Pinnacle Renewable Energy Inc.

This document is important and requires your immediate attention. If you are in any doubt as to how to deal with it, you should consult with your investment dealer, broker, lawyer or other professional advisor. This document does not constitute an offer or a solicitation to any person in any jurisdiction in which such offer or solicitation is unlawful. If you have questions, you may contact Pinnacle Renewable Energy Inc.’s proxy solicitation agent, D.F. King (Canada), by telephone at 1-800-290-1473 (toll free in North America) or 416-682-3825 (collect outside North America), or by email at [email protected].

==> picture [33 x 30] intentionally omitted <==

==> picture [104 x 32] intentionally omitted <==

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

to be held on March 31, 2021 and

MANAGEMENT INFORMATION CIRCULAR

with respect to a proposed plan of arrangement involving

PINNACLE RENEWABLE ENERGY INC.

and

DRAX GROUP PLC

and

DRAX CANADIAN HOLDINGS INC.

March 1 , 2021

The Board of Directors of Pinnacle Renewable Energy Inc. UNANIMOUSLY recommends that Shareholders vote FOR the Arrangement Resolution

==> picture [26 x 23] intentionally omitted <==

==> picture [16 x 8] intentionally omitted <==

March 1, 2021

Dear Shareholder:

You are invited to attend a special meeting (the “ Company Meeting ”) of the holders (“ Company Shareholders ”) of common shares (the “ Company Shares ”) of Pinnacle Renewable Energy Inc. (the “ Company ”) to be held on March 31, 2021 at 8:30 a.m. (Vancouver time). Given the ongoing coronavirus (COVID-19) pandemic, its public health impact, the associated current restrictions on and the risk in attending large group gatherings and to mitigate risks to the health and safety of the Company’s community, Company Shareholders and employees, the Company has made the decision to hold the Company Meeting in a virtual-only format which will be conducted via live audio webcast online at https://web.lumiagm.com/242749115. In the Notice of Special Meeting of Shareholders and Management Information Circular accompanying this letter, you will find important information and instructions about how to participate at the Company Meeting online.

The Arrangement

On February 7, 2021, the Company entered into a definitive arrangement agreement (the “ Agreement ”) with Drax Group plc (LSE:DRX) (the “ Purchaser ”) and its wholly-owned subsidiary, Drax Canadian Holdings Inc. (“ Acquireco ”), pursuant to which the Purchaser agreed to acquire, through Acquireco, all of the issued and outstanding Company Shares in consideration for $11.30 per Company Share in cash (the “ Arrangement ”). The transaction will be effected by way of a plan of arrangement (the “ Plan of Arrangement ”) under the Business Corporations Act (British Columbia). At the Company Meeting, Company Shareholders will be asked to consider and, if deemed advisable, to pass a special resolution (the “ Arrangement Resolution ”) to approve the Arrangement.

Recommendation of the Company Board

The Company’s board of directors (the “ Company Board ”), on the unanimous recommendation of an independent special committee (the “ Special Committee ”) of the Company Board, unanimously recommends that the Company Shareholders vote FOR the Arrangement Resolution.

Reasons for the Arrangement

The recommendations of the Special Committee and the Company Board that Company Shareholders vote FOR the Arrangement Resolution are based on various factors, including those presented below. A full description of the information and factors considered by the Special Committee and the Company Board is located in the accompanying Management Information Circular.

Attractive Value Relative to Alternatives : The value of $11.30 per Company Share in cash offered to Company Shareholders under the Arrangement is more favourable (and can be achieved with less risk) than the value that might have been realized through pursuing other alternatives reasonably available to the Company, including executing on its current strategic plan or a sale to a potential competing bidder.
Form of Consideration Provides Certainty and Immediate Value . The consideration to be paid pursuant to the Arrangement is all cash, which provides certainty of value to Company

Shareholders, and allows Company Shareholders to immediately realize a fair value for their investment.

Arrangement Provides Liquidity to Shareholders . Prior to announcement of the Arrangement, there was limited liquidity in the trading of the Company Shares on the Toronto Stock Exchange (the “ TSX ”). The Arrangement offers an attractive liquidity event for Company Shareholders in a thinly traded stock at a premium to the trading price of the Company Shares in the period prior to announcement on February 8, 2021.
Fairness Opinions . The Company Board and the Special Committee received opinions from each of CIBC World Markets Inc. and Scotiabank that, as of February 7, 2021, and based on and subject to the analyses referred to, and assumptions, qualifications and limitations set forth therein, the consideration under the Arrangement is fair, from a financial point of view, to the Company Shareholders.
Voting Agreements . The largest Company Shareholder, ONCAP Investment Partners II L.P. and its related entities (collectively, “ ONCAP ”), together with the Company’s directors and a former and all current members of senior management, who collectively with ONCAP own approximately 36% of the outstanding Company Shares, have entered into voting support agreements pursuant to which, among other things, they have agreed to vote all of the Company Shares owned or controlled by them in favour of the Arrangement at the Company Meeting.
Premium to Company Shareholders . The consideration being offered to Company Shareholders under the Arrangement represents a premium of approximately 13% to the closing price and 15% to the 20-day volume-weighted average price of the Company Shares on the TSX on February 5, 2021, the last trading day prior to announcement of the Arrangement, and a premium of approximately 33% to the closing price of the Company Shares on the TSX on December 4, 2020, the last trading day before the Company and the Purchaser entered into an exclusivity agreement.
Credibility and Reputation of the Purchaser . The Purchaser is a credible and reputable acquirer, listed on the London Stock Exchange, with a market capitalization on the day of announcement of approximately £1.553 billion, and is the Company’s largest customer.
The Terms of the Arrangement Agreement . The terms and conditions of the Arrangement Agreement are, in the judgment of the Special Committee and the Company Board, following consultations with their financial and legal advisors, reasonable and were the result of extensive negotiations between the Company and the Purchaser and their respective advisors.

Approval Requirements and Other Conditions

The Arrangement Resolution must be approved by not less than 66⅔% of the votes cast by Company Shareholders present in person (virtually) or by proxy at the Company Meeting (the “ Company Shareholder Approval ”). The Purchaser will also be convening a general meeting of the holders (the “ Purchaser Shareholders ”) of the ordinary shares of the Purchaser to vote on an ordinary resolution of the Purchaser Shareholders approving the acquisition of the Company Shares in accordance with the terms of the Arrangement (the “ Purchaser Resolution ”). The Purchaser Resolution must be approved by the Purchaser Shareholders at the Purchaser general meeting by a simple majority of votes eligible to vote and voting, either in person or by proxy (the “ Purchaser Shareholder Approval ”).

The Arrangement is subject to the fulfillment of certain conditions precedent, including but not limited to the Company Shareholder Approval having been obtained, the Purchaser Shareholder Approval having been obtained, the Supreme Court of British Columbia having approved the Arrangement and relevant regulatory approvals having been obtained, all as more particularly described in the Notice of Special Meeting of Shareholders and Management Information Circular.

Your vote is important. Whether or not you plan to attend the Company Meeting virtually, we encourage you to vote promptly. Please complete the enclosed form of proxy and submit it to our transfer agent, TSX Trust Company, as soon as possible but no later than 8:30 a.m. (Vancouver time) on March 29, 2021 or, if the Company Meeting is adjourned or postponed, no later than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in British Columbia) before the adjourned meeting is reconvened or the postponed meeting is convened. Subject to obtaining the prior consent of the Purchaser, the time limit for the deposit of proxies may be waived or extended without notice by the Chair of the Company Meeting.

The accompanying Notice of Special Meeting of Shareholders and Management Information Circular provide information about the Arrangement and the Company Meeting. Please read this information carefully, and if you require assistance, consult your own legal, tax, financial or other professional advisor or contact our proxy solicitation agent, D.F. King (Canada), by telephone at 1-800-290-1473 (toll free in North America) or 416-682-3825 (collect outside North America), or by email at [email protected].

On behalf of the Company Board, thank you for your consideration of this matter and your continued support.

Yours sincerely,

(Signed) “Gregory Baylin”

Gregory Baylin

Chair of the Board of Directors of Pinnacle Renewable Energy Inc.

iii

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS to be held on March 31, 2021

NOTICE IS HEREBY GIVEN that a special meeting (the “ Company Meeting ”) of the holders (“ Company Shareholders ”) of common shares (the “ Company Shares ”) of Pinnacle Renewable Energy Inc. (the “ Company ”) will be held on March 31, 2021 at 8:30 a.m. (Vancouver time) via live webcast at https://web.lumiagm.com/242749115 (case sensitive password: pinnacle2021) for the following purposes:

to consider, pursuant to an interim order of the Supreme Court of British Columbia dated March 1, 2021, as the same may be amended, modified or varied (the “ Interim Order ”), and, if deemed advisable, to pass, with or without variation, a special resolution (the “ Arrangement Resolution ”) to approve a proposed plan of arrangement involving the Company, Drax Group plc (the “ Purchaser ”) and Drax Canadian Holdings Inc. (“ Acquireco ”), pursuant to Division 5 of Part 9 of the Business Corporations Act (British Columbia) (the “ BCBCA ”) (the “ Arrangement ”). The full text of the Arrangement Resolution is set forth in Appendix “B” to the accompanying management information circular (the “ Information Circular ”); and
to transact such other business as may properly come before the Company Meeting or any postponement or adjournment thereof.

Specific details of the matters proposed to be put before the Company Meeting are set forth in the Information Circular which accompanies and is deemed to form part of this Notice of Special Meeting of Shareholders (the “ Notice ”).

Given the ongoing coronavirus (COVID-19) pandemic, its public health impact, the associated current restrictions on and the risk in attending large group gatherings and to mitigate risks to the health and safety of the Company’s community, Company Shareholders and employees, the Company has made the decision to hold the Company Meeting in a virtual-only format. Company Shareholders, regardless of geographic location and ownership, will have an opportunity to participate at the Company Meeting and engage with the directors of the Company and management.

Company Shareholders are entitled to vote at the Company Meeting either by attending the virtual meeting and voting while the Company Meeting is in session or by proxy, with each Company Share entitling the holder thereof to one vote at the Company Meeting. The board of directors of the Company (the “ Company Board ”) has fixed the close of business on February 16, 2021 as the record date (the “ Record Date ”) for determining Company Shareholders who are entitled to receive notice of and vote at the Company Meeting. Only Company Shareholders whose names have been entered in the register of the Company as at the close of business on the Record Date will be entitled to receive notice of and vote at the Company Meeting.

Registered Company Shareholders and duly appointed proxy holders (including non-registered (beneficial) Company Shareholders who have duly appointed themselves as proxyholders and registered their appointment with the Company’s transfer agent, TSX Trust Company (the “ Transfer Agent ”)) will be able to attend, submit questions and vote at the Company Meeting online by following the instructions beginning on page 15 of the accompanying Information Circular. To vote online at the Company Meeting you will require your 12-digit control number found on your form of proxy. Registered Company Shareholders may also vote by proxy by signing and returning the accompanying form of proxy for use at the Company Meeting or any adjournment or postponement thereof. Registered Company Shareholders not planning to, or unable to, attend the Company Meeting are requested to read the Information Circular and the form of proxy which accompanies this notice and to complete, sign, date and deliver the form of proxy and return it to the Transfer Agent, at 301-100 Adelaide St. West, Toronto, Ontario, M5H 4H1, or submit their proxy by internet in each case in accordance with the instructions included with the form of proxy, prior to 8:30 a.m. (Vancouver time) on March 29, 2021 (or if the Company Meeting is adjourned or postponed, not later than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in

British Columbia) before the adjourned meeting is reconvened or the postponed meeting is convened), whether or not you plan to attend the Company Meeting virtually. Notwithstanding the foregoing, the Chair of the Company Meeting has the discretion to accept proxies received after such deadline. The time limit for the deposit of proxies may also be waived or extended by the Chair of the Company Meeting at his or her discretion, without notice.

Non-registered Company Shareholders (being shareholders who hold their Company Shares through a broker, investment dealer, bank, trust company, custodian, nominee or other intermediary (an “ Intermediary ”)) who have not duly appointed themselves as proxyholder will be able to attend the Company Meeting as guests, but guests will not be able to vote or ask questions at the Company Meeting. Please see the accompanying Information Circular for details on attending the Company Meeting online. Non-registered Company Shareholders should follow the instructions provided by their Intermediary to ensure their vote is counted at the Company Meeting.

Company Shareholders who wish to appoint a proxyholder other than the persons designated by us in the form of proxy (including a non-registered Company Shareholder who wishes to appoint themselves as proxyholder) must carefully follow the instructions on their form of proxy or voting instruction form. These instructions include the additional step of registering such proxyholder with the Transfer Agent after submitting their form of proxy. Failure to register the proxyholder will result in the proxyholder not receiving a control number that is required for them to vote at the Company Meeting online and, consequently, only being able to attend the Company Meeting virtually as a guest. To register a proxyholder, Company Shareholders MUST contact the Transfer Agent by emailing [email protected] or can download a form to request a Control Number at https://www.tsxtrust.com/resource/en/75, so that the Transfer Agent may provide the proxyholder with a control number via email. Requests for control numbers must be made at least forty-eight (48) hours before the time of the Company Meeting. Non-registered Company Shareholders located in the United States must also provide the Transfer Agent with a duly completed legal proxy if they wish to vote at the Company Meeting or appoint a third-party as their proxyholder.

The voting rights attached to the Company Shares represented by a proxy in the enclosed form of proxy will be voted in accordance with the instructions indicated thereon. If no instructions are given, the voting rights attached to such Company Shares will be voted FOR the Arrangement Resolution.

A registered Company Shareholder who has submitted a proxy may revoke it (a) by depositing an instrument in writing executed by the registered Company Shareholder or such registered Company Shareholder’s attorney authorized in writing or if the registered Company Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof, duly authorized, indicating the capacity under which such officer or attorney is signing, with the Transfer Agent at the office designated above in this Notice not later than 5:00 p.m. (Vancouver time), on the business day preceding the day of the Company Meeting (or any adjournment or postponement thereof) or with the Chair of the Company Meeting on the day of the Company Meeting (or any adjournment or postponement thereof); (b) by a duly executed and deposited proxy as provided herein bearing a later date or time than the date or time of the proxy being revoked; or (c) as permitted by law. Registered Company Shareholders may also attend and vote virtually at the Company Meeting, and if they do so, any voting instructions they previously gave for their Company Shares will be revoked.

Only registered Company Shareholders have the right to revoke a proxy in the above manner. Beneficial Company Shareholders who wish to change their voting instructions must, in sufficient time in advance of the Company Meeting, contact their Intermediary in order to revoke their voting instructions and/or provide new voting instructions.

A proxyholder has discretion under the accompanying form of proxy in respect of amendments or variations to matters identified in this Notice and with respect to other matters which may properly come before the Company Meeting, or any adjournment or postponement thereof. As of the date hereof, management of the Company knows of no amendments, variations or other matters to come before the Company Meeting other than the matters set forth in this Notice. Company Shareholders who are

planning to return the accompanying form of proxy are encouraged to review the Information Circular carefully before submitting the form of proxy.

Pursuant to the Interim Order, registered Company Shareholders have been granted the right to dissent in respect of the Arrangement Resolution and, if the Arrangement becomes effective, to be paid an amount equal to the fair value of their Company Shares in accordance with the provisions of Sections 237 to 247 of the BCBCA, as modified by the Interim Order and the plan of arrangement (the “ Plan of Arrangement ”). Registered Company Shareholders who wish to exercise their dissent rights must: (i) deliver a written notice of dissent to the Arrangement Resolution to the Company, by mail to: Pinnacle Renewable Energy Inc., 350 – 3600 Lysander Lane, Richmond, British Columbia, V7B 1C3, Canada, Attention: General Counsel not later than 4:00 p.m. (Vancouver time) on March 29, 2021, or, if the Company Meeting is adjourned or postponed, by not later than 4:00 p.m. (Vancouver time) on the date that is two Business Days immediately preceding the date on which the adjourned or postponed Company Meeting is reconvened or convened, as applicable; (ii) not have voted in favour of the Arrangement Resolution; and (iii) otherwise have complied with the procedures set forth in Section 237247 of the BCBCA, as modified and supplemented by the Interim Order and the Plan of Arrangement. A registered Company Shareholder’s right to dissent, and the procedures for its exercise, are more particularly described in the Information Circular under “Rights of Dissent”. Copies of the Plan of Arrangement, the Interim Order and the text of Sections 237 to 247 of the BCBCA are set forth in Appendices “D”, “G” and “I”, respectively, to the Information Circular.

Persons who are beneficial owners of Company Shares registered in the name of an Intermediary who wish to dissent should be aware that only registered Company Shareholders are entitled to dissent. Accordingly, a beneficial owner of Company Shares desiring to exercise this right must make arrangements for the Company Shares beneficially owned by such Company Shareholder to be registered in the Company Shareholder’s name prior to the time the written objection to the Arrangement Resolution is required to be received by the Company or, alternatively, make arrangements for the registered holder of such Company Shares to exercise such right to dissent on the Company Shareholder’s behalf.

It is strongly suggested that any Company Shareholder wishing to dissent seek independent legal advice, as the failure to strictly comply with the provisions of the BCBCA, as modified by the Interim Order, Final Order and the Plan of Arrangement (as such terms are defined in the Information Circular), may prejudice such Company Shareholder’s right to dissent.

If you have any questions or need assistance in your consideration of the Arrangement or with the completion and delivery of your proxy, please contact the Company’s proxy solicitation agent, D.F. King (Canada), by email at [email protected] or by telephone at 1-800-290-1473 (North American Toll-Free), or 416-682-3825 (Outside North America).

Dated this 1[st] day of March, 2021

BY ORDER OF THE BOARD OF DIRECTORS OF PINNACLE RENEWABLE ENERGY INC.

By: (Signed) “Gregory Baylin” Name: Gregory Baylin Title: Chair of the Board of Directors

vii

MANAGEMENT INFORMATION CIRCULAR ............................................................................................... 1 Introduction ................................................................................................................................................ 1 Information Pertaining to the Purchaser and Acquireco ............................................................................ 1 Forward-Looking Statements .................................................................................................................... 1 Notice to Company Shareholders Not Resident in Canada ...................................................................... 3 Currency .................................................................................................................................................... 3 EXPECTED TIMETABLE OF PRINCIPAL EVENTS .................................................................................... 4 QUESTIONS AND ANSWERS ..................................................................................................................... 5 SUMMARY .................................................................................................................................................... 9 INFORMATION CONCERNING THE MEETING ........................................................................................ 14 Date, Time and Place of Meeting ............................................................................................................ 14 Purpose of the Meeting ........................................................................................................................... 14 Record Date ............................................................................................................................................ 15 Attending and Voting Virtually at the Meeting ......................................................................................... 15 Interest of Certain Persons in Matters to be Acted Upon ........................................................................ 18 Solicitation of Proxies .............................................................................................................................. 18 Voting Securities and Principal Holders Thereof ..................................................................................... 18 THE ARRANGEMENT ................................................................................................................................ 19 Background to the Arrangement ............................................................................................................. 19 Recommendation of the Special Committee ........................................................................................... 26 Recommendation of the Company Board ............................................................................................... 26 Reasons for the Arrangement ................................................................................................................. 27 Fairness Opinions .................................................................................................................................... 30 Effective Date .......................................................................................................................................... 32 Arrangement Mechanics.......................................................................................................................... 33 Depositary Agreement ............................................................................................................................. 34 Certificates and Payment ........................................................................................................................ 34 Letter of Transmittal ................................................................................................................................. 36 Guarantee ................................................................................................................................................ 37 Expenses of the Arrangement ................................................................................................................. 37 Interests of Certain Persons in the Arrangement .................................................................................... 37 Effects on the Company if the Arrangement is Not Completed ............................................................... 40 SUMMARY OF THE ARRANGEMENT AGREEMENT .............................................................................. 41 General .................................................................................................................................................... 41 Conditions to the Arrangement Becoming Effective ................................................................................ 41 Representations and Warranties ............................................................................................................. 43 Covenants ............................................................................................................................................... 43 Termination of the Arrangement Agreement ........................................................................................... 53

vii i

Termination Payments ............................................................................................................................. 56 Expenses ................................................................................................................................................. 57 Equitable Relief ....................................................................................................................................... 57 Amendments ........................................................................................................................................... 57 Governing Law ........................................................................................................................................ 58 CERTAIN LEGAL AND REGULATORY MATTERS ................................................................................... 58 Steps to Implementing the Arrangement and Timing .............................................................................. 58 Required Shareholder Approvals ............................................................................................................ 58 Court Approval ......................................................................................................................................... 58 Required Regulatory Approvals .............................................................................................................. 59 Stock Exchange De-Listing and Reporting Issuer Status ....................................................................... 62 DISSENT RIGHTS OF SHAREHOLDERS ................................................................................................. 63 INFORMATION CONCERNING THE COMPANY ...................................................................................... 66 General .................................................................................................................................................... 66 Description of Share Capital .................................................................................................................... 66 Trading in Shares .................................................................................................................................... 66 Material Changes in the Affairs of the Company ..................................................................................... 67 Dividend Policy ........................................................................................................................................ 67 INFORMATION CONCERNING THE PURCHASER AND ACQUIRECO .................................................. 68 CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS ...................................................... 68 Holders Resident in Canada ................................................................................................................... 69 Holders Not Resident in Canada ............................................................................................................. 70 RISK FACTORS .......................................................................................................................................... 71 Risk Factors Relating to the Arrangement .............................................................................................. 71 Risk Factors Relating to the Business of the Company .......................................................................... 74 INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS ................................................ 74 AUDITORS .................................................................................................................................................. 74 OTHER INFORMATION AND MATTERS .................................................................................................. 74 ADDITIONAL INFORMATION .................................................................................................................... 74 DIRECTORS’ APPROVAL .......................................................................................................................... 75 CONSENT OF CIBC WORLD MARKETS INC. .......................................................................................... 76 CONSENT OF SCOTIA CAPITAL INC. ...................................................................................................... 77

ADDENDA

APPENDIX “A” GLOSSARY OF TERMS APPENDIX “B” ARRANGEMENT RESOLUTION APPENDIX “C” ARRANGEMENT AGREEMENT APPENDIX “D” PLAN OF ARRANGEMENT APPENDIX “E” CIBC FAIRNESS OPINION

APPENDIX “F” SCOTIABANK FAIRNESS OPINION APPENDIX “G” INTERIM ORDER APPENDIX “H” NOTICE OF PETITION APPENDIX “I” SECTIONS 237 TO 247 OF THE BCBC

MANAGEMENT INFORMATION CIRCULAR

Introduction

This Information Circular is furnished in connection with the solicitation of proxies by and on behalf of management of the Company for use at the Company Meeting and any adjournment or postponement thereof.

In this Information Circular, Pinnacle Renewable Energy Inc. and its Subsidiaries are collectively referred to as the “Company”.

All capitalized terms used in this Information Circular but not otherwise defined herein have the meanings set forth in the Glossary of Terms in Appendix “A” or elsewhere in the Information Circular. Information contained in this Information Circular is given as of March 1, 2021, except where otherwise noted. No person has been authorized to give any information or to make any representation in connection with the Arrangement and other matters described herein other than those contained in this Information Circular and, if given or made, any such information or representation should be considered not to have been authorized by the Company or the Purchaser.

This Information Circular does not constitute the solicitation of an offer to purchase, or the making of an offer to sell, any securities or the solicitation of a proxy by any person in any jurisdiction in which such solicitation or offer is not authorized or in which the person making such solicitation or offer is not qualified to do so or to any person to whom it is unlawful to make such solicitation or offer.

Information contained in this Information Circular should not be construed as legal, tax or financial advice and Company Shareholders are urged to consult their own professional advisors in connection therewith.

Descriptions in this Information Circular of the terms of the Arrangement Agreement, the Plan of Arrangement, the Fairness Opinions or the Interim Order are summaries of the terms of those documents, and are qualified by reference to the full text of each of these documents attached to this Information Circular as Appendices. You are urged to carefully read the full text of these documents.

Information Pertaining to the Purchaser and Acquireco

Certain information in this Information Circular pertaining to the Purchaser and Acquireco including, but not limited to, information pertaining to the Purchaser and Acquireco under “Information Pertaining to the Purchaser and Acquireco” has been furnished by the Purchaser. Although the Company does not have any knowledge that would indicate that such information is untrue or incomplete, neither the Company nor any of its directors or officers assumes any responsibility for the accuracy or completeness of such information, or for the failure by the Purchaser to disclose events or information that may affect the completeness or accuracy of such information.

Forward-Looking Statements

Certain statements contained in this Information Circular may constitute forward-looking information under the meaning of applicable securities laws, which are based on the opinions, estimates and assumptions of the Company’s management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Forward-looking information may include views related to the proposed Arrangement, the anticipated benefits of the Arrangement, the completion of the Arrangement and other expectations of the Company and are often, but not always, identified by the use of words such as “believe”, “could”, “seek”, “anticipate”, “budget”, “plan”, “continue”, “estimate”, “expect”, “forecast”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar words suggesting future outcomes or statements regarding an outlook.

Such statements reflect the Company’s current views with respect to future events and are based on information currently available to the Company and are subject to certain risks, uncertainties and assumptions, including those discussed below. Many factors could cause the Company’s actual results, performance or achievements to differ materially from any future results, performance or achievements that may be expressed or implied by such forward-looking information. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.

Such assumptions include assumptions as to the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court and shareholder approvals; the ability of the parties to satisfy, in a timely manner, the other conditions for the completion of the Arrangement; and other expectations and assumptions concerning the Arrangement. The anticipated dates indicated may change for a number of reasons, including the necessary regulatory, court and shareholder approvals, the necessity to extend the time limits for satisfying the other conditions for the completion of the Arrangement or the ability of the Company Board to consider and approve, subject to compliance by the Company with its obligations under the Arrangement Agreement, a Company Superior Proposal. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct, that the proposed Arrangement will be completed or that it will be completed on the terms and conditions contemplated in this Information Circular. Accordingly, investors and others are cautioned that undue reliance should not be placed on any forward-looking statement.

Risks and uncertainties inherent in the nature of the Arrangement include, without limitation, the failure of the parties to obtain the necessary regulatory, court and shareholder approvals or to otherwise satisfy the conditions for the completion of the Arrangement; failure of the parties to obtain such approvals or satisfy such conditions in a timely manner; the effect of the announcement of the Arrangement on the Company’s strategic relationships, operating results and business generally; significant transaction costs or unknown liabilities; the risk of litigation that would prevent or hinder the completion of the Arrangement; the ability of the Company Board to consider and approve, subject to compliance by the Company with its obligations under the Arrangement Agreement, a Company Superior Proposal, the occurrence of a Purchaser Superior Proposal, or the occurrence of a Company Intervening Event or a Purchaser Intervening Event; the failure to realize the expected benefits of the Arrangement; general economic conditions; and other customary risks associated with transactions of this nature. Failure to obtain the necessary regulatory, court and shareholder approvals, or the failure of the parties to otherwise satisfy the conditions for the completion of the Arrangement, may result in the Arrangement not being completed on the proposed terms or at all. In addition, if the Arrangement is not completed, and the Company continues as an independent entity, there are risks that the announcement of the Arrangement and the dedication of substantial resources by the Company to the completion of the Arrangement could have an impact on its business and strategic relationships, including with future and prospective employees, customers, suppliers and partners, operating results and activities in general, and could have a material adverse effect on its current and future operations, financial condition and prospects. Factors that could cause anticipated opportunities and actual results to differ materially also include, but are not limited to, matters identified in the “Risk Factors” section of the Company’s Annual Information Form and the “Financial Risk Factors” section of the Company’s Annual MD&A, both of which can be accessed under the Company’s profile on SEDAR at www.sedar.com.

These factors should be considered carefully, and the reader should not place undue reliance on the forward-looking information. Forward-looking information is made as of the date of this Information Circular, and the Company does not intend, and does not assume any obligation, to update or revise forward-looking information, except as may be required under applicable Laws. The forward-looking information and statements contained herein are expressly qualified in their entirety by this cautionary statement.

Notice to Company Shareholders Not Resident in Canada

The Company is a corporation organized under the laws of the Province of British Columbia. The solicitation of proxies involves securities of a Canadian issuer and is being effected in accordance with applicable corporate and securities laws in Canada. Company Shareholders should be aware that the requirements applicable to the Company under Canadian laws may differ from requirements under corporate and securities laws relating to corporations in other jurisdictions.

The enforcement of civil liabilities under the securities laws of other jurisdictions outside Canada may be affected adversely by the fact that the Company is organized under the laws of the Province of British Columbia, that a large portion of its assets are located in Canada and all of its directors and executive officers are residents of Canada. You may not be able to sue the Company or its directors or officers in a Canadian court for violations of foreign securities laws. It may be difficult to compel the Company to subject itself to a judgment of a court outside Canada.

THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY ANY SECURITIES REGULATORY AUTHORITY, NOR HAS ANY SECURITIES REGULATORY AUTHORITY PASSED UPON THE FAIRNESS OR MERITS OF THIS TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS INFORMATION CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS AN OFFENCE.

Company Shareholders who are foreign taxpayers should be aware that the Arrangement described in this Information Circular may have tax consequences both in Canada and such foreign jurisdiction. Such consequences for Company Shareholders are not described in this Information Circular. Company Shareholders are advised to consult their tax advisors to determine the particular tax consequences to them of the transactions contemplated in this Information Circular.

Currency

All dollar amounts set forth in this Information Circular are in Canadian dollars, except where otherwise indicated. All references to £ refer to British pounds sterling.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

EXPECTED TIMETABLE OF PRINCIPAL	EVENTS
Announcement of the Arrangement	February 8, 2021
Interim Order in connection with the Plan of Arrangement obtained	March 1, 2021
Latest time and date for receipt of proxy forms	8:30 a.m. (Vancouver time) on March 29, 2021
Company Meeting	8:30 a.m. (Vancouver time) on March 31, 2021
Purchaser Meeting	4:30 p.m. (London time) on March 31, 2021
Expected date of the Final Order of the Court approving the Plan of Arrangement	April 6, 2021
Outside Date	September 7, 2021

QUESTIONS AND ANSWERS

The following are selected Questions and Answers regarding attending the Company Meeting virtually and voting at the Company Meeting virtually or by proxy. These Questions and Answers are not intended to be complete and are qualified in their entirety by the more detailed information contained elsewhere in this Information Circular, including its Appendices. Capitalized terms used in these Questions and Answers are defined in the Glossary of Terms of this Information Circular attached hereto as Appendix “A. Company Shareholders are urged to read this Information Circular and its Appendices carefully and in their entirety.

Q: When and where is the Company Meeting?

A: The Company Meeting will be held virtually via live audio webcast online at https://web.lumiagm.com/242749115 (case sensitive password: pinnacle2021)

Q: What am I being asked to vote on?

A: You are being asked to vote on the Arrangement Resolution to approve the Plan of Arrangement, which provides for, among other things, the acquisition by the Purchaser, indirectly through Acquireco, of all of the issued and outstanding Company Shares.

Q: What is the recommendation of the Company Board?

A: After taking into consideration, among other things, the Court approval, the Fairness Opinions and the recommendation of the Special Committee, the Company Board has concluded that the Arrangement is in the best interests of the Company and fair to the Company Shareholders. The Company Board unanimously recommends that Company Shareholders vote FOR the Arrangement Resolution to approve the Arrangement.

Q: What is the voting deadline?

A: Registered Shareholders are encouraged to submit their proxies as soon as possible to ensure that their votes are counted. Proxies must be received by the Transfer Agent no later than 8:30 a.m. (Vancouver time) on March 29, 2021, or if the Company Meeting is adjourned or postponed, forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in British Columbia) before the adjourned meeting is reconvened or the postponed meeting is convened. The time limit for the deposit of proxies may be waived or extended by the Chair of the Company Meeting at his or her discretion without notice.

A Beneficial Shareholder exercising voting rights through an Intermediary should consult the voting instruction form from such Beneficial Shareholder’s Intermediary as the Intermediary may have different and earlier deadlines.

Q: Who is entitled to vote on the Arrangement Resolution at the Company Meeting?

A: Only Company Shareholders as of the close of business on the Record Date, February 16, 2021, are entitled to receive notice of, attend and vote at the Company Meeting.

Q: How can a Registered Shareholder Vote?

A: A Registered Shareholder is a person whose Company Shares are registered in the Company Shareholder’s own name.

Before the Company Meeting : a Registered Shareholder may vote in advance of the Company Meeting by submitting a proxy in any of the ways set out below:

On the Internet: A Registered Shareholder can go to the website at www.voteproxyonline.com and follow the instructions on the screen. The Registered Shareholder will need the 12-digit Control Number found on his, her or its form of proxy.
By Mail: A Registered Shareholder can complete the form of proxy as directed and return it in the business reply envelope provided to TSX Trust Company, 301-100 Adelaide Street West, Toronto, ON, M5H 4H1.

At the Company Meeting : a Registered Shareholder may vote in the following way:

Virtually: A Registered Shareholder who plans to vote at the Company Meeting online should attend the live audio webcast online at https://web.lumiagm.com/242749115 (case sensitive password: pinnacle2021) by following the instructions beginning on page 15 of this Information Circular.

Q: How can a Beneficial Shareholder vote?

A: A Beneficial Shareholder is a person whose Company Shares are held in an account in the name of an Intermediary, such as a bank, trust company or securities broker.

If you are a Beneficial Shareholder, your Intermediary will have provided you with a voting instruction form or form of proxy for the purpose of obtaining your voting instructions. Every Intermediary has its own mailing procedures and provides instructions for voting. You must follow those instructions carefully to ensure your Company Shares are voted at the Company Meeting.

Before the Company Meeting : a Beneficial Shareholder should follow the voting instruction form or form of proxy provided by his, her or its Intermediary. Most Intermediaries use Broadridge Financial Solutions Inc. (“ Broadridge ”) to distribute voting instruction forms to Beneficial Shareholders.

If you are a Beneficial Shareholder receiving a voting instruction form from Broadridge, you may vote in any of the ways set out below.

On the Internet: A Beneficial Shareholder can go to the website at www.proxyvote.com and follow the instructions on the screen. The Beneficial Shareholder will need the 16-digit Control Number found on his, her or its Broadridge voting instruction form.
By Telephone: A Beneficial Shareholder can call the number located on such Beneficial Shareholder’s voting instruction form. The Beneficial Shareholder will need the 16-digit Control Number found on his, her or its Broadridge voting instruction form.
By Mail: A Beneficial Shareholder can complete the voting instruction form as directed and return it in the business reply envelope provided to such Beneficial Shareholder by the nominee’s cut-off date and time.
By Broadridge QuickVote™: The Company may utilize Broadridge’s QuickVote™ service to assist Beneficial Shareholders with voting their Company Shares. If the Company decides to utilize Broadridge’s QuickVote™ service, certain Beneficial Shareholders who have not objected to the Company knowing who they are (non-objecting beneficial owners) may be contacted by D.F. King (Canada) to assist them in providing their voting instructions over the telephone.

At the Company Meeting : a Beneficial Shareholder wishing to attend and to vote at the Company Meeting virtually or appoint a person (who need not be a Shareholder) to attend and act for him, her or it and on his, her or its behalf should instead follow these steps:

Virtually: A Beneficial Shareholder who wishes to vote at the Company Meeting online must first appoint themselves as proxyholder as described above. Then the Beneficial Shareholder must register with the Transfer Agent by either: (a) visiting https://tsxtrust.com/resource/en/75, or (b) contacting the Transfer Agent by email at: [email protected] on or before 8:30 a.m. (Vancouver time) on March 29, 2021. The Transfer Agent will ask for the Beneficial Shareholder’s proxyholder contact information and will send such Beneficial Shareholder a user ID number (i.e., a Control Number) via email shortly after this deadline. The Beneficial Shareholder can then attend the live audio webcast online at https://web.lumiagm.com/242749115 by following the instructions beginning on page 16 of this Information Circular. Beneficial Shareholders who have not duly appointed themselves as proxyholder will be able to attend the Company Meeting virtually as guests, but guests will not be able to vote at the Company Meeting.

Q: What if my Company Shares are registered in more than one name or in the name of a company?

A: If your Company Shares are registered in more than one name, all registered persons must sign the form of proxy. If your Company Shares are registered in a company’s name or any name other than your own, you may be required to provide documents proving your authorization to sign the form of proxy for that company or name. For any questions about the proper supporting documents, contact the Transfer Agent before submitting your form of proxy.

Q: How do I complete the voting instructions on my form of proxy?

A: On the form of proxy, a Company Shareholder has two choices: (a) the Company Shareholder can indicate how such shareholder wants his, her or its proxyholder to vote such holder’s Company Shares; or (b) the Company Shareholder can let his, her or its proxyholder decide how to vote the holder’s Company Shares.

If a Company Shareholder has specified on the form of proxy how such holder wants his, her or its Company Shares to be voted on a particular matter, then such holder’s proxyholder must vote the holder’s Company Shares accordingly in the case of either a vote by show of hands or a vote by ballot. If a Company Shareholder has chosen to let such holder’s proxyholder decide how to vote on behalf of the Company Shareholder, such holder’s proxyholder can then vote in accordance with his, her or its judgment.

Unless contrary instructions are provided, Company Shares represented by proxies received by the Company will be voted FOR each matter to be presented at the Company Meeting.

Q: Can I appoint someone other than the person(s) designated by management of the Company to vote my Company Shares?

A: Yes. A Company Shareholder can appoint a person (who need not be a Company Shareholder) to attend and act for him, her or it and on his, her or its behalf at the Company Meeting other than the persons designated in the form of proxy or voting instruction form. A Company Shareholder may exercise such right by inserting the name in full of the desired person in the blank space provided in the form of proxy or the voting instruction form and date and submit the form. If you appoint a non-management proxyholder, please make sure they are aware of such appointment and ensure they will attend the Company Meeting in order for your vote to count. The Company Shareholder will also need to register the name of the non-management proxyholder attending

and voting at the Company Meeting with the Transfer Agent by either (a) visiting https://www.tsxtrust.com/resource/en/75, or (b) contacting TSX Trust by email at: [email protected] on or before 8:30 a.m. (Vancouver time) on March 29, 2021 so that they can be provided a user ID number (i.e., Control Number) to access the virtual Company Meeting as a proxyholder.

Q: Can I revoke or change my vote after I have voted by proxy?

A: Yes. If a Registered Shareholder has submitted a proxy, such holder may revoke it (a) by instrument in writing executed by the Registered Shareholder or such Registered Shareholder’s attorney authorized in writing or if the Registered Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof, duly authorized, indicating the capacity under which such officer or attorney is signing and deposit with the Transfer Agent at the office designated in the Notice of Meeting not later than 5:00 p.m. (Vancouver time), on the Business Day preceding the day of the Company Meeting (or any adjournment or postponement thereof) or with the Chair of the Company Meeting on the day of the Company Meeting (or any adjournment or postponement thereof); (b) by a duly executed and deposited proxy as provided herein bearing a later date or time than the date or time of the proxy being revoked; or (c) as permitted by law. Registered Shareholders may also attend and vote virtually at the Company Meeting, and if they do so, any voting instructions they previously gave for their Company Shares will be revoked.

Only Registered Shareholders have the right to revoke a proxy in the above manner. Beneficial Shareholders who wish to change their voting instructions must, in sufficient time in advance of the Company Meeting, contact their Intermediary in order to revoke their voting instructions and/or provide new voting instructions.

