4.28
Finders and Brokers. Except as set forth on Section 4.28 of the Southern Disclosure Schedules, Southern does not have any Liability in connection with
this Agreement or the Ancillary Documents, or the Transactions, that would result in the obligation of Southern, or any of its Affiliates, to pay any finder’s fee, brokerage or agent’s commissions or other like payments.
4.29 Independent Investigation. Southern has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company and acknowledges
that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Company for such purpose. Southern acknowledges and agrees that: (a) in making its decision to
enter into this Agreement, the Ancillary Documents to which it is a party and to consummate the Transactions, it has relied solely upon its own investigation and the express representations and warranties of Merger SubCo set forth in Article
V and the Company set forth in Article VI of this Agreement (including the related portions of the Company Disclosure Schedules) and in any certificate delivered to Southern by the Company or Merger SubCo pursuant hereto; and
(b) neither the Company nor any of its Representatives has made any representation or warranty, express or implied, as to the Company, Merger SubCo, this Agreement, the Transactions, or any information or materials regarding the foregoing
furnished or made available to Southern, except as expressly set forth in Article V and Article VI of this Agreement (including the related portions of the Company Disclosure Schedules) or in any certificate delivered to
Southern by the Company or Merger SubCo pursuant hereto.
4.30 Information Supplied. None of the information supplied or to be supplied by Southern expressly for inclusion or incorporation by reference: (a) in any current report on Form 8-K, and any exhibits thereto or any other report, form,
registration or other filing made with any Governmental Authority or stock exchange with respect to the Transactions; (b) in the Registration Statement; or (c) the Company Circular and other mailings or other distributions to the Company
Shareholders, Southern Shareholders or prospective investors with respect to the consummation of the Transactions or in any amendment to any of documents identified in (a) through (c), will, when filed, made available, mailed or
distributed, as the case may be, including on the Closing Date, contain or will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements
therein, other than in the case of the Registration Statement, in light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by Southern expressly for inclusion or incorporation
by reference in any press release or filing will, when filed or distributed, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, Southern does not make any representation, warranty or covenant with respect to any information supplied by or on
behalf of the Company or its Affiliates.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MERGER SUBCO
The Company hereby represents and warrants to Southern that each of the following representations are true and correct as of the date of this Agreement and as of the
Closing Date (except, as to any representations and warranties that specifically relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date):
5.1 Organization and Standing. Merger SubCo is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and will have all requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Merger SubCo is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of
the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed or in good standing has not and would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of Merger SubCo to enter into this Agreement or consummate the Transactions (a “Merger SubCo Material Adverse Effect”). Merger SubCo is not in violation of any provision of
its Organizational Documents in any material respect.
5.2 Authorization;
Binding Agreement. Merger SubCo has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution and delivery of this Agreement and each Ancillary Document to which Merger SubCo is a party and the consummation of the Transactions have been duly and validly
authorized by the Merger SubCo Board and the Company (in its capacity as sole shareholder of Merger SubCo) in accordance with Merger SubCo’s Organizational Documents and applicable Law (c), no other corporate proceedings, other than as set forth elsewhere in this Agreement, on the part of Merger SubCo are necessary to authorize the execution and delivery of this Agreement
and each Ancillary Document to which it is a party or to consummate the Transactions. This Agreement has been, and each Ancillary Document to Merger SubCo is a party shall be when delivered, duly and validly executed and delivered by Merger SubCo and, assuming the due authorization, execution and delivery of this Agreement and such Ancillary Documents by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the valid and binding obligation of Merger SubCo, enforceable against Merger SubCo in
accordance with its terms, subject to the Enforceability Exceptions.
5.3 Governmental Approvals. No Consent of or with any Governmental Authority on the part of Merger SubCo is required to be obtained or made in connection with the execution, delivery or performance by Merger SubCo of this Agreement and
each Ancillary Document to which it is a party or the consummation by Merger SubCo of the Transactions, other than (a) such filings as are contemplated by this Agreement, including those necessary for the Required Regulatory Approvals, (b) any filings
required with Nasdaq or the SEC with respect to the Transactions, (c) applicable requirements, if any, of the
Securities Act, the Exchange Act, or any state “blue sky” securities Laws, and the rules and regulations thereunder, and (d) where the failure to obtain or
make such Consents or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Merger SubCo Material Adverse Effect.
5.4
Non-Contravention. The execution and delivery by Merger SubCo of this Agreement and each Ancillary Document to which it
is a party, the consummation by Merger SubCo of the Transactions, and compliance by Merger SubCo with any of the provisions hereof and thereof, will not (a) contravene, conflict with or violate any provision of Merger SubCo’s Organizational Documents, (b) subject
to obtaining the Consents from Governmental Authorities referred to in Section 5.3 hereof, and the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having been satisfied,
conflict with or violate in any respect any Law, Order or Consent applicable to Merger SubCo, or any of its properties or assets, except for violations that
would not prevent or delay the consummation of the Transactions or (c) (i) violate, conflict with or result
in a material breach of, (ii) result in a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) give rise to any right of termination, cancellation or acceleration under, (iv) give rise
to any obligation to make payments or provide compensation under, or (v) result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of Merger SubCo under, any of the terms, conditions or provisions of any Contract to which Merger SubCo is a party or by which Merger SubCo or
any of its assets may be bound, except in each case which would not, individually or in the aggregate, reasonably be expected to have a Merger SubCo Material
Adverse Effect.
5.5 Capitalization.
(a) Prior to giving effect to the Merger, Merger SubCo is authorized to issue up to 1,000 shares of common
shares, par value $0.0001, of which one common share is issued and outstanding in the name of the Company. Prior to giving effect to the Transactions, Merger SubCo has never had any Subsidiaries or owned any equity interests in any other
Person.
(b) Except as set forth in its Organizational Documents, Merger SubCo (i) has no obligation to issue, sell or
transfer any equity securities of Merger SubCo, (ii) is not party or subject to any contract that affects or relates to voting or giving of written consents with
respect to, or the right to cause the redemption, or repurchase of, any equity interests of Merger SubCo, (iii) has not granted any registration rights or information rights to any other Person, (iv) has not granted any phantom shares and
there are no voting or similar agreements entered into by Merger SubCo that relate to its capital or equity interests, (v) has no outstanding bonds, debentures, notes or other obligations the holders
of which have the right to vote (or convertible into or exercisable for voting interests of Merger SubCo or equity interests of Merger SubCo) with the owner or holder Merger SubCo on any matter or any agreements
to issues such bonds, debentures, notes or other obligations and (vi) has no outstanding contractual obligations to provide funds to, or make any investment (other than in connection with the Transactions) in, any other Person.
5.6 Merger SubCo Activities.
(a) Since incorporation, Merger SubCo has not engaged in any business activities other than as contemplated by this Agreement and activities
incident to the preservation of its existence, does not own directly or indirectly any ownership, equity, profits or voting interest in any Person and has no assets or Liabilities except those incurred
in connection with this Agreement and the Ancillary Documents to which it is a party and the Merger.
(b) Merger SubCo was formed solely for the purpose of effecting the Transactions.
(c) Other than this Agreement and the Ancillary Documents to which it is a party,
Merger SubCo is not party to or bound by any Contract or any agreement or understanding whereby it would have material interests, rights, obligations or
Liabilities with respect to another transaction that is, or would reasonably be interpreted as constituting, a merger, business combination or other
similar transaction. Except for the Transactions, Merger SubCo does not own or have a right to acquire, directly or indirectly, any interest or
investment (whether equity or debt) in any Person.
5.7
Compliance with Laws. Merger SubCo is not, and since the date of its formation, has not been, in conflict or non-compliance with, or in default or violation of,
any Laws applicable to it. Merger SubCo has not, since the date of its formation, received any written or oral notice of, or, to its knowledge, is not under
investigation with respect to, any material conflict or non-compliance with, or material default or violation of, any applicable Laws by which it is or was bound.
5.8
Actions; Orders. There is no material Action pending or, to the knowledge of Merger SubCo, threatened against or affecting Merger SubCo, and there is no
Action that Merger SubCo has pending against any other Person. Merger SubCo is not subject to any Orders of any Governmental Authority, nor, to the knowledge of Merger SubCo, are any such Orders pending.
5.9
Transactions with Related Parties. There are no transactions, Contracts or understandings between Merger SubCo, on the one hand, and any (a) present or former director, officer or employee or Affiliate of Merger SubCo, or any immediate family member of any of
the foregoing, or (b) record or beneficial owner of more than five percent (5%) of Merger SubCo outstanding capital stock as of the date hereof, on the other hand.
5.10 Finders and Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission from Merger SubCo or any of their
respective Affiliates in connection with the Transactions based upon arrangements made by or on behalf of Merger SubCo.
5.11
Investment Company Act. Merger SubCo is not an “investment company” or a
Person directly or indirectly controlled by or acting on behalf of a person subject to registration and regulation as an “investment company,” in each case within the meanings of the Investment Company Act.
5.12 Taxes. Merger SubCo has not taken or agreed to take any action, and does intend to or plan to take any action, or has any knowledge of any fact or circumstance that could reasonably be expected to prevent the Transactions from qualifying for the Intended US Tax Treatment (with the exception of any actions specifically contemplated by this Agreement).
5.13 Independent Investigation.
Merger SubCo has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of Southern and acknowledges that it has been provided
adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of Southern for such purpose. Merger SubCo acknowledges and agrees that: (a) in making its decision to enter into this
Agreement, the Ancillary Documents to which it is a party and to consummate the Transactions, it has relied solely upon its own investigation and the express representations and warranties of Southern set forth in Article VI of this
Agreement (including the related portions of Southern Disclosure Schedules); and (b) neither Southern nor any of its Representatives have made any representation or warranty as to Southern, this Agreement, the Transactions, or any
information or materials regarding the foregoing furnished or made available to Merger SubCo, except as expressly set forth Article VI of this Agreement (including the related portions of Southern Disclosure Schedules).
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in (a) the disclosure schedules delivered by the Company to Southern on the date hereof (the “Company Disclosure Schedules”), the Section
numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer or (b) as disclosed in the Company SEC Documents publicly filed or furnished prior to the date of this Agreement and after November 6,
2024 (other than disclosures in the “Risk Factors” section of any such filings and any disclosure of risks included in any “forward-looking statements” disclaimer contained in any such filings, in each case, to the extent such disclosures are
predictive, cautionary or forward-looking in nature) to the extent the relevance of such disclosure as an exception to (or disclosure for the purpose of) a representation or warranty is reasonably apparent, the Company hereby represents and
warrants to Southern that each of the following representations are true and correct as of the date of this Agreement and as of the Closing Date (except, as to any representations and warranties that specifically relate to an earlier date, in
which case such representations and warranties were true and correct as of such earlier date):
6.1
Organization and Standing. The Company is a corporation duly organized, validly existing and in good standing under the Laws of the Province of Alberta, and has
the requisite corporate power and capacity to own, lease and operate its properties and to carry on its business as now being conducted. The Company is duly qualified or licensed and in good standing to do business in each jurisdiction in
which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed or in good standing
has not and would not, individually or in the aggregate, reasonably be expected to have (i) a Material Adverse Effect on the Company or (ii) a material adverse effect on the ability of the Company to enter into this Agreement or consummate
the Transactions (clause (i) or (ii), a “Company Material Adverse Effect”). The Company has heretofore made available (including via the Company SEC Documents) to the Parties accurate and complete copies of its Organizational
Documents, as currently in effect as of the date hereof. The Company is not in violation of any provision of its Organizational Documents in any material respect. The Company is not the subject of any bankruptcy, dissolution, liquidation,
reorganization or similar proceeding.
6.2 Authorization; Binding Agreement.
(a) The Company has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which
it is a party, to perform its obligations hereunder and thereunder and to consummate the Domestication and the other Transactions,
subject to the receipt of the Required Company Shareholder Approval and the Letter of Authorization. The execution and delivery of this Agreement and each Ancillary Document to which the Company is or is required to be a party and the consummation of the Transactions (i) have been duly and validly authorized by the Company Board and,
where applicable, its shareholders, in accordance with the Company’s Organizational Documents, any applicable Law or any Contract to which the Company or any of its shareholders is a party or by which it
or its securities are bound and (ii) no other corporate proceedings, other than as set forth elsewhere in this Agreement, on the part of the Company are necessary to authorize the execution and
delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the Transactions
except for obtaining Required Company Shareholder Approval.
(b) The Company Board has by resolutions duly adopted at a meeting duly called and held, as of the date of this
Agreement (i) determined that this Agreement, the Domestication, the Merger and the other Transactions are advisable, fair to, and in the best interests of, the Company Shareholders, (ii) approved, among other things, this Agreement and the
Ancillary Documents to which it is a party and the Transactions, including the Domestication, on the terms and subject to the conditions of this Agreement and in accordance with applicable Law and (iii) resolved to recommend that the Company
Shareholders vote in favor of the Domestication. The Company Shareholders are the only Company Securityholders entitled to vote on the Company Resolutions. Except for the Required Company Shareholder Approval, no additional approval or vote
of any holders of voting or other equity interests of the Company would then be necessary to approve and adopt this Agreement and the Ancillary Documents and approve the Transactions.
(c) This Agreement has been, and each Ancillary Document to which the Company is a party shall be, when delivered, duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement and any such Ancillary Document by the
other parties hereto and thereto, constitutes, or when delivered shall constitute, the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms,
subject to the Enforceability Exceptions.
6.3 Governmental Approvals. Except as described in Section 6.3 of the Company Disclosure Schedules, no Consent of or with any Governmental Authority on the part
of the Company is required to be obtained or made in connection with the execution, delivery or performance by the Company of this Agreement each Ancillary Document to which it is a party or the consummation by the Company of the Transactions, other than (a) such filings and approvals as expressly contemplated by this Agreement, including those
necessary for the Required Regulatory Approvals, (b) any filings and approvals required with the SEC, Nasdaq, and other applicable Canadian securities regulatory authorities with respect to the Transactions, (c) applicable requirements, if any, of the Securities Act, the Exchange Act, or any state “blue sky”
securities Laws, and the rules and regulations thereunder, (d) a post-closing notification pursuant to the Investment Canada Act, (e) in connection with the Domestication and (f) where the failure to obtain or make such Consents or to make
such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
6.4 Non-Contravention. Except as otherwise described in Section 6.4 of the Company Disclosure Schedules, the execution and delivery by the Company of this Agreement and each Ancillary Document to which it is a party, the
consummation by the Company of the Transactions, and compliance by the Company with any of the provisions
hereof and thereof, will not (a) contravene or conflict with or violate any provision of the Company’s Organizational Documents, (b) contravene or conflict with or constitute a violation of any provisions of Law or Order binding upon or
applicable to the Company or (c) subject to obtaining the Consents from Governmental Authorities referred to in Section 6.3 hereof, and the waiting periods referred to therein having expired, and any condition precedent to such
Consent or waiver having been satisfied, conflict with or violate in any material respect any Law, Order or Consent applicable to the Company, or any of its properties or assets, except for violations that would not prevent or delay the consummation of the Transactions,
or (d)(i) violate, conflict with or result in a breach of, (ii) result in a default (or an event which, with notice or lapse of time or both, would constitute a material default) under, (iii) give rise to any right of termination,
cancellation or acceleration under, (iv) give rise to any obligation to make material payments or provide material compensation under, (v) result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of the Company under, (vi) give rise to any obligation to obtain any material third party Consent or provide any notice to any Person or (vii) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance,
cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of any Company Material Contract except, in each case, where such conflict, violation, breach, default, termination,
cancellation, modification, acceleration, obligation, creation, or default would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
6.5 Capitalization.
(a) As of the date hereof, the Company is authorized to issue an unlimited number
of Pre-Domestication Company Common Shares, of which 3,841,642 are issued and outstanding as at the date hereof and an unlimited number of shares of preferred stock, issuance in series, of which none are issued and outstanding as of the date
hereof. All outstanding Company Shares are, or when issued in connection with the Domestication, shall be duly authorized, are fully paid and non‑assessable and are not subject to or issued in violation of any purchase option, right of first
refusal, preemptive right, subscription right or any similar right under any provision of any applicable Law, or any Contract to which the Company is a party or by which it or its securities are bound.
