust company as the Directors may from time to time determine. All bank accounts shall be kept in the name of the Corporation and all cheques, bills, notes, drafts, or other instruments shall be executed as set out in the Corporation’s banking resolution authorized by the Board on or after the Effective Date. The parties agree that any banking resolution in effect prior to the Effective Date is of no further force and effect and does not bind the Corporation. In the absence of a banking resolution duly authorized by the Board of Directors on or after the Effective Date, it is agreed that Tyler Van Dyke or his appointee(s) shall have sole signing authority on all cheques, bills, notes, drafts or other instruments subject to Section 2.24 below. All monies received from time to time for the account of the Corporation shall be deposited immediately into those bank accounts for the time being in operation, and all disbursements on account of the Corporation shall be made by cheque drawn on such bank accounts.

 

2.24 General Signing Authority. Unless otherwise authorized by a resolution of the Board of Directors, Tyler Van Dyke or his appointee(s) shall have the sole signing authority with respect to any instrument or document entered into by the Corporation, and no other Shareholder, Director or officer of the Corporation shall have the authority or right to bind the Corporation in any manner or to sign any document or instrument on behalf of the Corporation; provided that any contract, instrument or document to be entered into by the Corporation that is of a value of $1,000,000 and could be reasonably considered to be outside the ordinary course of the Business shall require the signature of any Officer or T&T Nominee plus one Viking Nominee.

 

2.25 Subordination to Senior Lender. Viking agrees to execute and deliver the Postponement and Assignment of Creditors Claim and Postponement of Security Agreement in favour of TD Canada Trust on or prior to the Effective Date, in the form set out in Schedule D.

 

 
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ARTICLE 3

INDEMNITY

 

3.1 Indemnity. Each Shareholder hereby agrees to indemnify, hold harmless, reimburse, and defend each and every other Shareholder (referred to as an “Indemnified Shareholder”), for, from, and against any and all liability, loss, damage or expense (including, without limitation, reasonable legal fees and disbursements) and any claim thereof or therefor which:

 

 

(a)

is asserted against, imposed on, or incurred or sustained by any Indemnified Shareholder (regardless of the form or nature of such liability, damage, loss, expense, or claim); and

 

 

 

 

(b)

results from, arises out of, or is connected with the non-fulfillment or breach by any Shareholder of any covenant in or obligation under this Agreement.

 

ARTICLE 4

CONFIDENTIAL INFORMATION

 

4.1 Confidential Information.

 

 

(a)

Each Shareholder and Principal acknowledges that they may from time to time be entrusted with types of confidential information, including without limitation, intellectual property, customer lists, financial information, marketing strategies, production techniques, software, and other information of a privileged and confidential nature which, upon disclosure, would be highly prejudicial to the interests of the Business, the Corporation and/or any Subsidiary (collectively the “Confidential Information”).

 

 

 

 

(b)

Each Shareholder and Principal acknowledges and agrees that the right to possess and maintain confidential all such Confidential Information constitutes a proprietary right of the Corporation and/or any Subsidiary, which the Corporation and/or any Subsidiary is entitled to protect.

 

 

 

 

(c)

Each Shareholder and Principal agrees that they will not at any time, whether then a Shareholder or a Principal or not, directly or indirectly, disclose Confidential Information to any Person not authorized by the Corporation to receive such information, other than such party’s own professional advisors on a need-to-know basis.

 

 

 

 

(d)

Each Shareholder and Principal shall return to the Corporation all property, written information, and documents of the Corporation and all Confidential Information and all copies of the same, whether in written, electronic, or other form forthwith upon his cessation as a Shareholder or Principal, as the case may be.

 

 

 

 

(e)

For greater certainty, nothing in this Agreement imposes liability upon any Shareholder or Principal for making disclosures of Confidential Information where such disclosure (i) is required by law or court order; or (ii) is occasioned through theft, lawful or unlawful search and seizure, or through any other means beyond the reasonable control of the Shareholder.

 

4.2 Disparaging Comments. Each of the parties hereto covenants and agrees that it is strictly prohibited, at all times (whether then a Shareholder or Principal or not), from making any representations, statements, remarks, and/or any comments whatsoever to any Person, when said representations, statements, remarks, and/or comment can be reasonably interpreted by any party as being disparaging to, and/or adversely affecting, or in any way being harmful to the parties hereto, their affiliates, the Corporation and/or any Subsidiary and/or its goodwill.

 

4.3 Survival. The obligations of each Shareholder under this Article 4 shall survive said Shareholder ceasing to be a shareholder of the Corporation.

 

 
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ARTICLE 5

RESTRICTIONS ON TRANSFER

 

5.1 Restriction. Except as otherwise provided for herein or with the unanimous consent of the Shareholders, no Shareholder shall directly or indirectly sell, assign, transfer, give, devise, bequeath, mortgage, pledge, hypothecate, or otherwise dispose of, alienate or in any way encumber or create a security interest in, or grant any option on (each said act referred to herein as a “Transfer”) any of the Shares owned by said Shareholder. Any attempted Transfer of Shares made in violation of this Agreement shall be null and void. Neither the Board nor the Shareholders shall approve or ratify any Transfer of Shares made in contravention of this Agreement and the Corporation shall not permit any such Transfer to be recorded on the share register of the Corporation maintained for the Shares. Notwithstanding the foregoing, the Shareholders and Directors shall be deemed to have consented to any Transfer of Shares made in accordance with this Agreement and to have waived any restriction on Transfer contained in the Articles or Bylaws in order to give effect to such Transfer of Shares.

 

5.2 Suspension of Rights. From and after the date of an attempted Transfer, unless otherwise expressly provided for in this Agreement, all rights of the Shareholder purporting to make the Transfer shall be suspended and inoperative, and no Person shall be entitled to vote such Shares or receive dividends or other distributions from the Corporation until the Transfer is rescinded by the transferor and transferee.