Q: Whom can I contact if I have questions about the Company Meeting?

A: If you have any questions or need assistance in your consideration of the Arrangement or with the completion and delivery of your form of proxy or voting instruction form, please contact the Company’s proxy solicitation agent:

D.F. King (Canada)

Telephone: 1-800-290-1473 (toll free in North America) or

416-682-3825 (collect outside North America)

Email: [email protected]

SUMMARY

The following is a summary of certain information contained in this Information Circular, including its Appendices. This summary is not intended to be complete and is qualified in its entirety by the more detailed information contained elsewhere in this Information Circular, including its Appendices. Certain capitalized terms used in this summary are defined in the “Glossary of Terms” of this Information Circular attached hereto as Appendix “A. Company Shareholders are urged to read this Information Circular and its Appendices carefully and in their entirety.

The Company Meeting

Company Meeting and Record Date

The Company Meeting will be held on March 31, 2021 at 8:30 a.m. (Vancouver time). The Company Meeting will be held virtually via live audio webcast online at https://web.lumiagm.com/242749115 (case sensitive password: pinnacle2021). See “Information Concerning the Meeting”. The Company Board has fixed February 16, 2021 as the Record Date for determining Company Shareholders who are entitled to receive notice of and vote at the Company Meeting.

The Arrangement Resolution

At the Company Meeting, Company Shareholders will be asked to consider and, if deemed advisable, to pass the Arrangement Resolution, a copy of which is attached hereto as Appendix “B” to this Information Circular. See “Certain Legal and Regulatory Matters – Required Shareholder Approval” for a discussion of the Shareholder approval requirements to effect the Arrangement.

Background to the Arrangement

The terms of the Arrangement are the result of arm’s length negotiations between representatives of the Company and the Purchaser and their respective advisors. This Information Circular contains a summary of the material events leading up to the negotiation of the Arrangement Agreement and the meetings, negotiations, discussions and actions between the Parties that preceded the execution and public announcement of the Arrangement Agreement. See “The Arrangement – Background to the Arrangement” for a description of the background to the Arrangement.

Recommendation of the Special Committee

The Special Committee, having taken into account such matters as it considered relevant, including, among other things, the Fairness Opinions, and after receiving legal and financial advice, unanimously determined that the Arrangement is in the best interests of the Company and fair to the Company Shareholders, and unanimously recommended that the Company Board approve the Arrangement and recommend that the Company Shareholders vote FOR the Arrangement Resolution .

In forming its recommendation to the Company Board, the Special Committee considered a number of factors, including, without limitation, those listed under “The Arrangement - Reasons for the Arrangement”. The Special Committee based its recommendation upon the totality of the information presented to and considered by it in light of the members of the Special Committee’s knowledge of the business, the financial condition and prospects of the Company and after taking into account the advice of the Company’s financial, legal and other advisors and the advice and input of management of the Company.

See “The Arrangement – Recommendation of the Special Committee”.

Recommendation of the Company Board

After careful consideration and taking into account such matters as it considered relevant including, among other things, the recommendation of the Special Committee and the Fairness Opinions, and after receiving legal and financial advice, the Company Board has unanimously determined that the Arrangement is in the best interests of the Company and fair to the Company Shareholders. Accordingly, the Company Board unanimously recommends that the Company Shareholders vote FOR the Arrangement Resolution. In accordance with the Voting Agreements, each director of the Company intends to vote all of his or her Company Shares FOR the Arrangement Resolution.

In forming its recommendation, the Company Board considered a number of factors, including, without limitation, the recommendation of the Special Committee and the factors listed below under “The Arrangement - Reasons for the Arrangement”. The Company Board based its recommendation upon the totality of the information presented to and considered by it in light of the knowledge of the members of the Company Board of the business, the financial condition and prospects of the Company and after taking into account the advice of the Company’s financial, legal and other advisors and the advice and input of management of the Company.

The Company, on behalf of the Company Board, retained CIBC to act as financial advisor to the Company. Scotiabank was retained by the Special Committee to act as independent financial advisor to the Special Committee and received a fixed fee for its services, including for the preparation and delivery of the Scotiabank Fairness Opinion.

See “The Arrangement – Recommendation of the Company Board”.

Voting Agreements

On February 7, 2021, the Purchaser and Acquireco entered into Voting Agreements with the ONCAP Parties and each of the directors and a former and all current members of senior management of the Company (collectively holding, directly or indirectly, or exercising control or direction over, an aggregate of 12,011,045 Company Shares, representing approximately 36% of the issued and outstanding Company Shares), pursuant to which, among other things, they have agreed to vote their Company Shares in favour of the Arrangement. See “The Arrangement – Voting Agreements”.

Fairness Opinions

On February 7, 2021 CIBC, financial advisor to the Company Board, rendered its opinion to the Company Board and the Special Committee to the effect that, as of February 7, 2021 and, subject to the assumptions, limitations and qualifications contained in such opinion, the Consideration to be received by Company Shareholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to the Company Shareholders. See “The Arrangement – Fairness Opinions – CIBC Fairness Opinion”,

Pursuant to an engagement letter dated January 21, 2021, the Special Committee retained Scotiabank as independent financial advisor to the Special Committee for the purposes of, among other things, preparing and delivering to the Company Board and the Special Committee a written opinion as to the fairness, from a financial point of view, of the Consideration offered under the Arrangement. On February 7, 2021 Scotiabank rendered its opinion to the Company Board and the Special Committee to the effect that, as of February 7, 2021 and, subject to the assumptions, limitations and qualifications contained in such opinion, the Consideration to be received by the Company Shareholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to the Company Shareholders. See “The Arrangement – Fairness Opinions – Scotiabank Fairness Opinion”.

Effective Date

The Effective Date of the Arrangement will occur on the fifth Business Day following the satisfaction or waiver of all conditions to completion of the Arrangement (excluding any conditions that, by their terms, cannot be satisfied until the Effective Date, but subject to the satisfaction or, where not prohibited, waiver of those conditions as of the Effective Date by the applicable Party or Parties for whose benefit such conditions exist) or on such other time and date as may be agreed upon by the Parties in writing, and the Arrangement shall be effective at the Effective Time on the Effective Date and will have all of the effects provided by applicable Laws.

Consideration to be Received by Company Shareholders and Holders of Company Options and Company RSUs

Pursuant to the Arrangement, each Company Shareholder (other than Dissenting Shareholders) will be entitled to receive from the Purchaser $11.30 in cash per Company Share. The Consideration shall be reduced for dividends or distributions of any kind by the Company (other than regular quarterly cash dividends paid to Company Shareholders by the Company in an amount not to exceed $0.0375 per Company Share and payable in the second and third calendar quarters of 2021).

With respect to Company Options and Company RSUs, whether vested or unvested, outstanding immediately prior to the Effective Time, under the Arrangement:

(a) each outstanding Company Option, notwithstanding the terms of the Company Legacy Option Plan or the Company LTIP, shall be deemed to be unconditionally vested and exercisable, and without any further action by or on behalf of the holder of Company Options, will be deemed to be assigned and transferred by such holder to the Company (free and clear of all Liens) in exchange for a cash payment from the Company equal to the amount (if any) by which the Consideration in respect of each Company Share underlying each Company Option exceeds the exercise price of such Company Option, in each case, less applicable withholdings; and
(b) each outstanding Company RSU, notwithstanding the terms of the Company LTIP, shall, without any further action by or on behalf of a holder of Company RSUs, be deemed to be assigned and transferred by such holder to the Company (free and clear of all Liens) and such holder shall cease to be a holder of such Company RSU in exchange for a cash payment from the Company equal to the Consideration in respect of each Company RSU, less applicable withholdings, and such Company RSU shall immediately be cancelled.

See “The Arrangement – Arrangement Mechanics”. See also “Risk Factors - Risk Factors Relating to the Arrangement”.

Certain Legal and Regulatory Matters

Completion of the Arrangement is subject to the conditions precedent contained in the Arrangement Agreement having been satisfied or waived, including receipt of, among other things: (i) the Company Shareholder Approval; (ii) the Purchaser Shareholder Approval; (iii) the approval of the Court of the Arrangement; and (iii) the Key Regulatory Approvals. If the necessary approvals are obtained and the other conditions to closing are satisfied or waived, it is anticipated that the Arrangement will be completed in the second or third quarter of 2021. However, completion of the Arrangement is dependent on many factors and it is not possible at this time to determine precisely when or if the Arrangement will become effective. See “Certain Legal and Regulatory Matters” and “Risk Factors”.

For greater certainty, completion of the Arrangement is subject to the fulfillment of conditions precedent in addition to the legal and regulatory approvals described above. See “Summary of the Arrangement Agreement – Conditions to Closing”.

Stock Exchange De-Listing and Reporting Issuer Status

The Company Shares will be de-listed from the TSX as soon as practicable following the completion of the Arrangement. Following the Effective Date, it is expected that the Purchaser will cause the Company to apply to cease to be a reporting issuer under the securities legislation of each of the provinces and territories in Canada under which it is currently a reporting issuer (or equivalent), or take or cause to be taken such other measures as may be appropriate to ensure that the Company is not required to prepare and file continuous disclosure documents. See “Certain Legal and Regulatory Matters — Stock Exchange De-Listing and Reporting Issuer Status”.

Interests of Certain Persons in the Arrangement

In considering the recommendations of the Company Board with respect to the Arrangement, Company Shareholders should be aware that certain directors and executive officers of the Company may have certain interests or receive certain benefits in connection with the Arrangement that may be in addition to, or separate from, those of Company Shareholders generally in connection with the Arrangement, in the form of payments under existing employment agreements and related incentive arrangements with the Company, in either case, that may be applicable as a result of the Arrangement. The Company Board and the Special Committee are aware of these interests and considered them along with other matters described herein. See “The Arrangement - Interests of Certain Persons in the Arrangement”.

Company Termination Payment

The Arrangement Agreement requires that the Company pay the Company Termination Payment in certain circumstances. See “Summary of the Arrangement Agreement — Termination Payments”.

Purchaser Termination Payment

The Arrangement Agreement requires that the Purchaser pay the Purchaser Termination Payment in certain circumstances. The Arrangement Agreement also requires that the Purchaser pay an expense reimbursement of $5,000,000 to the Company in certain circumstances. See “Summary of the Arrangement Agreement — Termination Payments”.

Depositary and Proxy Solicitation Agent

The Company has engaged TSX Trust Company to act as Depositary to receive, hold and distribute the Consideration for the former Company Shareholders following completion of the Arrangement. The Company has retained D.F. King (Canada) to assist in the solicitation of proxies. D.F. King (Canada) can be contacted by telephone at 1-800-290-1473 (toll free in North America) or 416-6823825 (collect outside North America), or by email at [email protected].

Dissent Rights of Shareholders

Registered Shareholders have Dissent Rights with respect to the Arrangement. Registered Shareholders who wish to exercise their Dissent Rights must: (i) deliver a written notice of dissent to the Arrangement Resolution to the Company, by mail to: Pinnacle Renewable Energy Inc., 350 – 3600 Lysander Lane, Richmond, British Columbia, V7B 1C3, Canada, Attention: General Counsel not later than 4:00 p.m. (Vancouver time) on March 29, 2021, or, if the Company Meeting is adjourned or postponed, by not later than 4:00 p.m. (Vancouver time) on the date that is two Business Days immediately preceding the date on which the adjourned or postponed Company Meeting is reconvened or

convened, as applicable; (ii) not have voted in favour of the Arrangement Resolution; and (iii) otherwise have complied with the procedures set forth in Section 237-247 of the BCBCA, as modified and supplemented by the Interim Order and the Plan of Arrangement.

A Beneficial Shareholder who wishes that Dissent Rights be exercised in respect of its Company Shares should immediately contact its Intermediary with whom the Beneficial Shareholder deals.

A Registered Shareholder’s failure to strictly comply with the procedures set forth in Sections 237 to 247 of the BCBCA, as modified or supplemented by the Interim Order and Plan of Arrangement, will result in the loss of such Registered Shareholder’s Dissent Rights.

See “Dissent Rights of Company Shareholders”.

Parties to the Arrangement

The Company

The Company is a Canadian renewable energy company and one of the world’s leading manufacturers and distributors of industrial wood pellets, which are used by large-scale thermal power generators as a greener alternative to produce reliable baseload renewable power. The Company currently operates eight wood pellet production facilities throughout western Canada, and one production facility in Alabama, that process a wide range of wood fibre (primarily forest product residuals) sourced from forestry industry partners that harvest from sustainably certified forests.

See “Information Concerning the Company”.

Purchaser and Acquireco

The Purchaser is a public limited company formed under the laws of England and Wales. It owns and operates a portfolio of low carbon and renewable electricity generation assets across Britain. The assets include the United Kingdom’s largest power station, based at Selby, North Yorkshire.

Acquireco is a corporation formed under the laws of British Columbia on February 3, 2021 for the sole purpose of acquiring the Company Shares pursuant to the Arrangement and has not engaged in any business activities other than in connection with the transactions contemplated by the Arrangement Agreement. Acquireco is indirectly 100% beneficially owned by the Purchaser.

See “Information Concerning the Purchaser and Acquireco”.

Certain Canadian Federal Income Tax Considerations

This Information Circular contains a summary of the principal Canadian federal income tax considerations applicable to certain Company Shareholders with respect of the Arrangement. See “Certain Canadian Federal Income Tax Considerations”. This Information Circular does not contain a summary of any other tax considerations in respect of the Arrangement. Company Shareholders should consult their own tax advisors with respect to the tax consequences applicable in their particular circumstances, including with respect to any foreign tax considerations that may be applicable to them.

Risk Factors

Company Shareholders should consider a number of risk factors relating to the Arrangement and the Company in evaluating whether to approve the Arrangement Resolution. These risk factors are discussed herein and/or in certain sections of documents publicly filed, which sections are incorporated herein by reference. See “Risk Factors”.

INFORMATION CONCERNING THE MEETING

Date, Time and Place of Meeting

The Company Meeting will be held on March 31, 2021 at 8:30 a.m. (Vancouver time), unless adjourned or postponed.

In order to ensure the safety of Company Shareholders, colleagues, stakeholders and the community at large and to comply with social distancing recommendations and mandates of public health authorities associated with COVID-19, the Company will hold the Company Meeting in a virtual only format, which will be conducted via live audio webcast at https://web.lumiagm.com/242749115 (case sensitive password: pinnacle2021).

Purpose of the Meeting

At the Company Meeting, Company Shareholders will be asked to consider and, if deemed advisable, to pass the Arrangement Resolution (a copy of which is attached as Appendix “B” to this Information Circular) and such other business as may properly come before the Company Meeting. At the time of printing of this Information Circular, management of the Company knows of no other matter expected to come before the Company Meeting, other than the vote on the Arrangement Resolution.

Voting Process

The voting process differs depending on whether you are a Registered Shareholder or a Beneficial Shareholder.

Registered Shareholders

If you have Company Shares registered in your own name, you are a Registered Shareholder. If you beneficially own Company Shares but they are registered not in your own name, you are a Beneficial Shareholder. If your Company Shares are listed in an account statement provided to you by an Intermediary, then it is likely that those Company Shares are not registered in your name, but under the Intermediary’s name or under the name of an agent of that Intermediary such as CDS & Co., the nominee for many Intermediaries, or their nominees.

A Registered Shareholder may vote in advance of the Company Meeting by submitting a proxy in any of the ways set out below:

On the Internet: A Registered Shareholder can go to the website at www.voteproxyonline.com and follow the instructions on the screen. The Registered Shareholder will need the 12-digit Control Number found on his, her or its form of proxy.
By Mail: A Registered Shareholder can complete the form of proxy as directed and return it in the business reply envelope provided to TSX Trust Company, 301-100 Adelaide Street West, Toronto, ON, M5H 4H1.

Beneficial Shareholders

Securities regulation requires Intermediaries to seek voting instructions from Beneficial Shareholders in advance of the Company Meeting. Beneficial Shareholders should be aware that Intermediaries can only vote Company Shares if instructed to do so by the Beneficial Shareholder. If you are a Beneficial Shareholder, your Intermediary will have provided you with a voting instruction form or form of proxy for the purpose of obtaining your voting instructions. Every Intermediary has its own mailing procedures and provides instructions for voting. You must follow those instructions carefully to ensure

your Company Shares are voted at the Company Meeting. Most Intermediaries use Broadridge to distribute voting instruction forms to Beneficial Shareholders.

If you are a Beneficial Shareholder receiving a voting instruction form from Broadridge, you may vote in advance of the Company Meeting in any of the ways set out below:

On the Internet: A Beneficial Shareholder can go to the website at www.proxyvote.com and follow the instructions on the screen. The Beneficial Shareholder will need the 16-digit Control Number found on his, her or its Broadridge voting instruction form.
By Telephone: A Beneficial Shareholder can call the number located on such Beneficial Shareholder’s voting instruction form. The Beneficial Shareholder will need the 16-digit Control Number found on his, her or its Broadridge voting instruction form.
By Mail: A Beneficial Shareholder can complete the voting instruction form as directed and return it in the business reply envelope provided to such Beneficial Shareholder by the nominee’s cut-off date and time.
By Broadridge QuickVote™: The Company may utilize Broadridge’s QuickVote™ service to assist Beneficial Shareholders with voting their Company Shares. If the Company decides to utilize Broadridge’s QuickVote™ service, certain Beneficial Shareholders who have not objected to the Company knowing who they are (non-objecting Beneficial Shareholders) may be contacted by D.F. King (Canada) to assist them in providing their voting instructions over the telephone.

If you are a Company Shareholder receiving a voting instruction form or proxy from an Intermediary, you cannot use that proxy to vote your Company Shares virtually at the Company Meeting. To vote your Company Shares at the Company Meeting, the voting instruction form or proxy must be returned to the Intermediary well in advance of the Company Meeting, as instructed by the Intermediary. If you wish to attend and vote your Company Shares virtually at the Company Meeting, follow the instructions for doing so provided by your Intermediary.

Record Date and Quorum

The Record Date for determining those Company Shareholders entitled to receive notice and to vote at the Company Meeting is the close of business on February 16, 2021. Only Registered Shareholders and Beneficial Shareholders as of the close of business on the Record Date are entitled to receive notice of and to vote at the Company Meeting. No person becoming a Company Shareholder after the Record Date shall be entitled to receive notice of the Company Meeting, nor can any Registered Shareholder or Beneficial Shareholder vote Company Shares they acquire after the Record Date at the Company Meeting. The failure of any Company Shareholder to receive notice of the Company Meeting does not deprive the Company Shareholder of the right to vote at the Company Meeting.

The quorum required at the Company Meeting shall be Company Shareholders, present in person, or represented by proxy, who, in the aggregate, hold at least 25% of the voting rights attached to the Company Shares entitled to be voted at the Company Meeting.

Attending and Voting Virtually at the Meeting

Registered Shareholders and duly appointed proxyholders may virtually attend the Company Meeting using an internet connected device such as a laptop, computer, tablet or mobile phone, and the meeting platform will be supported across browsers and devices that are running the most updated version of the applicable software plugins.

Company Shareholders and duly appointed proxyholders attending the Company Meeting virtually must remain connected to the internet at all times during the Company Meeting in order to vote when balloting commences. It is the Shareholder’s and duly appointed proxyholder’s responsibility to ensure that they remain connected to the internet for the duration of the Company Meeting. Registered Shareholders and duly appointed proxyholders wishing to attend the Company Meeting online should allow ample time to check in. Online check-in will begin one hour prior to the Company Meeting (i.e., the check-in will begin at 7:30 a.m. (Vancouver time) on March 31, 2021).

Registered Shareholders

Registered Shareholders and duly appointed proxyholders wishing to attend and vote virtually at the Company Meeting should not complete or return the proxy form and should instead follow these steps:

Log into https://web.lumiagm.com/242749115 at least 15 minutes before the Company Meeting starts. You should allow ample time to check into the virtual Company Meeting and to complete the related procedures.
Click on “I have a Control Number”.
Enter your 12-digit Control Number as your username (on your proxy form).
Enter the Password: pinnacle2021

Registered Shareholders who currently plan to attend the Company Meeting should consider voting their Company Shares in advance so that their vote will be counted if they later decide not to attend the Company Meeting. Registered Shareholders should note that if they participate and vote on any matter at the virtual Company Meeting they will revoke any previously submitted proxy.

Beneficial Shareholders

Beneficial Shareholders wishing to attend and to vote at the Company Meeting virtually or appoint a person (who need not be a Shareholder) to attend and act for him, her or it and on his, her or its behalf should instead follow these steps.

Appoint yourself or the desired person to act on your behalf as a proxyholder. This step is necessary because the Company and the Transfer Agent do not have a record of the Beneficial Shareholders of the Company and as a result, will have no knowledge of your shareholdings or entitlement to vote, unless you appoint yourself as a proxyholder. In most cases, the Beneficial Shareholder can appoint themselves as proxyholder by filling in his, her or its name in the space provided for designating a proxy on the voting instruction form sent by such Shareholder’s Intermediary and following the execution and return instructions provided by his, her or its Intermediary. It is not necessary to otherwise complete the form, as the Beneficial Shareholder will be voting virtually at the Company Meeting.
Register with the Transfer Agent. A Beneficial Shareholder must register themselves or the appointed proxyholder with the Transfer Agent by either: (i) visiting https://tsxtrust.com/resource/en/75, or (ii) contacting TSX Trust by email at: [email protected] on or before 8:30 a.m. (Vancouver time) on March 29, 2021. The Transfer Agent will ask for the beneficial Shareholder’s or appointed proxyholder’s contact information and will send such Beneficial Shareholder or appointed proxyholder a user ID number (i.e., the Control Number) via email shortly after this deadline.

Log into https://web.lumiagm.com/242749115 at least 15 minutes before the Company Meeting starts. You should allow ample time to check into the virtual Company Meeting and to complete the related procedures.
Click on “I have a Control Number”.
Enter your user ID number (i.e., the Control Number), which TSX Trust will have provided to you by email and enter the password: pinnacle2021

Notwithstanding the foregoing, Beneficial Shareholders located in the United States will generally have to first obtain a valid legal proxy from their Intermediary and will need to submit such legal proxy to the Transfer Agent by email at [email protected]. For further details, a Beneficial Shareholder should contact his, her or its Intermediary directly. Additionally, requests for registration from Beneficial Shareholders located in the United States that wish to attend and vote at the Company Meeting online must be deposited with the Transfer Agent by visiting https://tsxtrust.com/resource/en/75.com on or before 8:30 a.m. (Vancouver time) on March 29, 2021. Once such legal proxy is deposited with the Transfer Agent in accordance with these instructions, such Beneficial Shareholder should receive from the Transfer Agent a user ID number (i.e., the Control Number) via email shortly after this deadline and may then proceed with following instructions 4 and 5 above.

Appointment of Proxyholders

The person named as proxyholder in the enclosed form of proxy or voting instruction form, Duncan Davies, or failing him, Andrea Johnston, are the Chief Executive Officer and Chief Financial Officer of the Company, respectively. You are entitled to appoint a person, who need not be a Company Shareholder, other than the person designated in the enclosed form of proxy, to represent you at the Company Meeting . If you are a Registered Shareholder, such right may be exercised by inserting in the blank space provided in the form of proxy the name of the person to be designated or by completing another form of proxy and depositing the form of proxy with the Transfer Agent at: TSX Trust Company, 301-100 Adelaide Street West, Toronto, ON, M5H 4H1, at any time before the proxy deadline, being 8:30 a.m. (Vancouver time) on March 29, 2021 or, in the event the Company Meeting is adjourned or postponed, not less than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in British Columbia) before the adjourned meeting is reconvened or the postponed meeting is convened. Beneficial Shareholders should follow the instructions provided by their Intermediary and must return the form of proxy or voting instruction form as directed by their Intermediary sufficiently in advance of the proxy deadline to enable their Intermediary to act on it before the proxy deadline. The Company reserves the right to accept late proxies and to waive the proxy deadline with or without notice, but is under no obligation to accept or reject any particular late proxy.

Revocation of Proxies

If a Registered Shareholder has submitted a proxy, such holder may revoke it (a) by depositing an instrument in writing executed by the Registered Shareholder or such Registered Shareholder’s attorney authorized in writing or if the Registered Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof, duly authorized, indicating the capacity under which such officer or attorney is signing and deposit with the Transfer Agent at the office designated in the Notice of Meeting not later than 5:00 p.m. (Vancouver time), on the Business Day preceding the day of the Company Meeting (or any adjournment or postponement thereof) or with the Chair of the Company Meeting on the day of the Company Meeting (or any adjournment or postponement thereof); (b) by a duly executed and deposited proxy as provided herein bearing a later date or time than the date or time of the proxy being revoked; or (c) as permitted by law. Registered Shareholders may also attend and vote virtually at the Company Meeting, and if they do so, any voting instructions they previously gave for their Company Shares will be revoked.

Exercise of Voting Rights by Proxies

The person named as proxy will vote or withhold from voting the Company Shares for which he or she is appointed in accordance with the instructions of the Company Shareholder appointing him or her. In the absence of such instructions, the proxy will vote such Company Shares FOR all the matters identified in the attached Notice of Meeting, as applicable. The enclosed form of proxy confers discretionary authority upon the person named therein to vote as he or she sees fit with respect to amendments or variations to matters identified in the Notice of Meeting and to other matters that may properly come before the Company Meeting or any adjournment or postponement thereof, whether or not the amendment, variation or other matter that comes before the Company Meeting is routine or is contested. As at the date of this Information Circular, the management of the Company knows of no such amendment, variation or other matter expected to come before the Company Meeting other than the matters referred to in the Notice of Meeting.

Interest of Certain Persons in Matters to be Acted Upon

No director or executive officer of the Company at any time since the beginning of the Company’s last completed financial year, or any associate or affiliate of any such director or executive officer, has had any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Company Meeting, except as set forth in this Information Circular. See “Interest of Certain Persons in the Arrangement”, below.

Solicitation of Proxies

Management of the Company is soliciting the enclosed proxy and the Company will bear the expenses of this solicitation. The Company has engaged D.F. King (Canada) to act as proxy solicitation agent and shareholder communications advisor with respect to the matters to be considered at the Company Meeting. The solicitation will be conducted primarily by mail but proxies may also be solicited personally, by advertisement, by telephone, by directors, officers or employees of the Company and/or D.F. King (Canada) or by any other means management may deem necessary. In connection with these services, D.F. King (Canada) will receive a fee of up to $27,500, plus reasonable out-of-pocket expenses. The Company shall directly deliver proxy documents to Registered Shareholders through the Transfer Agent and the Company shall bear the cost of such delivery. The Company is not sending proxy-related materials to Company Shareholders using notice-and-access. The Company may also reimburse Intermediaries for reasonable costs incurred in sending the proxy documents to Beneficial Shareholders. The Company may utilize the Broadridge QuickVote™ service to assist eligible Beneficial Shareholders with voting their Company Shares.

Voting Securities and Principal Holders Thereof

As at the Record Date, February 16, 2021, 33,359,570 Company Shares were issued and outstanding. To the knowledge of the Company Board and management of the Company and based on publicly available information, as at the Record Date, no person owned or exercised control or direction over more than 10% of the issued and outstanding Company Shares except for the ONCAP Parties[(1)] , which collectively held 10,422,463 Company Shares, representing approximately 31.2% of all the issued and outstanding Company Shares as of that date.

Note:

(1) The general partner of ONCAP II L.P., ONCAP (US) II L.P., ONCAP (US) II-A L.P. and ONEX Parallel Investment (ONCAP) L.P. is ONCAP Investment Partners II L.P., which is owned by certain members of management of ONCAP. ONCAP Investment Partners II Inc. has voting control over ONCAP Investment Partners II L.P. Onex Corporation has voting control over ONCAP Investment Partners II Inc. Voting and dispositive powers with respect to the Company Shares held by the ONCAP Parties are exercised by ONCAP Investment Partners II L.P. The board of directors of ONCAP Investment Partners II Inc. is comprised of Christopher A. Govan and Anthony Munk, each of whom disclaims any beneficial ownership of the Company Shares held by the ONCAP Parties.

THE ARRANGEMENT

Background to the Arrangement

The provisions of the Arrangement Agreement are the result of arm’s length negotiations conducted between the Company and the Purchaser and their respective representatives and advisors. The following is a summary of the material events, negotiations, discussions and actions leading up to the execution of the Arrangement Agreement, and its public announcement on February 8, 2021. Between receipt of the Initial Purchaser Proposal and execution of the Arrangement Agreement, there were more than two dozen Company Board and Special Committee meetings held regarding the potential transaction, with management and financial and legal advisors present, as appropriate, as well as in camera sessions.

The Company is currently the second largest producer of industrial wood pellets in the world. In February 2018, following a comprehensive “dual-track” process, a predecessor of the Company completed its initial public offering of the Company Shares, which included a treasury offering of Company Shares by the Company and a secondary offering of Company Shares by certain shareholders, at a price of $11.25 per Company Share. The Company initially enjoyed strong financial and operating performance following its initial public offering. Subsequently, however, it experienced several operating challenges, including a dryer explosion at its newly constructed Entwistle facility in Alberta on February 11, 2019, prolonged fibre supply headwinds as a result of sawmill closures and operational curtailments in British Columbia, as well as shipping and rail logistical issues. Due to these operating challenges and other factors, many of which were outside of the Company’s control, the business began experiencing volatility and the Company’s earnings failed to meet the Company’s guidance and/or analysts’ expectations on a number of occasions.

On February 6, 2020, the Company announced that Robert McCurdy had notified the Company Board of his intention to retire as Chief Executive Officer in 2020, and that he planned to remain in his current position until the appointment of his successor.

On May 11, 2020, the Company announced its earnings for Q1 2020, stating that several challenges had impacted its results, including that:

a significant volume of high cost finished pellet inventory from year end and third party purchased pellets with no margin were used to fulfill customer obligations due to production shortfall as a result of the incident at the Entwistle facility;
a CN Rail derailment in British Columbia damaged a number of the Company’s leased railcars and resulted in some lost pellets, ten straight days of cold weather in January 2020 caused CN Rail disruptions resulting in some facility downtime, and CN Rail lines and ports in British Columbia were disrupted by blockades resulting in downtime at the Company’s northern facilities;
the Aliceville facility was down for five days during a flooding at the facility dock; and
with the emergence of COVID-19 in Q1 2020 and the resulting supply chain disruptions and international travel restrictions affecting the onsite presence of its external experts, smaller projects had been proactively delayed in order to preserve capital and enforce federal safety standards.

The Company further announced that considering the uncertainty in the global economic climate, the Company Board had conducted a review of the Company’s dividend policy and had determined to reduce its dividend to an annual level of $0.15 per Company Share. In the ensuing weeks, the trading price of the Company Shares on the TSX declined, closing at a low of $3.67 per Company Share on May 21, 2020.

On August 13, 2020, the Company received an unsolicited non-binding proposal letter from the Purchaser (the “ Initial Purchaser Proposal ”), expressing the Purchaser’s interest in acquiring all of the outstanding Company Shares at a price of $8.50 per share, representing a 36% premium to the closing price of the Company Shares on the TSX on August 12, 2020. The letter further requested a six-week exclusivity period for the Purchaser to complete due diligence and negotiate definitive transaction agreements.

The Purchaser is one of the largest consumers of industrial wood pellets globally and is the Company’s largest customer, representing a substantial percentage of the Company’s annual revenue. The wood pellet industry has seen significant growth in recent years, driven in part by governmental incentives established in many jurisdictions focused on reducing carbon emissions. However, there are a number of risks facing the wood pellet industry, including the scheduled expiration of certain governmental incentives in the coming years and the possibility that a failure to implement new incentive programs could lead to a significant reduction in demand and prices for wood pellets. In late 2019, the Purchaser announced a strategic plan to increase biomass self-supply to 5 million tonnes per year and significantly reduce the cost of biomass generation to £50/MWh.

On August 17, 2020, the Company Board met with representatives of Stikeman Elliott LLP (“ Stikeman ”) in attendance to review the Initial Purchaser Proposal. After receiving legal advice from Stikeman on their fiduciary duties and after reviewing and discussing the Initial Purchaser Proposal, the Company Board determined that it would carefully evaluate the proposal relative to the Company’s business plan and prospects as a stand-alone company. It was also determined that the Chair and ViceChair of the Company Board would schedule a call with the Purchaser to receive any additional information that the Purchaser was prepared to share regarding its proposal.

On August 25, 2020 representatives from the Purchaser provided additional background to the Initial Purchaser Proposal, including an explanation of their strategic rationale for pursuing the proposed transaction, their view that it provided fair value for the Company, their capacity to move quickly through diligence and seek the requisite approval by the Purchaser Shareholders, and their interest in advancing discussions regarding a proposed transaction expeditiously and on an exclusive basis.

On August 31, 2020, the Company Board met with representatives of Stikeman in attendance to again review and consider the Initial Purchaser Proposal, as well as the discussion held on August 25, 2020 with representatives of the Purchaser. The Company Board determined to engage CIBC as financial advisor to the Company Board in connection with its evaluation of the Initial Purchaser Proposal, based on CIBC’s qualifications, expertise, experience, and familiarity with the Company, including its experience as the co-lead underwriter on the Company’s initial public offering and co-lead financial advisor on the “dual-track” process that the Company had carried out in conjunction with its initial public offering. CIBC was instructed to commence work in evaluating the value represented by the Initial Purchaser Proposal relative to the value that could be achieved by the Company on a standalone basis as well as an analysis of potential alternatives to the Initial Purchaser Proposal.

On September 15, 2020, the Company Board met with representatives of Stikeman in attendance to review the progress being made by CIBC in its analysis of the Initial Purchaser Proposal. Following discussion, the Company Board determined to form the Special Committee, comprised of all of the Company’s independent directors, namely, Pat Bell (Chair), Gregory Baylin, Michael Lay, Hugh MacDiarmid, Rex McLennan and Jane O’Hagan, to facilitate and oversee the review of the Initial Purchaser Proposal and other potential alternatives available to the Company. The Company Board also directed management to continue to work to provide CIBC with the information CIBC required to assist in its preliminary evaluation of the Initial Purchaser Proposal.

On October 8, 2020, the Special Committee met with representatives of Stikeman in attendance to receive a presentation from CIBC regarding, among other things, CIBC’s preliminary assessment of value that could be realized by the Company continuing as a standalone entity under various scenarios, including a sensitivity analysis of key assumptions underlying the Company’s forecast relative to operational, execution and macro risks facing the Company; an evaluation of the value represented by

the Initial Purchaser Proposal as compared to the value that could be achieved by the Company on a standalone basis; and an analysis of potential alternatives to the Initial Purchaser Proposal. CIBC advised the Special Committee that, while the Initial Purchaser Proposal was credible, in CIBC’s view the proposed price of $8.50 per Company Share would need to be enhanced to represent a compelling alternative to Company Shareholders.

On October 9, 2020, the Special Committee met with representatives of Stikeman in attendance to consider its response to the Initial Purchaser Proposal. Following discussion and the receipt of legal advice from Stikeman regarding their fiduciary duties, and considering the presentation and advice received from CIBC the prior day, the Special Committee concluded that the Initial Purchaser Proposal was inadequate, but given that the Purchaser was a logical purchaser of the Company due to its existing business relationship and familiarity with the Company and its announced strategy of developing a significant self-supply of wood pellets, it would be prudent to enter into discussions with the Purchaser and provide them limited confidential information with a view to seeing if the Purchaser was prepared to enhance its proposal. The Special Committee further considered whether to canvass alternative potential counterparties for a business combination transaction at this time and decided it was premature to do so, but that the Company should preserve this flexibility and, therefore, not agree to the period of exclusivity that the Purchaser had requested in the Initial Purchaser Proposal at this time.

On October 13, 2020, at the direction of the Special Committee, CIBC communicated to the Purchaser’s financial advisor that the Company was willing to engage in non-exclusive preliminary discussions with the Purchaser to explore a potential transaction under the terms of a non-disclosure and standstill agreement, but that any potential transaction would need to be at a materially enhanced price relative to the Initial Purchaser Proposal.

On October 14, 2020, the Company announced the appointment of Duncan Davies as Chief Executive Officer effective November 1, 2020.

On October 19, 2020, the Purchaser and the Company entered into a non-disclosure and standstill agreement. In late October and early November 2020, the Company made available to the Purchaser certain non-public financial information regarding the Company’s recently completed third quarter, as well as the Company’s business plan, so the Purchaser could perform further due diligence and be in a position to provide an enhanced proposal.

On November 4, 2020, the Company received a revised non-binding proposal letter from the Purchaser (the “ Revised Purchaser Proposal ”), expressing the Purchaser’s interest in acquiring all of the outstanding Company Shares at an increased price of $9.50 per share, representing a 12% increase to the $8.50 per share price in the Initial Purchaser Proposal and a 44% premium to the closing price of the Company Shares on November 3, 2020. The Revised Purchaser Proposal again requested a sixweek exclusivity period for the Purchaser to complete confirmatory due diligence and negotiate definitive transaction agreements.

On November 6, 2020, the Special Committee met with representatives of Stikeman in attendance to review the Revised Purchaser Proposal and receive a presentation from CIBC regarding its preliminary analysis of the Revised Purchaser Proposal. CIBC also provided its analysis of other potential counterparties in a business combination transaction, noting that the Purchaser was the most logical potential counterparty due to its existing business relationship and familiarity with the Company, and its announced strategy of developing a significant self-supply of wood pellets. CIBC further advised the Special Committee that it was CIBC’s view that the financial terms proposed in the Revised Purchaser Proposal did not warrant granting the Purchaser a period of contractual exclusivity. The members of the Special Committee also received legal advice from Stikeman regarding their fiduciary duties. The Special Committee discussed several available alternatives for responding to the Revised Purchaser Proposal, including terminating discussions with the Purchaser, continuing discussions with the Purchaser on a bilateral basis concerning a potential transaction and continuing discussions with the Purchaser while simultaneously commencing discussions with other potential counterparties concerning a potential transaction. In discussing other potential counterparties, consideration was given both to potential levels

of interest, including in light of the experience from the extensive “dual-track” process that was undertaken in conjunction with the Company’s initial public offering (during which over one hundred potential counterparties were contacted regarding their interest in acquiring the Company), the ability of the Company to simultaneously engage with multiple counterparties while continuing to execute on both its operations and its development plans, and the potential for parties to engage within a reasonable timeframe, including in comparison to the timeframe the Purchaser indicated in the Revised Purchaser Proposal. Following extensive discussion of, among other factors, the likelihood that the Purchaser would have capacity to further improve its offer based on the potential synergies available to the Purchaser in connection with a potential transaction, the importance to the Purchaser of the potential transaction in advancing its announced strategic objectives, and the importance of the Company’s existing commercial relationship with the Purchaser to the Company’s financial performance, the Special Committee directed CIBC to communicate to the Purchaser’s financial advisor that the Special Committee was not prepared to grant exclusivity to the Purchaser at the price that had been proposed, but that it would propose to share additional information with the Purchaser to demonstrate the strength of the potential synergies available to the Purchaser in the proposed transaction and support a higher offer price. The Special Committee also concluded that it would wait to see whether the Purchaser would submit a further revised proposal based on such additional information before determining whether to contact other potential counterparties in relation to any potential transaction.