The Company does not hold any shares or other equity interests of another Company in its treasury. None of the outstanding Company Securities have been, and after the Domestication, will be issued in violation of any applicable securities
Law.
(b) Except as set forth on Section 6.5(b) of
the Company Disclosure Schedules, there are no outstanding or authorized options, warrants, puts, calls, restricted stock, restricted stock units, phantom stock, profit participation rights, equity appreciation rights, phantom equity rights,
other equity or equity‑based awards or other similar rights with respect to the Company other than the Company Equity Incentive Plan.
(c) Section 6.5(c) of the Company Disclosure Schedules contains a complete
and correct list, as of the date hereof, of (i) the name of the holder of each such Company Warrant, (ii) the number of Company Shares underlying each such Company Warrant, (iii) the date on which each such Company Warrant was granted, (iv)
the exercise price of each Company Warrant and (v) the expiration date of each Company Warrant.
(d) Other than as set forth on Section 6.5(b), Section 6.5(c) and Section 6.5(d) of the
Company Disclosure Schedules, as of the date hereof, there are no other equity or voting interests in, or any Company Convertible Securities, or preemptive rights or other outstanding rights, options, warrants, subscriptions, puts,
calls, restricted stock, restricted stock units, phantom stock, stock appreciation, profit participation, conversion rights or similar equity or equity-based rights, interests, agreements or
commitments of any rights of first refusal or first offer, nor are there any Contracts, commitments, arrangements or restrictions to which the Company or, to the Knowledge of the Company, any of its
shareholders is a party or bound relating to any equity securities of the Company, whether or not outstanding.
(e) Except with respect to the Company Support & Lock-Up Agreement, there are no voting trusts, proxies,
shareholder agreements or any other agreements or understandings with respect to the voting of the Company’s equity interests. Except as set forth in the
Company’s Certificate of Incorporation or as expressly set forth in this Agreement, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any equity interests or securities of the Company,
nor has the Company granted any registration rights to any Person with respect to the Company’s equity securities. All of the Company Securities have been, and after the Domestication, shall be granted, offered, sold and issued in compliance
with all applicable securities Laws.
(f) No equity interests of the Company are issuable, and no rights in connection
with any interests, warrants, rights, options or other securities of the Company accelerate or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise) as a result of the Transactions.
(g) Except as disclosed in the Company Financial Statements, the Company has not declared or paid any
distribution or dividend in respect of its equity interests and has not repurchased, redeemed or otherwise acquired any equity interests of the Company, and the Company Board has not authorized any
of the foregoing.
6.6 Subsidiaries.
(a) Section 6.6(a) of the Company Disclosure
Schedules sets forth a true and complete list of the Subsidiaries of the Company, listing for each Subsidiary its name, the jurisdiction of its formation or organization (as applicable) and its parent company
(if wholly-owned) or its owners (if not-wholly owned). Except as set forth on Section 6.6(a) of the Company Disclosure Schedules, all of the outstanding voting or other equity securities, as applicable, of each Subsidiary of the
Company are duly authorized, validly issued, free of preemptive rights, restrictions on transfer (other than restrictions under applicable federal, state and other securities Laws) and, if applicable, fully paid and non-assessable, and are
owned by the Company, whether directly or indirectly, free and clear of all Liens (other than Permitted Liens).
(b) Except as set forth on Section 6.6(b) of the Company Disclosure Schedules, there are no options,
warrants, convertible securities, stock appreciation, phantom stock, stock-based performance unit, profit participation, restricted stock, restricted stock unit, other equity-based compensation award or similar rights with respect to any
Subsidiary of the Company and no rights, exchangeable securities, securities, “phantom” rights, appreciation rights, performance units, commitments or other agreements obligating any Subsidiary of
the Company to issue or sell, or cause to be issued or sold, any equity securities of, or any other interest in, any Subsidiary of the Company, including any security convertible or exercisable into equity securities of any Subsidiary of the
Company. There are no Contracts to which any Subsidiary of the Company is a party that require such Subsidiary of the Company to repurchase, redeem or otherwise acquire any equity interests or securities
convertible into or exchangeable for such equity securities or to make any investment in any other Person.
(c) The Company is not a participant in any joint venture, partnership or similar
arrangement, except as set forth on Section 6.6(c) of the Company Disclosure Schedules.
(d) There are no outstanding contractual obligations of the Company to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in, any other Person.
6.7 Financial Statements.
(a) The Company SEC Documents reflect the comparative audited consolidated balance
sheet of the Company and its Subsidiaries as of July 31, 2025 and the related comparative audited consolidated statements of comprehensive loss, cash flows and members’ equity, together with all related notes and schedules thereto,
accompanied by the reports thereon of the Company’s independent auditor (such financial statements, the “Company Financial Statements”).
(b) Except as set forth on Section 6.7(b) of the Company Disclosure
Schedules, the Company Financial Statements (i) have been prepared from the books and records of the Company and its Subsidiaries or their respective predecessors; (ii) shall have been prepared in accordance with GAAP, applied on a consistent
basis throughout the periods involved, except as may be indicated in the notes thereto and subject, in the case of the Unaudited Financial Statements, to the absence of footnotes and year-end adjustments; and (iii) fairly present, in all
material respects, the consolidated financial position of the Company and its Subsidiaries as of the dates thereof and their consolidated results of operations and cash flows for the periods then ended (subject, in the case of the Unaudited
Financial Statements, to the absence of footnotes and year-end adjustments, none of which would be expected to be material individually or in the aggregate).
(c) The books of account and other financial records of the Company and its Subsidiaries have been kept accurately in all material respects in
the ordinary course of business, and the transactions entered therein represent bona fide transactions.
(d) The Company and its Subsidiaries have devised and maintained a system of internal accounting policies and controls sufficient to provide reasonable assurances that (i) transactions are executed in all material respects in
accordance with management’s authorization; (ii) the transactions are recorded as necessary to permit the
preparation of financial statements in conformity GAAP and to maintain accountability for assets; and (iii) the amount recorded for assets on the books and
records of the Company and each of its Subsidiaries is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to
any difference (collectively, “Company Internal Controls”).
(e) The Company has not identified and has not received written notice from an independent auditor of (i) any
significant deficiency or material weakness in the system of Company Internal Controls utilized by the Company or any of its Subsidiaries; (ii) any fraud that involves the Company’s or any of its
Subsidiaries’ management or other employees who have a role in the preparation of financial statements or the Company Internal Controls utilized by the Company or any of its Subsidiaries; or (iii) any claim or allegation regarding any of the
foregoing. There are no significant deficiencies or material weaknesses in the design or operation of the Company Internal Controls over financial reporting that would reasonably be expected to materially and adversely affect the Company’s,
or any of its Subsidiaries’, ability to record, process, summarize and report financial information.
(f) Except as set forth on Section 6.7(f) of the Company Disclosure Schedules or to the extent
reflected or reserved against in the Company Financial Statements or as incurred in connection with this Agreement, neither the Company nor any of its Subsidiaries has incurred any Liabilities or obligations of the type required to be
reflected on a balance sheet in accordance with GAAP with respect to the Company Financial Statements that are not adequately reflected or reserved on or provided for in the Company Financial Statements other than (i) Liabilities of the type
required to be reflected on a balance sheet in accordance with GAAP, as applicable, that have been incurred since the Latest Balance Sheet Date in the ordinary course of business or (ii) Liabilities that are not, individually or in the
aggregate, material in amount or (iii) Liabilities incurred in connection or as permitted by this Agreement, the Ancillary Documents or the Transactions. All debts and Liabilities, fixed or contingent, which should be included under GAAP on a
balance sheet are included in all material respects in the Company Financial Statements as of the date of such Company Financial Statements. The Company has no off-balance sheet arrangements.
6.8 Absence of Certain Changes. Except as set forth on Section 6.8 of the Company
Disclosure Schedules, since the Latest Balance Sheet Date, (a) the Company and each of its Subsidiaries have conducted their respective business in the ordinary course and consistent with past practice in all material respects and (b)
neither the Company nor any of its Subsidiaries has taken any action that, if taken after the date of this Agreement and prior to the Closing, would require
the consent of Southern pursuant to Section 7.2.
6.9 Securities Laws. The Company is a “reporting issuer” under securities Laws in each of the provinces of Alberta, British Columbia and Ontario and is not in default under the securities Laws of such provinces. The issued and
outstanding Company Shares are listed for trading on Nasdaq and are not listed for trading on any other securities exchange as a result of any application made by the Company. Except as set forth on Section 6.9 of the Company
Disclosure Schedules, the Company is not in default of any material requirements of any securities Laws or the rules and policies of Nasdaq (including applicable continued listing requirements of such Company Shares and corporate governance
rules), and the Company has not received any written deficiency notice from the Nasdaq relating to the continued listing requirements of such Company Shares.
6.10 Compliance with Laws and Carbon Standards. Except as set forth on Section 6.10 of the Company Disclosure Schedules, neither the Company nor any of its
Subsidiaries is, and since its incorporation has ever been, in material conflict or material non-compliance with, or in material default or violation of any applicable Laws or applicable Carbon Standards. Since their respective formation,
neither the Company nor any of its Subsidiaries, (i) has received any written or, to the Knowledge of the Company or any of its Subsidiaries, oral notice of any material conflict or non-compliance with, or material default or violation of,
any applicable Laws by which it or any of its respective properties, assets, employees or other individual service providers (solely in such individuals’
capacity as service providers to the Company), business, products or operations are or were bound or affected, (ii) has been subjected to any investigation by a Governmental Authority regarding any actual or alleged violation of or failure
on the part of the Company or any of its Subsidiaries to comply with any applicable Law, (iii) has had claims filed against it or any of its Subsidiaries with (A) any Governmental Authority alleging any failure by the Company or any of its
Subsidiaries to comply with applicable Law or (B) any Registry alleging any failure with respect to the Carbon Credits transacted by the Company or any of its Subsidiaries to comply with applicable Carbon Standards, (iv) has not had its
access or Registry Account suspended in respect of any relevant Registry and (v) has not made a voluntary, directed, or involuntary disclosure to any Governmental Authority regarding any alleged act or omission arising under or relating to
any noncompliance with any applicable Law, in the case of clauses (i) through (iii), except as would not, or would not reasonably be expected to, be material to the Company or any of its Subsidiaries.
6.11 Company Permits and Registry Accounts. The Company and its Subsidiaries hold all material licenses and Permits necessary to lawfully own, lease and conduct in all material respects their respective business as presently conducted, including necessary Registry Accounts on any relevant Registry, and to own, lease and operate their respective assets and properties (collectively, the “Company
Permits”). All the Company Permits and Registry Accounts are in full force and effect and not subject to, or, to the Knowledge of the Company, threatened to be subject to, any revocation or modification Proceeding, or any suspension
or termination, as a result of, or in connection with, the consummation of the Transactions, and the Company
and its Subsidiaries are conducting business in compliance in all material respects with the Company Permits, any Carbon Standard under which any of the Carbon Credits that are transacted by the Company or its Subsidiaries are certified,
and the requirements of each relevant Registry. Neither the Company nor its Subsidiaries is in violation in any material respect of the terms of the Company Permits, and no Proceeding is pending or, to the Knowledge of the Company or any of
its Subsidiaries, threatened, to suspend, revoke, withdraw, modify or limit any such Company Permit in a manner that has had or would reasonably be expected to have a material impact on the ability of the Company or any of its Subsidiaries,
as applicable, to use such Company Permit or conduct its business, as applicable.
6.12 Carbon Credits. Neither the Company nor any of its Subsidiaries have, as of the date hereof, created any security interest or encumbrance in any Carbon Credits that are presently owned, or in
the future will be owned, by the Company or such Subsidiary, in favor of any third party.
6.13 Litigation. Except as set forth on Section 6.13 of the Company Disclosure Schedules, since the Company’s incorporation, there have been, and there are, no Actions or Orders of any nature currently pending or, to the Company’s
Knowledge, threatened against the Company or any of its Subsidiaries, and no such Action or Order has been brought against the Company or any of its Subsidiaries, or any of their respective current or former directors, officers or
securityholders, business, equity securities, or assets, or employees or other individual service providers in their capacities as such that would,
individually or in the aggregate, be material to the Company or any of its Subsidiaries, taken as a whole.
6.14 Material Contracts.
(a) Section 6.14(a) of the Company Disclosure Schedules sets forth a true, correct and complete list of the Company Material
Contracts, as of the date hereof, a true, correct and complete copy (including written summaries of oral Contracts) of which, in each case, has been made available to Southern. For purposes of this Agreement, “Company Material Contract”
means any contract, together with each Company Benefit Plan that is a Contract, to which the Company is a party or by which the Company, any of its Subsidiaries, or any of its properties or assets are bound or affected that:
(i) contains covenants that limit or restrict the ability of the Company or any of its
Subsidiaries (A) to compete in any line of business or with any Person or in any geographic area or to sell, receive or provide any service or product or solicit any Person, including any non-competition covenants, non-solicit covenants,
exclusivity restrictions, rights of first refusal or most-favored pricing clauses or similar provision with respect to any Person or (B) to purchase or acquire an interest in any other Person;
(ii) involves any joint venture, partnership or similar agreement;
(iii) relates to the voting or control of the equity
interests of the Company or any of its Subsidiaries or the election of directors of the Company or any of its Subsidiaries (other than the Organizational Documents of the Company and any of its Subsidiaries);
(iv) evidences Indebtedness (whether incurred, assumed, guaranteed or secured by any asset) of the Company having an outstanding principal amount in excess of $50,000;
(v) involves the acquisition or disposition, directly or indirectly (by merger or otherwise), of assets with an aggregate value in excess of $100,000 or shares or other equity interests of the Company or another Person;
(vi) relates to any merger,
consolidation or other business combination with any other Person or the acquisition or disposition of any other entity or its business or material assets
or the sale of the Company, its business or material assets;
(vii) by its terms, individually or with all related Contracts, is
reasonably expected to call for aggregate payments or receipts by the Company or any of its Subsidiaries under such Contract or Contracts of at least $200,000 per year or $1,000,000 in the aggregate;
(viii) is any carbon streaming agreement;
(ix) is any strategic partnership agreement;
(x) is with (A) any Governmental Authority or (B) any Related Person;
(xi) is a settlement, conciliation or similar agreement
pursuant to which the Company or any of its Subsidiaries will have any material outstanding obligation after the date of this Agreement;
(xii) provides for any severance, retention, transaction or change in control bonus or equity, equity-based or phantom equity arrangement;
(xiii) obligates the Company or any of its Subsidiaries to provide continuing indemnification or
a guarantee of obligations that would be expected to result in payments to a third party after the date hereof in excess of $100,000;
(xiv) provides for the employment or engagement of any director, officer, employee or individual
service provider, excluding offer letters providing for at-will employment that can be terminated without any post-termination Liabilities;
(xv) is a Labor Agreement;
(xvi) obligates the Company or any of its Subsidiaries to make any capital commitment or
expenditure in excess of $100,000 (including pursuant to any joint venture);
(xvii) (A) entered into with any third-party broker, distributor, dealer, manufacturer’s representative, franchise, agency, sales promotion, market research, marketing consulting and advertising
partner or service provider and (B) are material to the business of the Company or any of its Subsidiaries;
(xviii) provides for any guaranty, direct or indirect, of any obligation of a third party (other than the Company);
(xix) constitutes a lease or master lease of personal property reasonably likely to result in annual payments of $25,000 or more in a 12-month period;
(xx) constitutes any contract providing for (A) the grant of any preferential rights of first
offer or first refusal to purchase or lease any material asset of the Company or any of its Subsidiaries or (B) any exclusive right to sell or distribute, or
otherwise relating to the sale or distribution of, any product or service of the Company or any of its Subsidiaries;
(xxi) establishes any joint venture, partnership or limited liability company agreement or other similar Contract relating to the formation, creation, operation, management or control of any joint venture, partnership or limited liability company;
(xxii) constitutes any Contract that obligates the Company or any of its Subsidiaries to make
any loans, advances or capital contributions to, or investments in, any Person other than any loan or capital contribution to, or investment in, (A) the Company or one of its wholly owned Subsidiaries, (B) any Person (other than an officer,
director or employee of the Company or any of its Subsidiaries) that is less than $1,000,000 to such Person or (C) any officer, director or employee of the Company or any of its Subsidiaries that is less than $50,000 to such person;
(xxiii) constitutes any obligation to make payments, contingent or otherwise, arising out of the
prior acquisition of the business, all or substantially all of the assets or stock of other persons;
(xxiv) constitutes any Company IP Agreements (other than agreements for Off-the-Shelf Software);
(xxv) provides any third party a power of attorney;
(xxvi) relates to the future disposition or acquisition by the Company or any of its Subsidiaries
of (A) any business (whether by merger, consolidation or other business combination, sale of securities, sale of assets
or otherwise) or (B) any material assets or properties, except for any agreement related to the Transactions; or
(xxvii) involves the payment of any earnout or similar contingent payment on or after the date of
this Agreement.