 

5.3 Principal not to Cease being in Control of Shareholder Corporation. Except with the prior written consent of all Shareholders, no Principal that is in Control of a Shareholder shall cease to be in Control of such Shareholder at any particular time when such corporation is a Voting Shareholder.

 

 
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ARTICLE 6

PUT/CALL PROVISIONS

 

6.1 Grant of Put Option - Viking

 

 

(a)

T&T hereby irrevocably grants Viking the option (the “Viking Put Option”), exercisable by Viking at any time following the thirty-six (36) month anniversary of the Effective Date, to require T&T to purchase, and T&T shall purchase from Viking, all of the Shares held by Viking (in this Section, the “Viking Shares”), which option may be exercised by Viking providing T&T with written notice of its intention to exercise the Viking Put Option (the “Viking Notice”).

 

 

 

 

(b)

The purchase price of the Viking Shares payable upon the exercise of the Viking Put Option shall be $7,750,000.00 (or $3,181.44 per Viking Share), subject to potential adjustment pursuant to Section 6.3 below (the “Viking Put Option Price”) and shall be satisfied, at the option of T&T, as follows:

 

 

(i)

in cash, payable within 120 days of the date of the Viking Notice via wire transfer in immediately available funds; or

 

 

 

 

(ii)

in preferred stock of T&T (the “T&T Equity”), within 120 days of the date of the Viking Notice, having an aggregate face value equal to the Viking Put Option Price, which stock shall have the following attributes:

 

 

 

A.

a cumulative dividend entitlement of eight percent (8%) per annum;

 

 

 

 

 

 

B.

a liquidation preference over all other classes of stock or securities of T&T;

 

 

 

 

 

 

C.

a redemption right in favour of T&T to redeem the T&T Equity, at any time, at a redemption price equal to 110% of the face value of the T&T Equity plus all accrued but unpaid dividends thereon, whether or not declared; and

 

 

 

 

 

 

D.

a retraction right in favour of Viking, exercisable at any time following the twelve (12) month anniversary of the issuance of the T&T Equity, to cause T&T to redeem the T&T Equity at a redemption price equal to 110% of the face value of the T&T Equity plus all accrued but unpaid dividends thereon, whether or not declared; or

 

 

(iii)

a combination of cash and T&T Equity which, in the aggregate, has a value equal to the Viking Put Option Price.

 

 
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(c)

Notwithstanding anything hereinto the contrary, Viking shall have the right to exercise the Viking Put Option at any time, at the Viking Put Option Price, upon the occurrence of any of the following:

 

 

(i)

subject to subsection 6.3(e), if any other party (other than Viking) fails to perform or observe any material term or condition of this Agreement and such failure continues for a period of twenty (20) days following Written Notice thereof from Viking;

 

 

 

 

(ii)

the sale or proposed sale to a third party (pursuant to a binding agreement) of (A) all or substantially all of the Corporation’s assets; or (B) any unit or division of the Corporation on a stand-alone basis, provided that the cessation of the Corporation’s business operations in eastern Canada and/or the allocation of certain of the Corporation’s operations to T&T as part of a restructuring of the Corporation’s operations shall not be deemed a sale or proposed sale for the purposes of this Section;

 

 

 

 

(iii)

subject to subsection 6.3(d), the death or Permanent Incapacity of Tyler Van Dyke;

 

 

 

 

(iv)

the change of Control of T&T other than by the death or Permanent Incapacity of Tyler; or

 

 

 

 

(v)

any merger or amalgamation of the Corporation and T&T or any of its Affiliates, it being acknowledged by Viking that the cessation of the Corporation’s business operations in eastern Canada and/or the allocation of certain of the Corporation’s operations to T&T as part of an informal, internal restructuring of the Corporation’s operations to achieve operational and financial efficiencies will not be considered a merger for the purposes of this Section.

 

6.2 Grant of Call Option – T&T

 

 

(a)

Conditional upon and in consideration of the payment of an option fee equal to $100,000 payable by T&T to Viking on the Effective Date by wire transfer of immediately available funds, Viking hereby irrevocably grants to T&T the option (the “T&T Call Option”), exercisable at any time by T&T prior to the thirty-six (36) month anniversary of the Effective Date, by providing written notice to Viking of its intention to exercise such option (the “T&T Notice”), to require Viking to sell and T&T to purchase from Viking all of the Shares held by Viking (in this Section, the “Viking Shares).

 

 

 

 

(b)

The purchase price of the Viking Shares payable upon the exercise of the T&T Call Option shall be $5,750,000, subject to potential adjustment pursuant to Section 6.3 below (in this Section, the “T&T Call Option Price”).

 

 
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(c)

The T&T Call Option Price shall be satisfied by T&T as follows:

 

 

(i)

ten percent (10%) of such purchase price shall be paid in cash via wire transfer in immediately available funds on the T&T Notice date; and

 

 

 

 

(ii)

the balance shall be paid in cash via wire transfer in immediately available funds within 60 days of the T&T Notice date.

 

6.3 Potential Adjustment(s)

 

 

(a)

T&T shall be entitled to set off against the Viking Share Purchase Price any Damages (as defined in the Subscription Agreement) suffered by, imposed upon or asserted against the Subscriber Indemnified Persons (as defined in the Subscription Agreement) as a result of any of the matters identified in Section 10.1 of the Subscription Agreement as giving rise to an indemnity obligation, incurred or caused by any Shareholder (as defined in the Subscription Agreement) provided that T&T shall first make reasonable efforts to set off such Damages pursuant to the Subscription Agreement. For clarity, notwithstanding any provision to the contrary in the Subscription Agreement, T&T shall be entitled to reduce the Viking Share Purchase Price on a dollar-for-dollar basis for the full amount of Damages suffered by a Subscriber Indemnified Person addressed by any of the above-noted indemnity obligations, subject to the foregoing limitation. Should the scope of the Damages not be finally determined on or before the date on which the Viking Share Purchase Price is payable, the parties shall agree on a reasonable estimate of the Damages and such amount will be held back by T&T and the Viking Share Purchase Price will be reduced accordingly. Once the scope of the Damages is finally determined, should the amount of the Damages exceed the amount held back, Viking shall pay to T&T the amount of the shortfall within 15 Business Days of the date the Damages are determined. Should the amount of the Damages be less than the amount held back, T&T shall pay Viking the amount of the surplus within 15 Business Days of the date the Damages are determined.