Later on November 6, 2020, representatives of CIBC, at the direction of the Special Committee, had a call with the Purchaser’s financial advisor to communicate that the Company was not prepared to grant exclusivity to the Purchaser at the price that had been proposed in the Revised Purchaser Proposal, but would be prepared to share additional information with the Purchaser to demonstrate the strength of the potential synergies and support a higher offer price from the Purchaser.

On November 9, 2020, after the close of trading on the TSX, the Company announced its financial results for Q3 2020, disclosing, among other things, that the combination of warmer and drier weather, lower fibre costs and the returns associated with the Company’s capital investment activities contributed to record production and profitability in Q3 2020. In the ensuing days, the trading price of the Company Shares on the TSX increased, from a closing price of $7.07 per share on November 9, 2020 to $7.91 per share and $8.79 per share on November 10 and 11, 2020, respectively.

On November 11, 2020, Prospect Co. Ltd (“ Prospect ”), a shareholder of the Company that had held approximately 12.7% of the Company Shares as of May 22, 2020, began reporting regular sales of its Company Shares in its insider filings. On November 23, 2020, Prospect announced that, as of such date, it had disposed of a total of 669,000 Company Shares, reducing its overall ownership to approximately 10.7% of the Company Shares. Prospect reported further sales of Company Shares in November 2020, as well as January and February 2021.

On November 12, 2020, representatives of the Company and the Purchaser and their respective financial advisors held a call during which the Company provided its analysis of potential synergies and the value creation opportunity for the Purchaser under a potential business combination transaction with the Company. Following this call, representatives of CIBC and the Purchaser’s financial advisor had a call to discuss the Purchaser’s feedback following the synergy presentation. During this call, the Purchaser’s financial advisor expressed that it believed the Purchaser was potentially prepared to increase its price further, but was also unlikely to be willing to continue to submit proposals without receiving more specific guidance from the Company on a potential price at which the Company would be prepared to enter into exclusive discussions with the Purchaser.

On November 13, 2020, the Special Committee met with representatives of CIBC and Stikeman in attendance. Among other matters, the Special Committee discussed the potential risks to the Company if the Purchaser were to pursue alternative options to increase its biomass self-supply. The Special Committee also discussed the fact that Prospect had reported sizeable sales of Company Shares over the market (in comparison to the average daily trading volume of the Company’s common shares) since the Company’s recent earnings release and the subsequent rise in the trading price of the Company Shares, as well as the fact that the Company understood that Prospect was likely to continue to reduce its

investment in the Company. Following extensive deliberations regarding the recent discussions with the Purchaser, as well as the receipt of advice from CIBC and from Stikeman, and after considering the foregoing and other matters, including the limited number of other likely potential counterparties and the risk that the Purchaser would not be prepared to participate in a broader sale process if the Company were to initiate one, the Special Committee concluded that it was open to pursuing a potential transaction with the Purchaser if the parties could reach alignment on a price, and instructed CIBC to communicate to the Purchaser more specific guidance as to the price range at which the Company Board would be likely to support a transaction.

On November 19, 2020, representatives of CIBC had a call with representatives of the Purchaser’s financial advisor during which CIBC, as instructed, confirmed that the Company was open to pursuing a potential transaction with the Purchaser, subject to mutual agreement on terms, but that the Company Board and the Special Committee were looking for a price materially higher than the price most recently proposed by the Purchaser in the Revised Purchaser Proposal, referencing a number of metrics and the Special Committee’s views regarding the Company’s long term fundamental value.

On November 25, 2020, representatives of the Special Committee and the Purchaser had a call to discuss the potential transaction. During the call, the Purchaser communicated: (a) its expectations for a due diligence period that would extend through to the end of January; (b) its insistence that due diligence be conducted under a period of exclusivity; (c) its expectation that any transaction would receive a recommendation from the Company Board and would be supported by management and by the ONCAP Parties, as a Company Shareholder; and (d) its view that it had already raised the price from the Initial Purchaser Proposal, and that it believed that the Revised Purchaser Proposal of $9.50 per Company represented a fair price that already accounted for potential synergies that could be realized in a potential transaction. The representatives of the Purchaser then suggested that they would be prepared to increase their offer price to $10.50 per Company Share. The representatives of the Special Committee communicated that it was the Company’s expectation that any due diligence process would be completed more quickly than the end of January, and reaffirmed the guidance previously delivered to the Purchaser that the Special Committee and the Company Board expected any transaction to deliver a price materially above what was reflected in the Revised Purchaser Proposal and above the subsequently communicated offer price of $10.50 per Company Share, referencing a number of metrics. The call concluded with the representatives of the Purchaser stating that they did not have authority to increase the offer above $10.50 per Company Share, and that they would revert following further internal discussions.

On November 25, 2020, the Company announced that operations at its facility in Houston, B.C.

had been temporarily suspended as a result of a fire-related event.

In late November 2020, management informed the Company Board that Q4 2020 revenue and EBITDA were likely to be below analyst consensus estimates for the quarter as a result of lower than anticipated production and shipment volumes.

On December 1, 2020, the Purchaser’s financial advisor delivered a revised non-binding proposal to CIBC (the “ Final Purchaser Proposal ”), on behalf of the Purchaser, for the acquisition by the Purchaser of all of the Company Shares at a price of $11.30 per share, which represented a premium of 34% to the closing price of the Company Shares on the TSX on December 1, 2020, and increases of 33% and 19% to the Initial Purchaser Proposal and the Revised Purchaser Proposal, respectively. The Final Purchaser Proposal stipulated that the Company would cease to pay its regular quarterly dividend, and requested a period of exclusivity through to January 25, 2021 for the Purchaser to complete confirmatory due diligence and to negotiate definitive transaction agreements.

On December 2, 2020, the Special Committee met with representatives of CIBC and Stikeman in attendance to consider the Final Purchaser Proposal. During the meeting Stikeman provided legal advice on the directors’ fiduciary duties and CIBC provided its views and preliminary analysis of the Final Purchaser Proposal, stating that in CIBC’s view, taking into account the other factors that had been considered by the Special Committee and the Company’s other available alternatives, the increased price in the Final Purchaser Proposal supported entering into a period of exclusivity with the Purchaser to

pursue a potential transaction. In addition, Mr. Baylin confirmed, on behalf of the ONCAP Parties, that he expected that the ONCAP Parties would be supportive of the Final Purchaser Proposal. Having considered the foregoing and, following extensive discussion of, among other things, the terms and length of the proposed exclusivity period, the scope of due diligence activities proposed to be conducted by the Purchaser, the recent announcement that operations at the Company’s facility in Houston, B.C. had been temporarily suspended as a result of a fire-related event and the potential risks to the Company if the Purchaser were to pursue alternative options to increase its biomass self-supply, the Special Committee members authorized entering into a period of exclusive discussions with the Purchaser to pursue a potential transaction on the terms set forth in the Final Purchaser Proposal, and instructed representatives of CIBC and Stikeman to negotiate the form of exclusivity agreement in coordination with representatives of the Special Committee and management.

Following discussions between representatives of CIBC and the Purchaser’s financial advisor, on December 3, 2020, the Purchaser’s financial advisor provided a draft exclusivity agreement that provided for a period of exclusivity through January 18, 2021, with one automatic extension to January 25, 2021, if the parties were continuing to negotiate in good faith in respect of the proposed transaction. Over the ensuing several days, the representatives of the Company and the Purchaser negotiated the terms of the exclusivity agreement, and, on December 7, 2020, the Company and the Purchaser entered into the exclusivity agreement.

On December 7, 2020, the Company, the Purchaser and their respective representatives held a call to organize the plan for the Purchaser’s due diligence over the ensuing weeks. Over the next several weeks, the Company provided the Purchaser and its representatives with additional access to non-public information concerning the Company and numerous due diligence calls were held. During this period, the Special Committee also held various formal and informal meetings to review, among other things, the status of the Purchaser’s due diligence.

On December 11, 2020, the Special Committee met with representatives of CIBC and Stikeman in attendance to receive an update on the Purchaser’s due diligence activities. At the meeting, the Special Committee also decided that in light of the nature of the proposed transaction with the Purchaser, a second financial advisor should be retained to provide a fairness opinion to the Company Board and the Special Committee on a fixed-fee basis, regardless of its conclusions, and directed representatives of the Special Committee to meet with potential firms to be retained as a second financial advisor.

On January 5, 2021, the Special Committee met with representatives of CIBC and Stikeman in attendance to receive a further update on the Purchaser’s due diligence activities and approve the retention of a second financial advisor. Following discussion, the Special Committee approved retaining Scotiabank as an independent financial advisor to provide an opinion as to the fairness of the consideration in a potential transaction with the Purchaser on a fixed-fee basis based on, among other things, Scotiabank’s qualifications and experience, as well as its familiarity with the Company and its business, including acting as a co-lead financial advisor on the “dual-track” process that the Company had carried out in conjunction with its initial public offering. Scotiabank was subsequently engaged pursuant to an engagement agreement dated January 21, 2021.

On January 12, 2021, the Purchaser’s legal counsel provided an initial draft of the Arrangement Agreement and forms of the Voting Agreements to Stikeman. Between January 12, 2021 and February 7, 2021, the parties and their representatives negotiated the Arrangement Agreement and Voting Agreements. During this period the Special Committee held a number of formal and informal meetings to supervise the negotiations and provide direction to the Company’s representatives.

On January 15, 2021, the Special Committee met with representatives of CIBC and Stikeman in attendance to discuss the draft Arrangement Agreement and draft forms of Voting Agreements and to receive an update on the status of the Purchaser’s due diligence. Following discussion, in light of the upcoming expiry of the initial exclusivity period on January 18, 2021 (subject to the automatic extension to January 25, 2021, if the parties were continuing to negotiate in good faith in respect of the proposed transaction), the Special Committee determined to request that the Purchaser confirm it was still pursuing

the proposed transaction diligently and in good faith at a price of $11.30 per Company Share, that it provide an updated list of outstanding critical due diligence items, and that it commit to completing its due diligence efforts by January 22, 2021. The notice was delivered to the Purchaser later that day.

On January 18, 2021, the Purchaser confirmed in writing that it was still continuing to pursue the proposed transaction diligently and in good faith at a price of $11.30 per Company Share, and that the Purchaser was targeting completion of its confirmatory due diligence by January 22, 2021. Accordingly, under the terms of the exclusivity agreement between the parties, the exclusivity period was automatically extended to January 25, 2021.

On January 25, 2021, the Company announced that it had received notice of regulatory charges laid by Alberta Occupational Health and Safety (OHS) following their investigation of the explosion which resulted in injuries at the Company’s plant in Entwistle, AB on February 11, 2019.

Later, on January 25, 2021, the Special Committee met with representatives of Stikeman in attendance to receive a presentation from Scotiabank regarding its preliminary financial analysis of the proposed transaction with the Purchaser, and to receive an update on the status of negotiations concerning the Arrangement Agreement. The Special Committee provided direction to the Company’s representatives regarding the terms of the Arrangement Agreement and determined that it would not further extend the exclusivity period provided for under the terms of its initial exclusivity agreement with the Purchaser, if requested. The Special Committee resolved that it would instead determine whether agreement on the proposed transaction with the Purchaser could be promptly reached on acceptable terms. Detailed negotiations continued through the first week of February, with the final outstanding issues being resolved over the weekend on February 6 and February 7, 2021.

On February 7, 2021, the Company Board and the Special Committee held a joint meeting, together with representatives of CIBC, Scotiabank and Stikeman, to review the terms of the proposed final draft Arrangement Agreement and related matters. Representatives of CIBC and Scotiabank each provided a presentation regarding the proposed transaction with the Purchaser. Each of CIBC and Scotiabank then delivered to the Special Committee and the Company Board an oral opinion to the effect that, as of February 7, 2021, and based on and subject to the analyses referred to, and assumptions, qualifications and limitations set forth therein, the consideration under the Arrangement is fair, from a financial point of view, to the Company Shareholders. Following the presentations from CIBC and Scotiabank, representatives of Stikeman discussed certain aspects of the Arrangement Agreement, reviewed with the directors their fiduciary duties, and answered questions regarding the proposed transaction. Following extensive discussion of the key benefits and risks of the proposed transaction, including those noted under the heading “The Arrangement – Reasons for the Arrangement”, and after consulting with its legal and financial advisors and taking into account the Fairness Opinions delivered by CIBC and Scotiabank, the Special Committee unanimously determined that the Arrangement is in the best interests of the Company and is fair to the Company Shareholders and unanimously recommended that the Company Board approve the Arrangement and that the Company Shareholders vote in favour of the Arrangement Resolution. Thereafter, following further discussion of the key benefits and risks of the proposed transaction, including those noted under the heading “The Arrangement – Reasons for the Arrangement”, and after consulting with its legal and financial advisors and following receipt of the unanimous recommendation of the Special Committee and the Fairness Opinions delivered by CIBC and Scotiabank, the Company Board unanimously determined that the Arrangement is in the best interests of the Company and is fair to the Company Shareholders, unanimously approved entering into the Arrangement Agreement and unanimously recommended that the Company Shareholders vote in favour of the Arrangement Resolution.

Throughout the evening of February 7, 2021, representatives of the parties finalized the Arrangement Agreement and the related documents and press release. The Arrangement Agreement and the Voting Agreements were executed later that evening and, prior to the opening of trading on the TSX the next morning, the Company and the Purchaser issued press releases announcing entry into the transaction.

Recommendation of the Special Committee

As described above under “The Arrangement – Background to the Arrangement”, the Company Board established a Special Committee to, among other things, review and consider the Arrangement and other potential alternatives available to the Company and make recommendations to the Company Board. The Special Committee is comprised entirely of independent directors and it met on numerous occasions both as a committee with solely its members and advisors present and with management and the full Company Board present, where appropriate.

In forming its recommendation to the Company Board, the Special Committee considered a number of factors, including, without limitation, those listed below under “The Arrangement -Reasons for the Arrangement”. The Special Committee based its recommendation upon the totality of the information presented to and considered by it in light of the members of the Special Committee’s knowledge of the business, financial condition and prospects of the Company and after taking into account the advice of the Company’s financial, legal and other advisors and the advice and input of senior management of the Company.

Recommendation of the Company Board

After careful consideration and taking into account such matters as it considered relevant including, among other things, the recommendation of the Special Committee and the Fairness Opinions, and after receiving legal and financial advice, the Company Board has unanimously determined that the Arrangement is in the best interests of the Company and fair to the Company Shareholders. Accordingly, the Company Board unanimously recommends that the Company Shareholders vote FOR the Arrangement Resolution. In accordance with the Voting Agreements , each director of the Company intends to vote all of his or her Company Shares FOR the Arrangement Resolution.

Voting Agreements

The following description of certain provisions in the Voting Agreements is a summary only, is not comprehensive, and is qualified in its entirety by reference to the full texts of the applicable Voting Agreements, copies of which were filed under the Company’s profile on SEDAR at www.sedar.com. The ONCAP Parties, the Company’s largest shareholder, together with the Company’s directors and a former and all current members of senior management of the Company, who collectively with the

ONCAP Parties hold, directly or indirectly, or exercise control or direction over, an aggregate of 12,011,045 Company Shares, representing approximately 36% of the issued and outstanding Company Shares, have entered into Voting Agreements with the Purchaser and Acquireco pursuant to which, among other things, they have agreed to vote all of the Company Shares owned or controlled by them in favour of the Arrangement Resolution at the Company Meeting.

The Voting Agreements automatically terminate upon the earlier of the termination of the Arrangement Agreement in accordance with its terms and the Effective Time. Each Voting Agreement may also be terminated as follows: (a) by mutual agreement of the parties thereto; (b) by Acquireco or the Purchaser, if the Company Shareholder party thereto breaches or is in default of any of the covenants or obligations of such Company Shareholder thereunder or any of the representations or warranties of such Company Shareholder were as at the date of such Voting Agreement, or subsequently become, untrue or incorrect in any material respects, and such breach has not been cured within 10 Business Days of the date notice of the breach was received by such Company Shareholders; (c) by any of the parties thereto if the Effective Date has not occurred by the Outside Date; or (d) by the Company Shareholder party thereto if, without such Company Shareholder’s prior written consent, the Arrangement Agreement is amended in any manner that would result in a decrease in the amount, or a change in the form, of Consideration set out in the Arrangement Agreement.

Reasons for the Arrangement

In the course of their evaluation of the Arrangement, the Special Committee and the Company Board consulted with their financial and legal advisors and the Company’s senior management, and considered a number of factors including, among others, the following:

(a) Attractive Value Relative to Alternatives . The Special Committee and the Company Board, with the assistance of their financial advisors, concluded that the value of $11.30 per Company Share in cash offered to Company Shareholders under the Arrangement is more favourable (and can be achieved with less risk) than the value that might have been realized through pursuing other alternatives reasonably available to the Company. These included:
(i) Executing on Its Current Strategic Plan . The Special Committee and the Company Board undertook a detailed assessment of the current and anticipated future opportunities and risks associated with the business operations, assets, financial condition and prospects of the Company as an independent, publicly traded company, including the operating challenges the Company has experienced and the risks facing the Company and the wood pellet industry described above under “The Arrangement - Background to the Arrangement”; and
(ii) Sale to a Potential Competing Bidder . It was the Special Committee’s and the Company Board’s view that there was significant uncertainty associated with realizing an alternative transaction with another potential buyer on more attractive terms, including in light of the fact that over one hundred buyers were previously contacted during the “dual-track” process conducted in conjunction with the Company’s initial public offering.
(b) Form of Consideration Provides Certainty and Immediate Value . The Consideration to be paid pursuant to the Arrangement is all cash, which provides certainty of value to Company Shareholders, and allows Company Shareholders to immediately realize a fair value for their investment.
(c) Arrangement Provides Liquidity to Shareholders . Prior to announcement of the Arrangement, there was limited liquidity in the trading of the Company Shares on the TSX. The average daily volume of the Company Shares for the three months and six

months preceding the announcement of the Arrangement was only 177,443 and 163,832 Company Shares, respectively, representing approximately 0.53% and 0.49%, respectively, of the issued and outstanding Company Shares. The Arrangement offers an attractive liquidity event for Company Shareholders in a thinly traded stock at a premium to the trading price of the Company Shares in the period prior to announcement of the Arrangement on February 8, 2021.

(d) Fairness Opinions . The Fairness Opinions rendered by each of CIBC and Scotiabank provided that, as of February 7, 2021, and based on and subject to the analyses referred to, and assumptions, qualifications and limitations set forth therein, the consideration under the Arrangement is fair, from a financial point of view, to the Company Shareholders. See “The Arrangement - Fairness Opinions”.
(e) Voting Agreements . The largest Company Shareholder, the ONCAP Parties, together with the Company’s directors and a former and all current members of senior management of the Company, who collectively with the ONCAP Parties own approximately 36% of the outstanding Company Shares, have entered into the Voting Agreements pursuant to which, among other things, they have agreed to vote all of the Company Shares owned or controlled by them in favour of the Arrangement at the Company Meeting.
(f) Premium to Company Shareholders . The Consideration being offered to Company Shareholders under the Arrangement represents a premium of approximately 13% to the closing price and 15% to the 20-day volume-weighted average price of the Company Shares on the TSX on February 5, 2021, the last trading day prior to announcement of the Arrangement, and a premium of approximately 33% to the closing price of the Company Shares on the TSX on December 4, 2020, the last trading day before the Company and the Purchaser entered into an exclusivity agreement.
(g) The Terms of the Arrangement Agreement . The terms and conditions of the Arrangement Agreement are, in the judgment of the Special Committee and the Company Board, following consultations with their financial and legal advisors, reasonable and were the result of extensive negotiations between the Company and the Purchaser and their respective advisors. In particular:
(i) Ability to Respond to Company Superior Proposal and Company Intervening Event. Under the Arrangement Agreement, the Company Board remains able to respond, in accordance with its fiduciary duties, to unsolicited Company Acquisition Proposals that constitute or may reasonably be expected to constitute or lead to a Company Superior Proposal, as well as to Company Intervening Events, on the specific terms and conditions set forth in the Arrangement Agreement, including the payment of the Company Termination Payment if the Company terminates the Arrangement Agreement.
(ii) Limited Conditions to Closing . The Purchaser’s obligation to complete the Arrangement is subject to a limited number of conditions that the Special Committee and the Company Board believe are reasonable in the circumstances and the completion of the Arrangement is not subject to a due diligence or financing condition.
(iii) Company Termination Payment . The Company Termination Payment of $12,500,000, payable by the Company to the Purchaser if the Arrangement Agreement is terminated in certain circumstances, is appropriate in the circumstances as an inducement for the Purchaser to enter into the Arrangement Agreement and is not preclusive of other offers.

(iv) Purchaser Termination Payment . The Purchaser has agreed to pay the Company the Purchaser Termination Payment of $25,000,000 if the Arrangement is not completed under certain circumstances as set out in the Arrangement Agreement. The Purchaser has also agreed to pay an expense reimbursement of $5,000,000 to the Company in certain circumstances as set out in the Arrangement Agreement.
(h) Credibility and Reputation of the Purchaser . The Purchaser is a credible and reputable acquirer, listed on the London Stock Exchange, with a market capitalization on the day of announcement of approximately £1.553 billion, and is the Company’s largest customer. The Special Committee and the Company Board therefore believe that the Purchaser has the financial capability to consummate the Arrangement, and the skills necessary to operate the business thereafter. The Purchaser has unconditionally guaranteed all obligations of Acquireco under the Arrangement Agreement.
(i) Required Company Shareholder and Court Approval . The Special Committee and the Company Board considered the following rights and approvals which protect Company Shareholders:
(i) the Arrangement is the result of a robust negotiation process that was undertaken under the supervision of the Special Committee, which was comprised entirely of independent directors, and received advice from CIBC, Scotiabank and Stikeman throughout the process;
(ii) the Arrangement Resolution must be approved by not less than two-thirds of the votes cast at the Company Meeting by Company Shareholders;
(iii) the Arrangement must be approved by the Court, which will consider, among other things, the fairness of the Arrangement to Company Shareholders; and
(iv) Company Shareholders have been provided with the right to exercise Dissent Rights.

In the course of its deliberations, the Special Committee and the Company Board also identified and considered a variety of risks (as described in greater detail under “Risk Factors”) and potentially negative factors in connection with the Arrangement, including, but not limited to:

(a) the limitations contained in the Arrangement Agreement on the Company’s ability to solicit alternative transactions from third parties, as well as the fact that if the Arrangement Agreement is terminated in certain circumstances, the Company may also be required to pay the Company Termination Payment, which may adversely affect the Company’s financial condition;
(b) if the Arrangement is successfully completed, the Company will no longer exist as an independent publicly traded company and Company Shareholders will be unable to participate in the longer-term potential benefits of the business of the Company;
(c) the conditions to Acquireco’s and the Purchaser’s obligation to complete the Arrangement and the rights of Acquireco and the Purchaser to terminate the Arrangement Agreement in certain circumstances, including in response to a Purchaser Superior Proposal or Purchaser Intervening Event on the specific terms and conditions set forth in the Arrangement Agreement;
(d) the restrictions imposed pursuant to the Arrangement Agreement on the conduct of the Company’s business during the period between the entering into of the Arrangement Agreement and the consummation of the Arrangement;

(e) the fact that certain of the Company’s directors and executive officers have interests in the Arrangement that differ from, or are in addition to, the consideration to be received by Company Shareholders pursuant to the Arrangement, which interests are described under “The Arrangement – Interests of Certain Persons in the Arrangement”;
(f) if the Arrangement Agreement is terminated and the Company Board decides to seek another transaction or business combination, there is no assurance that the Company will be able to find a party willing to pay greater or equivalent value compared to the Consideration available to Company Shareholders under the Arrangement; and
(g) if the Arrangement Agreement is terminated, the Company’s business may be negatively impacted as a result of pursuing the Arrangement, including as a result of costs to the Company in pursuing the Arrangement, the diversion of management attention away from the conduct of the Company’s business in the ordinary course and the potential loss of key employees.

The foregoing reasons for recommending the Arrangement include certain assumptions relating to forward-looking information, and such information and assumptions are subject to various risks. See “Forward-Looking Information” and “Risk Factors”.

The foregoing discussion of certain of the factors considered by the Special Committee and the Company Board is not intended to be exhaustive. The recommendations of the Special Committee and the Company Board were made after consideration of all of the factors noted above and certain other factors, and in light of the Special Committee’s and the Company Board’s knowledge of the business, financial condition and prospects of the Company and taking into account the advice of their financial and legal advisors. In view of the wide variety of factors considered in connection with their evaluation of the Arrangement, the Special Committee and the Company Board did not find it practicable to, and did not, quantify or otherwise attempt to assign relative weight to specific factors in reaching their determination. In addition, individual members of the Special Committee and the Company Board may have given different weight to different factors.

Fairness Opinions

CIBC Fairness Opinion

The Company Board retained CIBC as financial advisor pursuant to an engagement letter effective November 30, 2020, to provide the Company Board with financial advisory services in connection with the Arrangement. In connection with its evaluation of the Arrangement, the Company Board received the CIBC Fairness Opinion that, as of February 7, 2021 and, subject to the assumptions, limitations and qualifications contained in such opinion, the Consideration to be received by Company Shareholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to the Company Shareholders. The CIBC Fairness Opinion was only one of many factors considered by the Special Committee and the Company Board in evaluating the Arrangement.

The full text of the written CIBC Fairness Opinion setting out the assumptions made, matters considered and limitations and qualifications on the review undertaken by CIBC in connection with the CIBC Fairness Opinion is attached as Appendix “E” to this Information Circular. CIBC provided the CIBC Fairness Opinion exclusively for the use of the Company Board in connection with its consideration of the Arrangement. The CIBC Fairness Opinion may not be published, relied upon by any other person, or used for any other purpose, without the prior written consent of CIBC, which consent has been obtained for the purposes of the CIBC Fairness Opinion’s inclusion in this Information Circular. The CIBC Fairness Opinion was not intended to be and does not constitute a recommendation to the Special Committee or the Company Board as to whether it should approve the Arrangement Agreement or the Arrangement, nor is it a recommendation to any Company Shareholder as to how to vote or act at the Company Meeting or as an opinion concerning the trading price or value of any securities of the Company following the announcement of the Arrangement. The CIBC Fairness Opinion was one of a number of factors taken

into consideration by the Company Board and the Special Committee in making their unanimous determinations that the Arrangement is in the best interests of the Company and is fair to the Company Shareholders and to recommend that Company Shareholders vote in favour of the Arrangement Resolution. Company Shareholders are urged to read the CIBC Fairness Opinion in its entirety. This summary of the CIBC Fairness Opinion is qualified in its entirety by the full text of the CIBC Fairness Opinion attached as Appendix “E” to this Information Circular.

Pursuant to the terms of its engagement with the Company, CIBC is to be paid fees for its services as financial advisor, a portion of which is payable upon rendering the CIBC Fairness Opinion and a substantial portion of which is contingent on the successful completion of the Arrangement or any alternative transaction. Additionally, the Company has agreed to reimburse CIBC for reasonable out-ofpocket expenses incurred in respect of its engagement and to indemnify CIBC in respect of certain liabilities that might arise out of its engagement.

Neither CIBC nor any of its affiliates is an insider, associate or affiliate (as those terms are defined in the Securities Act (Ontario)) of the Company, the Purchaser or any of their respective associates or affiliates (collectively, the “ Interested Parties ”). Neither CIBC nor any of its affiliates has been engaged to provide any financial advisory services, nor has CIBC or any of its affiliates participated in any financing, involving the Interested Parties within the past two years, other than (a) pursuant to its engagement with the Company Board and (b) in the ordinary course of its business and unrelated to the Arrangement, (i) Canadian Imperial Bank of Commerce, an affiliate of CIBC, is a member of a lending syndicate providing a credit facility to the Company, (ii) in the past, CIBC has acted as lead underwriter for the Company in connection with two offerings of equity securities, and (iii) providing ancillary financial and credit-related products and services to the Company. In the ordinary course of its business and unrelated to the Arrangement, Canadian Imperial Bank of Commerce, London Branch, an affiliate of CIBC, is a member of a lending syndicate providing a credit facility to the Purchaser. There are no understandings, agreements or commitments between CIBC and the Interested Parties with respect to any future business dealings. CIBC may, in the future, in the ordinary course of its business, perform financial advisory or investment banking services for the Interested Parties. In addition, Canadian Imperial Bank of Commerce, of which CIBC is a wholly-owned subsidiary, or one or more affiliates of Canadian Imperial Bank of Commerce, may provide banking or other financial services to one or more of the Interested Parties in the ordinary course of business.

Scotiabank Fairness Opinion

Scotiabank rendered an opinion, which was confirmed by delivery of a written opinion to the Company Board and the Special Committee (the “ Scotiabank Fairness Opinion ”), to the effect that, as of February 7, 2021, based on its review and subject to the assumptions, limitations and qualifications contained therein, Scotiabank was of the opinion that, as of the date of the written opinion, the Consideration being offered by the Purchaser pursuant to the Arrangement was fair, from a financial point of view, to the Company Shareholders.

Scotiabank is a leading Canadian investment dealer whose businesses include corporate finance, mergers and acquisitions, equity and fixed income sales and trading and investment research. The Scotiabank Fairness Opinion is the opinion of Scotiabank and the form and content of the Scotiabank Fairness Opinion have been approved for release by a committee of professionals of Scotiabank, each of whom is experienced in merger, acquisition, divestiture and fairness opinion and valuation matters.

The full text of the Scotiabank Fairness Opinion dated February 7, 2021 which sets forth, among other things, the assumptions made, information reviewed, matters considered and limitations and qualifications on the review undertaken in connection with the opinion, is set out as Appendix “F” to this Information Circular. The Scotiabank Fairness Opinion was prepared at the request and for the information of the Special Committee and the Company Board. The opinion is directed only to the fairness, from a financial point of view, of the Consideration to be received by Company Shareholders pursuant to the Arrangement, and is only one of a number of factors taken into consideration by the Special Committee and the Company Board in considering the Arrangement and does not constitute a recommendation of any kind to any Company Shareholder as to how such shareholder should vote or act with respect to the matters to be considered at the Company Meeting. The foregoing summary of the opinion is qualified in its entirety by the full text of the opinion which is attached as Appendix “F” to this Information Circular and the Company Shareholders are urged to read the Scotiabank Fairness Opinion in its entirety.

Pursuant to the terms of its engagement with the Special Committee, the Company has agreed to pay Scotiabank a fixed fee for its services, including for the preparation and delivery of the Scotiabank Fairness Opinion. The fees payable to Scotiabank are not contingent upon the conclusions reached by Scotiabank in the Scotiabank Fairness Opinion or on the completion of the Arrangement. In addition, Scotiabank is to be reimbursed for its reasonable out-of-pocket expenses and to be indemnified by the Company for certain liabilities that may arise under its engagement.

Neither Scotiabank nor any of its affiliates is an insider, associate or affiliate (as those terms are defined in the Securities Act (Ontario)) of the Interested Parties. Neither Scotiabank nor any of its affiliates has been engaged to provide any financial advisory services, nor has Scotiabank or any of its affiliates participated in any financing, involving the Interested Parties within the past two years, other than pursuant to its engagement with the Special Committee and as described herein. In the past two years, Scotiabank and its affiliates have been engaged in the following capacities for the Interested Parties: (i) acting as a co-lead arranger, joint bookrunner, administrative agent and lender in connection with the Company’s agreement with its lenders to amend its existing credit facility in June 2020; (ii) acting as a co-lead arranger, joint bookrunner, administrative agent and lender to the Company in connection with its $530 million expanded credit facility in June 2019; and (iii) providing ancillary financial and creditrelated products and services for the Company including foreign exchange, cash management, cash deposits, and letters of credit. There are no understandings, agreements or commitments between Scotiabank and the Interested Parties with respect to any future business dealings. Scotiabank may, in the future, in the ordinary course of its business, perform financial advisory or investment banking services for the Interested Parties. In addition, The Bank of Nova Scotia (“ BNS ”), of which Scotiabank is a wholly-owned subsidiary, or one or more affiliates of BNS, may provide banking or other financial services to one or more of the Interested Parties in the ordinary course of business.

Having regard to the nature of Scotiabank’s roles in the matters described above and the financial condition of the Company, the Special Committee was satisfied that Scotiabank is an independent financial advisor.

Effective Date

Arrangement Mechanics

The following description is qualified in its entirety by reference to the full text of the Plan of Arrangement, attached as Appendix “D” to this Information Circular.

Pursuant to the Arrangement, Company Shareholders (excluding Dissenting Shareholders) will receive $11.30 for each Company Share held and, upon completion of the Arrangement, the Company will become an indirect wholly-owned subsidiary of the Purchaser. The Consideration shall be reduced for dividends or distributions of any kind by the Company (other than regular quarterly cash dividend dividends paid to Company Shareholders by the Company in an amount not to exceed $0.0375 per Company Share and payable in the second and third calendar quarters of 2021).

Commencing at the Effective Time, each of the following events shall occur and shall be deemed to occur consecutively in the following order, except where noted, without any further authorization, act or formality:

(a) Acquireco will provide a non-interest bearing loan to the Company equal to the aggregate amount payable by the Company to the holders of Company Options and Company RSUs, respectively, in accordance with clauses (b) and (c) below;
(b) each Company Option outstanding immediately prior to the Effective Time (whether vested or unvested), notwithstanding the terms of the Company Legacy Option Plan and the Company LTIP, shall be deemed to be unconditionally vested and exercisable, and such Company Option shall, without any further action by or on behalf of a holder of Company Options, be deemed to be assigned and transferred by such holder to the Company (free and clear of all Liens) and such holder shall cease to be a holder of such Company Option in exchange for a cash payment from the Company equal to the amount (if any) by which the Consideration in respect of each Company Share underlying each Company Option exceeds the exercise price of such Company Option, in each case, less applicable withholdings, and such Company Option shall immediately be cancelled and, for greater certainty, where such amount is zero or negative, none of the Company, the Depositary, the Purchaser nor Acquireco shall be obligated to pay the holder of such Company Option any amount in respect of such Company Option;
(c) each Company RSU outstanding immediately prior to the Effective Time (whether vested or unvested), notwithstanding the terms of the Company LTIP, shall, without any further action by or on behalf of a holder of Company RSUs, be deemed to be assigned and transferred by such holder to the Company (free and clear of all Liens) and such holder shall cease to be a holder of such Company RSU in exchange for a cash payment from the Company equal to the Consideration in respect of each Company RSU, less applicable withholdings, and such Company RSU shall immediately be cancelled;
(d) (i) the name of each holder of Company Options or Company RSUs, as the case may be, shall be removed from each applicable register maintained by Company, (ii) the Company Legacy Option Plan, the Company LTIP and all agreements relating to the Company Options and the Company RSUs shall be terminated and shall be of no further force and effect, and (iii) each such holder shall thereafter have only the right to receive from the Company the consideration, if any, to which such holder is entitled pursuant to clauses (b) and (c) above;
(e) each of the Company Shares held by Dissenting Shareholders in respect of which Dissent Rights have been validly exercised shall be deemed to have been transferred without any further act or formality to Acquireco (free and clear of all Liens) in consideration for a debt claim against Acquireco for the amount determined under Article 4 of the Arrangement Agreement, and:

(i) such Dissenting Shareholders shall cease to be the holders of such Company Shares and to have any rights as holders of such Company Shares other than the right to be paid fair value for such Company Shares as set out in Section 4.1 of the Plan of Arrangement;
(ii) such Dissenting Shareholders’ names shall be removed as the holders of such Company Shares from the central securities register of Company Shares maintained by or on behalf of the Company; and
(iii) Acquireco shall be deemed to be the transferee of such Company Shares free and clear of all Liens, and Acquireco shall be entered in the central securities register of Company Shares maintained by or on behalf of the Company as the holder of such Company Shares; and
(f) each Company Share outstanding immediately prior to the Effective Time (other than Company Shares held by a Dissenting Shareholder who has validly exercised their Dissent Right, the Purchaser, Acquireco or any of the Purchaser or Acquireco’s respective affiliates) shall, without any further action by or on behalf of a Company Shareholder, be deemed to be assigned and transferred by the Company Shareholder thereof to Acquireco (free and clear of all Liens) in exchange for the Consideration for each Company Share held, and:
(i) the holders of such Company Shares shall cease to be the holders thereof and to have any rights as Company Shareholders other than the right to be paid the Consideration by the Depositary in accordance with this Plan of Arrangement;
(ii) such holders’ names shall be removed from the central securities register of the Company Shares maintained by or on behalf of the Company; and
(iii) Acquireco shall be deemed to be the transferee of such Company Shares (free and clear of all Liens) and Acquireco shall be entered in the central securities register of the Company Shares maintained by or on behalf of the Company;

it being expressly provided that the events provided for in the Plan of Arrangement will be deemed to occur on the Effective Date, notwithstanding that certain procedures related thereto may not be completed until after the Effective Date.

Depositary Agreement

Prior to the Effective Date, the Company, the Purchaser, Acquireco and the Depositary will enter into the Depositary Agreement pursuant to which the Depositary will receive and hold the Consideration for the Company Shares in escrow as agent and nominee for the former Company Shareholders following completion of the Arrangement. It is expected that the Depositary will receive customary compensation for its services in connection with processing the Letter of Transmittals and delivering the Consideration to former Company Shareholders, and that the Depositary Agreement will otherwise be on terms customary for a transaction in the nature of the Arrangement.

Certificates and Payment

Payment of the Consideration

Pursuant to the Plan of Arrangement, following receipt of the Final Order, on or immediately prior to the Effective Date, the Purchaser or Acquireco shall deliver or cause to be delivered to the Depositary sufficient funds to satisfy the aggregate Consideration payable to former Company Shareholders in accordance with Section 3.1(f) of the Plan of Arrangement, which cash shall be held by the Depositary in

escrow as agent and nominee for such former Company Shareholders for distribution thereto in accordance with the Plan of Arrangement.

The Depositary shall deliver the Consideration in respect of those Company Shares that were transferred or deemed to be transferred pursuant to Section 3.1(f) of the Plan of Arrangement and that were held on a book-entry basis at the time they were transferred or deemed to be transferred, less any amounts withheld in respect of Taxes pursuant to the Plan of Arrangement, in accordance with normal industry practice for payments relating to securities held on a book-entry only basis. With respect to those Company Shares not held on a book-entry basis, upon surrender to the Depositary for cancellation of an original certificate (if any) which immediately prior to the Effective Time represented outstanding Company Shares that were transferred pursuant to the Plan of Arrangement, together with an original duly completed and executed Letter of Transmittal and such additional documents and instruments as the Depositary may reasonably require, the registered holder of the Company Shares represented by such surrendered original certificate (if any) shall be entitled to receive in exchange therefor, and the Depositary shall deliver to such Shareholder(s), a cheque, wire or other form of immediately available funds representing the Consideration which such Registered Shareholder(s) has the right to receive under the Plan of Arrangement for such Company Shares, less any amounts withheld in respect of Taxes pursuant to the Plan of Arrangement, and any original certificate so surrendered shall forthwith be cancelled. See “Letter of Transmittal” below.

Until surrendered as contemplated above, each certificate that immediately prior to the Effective Time represented Company Shares (other than Company Shares in respect of which Dissent Rights have been validly exercised and not withdrawn), shall be deemed after the Effective Time to represent only the right to receive upon such surrender a cash payment in lieu of such certificate as contemplated above, less any amounts withheld in respect of Taxes pursuant to the Plan of Arrangement.