(b) With respect to the Company Material Contracts: (i) each Company Material Contract is valid and binding and
enforceable in all respects against the Company and, to the Knowledge of the Company, each other party thereto, and is in full force and effect (except, in each case, as such enforcement may be limited
by the Enforceability Exceptions); (ii) the consummation of the Transactions will not affect the validity or enforceability of the Company Material
Contracts; (iii) neither the Company nor any of its Subsidiaries is in breach or default in any material respect, and to the Knowledge of the Company, no condition or event has occurred that with the passage of time or giving of notice or
both would constitute a material breach or default by the Company or any of its Subsidiaries, or permit termination or acceleration by the other party thereto,
under such Company Material Contract; (iv) to the Knowledge of the Company, no other party to such Company Material Contract is in breach or default in any material respect, and no event has occurred
that with the passage of time or giving of notice or both would constitute such a material breach or default by such other party, or permit termination or
acceleration by the Company or any of its Subsidiaries, under such Company Material Contract; (v) the Company and its Subsidiaries have received neither written nor, to the Company’s Knowledge, oral notice of an intention by any party to any such Company Material Contract that provides for a continuing obligation by any party thereto to terminate such Company Material Contract or amend the
terms thereof, other than modifications in the ordinary course of business that, individually or in aggregate, are not reasonably expected to adversely affect the Company or any of its Subsidiaries in any material respect; and (vi) neither
the Company nor any of its Subsidiaries has waived any their respective material rights under any such Company Material Contract.
6.15 Intellectual Property.
(a) Section 6.15(a) of the Company Disclosure Schedules sets forth: (i)
all registered Patents, Trademarks, Copyrights and Internet Assets and applications owned by the Company or otherwise used or held for use by the Company or any of its Subsidiaries in which the Company or any of its Subsidiaries is the owner,
applicant or assignee (“Company Registered IP”); and (ii) all material unregistered Intellectual Property, including proprietary Software, owned or purported to be owned by the Company or any of its Subsidiaries (for material Trade
Secrets, only a general description shall be disclosed).
(b) Section 6.15(b) of the Company Disclosure Schedules sets forth all material Intellectual Property
licenses, sublicenses and other agreements or permissions (“Company IP Licenses”) (other than “shrink wrap,” “click wrap,” and “off the shelf” software
agreements and other agreements for Software commercially available on reasonable terms to the public generally with license, maintenance, support and other
fees of less than $50,000 per year (collectively, “Off-the-Shelf Software”), which are not required to be listed, although such licenses are “Company IP Licenses” as that term is used herein), under which the Company or any of
its Subsidiaries is a licensee or otherwise is authorized to use or practice or have rights to any Intellectual Property of any Person that is (i) incorporated into, or used in the authorship, invention, development, delivery, hosting or
distribution of, the Company Products; or (ii) used or held for use by the Company in the conduct of its business.
(c) The Company and its Subsidiaries either own or have valid and enforceable rights under a Company IP License
to use all Intellectual Property that is necessary and sufficient for, or used or held for use by the Company in, the conduct of its business, in each case free and clear of any Liens (other than Permitted Liens). All of the Company
Registered IP is in full force and effect, subsisting, valid and enforceable. The Company or its Subsidiaries, as applicable, (i) is the sole and exclusive owner of all right, title and interest in and to the Owned IP, in each case free and
clear of any Liens (other than Permitted Liens); and (ii) has a valid and enforceable license or other rights to use all Licensed IP. Neither the Company nor any of its Subsidiaries has dedicated to the public or otherwise allowed to fall
into the public domain any material Owned IP.
(d) The Company and its Subsidiaries have provided Southern with true and complete copies of all material
Company IP Agreements, including all modifications, amendments and supplements thereto and waivers thereunder. Neither the Company, any of its Subsidiaries nor, to the Knowledge of the Company, any other party
thereto is, or is alleged to be, in breach of or default under, or has provided or received any notice of breach of, default under, or intention to terminate (including by non-renewal), any Company IP Agreement. The Company or its
Subsidiaries, as applicable, have entered into binding, valid and enforceable, written Contracts with each current and former employee and independent contractor who is or was involved in or has contributed to the invention, creation, or
development of any Intellectual Property during the course of employment or engagement with the Company or any of its Subsidiaries, as applicable, whereby such employee or independent contractor (i) acknowledges the Company’s exclusive
ownership of all Intellectual Property invented, created, or developed by such employee or independent contractor within the scope of his or her employment or engagement with the Company or any of its Subsidiaries, as applicable; (ii) grants
to the Company or any of its Subsidiaries, as applicable, a present, irrevocable assignment of any ownership interest such employee or independent contractor may have in or to such Intellectual Property, to the extent such Intellectual
Property does not constitute a “work made for hire” under applicable Law; and (iii) irrevocably waives any right or interest, including any moral rights, regarding any such Intellectual Property, to the extent permitted by applicable Law. All
material assignments and other instruments necessary to establish, record and perfect the Company’s ownership interest in the Company Registered IP have been validly executed, delivered and filed with the relevant Governmental Authorities and
authorized registrars. Neither the execution, delivery or performance of this Agreement, nor the consummation of the Transactions, will result in the
loss or impairment of, or require the consent of any other Person in respect of, the Company’s right to own or use any Intellectual Property.
(e) The Company IP Licenses include all of the material licenses, sublicenses and other agreements or permissions necessary to operate the Company and its Subsidiaries as presently conducted.
(f) No Action is pending or, to the Company’s Knowledge, threatened against the Company or any of its
Subsidiaries that challenges the validity, enforceability, ownership or right to use, sell, license or sublicense, or that otherwise relates to, any Intellectual Property currently licensed, used or held for use by the Company or any of its
Subsidiaries, nor, to the Knowledge of the Company, is there any reasonable basis for any such Action. Since incorporation, neither the Company nor any of its Subsidiaries has received any written or, to the Knowledge of the Company, notice
or claim asserting or suggesting that any infringement, misappropriation, violation, dilution or unauthorized use of the Intellectual Property of any other Person is or may be occurring or has or may have occurred, as a consequence of the
business activities of the Company or any of its Subsidiaries, nor to the Knowledge of the Company is there any reasonable basis therefor. There are no Orders to which the Company or any of its Subsidiaries is a party or its otherwise bound that (i) restrict the rights of the Company or any of its Subsidiaries to use, transfer, license or enforce any Intellectual Property owned by the Company, (ii) restrict the
conduct of the business of the Company or any of its Subsidiaries in order to accommodate a third Person’s Intellectual Property or (iii) grant any third Person any right with respect to any Intellectual
Property owned by the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is currently infringing, or has, since incorporation, infringed, misappropriated or violated any Intellectual Property of any other
Person in connection with the ownership, use or license of any Intellectual Property owned or purported to be owned by the Company or any of its Subsidiaries or, to the Knowledge of the Company, otherwise in connection with the conduct of the
respective businesses of the Company and its Subsidiaries. To the Company’s Knowledge, no third party is currently, or in the past five (5) years has been, infringing upon, misappropriating or otherwise
violating any Intellectual Property owned, licensed by, licensed to or otherwise used or held for use by the Company or any of its Subsidiaries.
(g) No funding from any Governmental Authority or facilities of a university, college, other educational
institution or non-profit organization was used in the development of the Owned IP, and no Governmental Authority, university, college, other educational institution or non-profit organization has a claim or right to claim title to any Owned
IP.
(h)
(i) The Company and its Subsidiaries have taken steps consistent with generally accepted
industry standards, and in any event no less than all commercially reasonable steps, to safeguard and maintain the secrecy and confidentiality of all Trade Secrets included in the Owned IP.
(ii) Neither the Company nor any of its Subsidiaries has
authorized the disclosure of any Trade Secret included in the Owned IP, nor has any such Trade Secret been disclosed, in each case other than pursuant to a written and enforceable non-disclosure agreement.
(iii) There has been no misappropriation of any Trade Secret included in the Owned IP or
breach of any obligations of confidentiality with respect to such Trade Secrets.
(i) Neither the execution, delivery nor performance of this Agreement or any other agreements referred to in this Agreement nor the consummation of any of the Transactions will, with or without
notice or lapse of time, directly result in: (i) a loss of or an Lien on any Owned IP; (ii) a breach of or default under, or right to terminate or suspend performance of, any Company IP Agreement; (iii) the release,
disclosure or delivery of any Trade Secrets within the Owned IP by or to any escrow agent or other Person; (iv) the grant, assignment or transfer to any other Person of any license or other right or interest under, to or in any Owned IP. The
Company will own all right, title and interest in and to, or otherwise have a license to, all Owned IP and Licensed IP on identical terms and conditions as the Company enjoyed immediately prior to the Closing.
(j) The Source Code for Software within the Owned IP and the Source Code for Software included in all Company
Products (A) has at all times been maintained in confidence, and has been disclosed only to employees and consultants having a “need to know” the contents thereof in connection with the performance of their duties and who are bound by
confidentiality obligations of customary scope with respect to Source Code; and (B) has not been delivered, licensed or made available to any escrow agent or other Person, and neither the Company nor any of its Subsidiaries has any duty or
obligation to deliver, license or make available such Source Code to any escrow agent or other Person.
(k) Neither the Company nor any of its Subsidiaries has (i) used any Open Source Software in such a way that (A) obligates the Company to make any Software within the Owned IP available free of charge, available in source
code form, or reverse engineerable, (B) grants or purports to grant to any third Person any rights or immunities under any Intellectual Property within the Owned IP, or (C) requires any Company Products or any portion thereof, to be subject
to a Copyleft License; or (ii) contributed any Software within the Owned IP to an open source project or made any such Software available to any other Person under an open source license.
(l) The Company Products do not contain any malicious or surreptitious code
or device, such as a virus, worm, time or logic bomb, disabling device, Trojan horse or other malicious or surreptitious code designed to: (i) disrupt or damage any
licensee’s use of the Company Products or related computer systems; (ii) erase, destroy or corrupt any licensee’s files or data; or (iii) bypass any technical security measure, or masquerade as compliant, so as to obtain access to any of
licensee’s hardware or software in contravention of such technical security measures.
(m) The Company and its Subsidiaries own or have a valid license in all of the Company Systems necessary to
operate the business of the Company and its Subsidiaries as currently conducted. The Company and its Subsidiaries have taken commercially reasonable measures to protect and maintain the security of the Company Systems and all information
stored or contained therein from any unauthorized use, access, interruption or modification by any Person. The Company Systems (i) operate and perform in all material respects in accordance with their documentation and as required by the
business of the Company and its Subsidiaries as currently conducted; (ii) have not suffered any material persistent substandard performance, breakdown or failure since the Company’s incorporation; (iii) are free from any material defects;
(iv) do not contain any virus, Software or hardware component designed to permit unauthorized access or to disable or otherwise harm or disable any System whether
automatically with the passage of time or under the positive control of a Person; (v) are in good repair and operating condition and are adequate and suitable (including with respect to working
condition, license seats, performance and capacity) for the purposes for which they are currently being used; and (vi) are sufficient to operate the business of the Company and its Subsidiaries after the Closing in substantially the same
manner as conducted in the twelve (12) months prior to the Closing and constitute all of the Systems reasonably necessary to conduct the business of the Company and its Subsidiaries as currently
conducted.
6.16 Taxes and Returns.
(a) The Company and each of its Subsidiaries have or will have timely filed, or caused to be timely filed, all
material Tax Returns required to be filed by them (taking into account all available extensions), which Tax Returns are true, accurate, correct and complete in all material respects, and has paid,
collected or withheld, or caused to be paid, collected or withheld, all material Taxes required to be paid, collected or withheld, other than such Taxes being contested in good faith for which adequate reserves in the Company Financial
Statements have been established in accordance with GAAP. The Company and each of its Subsidiaries have complied in all material respects with all applicable Laws relating to Tax.
(b) There is no Action currently pending or threatened in writing against the Company or any of its
Subsidiaries by a Governmental Authority in a jurisdiction where the Company or such Subsidiary does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.
(c) There are no claims, assessments, audits, examinations, investigations or other Actions by any Taxing
Authority in progress or pending against the Company or any of its Subsidiaries in respect of any Tax, and neither the Company nor any of its Subsidiaries has been notified in writing, or to the Knowledge of the Company, orally, of any
proposed Tax claims or assessments against it (other than, in each case, claims or assessments for which adequate reserves in the Company Financial Statements have been established in accordance with GAAP for Company Financial Statements
delivered as of the date hereof) or that any such audit, examination, investigation or other Action is contemplated.
(d) Neither the Company nor any of its Subsidiaries has any liability
for Taxes of any Person (other than the Company and its Subsidiaries) (i) under any Tax indemnity, Tax sharing or Tax allocation agreement or any other contractual obligation (excluding for this
purpose, agreements entered into in the ordinary course of business the primary purpose of which is not related to Taxes, such as leases, licenses or credit agreements), (ii) arising from the application of U.S. Treasury Regulations Section 1.1502-6 or any analogous provision of state, local or non-U.S. Law or (iii)
as a transferee or successor, by Contract (excluding for this purpose, Contracts entered into in the ordinary course of business the primary purpose of which is not related to Taxes, such as leases,
licenses or credit agreements) or by operation of Law.
(e) There are no Liens with respect to any Taxes upon the Company’s or any of its Subsidiaries’ assets, other than Liens described in clause (a) of the definition of Permitted Liens.
(f) The Company and each of its Subsidiaries have collected or withheld all material Taxes currently required
to be collected or withheld by them, and all such Taxes have been paid to the appropriate Governmental Authorities or set aside in appropriate accounts for future payment when due.
(g) Neither the Company nor any of its Subsidiaries has any outstanding waivers or extensions of any applicable statute of limitations to assess any material amount of Taxes. There are no outstanding requests by the Company of any of its Subsidiaries for any extension of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return.
(h) Neither the Company nor any of its Subsidiaries has made any change in accounting methods (except as
required by a change in Law) or received a ruling from, or signed an agreement with, any Taxing Authority that would reasonably be expected to have a material impact on its Taxes following the
Closing.
(i) Neither the Company nor any of its Subsidiaries is, or has ever been, a member of an “affiliated group” as
defined in Section 1504(a) of the Code or any affiliated, combined, unitary, consolidated or similar group under state, local or foreign Law (other than a group all of the members of which consisted of the Company and its Subsidiaries).
(j) The Company is, and since its inception has been, properly characterized as a corporation for U.S. federal
income tax purposes. The Company is treated as a U.S. domestic corporation for U.S. federal income tax purposes pursuant to Section 7874(b) of the Code. Each Subsidiary
of the Company is, and since its inception has been, properly treated for U.S. federal income tax purposes in the manner set forth in Section 6.16(j) of the Company Disclosure Schedules.