 

 

 

 

(b)

T&T shall be entitled to reduce the Viking Share Purchase Price on a dollar-for-dollar basis for any and all costs, expenses, liabilities, fines, penalties, or other amounts reasonably incurred or payable in connection with the investigation, remediation, mitigation, or any other corrective action required by (A) an order of an government authority; and/or (B) a contractual commitment of the Corporation, with respect to any and all oil spills or other discharge of hazardous substances, other than the discharge of hazardous substances in a non-material amount in the ordinary course of business, that occurred as a result of the Corporation’s use of the premises at 1605 Kebet Way, Port Coquitlam, British Columbia, prior to the Effective Date, as confirmed by an independent expert assessment, including but not limited to compliance with any orders, directives, or requirements imposed by any governmental or regulatory authority, to the extent such Damages have not otherwise been set-off or recovered by any Subscriber Indemnified Persons pursuant to the terms of the Subscription Agreement.

 

 
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(c)

T&T shall be entitled to reduce the Viking Share Purchase Price on a dollar-for-dollar basis for every dollar the Indebtedness (as defined in section 4.40 of the Subscription Agreement), is greater than the Permitted Indebtedness, to the extent such Damages have not otherwise been set-off or recovered by any Subscriber Indemnified Persons pursuant to the terms of the Subscription Agreement.

 

 

 

 

(d)

If the Viking Put Option is exercised as a result of the death or Permanent Incapacity of Tyler Van Dyke (the “Triggering Event”) within thirty six (36) months of the Effective Date, the Viking Put Option Price shall be reduced to $5,750,000, subject to any further adjustment pursuant to the other provisions of this Section 6.3. Furthermore, if the Triggering Event occurs within eighteen (18) months of the Effective Date, the reference to 120 days in Section 6.1(b)(i) shall be deemed to state twelve (12) months.

 

 

 

 

(e)

If the Viking Put Option is exercised as a result of subsection 6.1(c)(i) within thirty six (36) months of the Effective Date, the Viking Put Option Price shall be reduced to $5,750,000, subject to any further adjustment pursuant to the other provisions of this Section 6.3.

 

ARTICLE 7

BANKRUPTCY OR INSOLVENCY

 

7.1 Event of Bankruptcy or Insolvency of T&T. In the event T&T (the “Insolvent Shareholder”) is adjudicated bankrupt, or makes an assignment for the benefit of creditors, or proceedings are instituted by a third party seeking relief, reorganization, or rearrangement under any laws relating to insolvency in any jurisdiction whatsoever, or a receiver, liquidator, or trustee is appointed in respect of any property or assets of the party, or an order is made for the liquidation, dissolution, or winding up of the party, or a judgment is granted by a court against a party and said party fails to satisfy said judgment within a period of thirty (30) days of the date of said judgment, or a party declares bankruptcy or makes an assignment for the benefit of creditors, or has a receiving order made against him (the “Insolvency”), then the following shall apply:

 

 

(a)

At the option of Viking either:

 

 

(i)

the Insolvent Shareholder shall be deemed to have offered to sell all of its Shares to Viking and Viking shall have the option to purchase all (but not less than all) of the Shares owned by the Insolvent Shareholder (the “Offered Shares”); or

 

 

 

 

(ii)

the Insolvent Shareholder shall be deemed to have offered to sell all of his Shares to the Corporation and the Corporation shall have the option to purchase all (but not less than all) of the Shares owned by the Insolvent Shareholder (the “Offered Shares”).

 

 
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(b)

Regardless of whether the Corporation purchases the Offered Shares or Viking purchases said Offered Shares, the purchase price of the Offered Shares shall be Fair Market Value of the Offered Shares as on the day before the date on which the Insolvent Shareholder met any of the circumstances set out in the opening paragraph of this Section 7.1 above. This share valuation shall be made in accordance with the provisions of Schedule C attached hereto within forty-two (42) days of the earlier of the date the Insolvent Shareholder advised Viking in writing of the Insolvency and the date on which Viking became aware of the Insolvency.

 

 

 

 

(c)

Within thirty (30) days from receiving the valuation of the Offered Shares Viking shall give notice to the Insolvent Shareholder of their intention to either: (i) purchase the Offered Shares, if they intend to do so; or (ii) have the Corporation purchase the Offered Shares. If Viking provide such notice, the transaction pursuant to said notice shall be completed within twenty (20) days after the date of the giving of notice at the Corporation's registered office where delivery of the Offered Shares shall be made by the Insolvent Shareholder with good title, free and clear of all liens, charges, and encumbrances. The purchase price for the shares shall be paid in equal consecutive monthly installments over a period of two (2) years from the date of purchase, with interest accumulating at a rate of the Bank’s prime rate plus one percent (1%), the first of such installments to become due and payable one (1) month after the date of the purchase. Provided that whenever Viking or Corporation (as the case may be) is not in default in payment of principal on the balance of said purchase price, Viking or Corporation (as the case may be) shall have the privilege of prepaying at any time or times all or any part of the principal balance outstanding at such time or times without notice or bonus.

 

7.2 Tyler Van Dyke. If an Insolvency occurs with respect to Tyler Van Dyke, the provisions of Section 8.1 shall apply mutatis mutandis with respect to any Shares held by T&T.

 

7.3 Section Definitions. All definitions in this Article 7 apply to this Article only.

 

ARTICLE 8

GENERAL SALE PROVISIONS

 

8.1 Application of Sale Provisions. Except as may otherwise be expressly provided in this Agreement or the Schedules hereto, the provisions of this Article shall apply to any sale of Shares between or among Shareholders, or any sale of Shares by a Shareholder to a third party or, to the extent applicable, between Shareholders and the Corporation pursuant to the provisions of this Agreement (the “Sale Transaction”). For the purpose of this Article: the term “Vendor” shall mean the transferring Shareholder; “Purchaser” shall mean the acquiring party; and the “Purchased Shares” shall mean the Shares being transferred with respect to any Sale Transaction.