Following receipt of the Final Order, on or immediately prior to the Effective Date, the Purchaser or Acquireco shall advance or cause to be advanced to the Company the loan described in Section 3.1(a) of the Plan of Arrangement to permit the Company to satisfy the aggregate consideration payable to the holders of Company Options and Company RSUs in accordance with Section 3.1(b) and Section 3.1(c) of the Plan of Arrangement, respectively, which cash shall be held by the Company in escrow as agent and nominee for such former holders of Company Options and Company RSUs in accordance with the Plan of Arrangement. On or as soon as practicable after the Effective Date, the Company shall pay, or cause to be paid, the amounts, less any amounts withheld in respect of Taxes pursuant to the Plan of Arrangement, to be paid to holders of Company Options and Company RSUs (i) pursuant to the normal payroll practices and procedures of the Company, or (ii) by cheque or wire transfer (delivered to such holder of Company Options or Company RSUs, as applicable, as reflected on the register maintained by or on behalf of the Company in respect of the Company Options and Company RSUs).

No holder of Company Shares, Company Options or Company RSUs shall be entitled to receive any consideration with respect to such Company Shares, Company Options or Company RSUs, other than any cash payment to which such holder is entitled to receive in accordance with the Plan of Arrangement and, for greater certainty, no such holder will be entitled to receive any interest, dividends, premium or other payment in connection therewith.

Lost Certificates

In accordance with the Plan of Arrangement, in the event any original certificate which immediately prior to the Effective Time represented one or more outstanding Company Shares that were transferred pursuant to the Plan of Arrangement shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such certificate to be lost, stolen or destroyed, the Depositary will issue, in exchange for such lost, stolen or destroyed certificate, a cheque, wire or other form of immediately available funds for the Consideration that such Company Shareholder has the right to receive in accordance with the Plan of Arrangement and such Company Shareholder’s Letter of Transmittal. In addition, such Registered Shareholder must complete as fully as possible the Letter of Transmittal and forward it together with a letter describing the loss to the Depositary and the Depositary

will respond with the replacement requirements that must be properly completed and returned in order to receive payment in exchange for such lost, stolen or destroyed certificate. When authorizing such payment in exchange for any lost, stolen or destroyed certificate, the Person to whom such cash is to be delivered shall as a condition precedent to the delivery of such cash, give a bond satisfactory to the Purchaser and the Depositary (each acting reasonably) in such sum as the Purchaser may direct (acting reasonably), or otherwise indemnify the Purchaser, the Company and the Depositary in a manner satisfactory to the Purchaser (acting reasonably) against any claim that may be made against the Purchaser and the Company with respect to the certificate alleged to have been lost, stolen or destroyed.

Withholdings

The Purchaser, the Company and the Depositary, as applicable, shall be entitled to deduct and withhold from any amount otherwise payable or otherwise deliverable to any Person under the Plan of Arrangement, such amounts as the Purchaser, the Company or the Depositary, as applicable, determines, acting reasonably, are required to be deducted or withheld from such amount otherwise payable or otherwise deliverable under any provision of any Law in respect of Taxes. Any such amounts will be deducted, withheld and remitted from the amount otherwise payable or otherwise deliverable pursuant to the Plan of Arrangement and shall be treated for all purposes under the Plan of Arrangement as having been paid or delivered to the Person in respect of which such deduction or withholding was made; provided that such deducted or withheld amounts are actually remitted to the appropriate Governmental Entity.

Final Proscription Date

Any certificate formerly representing Company Shares not duly surrendered on or before the date that is six years after the Effective Date shall cease to represent a right or claim of any kind or nature and the right of the holder to receive the applicable consideration for the Company Shares pursuant to the Plan of Arrangement shall terminate and be deemed to be surrendered and forfeited to the Purchaser, the Company or Acquireco, as applicable, for no consideration to represent a claim by or interest of any former holder of Company Shares of any kind or nature against or in the Company or the Purchaser. Any payment made by way of cheque by the Depositary pursuant to the Plan of Arrangement that has not been deposited or has been returned to the Depositary (or that otherwise remains unclaimed), in each case, on or before the date that is six years after the Effective Date shall cease to represent a right or claim of any kind or nature. On such date, all cash to which such former holder was entitled shall be delivered to the Purchaser or Acquireco, as applicable, by the Depositary and the certificates formerly representing Company Shares shall cease to represent a right or claim of any kind or nature as of such final proscription date.

Letter of Transmittal

Registered Shareholders will have received a Letter of Transmittal with this Information Circular. In order to receive the Consideration, the Registered Shareholders must complete and sign the Letter of Transmittal and deliver the originally signed Letter of Transmittal and all other documents required by it, including the original certificate(s) (if any) representing the Company Shares, to the Depositary, in accordance with the instructions contained in the applicable Letter of Transmittal. If the Company Shares owned by a Registered Shareholder are held through the Direct Registration System (DRS), the DRS advice need not accompany the Letter of Transmittal. Registered Shareholders can obtain additional copies of the applicable Letter of Transmittal by contacting the Transfer Agent. The form of Letters of Transmittal is also available under the Company’s profile on SEDAR at www.sedar.com.

The Letter of Transmittal contains procedural information relating to the Arrangement and should be reviewed carefully. Beneficial Shareholders holding Company Shares that are registered in the name of an Intermediary must contact their Intermediary to arrange for the surrender of their Company Shares.

The Purchaser, subject to the consent of the Depositary, reserves the right to waive or not to waive any and all errors or other deficiencies in any Letter of Transmittal or other document and any such

waiver or non-waiver will be binding upon the affected Company Shareholders. The granting of a waiver to one or more Company Shareholders does not constitute a waiver for any other Company Shareholders. The Company and the Purchaser reserve the right to demand strict compliance with the terms of the Letters of Transmittal and the Arrangement. The method used to deliver the Letters of Transmittal and any accompanying certificates (if any) representing the Company Shares is at the option and risk of the holder surrendering them, and delivery will be deemed effective only when such documents are actually received by the Depositary. The Company recommends that the necessary documentation be delivered by the use of registered mail with return receipt requested, and with proper insurance obtained.

Holders of Company Options and Company RSUs need not complete any documentation to receive the consideration owed to them under the Arrangement in respect of their Company Options and/or Company RSUs.

Guarantee

As part of the Arrangement, the Purchaser has (i) provided a guarantee in favour of the Company with respect to the due and punctual performance by Acquireco of each of its covenants, obligations and undertakings under the Arrangement Agreement and the Plan of Arrangement; and (ii) agreed to be jointly and severally liable with Acquireco for the truth, accuracy and completeness of all of Acquireco’s representations and warranties in the Arrangement Agreement.

Expenses of the Arrangement

The Company estimates that expenses in the aggregate amount of approximately $7.2 million will be incurred by the Company in connection with the Arrangement, including, without limitation, legal, financial advisory, accounting, filing and printing costs, the cost of preparing and mailing this Information Circular.

Interests of Certain Persons in the Arrangement

In considering the recommendation of the Special Committee and the Company Board, Company Shareholders should be aware that certain directors and executive officers of the Company may have interests in the Arrangement or may receive benefits that differ from, or be in addition to, the interests of Company Shareholders generally. Other than the interests and benefits described below, none of the directors or officers of the Company or, to the knowledge of the directors and executive officers of the Company, any of their respective associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise in any matter to be acted upon in connection with the Arrangement or that would materially affect the Arrangement.

All benefits received, or to be received, by directors, officers or employees of the Company as a result of the Arrangement are, and will be, solely in connection with their services as directors, officers or employees of the Company. No benefit has been, or will be, conferred for the purpose of increasing the value of consideration payable to any such person for the Company Shares held by such persons and no consideration is, or will be, conditional on such person supporting the Arrangement.

Company Shares and the Intentions of Directors and Executive Officers

As of March 1, 2021, the directors and executive officers of the Company beneficially owned, directly or indirectly, or exercised control or direction over, in the aggregate approximately 1,423,352 Company Shares, which represented approximately 4.27% of the issued and outstanding Company Shares on an undiluted basis. All of the Company Shares held by such directors and executive officers of the Company will be treated in the same fashion under the Arrangement as Company Shares held by all other Company Shareholders. In accordance with the Voting Agreements, all directors and executive

officers of the Company intend to vote FOR the Arrangement Resolution. See “The Arrangement – Voting Agreements”.

Company Options

As of March 1, 2021, the executive officers of the Company held, in the aggregate, approximately 982,880 Company Options. The outstanding Company Options held by such executive officers had exercise prices ranging from $6.48 to $15.03. Each Company Option outstanding immediately prior to the Effective Time (whether vested or unvested), notwithstanding the terms of the Company Legacy Option Plan or the Company LTIP, as applicable, shall be deemed to be unconditionally vested and exercisable, and such Company Option shall, without any further action by or on behalf of a holder of Company Options, be deemed to be assigned and transferred by such holder to the Company (free and clear of all Liens) and such holder shall cease to be a holder of such Company Option in exchange for a cash payment from the Company equal to the amount (if any) by which the Consideration in respect of each Company Share underlying each Company Option exceeds the exercise price of such Company Option, in each case, less applicable withholdings, and such Company Option shall immediately be cancelled and, for greater certainty, where such amount is zero or negative, none of the Company, the Depositary, the Purchaser nor Acquireco shall be obligated to pay the holder of such Company Option any amount in respect of such Company Option.

Company RSUs

As of March 1, 2021, the directors and executive officers of the Company held, in the aggregate, approximately 79,367 Company RSUs. If the Arrangement is consummated, each Company RSU outstanding immediately prior to the Effective Time (whether vested or unvested), notwithstanding the terms of the Company LTIP, shall, without any further action on behalf of the holder of such Company RSUs, be deemed to be assigned and transferred by such holder to the Company (free and clear of all Liens) and such holder shall cease to be a holder of such Company RSU in exchange for a cash payment from the Company equal to the Consideration in respect of each Company RSU, less applicable withholdings, and such Company RSU shall immediately be cancelled.

Currently Authorized but Unissued Grants

Prior to the date of the Arrangement Agreement, there were certain long-term incentive grants for certain independent directors of the Company (excluding Mr. Gregory Baylin and Mr. Michael Lay), consisting of Company RSUs, that were authorized, but unissued. The Company also expects to defer grants of Company RSUs that have been authorized for issuance in satisfaction of a portion of the retainer payable to such independent directors in respect of the first quarter of 2021.These entitlements to deferred Company RSUs will be settled for their cash value on or about the closing of the Arrangement. Such independent directors and executive officers would be entitled to collectively receive cash compensation of approximately $117,547 in the aggregate for such deferred Company RSUs.

Change of Control Benefits

There are no change of control benefits payable upon the closing of the Arrangement under any employment, consulting or any other agreements between the Company and any of its directors or executive officers, other than to Mr. Davies, the Chief Executive Officer and a director of the Company. Pursuant to the terms of the employment agreement between the Company and Mr. Davies dated November 1, 2020, if a change of control of the Company (which would include the completion of the Arrangement) occurs before the end of the blackout out period that was in effect on the date Mr. Davies was appointed Chief Executive Officer of the Company (the “ Current Blackout Period ”), or if the Company determines, in consultation with Mr. Davies and in connection with any potential change of control that is agreed to during the Current Blackout Period, that it would be impracticable to award to Mr. Davies certain security-based compensation payments to which Mr. Davies would be entitled following the end of the Current Blackout Period prior to the effective date of such change of control, the Company shall, upon the effective date of such change of control, pay to Mr. Davies a bonus in the gross amount of

$1,000,000.00, provided that neither the Company nor Mr. Davies has given the other a notice of termination of the employment agreement prior to the effective date of the Change of Control. The Company currently expects that the Current Blackout Period will remain in place until the completion or termination of the Arrangement such that the foregoing change of control payment shall be payable to Mr. Davies at the Effective Date.

Consideration

The following table sets out the names and positions of the directors and executive officers of the Company as of March 1, 2021, the number of Company Shares, Company Options and Company RSUs owned or over which control or direction was exercised by each such director or officer of the Company and, where known after reasonable enquiry, by their respective associates or affiliates and the consideration to be received for such Company Shares, Company Options and Company RSUs pursuant to the Arrangement, as well as the estimated amount of cash to be received by such directors and officers in respect of authorized but unissued Company Options and Company RSUs and in respect of change of control benefits.

Name and Position with the Company	Company Shares (#)	Estimated amount of Consideration to be received in respect of Company Shares ($)	Company Options (#)	Company RSUs (#)	Estimated amount of cash to be received in respect of Company Options and Company RSUs ($)	Estimated amount of cash to be received in respect of authorized but unissued Company Options and Company RSUs ($)	Change of Control Benefits ($)	Total estimated amount of consideration to be received (subject to applicable withholdings) ($)
Gregory Baylin Chair	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Pat Bell Vice Chair	1,470(1)	$16,611	Nil	5,787.29	$65,396.38	$25,701.64(6)	Nil	$107,709.02
Duncan Davies Director, Chief Executive Officer	Nil	Nil	Nil	759	$8,576.70	$14,740.60(6)	$1,000,000(7)	$1,023,317.30
Michael Lay Director	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Hugh MacDiarmid Director	26,200(2)	$296,060	Nil	5,787.29	$65,396.38	$25,701.64(6)	Nil	$387,158.02
Rex McLennan Director	10,000(3)	$113,000	Nil	2,277	$25,730.10	$25,701.64(6)	Nil	$164,431.74
Jane O’Hagan Director	Nil	Nil	Nil	5,787.29	$65,396.38	$25,701.64(6)	Nil	$91,098.02
Leroy Reitsma Director, Senior Advisor	1,236,576	$13,973,308.80	50,000	Nil	$87,000	Nil	Nil	$14,060,308.80
Andrea Johnston Chief Financial Officer	51,550(4)	$582,515	283,251	16,701	$267,021.30	Nil	Nil	$849,536.30

Scott Bax Chief Operating Officer	26,909.94	$304,082.32	254,425	12,940	$593,141.24	Nil	Nil	$897,223.56
Vaughan Bassett Senior Vice President, Sales and Logistics	66,000(5)	$745,800	241,168	10,000	$959,429.76	Nil	Nil	$1,705,229.76
Adnan Khan Vice President, Strategic Capital	119	$1,344.70	20,000	8,000	$106,200	Nil	Nil	$107,544.70
Ranj Sangra General Counsel & Corporate Secretary	2,747	$31,041.10	70,000	6,000	$120,000	Nil	Nil	$151,041.10
Erin Strong Director of Human Resources	1,780.22	$20,116.49	64,036	5,329	$112,417.70	Nil	Nil	$132,534.19

Notes:

(1) Mr. Bell holds 1,000 Company Shares directly and 470 Company Shares are held by his spouse.

(2) Mr. MacDiarmid holds 4,000 Company Shares directly and 22,200 Company Shares indirectly through Visex Management Corporation.

(3) These Company Shares are held in a registered retirement savings plan in the name of Mr. McLennan’s spouse.

(4) Ms. Johnson holds 14,987 Company Shares directly and 36,563 Company Shares in trust for her daughters.
(5) Mr. Bassett holds 65,000 Company Shares directly and 1,000 Company Shares are held in a registered retirement savings plan in the name of Mr. Bassett’s spouse.

(6) See “Interests of Certain Persons in the Arrangement – Currently Authorized but Unissued Grants”.

(7) See “Interests of Certain Persons in the Arrangement – Change of Control Benefits”.

Retention Payments

In addition to the payments and benefits described above, the Special Committee and the Company Board oversaw and approved the granting of certain one-time retention payments (the “ Retention Payments ”) to certain employees of the Company, conditional on, among other things, completion of the Arrangement. The aggregate amount of Retention Payments is approximately $1.6 million, of which approximately $1.175 million is payable to executive officers of the Company. The decision to grant the Retention Payments, and the quantum of such awards, was determined by the Special Committee and the Company Board upon the recommendation of the Governance, Nominating and Compensation Committee.

The purpose of the Retention Payments is to retain and to ensure alignment of interests of Company personnel in connection with the Arrangement and to compensate them for the additional work required to be performed as a result of the Arrangement (in addition to their normal roles within the Company that they perform on a daily basis).

Effects on the Company if the Arrangement is Not Completed

If the Arrangement Resolution is not approved by the Company Shareholders or if the Arrangement is not completed for any other reason, Company Shareholders will not receive any payment for any of their Company Shares in connection with the Arrangement and the Company will remain a reporting issuer and the Company Shares will continue to be listed on the TSX. See “Risk Factors — Risk Factors Relating to the Arrangement”. The Arrangement Agreement requires that the Company pay the Company Termination Payment and that the Purchaser pay the Purchaser Termination Payment as applicable, in certain circumstances. See “Summary of the Arrangement Agreement – Termination Fees”.

SUMMARY OF THE ARRANGEMENT AGREEMENT

General

The Arrangement will be effected pursuant to the Arrangement Agreement. The Arrangement Agreement contains, among other things, covenants, representations and warranties of and from each of the Company and the Purchaser and various conditions precedent, both mutual and with respect to the Company and the Purchaser. Unless all of such conditions are satisfied or waived by the Party for whose benefit such conditions exist, to the extent they may be capable of waiver, the Arrangement will not proceed. There is no assurance that the conditions will be satisfied or waived on a timely basis, or at all.

The following description of certain provisions of the Arrangement Agreement is a summary only, is not comprehensive and is qualified in its entirety by reference to the full text of the Arrangement Agreement, which is attached as Appendix “C” to this Information Circular.

Conditions to the Arrangement Becoming Effective

In order for the Arrangement to become effective, certain conditions must have been satisfied, waived or released on or before the Effective Time, which conditions are summarized below.

Mutual Conditions Precedent

Neither the Company nor the Purchaser are required to complete the Arrangement unless each of the following conditions is satisfied, which conditions may only be waived, in whole or in part, by the mutual consent of the Purchaser and the Company: (a) the Arrangement Resolution shall have been approved and adopted by the Company Shareholders at the Company Meeting in accordance with the Interim Order; (b) Purchaser Shareholders shall have approved an ordinary resolution approving the acquisition of all of the issued and outstanding Company Shares in accordance with the Arrangement; (c) the Interim and the Final Order shall each have been obtained on terms consistent with the Arrangement Agreement and have not been set aside or modified in a manner unacceptable to either the Company or the Purchaser, each acting reasonably, on appeal or otherwise; (d) all of the Key Regulatory Approvals shall have been obtained; and, (e) no Governmental Entity shall have enacted, issued, promulgated, enforced or entered any Order or Law which is then in effect and has the effect of making the Arrangement illegal or otherwise preventing or prohibiting consummation of the Arrangement.

Additional Conditions Precedent to the Obligations of the Purchaser

The obligation of the Purchaser and Acquireco to complete the Arrangement is subject to the fulfillment of each of the following additional conditions precedent (each of which is for the exclusive benefit of the Purchaser and Acquireco and may be waived by the Purchaser and Acquireco, in whole or in part at any time, each in its sole discretion, without prejudice to any other rights which the Purchaser may have):

(a) The representations and warranties of the Company set forth in Sections 3.1(a) [Organization] , 3.1(b ) [Authorization; Validity of Agreement; Company Action] , 3.1(c), [Board Approvals] , 3.1(s)(ii) [No Company Material Adverse Effect] , and 3.1(kk) [Brokers; Expenses] of the Arrangement Agreement shall be true and correct in all respects as of the Effective Time as if made as at and as of such time (except that any such representation and warranty that by its terms speaks specifically as of the date of the Arrangement Agreement or another date shall be true and correct in all respects as of such date); (ii) the representations and warranties of the Company set forth in Sections 3.1(i)(i), (ii), (iii), (iv), (vi) and (viii) [Capitalization] of the Arrangement Agreement shall be true and correct in all respects (except for de minimis inaccuracies) as of the Effective Time as if made as at and as of such time (except that any such representation and warranty that by its terms speaks specifically as of the date of the Arrangement

Agreement or another date shall be true and correct in all respects (except for de minimis inaccuracies) as of such date); and (iii) the other representations and warranties of the Company set forth in the Arrangement Agreement shall be true and correct in all respects (disregarding for purposes of this clause (iii) any materiality qualification or the Company Material Adverse Effect qualification contained in any such representation or warranty) as of the Effective Time as if made at and as of such time (except that any such representation and warranty that by its terms speaks specifically as of the date of the Arrangement Agreement or another date shall be true and correct in all respects as of such date), except in the case of this clause (iii) where the failure to be so true and correct in all respects, individually or in the aggregate, would not have a Company Material Adverse Effect; and the Company shall have provided to the Purchaser and Acquireco a certificate of two senior officers of the Company certifying (on the Company’s behalf and without personal liability) the foregoing dated the Effective Date;

(b) The Company shall have complied in all material respects with its covenants to be complied with by it prior to the Effective Time and the Company shall have provided to the Purchaser and Acquireco a certificate of two senior officers of the Company certifying (on the Company’s behalf and without personal liability) compliance with such covenants dated the Effective Date;
(c) Since the date of the Arrangement Agreement, there shall not have occurred a Company Material Adverse Effect;
(d) The number of Company Shares in respect of which Dissent Rights shall have been validly exercised shall not exceed 5% of Company Shares issued and outstanding as of February 7, 2020, the date of the Arrangement Agreement;
(e) There shall be no action or proceeding pending by a governmental entity that is reasonably likely to: (i) enjoin or prohibit the Purchaser’s or Acquireco’s ability to acquire, hold, or exercise full rights of ownership over, any Company Shares, including the right to vote Company Shares; or (ii) if the Arrangement is consummated, have a Company Material Adverse Effect; and
(f) The prior written consent of a third party shall have been obtained, in form acceptable to the Purchaser, acting reasonably, in respect of the change of control of the Company that will result from the Arrangement (the “ Key Consent ”).

In reliance on certain assurances received from the third party that is the subject of the Key Consent, the Purchaser and Acquireco have acknowledged to the Company that the foregoing condition in respect of the Key Consent has been fulfilled.

Additional Conditions Precedent to the Obligations of the Company

The obligation of the Company to complete the Arrangement is subject to the fulfillment of each of the following conditions precedent on or before the Effective Time (each of which is for the exclusive benefit of the Company and may be waived by the Company, in whole or in part at any time, in its sole discretion, without prejudice to any other rights which the Company may have):

(a) The representations and warranties of the Purchaser set forth in (i) Sections 4.1(a) [Authorization; Validity of Agreement; Company Action] and 4.1(b) [Authorization; Validity of Agreement; Company Action] of the Arrangement Agreement shall be true and correct in all respects as of the Effective Time as if made as at and as of such time (except that any such representation and warranty that by its terms speaks specifically as of the date of the Arrangement Agreement or another date shall be true and correct in all respects as of such date); and (ii) the other provisions of the Arrangement Agreement shall be true

and correct in all respects (disregarding for purposes of this clause (ii) any materiality or the Purchaser Material Adverse Effect qualification contained in any such representation or warranty) as of the Effective Time as if made at and as of such time (except that any such representation and warranty that by its terms speaks specifically as of the date of the Arrangement Agreement or another date shall be true and correct in all respects as of such date), except in the case of this clause (ii) where the failure to be so true and correct in all respects, individually and in the aggregate, would not have a Purchaser Material Adverse Effect, and the Purchaser shall have provided to the company a certificate of two senior officers of the Purchaser certifying (on the Purchaser’s behalf and without personal liability) the foregoing dated the Effective Date; and

(b) Each of the Purchaser and Acquireco shall have complied in all respects with its covenants in Section 2.10 [Payment of the Consideration] of the Arrangement Agreement and in all material respects with its other covenants to be complied with by it prior to the Effective Time and the Purchaser shall have provided to the Company a certificate of two senior officers of the Purchaser certifying (on the Purchaser’s behalf and without personal liability) compliance with such covenants dated the Effective Date.

Representations and Warranties

The Arrangement Agreement contains customary representations and warranties made by each of the Company and the Purchaser. The assertions embodied in those representations and warranties are solely for the purposes of the Arrangement Agreement. Certain representations and warranties may not be accurate or complete as of any specified date because they are qualified by certain disclosure provided by the Company to the Purchaser or are subject to a standard of materiality or are qualified by a reference to a Company Material Adverse Effect or a Purchaser Material Adverse Effect (as applicable). Therefore, Company Shareholders should not rely on the representations and warranties as statements of factual information.

The Arrangement Agreement contains customary representations and warranties of the Company relating to: (a) organization and qualification; (b) corporate authorization; (c) execution and binding obligation; (d) approval of the Arrangement by the Company Board; (e) consents and approvals; (f) no violations with respect to completion of the Arrangement; (g) governmental authorization; (h) the Company’s Subsidiaries; (i) compliance with Laws and constating documents; (j) the effect of all authorizations of the Company and it Subsidiaries to carry on its business and operations; (k) capitalization; (l) reporting issuer status and stock exchange compliance; (m) U.S. securities law matters; (n) reports to be filed in connection with the Company’s continuous disclosure obligations; (o) audits, reviews and comments from any securities authority; (p) financial statements; (q) undisclosed liabilities; (r) privacy; (s) environmental matters; (t) employment matters; (u) absence of certain changes or events; (v) litigation; (w) taxes; (x) books and records; (y) insurance; (z) non-arm’s length transactions; (aa) benefit plans; (bb) restrictions on business activities; (cc) First Nations claims; (dd) community groups and stakeholder relations; (ee) sustainable biomass sourcing; (ff) material contracts; (gg) leased real property; (hh) interest in real properties; (ii) title and rights re: other assets; (jj) legislation with respect to corrupt practices; (kk) non-contravention; (ll) sanctions; (mm) brokers and expenses; (nn) collateral benefits; and (oo) the Fairness Opinions.

In addition, the Arrangement Agreement also contains customary representations and warranties of the Purchaser relating to: (a) organization and qualification; (b) corporate authorization; (c) Purchaser Board approval; (d) conflicts; (e) litigation; (f) available funds; (g) security ownership; and (h) ownership of Acquireco.

Covenants

The Arrangement Agreement also contains customary negative and affirmative covenants of the Company and the Purchaser.

Covenants Relating to Conduct of Business of the Company

The Company has agreed to certain customary negative and affirmative covenants relating to the operation of its business (including the business of its Subsidiaries) during the period from the date of the Arrangement Agreement until the earlier of the Effective Date and the time that the Arrangement Agreement is terminated in accordance with its terms. Among other things, except (a) as expressly required or expressly permitted by the Arrangement Agreement or the Plan of Arrangement (including any Pre-Acquisition Reorganization), (b) as required by applicable Laws or Governmental Entity, (c) as expressly set out in the Company Disclosure Letter, (d) as a result of or in connection with any COVID-19 Measures (provided that the Company shall consult with the Purchaser and consider in good faith any suggestions of the Purchaser prior to undertaking any COVID-19 Measures), or (e) with the prior written consent of the Purchaser, such consent not to be unreasonably withheld, delayed or conditioned, including that the Company shall, and shall cause each of its Subsidiaries to, and shall exercise its rights (if any) with respect to the Joint Ventures to cause the Joint Ventures, to conduct its business in the Ordinary Course and to use its commercially reasonable efforts to preserve intact its and their present business organization, goodwill, business relationship and assets and to keep available the services of its and their officers and employees as a group. Company Shareholders should refer to the Arrangement Agreement for details regarding the additional negative and affirmative covenants given by the Company in relation to the conduct of its business prior to the Effective Time.

Covenants Relating to the Arrangement

Pursuant to the Arrangement Agreement, each of the Company, the Purchaser and Acquireco agreed to: (a) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use all commercially reasonable efforts to, satisfy (or cause the satisfaction of) the conditions precedent to its obligations set forth in Article 6 of the Arrangement Agreement to the extent it is within its control and to take, or cause to be taken, all other action and to do, or cause to be done, all other things necessary, proper or advisable under all applicable Laws to complete the Arrangement and any Pre-Acquisition Reorganization; (b) not take any action, refrain from taking any action, and not permit any action to be taken or not taken, which is inconsistent with this Arrangement Agreement or which would reasonably be expected to, individually or in the aggregate, materially impede or materially delay the consummation of the Arrangement or the other transactions contemplated herein; (c) use commercially reasonable efforts to: (A) defend all lawsuits or other legal, regulatory or other Proceedings against itself or any of its Subsidiaries challenging or affecting the Arrangement Agreement or the consummation of the transactions contemplated hereby; (B) appeal, overturn or have lifted or rescinded any injunction or restraining order or other order, including Orders, relating to itself or any of its Subsidiaries which may materially adversely affect the ability of the Parties to consummate the Arrangement; and (C) appeal or overturn or otherwise have lifted or rendered nonapplicable in respect of the Arrangement, any Law that makes consummation of the Arrangement illegal or otherwise prohibits or enjoins the Company or the Purchaser from consummating the Arrangement; and (d) carry out the terms of the Interim Order and Final Order applicable to it and use commercially reasonable efforts to comply promptly with all requirements which applicable Laws may impose on it or its Subsidiaries or affiliates with respect to the transactions contemplated hereby.

In addition, pursuant to the Arrangement Agreement the Purchaser covenants that it, and its Subsidiaries, shall use their best efforts to obtain the Key Consent and, notwithstanding the generality of the foregoing, the Purchaser shall not be required to take any action, or do or cause to be done anything that would, individually or in the aggregate, reasonably be expected to materially adversely amend the existing rights, obligations and liabilities under the contracts to which the Key Consent relates or results in material payments of any fees or costs by the Company or the Purchaser to secure the Key Consent in excess of customary consent fees, application fees, processing fees, and associated costs and expenses (including legal costs and expenses).

The Company shall, and shall cause its Representatives, consultants and Subsidiaries to, cooperate with and assist the Purchaser in obtaining such waivers, consents and approvals as may be

determined by the Purchaser, in its discretion, to be necessary or desirable pursuant to the contracts governing or relating to certain Joint Ventures in connection with the completion of the Arrangement.

Covenants Relating to Incentive Awards

In the Arrangement Agreement, the Company agreed to take such commercially reasonable actions as are necessary under the terms of the Company Legacy Option Plan, the Company LTIP and the Plan of Arrangement, to accelerate the vesting of all Company RSUs and to facilitate the surrender and termination of all Company Options at or prior to the Effective Time on the terms contemplated in the Plan of Arrangement.

Covenants Relating to Regulatory Approvals

In the Arrangement Agreement, the Company and the Purchaser agreed to: (a) within ten (10) Business Days after the date of the Arrangement Agreement or such date as the Parties may reasonably agree, file with the Commissioner of Competition a request for an Advance Ruling Certificate under section 102 of the Competition Act, or in the alternative a “No Action” letter and a waiver under section 113(c) of the Competition Act; (b) within ten (10) Business Days after the date of the Arrangement Agreement or such date as the Parties may reasonably agree, prepare and file a notification under Part IX of the Competition Act with the Commissioner of Competition; (c) within ten (10) Business Days after the date of the Arrangement Agreement, file their respective notification and report forms under the HSR Act with the United States Federal Trade Commission and the United States Department of Justice; (d) file, as promptly as practicable after the date of the Arrangement Agreement, any other filings, notifications or submission under the Competition Act, HSR Act, the Enterprise Act or any other applicable Antitrust Laws that the Parties may mutually agree to be required or appropriate to consummate the transitions contemplated by the Arrangement Agreement; (e) file, as promptly as practicable after the date of the Arrangement Agreement any other filings or notifications under any other applicable federal, provincial, state or foreign Law, other than under Antitrust Laws, required to obtain any other Regulatory Approvals; and (f) provide to each Governmental Entity all non-privileged information, documents and data and other things requested by the Governmental Entity that are necessary to permit the consummation of the transactions contemplated by the Arrangement Agreement.

The Purchaser also shall and shall cause it subsidiaries, as applicable to: (a) within five (5) Business Days after the date of the Arrangement Agreement, with the assistance of the Company in accordance with the Arrangement Agreement, submit to the CMA a briefing note with a view to confirming that the CMA does not intend to open a CMA Merger Investigation in respect of the transactions contemplated by the Arrangement Agreement; and (b) if requested by the CMA following submission of the briefing note referred to in sub-paragraph (a) above, file, as promptly as practicable after such request and in any event within ten (10) Business Days of the CMA’s request, a draft of a CMA Merger Notice with respect to the transactions contemplated by this Arrangement Agreement.

All filing fees in respect of any filing made to any Governmental Entity in respect of the Regulatory Approvals shall be paid by the Purchaser.

Each of the Company and the Purchaser shall cooperate with one another and shall provide such assistance as any other Party may reasonably request in connection with obtaining the Regulatory Approvals, and none of the Company, the Purchaser, nor Acquireco shall enter into any transaction, investment agreement, agreement or joint venture or take any action that would reasonably be expected to make obtaining the Regulatory Approvals materially more difficult or challenging, or reasonably be expected to materially delay the obtaining of the Regulatory Approvals.

The Parties shall not enter into any transaction, investment, agreement, arrangement or joint venture or take any other action, the effect of which would reasonably be expected to make obtaining the Regulatory Approvals materially more difficult or challenging, or reasonably be expected to materially delay the obtaining of the Regulatory Approvals, and without limiting the generality of the foregoing the Purchaser agrees that neither it nor any of its Subsidiaries will, directly or indirectly, enter into, continue,

pursue or otherwise participate in any discussions or negotiations regarding, any transaction described in Section 5.4(e) of the Company Disclosure Letter.

The Purchaser shall use its (and shall cause its subsidiaries to use their) best efforts to obtain the UK CMA Approval and commercially reasonable efforts to obtain the other Key Regulatory Approvals, in each case, as promptly as practicable after the date of the Arrangement Agreement, subject to certain conditions.

Covenants Regarding Access to Information; Confidentiality

From the date of the Arrangement Agreement until the earlier of the Effective Time or the termination of the Arrangement Agreement, the Company agreed, and agreed to cause its Representatives and consultants to: (a) afford to the Purchaser and its Representatives, upon reasonable notice, such access as the Purchaser may reasonably require at all reasonable times for the purposes of furthering the consummation of the transitions contemplated by the Arrangement Agreement and obtaining such waivers, consents and approvals as may be determined by the Purchaser, in its discretion, to be necessary or desirable pursuant to material contracts governing or relating to certain of the Joint Ventures; and (b) furnish the Purchaser on a timely basis with all data and information relating to the ongoing development programs at the Company’s leased and owned real property or involving the Subsidiaries or Joint Ventures or as the Purchaser may reasonably request from time to time for the purpose of consummating the transactions contemplated by the Arrangement Agreement.

Covenants Regarding Insurance and Indemnification

Prior to the Effective Time, the Company agreed to purchase customary “tail” policies of directors’ and officer’s liability, products and completed operations liability and employment practices liability insurance from a reputable and financially sound insurance carrier and continuing terms and conditions no less favourable in the aggregate to the protection provided by the policies maintained by the Company and its Subsidiaries 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 Time and the Company will, and will cause its Subsidiaries to, maintain such tail policies in effect without any reduction in scope or coverage for six years from the Effective Time; provided, that the Company and its Subsidiaries shall not be required to pay any amounts in respect of such coverage prior to the Effective Time and provided further that the cost of such policies shall not exceed 300% of the Company’s current annual aggregate premium for policies currently maintained by the Company or its Subsidiaries.

The Company will, and will cause its Subsidiaries to, honour all rights to indemnification or exculpation now existing in favour of present and former employees, officers and directors of the Company and its Subsidiaries under Law and under the articles or other constating documents of the Company and/or its Subsidiaries or, to the extent that they are disclosed in the Company Disclosure Letter, under any agreement or contract of any indemnified person with the Company or with any of its subsidiaries, and acknowledges that such rights shall survive the completion of the Plan of Arrangement, and, to the extent within the control of the Company, the Company shall ensure that the same shall not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any such indemnified person and shall continue in full force and effect in accordance with their terms for a period of not less than six years from the Effective Date.

From and following the Effective Time, the Purchaser will cause the Company to comply with its obligations under the provisions above.

Covenants Regarding a Pre-Acquisition Reorganization

Pursuant to the Arrangement Agreement, subject to certain conditions, the Company agreed to effect, and to cause each of its Subsidiaries to effect, such reorganization of its business, operations, subsidiaries and assets or such other transactions (a “ Pre-Acquisition Reorganization ”) as the

Purchaser or Acquireco may reasonably request prior to the Effective Date, and the Plan of Arrangement, if required, shall be modified accordingly.

Covenants Regarding Non-Solicitation

Each of the Company and the Purchaser are subject to reciprocal non-solicitation restrictions that, among other things, restrict their ability to (a) solicit, initiate, knowingly encourage or otherwise knowingly facilitate any inquiries, proposals or offers that constitute or that may reasonably be expected to constitute or lead to a Company Acquisition Proposal or Purchaser Acquisition Proposal (as applicable, and as both terms are defined in the Arrangement Agreement); (b) enter into, engage in, continue or otherwise participate in any discussions or negotiations (other than with each other) in respect of any inquiry, proposal or offer that constitutes or may reasonably be expected to lead to a Company Acquisition Proposal or Purchaser Acquisition Proposal (as applicable), provided that the Company or Purchaser are permitted to communicate with any person who has made a Company Acquisition Proposal or Purchaser Acquisition Proposal (as applicable) for the purpose of clarifying the terms and conditions thereof; (c) make a Company Change in Recommendation or a Purchaser Change in Recommendation (as applicable, and as both terms are defined in the Arrangement Agreement); or (d) accept or enter into, or publicly propose to accept or enter into, any letter of intent, agreement in principle, agreement, arrangement or understanding relating to any Company Acquisition Proposal or Purchaser Acquisition Proposal (as applicable) (other than a confidentiality agreement as permitted under the Arrangement Agreement).

The Company and the Purchaser have each agreed that it shall, and shall cause each of its Subsidiaries and Representatives to, immediately cease and terminate, and cause to be terminated, any solicitation, encouragement, discussion, negotiation or other related activities commenced prior to the date of the Arrangement Agreement with any Person (other than the Purchaser, and its Representatives) with respect to any inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, an Acquisition Proposal.

In connection therewith, the Company also agreed that it would (a) promptly discontinue access to and disclosure of all confidential information, including access to any data room and any other access to confidential information, properties, facilities, books and records of the Company or of any of its Subsidiaries to any such other Person; and (b) as soon as possible request (and in any case within two Business Days), and exercise all rights it has (or cause its Subsidiaries to exercise any rights that they have) to require, the return or destruction of all confidential information (including derivative information) regarding the Company and its Subsidiaries previously provided to any Person (other than the Purchaser) in connection with a possible company Acquisition Proposal to the extent such information has not already been returned or destroyed, and shall use its commercially reasonable efforts to ensure that such requests are fully complied with in accordance with the terms of such rights or entitlements.

Company Acquisition Proposals

Pursuant to the Arrangement Agreement, if the Company, or any of its Subsidiaries or any of their respective Representatives receives or otherwise becomes aware of either:

(a) any inquiry, proposal or offer made after the date of the Arrangement Agreement that constitutes or may reasonably be expected to constitute or lead to a Company Acquisition Proposal; or
(b) any request for copies of, access to, or disclosure of, confidential information relating to the Company or any of its Subsidiaries in connection with any proposal that constitutes or may reasonably be expected to lead to a Company Acquisition Proposal, including information, access or disclosure relating to the properties, facilities, books or records of the Company or any of its Subsidiaries, in each case made after the date of the Arrangement Agreement;

then the Company shall promptly orally notify the Purchaser, and then in writing, within 24 hours of such Company Acquisition Proposal, inquiry, offer or request, including the identity of the Person making such

Company Acquisition Proposal, inquiry, proposal, offer or request and the material terms and conditions thereof and copies of all written documents, correspondence or other materials received in respect of, from or on behalf of any Person.