(k) The Company has not constituted either a “distributing corporation” or a “controlled corporation” (within
the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying (or intended to qualify) in whole or in part for tax-free treatment under Section 355 of the Code (or so much of
Section 356 of the Code as relates to Section 355 of the Code) or Section 361 of the Code.
(l) Neither the Company nor any of its Subsidiaries has taken or agreed to take
any action, nor does it intend to or plan to take any action, or have any knowledge of any fact or circumstance that
could reasonably be expected to prevent the Transactions from qualifying for the Intended US Tax Treatment (with the exception of any actions specifically contemplated by this Agreement).
(m) There are no circumstances existing which could result in the application to the Company or any of its
Subsidiaries of Sections 17, 78, 80, 80.01, 80.02, 80.03, 80.04 or Subsection 160(1) of the ITA or any analogous provision of any comparable Law of any province or territory of Canada.
(n) The terms and conditions made or imposed in respect of every transaction (or series of transactions) between the Company or any of its Subsidiaries and any Person that is
(i) a non‑resident of Canada for purposes of the ITA, and (ii) not dealing at arm’s length with the Company or any of its Subsidiaries, as applicable, for purposes of the ITA, do not differ from those that would have been made between persons dealing at arm’s length for purposes of the ITA, and all documentation or records as required by applicable Law have been made or obtained in respect of such transactions (or series of transactions).
(o) None of the Company or any of its Subsidiaries has participated in any transactions which are subject to the reporting requirements
under section 237.3 or section 237.5 of the ITA, or the notification requirements under section 237.4 of the ITA.
6.17 Real Property.
(a) The leases set forth on Section 6.17(a) of the Company Disclosure Schedule (the “Company Leases”) are the only Contracts pursuant to which the Company leases any real property. Neither the Company nor any of its Subsidiaries is a party
to, or under any agreement to become a party to, any lease with respect to real property other than the Company Leases, copies of which have been provided to
Southern. Each Company Lease is in good standing, creates a good and valid leasehold estate in the leased properties thereby demised and is in full force and effect without amendment, except as set forth on Section 6.17(a) of the
Company Disclosure Schedules. With respect to each Company Lease, (a) such Company Lease (or a notice in respect of such Company Lease) has been properly registered in the appropriate land registry
office, (b) all rents and additional rents have been paid, (c) no waiver, indulgence or postponement of the lessee’s obligations has been granted by the lessor, (d) there exists no event of default or event, occurrence, condition or act
(including the purchase of the Company Securities) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default under the Lease and (e) to the knowledge of the Company, all of the covenants to be performed by any other party under such Company Lease have been fully performed.
(b) Each of the leased properties is adequate and suitable for the purposes for which it is presently being
used and the Company or its Subsidiaries, as applicable, has adequate rights of ingress and egress into each of the leased properties for the operation of the business in the ordinary course. Section 6.17(b) of the Company Disclosure
Schedules sets forth all of the Company Leases setting out, in respect of each Company Lease, a description of the leased premises (by municipal address and proper legal description), the term of the Company Lease, the rental payments under
the Company Lease (specifying any breakdown of base rent and additional rents), any rights of renewal and the term thereof, and any restrictions on assignment, change of control of the Company or
amalgamation.
6.18 Personal Property. Each
item of Personal Property that is currently owned, used or leased by the Company or any of its Subsidiaries, as applicable, with a book value or fair market value of greater than Twenty-Five Thousand Dollars ($25,000) is set forth on Section
6.18 of the Company Disclosure Schedules, along with, to the extent applicable, a list of lease agreements, lease guarantees, security agreements
and other agreements related thereto, including all amendments, terminations and modifications thereof or waivers thereto (“Company Personal Property
Leases”). Except as would not be material to the Company or any of its Subsidiaries, or as set forth in Section 6.18 of the Company Disclosure Schedules, all such items of Personal Property are in good operating condition and
repair (reasonable wear and tear excepted consistent with the age of such items) and are suitable for their intended use in the business of the Company. The operation of the Company’s business as it is now conducted or presently proposed to
be conducted is not in any material respect dependent upon the right to use the Personal Property of Persons other than the Company, except for such Personal Property that is owned, leased or licensed by or otherwise contracted to the
Company. The Company Personal Property Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect. No event has occurred that (whether with or without notice, lapse of time or both or the
happening or occurrence of any other event) would constitute a material default on the part of the Company or, to the Knowledge of the Company, any other party
under any of the Company Personal Property Leases, and neither the Company nor any of its Subsidiaries has received notice of any such condition.
6.19 Title to and Sufficiency of Assets. The Company and its Subsidiaries have good and marketable title to, or, in the case of leased or subleased assets, a valid
leasehold interest in or right to use, all of their respective material assets, free and clear of all Liens other than (a) Permitted Liens, (b) the rights of lessors under leasehold interests and (c) Liens set forth in the Company Financial
Statements (collectively, the “Assets”). The Assets (including Intellectual Property rights and contractual rights) of the Company and its Subsidiaries,
taken as a whole, constitute all of the material assets, rights and properties that are used in the operation of the businesses of the Company and its
Subsidiaries as they are now conducted or that are used or held by the Company or any of its Subsidiaries for use in the operation of the business of the Company or any of its Subsidiaries.
6.20 Employee Matters.
(a) The Company is not party to, or bound by, any Labor Agreement, and
has never been party to, or bound by, any such Contract. There are no unfair labor practice charges, material labor grievances, labor arbitrations, labor strikes, slowdowns, work stoppages, boycotts,
picketing, handbilling, lockouts, or other material labor disputes, or to the Company’s Knowledge threat of any of the foregoing, or, to the Company’s Knowledge, union organizing activity or demand or petition for representation or
certification, by or with respect to any of the employees of the Company, and no such activities or disputes have occurred (including any representation or certification proceedings brought or filed
with the National Labor Relations Board or any other labor relations tribunal or authority) since the Company’s incorporation. No employees of the Company are represented by any labor organization, labor or trade union, or works council with
respect to their employment with the Company. The Company has not engaged in any unfair labor practices since its incorporation. With respect to the Transactions,
the Company has satisfied in all material respects any pre-signing or, as of the Closing, pre-Closing notice, consultation or other obligations owed to its employees or their representatives under applicable Law or Labor Agreement.
(b) The Company is and since its incorporation has been in compliance in all
material respects with all applicable Laws respecting labor, employment and employment practices, including Laws regarding terms and conditions of employment, health and safety, wages and hours, discrimination, harassment, retaliation,
whistleblowing, disability, labor relations, worker classification, Tax withholding, hours of work, payment of wages and overtime wages, pay equity, immigration (including the completion of Forms I-9 and
confirmation of visas), workers’ compensation, unemployment insurance, working conditions, equal opportunity, affirmative action, employee leave and other time off, COVID-19, and employee terminations
(including plant closures and layoffs), and has not received written or, to the Knowledge of the Company, oral notice that there is any instance of noncompliance in any of the foregoing respects. Except as would not result in material liability to the Company, the Company (i) has since its incorporation correctly classified all current and former exempt and non-exempt employees, individual independent contractors, leased employees,
and other non-employee service providers for all applicable purposes, (ii) is not liable for any past due arrears of wages, salaries, premiums, commissions, bonuses, severance, termination payments, fees, or other compensation due to current
or former employees, independent contractors or other individual service providers of the Company since its incorporation or any fine, Tax, interest or penalty for failure or delinquency to pay the foregoing and (iii) is not liable for any
material payment to any Governmental Authority with respect to unemployment or workers’ compensation benefits, social security or other benefits, insurance, Taxes or obligations for employees, independent contractors or other individual
service providers due since the Company’s incorporation (other than routine payments to be made in the ordinary course of business and consistent with past practice). There are no Actions pending or, to the Company’s Knowledge, threatened,
and there have been no such Actions since the Company’s incorporation, by or against the Company brought by or against any applicant for employment, any current or former employee, consultant, independent contractor or other individual
service provider, any Person alleging to be a current or former employee, contractor or individual service provider, or any Governmental Authority or any other Person relating to violations of labor or employment Laws, or making any other
allegation relating to the employment of or services rendered by such Person including alleging breach of any express or implied contract of employment or engagement, wrongful termination of
employment or engagement, or alleging any other discriminatory, wrongful or tortious conduct in connection with the employment or service relationship. To the Company’s Knowledge, (A) no employee or individual service provider intends to
terminate his or her employment with or services to the Company, and (B) no current or former employee or individual service provider is in any material respect in violation of any employment agreement,
nondisclosure obligation, fiduciary duty, restrictive covenant or other obligation (I) owed to the Company or (II) owed to any third party with respect to such person’s
right to be employed or engaged by the Company.
(c) Section 6.20(c) of the Company Disclosure Schedules sets forth a complete and accurate list of all
employees and individual service providers of the Company, as of the date hereof, including each such individual’s (i) name, (ii) job title or services description, (iii) employing or engaging entity, (iv) work location, (v) compensation rate
and method, (vi) hire or engagement date, (vii) status as exempt or non-exempt from overtime requirements (for employees), (viii) leave status and (ix) accrued vacation or paid time off.
(d) There has not at any time since the Company’s incorporation been any, and there is no pending or, to the
Knowledge of the Company, threatened, any allegation, investigation (including any internal investigation), complaint, lawsuit or Action concerning any Misconduct with respect to any Company employee, contractor, or other service provider
(and, where required, the Company has taken corrective action in response to).
(a) “Company Benefit Plan” means each Benefit Plan that is sponsored, maintained, contributed to or required to be contributed by the
Company or any of its Subsidiaries or under which the Company or any of its Subsidiaries has any liability or obligation (including any contingent liability
or obligation).
(b) Set forth on Section 6.21(b) of the Company Disclosure Schedules is a true and complete list of
each material Company Benefit Plan (other than any at-will offer letter that does not provide for equity-based or phantom equity awards, retention, change in control, severance or termination benefits
and is on the standard form of offer letter set forth on Section 6.21(b) of the Company Disclosure Schedules). With respect to each material Company Benefit Plan, the Company and its Subsidiaries have provided to Southern or its
counsel true and complete copies, to the extent applicable, of (i) each writing constituting a part of such Company Benefit Plan, including all plan documents and amendments thereto, or if not in writing, a summary of such Company Benefit
Plan, (ii) the most recent annual report (IRS Forms 5500 series), (iii) any related trust documents and the most recent summary plan description distributed to participants (and any summaries of
material modifications thereto), and (iv) any non-routine correspondence with any Governmental Authority. Each Company Benefit Plan that is intended to be qualified within the meaning of Section 401(a) of the Code timely received a current,
favorable determination, advisory or opinion letter from the IRS, and, to the Company’s Knowledge, nothing has occurred that could reasonably be expected to adversely affect the qualified status of any such Company Benefit Plan.
(c) No Company Benefit Plan is, and neither the Company nor any of its Subsidiaries sponsors, maintains or
contributes to (or have any obligation to contribute to), or has any liability under or with respect to any: (i) “defined benefit plan” (as defined in
Section 3(35) of ERISA) or any plan that is or was subject to Title IV of ERISA or Section 412 or 430 of the Code, (ii) “multiemployer plan,” as defined in Section 3(37) of ERISA, (iii) “multiple employer plan” within the meaning of Section
413(c) of the Code or Section 210 of ERISA, or (iv) “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA). Neither the Company nor any of its Subsidiaries has any Liability
on account of being considered a single employer under Section 414 of the Code with any other Person. No Company Benefit Plan provides, and neither the Company nor any of its Subsidiaries has any obligation to provide, retiree or
post-employment health or life insurance or any other retiree or post-employment welfare-type benefits to any Person other than as required under Section 4980B of the Code or any similar state Law and for which the covered Person pays the
full cost of coverage.
(d) With respect to each Company Benefit Plan: (i) such Company Benefit Plan is and
has at all times been operated, maintained, funded and administered in all material respects in accordance with its terms, and applicable Laws; (ii) there have been no “prohibited transactions” within the meaning of Section 4975 of the Code or Section 406 or 407 of ERISA that are not otherwise exempt under Section 408 of ERISA and no breaches of fiduciary duty; (iii) no Action
is pending, or to the Company’s Knowledge, threatened (other than routine claims for benefits arising in the ordinary course of administration); and (iv) all contributions, distributions, reimbursements and premiums due through the Closing
Date have been timely made and all such amounts for any period ending on or before the Closing Date that are not yet due have been made or properly accrued on the Company Financial Statements. Neither the Company nor any of its Subsidiaries
has incurred (whether or not assessed) or is reasonably expected to incur or to be subject to, any material Tax or other penalty with respect to the reporting requirements under Sections 6055 and 6056 of the Code, as applicable, or under
Section 4980B, 4980D or 4980H of the Code.
(e) Neither the execution and delivery of this Agreement nor the consummation of the Transactions could (either alone or in combination with another event) (i) result in any payment or benefit, or increase in the amount of any compensation
or benefits due, to any current or former employee, officer, director or other individual service provider of the Company or any of its Subsidiaries; (ii) result in the acceleration of the time of payment or vesting, or trigger any payment or
funding of any compensation or benefits due to any current or former employee, officer, director or other individual service provider of the Company or any of its Subsidiaries; (iii) except as required under the terms of this Agreement or by
applicable Law, restrict the ability of the Company to merge, amend or terminate any material Company Benefit Plan; (iv) result in the forgiveness of any employee or service provider loan; or (v) result in the payment of any amount (whether
in cash or property or the vesting of property) that could, individually or in combination with any other such payment, constitute an “excess parachute payment” (within the meaning of Section 280G(b)(1) of the Code). No person is entitled to receive, and neither the Company nor any of its Subsidiaries has any current or contingent obligation to provide, any payment (including any tax
gross-up or other payment), indemnification, reimbursement or otherwise be made whole from the Company as a result of the imposition of any excise taxes required by any applicable Laws, including
under Section 4999 or Section 409A of the Code (or any corresponding provisions of state, local or foreign Tax law).
(f) Each Company Benefit Plan that constitutes in any part a “nonqualified deferred compensation plan” (as
defined under Section 409A(d)(1) of the Code) subject to Section 409A of the Code has been operated and administered in all respects in operational compliance with, and is in all respects in documentary compliance with, Section 409A of the
Code and all IRS guidance promulgated thereunder, and no amount under any such plan, agreement or arrangement is, has been or could reasonably be expected
to be subject to any additional Tax, interest or penalties under Section 409A of the Code.
6.22 Environmental Matters.
(a) The Company and its Subsidiaries have, since incorporation have been, in compliance in all material respects
with all applicable Environmental Laws, including obtaining, maintaining, and complying in all material respects with all Permits required under Environmental Laws for the operation of its business and the occupation of its properties and
facilities.
(b) Neither the Company nor any of its Subsidiaries has received any Order, notice or written report from any
Governmental Authority regarding any actual or alleged material violation of, or material Liability under, Environmental Laws.
(c) Neither the Company nor any of its Subsidiaries have treated, stored, arranged for or permitted the
disposal of, transported, handled, distributed, exposed any person to or Released Hazardous Materials, including on any property
owned, or operated on, by the Company or any of its Subsidiaries and no such property owned or operated on by the Company or any of its Subsidiaries is contaminated by Hazardous Materials, in each case so as to give rise to any Environmental
Liabilities of the Company.
(d) Neither the Company nor any of its Subsidiaries is party to any
Contract pursuant to which the Company or such Subsidiary provided an indemnity with respect to, or has otherwise become subject to (either by Contract or operation of Law), any Environmental Liability of any other Person under Environmental
Laws or relating to Hazardous Materials.
(e) The Company has provided to Southern all environmental audits, assessments and reports and other material
environmental, health or safety documents relating to the Company’s past or current properties, facilities or operations on the Company’s properties and facilities that are in the Company and its Subsidiaries’ possession or, to the Knowledge
of the Company, under its reasonable control.