 

 
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8.2 Obligations of Vendor. At or prior to the time of closing, the Vendor shall:

 

 

(a)

Assign and transfer to the Purchaser the Purchased Shares and deliver the share certificate(s) representing the Purchased Shares duly endorsed for transfer to the Purchaser or as directed by him;

 

 

 

 

(b)

Do all other things required in order to deliver good and marketable title to the Purchased Shares to the Purchaser free and clear of any liens whatsoever;

 

 

 

 

(c)

Deliver to the Corporation and the Purchaser all necessary documents (which documents shall be in form and substance reasonably satisfactory to the solicitors for the Purchaser) required to transfer to the Purchaser the indebtedness of the Corporation and the other Shareholders to the Vendor or to otherwise comply fully with the intent of this Agreement;

 

 

 

 

(d)

Deliver to the Corporation signed resignations of the Vendor and his nominees, if any, as Directors, officers and employees of the Corporation, as the case may be;

 

 

 

 

(e)

Deliver to the Corporation releases by the Vendor and his nominees, if any, of all claims against the Corporation with respect to any matter or thing up to and including the time of closing in their capacities as Directors, officers, Shareholders, employees, or creditors of the Corporation, as the case may be, except for any claims which might arise out of the Sale Transaction;

 

 

 

 

(f)

Deliver to the remaining Shareholders releases by the Vendor and his/her nominees, if any, all claims against each remaining Shareholder and their respective nominees, if any, in their capacities as a Shareholder, Director or officer of the Corporation, except for any claims which might arise out of the Sale Transaction; and

 

 

 

 

(g)

Either provide the Purchaser with evidence reasonably satisfactory to the Purchaser that the Vendor is not then a non-resident of Canada within the meaning of the Income Tax Act (Canada) or provide the Purchaser with a certificate pursuant to Sub article 116(2) of the Income Tax Act (Canada) with a certificate limit in an amount not less than the purchase price for the Purchased Shares.

 

8.3 Release of Guarantees etc. If, at the time of closing, the Vendor, a Principal of the Vendor, or any other Person for and on behalf of the Vendor, shall have any guarantees, securities, or covenants lodged with any Person to secure any indebtedness, liability, or obligation of the Corporation or the remaining Shareholder, then the remaining Shareholder shall make reasonable commercial efforts to have such guarantees, securities, and/or covenants released, failing which all the remaining Shareholder shall indemnify the Vendor, a Principal of the Vendor, and/or any other Person for and on behalf of the Vendor, should any of them be required to make payment on said guarantees, securities, and/or covenants following the closing of the Sale Transaction.

 

 
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8.4 Deliveries to Vendor. At or prior to the time of closing, the Purchaser shall:

 

 

(a)

Deliver to the Vendor and his/its nominees, if any, a release by him, in his capacity as a Director, officer and Shareholder of the Corporation, of all of his claims against the Vendor and his nominees in his capacity as a Shareholder, Director, or officer of the Corporation, except for any claims which may arise out of the Sale Transaction; and

 

 

 

 

(b)

Cause the Corporation to deliver to the Vendor and his nominees, if any, a release by the Corporation of all its claims against the Vendor and his nominees with respect to any matter or thing arising as a result of the Vendor or his nominees being a Shareholder, Director, or officer of the Corporation, except for any claims which might arise out of the Sale Transaction or Subscription Agreement.

 

8.5 Repayment of Debts. If, at the time of closing, the Corporation is indebted to the Vendor in an amount recorded on the books of the Corporation and verified by the accountant of the Corporation, the Corporation shall repay such amount to the Vendor at the time of closing. If, at the time of closing, the Vendor is indebted to the Corporation in an amount recorded on the books of the Corporation and verified by the accountant of the Corporation, the Vendor shall repay such amount to the Corporation at the time of closing and, if the Vendor fails to make such repayment, the Purchaser shall be required to pay the amount of such indebtedness to the Corporation from the purchase price and the amount of the purchase price payable to the Vendor shall be reduced accordingly. The Purchaser shall also be required to deduct from the purchase price and remit to the Corporation any amounts to be paid to the Corporation on account of the Vendor's liability for Shareholder Loans or shareholder guarantees.

 

8.6 Payment of Purchase Price. Unless otherwise agreed in the Sale Transaction or otherwise provided for by this Agreement and Schedules hereto, the purchase price for the Purchased Shares shall be paid by the Purchaser in full by cash or bank draft at the time of closing.

 

8.7 Non-compliance with Conditions. If at the time of closing the Purchased Shares are not free and clear of all liens, charges, and encumbrances (“Liens”), the Purchaser may, without prejudice to any other rights which it may have, purchase the Purchased Shares subject to such Liens and, in that event, the Purchaser shall, at the time of closing assume all obligations and liabilities with respect to such Liens and make the payment of tax required under Article 116 of the Income Tax Act (Canada), as the case may be; and in each such case the purchase price payable by the Purchaser for the Purchased Shares shall be satisfied, in whole or in part, as the case may be, by such assumption or payment and the amount so assumed or paid shall be deducted from the purchase price payable at the time of closing.