Notwithstanding the non-solicitation covenants of the Company, if at any time prior to the Company Shareholder Approval having been obtained, the Company receives a written Company Acquisition Proposal, the Company (A) may engage in or participate in discussions or negotiations with such Person regarding such Company Acquisition Proposal, and (B) may provide copies of, access to or disclosure of information, properties, facility, books or records of the Company or its Subsidiaries, if and only if:

(a) the Company Board first determines in good faith, after consultation with its financial advisor and its legal counsel, that such Company Acquisition Proposal constitutes or could reasonably be expected to constitute or lead to a Company Superior Proposal;
(b) such Person was not restricted from making such Company Acquisition Proposal pursuant to an existing confidentiality, standstill, non-disclosure, use, business purpose or similar restriction with the Company or any of its Subsidiaries;
(c) the Company has been, and continues to be, in compliance with its obligations under Section 5.5 [Company Non-Solicitation] of the Arrangement Agreement in all material respects; and
(d) prior to providing any such copies, access or disclosures, the Company enters into a confidentiality and standstill agreement with such Person, or confirms it has previously entered into such an agreement which remains in effect, in either case on terms that are not less favourable in the aggregate to the Company than the confidentiality agreement between the Company and Drax Corporate Limited dated October 15, 2020, and any such copies, access or disclosure provided to such Person shall have already been (or simultaneously be) provided to the Purchaser.

Company Right to Match and Company “Fiduciary Out”

If the Company receives a Company Acquisition Proposal that constitutes a Company Superior Proposal prior to the Company Shareholder Approval having been obtained, the Arrangement Agreement provides that the Company Board may make a Company Change in Recommendation or may cause the Company to terminate the Arrangement Agreement and enter into a definitive agreement with respect to such Company Superior Proposal (a “ Company Proposed Agreement ”), if and only if:

(a) the Person making such Company Superior Proposal is not restricted from making a Company Acquisition Proposal pursuant to an existing standstill, confidentiality, nondisclosure, business purpose, use or similar restriction;
(b) the Company has been, and continues to be, in compliance with its obligations with respect to non-solicitation under the Arrangement Agreement in all material respects;
(c) the Company or its Representatives have delivered to the Purchaser the information required to be delivered in connection with a Company Acquisition Proposal and a written notice of the determination of the Company Board that such Company Acquisition Proposal constitutes a Company Superior Proposal and of the intention of the Company Board to make the Company Change in Recommendation and/or terminate the Arrangement Agreement and to concurrently enter into the Company Proposed Agreement with respect to such Company Superior Proposal, as applicable (the “ Company Superior Proposal Notice ”);

(d) in the case of the Company Board terminating the Arrangement Agreement and concurrently entering into a Company Proposed Agreement, the Company or its Representatives have provided the Purchaser with a copy of the Company Proposed Agreement and all supporting materials, including any financing documents with customary redactions supplied to the Company in connection therewith;
(e) five Business Days (the “ Purchaser Response Period ”) shall have elapsed from the date on which the Purchaser received the Company Superior Proposal Notice and all necessary documentation referred to in paragraphs (c) and (d) above;
(f) during any Purchaser Response Period, the Purchaser has had the opportunity (but not the obligation) in accordance with Section 5.5(i) [Purchaser Match of a Company Superior Proposal] of the Arrangement Agreement, to offer to amend the Arrangement Agreement and the Plan of Arrangement in order for such Company Acquisition Proposal to cease to be a Company Superior Proposal;
(g) after the Purchaser Response Period, the Company Board (A) has determined in good faith, after consultation with its outside legal counsel and financial advisors, that such Company Acquisition Proposal continues to constitute a Company Superior Proposal (if applicable, compared to the terms of the Arrangement as proposed to be amended by the Purchaser under Section 5.5(i) [Purchaser Match of a Company Superior Proposal] of the Arrangement Agreement) and (B) has determined in good faith, after consultation with its outside legal counsel, that the failure by the Company Board to make the Company Change in Recommendation and/or to cause the Company to terminate the Arrangement Agreement to enter into the Company Proposed Agreement, as applicable, would be inconsistent with its fiduciary duties; and
(h) in the case of the Company Board exercising its rights under the Arrangement Agreement to terminate the Arrangement Agreement and enter into a Company Proposed Agreement, prior to or concurrently with terminating the Arrangement Agreement pursuant to Section 7.2(a)(iv)(B) [Company Superior Proposal or Company Intervening Event] of the Arrangement Agreement, the Company enters into such Company Proposed Agreement and concurrently pays to the Purchaser the amounts required to be paid pursuant to Section 7.3 [Termination Payments] of the Arrangement Agreement.

During the Purchaser Response Period, or such longer period as the Company may approve in writing for such purpose: (a) the Company Board shall review any offer made by the Purchaser under Section 5.5(h)(vi) [Purchaser Right to Offer to Amend the Arrangement] of the Arrangement Agreement to amend the terms of the Arrangement Agreement and the Arrangement in good faith in order to determine whether such offer would, upon acceptance, result in the Company Acquisition Proposal previously constituting a Company Superior Proposal ceasing to be a Company Superior Proposal; and (b) if the Company determines that the Company Acquisition Proposal previously constituting a Company Superior Proposal would cease to be a Company Superior Proposal, the Company shall negotiate in good faith with the Purchaser to make such amendments to the terms of the Arrangement Agreement and the Arrangement as would enable the Purchaser to proceed with the transactions contemplated by the Arrangement Agreement on such amended terms. If the Company Board determines that such Company Acquisition Proposal would cease to be a Company Superior Proposal, the Company shall promptly so advise the Purchaser and the Company and the Purchaser shall amend the Arrangement Agreement to reflect such offer made by the Purchaser, and shall take and cause to be taken all such actions as are necessary to give effect to the foregoing.

Each successive amendment to any Company 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 Company Acquisition Proposal for the purposes of the Arrangement Agreement and the Purchaser shall be afforded a new five

Business Day Purchaser Response Period from the date on which the Purchaser has received the notice and all documentation prescribed in the Arrangement Agreement.

The Company Board shall promptly reaffirm the Company Board Recommendation by press release after the Company Board determines that any Company Acquisition Proposal that is publicly announced is not a Company Superior Proposal or the Company Board determines that a proposed amendment to the terms of the Arrangement Agreement as contemplated under Section 5.5(i) [Purchaser Match of a Company Superior Proposal] of the Arrangement Agreement would result in a Company Acquisition Proposal that has been previously announced no longer being a Company Superior Proposal, and the Arrangement Agreement has been so amended. The Company shall provide the Purchaser and its outside legal counsel with a reasonable opportunity to review the form and content of any such press release and shall make all reasonable amendments to such press release as requested by the Purchaser and its counsel.

In circumstances where the Company provides the Purchaser with notice of a Company Superior Proposal and all documentation referred to in paragraphs (c) and (d) above on a date that is less than seven Business Days prior to the scheduled date of the Company Meeting, the Company may either proceed with or postpone the Company Meeting to a date that is not more than 10 Business Days after the scheduled date of such Company Meeting, and shall postpone the Company Meeting to a date that is not more than 10 Business Days after the scheduled date of such Company Meeting if so directed by the Purchaser.

Purchaser Acquisition Proposals

Pursuant to the Arrangement Agreement, if, at any time prior to the obtaining Purchaser Shareholder Approval, the Purchaser, or any of its Subsidiaries or any of their respective Representatives receives or otherwise becomes aware of either:

(a) any inquiry, proposal or offer made after the date of the Arrangement Agreement that constitutes or may reasonably be expected to constitute or lead to a Purchaser Acquisition Proposal; or
(b) any request for copies of, access to, or disclosure of, confidential information relating to the Company or any of its Subsidiaries in connection with any proposal that constitutes or may reasonably be expected to lead to a Purchaser Acquisition Proposal, including information, access or disclosure relating to the properties, facilities, books or records of the Purchaser or any of its Subsidiaries, in each case made after the date of the Arrangement Agreement;

then the Purchaser shall promptly orally notify the Purchaser, and then in writing in writing, within 24 hours of such Purchaser Acquisition Proposal, inquiry, offer or request, including the identity of the Person making such Purchaser Acquisition Proposal, inquiry, proposal, offer or request and the material terms and conditions thereof and copies of all written documents, correspondence or other materials received in respect of, from or on behalf of any Person.

Notwithstanding the non-solicitation covenants of the Purchaser, if at any time following the date of the Arrangement Agreement and prior to the Purchaser Shareholder Approval having been obtained, the Purchaser receives a written Purchaser Acquisition Proposal, the Purchaser (A) may engage in or participate in discussions or negotiations with such Person regarding such Purchaser Acquisition Proposal, and (B) may provide copies of, access to or disclosure of information, properties, facility, books or records of the Purchaser or its Subsidiaries, if and only if:

(a) the Purchaser Board determines in good faith, after consultation with its financial and legal advisors, that such Purchaser Acquisition Proposal constitutes or could reasonably be expected to constitute or lead to a Purchaser Superior Proposal;

(b) such Person is not restricted from making such Purchaser Acquisition Proposal pursuant to an existing standstill, confidentiality, non-disclosure, business purpose, use or similar restriction with the Purchaser or any of its Subsidiaries;
(c) the Purchaser has been, and continues to be, in compliance with Section 5.6 [Purchaser Non-Solicitation] of the Arrangement Agreement in all material respects; and
(d) prior to providing any such copies, access or disclosures, the Purchaser enters into a confidentiality and standstill agreement with such Person, or confirms it has previously entered into such an agreement which remains in effect, in either case containing customary terms.

Purchaser Right to Match

If the Purchaser receives a Purchaser Acquisition Proposal that constitutes a Purchaser Superior Proposal prior to obtaining the Purchaser Shareholder Approval, the Arrangement Agreement provides that the Purchaser Board may make a Purchaser Change in Recommendation in response to such Purchaser Superior Proposal or may cause the Purchaser to terminate the Arrangement Agreement and enter into a definitive agreement with respect to such Purchaser Superior Proposal (a “ Purchaser Proposed Agreement ”), if and only if:

(a) the Person making such Purchaser Superior Proposal is not restricted from making a Purchaser Acquisition Proposal pursuant to an existing standstill, confidentiality, nondisclosure, business purpose, use or similar restriction;
(b) the Purchaser has been, and continues to be, in compliance with its obligations under this Section 5.6 [Purchaser Non-Solicitation] of the Arrangement Agreement in all material respects;
(c) the Purchaser or its Representatives have delivered to the Company the information required to be delivered in connection with a Purchaser Acquisition Proposal and a written notice of the determination of the Purchaser Board that such Purchaser Acquisition Proposal constitutes a Purchaser Superior Proposal and of the intention of the Purchaser Board to make a Purchaser Change in Recommendation or to terminate the Arrangement Agreement to enter into the Purchaser Proposed Agreement with respect to such Purchaser Superior Proposal, as applicable (the “ Purchaser Superior Proposal Notice ”);
(d) in the case of the Purchaser Board terminating the Arrangement Agreement and concurrently entering into a Purchaser Proposed Agreement, the Purchaser or its Representatives have provided the Company with a copy of the Purchaser Proposed Agreement and all supporting materials, including any financing documents with customary redactions supplied to the Purchaser in connection therewith;
(e) five Business Days (the “ Company Response Period ”) shall have elapsed from the date on which the Purchaser received the Purchaser Superior Proposal Notice and all necessary documentation prescribed in paragraphs (c) and (d) above;
(f) during any Company Response Period, the Company has had the opportunity (but not the obligation) in accordance with Section 5.6(i) [Company Match of a Purchaser Superior Proposal] of the Arrangement Agreement, to offer to amend the Arrangement Agreement and the Plan of Arrangement in order for such Purchaser Acquisition Proposal to cease to be a Purchaser Superior Proposal;

(g) after the Company Response Period, the Purchaser Board (A) has determined in good faith, after consultation with its outside legal counsel and financial advisors, that such Purchaser Acquisition Proposal continues to constitute a Purchaser Superior Proposal (if applicable, compared to the terms of the Arrangement as proposed to be amended by the Purchaser under Section 5.6(i) [Company Match of a Purchaser Superior Proposal] of the Arrangement Agreement) and (B) has determined in good faith, after consultation with its outside legal counsel, that the failure by the Purchaser Board to make the Purchaser Change in Recommendation and/or to cause the Purchaser to terminate the Arrangement Agreement to enter into the Purchaser Proposed Agreement, as applicable, would be inconsistent with its fiduciary duties; and
(h) in the case of the Purchaser Board exercising its rights under the Arrangement Agreement to terminate the Arrangement Agreement and enter into a Purchaser Proposed Agreement, prior to or concurrently with terminating the Arrangement Agreement pursuant to Section 7.2(a)(iii)(E) [Purchaser Superior Proposal or Purchaser Intervening Event] , the Purchaser enters into such Purchaser Proposed Agreement and concurrently pays to the Company the amounts required to be paid pursuant to Section 7.3 [Termination Payments] of the Arrangement Agreement.

During the Company Response Period, or such longer period as the Purchaser may approve in writing for such purpose: (a) the Purchaser Board shall review any offer made by the Company under Section 5.6(h)(vi) [Company Right to Offer to Amend the Arrangement] of the Arrangement Agreement to amend the terms of the Arrangement Agreement and the Plan of Arrangement in good faith in order to determine whether such offer would, upon acceptance, result in the Purchaser Acquisition Proposal previously constituting a Purchaser Superior Proposal ceasing to be a Purchaser Superior Proposal; and (b) if the Purchaser determines that the Purchaser Acquisition Proposal previously constituting a Purchaser Superior Proposal would cease to be a Purchaser Superior Proposal, the Purchaser shall negotiate in good faith with the Company to make such amendments to the terms of the Arrangement Agreement and the Arrangement as would enable the Company to proceed with the transactions contemplated by the Arrangement Agreement on such amended terms. If the Purchaser Board determines that such Purchaser Acquisition Proposal would cease to be a Purchaser Superior Proposal, the Purchaser shall promptly so advise the Company and the Company and the Purchaser shall amend the Arrangement Agreement to reflect such offer made by the Company, and shall take and cause to be taken all such actions as are necessary to give effect to the foregoing.

Each successive amendment to any Purchaser Acquisition Proposal that results in an increase in, or modification of, the consideration (or value of such consideration) to be received by the Purchaser Shareholders or other material terms or conditions thereof shall constitute a new Purchaser Acquisition Proposal for the purposes of the Arrangement Agreement and the Company shall be afforded a new five Business Day Company Response Period from the date on which the Purchaser has received the notice and all documentation prescribed in the Arrangement Agreement.

The Purchaser Board shall promptly reaffirm the Purchaser Board Recommendation by press release after the Company Board determines that any Purchaser Acquisition Proposal that is publicly announced is not a Purchaser Superior Proposal or the Purchaser Board determines that a proposed amendment to the terms of the Arrangement Agreement as contemplated under Section 5.6(i) [Company Match of a Purchaser Superior Proposal] of the Arrangement Agreement would result in a Purchaser Acquisition Proposal that has been previously announced no longer being a Purchaser Superior Proposal, and the Arrangement Agreement has been so amended. The Purchaser shall provide the Company and its outside legal counsel with a reasonable opportunity to review the form and content of any such press release and shall make all reasonable amendments to such press release as requested by the Company and its counsel.

In circumstances where the Purchaser provides the Company with notice of a Purchaser Superior Proposal and all documentation contemplated by paragraphs (c) and (d) above on a date that is less than seven Business Days prior to the scheduled date of the Purchaser Meeting, the Purchaser may either

proceed with or postpone the Purchaser Meeting to a date that is not more than 10 Business Days after the scheduled date of such Purchaser Meeting, and shall postpone the Purchaser Meeting to a date that is not more than 10 Business Days after the scheduled date of such Purchaser Meeting if so directed by the Company.

Company and Purchaser Intervening Events

Each of the Company and the Purchaser are also subject to covenants providing that, other than in connection with a Company Acquisition Proposal that constitutes a Company Superior Proposal or a Purchaser Acquisition Proposal that constitutes a Purchaser Superior Proposal (as applicable), the Company Board or the Purchaser Board (as applicable) shall be permitted to effect a Company Change in Recommendation or a Purchaser Change of Recommendation (as applicable) in response to a Company Intervening Event or a Purchaser Intervening Event, as applicable, if and only if: (a) the Company Board or the Purchaser Board (as applicable) shall have determined in good faith (after consultation with its financial advisors and outside legal counsel) that the failure to effect a Company Change in Recommendation or a Purchaser Change in Recommendation (as applicable) would be inconsistent with the Company Board’s or the Purchaser Board’s (as applicable) fiduciary duties under applicable Laws (as defined in the Arrangement Agreement); (b) the Company or the Purchaser (as applicable) has notified the other Party in writing at least four Business Days before effecting a Company Change in Recommendation or a Purchaser Change in Recommendation (as applicable) that it intends to effect a Company Change in Recommendation or a Purchaser Change in Recommendation (as applicable) in response to a Company Intervening Event or a Purchaser Intervening Event (as applicable); (c) if requested by the other Party, the Company or the Purchaser (as applicable) shall have engaged in good faith negotiations with the other Party and its Representatives during such four day period with respect to adjustments to the terms and conditions of the Arrangement Agreement proposed by the other Party to obviate the need for a Company Change in Recommendation or a Purchaser Change in Recommendation (as applicable); and (d) if the other Party shall have delivered to the Company or the Purchaser (as applicable) a written, binding offer to alter the terms or conditions of the Arrangement Agreement during such four day period, the Company Board or the Purchaser Board (as applicable) shall have determined in good faith (after consultation with its financial advisors and outside legal counsel), after considering the modifications to the Arrangement Agreement proposed by the other Party, that the failure to effect a Company Change in Recommendation or a Purchaser Change in Recommendation (as applicable) would still be inconsistent with its fiduciary duties under applicable Laws.

Termination of the Arrangement Agreement

The Arrangement Agreement may be terminated at any time prior to the Effective Time by:

(a) the mutual written agreement of the Parties;
(b) either the Company or the Purchaser, if:
(i) the Effective Time shall not have occurred on or before the Outside Date, September 7, 2021, except that the right to terminate the Arrangement Agreement under this clause shall not be available to any Party whose failure to fulfill any of its (or in the case of the Purchaser, its or Acquireco’s) covenants or agreements or breach of any of its (or in the case of the Purchaser, its or Acquireco’s) representations and warranties under the Arrangement Agreement has been the cause of, or resulted in, the failure of the Effective Time to occur by such Outside Date;
(ii) after the date of the Arrangement Agreement, there shall be enacted or made any applicable Laws or Order that makes consummation of the Arrangement illegal or otherwise prohibits or enjoins the Company or the Purchaser from consummating the Arrangement and such Law or Order shall have become final

and non-appealable; provided that the Party seeking to terminate the Arrangement Agreement has complied with Sections 5.2 [Covenants Relating to the Arrangement] and 5.4 [Regulatory Approvals] of the Arrangement Agreement in all material respects and that the enactment or making of such Law or Order was not caused by, or the result of, the failure of such Party to comply with its (or in the case of the Purchaser, its or Acquireco’s) obligations under the Arrangement Agreement;

(iii) the Company Meeting is duly convened and held and Company Shareholder Approval shall not have been obtained at such duly held Company Meeting as required by the Interim Order;
(iv) the Purchaser Meeting is duly convened and held and the Purchaser Shareholder Approval shall not have been obtained at such duly held the Purchaser Meeting.
(c) by the Purchaser if:
(i) prior to the Purchaser Shareholder Approval, the Company Board: (1) fails to make the Company Board Recommendation or withdraws, amends, modifies or qualifies, or publicly states an intention to withdraw, amend, modify or qualify, in a manner adverse to the Purchaser, the Company Board Recommendation, (2) accepts, approves, endorses or recommends, or publicly proposes to accept, approve, endorse or recommend a Company Acquisition Proposal or takes no position or a neutral position with respect to a Company Acquisition Proposal for more than five Business Days after the public announcement of such Company Acquisition Proposal (or beyond the third Business Day prior to the date of the Company Meeting, if sooner), (3) accepts or enters into (other than a confidentiality agreement permitted by and in accordance with Section 5.5(e) [Company Superior Proposal] of the Arrangement Agreement) or publicly proposes to accept or enter into (other than a confidentiality agreement permitted by and in accordance with Section 5.5(e) [Company Superior Proposal] of the Arrangement Agreement) any agreement in respect of a Company Acquisition Proposal, or (4) fails to publicly reaffirm (without qualification) the Company Board Recommendation within five Business Days after having been requested in writing by the Purchaser to do so (or in the event the Company Meeting is scheduled to occur within such five Business Day period, prior to the third Business Day prior to the Company Meeting) (each of the foregoing described, a “ Company Change in Recommendation ”);
(ii) prior to Company Shareholder Approval having been obtained, the Company shall have breached Section 5.5 [Company Non-Solicitation] of the Arrangement Agreement in any material respect;
(iii) a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company set forth in the Arrangement Agreement shall have occurred that would cause the conditions set forth in Sections 6.2(a) [Company Reps and Warranty Condition] or 6.2(b) [Company Covenants Condition] of the Arrangement Agreement not to be satisfied, and such breach is not cured in accordance with the terms of Section 7.2(b) of the Arrangement Agreement; provided that neither the Purchaser nor Acquireco is then in breach of the Arrangement Agreement so as to cause any condition in Sections 6.3(a) [Purchaser Reps and Warranty Condition] or 6.3(b) [Purchaser Covenant Condition] of the Arrangement Agreement not to be satisfied;

(iv) there has occurred a Company Material Adverse Effect after the date of the Arrangement Agreement which is incapable of being cured on or prior to the Outside Date; or
(v) prior to obtaining the Purchaser Shareholder Approval, the Purchaser Board makes a Purchaser Change in Recommendation (as defined below) or authorizes Purchaser to enter into a Purchaser Proposed Agreement, in each case, in accordance with Section 5.6 [Purchaser Non-Solicit] of the Arrangement Agreement and provided that the Purchaser is then in compliance with Section 5.6 [Purchaser Non-Solicit] of the Arrangement Agreement and that concurrent with such termination the Purchaser pays the Purchaser Termination Payment in accordance with Section 7.3 [Termination Payments] of the Arrangement Agreement;
(d) by the Company if:
(i) a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Purchaser or Acquireco set forth in the Arrangement Agreement shall have occurred that would cause the conditions set forth in Sections 6.3(a) [Purchaser Reps and Warranty Condition] or 6.3(b) [Purchaser Covenant Condition] of the Arrangement Agreement not to be satisfied, and such breach is not cured in accordance with the terms of Section 7.2(b); provided that the Company is not then in breach of the Arrangement Agreement so as to cause any condition in Sections 6.2(a) [Company Reps and Warranty Condition] or 6.2(b) [Company Covenants Condition] of the Arrangement Agreement not to be satisfied;
(ii) prior to obtaining the Company Shareholder Approval, the Company Board makes a Company Change in Recommendation or authorizes the Company to enter into a Company Proposed Agreement, in each case, in accordance with Section 5.5 [Company Non-Solicitation] of the Arrangement Agreement and provided that the Company is then in compliance with Section 5.5 [Company Non-Solicitation] of the Arrangement Agreement and that concurrent with such termination the Company pays the Company Termination Payment pursuant to Section 7.3 [Termination Payments] of the Arrangement Agreement;
(iii) prior to Purchaser Shareholder Approval having been obtained, the Purchaser Board: (1) fails to make the Purchaser Board Recommendation or withdraws, amends, modifies or qualifies, or publicly states an intention to withdraw, amend, modify or qualify in a manner adverse to the Company, the Purchaser Board Recommendation, (2) accepts, approves, endorses or recommends, or publicly proposes to accept, approve, endorse or recommend a Purchaser Acquisition Proposal or takes no position or a neutral position with respect to a Purchaser Acquisition Proposal for more than five Business Days after the public announcement of such Purchaser Acquisition Proposal (or beyond the third Business Day prior to the date of the Purchaser Meeting, if sooner), (3) accepts or enters into (other than a confidentiality agreement permitted by and in accordance with Section 5.6(e) [Company Superior Proposal] of the Arrangement Agreement) or publicly proposes to accept or enter into (other than a confidentiality agreement permitted by and in accordance with Section 5.6(e) [Company Superior Proposal] of the Arrangement Agreement) any agreement in respect of a Purchaser Acquisition Proposal, or (4) fails to publicly reaffirm (without qualification) the Purchaser Board Recommendation within five Business Days after having been requested in writing by the Company to do so (or in the event the Purchaser Meeting is scheduled to occur within such five Business Day

period, prior to the third Business Day prior to the Purchaser Meeting) (each of the foregoing described, a “ Purchaser Change in Recommendation ”); or

(iv) prior to the Purchaser Shareholder Approval having been obtained, the Purchaser shall have breached Section 5.6 [Purchaser Non-Solicit] of the Arrangement Agreement in any material respect.

Termination Payments

Company Termination Payment

The Agreement provides for a termination fee of $12,500,000 to be paid by the Company to the Purchaser if the Arrangement Agreement is terminated in the following instances (a “ Company Termination Payment Event ”):

(a) by the Purchaser pursuant to Sections 7.2(a)(iii)(A) [Company Change of Recommendation] or Section 7.2(a)(iii)(B) of the Arrangement Agreement [Breach of Company Non-Solicitation] of the Arrangement Agreement;
(b) by the Company pursuant to Section 7.2(a)(iv)(B) of the Arrangement Agreement [Company Superior Proposal or Company Intervening Event] ; or
(c) by any party pursuant to Section 7.2(a)(ii)(A) [Effective Time Not Occurring Prior to Outside Date] or Section 7.2(a)(ii)(C) [Failure to Obtain Company Shareholder Approval] of the Arrangement Agreement, but only if, in these termination events, (A) following the date hereof and prior to the Company Meeting, a bona fide Company Acquisition Proposal shall have been made or publicly announced by any person other than the Purchaser (or any of its affiliates or any person acting jointly or in concert with any of the foregoing) and has not expired or been withdrawn, and (B) within 12 months following the date of such termination, (1) the Company or one or more of its Subsidiaries enters into a definitive agreement in respect of a Company Acquisition Proposal (whether or not such Company Acquisition Proposal is the same Company Acquisition Proposal referred to in clause (A) above) and such Company Acquisition Proposal is later consummated (whether or not within such 12 month period) or (2) a Company Acquisition Proposal shall have been consummated (whether or not such Company Acquisition Proposal is the same Company Acquisition Proposal referred to in clause (A) above); provided that for purposes of this provision, the term “ Company Acquisition Proposal ” shall have the meaning ascribed to such term in Section 1.1 of the Arrangement Agreement except that a reference to “20%” therein shall be deemed to be a reference to “50%”.

Purchaser Termination Payment

The Agreement provides for a termination fee of $25,000,000 to be paid by the Purchaser to the Company if the Arrangement Agreement is terminated in the following instances (a “ Purchaser Termination Payment Event ”), less the amount payable pursuant to Section 7.3(g) of the Arrangement Agreement if and only if such amount has been paid by the Purchaser prior to the Purchaser Termination Payment becoming due and payable under the Arrangement Agreement:

(a) by the Purchaser pursuant to Section 7.2(a)(iv)(C) [Purchaser Change in Recommendation] or Section 7.2(a)(iv)(D) of the Arrangement Agreement [Breach of Purchaser Non- Solicitation] ;
(b) by the Purchaser pursuant to Section 7.2(a)(iii)(E) of the Arrangement Agreement [Purchaser Superior Proposal or Purchaser Intervening Event] ; or

(c) by any party pursuant to Section 7.2(a)(ii)(A) [Effective Time Not Occurring Prior to Outside Date] or Section 7.2(a)(ii)(D) [Failure to Obtain Purchaser Shareholder Approval] of the Arrangement Agreement, but only if, in these termination events, (A) following the date hereof and prior to the Purchaser Meeting, a bona fide Purchaser Acquisition Proposal shall have been made or publicly announced by any person other than the Company (or any of its affiliates or any person acting jointly or in concert with any of the foregoing) and has not expired or been withdrawn, and (B) within 12 months following the date of such termination, (1) the Purchaser or one or more of its subsidiaries enters into a definitive agreement in respect of a Purchaser Acquisition Proposal (whether or not such Purchaser Acquisition Proposal is the same Purchaser Acquisition Proposal referred to in clause (A) above) and such Purchaser Acquisition Proposal is later consummated (whether or not within such 12 month period) or (2) a Purchaser Acquisition Proposal shall have been consummated (whether or not such Purchaser Acquisition Proposal is the same Purchaser Acquisition Proposal referred to in clause (A) above); provided that for purposes of this clause, the term “ Purchaser Acquisition Proposal ” shall have the meaning ascribed to such term in Section 1.1 of the Arrangement Agreement except that a reference to “20%” therein shall be deemed to be a reference to “50%”.

Failure to Obtain Purchaser Shareholder Approval

In the event that any party terminates the Arrangement Agreement pursuant to Section 7.2(a)(ii)(D) [Failure to Obtain Purchaser Shareholder Approval] of the Arrangement Agreement, then the Purchaser shall pay the Company $5,000,000, by wire transfer of immediately available funds, within two Business Days following any such termination. Notwithstanding the foregoing, no amount shall be payable by the Company pursuant to this provision if the Purchaser Termination Payment described above is otherwise payable pursuant to the Arrangement Agreement.

Expenses

Except as otherwise provided in the Arrangement Agreement, all fees, costs and expenses incurred in connection with the Arrangement Agreement and the Plan of Arrangement shall be paid by the Party incurring such fees, costs or expenses.

Equitable Relief

The Arrangement Agreement provides that the Parties shall be entitled to equitable relief, including injunctive relief and specific performance to prevent breaches or threatened breaches of the Arrangement Agreement, and to enforce compliance with the terms of the Arrangement Agreement and the non-breaching Party will not be required to post a bond or other security in relation therewith. Such remedies are not the exclusive remedies for any breach under the Arrangement Agreement but will be in addition to all other remedies available at Law or equity to each of the Parties.

Amendments

Subject to the provisions of the Interim Order, the Plan of Arrangement and applicable Laws, the Arrangement Agreement and the Plan of Arrangement may, at any time and from time to time. but not later than the Effective Time, be amended by mutual written agreement of the Company, Acquireco and the Purchaser, without further notice to or authorization on the part of the Company Shareholders, and any such amendment may without limitation:

(a) change the time for performance of any of the obligations or acts of the Parties;
(b) waive any inaccuracies or modify any representation or warranty contained in the Arrangement Agreement or in any document delivered pursuant to the Arrangement Agreement;

(c) waive compliance with or modify any of the covenants herein contained and waive or modify performance of any of the obligations of the Parties; and/or
(d) waive compliance with or modify any mutual conditions precedent herein contained.

Governing Law

The Arrangement Agreement will be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein provided, however, that all matters related to (a) the Company Board’s “fiduciary duties” and (b) the effectuation of the Arrangement shall be governed by the Laws of the Province of British Columbia, in each case, without regard to its rules of conflict of Laws

CERTAIN LEGAL AND REGULATORY MATTERS

Steps to Implementing the Arrangement and Timing

Completion of the Arrangement is subject to the conditions precedent contained in the Arrangement Agreement having been satisfied or waived. If the necessary approvals are obtained and the other conditions to closing are satisfied or waived, it is anticipated that the Arrangement will be completed in the second or third quarter of 2021. However, completion of the Arrangement is dependent on many factors and it is not possible at this time to determine precisely when or if the Arrangement will become effective. As provided under the Arrangement Agreement, the Arrangement cannot be completed later than the Outside Date.

Required Shareholder Approvals

In order for the Arrangement to be effected, among the completion of other conditions precedent, Company Shareholders will be asked to consider and, if deemed advisable, approve the Arrangement Resolution and any other related matters at the Company Meeting. The Arrangement Resolution must be approved by not less than 66⅔% of the votes cast by Company Shareholders present in person (virtually) or by proxy at the Company Meeting (the “ Company Shareholder Approval ”). The full text of the Arrangement Resolution and Plan of Arrangement are attached to this Information Circular as Appendices “B” and “D”, respectively.

In addition, the Arrangement requires approval of the Purchaser Resolution by the Purchaser Shareholders at the Purchaser Meeting by a simple majority of votes eligible to vote and voting, either in person or by proxy (the “ Purchaser Shareholder Approval ”). The Purchaser Meeting is expected to be held on March 31, 2021 at 4:30 p.m. (London time) to coincide with the Company Meeting.

Court Approval

An arrangement of a company under the BCBCA requires sanction by the Court. On March 1, 2021, the Company obtained the Interim Order providing for the calling and holding of the Company Meeting and other procedural matters. A copy of the Interim Order and the Notice of Petition are attached to this Information Circular as Appendices “G” and “H”, respectively.

If the Arrangement Resolution is approved by Company Shareholders at the Company Meeting in the manner required by the Interim Order, the Company will apply to the Court to obtain a Final Order approving the arrangement and declaring it to be fair and reasonable to the Company Shareholders. The hearing in respect of the Final Order is scheduled to take place at the Courthouse at 800 Smithe Street, Vancouver British Columbia or as the Court may direct on April 6 at 9:45 a.m. (Vancouver time), or as

soon after such time as counsel may be heard. Any Company Shareholders wishing to appear or to be represented by counsel at the hearing of the Petition for the Final Order may do so but must comply with certain procedural requirements described in the Petition for the Final Order and the Interim Order, including filing a Petition Response with the Court and serving same upon the Company and the Purchaser via their respective counsel as soon as reasonably practicable and, in any event, no less than two days (excluding Saturdays, Sundays and statutory holidays in British Columbia) before such date.

The Court has broad discretion under the BCBCA when making orders with respect to arrangements. The Court, when hearing the application for the Final Order, will consider, among other things, the fairness of the Arrangement to Company Shareholders. The Court may approve the Arrangement in any manner it may direct and determine appropriate.

Provided that the conditions of the Arrangement have been fulfilled or waived, documents, records and information, including a copy of the entered Final Order, will be filed with the Registrar as required pursuant to the BCBCA in order for the Registrar to give effect to the Arrangement as of the Effective Time.

Required Regulatory Approvals

Competition Act Approval

The transaction contemplated by the Arrangement Agreement is a “notifiable transaction” for the purposes of Part IX of the Competition Act. When a transaction is a notifiable transaction under the Competition Act, a pre-merger notification must be provided to the Commissioner of Competition under Part IX of the Competition Act and the transaction may not be completed until either the expiry or termination of the applicable waiting period under section 123 of the Competition Act, or the Commissioner of Competition has waived the obligation to provide the pre-merger notification pursuant to section 113(c) of the Competition Act. Where a pre-merger notification is made, the waiting period is 30 calendar days after the day on which the parties to the transaction submit the pre-merger notification, provided that, before the expiry of this period, the Commissioner of Competition has not notified the parties that he requires additional information that is relevant to the Commissioner of Competition’s assessment of the transaction (a “ Supplementary Information Request ”). If the Commissioner of Competition provides the parties with a Supplementary Information Request, the waiting period extends to a date that is 30 calendar days after compliance with such Supplementary Information Request, provided that there is no order in effect prohibiting completion at the relevant time.

The Commissioner of Competition may, upon application by the parties to a proposed transaction, issue an Advance Ruling Certificate under section 102 of the Competition Act where he is satisfied that he would not have sufficient grounds on which to apply to the Competition Tribunal (the “ Tribunal ”) for an order under section 92 of the Competition Act. Further, if the transaction to which the Advance Ruling Certificate relates is substantially completed within one year after the Advance Ruling Certificate is issued, the Commissioner of Competition cannot seek an order of the Tribunal under section 92 of the Competition Act in respect of the transaction solely on the basis of information that is the same or substantially the same as the information on the basis of which the Advance Ruling Certificate was issued. Where the Commissioner of Competition declines to issue an Advance Ruling Certificate he may instead advise the parties in writing that he does not intend to make an application under section 92 of the Competition Act in respect of the transaction (“ No Action Letter ”). The issuance of an Advance Ruling Certificate or a No Action Letter automatically terminates the applicable waiting period described above (where it was otherwise running).

Other than in circumstances where an Advance Ruling Certificate has been issued, the Commissioner of Competition may apply to the Tribunal for a remedial order under section 92 of the Competition Act if he is of the view that the transaction is likely to prevent or lessen competition substantially. The Commissioner of Competition may also apply to the Tribunal under section 104 of the Competition Act for an injunction to prevent closing of the transaction pending the Tribunal’s determination of the Commissioner of Competition’s application for a remedial order. On application by

the Commissioner of Competition under section 92 of the Competition Act, the Tribunal may, where it finds that the merger prevents or lessens, or is likely to prevent or lessen, competition substantially, order that the merger not proceed or, if completed, order its dissolution or the disposition of assets or shares involved in such merger; in addition to, or in lieu thereof, with the consent of the person against whom the order is directed and the Commissioner of Competition, the Tribunal may order a person to take any other action. The Tribunal is prohibited from issuing a remedial order where it finds that the transaction is likely to bring about gains in efficiency that will be greater than, and will offset, the effects of any prevention or lessening of competition that is likely to result from the transaction and that the gains in efficiency would not likely be attained if the order were made.

On February 12, 2021, the parties jointly requested that the Commissioner of Competition issue an Advance Ruling Certificate under section 102 of the Competition Act or, alternatively, a No Action Letter. On February 16, 2021, each of the parties filed their respective pre-merger notifications pursuant to Part IX of the Competition Act. The Parties received an Advance Ruling Certificate on February 24, 2021.

HSR Approval

Each of the parties caused to be filed a Premerger Notification and Report Form under the HSR Act with the U.S. Federal Trade Commission (the “ FTC ”) and the Antitrust Division of the U.S. Department of Justice (the “ DOJ ”) in connection with the transactions contemplated by the Arrangement Agreement on February 16, 2021. The required waiting period under the HSR Act with respect to the transactions contemplated by the Arrangement Agreement will expire at 11:59 p.m. (Eastern Time) on March 24, 2021, unless early termination of the waiting period is granted or the waiting period is extended by the issuance of a Request for Additional Information and Documentary Material by the FTC or DOJ prior to that time. If within the 30 calendar-day waiting period either the FTC or the DOJ issues a Request for Additional Information and Documentary Material from the parties, the waiting period with respect to the transactions contemplated by the Arrangement Agreement would be extended for an additional period of 30 calendar days following the date of the parties’ substantial compliance with that request, unless the parties otherwise agree with the FTC or the DOJ to not close before some date more than 30 days following substantial compliance. The FTC or the DOJ may terminate the additional 30 calendar-day waiting period before its expiration. In practice, complying with a Request for Additional Information and Documentary Material can take a significant period of time.