6.23 Related Person Transactions. Except as set forth on Section 6.23 of the Company Disclosure Schedules, neither the Company nor any of its Affiliates, nor any
officer, director, manager, employee, trustee or beneficiary of the Company or any of its Affiliates, nor any immediate family member of any of the foregoing
(whether directly or indirectly through an Affiliate of such Person) (each of the foregoing, a “Company Related Person”) is presently, or since January 1, 2025, has been, a party to any transaction with the Company, including any Contract or other arrangement (a) providing for the furnishing of services by (other than as officers, directors or employees of the Company), (b) providing for the rental of real
property or Personal Property from or (c) otherwise requiring payments to (other than for services or expenses as directors, officers or employees of the
Company in the ordinary course of business consistent with past practice) any Company Related Person or any Person in which any Company Related Person has an interest as an owner, officer, manager, director, trustee or partner or in which any Company Related Person has any direct or indirect interest.
6.24 Insurance.
(a) A list of all insurance policies (by policy number, insurer, coverage period, coverage amount, annual
premium and type of policy) held by the Company, as of the date hereof, relating to the Company or its business, properties, assets, directors, officers and employees, copies of which have previously
been made available to Southern is set forth on Section 6.24(a) of the Company Disclosure Schedules. All premiums due and payable under all such insurance policies have been timely paid and the Company is otherwise in material
compliance with the terms of such insurance policies and each such insurance policy (i) is legal, valid, binding, enforceable and in full force and effect and (ii) will continue to be legal, valid, binding, enforceable, and in full force and
effect on identical terms following the Closing. Neither the Company nor any of its Subsidiaries has any self-insurance or co-insurance programs. Since the date of the Company’s incorporation, neither the Company nor any of its Subsidiaries
has received any notice from, or on behalf of, any insurance carrier relating to or involving any adverse change or any change other than in the ordinary course of business, in the conditions of insurance, any refusal to issue an insurance
policy or non-renewal of a policy.
(b) The Company and its Subsidiaries have reported to its insurers all claims and
pending circumstances that would reasonably be expected to result in a claim, except where such failure to report such a claim would not be reasonably likely to be material to the Company or any of its Subsidiaries. To the Knowledge of the
Company, no event has occurred, and no condition or circumstance exists, that would reasonably be expected to (with or without notice or lapse of time) give rise to or serve as a basis for the denial of any such material insurance claim.
Since incorporation, neither the Company nor any of its Subsidiaries has made any claim against an insurance policy as to which the insurer is denying or has denied coverage.
6.25 Books and Records. All of the financial books and records of the Company and its Subsidiaries are complete and accurate in all material respects and have been
maintained in the ordinary course of business consistent with past practice and in accordance with applicable Laws.
6.26 Certain Business Practices.
(a) Neither the Company or any of its Subsidiaries nor any of their respective officers, directors, employees
or other individual service providers, nor to the Knowledge of the Company, any agent or other third party representative acting on behalf of the Company
or any of its Subsidiaries, (a) is currently, or has been since incorporation: (i) a Sanctioned Person; (ii) engaging in any dealings or transactions
with or for the benefit of any Sanctioned Person or in any Sanctioned Country; (iii) engaging in any export, reexport, transfer or provision of any goods, software, technology, data or service without,
or exceeding the scope of, any required or applicable licenses or authorizations under all applicable Ex-Im Laws; or (iv) otherwise in violation of Sanctions, Ex-Im Laws, or U.S. anti-boycott Laws (collectively, “Trade Controls”); or
(b) has at any time (i) made or accepted any unlawful payment or given, received, offered, promised, or authorized or agreed to give or receive, any money, advantage or thing of value, directly or indirectly, to or from any employee or
official of any Governmental Authority or any other Person in violation of Anti-Corruption Laws; or (ii) otherwise been in violation of any Anti-Corruption Laws.
(b) Neither the Company nor any of its Subsidiaries has received from any Governmental Authority or any Person
any notice, inquiry, or internal or external allegation; made any voluntary or involuntary disclosure to a Governmental Authority; or conducted any internal investigation or audit concerning any actual or potential violation or wrongdoing in
each case, related to Trade Controls or Anti-Corruption Laws.
(c) Neither the Company nor any of its Subsidiaries is a “TID U.S. Business,” as such term is defined in 31 C.F.R. § 800.248.
6.27 Compliance with
Privacy Laws, Privacy Policies and Certain Contracts.
(a) The Company and its Subsidiaries, and to the Knowledge of the Company, their respective officers,
directors, employees, agents, subcontractors, vendors and other individual service providers to whom the Company or any of its Subsidiaries, as applicable, has given access to Personal Data, are and have been at all times, in compliance in
all material respects with (i) all applicable Privacy Laws, (ii) the Company’s and its Subsidiaries’ privacy policies, (iii) all industry and self-regulatory standards governing Personal Data, privacy, data security, and data protection to
which the Company or any of its Subsidiaries are bound or to which they purport to adhere (including, as applicable, the Payment Card Industry Data Security Standard), and (iv) the Company’s and its Subsidiaries’ contractual obligations
concerning Personal Data, privacy, data protection, cybersecurity, data security and the security of the Company’s and each of its Subsidiaries’ information technology systems, and neither the execution, delivery nor performance of this
Agreement or any other agreements referred to in this Agreement nor the consummation of any of the Transactions
will, with or without notice or lapse of time, directly result in any violation of the foregoing clauses (i)–(iv) in any material respect;
(b) To the Knowledge of the Company, neither the Company nor any of its Subsidiaries has experienced any material
loss, damage or unauthorized access, use, disclosure, modification or breach of security of Personal Data maintained by or on behalf of the Company (including, to the Knowledge of the Company, by any agent, subcontractor or vendor of the
Company); and
(c) To the Knowledge of the Company, (i) no Person, including any Governmental Authority, has made any written
claim or commenced any Proceeding with respect to any violation of any Privacy Law by the Company or any of its Subsidiaries; and (ii) the Company has not been given written notice of any criminal, civil or administrative violation of any
Privacy Law, in any case including any claim or Action with respect to any loss, damage or unauthorized access, use, disclosure, modification or breach of security, of Personal Data maintained by or on behalf of the Company or any of its
Subsidiaries (including by any agent, subcontractor or vendor of the Company).
6.28 Investment Company Act. Neither the Company nor any of its Subsidiaries is an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company,” or required to register as an “investment
company,” in each case within the meaning of the Investment Company Act.
6.29 Finders and Brokers. Except as set forth on Section 6.29 of the Company Disclosure Schedules, neither the
Company nor any of its Subsidiaries has any Liability in connection with this Agreement or the Ancillary Documents, or the Transactions, that would result in the obligation of the Company or any of its Subsidiaries, or any of their respective Affiliates, to pay any finder’s fee, brokerage or agent’s commissions or other like payments.
6.30 Independent Investigation. The Company has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of Southern and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of Southern for such purpose. The Company acknowledges and agrees that: (a) in making its decision to enter into this Agreement, the Ancillary
Documents to which it is a Party and to consummate the Transactions, it has relied solely upon its own
investigation and the express representations and warranties of Southern set forth in Article IV of this Agreement (including the related portions of Southern Disclosure Schedules) and in any certificate delivered to the Company by
Southern pursuant hereto; and (b) neither Southern nor any of its Representatives is making or has made any representation or warranty, express or implied, as to Southern or this Agreement, the Transactions, or any information or materials
regarding the foregoing furnished or made available to the Company, except as expressly set forth in Article IV of this Agreement (including the related portions of Southern Disclosure Schedules) or in any certificate delivered to
the Company by Southern pursuant hereto.
6.31 Information Supplied. None of the information supplied or to be supplied by the Company expressly for inclusion or incorporation by reference: (a) in any current
report on Form 8-K, and any exhibits thereto or any other report, form, registration or other filing made with any Governmental Authority or stock exchange with
respect to the Transactions; (b) in the Registration Statement; or (c) in the Company Circular and other
mailings or other distributions to the Company Shareholders, Southern Shareholders or prospective investors with respect to the consummation of the Transactions or in any amendment to any of documents identified in (a) through (c), will, when filed, made available, mailed or distributed, as the case may be, including on the Closing Date, contain or will
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements
therein, other than in the case of the Registration Statement, in light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by the Company expressly for inclusion or
incorporation by reference in any press release or filing will, when filed or distributed, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, neither the Company nor any
of its Subsidiaries makes any representation, warranty or covenant with respect to any information supplied by or on behalf of Southern or its Affiliates.
6.32 Company SEC Documents. Since November 6, 2024, the Company has filed with or furnished to (as applicable) the SEC all registration statements, prospectuses,
forms, reports, definitive proxy statements, schedules and documents and related exhibits required to be filed or furnished by it under the Securities Act or the Exchange Act, as the case may be, together with all certifications required
pursuant to SPX (such documents and any other documents filed or furnished by the Company with the SEC since November 6, 2024, as have been supplemented, modified or amended since the time of filing, collectively, the “Company SEC
Documents”). As of their respective filing dates or, if supplemented, modified or amended since the time of filing, as of the date of the most recent supplement, modification or amendment, the Company SEC Documents (a) did not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading and
(b) complied as to form in all material respects with all applicable requirements of the Exchange Act or the Securities Act, as the case may be, in each case as in effect on the date each such document was filed with or furnished to the
SEC. None of the Company Subsidiaries is currently required to file periodic reports with the SEC. As of the date of this Agreement, there are no material outstanding or unresolved comments received from the SEC with respect to any of the
reports filed by the Company with the SEC. Since November 6, 2024, the Company has been and is in compliance in all material respects with the applicable provisions of SOX and the applicable listing and corporate governance rules and
regulations of the Nasdaq. Neither the Company nor any Company Subsidiary has outstanding, or has arranged any outstanding, “extension of credit” to any director or executive officer within the meaning of Section 402 of SOX. With respect to
each annual report on Form 10-K and each quarterly report on Form 10-Q included in the Company SEC Documents, the “principal executive officer” and “principal financial officer” of the Company (as such terms are defined under SOX) have made
all certifications required by Rules 13a-14 and 15d-14 under the Exchange Act and Sections 302 and 906 of the SOX.
6.33 No Collateral Benefit. To the knowledge of the
Company, no “related party” of the Company (as such term is defined in MI 61-101), together with its “associated entities” (as such term is defined in MI 61-101), beneficially owns or exercises control or direction over 1% or more of the
outstanding Shares, except for related parties who will not receive a “collateral benefit” (as such term is defined in MI 61-101) as a consequence of the Transactions.
6.34 Fairness Opinion. The Company Board has received the written opinion of EntrepreneurShares LLC to the effect that, among other matters as determined by the Company Board in its sole discretion, the Transactions are fair to the Company Shareholders
from a financial point of view (the “Company Fairness Opinion”).
6.35 Competition Act. The aggregate value of the assets in
Canada that are owned by the Company and its Subsidiaries, and the gross revenues from sales in, from or into Canada generated by the Company and its Subsidiaries, both as determined in accordance with Part IX of the Competition Act and
the Notifiable Transactions Regulations thereunder, do not exceed 93,000,000 Canadian dollars.
ARTICLE VII
COVENANTS
7.1 Access and Information. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with Section
10.1 or the Closing (the “Interim Period”), and subject to Section 7.12, each Party shall, and shall cause its Representatives to, provide the other Parties and their Representatives, at reasonable times during normal
business hours and upon reasonable intervals and notice, reasonable access to all offices and other facilities and to all employees, properties, Contracts, agreements, commitments, books and records, financial and operating data and other
information (including Tax Returns, internal working papers, client files, client Contracts and director service agreements) of or pertaining to such Party, as the requesting Party or its Representatives may reasonably request regarding
such Party’s business, assets, Liabilities, financial condition, prospects, operations, management, employees and other aspects (including unaudited quarterly financial statements, a consolidated quarterly balance sheet and income
statement, copies of each material report, Schedule and other document filed with or received by a Governmental Authority pursuant to applicable securities Laws, and independent public accountants’ work papers (subject to any required
consents or conditions)). Each Party shall cause its Representatives to reasonably cooperate with the other Parties and their Representatives in connection with any such investigation; provided, however, that each requesting
Party and its Representatives shall conduct any such activities in such a manner as not to unreasonably interfere with the business or operations of the disclosing Party.
7.2 Conduct of Business of the Company and its Subsidiaries.
Unless Southern shall otherwise consents in writing (such consent not to be unreasonably
withheld, conditioned or delayed), during the Interim Period, except as expressly contemplated by this Agreement (including Section 7.2 of the Company Disclosure Schedules) or the Ancillary Documents, the Company and its Subsidiaries
(other than Merger SubCo) shall (i) conduct their business, in all material respects, in the ordinary course of business consistent with past practice, (ii) comply in all material respects with all Laws applicable to them and their respective
business, assets and employees, and (iii) take all commercially reasonable measures necessary or appropriate to preserve intact, in all material respects, its business organization, to keep available
the services of their managers, directors, officers, employees and individual service providers, and to preserve the possession, control and condition of their assets.