 

 
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8.8 Non-Completion by Vendor. If, at the time of closing, the Vendor fails to complete the Sale Transaction, the Purchaser shall have the right, if not in default under this Agreement, without prejudice to any other rights which the Purchaser may have, make payment of the purchase price payable to the Vendor at the time of closing by depositing such amount to the credit of the Vendor in any branch of the Corporation's bankers. Such deposit shall constitute valid and effective payment of such amount to the Vendor irrespective of any action the Vendor may have taken to transfer or grant of Lien on the Purchased Shares. If the purchase price has been so paid, then from and after the date of deposit, the Sale Transaction shall be deemed to have been fully completed and all right, title, benefit and interest, both at law and in equity and to the Purchased Shares shall conclusively be deemed to have been transferred to and become vested in the Purchaser and all right, title, benefit, and interest, both at law and in equity, in and to the Purchased Shares of the Vendor or of any transferee or assignee of the Vendor shall cease and determine. The Purchaser shall also have the right to execute and deliver, on behalf of and in the name of the Vendor, such deeds, transfers, share certificates, resignations, and other documents that may be necessary to complete the Sale Transaction and each Shareholder, to the extent it may be a Vendor irrevocably appoints any Shareholder who becomes a Purchaser in a Sale Transaction its attorney in that behalf in accordance with the Powers of Attorney Act (Alberta), with no restriction or limitation in that regard and declaring that this power of attorney may be exercised during any subsequent legal incapacity on its part.

 

8.9 No Joint Liability. For greater certainty, the parties acknowledge and agree that where a Sale Transaction involves more than one Purchaser, the Purchasers in such Sale Transaction are not jointly liable for the payment of the purchase price for the Purchased Shares and any indebtedness purchased, but are only liable for their proportionate share.

 

8.10 Consents. The parties acknowledge that the completion of any Sale Transaction shall be subject, in any event, to the receipt of all necessary governmental and regulatory consents and approvals to the transfer of Shares contemplated thereby.

 

8.11 Option or Mandatory Obligation to Continue. Should the Corporation not be in a position to purchase the Shares of a Shareholder at the time that any option contained in this Agreement is exercised by a Shareholder then such right shall continue until the Corporation is in a position to so redeem the said shares.

 

 
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ARTICLE 9

DISPUTE RESOLUTION

 

9.1 Dispute Resolution. All disputes and questions whatsoever which shall arise between any of the parties in connection with this Agreement, or the construction or application thereof or any Article or thing contained in this Agreement or as to any act, deed or omission of any party or as to any other matter in any way relating to this Agreement (the “Dispute”), shall be resolved as follows:

 

 

(a)

First the parties shall endeavour to resolve the Dispute amongst themselves, however if there is not a resolution satisfactory to all parties concerned within five (5) Business Days of a party informing the other party or parties of the subject matter of the Dispute, the provisions in Section 9.1(b) shall apply.

 

 

 

 

(b)

Any Dispute that the parties hereto are unable resolve in accordance with Section 9.1(a), shall be resolved through mediation by an independent mediator (professional or otherwise) chosen by the parties, with each party agreeing on the choice of mediator. The mediator shall resolve the dispute within fifteen (15) Business Days of being retained. If the parties are unable to agree on a choice of a mediator or if the mediator is unable to reach or mediate a resolution of the Dispute then the provisions in Section 9.1(c) shall apply.

 

 

 

 

(c)

Failing a resolution in accordance Section 9.1(b), the Dispute will be settled by arbitration pursuant to the laws of the Province of Alberta in the City of Edmonton, Province of Alberta, Canada, following the arbitration and conciliation procedures set forth in the Arbitration Act (Alberta) or such successor legislation in force on the date of the mailing of the notice of arbitration. The parties agree that any such arbitral hearing shall close within three (3) months from the date of the commencement of such arbitral proceedings and the arbitral award will be made within thirty (30) days after the close of hearings and will be final and binding upon the parties. The parties hereto acknowledge that a qualified independent third party arbitrator, who may not be the mediator chosen in Section 9.1(b) above, to be determined by mutual agreement of the parties shall be the arbitrator appointed herein and that any decision rendered by such arbitrator shall be binding upon them. In the event that parties fail to agree on the person to be appointed arbitrator in accordance with the terms hereof, said arbitrator shall be appointed in accordance with the arbitration and conciliation procedures set forth in the Arbitration Act (Alberta).

 

 

 

 

(d)

That all costs and expenses for the aforementioned mediation and arbitration be paid out of the assets of the Corporation.

 

 
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ARTICLE 10

INSURANCE

 

10.1 Directors and Officers Insurance. The Corporation shall purchase and maintain insurance for the benefit of any Director or officer against any liability incurred by such Director and officer in a minimum amount of Three Million Dollars ($3,000,000.00) or such greater amount as the Board determines:

 

 

(a)

in the capacity as a Director or officer, except where the liability relates to the Director or officers’ failure to act honestly and in good faith with a view to the best interests of the Corporation; and/or

 

 

 

 

(b)

in the capacity as a Director or officer of another body corporate where the Director acts or acted in that capacity at the Corporation's request, except where the liability relates to the Director’s failure to act honestly and in good faith with a view to the best interests of the body corporate.

 

10.2 Life Insurance. Intentionally Deleted.

 

 
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ARTICLE 11

NON-COMPETITION

 

11.1 Restriction on Competition. Viking (the “Covenantor”) agrees and covenants with T&T and the Corporation (the “Covenantees”) that, from the execution of this Agreement and until the expiry of two (2) years from any subsequent termination of this Agreement or from the Covenantor ceasing to be a Shareholder in the Corporation (the “Binding Period”), whichever is sooner, the Covenantor shall not, directly or indirectly, either alone or in partnership or in conjunction with any person or persons as principal, agent, shareholder or in any other manner whatsoever, within Canada:

 

 

(a)

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 its name or any part thereof to be used or employed by any Person engaged in or concerned with or interested in any competitive business or any aspect thereof as conducted at any time during the Binding Period;

 

 

 

 

(b)

solicit, interfere with or attempt to solicit or interfere with any supplier, employee, customer or client of or to the Corporation and/or any Shareholder away from the Corporation;

 

 

 

 

(c)

engage the services of any Person that was an employee, agent or sales representative of the Corporation and/or any Subsidiary at any time during the Binding Period, do any act or thing which results in the relationship between the Corporation and/or any Subsidiary and any supplier, employee, customer or client of the Corporation and/or any Subsidiary or any Shareholder being diminished or impaired; and/or

 

 

 

 

(d)

During the Binding Period, the Covenantor shall not, directly or indirectly, in any manner whatsoever, including either individually, in partnership, jointly or in conjunction with any other Person, or as principal, agent, director, officer, employee, consultant or shareholder, defame or actively disparage the commercial, business or financial reputation of the Corporation or its Affiliates or subsidiaries, any of their products or services, or any of their respective shareholders, employees, officers or directors.