The FTC and the DOJ may scrutinize the legality under the U.S. federal antitrust laws of proposed transactions, such as the transactions contemplated by the Arrangement Agreement. At any time before or after completion of the transactions contemplated by the Arrangement Agreement, if the FTC or the DOJ believes that the transactions contemplated by the Arrangement Agreement would violate the U.S. federal antitrust laws by substantially lessening competition in any line of commerce affecting U.S. consumers, the FTC or the DOJ could take any action under the U.S. federal antitrust laws that it considers necessary in the public interest, including seeking to enjoin the transactions contemplated by the Arrangement Agreement or ordering the divestiture of substantial assets of the Purchaser, the Company, or any of their respective subsidiaries or affiliates. Under certain circumstances, U.S. state attorneys general and private parties as well as state attorneys general also may bring legal actions under the U.S. federal antitrust laws seeking similar relief or seeking conditions to the completion of the transactions contemplated by the Arrangement Agreement. While the Purchaser and the Company believe that the consummation of the transactions contemplated by the Arrangement Agreement will not violate any U.S. federal antitrust laws, there can be no assurance that a challenge to the transactions contemplated by the Arrangement Agreement on antitrust grounds will not be made or, if a challenge is made, what the result will be.

UK CMA Approval

The completion of the transaction contemplated by the Arrangement Agreement is subject to obtaining UK CMA Approval if the CMA exercises its jurisdiction to review the transaction.

The UK merger control regime is voluntary and non-suspensory, meaning mergers do not require notification and transactions may be closed before notification to the CMA. However, the CMA may nevertheless call in anticipated or completed mergers that have not been notified voluntarily. The CMA has four months from the date of the merger to make a reference. The CMA can ‘stop the clock’ on this time period in certain circumstances, including failure to respond to information requests from the CMA. The CMA can also impose interim orders preventing integration (and imposing compliance and reporting requirements) until the conclusion of its review of the transaction.

The CMA has jurisdiction to investigate mergers that meet its jurisdictional thresholds which include where the target’s UK turnover is more than £70 million. The transaction contemplated by the Arrangement Agreement meets this jurisdictional threshold.

As required under the Arrangement Agreement, the Purchaser submitted a briefing note to the CMA to inform it of the transaction within five Business Days of the date of the Agreement, with a view to getting an indication that the CMA does not intend to open a formal CMA Merger Investigation in respect of the transaction. On February 24, 2021, the CMA confirmed that it did not have any further questions in respect of the transaction. Confirmation from the CMA that it has no further questions does not preclude the CMA from opening an investigation at a later stage. The CMA has the power to review completed transactions four months from the later of completion of a transaction or material facts about the transaction being made public.

Canadian Securities Law Matters

The Company is a reporting issuer (or its equivalent) in all provinces and territories of Canada and, accordingly, is subject to applicable securities laws of such provinces and territories, including MI 61101 which regulates transactions which raise the potential for conflicts of interest, including issuer bids, insider bids, related party transactions and business combinations.

The Arrangement does not constitute an issuer bid, an insider bid or a related party transaction. In assessing whether the Arrangement could be considered to be a “business combination” for the purposes of MI 61-101, the Company reviewed all benefits or payments which related parties of the Company are entitled to receive, directly or indirectly, as a consequence of the Arrangement to determine whether any constituted a ‘‘collateral benefit’’. For these purposes, the only related parties of the Company that are entitled to receive a benefit, directly or indirectly, as a consequence the Arrangement are the directors and executive officers of the Company, excluding Gregory Baylin and Michael Lay, who do not own any Company Shares, Company Options or Company RSUs.

If the Arrangement is completed, the vesting of all Company Options and Company RSUs will be accelerated and the executive officers and directors of the Company who hold Company Options or Company RSUs, as applicable, will receive cash payments in respect of such surrendered Company Options and RSUs at the Effective Time. Pursuant to his employment agreement with the Company, Leroy Reitsma is also entitled to payments from the Company if his employment is terminated in connection with the Arrangement. See ‘‘The Arrangement — Interests of Certain Persons in the Arrangement’’ for detailed information regarding the benefits and other payments to be received by each of the directors and executive officers of the Company in connection with the Arrangement.

Following disclosure by each of the directors and executive officers to the Special Committee of the number of Company Shares held by them and the benefits or payments that they expect to receive pursuant to the Arrangement, the Special Committee has determined that the aforementioned benefits or payments fall within an exception to the definition of ‘‘collateral benefit’’ for the purposes of MI 61-101, since the benefits are received solely in connection with the related parties’ services as employees or directors of the Company or of any affiliated entities of the Company, are not conferred for the purpose, in whole or in part, of increasing the value of the consideration paid to the related parties for their Company Shares, are not conditional on the related parties supporting the Arrangement in any manner, and at the time of the entering into of the Arrangement Agreement, and either (i) none of the related parties, other than Mr. Reitsma exercised control or direction over, or beneficially owned, more than 1% of the

Company Shares, as calculated in accordance with MI 61-101; or (ii) solely with respect to Mr. Reitsma, the related party disclosed to the Special Committee the amount of consideration that he expected to beneficially receive under the terms of the Arrangement, in exchange for the equity securities beneficially owned and as a result of his termination entitlement and the Special Committee, acting in good faith, determined that the value of the benefit to be received by Mr. Reitsma, net of any offsetting costs to Mr. Reitsma, is less than 5% of the value of the consideration that Mr. Reitsma will receive pursuant to the terms of the Arrangement for the equity securities beneficially owned by him and as a result of any change of control payments.

Stock Exchange De-Listing and Reporting Issuer Status

The Company Shares will be de-listed from the TSX as soon as practicable following the completion of the Arrangement. Following the Effective Date, it is expected that the Purchaser will cause the Company to apply to cease to be a reporting issuer under the securities legislation of each of the provinces and territories in Canada under which it is currently a reporting issuer (or equivalent) or take or cause to be taken such other measures as may be appropriate to ensure that the Company is not required to prepare and file continuous disclosure documents.

DISSENT RIGHTS OF SHAREHOLDERS

The following description of the rights of Company Shareholders to dissent from the Arrangement Resolution (the “ Dissent Rights ”) is not a comprehensive statement of the procedures to be followed by a Dissenting Shareholder who seeks payment of the fair value of their Company Shares. A Shareholder’s failure to strictly comply with the procedures set forth in Sections 237 to 247 of the BCBCA, as modified or supplemented by the Interim Order and Plan of Arrangement, will result in the loss of such Shareholder’s Dissent Rights. If you are a Registered Shareholder and wish to dissent, you should obtain your own legal advice and carefully read the Plan of Arrangement, the provisions of Sections 237 to 247 of the BCBCA and the Interim Order which are attached to this Information Circular as Appendices “D”, “G” and “I”, respectively. In addition to any other restrictions under Sections 237 to 247 of the BCBCA (as modified or supplemented by the Interim Order and the Plan of Arrangement), holders of securities convertible for Company Shares are not entitled to exercise dissent rights.

A Registered Shareholder may dissent in respect of the Arrangement in accordance with Sections 237 to 247 of the BCBCA only with respect to all of the Company Shares held by such Registered Shareholder or on behalf of any one Beneficial Shareholder and registered in the Registered Shareholder’s name.

Only Registered Shareholders may dissent. Persons who are Beneficial Shareholders who wish to dissent should be aware that only the registered owner is entitled to exercise Dissent Rights. A registered holder, such as a broker, who holds Company Shares as nominee for Beneficial Shareholders, some of whom wish to dissent, must exercise Dissent Rights on behalf of such Beneficial Shareholders with respect to the Company Shares held for such Beneficial Shareholders. In such case, the demand for dissent should set forth the number of Company Shares covered by it.

Registered Shareholders may exercise rights of dissent with respect to such Company Shares pursuant to and in the manner set forth in sections 237 to 247 of the BCBCA, as modified or supplemented by the Interim Order and Plan of Arrangement. Registered Shareholders who duly exercise such rights of dissent and who:

(a) are ultimately entitled to be paid fair value for their Company Shares shall be entitled to be paid by Acquireco such fair value as determined as at the close of business on the day prior to the approval of the Arrangement Resolution by Company Shareholders; or
(b) are ultimately not entitled, for any reason, to be paid fair value for their Company Shares, shall be deemed to have participated in the Arrangement on the same basis as a Company Shareholder who has not exercised Dissent Rights.

but in no case shall the Company, Acquireco, the Purchaser or any other person be required to recognize a Dissenting Shareholder as a registered or beneficial holder of Company Shares or having any interest therein after the Effective Time, and the names of such Company Shareholders shall be deleted from the central securities register of the Company as at the Effective Time. There can be no assurance that a Company Shareholder validly exercising Dissent Rights will receive consideration for its Company Shares of equal or greater value to the consideration that such Company Shareholder would have received on completion of the Arrangement.

Section 237 to 247 of the BCBCA

Sections 237 to 247 of the BCBCA, as modified or supplemented by the Interim Order and Plan of Arrangement, provide that a Company Shareholder who dissents to the Arrangement may exercise a right of dissent and require Acquireco to purchase the applicable Company Shares held by such Company Shareholder at the fair value of such Company Shares.

The exercise of Dissent Rights does not deprive a Registered Shareholder of the right to vote at the Company Meeting. However, a Company Shareholder is not entitled to exercise Dissent Rights in respect of the Arrangement Resolution if such holder votes any of the Company Shares beneficially held by such holder in favour of the Arrangement Resolution.

Registered Shareholders who wish to exercise their Dissent Rights must: (i) deliver a written notice of dissent to the Arrangement Resolution to the Company, by mail to: Pinnacle Renewable Energy Inc., 350 – 3600 Lysander Lane, Richmond, British Columbia, V7B 1C3, Canada, Attention: General Counsel not later than 4:00 p.m. (Vancouver time) on March 29, 2021, or, in the case that the Company Meeting is adjourned or postponed, by not later than 4:00 p.m. (Vancouver time) on the date that is two Business Days immediately preceding the date on which the adjourned or postponed Company Meeting is reconvened or convened, as applicable; (ii) not have voted in favour of the Arrangement Resolution; and (iii) otherwise have complied with the procedures set forth in Section 237-247 of the BCBCA, as modified and supplemented by the Interim Order and the Plan of Arrangement.

A Beneficial Shareholder who wishes that Dissent Rights be exercised in respect of its Company Shares should immediately contact its Intermediary with whom the Beneficial Shareholder deals.

A vote against the Arrangement Resolution or not voting on the Arrangement Resolution does not constitute a written objection for purposes of the notice of dissent under Section 242 of the BCBCA.

If the Company intends to act on the authority of the Arrangement Resolution, it must send a notice (the “ Notice to Proceed ”) to the Company Shareholder validly exercising its Dissent Rights promptly after the later of the date on which the Company forms the intention to proceed and the date the notice of dissent was received. If the Company has acted on the Arrangement Resolution, it must promptly send a Notice to Proceed to each such Company Shareholder. The Notice to Proceed will set out the manner in which the dissent is to be completed. A Company Shareholder who receives a Notice to Proceed, and who wishes to proceed with the dissent, must, within one month after the date of the Notice to Proceed, send a written statement to the Company requiring Acquireco to purchase the Shareholder’s Company Shares, the certificates representing the Company Shares, if applicable, and any other applicable information required by Section 244 of the BCBCA.

Acquireco and the Dissenting Shareholder may agree on the amount of the payout value of the Company Shares. If Acquireco and the Dissenting Shareholder do not agree on the amount of the payout value of the Company Shares, the Dissenting Shareholder or Acquireco may apply to a court of competent jurisdiction and the court may determine the payout value. On agreement or determination of the payout value, Acquireco must either promptly pay that amount to the Dissenting Shareholder or send a notice to the Dissenting Shareholder that Acquireco is unable lawfully to pay the Dissenting Shareholders exercising their Dissent Rights for their Company Shares as Acquireco is insolvent or if the payment would render Acquireco insolvent. If the Dissenting Shareholder receives a notice that Acquireco is unable to lawfully pay Dissenting Shareholders for their Company Shares, the Dissenting Shareholder may, within 30 days after receipt, withdraw his, her or its notice of dissent. If the notice of dissent is not withdrawn, the Dissenting Shareholder remains a claimant against Acquireco to be paid as soon as Acquireco is lawfully able to do so.

Address for Notice

All notices to the Company of dissent to the Arrangement Resolution pursuant to Sections 237 to 247 of the BCBCA should be addressed to the attention of the individual set out below and be sent not later than 4:00 p.m. (Vancouver time) on March 29, 2021, or, in the case that the Company Meeting is adjourned or postponed, by not later than 4:00 p.m. (Vancouver time) on the date that is two Business Days immediately preceding the date on which the adjourned or postponed Company Meeting is reconvened or convened, as applicable, by mail to:

Pinnacle Renewable Energy Inc. 350 – 3600 Lysander Lane Richmond, British Columbia V7B 1C3, Canada Attention: General Counsel

INFORMATION CONCERNING THE COMPANY

General

The Company is the second largest producer of industrial wood pellets in the world. The Company’s products are used to displace fossil fuels in the production of baseload electrical power in key markets around the world. The Company operates nine production facilities in Western Canada and one in Alabama, with one additional facility under construction in Alabama and more in development. The Company also owns a port terminal in Prince Rupert, BC. The Company has entered into long-term, takeor-pay contracts with utilities in the UK, Europe and Asia that represent an average of 99% of its production capacity through 2026.

The principal office of the Company is located at Suite 350, 3600 Lysander Lane, Richmond, British Columbia, Canada, V7B 1C3.

The registered office of the Company is located at 2800 Park Place, 666 Burrard Street, Vancouver, British Columbia, Canada, V6C 2Z7.

Description of Share Capital

The authorized share capital of the Company consists of: (i) an unlimited number of Company Shares; and (ii) an unlimited number of preferred shares, issuable in series (“ Preferred Shares ”). Company Shareholders are entitled to one vote in respect of each Company Share held at all meetings of Company Shareholders. Except as required by law or in accordance with any voting rights attaching to any series of Preferred Shares issued from time to time, the Preferred Shares will not be entitled to receive notice of, attend or vote at any meeting of Company Shareholders.

Company Shareholders are entitled to receive dividends as and when declared by the Company Board. Subject to the rights, privileges, restrictions and conditions attaching to any other class of shares of the Company, the holders of the Company Shares are entitled to receive the remaining property of the Company in the event of liquidation, dissolution or winding-up of the Company.

As of the Record Date, there were 33,359,570 Company Shares issued and outstanding and no Preferred Shares issued and outstanding. Only Company Shareholders of record as at the Record Date will be entitled to vote at the Company Meeting.

Trading in Shares

The Company Shares are currently listed for trading on the TSX under the symbol “PL”. The Company Shares will be de-listed from the TSX as soon as practicable following the completion of the Arrangement. See “Certain Legal and Regulatory Matters — Stock Exchange De-Listing and Reporting Issuer Status . ”

The following tables summarize the monthly range of high and low intraday prices per Company Share, as well as the total monthly trading volumes of the Company Shares, on the TSX during the twelve-month period preceding the date of this Information Circular according to the TSX:

Month	High ($)	Low ($)	Volume
March 2020	9.81	4.65	2,243,127
April 2020	7.74	5.55	930,717
May 2020	7.11	3.63	2,869,252
June 2020	4.695	3.76	1,706,235
July 2020	4.88	4.05	2,814,041
August 2020	6.85	4.59	2,186,936
September 2020	6.60	5.69	2,495,898
October 2020	7.16	5.32	2,134,979
November 2020	9.10	6.32	2,805,497
December 2020	9.74	8.28	1,664,902
January 2021	10.41	8.70	1,114,363
February 2021	11.20	9.34	9,055,399
March 1, 2021	11.02	10.92	109,458

Material Changes in the Affairs of the Company

To the knowledge of the directors and executive officers of the Company and except as publicly disclosed or otherwise described in this Information Circular, there are no plans or proposals for material changes in the affairs of the Company.

Dividend Policy

The Company’s dividend policy, which commenced in 2018, was to pay a regular annual dividend of $0.148 per Company Share in total to be paid quarterly. The Consideration shall be reduced for dividends or distributions of any kind by the Company (other than regular quarterly cash dividend dividends paid to Company Shareholders by the Company in an amount not to exceed $0.0375 per Company Share and payable in the second and third calendar quarters of 2021).

INFORMATION CONCERNING THE PURCHASER AND ACQUIRECO

The Purchaser is a public limited company formed under the laws of England and Wales and listed on the London Stock Exchange and its Ordinary Shares are traded under the symbol “DRX”. It owns and operates a portfolio of electricity generation assets in England and Scotland and is the largest source of renewable electricity in the United Kingdom, with around 80% of the electricity generated from sustainable and renewable materials including biomass and wood pellets. The generation assets include the United Kingdom’s largest power station, based at Selby, North Yorkshire.

Pursuant to the Arrangement Agreement, the Purchaser has (i) guaranteed the due and punctual performance by Acquireco of each and every of Acquireco’s covenants, obligations and undertakings under the Arrangement Agreement and the Plan of Arrangement; and (ii) agreed to be jointly and severally liable with Acquireco for the truth, accuracy and completeness of all of Acquireco’s representations and warranties in the Arrangement Agreement. The Purchaser’s registered office is located at Drax Power Station, Selby, North Yorkshire YO8 8PH.

Acquireco is a corporation formed under the laws of British Columbia for the sole purpose of acquiring the Company Shares pursuant to the Arrangement and has not engaged in any business activities other than in connection with the transactions contemplated by the Arrangement Agreement. Acquireco is indirectly 100% beneficially owned by the Purchaser. Acquireco’s registered office is located at 1055 West Hastings Street, Suite 1700, Vancouver, British Columbia V6E 2E9.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

The following summary describes the principal Canadian federal income tax considerations under the Tax Act in respect of the Arrangement generally applicable to a Company Shareholder who is the beneficial owner of the Company Shares and who, for the purposes of the Tax Act and at all relevant times, (i) deals at arm’s length with the Company and the Purchaser, (ii) is not affiliated with the Company or the Purchaser, (iii) disposes of Company Shares under the Arrangement, and (iv) holds Company Shares as capital property (a “ Holder ”). The Company Shares will be capital property to a Holder unless the Company Shares are held or were acquired in the course of carrying on a business or as part of an adventure or concern in the nature of trade.

This summary does not address the tax consequences to holders of Company Options or Company RSUs. Such holders should consult their own tax advisors.

This summary is based upon the current provisions of the Tax Act and an understanding of the current administrative policies and assessing practices published in writing by the Canada Revenue Agency prior to the date hereof. This summary also takes into account all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “ Proposed Amendments ”) and assumes that all Proposed Amendments will be enacted in the form proposed. However, no assurances can be given that the Proposed Amendments will be enacted as proposed, or at all. This summary does not otherwise take into account or anticipate any changes in law or administrative policies or assessing practices, whether by legislative, regulatory, administrative or judicial action or decision, nor does it take into account provincial, territorial or foreign tax legislation or considerations, which may be different from those discussed in this summary.

This summary is not applicable to a Holder (i) that is a “financial institution” as defined in the Tax Act for the purposes of the “mark-to-market property” rules contained in the Tax Act; (ii) that is a “specified financial institution” as defined in the Tax Act; (iii) who has acquired Company Shares on the exercise of an employee stock option or other equity-based employment compensation plans or arrangements; (iv) an interest in which is a “tax shelter investment” as defined in the Tax Act; (v) who reports its “Canadian tax results” within the meaning of section 261 of the Tax Act in a currency other than Canadian currency; or (vi) that has entered into or will enter into a “derivative forward agreement” or “synthetic disposition agreement” (each as defined in the Tax Act) in respect of the Company Shares. Such Holders should consult their own tax advisors.

This summary is of a general nature only and is not, and is not intended to be, legal or tax advice to any particular Holder. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, Holders should consult their own tax advisors with respect to the tax consequences of the Arrangement having regard to their own particular circumstances. This Circular does not contain a summary of the non-Canadian income tax considerations of the Arrangement for Company Shareholders who are subject to income tax outside of Canada. Such Company Shareholders should consult their own tax advisors with respect to the tax implications of the Arrangement, including any associated filing requirements in such jurisdictions.

Generally, for the purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of securities (including proceeds of disposition) must be converted into Canadian dollars based on exchange rates as determined in accordance with the Tax Act.

Holders Resident in Canada

The following portion of the summary is generally applicable to a Holder who, at all relevant times, is, or is deemed to be, resident in Canada for purposes of the Tax Act and any applicable income tax treaty (a “ Resident Holder ”). Certain Resident Holders whose Company Shares might not otherwise be capital property may, in some circumstances, be entitled to make an irrevocable election in accordance with subsection 39(4) of the Tax Act to have such Company Shares and every other “Canadian security” (as defined in the Tax Act) owned by them deemed to be capital property in the taxation year of the election and in all subsequent taxation years. Such Resident Holders should consult their own tax advisors for advice with respect to whether an election under subsection 39(4) of the Tax Act is available or advisable in their particular circumstances.

Disposition of Company Shares under the Arrangement

Generally, a Resident Holder who disposes of Company Shares under the Arrangement, other than a Resident Dissenting Holder (as defined below), will realize a capital gain (or capital loss) equal to the amount by which the consideration received by the Resident Holder under the Arrangement exceeds (or is less than) the aggregate of the adjusted cost base of the Company Shares to the Resident Holder and any reasonable costs of disposition.

Generally, a Resident Holder is required to include in computing its income for a taxation year one-half of the amount of any capital gain (a “ taxable capital gain ”) realized by the Resident Holder in such taxation year. Subject to and in accordance with the provisions of the Tax Act, a Resident Holder is required to deduct one-half of the amount of any capital loss (an “ allowable capital loss ”) realized in a taxation year from taxable capital gains realized by the Resident Holder in the year. Allowable capital losses in excess of taxable capital gains may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized by the Resident Holder in such years, to the extent and in the circumstances described in the Tax Act.

The amount of any capital loss realized by a Resident Holder that is a corporation on the disposition of a Company Share may be reduced by the amount of any dividends received (or deemed to be received) by it on such Company Share to the extent and under the circumstances described in the Tax Act. Similar rules may apply where a Company Share is owned by a partnership or trust of which a corporation, trust or partnership is a member or beneficiary. Resident Holders to whom these rules may be relevant should consult their own tax advisors.

A Resident Holder, including a Dissenting Resident Holder (as defined below) that is throughout the year a “Canadian-controlled private corporation” (as defined in the Tax Act) may be liable for a refundable tax on its “aggregate investment income”, which is defined to include an amount in respect of taxable capital gains and interest income.

Capital gains realized by an individual or a trust, other than certain trusts, may give rise to alternative minimum tax under the Tax Act. Resident Holders should consult their own advisors with respect to the potential application of alternative minimum tax.

Resident Dissenting Holders

A Resident Holder that is a Dissenting Shareholder (a “ Resident Dissenting Holder ”) will be deemed to have transferred its Company Shares to the Purchaser and will be entitled to receive from the Purchaser a payment of an amount equal to the fair value of such Holder’s Company Shares.

In general, a Resident Dissenting Holder will realize a capital gain (or capital loss) equal to the amount by which the consideration received in respect of the fair value of the Resident Dissenting Holder’s Company Shares (other than in respect of interest awarded by a court) exceeds (or is less than) the aggregate of the adjusted cost base of such Company Shares and any reasonable costs of disposition. See “Certain Canadian Federal Income Tax Considerations — Holders Resident in Canada — Disposition of Company Shares under the Arrangement” above. Any interest awarded by a court to a Resident Dissenting Holder is required to be included in the Holder’s income for the purposes of the Tax Act.

Holders Not Resident in Canada

The following portion of this summary is generally applicable to a Holder who, for the purposes of the Tax Act and any applicable income tax treaty or convention, and at all relevant times, is not, and is not deemed to be, resident in Canada and does not use or hold Company Shares in connection with carrying on a business in Canada (a “ Non-Resident Holder ”). Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer carrying on business in Canada and elsewhere or an authorized foreign bank, as defined in the Tax Act.

Disposition of Company Shares under the Arrangement

A Non-Resident Holder will not be subject to tax under the Tax Act on any capital gain realized on the disposition of Company Shares under the Arrangement unless the Company Shares are “taxable Canadian property” (within the meaning of the Tax Act) to the Non-Resident Holder at the disposition time and are not “treaty protected property”.

Provided that the Company Shares are listed on a designated stock exchange (which currently includes the TSX) at the disposition time, such Company Shares will not be taxable Canadian property to a Non-Resident Holder unless, at any time during the 60 month period immediately preceding the disposition time, (i) at least 25% of the issued shares of any class or series of the capital stock of the Company were owned by or belonged to one or any combination of (a) the Non-Resident Holder, (b) persons with whom the Non-Resident Holder did not deal at arm’s length, and (c) partnerships in which the Non-Resident Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships; and (ii) at such time, more than 50% of the fair market value of such shares was derived, directly or indirectly, from one or any combination of real or immovable property situated in Canada, “Canadian resource property” (as defined in the Tax Act), “timber resource property” (as defined in the Tax Act), or options in respect of, or interests in, or for civil law rights in such properties, whether or not such property exists.

Notwithstanding the foregoing, Company Shares which are not otherwise taxable Canadian property may be deemed to be taxable Canadian property in certain circumstances specified in the Tax Act.

Even if the Company Shares are considered to be taxable Canadian property of a Non-Resident Holder, the Non-Resident Holder may be exempt from tax under the Tax Act on any gain on the disposition of Company Shares if the Company Shares constitute “treaty protected property” (as defined

in the Tax Act). Company Shares owned by a Non-Resident Holder will generally be treaty protected property if the gain from the disposition of such Company Shares would, because of an applicable income tax treaty or convention, be exempt from tax under the Tax Act.

In the event that the Company Shares constitute or are deemed to be taxable Canadian property but are not treaty protected property to a Non-Resident Holder, then the tax consequences described above under “Certain Canadian Federal Income Tax Considerations — Holders Resident in Canada — Disposition of Company Shares under the Arrangement” will generally apply.

A Non-Resident Holder whose shares may be “taxable Canadian property” should consult its own tax advisor, including with regard to any Canadian reporting requirement arising from the Arrangement.

Non-Resident Dissenting Holders

A Non-Resident Holder that is a Dissenting Shareholder (a “ Non- Resident Dissenting Holder ”) will be deemed to have transferred its Company Shares to the Purchaser, and will be entitled to receive from the Purchaser a payment of an amount equal to the fair value of the Non-Resident Dissenting Holder’s Company Shares and may realize a capital gain or capital loss in a manner similar to that discussed above under “Holders Resident in Canada – Dissenting Resident Holders”. As discussed above under “Holders Not Resident in Canada – Disposition of Shares under the Arrangement”, any resulting capital gain will only be subject to tax under the Tax Act if the Company Shares are taxable Canadian property to the Non-Resident Dissenting Holder and are not treaty-protected property of the Non-Resident Dissenting Holder at that time.

The amount of any interest awarded by a court to a Non-Resident Dissenting Holder will not be subject to Canadian withholding tax provided that such interest is not “participating debt interest” (as defined in the Tax Act).

RISK FACTORS

Company Shareholders should carefully consider the following risk factors in evaluating whether to approve the Arrangement. These risk factors should be considered in conjunction with the other information included in this Information Circular, including certain sections of documents publicly filed, which sections are incorporated by reference herein.

Risk Factors Relating to the Arrangement

There can be no certainty that all conditions to completion of the Arrangement will be satisfied prior to the Outside Date, if at all. Failure to complete the Arrangement could negatively impact the share price of the Company Shares or otherwise adversely affect the business of the Company.

The completion of the Arrangement is subject to a number of conditions, certain of which are outside the control of the Company, including the receipt of Company Shareholder approval, the receipt of Purchaser Shareholder Approval, the receipt of the Required Regulatory Approvals, the receipt of the Final Order and no Governmental Entity issuing any Laws or Orders that has the effect of making the Arrangement illegal or otherwise prohibiting the consummation of the Arrangement. The Arrangement Agreement also contains a number of additional conditions for the benefit of the Purchaser including, compliance with covenants by the Company, the truth and correctness of certain representations and warranties made by the Company as of the Effective Time, that the number of Company Shares in respect of which Dissent Rights have been exercised shall not have exceeded 5% of Company Shares issued and outstanding as of the date of the Arrangement Agreement, and the absence of a Company Material Adverse Effect between the date of the Arrangement Agreement and the Effective Time. There can be no certainty, nor can the Company provide any assurance, that these conditions will be satisfied or, if satisfied, when they will be satisfied.

If the Arrangement is not completed, the market price of the Company Shares may decline to the extent that the market price reflects a market assumption that the Arrangement will be completed. If the Arrangement is not completed and the Company Board decides to seek another merger or business combination, there can be no assurance that it will be able to find a party willing to pay an equivalent or more attractive price than the Consideration to be paid pursuant to the Arrangement.

Certain costs related to the Arrangement, such as legal and certain financial advisor fees, must be paid by the Company even if the Arrangement is not completed.

In addition, since the completion of the Arrangement is subject to uncertainty, officers and employees of the Company may experience uncertainty about their future roles with the Company. This may adversely affect the Company’s ability to attract or to retain key management and personnel in the period until the Arrangement is completed or terminated.

The Company has dedicated significant resources to pursuing the Arrangement and is restricted from taking specified actions while the Arrangement is pending and failure to complete the Arrangement could negatively impact the Company’s business.

The Company is subject to customary non-solicitation provisions under the Arrangement Agreement. Subject to certain exceptions, the Arrangement Agreement also restricts the Company from taking specified actions. These restrictions may prevent the Company from pursuing attractive business opportunities that may arise prior to the completion of the Arrangement. If the Arrangement is not completed for any reason, the announcement of the Arrangement, the dedication of the Company’s resources to the completion thereof and the restrictions that were imposed on the Company under the Arrangement Agreement may have an adverse effect on the current future operations, financial condition and prospects of the Company.

The relative trading price of Company Shares prior to the Effective Date may be volatile.

Market assessments of the benefits of the Arrangement and the likelihood that the Arrangement will be consummated may impact the volatility of the market price of the Company Shares prior to the consummation of the Arrangement.

Uncertainty surrounding the Arrangement could adversely affect the Company’s retention of customers and suppliers.

The Arrangement is dependent upon satisfaction of various conditions, and as a result, its completion is subject to uncertainty. In response to this uncertainty, the Company’s customers and suppliers may delay or defer decisions concerning the Company. Any change, delay or deferral of those decisions by customers and suppliers could negatively impact the Company’s business, operations and prospects, regardless of whether the Arrangement is ultimately completed.

The Company, the Purchaser and Acquireco may be the targets of legal claims, securities class actions, derivative lawsuits and other claims. Any such claims may delay or prevent the Arrangement from being completed.

The Company, the Purchaser and Acquireco may be the target of securities class actions and derivative lawsuits which could result in substantial costs and may delay or prevent the Arrangement from being completed. Securities class action lawsuits and derivative lawsuits may be brought against companies that have entered into an agreement to acquire a public company or to be acquired. Third parties may also attempt to bring claims against the Company, the Purchaser or Acquireco seeking to restrain the Arrangement or seeking monetary compensation or other remedies. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting consummation of the Arrangement, then that injunction may delay or prevent the Arrangement from being completed.

In addition, political and public attitudes towards the Arrangement could result in negative press coverage and other adverse public statements affecting the Company. Adverse press coverage and other adverse statements could lead to investigations by regulators, legislators and law enforcement officials or in legal claims or otherwise negatively impact the ability of the Company to conduct its business.

The Arrangement Agreement may be terminated in certain circumstances.

Each of the parties has the right to terminate the Arrangement Agreement in certain circumstances. Accordingly, there is no certainty, nor can the Company provide any assurance, that the Arrangement will not be terminated by either party before the completion of the Arrangement. Failure to complete the Arrangement could negatively impact the trading price of the Company Shares or otherwise adversely affect the business of the Company.

The Company Termination Payment provided under the Arrangement Agreement if the Arrangement Agreement is terminated in certain circumstances may discourage other parties from attempting to acquire the Company.

Under the Arrangement Agreement, the Company is required to pay the Company Termination Payment in the event the Arrangement Agreement is terminated in certain circumstances following the occurrence of a Company Termination Payment Event. The Company Termination Payment may discourage other parties from attempting to acquire the Company Shares, even if those parties would otherwise be willing to offer greater value than that offered under the Arrangement. See “Summary of the Arrangement Agreement — Termination Payments”.

Even if the Arrangement Agreement is terminated without payment of the Company Termination Payment, the Company may, in the future, be required to pay the Company Termination Payment in certain circumstances.

Under the Arrangement Agreement, the Company may be required to pay the Company Termination Payment to the Purchaser at a date subsequent to the termination of the Arrangement Agreement if the Arrangement Agreement is terminated in certain circumstances and (i) prior to the Company Meeting, a bona fide Acquisition Proposal is publicly announced or otherwise publicly disclosed by any Person (other than the Purchaser, its Affiliates or any Person acting jointly or in concert with any of the foregoing), and (ii) within 12 months days following the date of such termination, the Company (A) enters into an agreement with respect to the Acquisition Proposal which is ultimately consummated or (B) consummates an Acquisition Proposal. For the purposes of the foregoing, the term “Acquisition Proposal” has the meaning assigned to such term in Appendix “A” to this Information Circular, except that references to “20% or more” are deemed to be references to “50% or more”.

Rights of Securityholders after the Arrangement.

Following the completion of the Arrangement, securityholders will no longer hold Company Shares, Company Options, Company RSUs or any other securities convertible into Company Shares and will no longer have an interest in the Company, its assets, revenues or profits. Company Shareholders will likewise forego any future increase in value that might result from future growth and the potential achievement of the Company’s long-term plans. In the event that the value of the Company’s assets or business, prior, at or after the Effective Date, exceeds the implied value of the Company under the Arrangement, securityholders will not be entitled to additional consideration for their Company Shares, Company Options or Company RSUs.

The Arrangement will result in tax payable by most Securityholders.

The Arrangement will be a taxable transaction for most securityholders and, as a result, taxes will generally be required to be paid by such securityholders on any income and gains that result from receipt of the Consideration under the Arrangement. See “Certain Canadian Federal Income Tax

Considerations”. Securityholders are advised to consult with their own tax advisors to determine the tax consequences of the Arrangement to them.

The pending Arrangement may divert the attention of the Company’s management.

The pendency of the Arrangement could cause the attention of the Company’s management to be diverted from the day-to-day operations and customers or suppliers may seek to modify or terminate their business relationships with the Company. These disruptions could be exacerbated by a delay in the completion of the Arrangement and could have an adverse effect on the business, operating results or prospects of the Company.

The Company’s directors and officers may have interests in the Arrangement that are different from those of Company Shareholders.

In considering the recommendation of the Special Committee and the Company Board to vote in favour of the Arrangement Resolution, Company Shareholders should be aware that certain directors and officers of the Company may have agreements or arrangements that provide them with interests in the Arrangement that differ from, or are in addition to, those of Company Shareholders, generally. See “The Arrangement — Interests of Certain Persons in the Arrangement”.

Risk Factors Relating to the Business of the Company

Whether or not the Arrangement is completed, the Company will continue to face many of the risks that it currently faces with respect to its business and affairs. A description of the risk factors (incorporated by reference into this Information Circular) applicable to the Company is contained under the heading “Risk Factors” in the Annual Information Form and in the Company’s other filings with Securities Authorities available on SEDAR at www.SEDAR.com.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

Except as otherwise disclosed in this Information Circular, the Company is not aware of any director, executive officer or any person who, to the knowledge of the directors or officers of the Company, beneficially owns or controls or exercises discretion over shares carrying more than 10% of the votes attached to the Company Shares, or any associate or affiliate of any of the foregoing, having any material interest, direct or indirect, in any transaction or proposed transaction, which has materially affected or would materially affect the Company or any of its subsidiaries.

AUDITORS

KPMG LLP are the auditors of the Company and are independent in accordance with the Chartered Professional Accountants of British Columbia Code of Conduct

OTHER INFORMATION AND MATTERS

There is no information or matter not disclosed in this Information Circular but known to the Company that would be reasonably expected to affect the decision of Company Shareholders to vote for or against the Arrangement Resolution.

ADDITIONAL INFORMATION

Additional information relating to the Company is available on SEDAR at www.sedar.com and on the Company’s website at www.pinnaclepellet.com. Information on the Company’s website is not incorporated by reference in this Information Circular.

Financial information concerning the Company is contained in the Company’s consolidated financial statements as at and for the years ended December 25, 2020 and December 27, 2019, and the Annual MD&A. Copies of such documents, in addition to the Company’s Annual Information Form and this Information Circular, all as filed on SEDAR, may be obtained without charge upon request to the General Counsel at its principal place of business at 3600 Lysander Lane, Suite 350, Richmond, British Columbia, V7B 1C3.

DIRECTORS’ APPROVAL

The undersigned Chair of the Company Board certifies that the contents and sending of this Information have been approved by the Company Board.

Dated this 1[st] day of March, 2021

BY ORDER OF THE BOARD OF DIRECTORS OF PINNACLE RENEWABLE ENERGY INC.

By: (Signed) “Gregory Baylin” Name: Gregory Baylin Title: Chair of the Board of Directors

CONSENT OF CIBC WORLD MARKETS INC.

March 1, 2021 Pinnacle Renewable Energy Inc. 3600 Lysander Lane, Suite 350 Richmond, British Columbia, Canada, V7B 1C3.

To: The Board of Directors of Pinnacle Renewable Energy Inc. (the “ Company ”)

We refer to the management information circular (the “ Circular ”) of the Company dated March 1, 2021 relating to the special meeting of holders of common shares of the Company to approve an arrangement under the Business Corporations Act (British Columbia) involving the Company, Drax Group plc, and Drax Canadian Holdings Inc. We consent to the inclusion in the Circular of our fairness opinion to the Company Board dated February 7, 2021 as Appendix “E” and references to our firm name and our fairness opinion in the letter to shareholders and in the Circular under the headings “Summary”, “The Arrangement – Background to the Arrangement”, “The Arrangement – Recommendation of the Special Committee”, “The Arrangement – Recommendation of the Company Board”, “The Arrangement – Fairness Opinions – CIBC Fairness Opinion”, “The Arrangement – Reasons for the Arrangement” and Appendix “A”. Our fairness opinion was given as of February 7, 2021 and remains subject to the assumptions, qualifications and limitations contained therein. In providing our consent, we do not intend that any person other than the Company Board shall be entitled to rely upon our opinion.

Sincerely,

(Signed) “CIBC World Markets Inc.” CIBC World Markets Inc.

CONSENT OF SCOTIA CAPITAL INC.

March 1, 2021 Pinnacle Renewable Energy Inc. 3600 Lysander Lane, Suite 350 Richmond, British Columbia, Canada, V7B 1C3.

To: The Special Committee of the Board of Pinnacle Renewable Energy Inc. (the “ Company ”)

We refer to the management information circular (the “ Circular ”) of the Company dated March 1, 2021 relating to the special meeting of holders of common shares of the Company to approve an arrangement under the Business Corporations Act (British Columbia) involving the Company, Drax Group plc, and Drax Canadian Holdings Inc. We consent to the inclusion in the Circular of our fairness opinion to the Pinnacle Board of Directors and the Special Committee dated February 7, 2021 as Appendix “F” and references to our firm name and our fairness opinion in the letter to shareholders and in the Circular under the headings “Summary”, “The Arrangement – Background to the Arrangement”, “The Arrangement – Recommendation of the Special Committee”, “The Arrangement – Recommendation of the Company Board”, “The Arrangement – Fairness Opinions – Scotiabank Fairness Opinion”, “The Arrangement – Reasons for the Arrangement” and Appendix “A”. Our fairness opinion was given as of February 7, 2021 and remains subject to the assumptions, qualifications and limitations contained therein. In providing our consent, we do not intend that any person other than the Pinnacle Board shall be entitled to rely upon our opinion.