Without limiting the generality of this Section 7.2, and except as contemplated by the terms of this Agreement or the Ancillary Documents or as set forth in Section
7.2 of the Company Disclosure Schedules, during the Interim Period, without the written consent of Southern (such consent not to be unreasonably withheld,
conditioned or delayed), the Company and its Subsidiaries shall not, unless required by applicable Law:
(a) amend, waive or otherwise change, in any respect, its Organizational Documents;
(b) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to
issue, grant, sell, pledge or dispose of any of its equity or debt securities or any options, restricted stock units, restricted stock, phantom stock, stock appreciation, profit participation, warrants, commitments, subscriptions or rights of
any kind to acquire or sell any of its equity or debt securities, or other securities, including any securities convertible into or exchangeable for any of its shares or other equity or debt securities or securities of any class and any other
equity-based or phantom equity awards, or engage in any hedging transaction with a third Person with respect to such securities;
(c) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other
securities in respect thereof or declare, pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its equity interests, or directly or indirectly redeem, purchase or
otherwise acquire or offer to acquire any of its securities (except for the repurchase of Company Shares from former employees, non-employee directors and consultants in accordance with agreements as
in effect on the date hereof that are set forth on the Company Disclosure Schedules providing for the repurchase of shares in connection with any termination of service);
(d) incur, create, assume, prepay, commit to, or otherwise become liable for any
Indebtedness (directly, contingently or otherwise) in excess of $250,000 individually or $750,000 in the aggregate, make a loan or advance to or investment in any Person (other than advancement of expenses
to employees in the ordinary course of business), or guarantee or endorse any Indebtedness, Liability or obligation of any Person in excess of $250,000 individually or $750,000 in the aggregate;
(e) except as required by the terms in existence as of the date hereof of any Company Benefit Plan set forth on
Section 6.21(b) of the Company Disclosure Schedules or applicable Law, (i) increase or decrease the wages, salaries or any other compensation or benefits provided to any of its current or former employees, officers, directors or other
individual service providers, including under any Company Benefit Plan or any other benefit or compensation plan, agreement, contract, program, policy or arrangement that would be a Company Benefit Plan if in effect as of the date hereof (other than ordinary course increases in the annual base salary (and
corresponding increases in any annual target bonus linked to a percentage of base salary) to employees whose annual base salary is below $100,000 (prior to such increase)), (ii) make, announce or commit to make any retention, change in control, transaction, severance or similar payment (whether cash, properties or securities) to any employee,
officer, director or other individual service provider of the Company or (iii) enter into, establish, amend, modify, commence participation in or terminate any Company Benefit Plan, including any benefit or compensation plan, policy, program,
contract, agreement or arrangement that would be a Company Benefit Plan if in effect on the date hereof;
(f) take any action to (i) hire, engage, or otherwise enter into any
employment or consulting agreement or other service agreement with, or terminate (other than for “cause”) any officer, director, or, other than in the
ordinary course consistent with past practice, any employee or other individual service provider of the Company, (ii) grant, promise or announce any cash, equity, equity-based or phantom equity awards, other than in the ordinary course and
consistent with past practice, (iii) accelerate, or commit to accelerate, the payment, funding, right to payment or vesting of any compensation or benefits, (iv) enter into, amend, negotiate or terminate any Labor Agreement or recognize or
certify any labor union, works council or labor organization as the bargaining representative for any employees of the Company, or (v) knowingly or through conduct waive or release any noncompetition, nonsolicitation, or other restrictive covenant obligation of any current or former employee or other individual service provider;
(g) make, change or rescind any material election relating to Taxes, settle or
compromise any Action, arbitration, investigation, audit or controversy relating to Taxes, enter into any closing agreement with respect to Taxes, file any
amended Tax Return or claim for refund, or make any material change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or in compliance with GAAP;
(h) sell, assign, transfer, license or sublicense to any Person or otherwise extend, materially amend or modify,
abandon, permit to lapse or expire, subject to any Lien, otherwise dispose of, or fail to preserve any material Owned IP or Company IP Licenses (excluding non-exclusive licenses granted to customers in
the ordinary course of business consistent with past practice), disclose to any Person who has not entered into a confidentiality agreement any Trade Secrets, or disclose, license,
escrow, or otherwise make available, or grant any rights to, any Source Code owned or purported to be owned by the Company;
(i) other than in the ordinary course and consistent with past practice with respect to customers and suppliers,
(i) enter into any amendment of any Company Material Contract, (ii) enter into any Contract that if entered into prior to the date hereof would be a Company Material Contract, (iii) voluntarily terminate any Company Material Contract, except
for any termination at the end of the term of such Company Material Contract pursuant to the terms of such Company Material Contract, or (iii) waive any material benefit or right under any Company Material Contract;
(j) fail to maintain its books, accounts and records in all material respects in the ordinary course of
business consistent with past practice;
(k) establish any Subsidiary, enter into any new line of business, materially change the business carried on by
the Company and its Subsidiaries, taken as a whole;
(l) voluntarily terminate, cancel, materially modify or amend, permit
to lapse, or fail to keep in force any insurance policies maintained for the benefit of the Company or providing insurance coverage with respect to its assets, operations and activities, without
replacing or revising such policies with a comparable amount of insurance coverage with substantially similar coverage to that which is currently in effect;
(m) revalue any of its material assets or make any material change in
accounting methods, principles or practices, except to the extent required to comply with GAAP and after consulting with the Company’s outside auditors;
(n) waive, release, assign, commence, initiate, satisfy, settle or
compromise any Action, other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the
admission of wrongdoing by, the Company or its Affiliates) not in excess of $100,000 individually or $500,000 in the aggregate;
(o) close or materially reduce its activities, effect any group layoff or effect any other group personnel
reduction, at any of its facilities, provided that the Company shall have the right to terminate personnel in accordance with the terms of Section 7.2(f);
(p) acquire, including by merger, consolidation, acquisition of equity
interests or assets, or any other form of business combination, any corporation, partnership, limited liability
company, other business organization or any division thereof, or any material amount of assets outside the ordinary course of business consistent with past
practice;
(q) make capital expenditures in excess of $100,000 (individually for any project (or set of related projects)
or $500,000 in the aggregate);
(r) authorize, recommend, propose or announce an intention to adopt, or otherwise
effect a plan of complete or partial liquidation, rehabilitation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or similar transaction;
(s) purchase, sell, lease, license,
transfer, exchange or swap, pledge, mortgage or otherwise pledge or encumber (including securitizations), or transfer or otherwise dispose of any material portion of its properties, assets or rights
(including equity interests of the Company);
(t) other then in connection with the solicitation of proxies in connection with the Company Meeting or the Company Support & Lock-Up
Agreements and the Southern Support & Lock-Up Agreements, enter into any agreement, understanding or arrangement with respect to the voting of equity
securities of the Company;
(u) (A) enter into any lease for real property or (B) terminate, amend, assign, transfer, modify, supplement, deliver a notice of
termination under, fail to renew or waive or accelerate any rights or defer any liabilities under any Company Lease; or
(v) agree to take any action that is prohibited by this Section 7.2.
Nothing contained in this Section 7.2 shall be deemed to give Southern or any other Party, directly or indirectly, the right to control or direct the Company prior to the Closing. Prior to the Closing, the Company shall exercise, consistent with the terms and conditions hereof, control
over its business and operations. The Parties acknowledge and agree that for purposes this Section 7.2, Southern shall be deemed to have consented in writing to any of the foregoing actions taken or proposed to be taken by the
Company, if (x) the Company delivers to Southern written request to take such action and Southern fails to respond thereto within 72-hours following its receipt of such request or (y) if the Company receives written approval or written
acknowledgment (without objection) of the taking of such action from any of the individuals listed on Section 12.1(a) of the Southern Disclosure Schedules.
7.3 Conduct of Business of Southern.
Unless the Company shall otherwise consents in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the Interim Period, except as
expressly contemplated by this Agreement (including Section 7.3 of the Southern Disclosure Schedules) or the Ancillary Documents, Southern shall (i) conduct its business, in all material respects, in the ordinary course of business
consistent with past practice, (ii) comply in all material respects with all Laws applicable to its business, assets and employees, and (iii) take all commercially reasonable measures necessary or appropriate to preserve intact, in all
material respects, its business organization, to keep available the services of their managers, directors, officers, employees and individual service providers, and to preserve the possession, control and condition of their assets.
Without limiting the generality of this Section 7.3, and except as contemplated by the terms of this Agreement or the Ancillary Documents or as set forth in Section
7.3 of the Southern Disclosure Schedules, during the Interim Period, without the written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed), Southern shall not, unless required by applicable
Law:
(a) amend, waive or otherwise change, in any respect, its Organizational Documents;
(b) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity or
debt securities or any options, restricted stock units, restricted stock, phantom stock, stock appreciation, profit participation, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity or debt
securities, or other securities, including any securities convertible into or exchangeable for any of its shares or other equity or debt securities or securities of any class and any other equity-based or phantom equity awards, or engage in
any hedging transaction with a third Person with respect to such securities;
(c) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or
declare, pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to
acquire any of its securities (except for the repurchase of Southern Shares from former employees, non-employee directors and consultants in accordance with agreements as in effect on the date hereof that are set forth on the Southern
Disclosure Schedules providing for the repurchase of shares in connection with any termination of service);
(d) incur, create, assume, prepay, commit to, or otherwise become liable for any Indebtedness (directly, contingently or otherwise) in excess
of $250,000 individually or $750,000 in the aggregate, make a loan or advance to or investment in any Person (other than advancement of expenses to employees in the ordinary course of business), or guarantee or endorse any Indebtedness,
Liability or obligation of any Person in excess of $250,000 individually or $750,000 in the aggregate;
(e) except as required by the terms in existence as of the date hereof of any Southern Benefit Plan set forth on Section 4.20(b) of
the Southern Disclosure Schedules or applicable Law, (i) increase or decrease the wages, salaries or any other compensation or benefits provided to any of its current or former employees, officers, directors or other individual service
providers, including under any Southern Benefit Plan or any other benefit or compensation plan, agreement, contract, program, policy or arrangement that would be a Southern Benefit Plan if in effect as of the date hereof (other than ordinary course increases in the annual base salary (and corresponding increases in any annual target bonus linked to a percentage of base salary) to employees whose annual base salary is below $100,000
(prior to such increase)), (ii) make, announce or commit to make any retention, change in control, transaction, severance or similar payment (whether cash, properties or securities) to any employee, officer, director or other individual
service provider of Southern or (iii) enter into, establish, amend, modify, commence participation in or terminate any Southern Benefit Plan, including any benefit or compensation plan, policy, program, contract, agreement or arrangement that
would be a Southern Benefit Plan if in effect on the date hereof;
(f) take any action to (i) hire, engage, or otherwise enter into any employment or consulting agreement or other
service agreement with, or terminate (other than for “cause”) any officer, director, or, other than in the ordinary course consistent with past practice, any employee or other individual service provider of Southern, (ii) grant, promise or
announce any cash, equity, equity-based or phantom equity awards, other than in the ordinary course and consistent with past practice, (iii) accelerate, or commit to accelerate, the payment, funding, right to payment or vesting of any
compensation or benefits, (iv) enter into, amend, negotiate or terminate any Labor Agreement or recognize or certify any labor union, works council or labor organization as the bargaining representative for any employees of Southern, or (v)
knowingly or through conduct waive or release any noncompetition, nonsolicitation, or other restrictive covenant obligation of any current or former employee or other individual service provider;
(g) make, change or rescind any material election relating to Taxes, settle or compromise any Action, arbitration, investigation, audit or
controversy relating to Taxes, enter into any closing agreement with respect to Taxes, file any amended Tax Return or claim for refund, or make any material change in its accounting or Tax policies or procedures, in each case except as
required by applicable Law or in compliance with GAAP;
(h) sell, assign, transfer, license or sublicense to any Person or otherwise extend, materially amend or modify, abandon, permit to lapse or
expire, subject to any Lien, otherwise dispose of, or fail to preserve any material Owned IP or Southern IP Licenses (excluding non-exclusive licenses granted to customers in the ordinary course of business consistent with past practice),
disclose to any Person who has not entered into a confidentiality agreement any Trade Secrets, or disclose, license, escrow, or otherwise make available, or grant any rights to, any Source Code owned or purported to be owned by Southern;
(i) other than in the ordinary course and consistent with past practice with respect to customers and suppliers, (i) enter into any amendment
of any Southern Material Contract, (ii) enter into any Contract that if entered into prior to the date hereof would be a Southern Material Contract, (iii) voluntarily terminate any Southern Material Contract, except for any termination at the
end of the term of such Southern Material Contract pursuant to the terms of such Southern Material Contract, or (iii) waive any material benefit or right under any Southern Material Contract;
(j) fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past
practice;
(k) establish any Subsidiary, enter into any new line of business, materially change the business carried on by the Southern and its
Subsidiaries, taken as a whole;
(l) voluntarily terminate, cancel, materially modify or amend, permit to lapse, or fail to keep in force any insurance policies maintained
for the benefit of Southern or providing insurance coverage with respect to its assets, operations and activities, without replacing or revising such policies with a comparable amount of insurance coverage with substantially similar coverage
to that which is currently in effect;
(m) revalue any of its material assets or make any material change in accounting methods, principles or practices, except to the extent
required to comply with GAAP and after consulting with Southern outside auditors;
(n) waive, release, assign, commence, initiate, satisfy, settle or compromise any Action, other than waivers, releases, assignments,
settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, Southern or its Affiliates) not in excess of $100,000 individually or $500,000 in
the aggregate;
(o) close or materially reduce its activities, effect any group layoff or effect any other group personnel reduction, at any of its
facilities, provided that Southern shall have the right to terminate personnel in accordance with the terms of Section 7.3(f);
(p) acquire, including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any
corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets outside the ordinary course of business consistent with past practice;
(q) make capital expenditures in excess of $100,000 (individually for any project (or set of related projects) or $500,000 in the
aggregate);
(r) authorize, recommend, propose or announce an intention to adopt, or otherwise effect a plan of complete or partial liquidation,
rehabilitation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or similar transaction;
(s) purchase, sell, lease, license, transfer, exchange or swap, pledge, mortgage or otherwise pledge or encumber (including securitizations),
or transfer or otherwise dispose of any material portion of its properties, assets or rights (including equity interests of Southern);
(t) enter into any agreement, understanding or arrangement with respect to the voting of equity securities of Southern;
(u) (A) enter into any lease for real property or (B) terminate, amend, assign, transfer, modify, supplement, deliver a notice of
termination under, fail to renew or waive or accelerate any rights or defer any liabilities under any Southern Lease; or
(v) agree to take any action that is prohibited by this Section 7.3.
Nothing contained in this Section 7.3 shall be deemed to give the Company or any other Party, directly or indirectly, the right to control or direct Southern prior to the Closing. Prior to the Closing, Southern shall exercise, consistent with the terms and conditions hereof, control over its
business and operations. The Parties acknowledge and agree that for purposes this Section 7.3, the Company shall be deemed to have consented in writing to any of the foregoing actions taken or proposed to be taken by Southern, if (x)
Southern delivers to the Company written request to take such action and the Company fails to respond thereto within 72-hours following its receipt of such request, or (y) if Southern receives written approval or written acknowledgment
(without objection) of the taking of such action from the Chief Executive Officer or the Chief Financial Officer of the Company or the Chairman of the Company Board.
7.4 Conduct of Business of Merger SubCo Unless Southern shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed),
during the Interim Period, except as expressly contemplated by this Agreement or the Ancillary Documents Merger SubCo shall comply with all Laws applicable to Merger SubCo.
Without limiting the generality of this Section 7.4 and except as contemplated by the terms of this Agreement or the Ancillary Documents, during the Interim
Period, without the prior written consent of Southern (such consent not to be unreasonably withheld, conditioned or delayed), Merger SubCo shall not:
(a) amend, waive or otherwise change, in any respect, its Organizational Documents;
(b) issue, grant, sell, pledge, dispose of or authorize to issue, grant, sell, pledge or dispose of any of its equity securities, or issue or
sell, or authorize to issue or sell, any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for
any of its equity securities or other security interests of any class and any other equity-based awards;
(c) (i) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect
thereof or (ii) declare, pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its shares or other equity interests, or (iii) other than as permitted under its
Organizational Documents, directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization (other than with respect to the Merger); or
(e) authorize, recommend, propose or announce an intention to adopt, or otherwise effect a plan of complete or partial liquidation,
rehabilitation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or similar transaction;
(f) buy, purchase or otherwise acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any
material portion of assets, securities, properties, interests or businesses of any Person outside the ordinary course of business;
(g) enter into any Contract, whether written, oral or otherwise, relating to the employment of any Person or the provision of services by
any Person;
(h) carry on any business or otherwise engage in any activities, other than any activities reasonably necessary to implement the
Transactions;
(i) incur any liabilities, except to the extent reasonably necessary to implement the Transactions; or
(j) agree to take any action that is prohibited by this Section 7.4.
7.5 Covenants Relating to the Transactions
(a) Subject to Section 7.6, which shall govern in relation to Regulatory Approvals, each of the Parties covenants and agrees that
during the Interim Period, each of the Parties shall do all such commercially reasonable acts and things as may be necessary or advisable in order to consummate and make effective, as soon as reasonably practicable, the Transactions and,
without limiting the generality of the foregoing, the Parties shall and, where applicable, shall cause each of its Subsidiaries to:
(i) use commercially reasonable efforts to satisfy (or cause the satisfaction of) the conditions precedent to its
obligations hereunder as set forth in Article IX to the extent the same is within its control (including, for the avoidance of doubt, the Required Company Shareholder Approval, the Company Support & Lock-Up Agreements and the
Southern Support & Lock-Up Agreement);
(ii) use commercially reasonable efforts to oppose, lift or rescind any Order seeking to
restrain, enjoin or otherwise prohibit or delay or otherwise adversely affect the consummation of the Domestication, the Merger or the other Transactions and defend, or cause to be defended, any proceedings to which it is a party or brought
against it or its directors or officers challenging this Agreement, any Ancillary Document, the Domestication, the Merger or the Transactions; and
(iii) not take any action, or refrain from taking any commercially reasonable action, or permit any action to be taken or
not taken, which would reasonably be expected to prevent, materially delay or otherwise impede the consummation of the Pre-Closing Reorganization, Domestication, the Merger or the other Transactions.
(b) The Company covenants and agrees that from the date hereof until the end of the Interim Period, the Company shall use commercially
reasonable efforts to obtain and maintain in force the Stock Exchange Approvals (as applicable). Southern shall use commercially reasonable efforts to cooperate with the Company in respect of the foregoing, including by providing information
reasonably requested by the Company in connection therewith in a timely manner.