 

For further certainty, if the Corporation is adjudicated bankrupt, or makes an assignment for the benefit of creditors, or proceedings are instituted by a third party seeking relief, reorganization, or rearrangement under any laws relating to insolvency in any jurisdiction whatsoever, or a receiver, liquidator, or trustee is appointed in respect of any property or assets of the Corporation, or an order is made for the liquidation, dissolution, or winding up of the Corporation, or a judgment is granted by a court against the Corporation and the Corporation fails to satisfy said judgment within a period of thirty (30) days from the date of said judgment, or the Corporation declares bankruptcy or has a receiving order made against the Corporation, then the Covenantor shall not continue to be bound by the terms of this non-competition provision.

 

 
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ARTICLE 12

GENERAL

 

12.1 Termination. This Agreement shall terminate on the earlier of:

 

 

(a)

the date on which one Person becomes the registered and beneficial owner of all the Shares; or

 

 

 

 

(b)

the date upon which there is an initial public offering of Shares.

 

Notwithstanding the foregoing, the provisions of this Article 12 and any other obligations under this Agreement which by their terms are intended to survive the termination of this Agreement, shall survive the termination of this Agreement.

 

12.2 Further Assurances. The parties shall sign such further and other documents, cause such meetings to be held, cause such resolutions to be passed and such by-laws to be enacted, exercise their vote and influence and do and perform (and cause to be done and performed) such further and other acts or things as may be necessary or desirable in order to give full effect to this Agreement and every part of it. Any actions required to be taken pursuant to this Section 12.2 shall be undertaken at the sole cost and expense of the party undertaking such actions. Each of the parties agree that they will at all times be faithful to the others and will do their best to further the interests of the Corporation and will at all times cast their votes for the election of the persons as provided in this Agreement as officers and directors of the Corporation, and will at no time cast their vote as a director or shareholder for the purpose of ousting the other parties from office, nor shall any of the parties take any measure by way of entering into a conspiracy or agreement for the purpose of ousting the other parties from office or for doing that which may prove detrimental to the interests of any of the parties.

 

12.3 Covenant of Viking – Correction of Financial Statements. Viking covenants and agrees that it shall, as soon as reasonably practical following the Effective Date, cause the Corporation to reverse the revenue entry made in the second fiscal quarter of 2024 with respect to the transaction involving Quilliq Energy Corporation (the “QEC Adjustment”) and to adjust the Corporation’s Financial Statements and Books and Records (as defined in the Subscription Agreement) accordingly. Viking shall bear and be solely responsible for all third-party accounting, legal, and other professional costs and expenses incurred in connection with such correction. Viking shall also provide T&T with evidence reasonably satisfactory to T&T confirming that the QEC Adjustment has been completed.

 

 
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12.4 Implementation of Agreement. If any conflict shall appear between the Articles, By-laws or resolutions of the Corporation and the provisions of this Agreement, the provisions of this Agreement shall govern and supersede the provisions of the Articles, By-laws and resolutions. If there shall be any such conflict, the Shareholders shall amend the Articles, By-laws and resolutions so as to ensure conformity with the terms of this Agreement.

 

12.5 Legend on Certificates. All share certificates of the Corporation shall be endorsed with the following legend:

 

“THE CORPORATION IS BOUND BY, AND THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO, A UNANIMOUS SHAREHOLDER AGREEMENT DATED AS OF THE ___ DAY OF MARCH, 2025, AS MAY BE AMENDED FROM TIME TO TIME, AND SUCH SECURITIES MAY NOT BE PLEDGED, SOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS THEREOF. ANY TRANSFEREE OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE IS DEEMED, AND REQUIRED, TO BE A PARTY TO THAT AGREEMENT.”

 

12.6 Copy of Agreement. The Corporation shall keep a true copy of this Agreement at its registered office and on reasonable prior notice from any party shall make the same available for examination by such party during the Corporation’s regular hours of business at such office.

 

12.7 Notices. All notices, requests, demands, or other communications required or permitted to be given by one party to another pursuant to this Agreement shall be given in writing by personal delivery, courier service, registered mail (postage prepaid), or facsimile transmission, or electronically by e-mail, addressed or delivered to the parties at the respective addresses set out in Schedule A or at such other address of which Written Notice is given to the other parties or to the Corporation. Such notices, requests, demands, or other communications shall be deemed to have been received when delivered, when sent by electronic means, if mailed through Canada Post, on the fifth (5th) Business Day after the mailing thereof, or, if sent by facsimile transmission, on the first (1st) Business Day after confirmed transmission. If a notice, request, demand or other communication is delivered by registered mail, and regular mail service shall be interrupted by strikes or other irregularities on or before the fifth (5th) Business Day after the mailing thereof, such notice, request, demand, or other communication shall be deemed to have been received only upon personal delivery thereof.

 

 
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12.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein. All of the parties to this Agreement irrevocably submit to the exclusive jurisdiction of the courts of the Province of Alberta.

 

12.9 Entire Agreement and Amendment. This Agreement, including the Schedules attached hereto, constitutes the entire agreement between the parties with respect to the matters in this Agreement and supersedes all prior agreements and negotiations, whether written or oral, relating to the subject-matter of this Agreement. The execution of this Agreement has not been induced by, nor do any of the parties rely upon or regard as material, any representations, promises, agreements or statements whatsoever not incorporated in this Agreement and made a part of this Agreement. This Agreement shall not be amended, altered or qualified except by an instrument in writing signed by all of the parties.