Sincerely,

(Signed) “Scotia Capital Inc.” Scotia Capital Inc.

APPENDIX “A” GLOSSARY OF TERMS

Unless the context otherwise requires or where otherwise provided, the following words and terms shall have the meanings set forth below when used in this Information Circular.

“ Acquireco ” means Drax Canadian Holdings Inc.

“ Advance Ruling Certificate ” means an advance ruling certificate issued by the Commissioner of Competition pursuant to Section 102 of the Competition Act in respect of the transactions contemplated under the Arrangement;

“ allowable capital loss ” has the meaning specified in “Certain Canadian Federal Income Tax Considerations – Holders Resident in Canada – Disposition of Company Shares under the Arrangement”.

“ Annual Information Form ” means the annual information form of the Company dated March 31, 2020 for the fiscal year ended December 27, 2019.

“ Annual MD&A ” means the Management Discussion and Analysis dated February 24, 2021 for the 52 weeks ended December 25, 2020 and December 27, 2019.

“ Antitrust Laws ” shall mean all Laws and Orders that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization, restraint of trade, or lessening of competition through merger or acquisition.

“ Arrangement ” means the arrangement under Section 288 of the BCBCA on the terms and subject to the conditions set out in the Plan of Arrangement, subject to any amendments or variations made in accordance with the terms of the Arrangement Agreement or Plan of Arrangement or made at the direction of the Court in the Final Order with the prior written consent of the Company and the Purchaser, each acting reasonably.

“ Arrangement Agreement ” means the arrangement agreement entered into as of February 7, 2021 among the Company, the Purchaser and Acquireco (including the schedules thereto) as it may be amended, modified or supplemented from time to time in accordance with the terms thereof, a copy of which is attached as Appendix “C” to this Information Circular.

“ Arrangement Resolution ” means the special resolution approving the Plan of Arrangement to be considered at the Company Meeting, attached as Appendix “B” to this Information Circular.

“ BCBCA ” means the Business Corporations Act (British Columbia).

“ Beneficial Shareholder ” means a non-registered, beneficial holder of Company Shares whose Company Shares are held through an Intermediary.

“ BNS ” has the meaning set forth in “The Arrangement – Fairness Opinions – Scotiabank Fairness Opinion”.

“ Broadridge ” means Broadridge Financial Solutions Inc.

“ Business Day ” means any day of the year, other than a Saturday, Sunday or any day on which major banks are closed for business in Toronto, Ontario or Vancouver, British Columbia or London, England.

“ CIBC ” means CIBC World Markets Inc.

A - 1

“ CIBC Fairness Opinion ” means the written fairness opinion of CIBC dated February 7, 2021.

“ CMA Merger Investigation ” means a formal investigation undertaken by the CMA for the purposes of deciding whether or not to make a CMA Phase 2 Reference.

“ CMA ” means United Kingdom Competition and Markets Authority.

“ CMA Merger Notice ” means a notice given to the CMA pursuant to section 96 of the Enterprise Act.

“ CMA Phase 2 Reference ” means a reference by the CMA pursuant to section 33 of the Enterprise Act.

“ Commissioner of Competition ” means the Commissioner of Competition appointed pursuant to Subsection 7(1) of the Competition Act or his or her designee.

“ Company ” means Pinnacle Renewable Energy Inc.

“ Company Acquisition Proposal ” means, other than the transactions contemplated by the Arrangement Agreement and other than any transaction involving only the Company and/or one of its wholly owned Subsidiaries, any offer, proposal or inquiry from any Person or group of Persons (other than the Purchaser or any affiliate of the Purchaser), whether or not in writing and whether or not delivered to the Shareholders, relating to: (a) any direct or indirect acquisition, purchase, sale or disposition (or any lease, offtake, throughput or long-term supply agreement or other arrangement having the same economic effect as a sale), through one or more transactions, of (i) the assets of the Company and/or one or more of its Subsidiaries that, individually or in the aggregate, constitute 20% or more of the consolidated assets of the Company and its Subsidiaries, taken as a whole, or which contribute 20% or more of the consolidated revenue of the Company and its Subsidiaries, taken as a whole, or (ii) 20% or more of any voting or equity securities of the Company or 20% or more of any voting or equity securities of any one or more of any of the Company’s Subsidiaries that, individually or in the aggregate, contribute 20% or more of the consolidated revenues or constitute 20% or more of the consolidated assets of the Company and its Subsidiaries, taken as a whole (in each case, determined based upon the most recently publicly available consolidated financial statements of the Company); (b) any direct or indirect take-over bid, tender offer, exchange offer, sale or issuance of securities or other transaction that, if consummated, would result in such Person or group of Persons beneficially owning 20% or more of any class of voting or equity securities (including securities convertible into or exercisable or exchangeable for voting or equity securities) of the Company or any of its Subsidiaries that, individually or in the aggregate, contribute 20% or more of the consolidated revenues or constitute 20% or more of the consolidated assets of the Company and its Subsidiaries, taken as a whole; or (c) a plan of arrangement, merger, amalgamation, consolidation, share exchange, share reclassification, business combination, reorganization, recapitalization, liquidation, dissolution, winding up or other similar transaction or series of transactions involving the Company or any of its Subsidiaries that, if consummated, would result in such Person or group of Persons beneficially owning 20% or more of any class of voting or equity securities (including securities convertible into or exercisable or exchangeable for voting or equity securities) of the Company or any of its Subsidiaries that, individually or in the aggregate, contribute 20% or more of the consolidated revenues or constitute 20% or more of the consolidated assets of the Company and its Subsidiaries, taken as a whole.

“ Company Board ” means the board of directors of the Company as constituted from time to time.

“ Company Board Recommendation ” means the unanimous recommendation of the Company Board to the Shareholders that they vote in favour of the Arrangement Resolution.

“ Company Change in Recommendation ” has the meaning ascribed thereto in “Summary of the Arrangement Agreement – Termination of the Arrangement Agreement”.

A - 2

“ Company Disclosure Letter ” means the disclosure letter dated the date of the Arrangement Agreement executed and delivered by the Company to the Purchaser in connection with the execution of the Arrangement Agreement.

“ Company Intervening Event ” means any event, development, circumstance, change, effect, condition or occurrence with respect to the Company or its Subsidiaries or the Purchaser or its Subsidiaries that, as of the date of the Arrangement Agreement, was not known to the Company Board.

“ Company Legacy Option Plan ” means the amended and restated stock option plan of the Company approved by the Company Board on January 29, 2018.

“ Company LTIP ” means the amended and restated omnibus long-term incentive plan of the Company dated May 7, 2019.

“ Company Material Adverse Effect ” means any event, change, occurrence, effect, state of facts or circumstances that, individually or in the aggregate with other events, changes, occurrences, effects, states of facts or circumstances is, or would reasonably be expected to be, material and adverse to the business, assets, properties, operations, financial condition or results of operations of the Company and its Subsidiaries taken as a whole, except any such event, change, occurrence, effect, state of facts or circumstances resulting from or arising in connection with:

(a) any change, development or condition generally affecting the industrial wood pellet industry or the supply of wood fibre to the industrial wood pellet industry;
(b) any change, development or condition in global, national or regional political conditions (including any protest, riot, facility takeover for emergency purposes, outbreak of hostilities or war, or acts of espionage, sabotage or terrorism, or any escalation or worsening of the foregoing) or any earthquake, flood, forest fire, or other natural disaster;
(c) any epidemic, pandemic or outbreak of illness (including COVID-19 and any COVID-19 Measures) or health crisis or public health event, or any worsening of any of the foregoing;
(d) any change or development in general economic, business, banking or regulatory conditions or in financial, credit, commodities or securities markets in Canada or the United States;
(e) any change in applicable generally acceptable accounting principles, including IFRS;
(f) changes, developments or conditions in or relating to currency exchange, interest or inflation rates;
(g) any adoption, proposal, implementation or change in applicable Laws or in any interpretation, application or non-applications of any applicable Laws by any Governmental Entity;
(h) the execution, announcement or pendency of the Arrangement Agreement or consummation of the Arrangement, including any lawsuit brought by Shareholders in respect of the Arrangement Agreement or the transactions contemplated hereby;
(i) any actions or inactions expressly required by the Arrangement Agreement or Law or that are taken (or omitted to be taken) at the request, or with the prior written consent, of the Purchaser (provided that this clause (i) shall not apply with respect to any representation or warranty the purpose of which is to address the consequences resulting from the execution and delivery of the Arrangement Agreement or the consummation of the transactions contemplated by the Arrangement Agreement or the performance of obligations under the Arrangement Agreement);

A - 3

(j) any matter which has been disclosed by the Company in the Company Disclosure Letter; any change in the market price or trading volume of any securities of the Company or any suspension of trading in securities generally on any securities exchange on which any securities of the Company trade (it being understood that the causes underlying such changes in market price or trading volume or suspension of trading may be taken into account, to the extent not referred to in paragraphs (a) to (j) above, in determining whether a Company Material Adverse Effect has occurred);
(k) the failure, in and of itself, of the Company to meet any internal, published or public projections, forecasts, guidance or estimates, including of revenues, earnings, cash flows or other financial operating metrics before, on or after the date of the Arrangement Agreement (it being understood that the causes underlying such failure may be taken into account, to the extent not referred to in paragraphs (a) to (j) above, in determining whether a Company Material Adverse Effect has occurred);

provided , however , that (i) any event, change, occurrence, effect, state of facts or circumstances referred to in paragraphs (a) to and including (g) above shall be taken into account in determining whether a Company Material Adverse Effect has occurred to the extent it disproportionately adversely affects the Company and its Subsidiaries, taken as a whole, compared to other companies operating in the business or industry in which the Company and its Subsidiaries operate; and (ii) references in the Arrangement Agreement to dollar amounts are not intended to be and shall not be deemed to be illustrative or interpretative for purposes of determining whether a Company Material Adverse Effect has occurred;

“ Company Options ” means outstanding options to purchase Company Shares granted under the Company Legacy Option Plan or the Company LTIP.

“ Company Proposed Agreement ” has the meaning ascribed to it under “Summary of the Arrangement Agreement — Company Right to Match”.

“ Company Response Period ” has the meaning ascribed to it under “Summary of the Arrangement Agreement — Purchaser Right to Match”.

“ Company RSUs ” means restricted share units issued under the Company LTIP.

“ Company Shareholder Approval ” has the meaning ascribed to it in “Certain Legal and Regulatory Matters – Required Shareholder Approvals”.

“ Company Shareholders ” means, as the context requires, either or both of the registered and beneficial holders of the Company Shares, and “ Company Shareholder ” means any one of them.

“ Company Shares ” means, as of any date, common shares in the capital of the Company issued and outstanding as of such date.

“ Company Superior Proposal ” means an unsolicited bona fide written Company Acquisition Proposal to acquire not less than all of the outstanding Company Shares not already owned by the Person making such Company Acquisition Proposal or all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis made by an arm’s length third party after the date of the Arrangement Agreement: (a) that did not result from or involve a breach of the Company’s non-solicitation covenants set out in Section 5.5 of the Arrangement Agreement; (b) that is not subject to any financing condition and in respect of which it has been demonstrated to the satisfaction of the Company Board, acting in good faith, that adequate arrangements have been made in respect of any financing required to complete such Company Acquisition Proposal; (c) that is not subject to a due diligence and/or access condition; (d) that is reasonably capable of being consummated without undue delay, taking into account all legal, financial, regulatory and other aspects of such Company Acquisition Proposal and the Person making such Company Acquisition Proposal; and (e) in respect of which the Company Board determines

A - 4

in good faith, after consultation with its outside financial and legal advisors, and after taking into account all the terms and conditions of such Company Acquisition Proposal, including all legal, financial, regulatory and other aspects of such Company Acquisition Proposal and the party making such Company Acquisition Proposal, would, if consummated in accordance with its terms (but without assuming away the risk of non-completion), result in a transaction that is more favourable, from a financial point of view, to the Company Shareholders, than the Arrangement (taking into account any amendments to the terms and conditions of the Arrangement proposed by the Purchaser pursuant to Section 5.5(i) of the Arrangement Agreement).

“ Company Superior Proposal Notice ” has the meaning ascribed to it under “Summary of the Arrangement Agreement — Company Right to Match”.

“ Company Termination Payment ” means an amount equal to $12,500,000.

“ Company Termination Payment Event ” has the meaning ascribed to it under “Summary of the Arrangement Agreement — Termination Payments”.

“ Competition Act ” means the Competition Act (Canada).

“ Competition Act Approval ” means that, in connection with the transactions contemplated by the Arrangement Agreement, either (i) the (a) applicable waiting periods under subsection 123(1) of the Competition Act shall have expired or have been terminated in accordance with subsection 123(2) of the Competition Act or the obligation to provide a pre-merger notification in accordance with Part IX of the Competition Act shall have been waived in accordance with paragraph 113(c) of the Competition Act, and (b) the Commissioner of Competition shall have issued a written confirmation that he does not, at that time, intend to make an application under section 92 of the Competition Act in respect of the transactions contemplated by the Arrangement Agreement; or (ii) the Commissioner of Competition shall have issued an Advance Ruling Certificate under Section 102 of the Competition Act in respect of the transactions contemplated by the Arrangement Agreement.

“ Consideration ” means $11.30 in cash per Company Share or Company RSU.

“ Court ” means the Supreme Court of British Columbia.

“ COVID-19 ” means SARS-CoV-2 or COVID-19, and any evolutions, variants or mutations thereof or related or associated epidemics, pandemics or disease outbreaks.

“ COVID-19 Measures ” means any actions taken or not taken (i) to comply with facility closure, quarantine, “stay at home”, “shelter in place”, social or physical distancing, travel restriction or other directive, guideline or recommendation issued by any Governmental Entity or any other Law in response to COVID-19 or (ii) in good faith and on a commercially reasonable basis to mitigate, remedy, respond to or otherwise address the actual or reasonably anticipated effects or impacts of COVID-19, including to protect the health and safety of the employees of the Company and its Subsidiaries and the Joint Ventures and other individuals having business dealings with the Company or to respond to third party supply or service disruptions caused by COVID-19.

“ Current Blackout Period ” has the meaning specified in “The Arrangement – Interests of Certain Persons in the Arrangement – Change of Control Benefits”.

“ Depositary ” means TSX Trust Company or such other Person as the Company and the Purchaser agree in writing to appoint to act as depositary and paying agent in relation to the Arrangement.

“ Depositary Agreement ” means the depositary agreement to be entered into by the Company, Purchaser and the Depositary, with the approval of the Purchaser, acting reasonably.

A - 5

“ Dissenting Shareholder ” means a Registered Shareholder who has duly exercised a Dissent Right and has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights, but only in respect of Company Shares in respect of which Dissent Rights are validly exercised by such shareholder.

“ Dissent Rights ” has the meaning ascribed to it under “Dissent Rights of Company Shareholders”.

“ DRS ” has the meaning given to it in “Letter of Transmittal”.

“ Effective Date ” means the date on which the Arrangement becomes effective in accordance with the Arrangement Agreement. See “The Arrangement – The Effective Date”.

“ Effective Time ” means the time on the Effective Date that the Arrangement becomes effective, as set out in the Plan of Arrangement.

“ Enterprise Act ” means the Enterprise Act (UK).

“ Fairness Opinions ” means, together, the CIBC Fairness Opinion and the Scotiabank Fairness Opinion, as described in greater detail under “The Arrangement — Fairness Opinions”.

“ Final Order ” means the final order of the Court pursuant to Section 291 of the BCBCA in a form acceptable to the Company and the Purchaser, each acting reasonably, approving the Arrangement, as such order may be amended, supplemented, varied or modified by the Court (with the consent of both the Company and the Purchaser, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended (provided that any such amendment is acceptable to both the Company and the Purchaser, each acting reasonably) on appeal.

“ Final Purchaser Proposal ” has the meaning specified in “The Arrangement – Background to the Arrangement”.

“ Governmental Entity ” means: (a) any international, multinational, national, federal, provincial, territorial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, commissioner, board, minister, ministry, bureau, agency or instrumentality, domestic or foreign; (b) any stock exchange, including the TSX and the London Stock Exchange; (c) any subdivision, agent, commission, board or authority of any of the foregoing; or (d) any quasi-governmental or private body, including any tribunal, commission, regulatory agency or selfregulatory organization, exercising any regulatory, antitrust, foreign investment, expropriation or taxing authority under or for the account of any of the foregoing.

“ Holder ” has the meaning specified in “Certain Canadian Federal Income Tax Considerations”.

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvement Act of 1976 , as amended.

“ HSR Approval ” means the waiting period (and any extension thereof) under the HSR Act shall have been terminated or shall have expired.

“ IFRS ” means generally accepted accounting principles as set out in the CPA Canada Handbook – Accounting for an entity that prepares its financial statements in accordance with International Financial Reporting Standards as applied by the International Accounting Standards Board, at the relevant time, applied on a consistent basis.

“ Information Circular ” means this notice of the Company Meeting and accompanying management information circular, including all appendices hereto and enclosures herewith, as amended, supplemented or otherwise modified from time to time.

A - 6

“ Initial Purchaser Proposal ” has the meaning specified in “The Arrangement – Background to the Arrangement”.

“ Interim Order ” means the interim order of the Court in a form acceptable to the Company and the Purchaser, each acting reasonably, providing for, among other things, the calling and holding of the Company Meeting, as such order may be amended, modified, supplemented or varied by the Court with the consent of the Company and the Purchaser, each acting reasonably.

“ Interested Parties ” has the meaning ascribed thereto in “The Arrangement – Fairness Opinions – CIBC Fairness Opinion”.

“ Intermediary ” means an intermediary with which a Beneficial Shareholder may deal, including banks, trust companies, securities dealers, custodians or brokers and trustees or administrators of self-directed trusts governed by RRSPs, RRIFs, RESPs (collectively as defined in the Tax Act) and similar plans, and their nominees.

“ Joint Ventures ” means (a) Alabama Pellets, LLC; (b) Houston Pellet Limited Partnership and its general partner, Houston Pellet Inc.; (c) Lavington Pellet Limited Partnership and its general partner, Lavington Pellet Inc.; (d) Smithers Pellet Limited Partnership and its general partner, Smithers Pellet Inc.; and (e) Northern Pellet Limited Partnership and its general partner, Northern Pellet Inc.

“ Key Consent” has the meaning given to it in “Summary of The Arrangement Agreement - Conditions to the Arrangement Becoming Effective - Additional Conditions Precedent to the Obligations of the Purchaser”.

“ Key Regulatory Approvals ” means Competition Act Approval, HSR Approval and, if applicable, UK CMA Approval.

“ Law ” means, with respect to any Person, any and all applicable law (statutory, common, equitable or otherwise), constitution, treaty, convention, ordinance, by-law, code, rule, regulation, order, injunction, notice, judgment, award, decree, ruling or other similar requirement, whether domestic or foreign, enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such Person or its business, undertaking, property or securities, and to the extent that they have the force of law, policies, guidelines, notices and protocols of any Governmental Entity, as amended unless expressly specified otherwise.

“ Letter of Transmittal ” means the letter of transmittal sent to Shareholders for use in connection with the Arrangement.

“ Lien ” means any hypothecs, mortgages, pledges, liens, charges, security interests, easements, encumbrances and adverse rights or claims, whether contingent or absolute.

“ MI 61-101 ” means Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions .

“ No Action Letter ” has the meaning ascribed thereto in “Certain Legal and Regulatory Matters – Required Regulatory Approvals – Competition Act Approval”.

“ Non-Resident Holder ” has the meaning ascribed thereto in Certain Canadian Federal Income Tax Considerations - Holders Not Resident in Canada”.

“ Notice of Meeting ” means the notice of special meeting of Shareholders which accompanies this Information Circular.

A - 7

“ Notice to Proceed ” means the notice that the Company must send to a Dissenting Shareholder if the Company decides to act on the authority of the Arrangement Resolution.

“ ONCAP Parties ” means collectively, ONCAP II L.P., ONCAP (US) II L.P., ONCAP (US) II-A L.P., ONEX Parallel Investment (ONCAP) L.P., ONCAP Investment Partners II L.P. and Biomass EI Ltd.

“ Order ” means all judicial, arbitral, administrative, ministerial, departmental or regulatory judgments, injunctions, orders, decisions, rulings, determinations, awards, or decrees of any Governmental Entity (in each case, whether temporary, preliminary or permanent).

“ Ordinary Course ” means, with respect to the Company or its Subsidiaries or Joint Venture, as applicable, any action that is consistent in nature and scope with the past practices of the Company or such Subsidiary or Joint Venture, as applicable, and is taken in the ordinary course of the business of the Company or such Subsidiary or Joint Venture, as applicable.

“ Outside Date ” means September 7, 2021, or such later date as may be agreed to in writing by the Parties.

“ Parties ” means, together, the Company, the Purchaser and Acquireco, and “Party” means any one of them.

“ Person ” means any individual, partnership, association, body corporate, organization, trust, estate, trustee, executor, administrator, legal representative, government (including Governmental Entity), syndicate or other entity, whether or not having legal status.

“ Plan of Arrangement ” means the plan of arrangement, substantially in the form set out in Appendix “D” to this Information Circular, and any amendments or variations thereto made in accordance with the Arrangement Agreement and the Plan of Arrangement or upon the direction of the Court (with the prior written consent of the Company and the Purchaser, each acting reasonably) in the Final Order.

“ Pre-Acquisition Reorganization ” has the meaning ascribed thereto in “Summary of the Arrangement Agreement – Covenants – Covenants Regarding a Pre-Acquisition Reorganization”.

“ Preferred Shares ” has the meaning specified in Information Concerning the Company”.

“ Proceedings ” means any suit, claim, action, charge, complaint, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, audit, examination or investigation commenced, brought, conducted or heard by or before, any court or other Governmental Entity.

“ Proposed Amendments ” has the meaning specified in “Certain Canadian Federal Income Tax Considerations”.

“ Prospect ” has the meaning specified in “The Arrangement – Background to the Arrangement”.

“ Purchaser ” means Drax Group plc.

A - 8

voting or equity securities of the Purchaser or 20% or more of any voting or equity securities of any one or more of any of the Purchaser’s Subsidiaries that, individually or in the aggregate, contribute 20% or more of the consolidated revenues or constitute 20% or more of the consolidated assets of the Purchaser and its Subsidiaries, taken as a whole (in each case, determined based upon the most recently publicly available consolidated financial statements of the Purchaser), provided, however, that any financing activities undertaken by the Purchaser and its Subsidiaries in the ordinary course of business (including any securitisations of any receivables or revenues) shall not constitute a direct or indirect acquisition, purchase, sale or disposition for purposes of this clause (a); (b) any direct or indirect take-over bid, tender offer, exchange offer, sale or issuance of securities or other transaction that, if consummated, would result in such Person or group of Persons beneficially owning 20% or more of any class of voting or equity securities (including securities convertible into or exercisable or exchangeable for voting or equity securities) of Purchaser or any of its Subsidiaries that, individually or in the aggregate, contribute 20% or more of the consolidated revenues or constitute 20% or more of the consolidated assets of the Purchaser and its Subsidiaries, taken as a whole; or (c) a scheme of arrangement, merger, amalgamation, consolidation, share exchange, share reclassification, business combination, reorganization, recapitalization, liquidation, dissolution, winding up or other similar transaction or series of transactions involving the Purchaser or any of its Subsidiaries that, if consummated, would result in such Person or group of Persons beneficially owning 20% or more of any class of voting or equity securities (including securities convertible into or exercisable or exchangeable for voting or equity securities) of the Purchaser or any of its Subsidiaries that, individually or in the aggregate, contribute 20% or more of the consolidated revenues or constitute 20% or more of the consolidated assets of the Purchaser and its Subsidiaries, taken as a whole.

“ Purchaser Board ” means the board of directors of the Purchaser, as the same is constituted from time to time.

“ Purchaser Board Recommendation ” means the unanimous recommendation of the Purchaser Board that Purchaser Shareholders vote in favour of the Purchaser Resolution.

“ Purchaser Change in Recommendation ” has the meaning ascribed thereto in “Summary of the Arrangement Agreement – Termination of the Arrangement Agreement”.

“ Purchaser Intervening Event ” means any event, development, circumstance, change, effect, condition or occurrence that, as of the date of the Arrangement Agreement, was not known to the Purchaser Board.

“ Purchaser Material Adverse Effect ” has the meaning ascribed thereto in the Arrangement Agreement.

“ Purchaser Meeting ” means the general meeting of the Purchaser Shareholders, including any adjournment or postponement thereof, to be convened to vote on the Purchaser Resolution. “ Purchaser Proposed Agreement ” has the meaning ascribed to it under “Summary of the Arrangement Agreement — Purchaser Right to Match”.

“ Purchaser Resolution ” means an ordinary resolution of the Purchaser Shareholders approving the acquisition of all of the issued and outstanding Company Shares in accordance with the terms of the Arrangement and all ancillary matters related thereto.

“ Purchaser Response Period ” has the meaning ascribed to it under “Summary of the Arrangement Agreement — Company Right to Match”.

“ Purchaser Shareholder Approval ” has the meaning ascribed to it under “Certain Legal and Regulatory Matters – Required Shareholder Approvals”.

“ Purchaser Shareholder ” means the registered and/or beneficial holders of the Purchaser Shares, as the context requires.

A - 9

“ Purchaser Shares ” means the ordinary shares in the authorized share capital of the Purchaser.

“ Purchaser Superior Proposal ” means an unsolicited bona fide written Purchaser Acquisition Proposal to acquire not less than 50% of the outstanding Purchaser Shares or all or substantially all of the assets of the Purchaser and its Subsidiaries on a consolidated basis made by an arm’s length third party after the date of the Arrangement Agreement: (a) that did not result from or involve a breach of the Purchaser’s non-solicitation covenants in Section 5.6 of the Arrangement Agreement; (b) in respect of which the Purchaser Board determines in good faith, after consultation with its outside financial and legal advisors, and after taking into account all the terms and conditions of such Purchaser Acquisition Proposal, including all legal, financial, regulatory and other aspects of such Purchaser Acquisition Proposal and the party making such Purchaser Acquisition Proposal, would, if consummated in accordance with its terms (but without assuming away the risk of non-completion), result in a transaction that is more favourable to the Purchaser Shareholders than the Arrangement (taking into account any amendments to the terms and conditions of the Arrangement proposed by the Company pursuant to Section 5.6(i) of the Arrangement Agreement); and (c) that is reasonably capable of being consummated in accordance with the terms proposed.

“ Purchaser Superior Proposal Notice ” has the meaning ascribed to it under “Summary of the Arrangement Agreement — Purchaser Right to Match”.

“ Purchaser Termination Payment ” means an amount equal to $25,000,000 less the amount payable pursuant to Section 7.3(g) of the Arrangement Agreement if and only if such amount has been paid by the Purchaser prior to the Purchaser Termination Payment becoming due and payable under the Arrangement Agreement.

“ Purchaser Termination Payment Event ” has the meaning ascribed to it under “Summary of the Arrangement Agreement — Termination Payments”.

“ Record Date ” means the close of business on February 16, 2021.

“ Registered Shareholder ” means a registered holder of Company Shares as recorded in the registers maintained by the Transfer Agent.

“ Registrar ” means the Registrar of Companies for the Province of British Columbia.

“ Regulatory Approvals ” means any consent, waiver, permit, exemption, review, order, decision or approval of, or any registration and filing with, any Governmental Entity, or the expiry, waiver or termination of any waiting period imposed by Law or a Governmental Entity, in each case required in connection with the Arrangement and includes the Required Regulatory Approvals.

“ Representatives ” means, with respect to any Person, its and its Subsidiaries’ officers, directors, employees, representatives (including any financial and other advisors) and agents.

“ Required Regulatory Approvals ” means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of notice without an objection being made) of Governmental Entities required in relation to the transactions contemplated hereby, including the Key Regulatory Approvals.

“ Required Shareholder Approval ” means, collectively, Company Shareholder Approval and Purchaser Shareholder Approval.

“ Resident Dissenting Holder ” has the meaning specified in “Certain Canadian Federal Income Tax Considerations – Holders Resident in Canada – Dissenting Resident Holders”.

A - 10

“ Resident Holder ” has the meaning specified in “Certain Canadian Federal Income Tax Considerations – Holders Resident in Canada”.

“ Retention Payments ” has the meaning ascribed thereto in “The Arrangement – Interests of Certain Persons in the Arrangement – Retention Payments”.

“ Revised Purchaser Proposal ” has the meaning specified in “The Arrangement – Background to the Arrangement”.

“ Scotiabank ” means Scotia Capital Inc.

“ Scotiabank Fairness Opinion ” means the written fairness opinion of Scotiabank dated February 7, 2021.

“ SEDAR ” means the System for Electronic Document Analysis and Retrieval.

“ Special Committee ” means the special committee of the Company Board comprised entirely of independent directors.

“ Stikeman ” has the meaning specified in “The Arrangement – Background to the Arrangement”.

“ Subsidiary ” has the meaning ascribed thereto in the National Instrument 45-106 – Prospectus Exemptions , in force as of the date of the Arrangement Agreement, and, without limiting the generality of the foregoing, the Joint Ventures are deemed to be Subsidiaries of the Company for purposes of the representations and warranties of the Company in the Arrangement Agreement.

“ Supplementary Information Request ” has the meaning ascribed thereto in “Certain Legal and Regulatory Matters – Required Regulatory Approvals – Competition Act Approval”.

“ taxable capital gain ” has the meaning specified in “Certain Canadian Federal Income Tax Considerations – Holders Resident in Canada – Disposition of Company Shares under the Arrangement”.

“ Tax Act ” means the Income Tax Act (Canada) and the regulations therein.

“ Taxes ” means (a) any taxes, duties, fees, premiums, assessments, imposts, levies and other like charges or assessments of any kind whatsoever imposed by any Governmental Entity, whether computed on a separate, consolidated, unitary, combined or other basis, and including those levied on, or measured by, or referred to as, income, gross receipts, profits, windfall, royalty, capital, capital stock, production, recapture, transfer, land transfer, license, gift, occupation, wealth, environment, net worth, indebtedness, surplus, sales, goods and services, harmonized sales, use, value-added, excise, special assessment, stamp, withholding, business, franchising, real or personal property, development, occupancy, employer health, payroll, workers’ compensation, employment or unemployment, health, utility, social services, education and social security taxes, all surtaxes, all customs duties and import and export taxes, countervail and anti-dumping, all licence, franchise and registration fees and all employment insurance, health insurance and Canada, Québec and other pension plan premiums or contributions imposed by any Governmental Entity; (b) all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Entity in respect of amounts of the type described in clause (a) or this clause (b); (c) any liability for the payment of any amounts of the types described in clauses (a) or (b) as a result of being a member of an affiliated, consolidated, combined or unitary group for any period; and (d) any liability for the payment of any amounts of the type described in clauses (a) or (b) as a result of any express or implied obligation to indemnify any other Person.

“ Transfer Agent ” means TSX Trust Company.

A - 11

“ Tribunal ” has the meaning ascribed thereto in “Certain Legal and Regulatory Matters – Required Regulatory Approvals – Competition Act Approval”.

“ TSX ” means the Toronto Stock Exchange.

“ United Kingdom ” or “ UK ” means the United Kingdom of Great Britain and Northern Ireland.

“ UK CMA Approval ” means, only in the event the CMA has requested submission of a CMA Merger Notice or opened a CMA Merger Investigation: (a) the CMA having issued a decision that the Arrangement will not be subject to a CMA Phase 2 Reference (whether or not the Arrangement is subject to undertakings); or (b) the period for the CMA considering a merger notice under section 96 of the Enterprise Act having expired without a CMA Phase 2 Reference having been made.

“ United States ” or “ U.S. ” means the United States of America, its territories and possessions, any State of the4 United States and the District of Columbia.

“ Voting Agreements ” means each of the voting agreements made between the Purchaser and Acquireco, on one hand, and the ONCAP Parties and each of the directors of the Company and certain senior officers of the Company, on the other hand, copies of which have been filed under the Company’s SEDAR profile at www.SEDAR.com.

A - 12

APPENDIX “B” ARRANGEMENT RESOLUTION

BE IT RESOLVED THAT:

The arrangement (the “ Arrangement ”) under Section 291 of the Business Corporations Act (British Columbia) involving Pinnacle Renewable Energy Inc. (the “ Company ”), pursuant to the arrangement agreement among the Company, Drax Canadian Holdings Inc. and Drax Group plc (the “ Purchaser ”) dated February 7, 2021, as it may be modified, supplemented or amended from time to time in accordance with its terms (the “ Arrangement Agreement ”), as more particularly described and set forth in the management information circular of the Company dated March 1, 2021 (the “ Circular ”), and all transactions contemplated thereby, are hereby authorized, approved and adopted.
The plan of arrangement of the Company, as it has been or may be modified, supplemented or amended in accordance with the Arrangement Agreement and its terms (the “ Plan of Arrangement ”), the full text of which is set out as Appendix “D” to the Circular, is hereby authorized, approved and adopted.
The: (i) Arrangement Agreement and all the transactions contemplated therein; (ii) actions of the directors of the Company in approving the Arrangement and the Arrangement Agreement; and (iii) actions of the directors and officers of the Company in executing and delivering the Arrangement Agreement and any modifications, supplements or amendments thereto, and causing the performance by the Company of its obligations thereunder, are hereby ratified and approved.
The Company is hereby authorized to apply for a final order from the Supreme Court of British Columbia (the “ Court ”) to approve the Arrangement on the terms set forth in the Arrangement Agreement and the Plan of Arrangement (as they may be, or may have been, modified, supplemented or amended).
Notwithstanding that this resolution has been passed (and the Arrangement adopted) by the holders of common shares of the Company (the “ Company Shareholders ”) entitled to vote thereon or that the Arrangement has been approved by the Court, the directors of the Company are hereby authorized and empowered, without further notice to or approval of the Company Shareholders: (i) to amend, modify or supplement the Arrangement Agreement or the Plan of Arrangement to the extent permitted by their terms; and (ii) subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement and any related transactions.
Any officer or director of the Company is hereby authorized and directed, for and on behalf of the Company, to execute or cause to be executed and to deliver or cause to be delivered, whether under the corporate seal of the Company or otherwise, all such other documents and instruments and to perform or cause to be performed all such other acts and things as, in such person’s opinion, may be necessary or desirable to give full force and effect to the foregoing resolutions and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of any such other document or instrument or the doing of any such other act or thing.

B - 1

APPENDIX “C” ARRANGEMENT AGREEMENT

(See attached.)

C - 1

EXECUTION COPY

PINNACLE RENEWABLE ENERGY INC.

AND

DRAX GROUP PLC

AND

DRAX CANADIAN HOLDINGS INC.

ARRANGEMENT AGREEMENT

February 7, 2021

C - 2

TABLE OF CONTENTS

Page

	Page
ARTICLE 1	INTERPRETATION ................................................................................................. 2
1.1	Definitions.............................................................................................................. 2
1.2	Interpretation Not Affected by Headings ............................................................. 19
1.3	Number and Gender ............................................................................................. 19
1.4	Computation of Time ........................................................................................... 19
1.5	Time References .................................................................................................. 20
1.6	Currency ............................................................................................................... 20
1.7	Accounting Matters .............................................................................................. 20
1.8	Knowledge ........................................................................................................... 20
1.9	Statutes ................................................................................................................. 20
1.10	Agreements .......................................................................................................... 20
1.11	Joint Ventures ...................................................................................................... 20
1.12	Capitalized Terms ................................................................................................ 21
1.13	Schedules ............................................................................................................. 21
1.14	Company Disclosure Letter ................................................................................. 21
ARTICLE 2	THE ARRANGEMENT ......................................................................................... 21
2.1	Arrangement ........................................................................................................ 21
2.2	Interim Order ....................................................................................................... 21
2.3	Company Meeting ................................................................................................ 22
2.4	Purchaser Meeting ............................................................................................... 24
2.5	Company Circular ................................................................................................ 26
2.6	Purchaser Circular ................................................................................................ 27
2.7	Final Order ........................................................................................................... 29
2.8	Court Proceedings ................................................................................................ 29
2.9	Arrangement and Effective Date ......................................................................... 30
2.10	Payment of Consideration .................................................................................... 30
2.11	Announcement and Shareholder Communications .............................................. 31
2.12	Withholding Taxes ............................................................................................... 31
2.13	Guarantee of the Purchaser .................................................................................. 32
2.14	Adjustments to Consideration .............................................................................. 32
ARTICLE 3	REPRESENTATIONS AND WARRANTIES OF THE COMPANY ................... 32
3.1	Representations and Warranties ........................................................................... 32
3.2	Survival of Representations and Warranties ........................................................ 58
ARTICLE 4	REPRESENTATIONS AND WARRANTIES OF THE PURCHASER ............... 58
4.1	Representations and Warranties ........................................................................... 58
4.2	Survival of Representations and Warranties ........................................................ 60
ARTICLE 5	COVENANTS ........................................................................................................ 61
5.1	Covenants of the Company Regarding the Conduct of Business ........................ 61
5.2	Covenants of the Parties Relating to the Arrangement ........................................ 66

==> picture [198 x 34] intentionally omitted <==

C - 3

	TABLE OF CONTENTS
	Page
5.3	Covenants of the Company Relating to Incentive Awards .................................. 69
5.4	Regulatory Approvals .......................................................................................... 69
5.5	Company Non-Solicitation .................................................................................. 72
5.6	Purchaser Non-Solicitation .................................................................................. 78
5.7	Access to Information; Confidentiality ................................................................ 84
5.8	Insurance and Indemnification ............................................................................. 85
5.9	Pre-Acquisition Reorganization ........................................................................... 86
ARTICLE 6 CONDITIONS ........................................................................................................ 88
6.1	Mutual Conditions Precedent ............................................................................... 88
6.2	Additional Conditions Precedent to the Obligations of the Purchaser ................ 89
6.3	Conditions Precedent to the Obligations of the Company ................................... 90
6.4	Satisfaction of Conditions .................................................................................... 91
6.5	Notice of Breach .................................................................................................. 91
ARTICLE 7 TERM, TERMINATION, AMENDMENT AND WAIVER ................................. 91
7.1	Term ..................................................................................................................... 91
7.2	Termination .......................................................................................................... 92
7.3	Termination Payments ......................................................................................... 95
7.4	Amendment ........................................................................................................ 100
7.5	Waiver ................................................................................................................ 100
ARTICLE 8 GENERAL PROVISIONS ................................................................................... 100
8.1	Notices ............................................................................................................... 100
8.2	Governing Law .................................................................................................. 101
8.3	Injunctive Relief ................................................................................................. 102
8.4	Time of Essence ................................................................................................. 102
8.5	Entire Agreement, Binding Effect and Assignment .......................................... 102
8.6	No Liability ........................................................................................................ 102
8.7	Severability ........................................................................................................ 103
8.8	Waiver of Jury Trial ........................................................................................... 103
8.9	Third Party Beneficiaries ................................................................................... 103
8.10	Counterparts, Execution ..................................................................................... 104
SCHEDULE A FORM OF PLAN OF ARRANGEMENT
SCHEDULE B ARRANGEMENT RESOLUTION

C - 4

ARRANGEMENT AGREEMENT

THIS ARRANGEMENT AGREEMENT is made as of February 7, 2021

BETWEEN:

PINNACLE RENEWABLE ENERGY INC. , a corporation existing under the laws of British Columbia (the “ Company ”)

and -

DRAX GROUP PLC , a corporation existing under the laws of England and Wales (the “ Purchaser ”)

and -

DRAX CANADIAN HOLDINGS INC. , a corporation existing under the laws of British Columbia (“ Acquireco ”).