(c) Southern covenants and agrees that from the date hereof until the end of the Interim Period, Southern shall
promptly notify the Company in writing of:
(i) any Southern Material Adverse Effect;
(ii) any notice or other communication from any Person alleging that the consent (or waiver, permit, exemption, order,
approval, agreement, amendment or confirmation) of such Person is required in connection with this Agreement, any Ancillary Document or the Transactions;
(iii) any notice or other communication from any Person that has a material business relationship with Southern to the
effect that such Person is terminating or otherwise materially adversely modifying its relationship with Southern as a result of this Agreement or the Transactions;
(iv) any notice or other communication from any Governmental Authority in connection with this Agreement or the Transactions
(and to the extent legally permitted Southern shall promptly following the receipt thereof provide a copy of any such written notice or communication to the Company);
(v) any material filing, Actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened
against, relating to or involving or otherwise affecting Southern;
(vi) any failure of Southern to comply with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it or its Affiliates hereunder, in any material respect;
(vii) any material non-compliance with any Law by Southern; or
(viii) the discovery of any fact or circumstance that, or Southern becoming aware of the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which, would make any representation or warranty of Southern contained in this Agreement false or untrue, would reasonably be expected to constitute a breach by Southern of any covenant or agreement
contained in this Agreement, or would reasonably be expected to cause or result in any of the conditions to the Closing set forth in this Agreement, not capable of being satisfied or the satisfaction of those conditions being materially
delayed.
(d) The Company covenants and agrees that from the date hereof until the end of the Interim Period, the Company shall promptly notify
Southern in writing of:
(i) any Company Material Adverse Effect;
(ii) any notice or other communication from any Person alleging that the consent (or waiver, permit, exemption, order,
approval, agreement, amendment or confirmation) of such Person is required in connection with this Agreement, any Ancillary Document or the Transactions;
(iii) any notice or other communication from any Person that has a material business relationship with the Company or its
Subsidiaries (taken as a whole) to the effect that such Person is terminating or otherwise materially adversely modifying its relationship with the Company or any of its Subsidiaries as a result of this Agreement or the Transactions;
(iv) any notice or other communication from any Governmental Authority in connection with this Agreement (and to the
extent legally permitted the Company shall promptly following the receipt thereof provide a copy of any such written notice or communication to Southern); or
(v) any material filing, Actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened
against, relating to or involving or otherwise affecting the Company or any of its Subsidiaries;
(vi) any failure of Company to comply with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it or its Affiliates hereunder, in any material respect;
(vii) any material non-compliance with any Law by the Company or its Affiliates; or
(viii) the discovery of any fact or circumstance that, or the Company becoming aware of the occurrence or non-occurrence of
any event the occurrence or non-occurrence of which, would make any representation or warranty of the Company contained in this Agreement false or untrue, would reasonably be expected to constitute a breach by the Company of any covenant or
agreement contained in this Agreement, or would reasonably be expected to cause or result in any of the conditions to the Closing set forth in this Agreement, not capable of being satisfied or the satisfaction of those conditions being
materially delayed.
7.6 Regulatory Approvals
(a) As soon as reasonably practicable after the date hereof each Party, or where appropriate, the Parties jointly, shall make all
notifications, filings, applications and submissions with Governmental Authorities required or advisable in connection with the Regulatory Approvals, including the Required Regulatory Approvals, and shall use commercially reasonable efforts
to obtain as soon as reasonably practicable and maintain the Regulatory Approvals, including the Required Regulatory Approvals, subject to the terms hereof.
(b) All filing fees (including any Taxes thereon) in respect of any filing made to any Governmental Authority in respect of any Regulatory
Approvals shall be shared by the Parties equally.
(c) The Parties shall (i) cooperate with and keep one another fully and promptly informed as to the status of and the processes and
proceedings relating to obtaining the Regulatory Approvals and shall promptly notify each other of any communication from any Governmental Authority in respect this Agreement, (ii) provide or submit on a timely basis, and as promptly as
practicable, all documentation and information that is required, or in the discretion of a Party, acting reasonably, advisable, in response to any inquiries or requests received from any state attorney general, antitrust authority or other
Governmental Authority in connection with obtaining the Regulatory Approvals and use their commercially reasonable efforts to ensure that such information does not contain a Misrepresentation; provided, however, that, except
as otherwise provided in this Agreement, including Section 7.15, nothing in this provision shall require a Party to provide information that is not in its possession or not otherwise reasonably available to it, and (iii) not make any
submissions or filings to any Governmental Authority related to the Transactions, or participate in any meetings or any material conversations with any Governmental Authority in respect of any filings, submissions, investigations or other
inquiries or matters related to the Transactions, unless it consults with the other Party in advance and, to the extent not precluded by such Governmental Authority, gives the other Party a reasonable opportunity to review drafts of any
submissions or filings (and will give due consideration to any comments received from such other Parties) and to attend and participate in any communications. Despite the foregoing, submissions, filings or other written communications with
any Governmental Authority may be redacted as necessary before sharing with the other Parties to address reasonable attorney-client or other privilege or confidentiality concerns, provided that a Party must provide external legal
counsel to the other Parties non-redacted versions of drafts and final submissions, filings or other written communications with any Governmental Authority on the basis that the redacted information will not be shared with its clients.
(d) Each Party shall promptly notify the other Parties if it becomes aware that any (i) application, filing, document or other submission
for a Regulatory Approval contains a Misrepresentation, or (ii) any Regulatory Approval contains, reflects or was obtained following the submission of any application, filing, document or other submission containing a Misrepresentation, such
that an amendment or supplement may be necessary or advisable. In such case, the Parties shall co-operate in the preparation, filing and dissemination, as applicable, of any such amendment or supplement.
(e) The Parties shall request that any Required Regulatory Approval, be processed by the applicable Governmental Authority on an expedited
basis and, to the extent that a public hearing is held, the Parties shall request the earliest possible hearing date for the consideration of such Regulatory Approvals.
(f) If any objections are asserted with respect to the Transactions under any Law, or if any proceeding is instituted or threatened by any
Governmental Authority challenging or which could lead to a challenge of any of the Transactions as not in compliance with Law or as not satisfying any applicable legal text under a Law necessary to obtain the Regulatory Approvals, the
Parties shall use commercially reasonable efforts (in accordance with Section 7.5(a)(ii)) to resolve such objection, proceeding or Action, as the case may be, so as to allow the Effective Time to occur on or prior to the Outside Date.
(g) Notwithstanding anything to the contrary in this Agreement, no Party or any of its Subsidiaries is permitted or required to divest or to
offer to divest any of their material assets or properties or to agree to any material behavioral remedy, undertaking, commitment, or restriction on the operations of Southern or the Company in order to secure any Regulatory Approval, except
with the express consent of both Southern and the Company.
7.7 No Solicitation.
(a) For purposes of this Agreement, (i) an “Acquisition Proposal” means any inquiry, proposal or offer,
or any indication of interest in making an offer or proposal, from any Person or group at any time (other than, with respect to the Company, an existing shareholder of the Company, including a Core Company Securityholder or their respective
Affiliates, or existing Company Affiliate or insider) relating to an Alternative Transaction, and (ii) an “Alternative Transaction” means a transaction (other than the Transactions) concerning the sale of (i) all or any material part of the business
or assets (other than a sale of immaterial assets in the ordinary course of business consistent with past practice) of the Company or Southern, as applicable, or (ii) any of the shares or other equity
interests or profits of the Company or Southern, as applicable, in any case, whether such transaction takes the form of a sale of shares or other equity
interests, assets, merger, consolidation, issuance of debt securities, management Contract, joint venture or partnership, or otherwise.
(b) During the Interim Period, in order to induce the other Parties to
continue to commit to expend management time and financial resources in furtherance of the Transactions, each Party shall not, and shall cause its
Representatives to not, without the prior written consent of the Company and Southern, directly or indirectly, (i) solicit, assist, initiate or facilitate the making, submission or announcement of, or
intentionally encourage, any Acquisition Proposal, (ii) furnish any non-public information regarding such Party or its Affiliates or their respective businesses, operations, assets, Liabilities,
financial condition, prospects or employees to any Person or group (other than a Party to this Agreement or their respective Representatives) in connection with or in response to an Acquisition Proposal, (iii) engage or participate in
discussions or negotiations with any Person or group with respect to, or that could reasonably be expected to lead to, an Acquisition Proposal, (iv) approve, endorse or recommend, or publicly propose to approve, endorse or recommend, any
Acquisition Proposal, or (v) negotiate or enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Acquisition Proposal.
(c) Each Party shall notify the other Parties as promptly as practicable (and in any event within 48 hours) in
writing of the receipt by such Party or any of its Representatives of (i) any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations regarding or constituting any Acquisition Proposal or
any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations that could be expected to result in an Acquisition Proposal, and (ii) any request for non-public information relating to such
Party or its Affiliates in connection with any Acquisition Proposal, specifying in each case, the material terms and conditions thereof. Each Party shall keep the others promptly informed of the status of any such inquiries, proposals, offers
or requests for information. During the Interim Period, each Party shall, and shall cause its Representatives to, immediately cease and cause to be terminated any solicitations, discussions or negotiations with any Person with respect to any
Acquisition Proposal and shall, and shall direct its Representatives to, cease and terminate any such solicitations, discussions or negotiations.
(d) If the Company receives a bona fide unsolicited Acquisition Proposal that constitutes a Superior Proposal,
the Company Board may, or may cause the Company to, as applicable, approve, recommend, or enter into a definitive agreement with respect to such Superior
Proposal, if and only if:
(i) the Person making the Superior Proposal was not restricted from making such Superior
Proposal pursuant to an existing standstill or similar restriction;
(ii) the Company has been, and continues to be, in compliance with its obligations under
this Section 7.7;
(iii) the Company or its Representatives have delivered to Southern a written notice of the
determination of the Company’s Board that it has received a Superior Proposal and of the intention to approve or enter into a definitive agreement with
respect to such Superior Proposal, including a notice as to the value in financial terms that the Company Board has, in consultation with its financial advisors, determined should be ascribed to
any non-cash consideration offered under the Superior Proposal (the “Superior Proposal Notice”);
(iv) the Company or its Representatives have provided to Southern, a copy of any proposed
definitive agreement, LOI or term sheet for the Superior Proposal;
(v) at least five Business Days (the “Matching Period”) have elapsed from the date
that is the later of the date on which Southern received the Superior Proposal Notice from the Company and the date on which Southern received a copy of the definitive agreement for the Superior
Proposal;
(vi) after the Matching Period, the Company’s
Board has determined in good faith, after consultation with its legal counsel and financial advisors, that such Acquisition Proposal continues to constitute a Superior Proposal;
(vii) the Company Shareholders have not approved the Merger; and
(viii) prior to or concurrently with entering into such definitive agreement the Company terminates this Agreement.
If Southern receives a bona fide unsolicited Acquisition Proposal, whether or not it constitutes a Superior Proposal, the Southern Board shall not approve, recommend, or enter into a definitive agreement with
respect to such Acquisition Proposal.
(e) During the Matching Period, or such longer period as the Company may approve in writing for such purpose:
(a) the Company Party Board shall review any offer made by Southern to amend the terms of this Agreement and the Merger in good faith, after consultation with legal and financial advisors, in order to determine whether such proposal would, upon acceptance, result in the Acquisition Proposal previously constituting a Superior Proposal ceasing to be a Superior Proposal; and (b) the Company shall
negotiate in good faith with Southern to make such amendments to the terms of this Agreement as would enable the Company or its affiliates to proceed with the Transactions on such amended terms. If as a consequence of the foregoing the Company Board determines that such Acquisition Proposal would cease to be a
Superior Proposal, the Company shall promptly so advise Southern and such parties shall amend this Agreement to reflect such offer made by Southern and shall take and cause to be taken all such actions
as are necessary to give effect to the foregoing.
(f) Each successive amendment to any Acquisition Proposal that results in an increase in, or modification of, the
consideration (or value of such consideration) to be received by the Company Shareholders or other material terms or conditions thereof shall constitute a new Acquisition Proposal for the purposes of this Section 7.7(f).
(g) Nothing in this Agreement shall prohibit the Company Board from
responding through a directors’ circular or otherwise as required by applicable Laws to an Acquisition Proposal that it determines is not a Superior Proposal to inform them of such. Further, nothing in this Agreement shall prevent the Company Board from making any disclosure to the Company Shareholders if the Company Board, acting in good faith and upon the advice of its legal and
financial advisors, shall have determined that the failure to make such disclosure would be inconsistent with the fiduciary duties of the Company Board or such disclosure is otherwise required
under Law; provided, however, that, notwithstanding that the Company Board shall be permitted to make such disclosure, the Company
Board shall not be permitted to make a Company Change in Recommendation, other than as permitted by Section 7.7(d).
(h) If the Company provides a Superior Proposal Notice to Southern after a date that is less than five Business
Days before the Company Meeting, the Company shall, upon request from Southern, postpone the Company Meeting to a date that is not more than 15 Business Days after the scheduled date of the Company Meeting (and, in any event, no less than
five Business Days prior to the Outside Date); provided, however, that if the Company has fully complied with Section 7.7(d) through Section 7.7(e), and has determined that the Acquisition Proposal continues to
be a Superior Proposal in accordance with Section 7.7(d), it may then cancel the Company Meeting only if prior to or concurrently therewith it enters into such definitive agreement and the
Company terminates this Agreement immediately prior thereto.
7.8 No Trading.
(a) Southern acknowledges and agrees that it is aware, and that Southern’s Affiliates are aware (and each of
their respective Representatives is aware or, upon receipt of any material nonpublic information of the Company, will be advised) of the restrictions imposed by Canadian securities Laws
and the rules of the Nasdaq and other applicable foreign and domestic Laws on a Person possessing material nonpublic information about a publicly traded company.
Southern hereby agrees that, while it is in possession of such material nonpublic information, it shall not purchase or sell any securities of the Company (other than in connection with the Merger in accordance with Article I, and
Article III), communicate such information to any third party, take any other action with respect to the Company in violation of such Laws, or cause or
encourage any third party to do any of the foregoing.
7.9
Notification of Certain Matters. During the Interim Period, each Party shall give prompt notice to the other Parties if such Party or its Affiliates: (a) fails
to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it or its Affiliates hereunder, in any material respect;
(b) receives any notice or other communication in writing from any third party (including any Governmental Authority) alleging (i) that the Consent of such
third party is or may be required in connection with the Transactions or (ii) any non-compliance with any Law by such Person or its Affiliates; (c) receives any notice or other communication from any Governmental Authority in connection with the Transactions; (d) discovers any fact or circumstance that, or becomes aware of the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which, would make any representation or warranty contained in this Agreement, false or untrue, would reasonably be expected to constitute a breach of any covenant or agreement contained in this Agreement, or would reasonably be expected to cause or result in any of the conditions to the Closing set forth in this Agreement, not
being satisfied or the satisfaction of those conditions being materially delayed; or (e) becomes aware of the commencement or threat, in writing, of any Action against such Person or any of its Affiliates, or any of their respective
properties or assets, or, to the actual knowledge of such Person, any
officer, director, partner, member or manager, in his, her or its capacity as such, of such Person or of its Affiliates with respect to the consummation of the Transactions. No such notice shall constitute an acknowledgement or admission by the Party providing the notice regarding whether or not any of the conditions to
the Closing have been satisfied or in determining whether or not any of the representations, warranties or covenants contained in this Agreement have been breached.
7.10 Tax Matters.
(a) The Company shall pay all transfer, documentary, sales, use, stamp, registration, value added or other similar
Taxes incurred in connection with the Transactions (collectively, the “Transfer Taxes”) and file all necessary Tax Returns with respect to all
Transfer Taxes, and if required by applicable Law, the Parties shall, and shall cause their respective Affiliates to, join in the execution of any such Tax Returns and other document. Notwithstanding any other provision of this Agreement, the
Parties shall (and shall cause their respective Affiliates to) cooperate in good faith to minimize, to the extent permissible under applicable Law, the amount of any such Transfer Taxes, which shall constitute “Expenses” hereunder. For the
avoidance of doubt, Transfer Taxes shall not income any income Taxes.