 

12.10 Waiver. No party to this Agreement shall be deemed or taken to have waived any provision of this Agreement unless such waiver is in writing, and then such waiver shall be limited to the circumstances set forth in such written waiver. No failure or delay on the part of a party in exercising any right, power, or remedy shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. No waiver by a party of a default shall operate against such party as a waiver of such default unless made in writing and signed.

 

12.11 Enurement and Assignment. This Agreement shall be binding upon and enure to the benefit of the parties, their respective heirs, executors, administrators and other legal representatives, and, to the extent permitted, their respective successors and permitted assigns. No party to this Agreement may assign, transfer or otherwise dispose of all or any part of its rights or obligations or any interest in this Agreement without the prior consent of the parties.

 

12.12 Power of Attorney. If any Shareholder neglects or refuses, or is unable to execute or deliver any document required to be executed or delivered pursuant to the provisions of this Agreement, then such Shareholder shall be deemed to have appointed the Corporation as his or her agent and lawful attorney, in accordance with the Powers of Attorney Act (Alberta), for the purpose of executing and delivering such document and such execution or delivery shall be as valid and effectual, for all purposes, as though it had been executed or delivered by such Shareholder. This appointment, being coupled with interest, is therefore irrevocable.

 

12.13 Severability. If any provision of this Agreement or the application of such provision to any Person or circumstances shall be held illegal, invalid, or unenforceable, the remainder of this Agreement or the application of such provision to Persons or circumstances other than those as to which it is held illegal, invalid, or unenforceable shall not be affected thereby. Each provision of this Agreement is intended to be severable, and if any provision is illegal, invalid, or unenforceable in any jurisdiction, this will not affect the legality, validity, or enforceability of such provision in any other jurisdiction or the validity of the remainder of this Agreement.

 

 
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12.14 Counterparts. This Agreement may be executed in two or more counterparts, each of which when so signed and delivered shall be deemed an original and all such counterparts shall together constitute one and the same instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof.

 

12.15 Independent Legal Advice. By execution of this Agreement, the parties hereto do individually acknowledge, consent and agree:

 

 

(a)

that they have been advised to seek independent legal advice with respect to the terms of the Agreement, and that they have been given an opportunity to seek such legal advice. If they have not obtained such independent legal advice, that notwithstanding such recommendation and said opportunity, they acknowledge and declare that they wish to enter into this Agreement without independent legal advice, that the terms of this Agreement correctly set out their wishes and intentions, and that they agree to be bound by those terms;

 

 

 

 

(b)

that they understand their respective rights and obligations under this Agreement; and

 

 

 

 

(c)

that they are signing this Agreement voluntarily.

 

[Signature page follows below.]

 

 
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IN WITNESS WHEREOF, the parties have executed this Unanimous Shareholders Agreement as of the Effective Date.

 

CORPORATION

 

SIMSON-MAXWELL LTD.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title: President

I have authority to bind the Corporation

 

 

SHAREHOLDERS

 

VIKING ENERGY GROUP, INC.

 

 

 

 

 

By:

 

 

 

 

Name: James Doris

Title: President and C.E.O.

I have authority to bind the Corporation

 

 

 

 

 

T&T POWER GROUP INC

 

 

 

 

 

By:

 

 

 

 

Name: Tyler Van Dyke

 

 

 

Title: President

I have authority to bind the Corporation

 

 

 PRINCIPALS

 

 

Tyler Van Dyke

 

 

[Signature Page – Unanimous Shareholders Agreement]

 

 
30

 

 

Schedule A 

Shareholders

 

Name

Address

Class of Shares

Number of Shares

Viking Energy Group, Inc.

12 Greenway Plaza, Suite 1100

Houston, TX 77046 USA

Class A Common

2,436

T&T Power Group Inc.

Principal: Tyler Van Dyke

1430 Hutchinson Road

Wellesley, Ontario N0B 2T0 Canada

Class A Common

2,536

 

 
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Schedule B

Form of Acknowledgment

 

To:

The parties to the Unanimous Shareholders Agreement dated as of April ___, 2025 (the "Shareholders Agreement") relating to Simson-Maxwell Ltd. (the “Corporation”)

 

The undersigned, as a holder of shares in the capital of the Corporation, hereby agrees to be a party to and to be bound by all of the provisions of the Shareholders’ Agreement.

 

DATED _______________ .

 

If an individual: Signature:

 

 

Name:

 

 

 

If a corporation:

 

 

Name of Corporation:

 

 

 

 

 

 

By: 

 

 

 

 

Name:

 

 

 

Title:

 

 

Acceptance by the Corporation:

 

SIMSON-MAXWELL LTD.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 
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Schedule C 

Share Valuation

 

 

(a)

For the purposes of this Agreement, “Fair Market Value” means the aggregate fair market value of the applicable Shares as agreed to in writing by the Shareholders or, failing agreement, as determined by a qualified, independent business valuator (the “Valuator”) appointed under Article (b) below. Fair Market Value per Share shall be deemed to be equal to the most recent determination of Fair Market Value per Share pursuant to this Schedule if such most recent determination of Fair Market Value took place within twelve (12) months of the date on which such determination is to be made, failing which, in accordance with Article (b) below.

 

 

 

 

(b)

If the Shareholders fail to reach unanimous written agreement as to the Fair Market Value of a Shareholder’s Shares within thirty (30) days following written request given by any of them, then the Board of Directors shall appoint the Valuator and shall instruct the Valuator to determine the Fair Market Value of such Shares within sixty (60) days following their appointment. In making its determination as to the Fair Market Value of any Shares, the Valuator shall not take into account the fact that such Shares do not form part of a “control block”. The determination of the Valuator as to the Fair Market Value of the Shares shall be final and binding upon the Shareholders. The Valuator shall have access to the books, accounts, records, vouchers, cheques, papers and documents of, or which may relate to the Corporation. The Shareholders shall cooperate with the Valuator and shall provide all information and documents reasonably requested by the Valuator. All reasonable fees and disbursements charged by the Valuator shall be paid by the Corporation. All costs associated with the valuation shall be shared between the Shareholders unless the Shareholders agree by unanimous resolution that the costs shall be borne by the Corporation.

 

 

 

 

(c)

If any Shareholder disputes the determination made by the Valuator, such Shareholder shall have seven (7) days from receipt of the valuation information to engage an independent firm of business valuators (qualified by professional industry standards to provide advice with respect to valuations) to determine the Fair Market Value of each Share on the same basis as outlined in Subsection (b) of this Schedule “C”, and the determination made by this firm shall be averaged with the determination made by the Valuator in order to produce a final valuation which shall be binding on the parties. All costs associated with the second valuation will be borne by the Shareholder that invoked this Subsection (c).

 

 
33

 

 

Schedule D

 

Form of

Postponement and Assignment of Creditors Claim and Postponement of Security Agreement

 

See attached.

 

 

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EX-99.1 4 cei_ex991.htm PRESS RELEASE cei_ex991.htm

EXHIBIT 99.1

 

 

Camber Energy Completes Strategic Alliance in Power Generation Division

 

Closes Transaction with T&T Power Group

 

HOUSTON, TX / ACCESSWIRE / April 1, 2025 -- Camber Energy, Inc. (OTC:QB: CEIN) (“Camber” or the “Company”) is pleased to announce the closing of a strategic transaction involving T&T Power Group, Inc. (“T&T”) and Simson-Maxwell Ltd. (“Simson-Maxwell”), two industry leaders in power generation, electrical distribution and energy solutions. 

 

The deal, which closed effective April 1, 2025, results in T&T and Viking Energy Group, Inc. (Camber’s wholly-owned subsidiary) being co-owners of Simson-Maxwell. 

 

James Doris, Camber’s President & CEO, commented, “With T&T’s support, expertise and decades-long track record, Simson-Maxwell is well positioned for growth and to deliver an unmatched experience for industrial and commercial power solutions’ customers across Canada.”

 

 

For more information visit www.lp-camberenergy.com.

 

About T&T Power Group

 

For over 40 years, T&T Power Group has been a leading provider of power generation, electrical distribution, and energy solutions across Canada. Known for its engineering expertise and customer-first approach, T&T Power Group delivers custom-built power systems designed to meet the needs of industrial, commercial, and municipal clients.   With a national presence and 11 locations across Canada, the company offers a full spectrum of power solutions, including standby, prime and continuous power generators, switchgear, and electrical distribution equipment.

 

T&T Power Group is recognized for its ability to design and manufacture tailor-made energy solutions, supporting industries that require mission-critical reliability. Beyond delivering industry-leading products, T&T Power Group provides full-service maintenance, 24/7 emergency support, remote monitoring, and turnkey project management, ensuring customers have a trusted partner in power. With a foundation built on innovation, reliability, and long-term commitment, the company continues to evolve, helping businesses and communities across Canada power their future.

 

 

 

 

 

About Simson-Maxwell

 

Simson Maxwell has been a trusted name in power generation, industrial engines, and electrical control solutions for over 80 years. With a strong reputation as both a manufacturer and distributor, the company has worked with some of the world’s leading engine and power generation brands, delivering custom-engineered solutions to industrial and commercial clients across Canada.

 

Operating from seven locations across Western Canada, Simson Maxwell serves a diverse customer base with standby and prime power generator systems, industrial engines, and comprehensive service solutions. The Simmax® brand is recognized for its high-quality power generation and electrical control equipment, designed to meet the rigorous demands of industrial applications.  Beyond products, Simson Maxwell provides ongoing maintenance, remote monitoring, and technical support, ensuring customers have reliable power when they need it most. With a legacy of expertise and innovation, the company has remained a key player in Canada's power industry, evolving to meet the growing demands of its customers.

 

Additional Details      

 

Viking did not purchase or sell any shares of Simson-Maxwell in connection with the aforementioned transaction, rather T&T subscribed for shares directly from Simson-Maxwell and purchased shares directly from  other shareholders.  Additional details regarding the transaction will be included in, and the foregoing description and description above is qualified in its entirety by, Camber's Current Report on Form 8-K filed with the Securities and Exchange Commission ("SEC"), which, once filed, will be available under "investors" - "SEC filings" at www.camber.energy.

  

About Camber Energy, Inc.

 

Camber Energy, Inc. (“Camber”) is a growth-oriented diversified energy company. Through subsidiaries, Camber provides custom energy & power solutions to commercial and industrial clients in North America and has a majority interest in: (i) an entity with intellectual property rights to a patented, proprietary Medical & Bio-Hazard Waste Treatment system using Ozone Technology; and (ii) entities with the intellectual property rights to patented and patent pending, proprietary Electric Transmission and Distribution Broken Conductor Protection Systems.  Camber also holds, through a subsidiary, an exclusive license in Canada to a patented clean energy & carbon-capture system.

 

For more information, please visit the company's website at www.camber.energy.

 

Forward-Looking Statements

 

This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Any statements that are not historical facts contained in this press release are "forward-looking statements", which statements may be identified by words such as "expects," "plans," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates," and other words of similar meaning. Such forward-looking statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, transactions that may be cancelled, and other factors that may cause our actual results, performance or achievements, or developments in our industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties related to the fluctuation of global economic conditions or economic conditions with respect to the oil and gas industry, the COVID-19 pandemic, the performance of management, actions of government regulators, vendors, and suppliers, our cash flows and ability to obtain financing, competition, general economic conditions and other factors that are detailed in Camber's filings with the Securities and Exchange Commission.  We intend that all forward-looking statements be subject to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.

 

Camber cautions that the foregoing list of important factors is not complete, any forward-looking statement speaks only as of the date on which such statement is made, and Camber does not undertake to update any forward-looking statements that it may make, whether as a result of new information, future events or otherwise, except as required by applicable law. All subsequent written and oral forward-looking statements attributable to Camber or any person acting its behalf are expressly qualified in their entirety by the cautionary statements referenced above.

 

Contact Information

Investors and Media:

Tel. 281.404.4387

 

 

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