(b) The Parties agree and intend that, to the greatest extent permitted by Law, for U.S. federal (and applicable
state and local) income tax purposes, the Transactions are intended to be treated consistent with the Intended US
Tax Treatment. Provided the Merger satisfies the requirements applicable to the Intended US Tax Treatment, the Parties will prepare and file all Tax Returns consistent with the Intended US Tax Treatment and will not take any inconsistent
position on any Tax Return; provided, however, that no Party shall be unreasonably impeded in its ability and discretion to negotiate, compromise or settle any Tax audit, claim or similar proceedings
in connection with the Intended US Tax Treatment. Notwithstanding the foregoing or anything herein to the contrary, none of the Parties makes any representation, warranty or covenant to any other Party (except to the extent expressly provided
in Section 4.15(l), Section 5.12 and Section 6.16(l)) or the Southern Shareholders or Company Securityholders regarding the tax treatment of the Merger, or any component thereof.
(c) The Parties shall execute and deliver (i) officer’s certificates, in customary
form, in a timely manner upon request by the other Party and (ii) any other representations reasonably requested by counsel to Southern or counsel to the Company, as applicable, for purposes of rendering opinions regarding the Intended US Tax
Treatment and other tax matters in connection with the Transactions, at such time or times as may be requested by
counsel to Southern or counsel to the Company, including in connection with the Closing and any filing with the SEC.
7.11 Securityholder Litigation and Dissenter’s Rights Each Party
shall give the other Parties prompt written notice of any securityholder Action against such Party or its directors, officers or other representatives relating to this Agreement, any Ancillary Agreement or the Transactions, shall keep the
other Parties reasonably informed regarding any such litigation, and shall give the other Parties the opportunity to participate (at such other’s Party’s expense) in the defense or settlement of any such litigation. Each Party shall give the
other Parties the right to review and comment on all filings or responses to be made by such Party in connection with any such litigation, and will in good faith take such comments into account. No Party shall offer to or agree to settle any
such litigation without the other Parties’ prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.
7.12
Confidential Information. During the Interim Period, each Party shall be bound by and comply with the provisions set forth in the Confidentiality Agreement as
if such provisions were set forth herein, and such provisions are hereby incorporated herein by reference. Each Party acknowledges and agrees that each is aware, and each of their respective Affiliates and representatives is aware (or upon receipt of any material nonpublic information of the other Party, will be advised), of the restrictions imposed by the United
States federal securities Laws and other applicable foreign and domestic Laws on Persons possessing material nonpublic information about a
public company.
7.13 Post-Closing Board of Directors and Executive Officers.
(a) The Parties shall take all necessary action, including causing the existing
directors of the Company to resign, such that (i) effective as of the Effective Time, the post-closing Company Board will consist of up to seven (7) directors (the “Post-Closing Company Board”), including: (A) two (2) directors who
shall be designated by the Company prior to the Closing, who shall be reasonably acceptable to Southern and one (1) of whom shall be independent in accordance with Nasdaq and SEC guidelines, (B) four (4) directors who shall be designated by
Southern prior to the Closing, who shall be reasonably acceptable to the Company and two (2) of whom shall be independent in accordance with Nasdaq and SEC guidelines, and (C) up to one (1) director who is independent in accordance with
Nasdaq and SEC guidelines and mutually designated by the Company and Southern prior to the Closing, and (ii) the Post-Closing Company Board will be elected effective as of the Effective Time in accordance with the Closing Company
Organizational Documents effective as of the Effective Time and Nasdaq rules. Prior to the effectiveness of the Registration Statement, Company and Southern shall determine the directors to be appointed to the audit, compensation and
nominating committees.
(b) The Parties shall take all action necessary such that the
individuals serving as the Chairman of the Company Board immediately prior to the Effective Time will serve as both the Chairman of the Board and the Chief Executive Officer of the Company immediately after the Effective Time.
(c) Southern and the Company shall obtain a background check and a completed
directors & officers questionnaire with respect to any individual that will serve on the Post-Closing Company Board at the Company’s expense.
(d) At or prior to the Closing, the Company will provide each member of the Post-Closing Company Board with a
customary director indemnification agreement.
7.14 Insurance and Indemnification
(a) Prior to the Effective Date, the Company shall purchase customary non-cancellable and fully pre-paid “tail” policies of directors’ and
officers’ liability, employment practices liability and fiduciary liability insurance providing protection no less favorable in the aggregate to the protection provided by the policies maintained by the Company and its Subsidiaries, as
applicable, which are in effect immediately prior to the Effective Date and providing protection in respect of claims arising from facts or events which occurred on or prior to the Effective Date; provided that the cost of such
policies will not exceed 250% of the annual premiums currently in effect for such directors’ and officers’ liability, employment practices liability and fiduciary liability coverage and that if such insurance coverage is unavailable, then as
promptly as practicable following the Closing, the Company will purchase such tail policies with the best available insurance coverage whose cost will not exceed 250% of the annual premiums currently in effect for such directors’ and
officers’ liability, employment practices liability and fiduciary liability coverage. The Company shall continuously maintain such tail policies in full force and effect without any reduction in scope or coverage for six (6) years from the
Effective Date and to abide by its obligations thereunder.
(b) Prior to the Effective Date, Southern shall purchase customary non-cancellable and fully pre-paid “tail”
policies of directors’ and officers’ liability, employment practices liability and fiduciary liability insurance providing protection no less favorable in the aggregate to the protection provided by the policies maintained by the Southern, as
applicable, which are in effect immediately prior to the Effective Date and providing protection in respect of claims arising from facts or events which occurred on or prior to the Effective Date; provided that the cost of such
policies will not exceed 250% of the annual premiums currently in effect for such directors’ and officers’ liability, employment practices liability and fiduciary liability coverage and that if such insurance coverage is unavailable, then as
promptly as practicable following the Closing, the Company will, or if the cost of such a tail policy will exceed such amount, will cause Southern to purchase such tail policies with the best available insurance coverage whose cost will not
exceed 250% of the annual premiums currently in effect for such directors’ and officers’ liability, employment practices liability and fiduciary liability coverage. The Company shall, or shall cause Southern to, continuously maintain such
tail policies in full force and effect without any reduction in scope or coverage for six (6) years from the Effective Date and to abide by their obligations thereunder.
(c) From and after the Effective Time, the Company shall, and shall cause Southern to, honor all rights to
indemnification or exculpation now existing in favor of present and former officers and directors of the Company and its Subsidiaries and Southern as of the date hereof (the “D&O Indemnified Persons”) to the extent they have been
provided under applicable Law, the Organizational Documents of such entities or under indemnification agreements made available as of the date hereof, and acknowledges that such rights shall survive the completion of the Transactions and
shall continue in full force and effect and shall not be amended in any manner adverse to the D&O Indemnified Persons for at least six (6) years following the Effective Date.
(d) The provisions of this Section 7.14 are intended for the benefit of, and shall be enforceable by, each insured or D&O
Indemnified Person, his or her heirs, estates and his or her legal representatives.
(e) If Southern, the Company or any of their respective Subsidiaries or any of their respective successors or assigns (i) consolidates with
or merges into any other Person and is not a continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers all or substantially all of its properties and assets to any Person, proper provision shall be made
so that any such successor or assign (including, as applicable, any acquirer of substantially all of the properties and assets of Southern, the Company or any of their respective Subsidiaries) assumes all of the obligations set forth in this
Section 7.14.
7.15 Financial Statements.
(a) During the Interim Period, as promptly as
practicable after the date of this Agreement and in the case of Section 7.15(a)(x)(i) and Section 7.15(a)(x)(iii) below, in no event later than January 31, 2026 (“Financial Statements Delivery Date”), Southern shall
deliver to the Company the following financial statements (such financial statements, the “Required Financial Statements”): (x) (i) audited consolidated balance sheet of Southern as of September 30, 2025 and December 31, 2025, and the
related audited consolidated statements of comprehensive loss, cash flows and securityholders equity for the fiscal years ended on such dates, together with all related notes and schedules thereto, accompanied by the reports thereon of
Southern’s independent auditors (which reports shall be unqualified) in each case audited in accordance with the standards of the PCAOB (the “PCAOB Financial Statements”); (ii) all other audited and unaudited financial statements of
Southern and any company or business units acquired by Southern, as applicable, required under the applicable rules and regulations and guidance of the SEC to be included in the Registration Statement or the Closing Form 8-K (including pro
forma financial information); and (iii) management’s discussion and analysis of financial condition and results of operations prepared in accordance with Item 303 of Regulation S-K of the Exchange Act (as if Southern was subject thereto) with
respect to the periods described in clauses (i) and (ii) above, as necessary for inclusion in the Registration Statement or the Closing Form 8-K (including pro forma financial information) and (y) within
forty-five (45) calendar days following the end of each three-month quarterly period and each fiscal year, an unaudited income statement and an unaudited balance sheet of Southern for the period from the Latest Balance Sheet Date through the
end of such calendar month, quarterly period or fiscal year and the applicable comparative period in the preceding fiscal year, in each case accompanied by a certificate of the Chief Financial Officer of Southern to the effect that all such
financial statements fairly present the financial position and results of operations of Southern as of the date or for the periods indicated, in accordance with GAAP, subject to year-end audit adjustments and excluding footnotes.
(b) Southern shall use commercially reasonable efforts (i) to assist the Company and its Representatives, upon
advance written notice, during normal business hours and in a manner such as to not unreasonably interfere with the normal operation of Southern, in causing to be prepared in a timely manner any other financial information or statements
(including customary pro forma financial statements) that is reasonably required to be included in the Registration Statement and any other filings to be made by the Company with the SEC or any other Securities Authorities in connection with
the Transactions and (ii) to obtain the consents of Southern’s auditors with respect thereto as may be required by applicable Law.
(c) The Company shall use commercially reasonable efforts to apply for exemptive relief to the extent the Parties
reasonably determine that the Required Financial Statements do not sufficiently comply with prescribed requirements under Canadian securities Laws requiring the inclusion of the Required Financial Statements or any other financial information
or statements in respect of Southern in the Company Circular or any other document to be filed by Company under National Instrument 51-102 Continuous Disclosure Obligations.
(d) Southern shall take all actions reasonably necessary for an independent auditor to not deliver a report on the Required Financial
Statements containing an adverse opinion or a disclaimer of opinion. Prior to the Effective Time, Southern shall not have identified and shall not have received written notice from an independent auditor of any fraud that involves
Southern’s management or other employees have a role in the preparation of financial statements or any claim or allegation of the regarding any of the foregoing.
7.16 Pre-Closing Reorganization.
(a) Subject to Section 7.16(b), the Parties agree that the Company, in its reasonable discretion, shall,
and shall cause each of its Subsidiaries to, use commercially reasonable efforts to: (i) effect such reorganizations of the Company’s or its Subsidiaries’ business, operations and assets or such other transactions as the Company and Southern
may reasonably determine, including amalgamations, continuances, wind-ups, distributions, contributions, sales, intercompany loans or the refinancing thereof, and any other transaction (each a “Pre-Closing Reorganization”); (ii)
cooperate with Southern and its advisors in order to determine the nature of any Pre-Closing Reorganization that might be undertaken and the manner in which any Pre-Closing Reorganizations might most effectively be undertaken; and (iii)
cooperate with Southern and its advisors to seek to obtain any Consent which might be required from any third party in connection with any Pre-Closing Reorganization; provided, that any Pre-Closing Reorganization, if elected to be
undertaken by the Company, shall be subject to Southern’s prior written consent.
(b) The Company will not be obligated to undertake any Pre-Closing Reorganization unless the Company, acting reasonably, determines that such
Pre-Closing Reorganization:
(i) does not adversely affect the interests of the Company, any of its Subsidiaries or the Company Shareholders in any
material respect;
(ii) does not require the Company to obtain the approval of the Company Shareholders;
(iii) does not impair, prevent or materially delay the consummation of the Domestication or the Merger or the other
Transactions;
(iv) is effected as closely as is reasonably practicable prior to the Effective Date;
(v) does not result in any breach by the Company or any of its Subsidiaries of any Contract, the Company’s Organizational
Documents, the organizational documents or any applicable Subsidiary, or any applicable Law;
(vi) does not require the Company or its Subsidiaries to take any action that could reasonably be expected to result in
Taxes being imposed on, or any adverse Tax or other consequences to, any Company Shareholders greater than the Taxes or other consequences to such party in connection with the completion of the Domestication and the Merger in the absence of
action being taken pursuant to this Section 7.16; and
(vii) shall not become effective unless Southern has irrevocably waived or confirmed in writing the satisfaction of all
conditions to the Closing in its favor under this Agreement and shall have confirmed in writing that it is prepared, and able to promptly and without condition proceed to effect the Closing.
(c) Upon the delivery of its consent pursuant to Section 7.16(a), Southern shall be deemed to waive any breach of a representation,
warranty or covenant by the Company provided herein, where such breach is a result of an action taken by the Company or a Subsidiary is solely pursuant to a determination made by both the Company and Southern in accordance with this Section
7.16.
(d) If Southern has delivered its consent pursuant to Section 7.16(a), the Company and Southern shall work co-operatively and use
commercially reasonable efforts to determine any proposed Pre-Closing Reorganization at least 15 Business Days prior to the Effective Date and to prepare prior to the Effective Date all documentation necessary and do all such other acts and
things as are reasonably necessary, including making amendments to this Agreement (provided that such amendments do not require the Company to obtain approval of Company Shareholders (other than as properly put forward and approved at
the Company Meeting)), to give effect to such Pre-Closing Reorganization.
7.17 Off-Take
Agreement. During the Interim Period and subject to Section 7.3, Southern shall use commercially reasonable efforts to enter into one or more binding, long-term offtake agreements with
investment-grade counterparties for a material portion of the initial plant’s nameplate capacity.
7.18 Southern Financial Statements. Within fifteen (15) Business Days following the date hereof, Southern shall deliver to the Company copies of the unaudited consolidated balance sheet of Southern as of September 30, 2025 and the related unaudited consolidated
statements of income and cash flows for period from its incorporation to such date (the “Southern Financial Statements”).
7.19 Resale Registration Statement. The Company shall prepare and file or cause to be prepared and filed with the SEC one or more registration statements on Form S-3 (or, if the Company is ineligible to use Form S-3, on Form S-1, for an offering to be made on a
continuous basis pursuant to Rule 415 of the Securities Act) registering the resale from time-to-time of the Southern Consideration Shares held by the Company’s Affiliates immediately after the Closing Date that are not covered by an
effective resale registration statement (the “Resale Registration Statement”) on the terms set forth in the Registration Rights Agreement.
ARTICLE VIII
NO SURVIVAL
8.1 No Survival. None of the representations, warranties, covenants or agreements
set forth herein or in any certificate or instrument delivered by or on behalf of any Party pursuant to this Agreement including any rights arising out of any breach of such representations, warranties, covenants or agreements, shall survive the Closing (and there shall be no Liability after the Closing in respect thereof), in each case, except for those covenants and agreements that by their terms apply or are to be performed, in each case, in whole or in part after the Closing (which such covenants shall survive the Closing and
continue until fully performed in accordance with their terms). Notwithstanding anything to the contrary contained herein, none of the provisions set forth herein shall be deemed a waiver by any Party of any right or remedy which such Party
may have at Law or in equity in the case of Fraud.
ARTICLE IX
CLOSING CONDITIONS
9.1
Conditions to Each Party’s Obligations.
The obligations of each Party to consummate the Merger and the other Transactions,
shall be subject to the satisfaction or written waiver (where permissible) by the Company and Southern of the following conditions:
(a) Required Company Shareholder Approval. Company Resolutions shall have
been authorized and adopted by the Company Shareholders at the Company Meeting in accordance with applicable Law (together, the “Required Company Shareholder Approval”).
(b) No Orders or Illegality. No Law is in effect that makes the consummation of the Domestication
or the Merger illegal or otherwise prohibits or enjoins any Party or its affiliates from consummating the Domestication or the Merger and no Law or Order is in effect that makes the consummation of the Domestication or the Merger illegal or
otherwise prohibits or enjoins any Party or its affiliates from consummating the Domestication or the Merger or any other Transactions.
(c) Regulatory Approvals. Each of the Required Regulatory Approvals shall have been made, given or obtained (or the termination of
any such waiting period has occurred) on terms satisfactory to the Parties, each acting reasonably, and each such Required Regulatory Approval shall be in full force and effect.
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