RECITALS:

A. The Purchaser proposes to acquire, through Acquireco, all of the issued and outstanding Company Shares and that all other equity interests of the Company be cancelled, in each case, in accordance with the Arrangement;
B. Upon the effectiveness of the Arrangement, Company Shareholders will receive the Consideration for each Company Share they hold;
C. The Company Board has unanimously determined, after receiving financial and legal advice and following the receipt and review of a unanimous recommendation from the Special Committee, that the Arrangement is in the best interests of the Company, and the Company Board has resolved to recommend that the Company Shareholders vote in favour of the Arrangement Resolution, all subject to the terms and the conditions contained in this Agreement;
D. The Purchaser and Acquireco have entered into the Voting Agreements with the LockedUp Shareholders, pursuant to which each of the Locked-Up Shareholders has agreed to vote its Company Shares in favour of the Arrangement Resolution on the terms and subject to the conditions set forth in the Voting Agreements; and
E. The parties hereto have entered into this Agreement to provide for the matters referred to in the foregoing recitals and for other matters related to the transaction herein provided for.

THEREFORE , in consideration of the covenants and agreements herein contained, the Parties agree as follows:

==> picture [210 x 32] intentionally omitted <==

C - 5

ARTICLE 1 INTERPRETATION

1.1 Definitions

Whenever used in this Agreement, the following words and terms have the meanings set out below:

“ Advance Ruling Certificate ” means an advance ruling certificate issued by the Commissioner pursuant to Section 102 of the Competition Act in respect of the transactions contemplated by this Agreement;

“ affiliate ” has the meaning ascribed thereto in the NI 45-106, in force as of the date of this Agreement;

“ Agreement ” means this arrangement agreement;

“ Anti-Spam Laws ” means An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commissions Act (Canada), the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act (Canada) and other Laws that regulate the same or similar subject matter;

“ Arrangement ” means the arrangement of the Company under Division 5 of Part 9 of the BCBCA on the terms and subject to the conditions set out in the Plan of Arrangement, subject to any amendments or variations thereto made in accordance with the terms of this Agreement and the Plan of Arrangement or made at the direction of the Court in the Final Order (with the prior written consent of the Company and the Purchaser, each acting reasonably);

“ Arrangement Resolution ” means the special resolution of the Company Shareholders approving the Plan of Arrangement which is to be considered at the Company Meeting substantially in the form of Schedule B hereto;

“ Authorization ” means, with respect to any Person, any authorization, Order, permit, approval, grant, licence, registration, waiver, certificate, writ or consent or similar authorization of, from or required by any Governmental Entity having jurisdiction over the Person;

“ BCBCA ” means the Business Corporations Act (British Columbia);

“ Breach of Security Safeguards ” means the actual or suspected theft, loss of, unauthorized access to, alteration or compromise of, unavailability of, or unauthorized disclosure or other processing of Personal Information;

==> picture [210 x 36] intentionally omitted <==

C - 6

“ Breaching Party ” has the meaning ascribed thereto in Section 7.2(b);

“ Business Day ” means any day, other than a Saturday, a Sunday or any day on which banks are closed or authorized to be closed for business in Vancouver, British Columbia, Toronto, Ontario or London, England;

“ Bump Transactions ” has the meaning ascribed thereto in Section 5.9(c);

“ Canadian Securities Laws ” means the Securities Act and the securities Laws of any other province or territory of Canada;

“ CARES Act ” means the Coronavirus Aid, Relief, and Economic Security Act (United States);

“ Cleanup ” means all actions required to: (a) clean-up, remove, treat or remediate Hazardous Substances in the indoor or outdoor environment; (b) perform pre-remedial studies and investigations and post-remedial monitoring and care; and (c) respond to requests for information or documents in any way relating to cleanup, removal, treatment or remediation or potential cleanup, removal, treatment or remediation of Hazardous Substances in the indoor or outdoor environment;

“ CMA ” means United Kingdom Competition and Markets Authority;

“ CMA Merger Investigation ” means a formal investigation undertaken by the CMA for the purposes of deciding whether or not to make a CMA Phase 2 Reference;

“ CMA Merger Notice ” means a notice given to the CMA pursuant to section 96 of the Enterprise Act;

“ CMA Phase 2 Reference ” means a reference by the CMA pursuant to section 33 of the Enterprise Act;

“Code” means the U.S. Internal Revenue Code of 1986, as amended;

“ Commissioner ” means the Commissioner of Competition appointed under subsection 7(1) of the Competition Act and includes any Person designated by the Commissioner to act on his or her behalf;

“ Company Acquisition Proposal ” means, other than the transactions contemplated by this Agreement and other than any transaction involving only the Company and/or one of its whollyowned Subsidiaries, any offer, proposal or inquiry from any Person or group of Persons (other than the Purchaser or any affiliate of the Purchaser), whether or not in writing and whether or not delivered to the Company Shareholders, relating to: (a) any direct or indirect acquisition, purchase, sale or disposition (or any lease, offtake, throughput or long-term supply agreement or other arrangement having the same economic effect as a sale), through one or more transactions, of (i) the assets of the Company and/or one or more of its Subsidiaries that, individually or in the aggregate, constitute 20% or more of the consolidated assets of the Company and its Subsidiaries, taken as a whole, or which contribute 20% or more of the consolidated revenue of the Company

==> picture [210 x 36] intentionally omitted <==

C - 7

and its Subsidiaries, taken as a whole, or (ii) 20% or more of any voting or equity securities of the Company or 20% or more of any voting or equity securities of any one or more of any of the Company’s Subsidiaries that, individually or in the aggregate, contribute 20% or more of the consolidated revenues or constitute 20% or more of the consolidated assets of the Company and its Subsidiaries, taken as a whole (in each case, determined based upon the most recently publicly available consolidated financial statements of the Company); (b) any direct or indirect take-over bid, tender offer, exchange offer, sale or issuance of securities or other transaction that, if consummated, would result in such Person or group of Persons beneficially owning 20% or more of any class of voting or equity securities (including securities convertible into or exercisable or exchangeable for voting or equity securities) of the Company or any of its Subsidiaries that, individually or in the aggregate, contribute 20% or more of the consolidated revenues or constitute 20% or more of the consolidated assets of the Company and its Subsidiaries, taken as a whole; or (c) a plan of arrangement, merger, amalgamation, consolidation, share exchange, share reclassification, business combination, reorganization, recapitalization, liquidation, dissolution, winding up or other similar transaction or series of transactions involving the Company or any of its Subsidiaries that, if consummated, would result in such Person or group of Persons beneficially owning 20% or more of any class of voting or equity securities (including securities convertible into or exercisable or exchangeable for voting or equity securities) of the Company or any of its Subsidiaries that, individually or in the aggregate, contribute 20% or more of the consolidated revenues or constitute 20% or more of the consolidated assets of the Company and its Subsidiaries, taken as a whole;

“ Company Benefit Plans ” means all health, welfare, dental, vision, sickness, death, life, cafeteria, flexible spending, supplemental unemployment benefit, bonus, change of control, profit sharing, insurance, incentive compensation, deferred compensation, share purchase, share options, share compensation or other equity-based compensation plans, disability, fringe benefit, pension, supplemental pension, retirement income or savings plans, vacation or other paid time off, severance, employment or individual consulting agreements and any other material employee compensation arrangement or benefit plans, trust, funds, policies, programs, arrangements, or practices, whether oral or written, which are (a) sponsored, maintained, contributed to or required to be contributed to by the Company or its Subsidiaries, or (b) for which the Company or its Subsidiaries has any liability or contingent liability with respect to any current or former employee, officer, director or independent contractor of the Company or any of its Subsidiaries, excluding Statutory Plans, but including the Company Legacy Option Plan;

“ Company Board ” means the board of directors of the Company as the same is constituted from time to time;

“ Company Board Recommendation ” has the meaning ascribed thereto in Section 2.5(c);

“ Company Budget ” means the Company annual budget for 2021 appended to the Company Disclosure Letter;

“ Company Change in Recommendation ” has the meaning ascribed thereto in Section 7.2(a)(iii)(A);

==> picture [210 x 36] intentionally omitted <==

C - 8

“ Company Circular ” means the notice of the Company Meeting and accompanying management information circular, including all schedules, appendices and exhibits thereto and enclosures therewith, to be sent to the Company Shareholders in connection with the Company Meeting, as amended, supplemented or otherwise modified from time to time;

“ Company Disclosure Letter ” means the disclosure letter dated the date of this Agreement executed and delivered by the Company to the Purchaser in connection with the execution of this Agreement;

“ Company Fairness Opinions ” has the meaning ascribed thereto in Section 3.1(mm)(i);

“ Company Financial Advisors ” has the meaning ascribed thereto in Section 3.1(mm)(i);

“ Company Intervening Event Notice ” has the meaning ascribed thereto in Section 5.5(f)(ii);

“ Company Intervening Event Period ” has the meaning ascribed thereto in Section 5.5(f)(ii);

“ Company Legacy Option Plan ” means the amended and restated stock option plan of the Company approved by the Company Board on January 29, 2018;

“ Company LTIP ” means the amended and restated omnibus long-term incentive plan of the Company dated May 7, 2019;

(a) any change, development or condition generally affecting the industrial wood pellet industry or the supply of wood fibre to the industrial wood pellet industry;
(b) any change, development or condition in global, national or regional political conditions (including any protest, riot, facility takeover for emergency purposes, outbreak of hostilities or war, or acts of espionage, sabotage or terrorism, or any escalation or worsening of the foregoing) or any earthquake, flood, forest fire, or other natural disaster;
(c) any epidemic, pandemic or outbreak of illness (including COVID-19 and any COVID-19 Measures) or health crisis or public health event, or any worsening of any of the foregoing;

==> picture [210 x 36] intentionally omitted <==

C - 9

(d) any change or development in general economic, business, banking or regulatory conditions or in financial, credit, commodities or securities markets in Canada or the United States;
(e) any change in applicable generally acceptable accounting principles, including IFRS;
(f) changes, developments or conditions in or relating to currency exchange, interest or inflation rates;
(g) any adoption, proposal, implementation or change in applicable Laws or in any interpretation, application or non-applications of any applicable Laws by any Governmental Entity;
(h) the execution, announcement or pendency of this Agreement or consummation of the Arrangement, including any lawsuit brought by Company Shareholders in respect of this Agreement or the transactions contemplated hereby;
(i) any actions or inactions expressly required by this Agreement or Law or that are taken (or omitted to be taken) at the request, or with the prior written consent, of the Purchaser (provided that this clause (i) shall not apply with respect to any representation or warranty the purpose of which is to address the consequences resulting from the execution and delivery of this Agreement or the consummation of the transactions contemplated by this Agreement or the performance of obligations under this Agreement);
(j) any matter which has been disclosed by the Company in the Company Disclosure Letter;
(k) any change in the market price or trading volume of any securities of the Company or any suspension of trading in securities generally on any securities exchange on which any securities of the Company trade (it being understood that the causes underlying such changes in market price or trading volume or suspension of trading may be taken into account, to the extent not referred to in paragraphs (a) to (j) above, in determining whether a Company Material Adverse Effect has occurred); or
(l) the failure, in and of itself, of the Company to meet any internal, published or public projections, forecasts, guidance or estimates, including of revenues, earnings, cash flows or other financial operating metrics before, on or after the date of this Agreement (it being understood that the causes underlying such failure may be taken into account, to the extent not referred to in paragraphs (a) to (j) above, in determining whether a Company Material Adverse Effect has occurred);

==> picture [210 x 36] intentionally omitted <==

C - 10

adversely affects the Company and its Subsidiaries, taken as a whole, compared to other companies operating in the business or industry in which the Company and its Subsidiaries operate; and (ii) references in this Agreement to dollar amounts are not intended to be and shall not be deemed to be illustrative or interpretative for purposes of determining whether a Company Material Adverse Effect has occurred;

“ Company Material Contract ” means in respect of the Company or any of its Subsidiaries, any Contract:

(a) that if terminated or modified or if it ceased to be in effect, would reasonably be expected to have a Company Material Adverse Effect;
(b) entered into since January 1, 2018 regarding the acquisition of a Person or business with a purchase price in excess of $5,000,000, whether in the form of an asset purchase, merger, consolidation or otherwise (including any such agreement, contract or letter of intent that has closed but under which one or more of the parties has executory indemnification, earn-out or other liabilities);
(c) under which the Company or any of its Subsidiaries has directly or indirectly loaned or advanced to a third party or guaranteed any liabilities or obligations of an arm’s length Person;
(d) that is a lease, sublease, license or right of way or occupancy agreement for Leased Real Property which is material to the business of the Company and its Subsidiaries, taken as a whole;
(e) that provides for the establishment of, investment in or formation of any partnership or joint venture with an arm’s length Person;
(f) relating to indebtedness for borrowed money in excess of $5,000,000, whether incurred, assumed or secured by any asset;
(g) restricting the incurrence of indebtedness by the Company or any of its Subsidiaries or (including by requiring the granting of an equal and rateable Lien) the incurrence of any Liens on any properties or assets of the Company or any of its Subsidiaries;
(h) under which the Company or any of its Subsidiaries is obligated to make or expects to receive payments in excess of $2,000,000 in any 12-month period or $7,500,000 over the remaining term of the contract;
(i) that creates an exclusive dealing arrangement (including exclusive sales, agency and distribution agreements) or right of first offer;
(j) that purports to limit or restrict the Company or any of its affiliates in any material respect from engaging in any line of business or in any geographic area;

==> picture [210 x 36] intentionally omitted <==

C - 11

(k) that is a collective bargaining agreement, a labour union contract or any other memorandum of understanding or other agreement with a union;
(l) under which the Company has granted any Person registration rights (including demand and piggy-back registration rights); or
(m) with a Governmental Entity, which is material to the business of the Company and its Subsidiaries, taken as a whole.

“ Company Meeting ” means the special meeting of the Company Shareholders, including any adjournment or postponement thereof, to be called and held in accordance with the Interim Order to consider the Arrangement Resolution;

“ Company Options ” means outstanding options to purchase Company Shares granted under the Company Legacy Option Plan or the Company LTIP;

“ Company Property ” has the meaning ascribed thereto in Section 3.1(ff);

“ Company Proposed Agreement ” has the meaning ascribed thereto in Section 5.5(h);

“ Company Public Documents ” means all forms, reports, schedules, statements and other documents which are publicly filed by the Company on SEDAR pursuant to Canadian Securities Laws;

“ Company Response Period ” has the meaning ascribed thereto under Section 5.6(h)(v);

“ Company RSUs ” means restricted share units issued under the Company LTIP;

“ Company Shareholder Approval ” means the approval of the Arrangement Resolution by the Company Shareholders at the Company Meeting as required by the Interim Order;

“ Company Shareholders ” means the registered and/or beneficial holders of Company Shares;

“ Company Shares ” means the common shares in the authorized share capital of the Company;

“ Company Superior Proposal ” means an unsolicited bona fide written Company Acquisition Proposal to acquire not less than all of the outstanding Company Shares not already owned by the Person making such Company Acquisition Proposal or all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis made by an arm’s length third party after the date of this Agreement: (a) that did not result from or involve a breach of Section 5.5 of this Agreement; (b) that is not subject to any financing condition and in respect of which it has been demonstrated to the satisfaction of the Company Board, acting in good faith, that adequate arrangements have been made in respect of any financing required to complete such Company Acquisition Proposal; (c) that is not subject to a due diligence and/or access condition; (d) that is reasonably capable of being consummated without undue delay, taking into account all legal, financial, regulatory and other aspects of such Company Acquisition Proposal and the Person making such Company Acquisition Proposal; and (e) in respect of which the Company Board

==> picture [210 x 36] intentionally omitted <==

C - 12

determines in good faith, after consultation with its outside financial and legal advisors, and after taking into account all the terms and conditions of such Company Acquisition Proposal, including all legal, financial, regulatory and other aspects of such Company Acquisition Proposal and the party making such Company Acquisition Proposal, would, if consummated in accordance with its terms (but without assuming away the risk of non-completion), result in a transaction that is more favourable, from a financial point of view, to the Company Shareholders, than the Arrangement (taking into account any amendments to the terms and conditions of the Arrangement proposed by the Purchaser pursuant to Section 5.5(i));

“ Company Superior Proposal Notice ” has the meaning ascribed thereto in Section 5.5(h)(iii);

“ Company Termination Payment ” has the meaning ascribed thereto in Section 7.3(b);

“ Company Termination Payment Event ” has the meaning ascribed thereto in Section 7.3(c);

“ Competition Act ” means the Competition Act (Canada);

“ Competition Act Approval ” means that, in connection with the transactions contemplated by this Agreement, either (i) the (a) applicable waiting periods under subsection 123(1) of the Competition Act shall have expired or have been terminated in accordance with subsection 123(2) of the Competition Act or the obligation to provide a pre-merger notification in accordance with Part IX of the Competition Act shall have been waived in accordance with paragraph 113(c) of the Competition Act, and (b) the Commissioner shall have issued a written confirmation that he does not, at that time, intend to make an application under section 92 of the Competition Act in respect of the transactions contemplated by this Agreement; or (ii) the Commissioner shall have issued an Advance Ruling Certificate under Section 102 of the Competition Act in respect of the transactions contemplated by this Agreement;

“ Confidentiality Agreement ” means the confidentiality agreement between the Company and Drax Corporate Limited dated October 15, 2020;

“ Consideration ” means $11.30 in cash per Company Share;

“ Contract ” means any written or oral contract, agreement, license, franchise, lease, arrangement, commitment, joint venture, partnership or other right or obligation to which a Party or any of its Subsidiaries is a party or by which it or any of its Subsidiaries is bound or to which any of their respective properties or assets is subject;

“ Court ” means the Supreme Court of British Columbia or other competent court, as applicable;

“ COVID-19 ” means SARS-CoV-2 or COVID-19, and any evolutions, variants or mutations thereof or related or associated epidemics, pandemics or disease outbreaks;

==> picture [210 x 36] intentionally omitted <==

C - 13

remedy, respond to or otherwise address the actual or reasonably anticipated effects or impacts of COVID-19, including to protect the health and safety of the employees of the Company and its Subsidiaries and the Joint Ventures and other individuals having business dealings with the Company or to respond to third party supply or service disruptions caused by COVID-19;

“ Data Room ” means the material contained in the virtual data room hosted by Intralinks, Inc. and established by the Company as at 5:00 p.m. (Toronto time) on February 5, 2021, the index of documents of which is appended to the Company Disclosure Letter;

“ Depositary ” means TSX Trust Company, or such other Person as the Company may appoint to act as depositary in relation to the Arrangement, with the approval of the Purchaser, acting reasonably;

“ Disclosed Personal Information ” has the meaning ascribed thereto in Section 5.7(d).

“ Dissent Rights ” means the rights of dissent in respect of the Arrangement described in the Plan of Arrangement;

“ Effective Date ” means the date on which the Arrangement becomes effective, as set out in Section 2.9;

“ Effective Time ” means the time on the Effective Date that the Arrangement becomes effective, as set out in the Plan of Arrangement;

“ Enterprise Act ” means the Enterprise Act 2002 (United Kingdom);

“ Environmental Claim ” means any claim, action, cause of action, investigation or written notice by any Person alleging liability (including liability for investigatory costs, Cleanup costs, governmental response costs, natural resource damages, property damages, personal injuries or penalties) arising out of, based on or resulting from the presence, or Release into the environment, of an Hazardous Substance at any location, whether or not owned or operated by the Company;

“ Environmental Laws ” means all Laws relating to pollution, to the protection or quality of the environment, to the Release of Hazardous Substances to the environment, to protection of natural resources, to occupational health and safety, or to management of waste, and all Authorizations issued pursuant to such Laws;

“ ERISA ” means the U.S. Employee Retirement Income Security Act of 1974, as amended;

“ FCA ” means the United Kingdom Financial Conduct Authority;

“ Final Order ” means the final order of the Court in a form acceptable to the Purchaser and the Company, each acting reasonably, pursuant to Section 291 of the BCBCA approving the Arrangement, as such order may be amended, modified, supplemented or varied by the Court (with the consent of both the Purchaser and the Company, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or

==> picture [210 x 36] intentionally omitted <==

C - 14

as amended (provided that any such amendment is acceptable to both the Purchaser and the Company, each acting reasonably) on appeal;

“ First Nations Claim ” means any and all claims (whether or not proven) by any Person to or in respect of:

(a) rights, title or interest of any First Nations Group by virtue of its status as a First Nations Group;
(b) treaty rights;
(c) Métis rights, title or interests; or
(d) specific or comprehensive claims being considered by the Government of Canada,

and includes any alleged or proven failure of the Crown to satisfy any of its duties to any claimant of any of the foregoing, whether such failure is in respect of matters before, on or after the date hereof;

“ First Nations Group ” means any first nations and/or indigenous and/or aboriginal person(s), tribe(s), band(s) and/or group(s) of Canada;

“ GDPR ” means Regulation 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation);

“ Governmental Entity ” means: (a) any international, multinational, national, federal, provincial, territorial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, commissioner, board, minister, ministry, bureau, agency or instrumentality, domestic or foreign; (b) any stock exchange, including the TSX and the London Stock Exchange; (c) any subdivision, agent, commission, board or authority of any of the foregoing; or (d) any quasi-governmental or private body, including any tribunal, commission, regulatory agency or self-regulatory organization, exercising any regulatory, antitrust, foreign investment, expropriation or taxing authority under or for the account of any of the foregoing;

“ Hazardous Substances ” means any material or substance that is prohibited, listed, defined, designated or classified as dangerous, hazardous, radioactive, explosive, corrosive, flammable, leachable, oxidizing, or toxic or a pollutant or a contaminant under or pursuant to any applicable Environmental Laws, and including petroleum and all derivatives thereof or synthetic substitutes therefor (including polychlorinated biphenyls);

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvement Act of 1976 , as amended;

“ HSR Approval ” means the waiting period (and any extension thereof) under the HSR Act shall have been terminated or shall have expired;

==> picture [210 x 36] intentionally omitted <==

C - 15

“ IFRS ” means generally accepted accounting principles in Canada from time to time including, for the avoidance of doubt, the standards prescribed in Part I of the CPA Canada Handbook - Accounting (International Financial Reporting Standards) as the same may be amended, supplemented or replaced from time to time;

“ including ” means including without limitation, and “ include ” and “ includes ” have a corresponding meaning;

“ Interim Order ” means the interim order of the Court contemplated by Section 2.2 of this Agreement and made pursuant to the BCBCA in a form acceptable to the Company and the Purchaser, each acting reasonably, providing for, among other things, the calling and holding of the Company Meeting, as the same may be amended, modified, supplemented or varied by the Court (with the consent of the Company and the Purchaser, each acting reasonably);

“ Key Consent ” means the consent listed in Schedule A to the Company Disclosure Letter;

“ Key Regulatory Approvals ” means Competition Act Approval, HSR Approval and, if applicable, UK CMA Approval;

“ Law ” or “ Laws ” means, with respect to any Person, any applicable laws (including common law), by-laws, statutes, rules, regulations, principles of law and equity, orders, rulings, ordinances, judgments, injunctions, determinations, awards, decrees or other legally binding requirements, whether domestic or foreign, and the terms and conditions of any Authorization of or from any Governmental Entity, and, for greater certainty, includes Canadian Securities Laws;

“ Leases ” means Contracts pursuant to which the Company or any of the Subsidiaries uses or occupies the Leased Real Property;

“ Leased Real Property ” has the meaning ascribed thereto in Section 3.1(ee)(ii);

“ Liens ” means any hypothecs, mortgages, pledges, liens, charges, security interests, easements, encumbrances and adverse rights or claims, whether contingent or absolute;

“ Locked-Up Shareholders ” means the ONCAP Parties, the directors of the Company and certain senior officers of the Company;

“ LR Cap ” has the meaning ascribed thereto in Section 7.3(i);

“ made available ” means copies of the subject materials were included in the Data Room;

==> picture [210 x 36] intentionally omitted <==

C - 16

“ MI 61-101 ” means Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ;

“ misrepresentation ” has the meaning ascribed thereto in the Securities Act;

“ NI 45-106 ” means National Instrument 45-106 – Prospectus Exemptions ;

“ NI 52-109 ” means National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings ;

“ ONCAP Parties ” means, collectively, ONCAP Investment Partners II L.P., ONEX Parallel Investment (ONCAP) LP, ONCAP (US) II-A L.P., ONCAP (US) II L.P., ONCAP II L.P. and Biomass EI Ltd.;

“ Ordinary Course ” means, with respect to an action taken by the Company or its Subsidiary or a Joint Venture, as applicable, that such action is consistent with the past practices of the Company or such Subsidiary or Joint Venture, and is taken in the ordinary course of the normal day-to-day operations of the business of the Company or such Subsidiary or Joint Venture;

“ Outside Date ” means September 7, 2021, or such later date as may be agreed to in writing by the Parties;

“ Parties ” means the Company, the Purchaser, and Acquireco and “ Party ” means any one of them, as the context requires;

“ Permitted Dividend ” means the regular quarterly cash dividend paid to Company Shareholders by the Company in an amount not to exceed $0.0375 per Company Share payable in the second and third calendar quarters of 2021 on timing substantially consistent with the Company’s historical and normal course practice;

“ Permitted Liens ” means, in respect of the Company or any of its Subsidiaries, any one or more of the following:

(a) Liens for Taxes that are not at the time due and payable or otherwise contested in good faith or for which adequate reserves have been established;
(b) restrictions, covenants, land use contracts, rent charges, building schemes, declarations of covenants, conditions and restrictions, servicing agreements, or other registered agreements or instruments in favour of any Governmental Entity, easements, rights-of-way, servitudes, rental pool agreements or other similar rights granted to or reserved by other persons or properties, which individually or in the aggregate do not materially impair the use of or the operation of the business of

==> picture [210 x 36] intentionally omitted <==

C - 17

such Person or the property subject thereto and provided that same have been complied with;

(c) inchoate or statutory Liens or privileges imposed by Law such as contractors, subcontractors, carriers, warehousemen’s, mechanics, builder’s, workers, suppliers, and materialmen’s and others in respect of the construction, maintenance, repair or operation of real or personal property;
(d) any security given to a public or private utility or other service provider or any other Governmental Entity when required by such utility or other Governmental Entity in connection with the operations of such person in the Ordinary Course, but only to the extent relating to costs and expenses for which payment is not due;
(e) any right reserved to or vested in any Governmental Entity by the terms of any permit, licence, certificate, order, grant, classification (including any zoning laws and ordinances and similar legal requirements), registration or other consent, approval or authorization acquired by such person from any Governmental Entity or by any Law, to terminate any such permit, licence, certificate, order, grant, classification, registration or other consent, approval or authorization or to require annual or other payments as a condition to the continuance thereof;
(f) the reservations, exceptions, limitations, provisos and conditions, if any, expressed in any grants from any Governmental Entity;
(g) such other imperfections or irregularities of title or Lien that, in each case, do not materially adversely affect the use of the property or assets subject thereto or otherwise materially adversely impair business operations of such properties;
(h) purchase money liens and liens securing rental payments under capital lease arrangements;
(i) any Liens granted in connection with credit, loan or financing Contracts that have been disclosed in the Data Room;
(j) any Liens, other than those described above, that are registered or recorded against title to any property as of January 19, 2021; and
(k) Liens as listed and described in Section 1.1 of the Company Disclosure Letter;

“ Person ” includes an individual, partnership, trust, association, body corporate, trustee, executor, administrator, legal representative, government (including any Governmental Entity) or any other entity, whether or not having legal status;

“ Personal Information ” means information about an identifiable individual in the possession or under the control of the Company or any of its Subsidiaries;

==> picture [210 x 36] intentionally omitted <==

C - 18

“ Plan of Arrangement ” means the plan of arrangement of the Company, substantially in the form of Schedule A hereto, and any amendments or variations thereto made in accordance with this Agreement and the Plan of Arrangement or upon the direction of the Court (with the prior written consent of the Company and the Purchaser, each acting reasonably) in the Final Order;

“ Pre-Acquisition Reorganization ” has the meaning ascribed thereto in Section 5.9(a);

“ Privacy Laws ” means all Laws regarding the collection, use, disclosure or other processing of Personal Information, and includes Anti-Spam Laws;

“ Proceeding ” means any suit, claim, action, charge, complaint, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, audit, examination or investigation commenced, brought, conducted or heard by or before, any court or other Governmental Entity;

“ Public Official ” has the meaning ascribed thereto in Section 3.1(hh);

“ Purchaser Acquisition Proposal ” means, other than any transaction involving only the Purchaser and/or one of its wholly-owned Subsidiaries, any offer, proposal or inquiry from any Person or group of Persons (other than the Company or any affiliate of the Company), whether or not in writing and whether or not delivered to the Purchaser Shareholders, relating to: (a) any direct or indirect acquisition, purchase, sale or disposition, through one or more transactions, of (i) the assets of the Purchaser and/or one or more of its Subsidiaries that, individually or in the aggregate, constitute 20% or more of the consolidated assets of the Purchaser and its Subsidiaries, taken as a whole, or which contribute 20% or more of the consolidated revenue of the Purchaser and its Subsidiaries, taken as a whole, or (ii) 20% or more of any voting or equity securities of the Purchaser or 20% or more of any voting or equity securities of any one or more of any of the Purchaser’s Subsidiaries that, individually or in the aggregate, contribute 20% or more of the consolidated revenues or constitute 20% or more of the consolidated assets of the Purchaser and its Subsidiaries, taken as a whole (in each case, determined based upon the most recently publicly available consolidated financial statements of the Purchaser), provided, however, that any financing activities undertaken by the Purchaser and its Subsidiaries in the ordinary course of business (including any securitisations of any receivables or revenues) shall not constitute a direct or indirect acquisition, purchase, sale or disposition for purposes of this clause (a); (b) any direct or indirect take-over bid, tender offer, exchange offer, sale or issuance of securities or other transaction that, if consummated, would result in such Person or group of Persons beneficially owning 20% or more of any class of voting or equity securities (including securities convertible into or exercisable or exchangeable for voting or equity securities) of Purchaser or any of its Subsidiaries that, individually or in the aggregate, contribute 20% or more of the consolidated revenues or constitute 20% or more of the consolidated assets of the Purchaser and its Subsidiaries, taken as a whole; or (c) a scheme of arrangement, merger, amalgamation, consolidation, share exchange, share reclassification, business combination, reorganization, recapitalization, liquidation, dissolution, winding up or other similar transaction or series of transactions involving the Purchaser or any of its Subsidiaries that, if consummated, would result in such Person or group of Persons beneficially owning 20% or more of any class of voting or equity securities (including securities convertible into or exercisable or exchangeable for voting or equity securities) of the

==> picture [210 x 36] intentionally omitted <==

C - 19

Purchaser or any of its Subsidiaries that, individually or in the aggregate, contribute 20% or more of the consolidated revenues or constitute 20% or more of the consolidated assets of the Purchaser and its Subsidiaries, taken as a whole;

“ Purchaser Board ” means the board of directors of the Purchaser, as the same is constituted from time to time;

“ Purchaser Board Recommendation ” has the meaning ascribed thereto in Section 2.6(c);

“ Purchaser Change in Recommendation ” has the meaning ascribed thereto in Section 7.2(a)(iv)(C);

“ Purchaser Circular ” means the class 1 circular of the Purchaser, including the notice of general meeting of the Purchaser and all schedules, appendices and exhibits to, and information incorporated by reference in, such class 1 circular, to be sent to the Purchaser Shareholders in connection with the Purchaser Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement;

“ Purchaser Intervening Event ” means any event, development, circumstance, change, effect, condition or occurrence that, as of the date of this Agreement, was not known to the Purchaser Board;

“ Purchaser Intervening Event Notice ” has the meaning ascribed thereto in Section 5.6(f)(ii);

“ Purchaser Intervening Event Period ” has the meaning ascribed thereto in Section 5.6(f)(ii);

“ Purchaser Material Adverse Effect ” has the meaning ascribed thereto in Section 4.1(a);

“ Purchaser Meeting ” means the general meeting of the Purchaser Shareholders, including any adjournment or postponement thereof, to be convened to vote on the Purchaser Resolution (and for any other purpose as may be set out in the Purchaser Circular and agreed to in writing by the Company, acting reasonably);

“ Purchaser Proposed Agreement ” has the meaning ascribed thereto in Section 5.6(h);

“ Purchaser Response Period ” has the meaning ascribed thereto under Section 5.5(h)(v);

“ Purchaser Shareholder Approval ” means the approval of the Purchaser Resolution by the Purchaser Shareholders at the Purchaser Meeting by a simple majority of votes eligible to vote and voting (either in person or by proxy);

“ Purchaser Shareholders ” means the registered and/or beneficial holders of the Purchaser Shares, as the context requires;

==> picture [210 x 36] intentionally omitted <==

C - 20

“ Purchaser Shares ” means the ordinary shares in the authorized share capital of the Purchaser;

“ Purchaser Superior Proposal ” means an unsolicited bona fide written Purchaser Acquisition Proposal to acquire not less than 50% of the outstanding Purchaser Shares or all or substantially all of the assets of the Purchaser and its Subsidiaries on a consolidated basis made by an arm’s length third party after the date of this Agreement: (a) that did not result from or involve a breach of Section 5.6 of this Agreement; (b) in respect of which the Purchaser Board determines in good faith, after consultation with its outside financial and legal advisors, and after taking into account all the terms and conditions of such Purchaser Acquisition Proposal, including all legal, financial, regulatory and other aspects of such Purchaser Acquisition Proposal and the party making such Purchaser Acquisition Proposal, would, if consummated in accordance with its terms (but without assuming away the risk of non-completion), result in a transaction that is more favourable to the Purchaser Shareholders than the Arrangement (taking into account any amendments to the terms and conditions of the Arrangement proposed by the Company pursuant to Section 5.6(i)); and (c) that is reasonably capable of being consummated in accordance with the terms proposed;

“ Purchaser Termination Payment ” has the meaning ascribed thereto in Section 7.3(b)(ii);

“ Real Property ” means Company Property and Leased Real Property;

“ Regulatory Approvals ” means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of notice without an objection being made) of Governmental Entities required in relation to the transactions contemplated hereby, including the Key Regulatory Approvals;

“ Release ” means any spill, leak, pumping, addition, pouring, emission, emptying, discharge, injection, escape, leaching, disposal, dumping, deposit, spraying, burial, abandonment, incineration, seepage, placement or introduction of a Hazardous Substance into the environment;

“ Representatives ” means, with respect to any Person, its and its Subsidiaries’ officers, directors, employees, representatives (including any financial and other advisors) and agents;

“ Sanction Laws ” has the meaning ascribed thereto in Section 3.1(jj);

“ Securities Act ” means the Securities Act (British Columbia);

“ Securities Authority ” means the applicable securities commission or securities regulatory authority of a province or territory of Canada;

“ Special Committee ” means the special committee of independent directors of the Company Board;

“ Statutory Plans ” means statutory benefit plans which the Company and any of its Subsidiaries are required to participate in or comply with, including any benefit plan administered by any federal, provincial, or state Governmental Entity and any benefit plans administered pursuant to applicable health, Tax, workplace safety insurance, and employment insurance Laws;

==> picture [210 x 36] intentionally omitted <==

C - 21

“ Subsidiary ” has the meaning ascribed thereto in the NI 45-106, in force as of the date of this Agreement, and, without limiting the generality of the foregoing, the Joint Ventures shall be deemed to be Subsidiaries of the Company for purposes of the representations and warranties in Section 3.1;

“ Tax ” or “ Taxes ” means (a) any taxes, duties, fees, premiums, assessments, imposts, levies and other like charges or assessments of any kind whatsoever imposed by any Governmental Entity, whether computed on a separate, consolidated, unitary, combined or other basis, and including those levied on, or measured by, or referred to as, income, gross receipts, profits, windfall, royalty, capital, capital stock, production, recapture, transfer, land transfer, license, gift, occupation, wealth, environment, net worth, indebtedness, surplus, sales, goods and services, harmonized sales, use, value-added, excise, special assessment, stamp, withholding, business, franchising, real or personal property, development, occupancy, employer health, payroll, workers’ compensation, employment or unemployment, health, utility, social services, education and social security taxes, all surtaxes, all customs duties and import and export taxes, countervail and anti-dumping, all licence, franchise and registration fees and all employment insurance, health insurance and Canada, Québec and other pension plan premiums or contributions imposed by any Governmental Entity; (b) all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Entity in respect of amounts of the type described in clause (a) or this clause (b); (c) any liability for the payment of any amounts of the types described in clauses (a) or (b) as a result of being a member of an affiliated, consolidated, combined or unitary group for any period; and (d) any liability for the payment of any amounts of the type described in clauses (a) or (b) as a result of any express or implied obligation to indemnify any other Person;

“ Tax Act ” means the Income Tax Act (Canada);

“ Tax Returns ” means returns, reports, declarations, elections, designations, notices, filings, forms, statements and other documents (whether in tangible, electronic or other form) and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto, made, prepared, filed or required by a Governmental Entity to be made, prepared or filed by Law in respect of Taxes;

“ Terminating Party ” has the meaning ascribed thereto in Section 7.2(b);

“ Termination Notice ” has the meaning ascribed thereto in Section 7.2(b);

“ Termination Payment ” means a Purchaser Termination Payment or a Company Termination Payment, as applicable;

“ Third Party Beneficiaries ” has the meaning ascribed thereto in Section 8.9;

“ Third Party Consents ” has the meaning ascribed thereto in Section 5.2(c);

“ TSX ” means the Toronto Stock Exchange;

“ UK CMA Approval ” means, only in the event the CMA has requested submission of a CMA Merger Notice or opened a CMA Merger Investigation: (a) the CMA having issued a decision that

==> picture [210 x 36] intentionally omitted <==

C - 22

the Arrangement will not be subject to a CMA Phase 2 Reference (whether or not the Arrangement is subject to undertakings); or (b) the period for the CMA considering a merger notice under section 96 of the Enterprise Act having expired without a CMA Phase 2 Reference having been made;

“ UK Listing Rules ” means the rules and regulations made by the FCA pursuant to Part 6, section 73A of the Financial Services and Markets Act 2000 and contained in the FCA’s publication of the same name;

“ UK Securities Laws ” means the UK Financial Services and Markets Act 2000 , the UK Listing Rules and the UK Disclosure Guidance and Transparency Rules, together with all other applicable securities Laws, rules and regulations and published policies thereunder (including in respect of the disclosure of inside information);

“ UK VAT ” means (a) any value added Tax imposed by the United Kingdom Value Added Tax Act 1994 and legislation and regulations supplemental thereto and (b) any other Taxes of a similar nature imposed in the United Kingdom in substitution for, or levied in addition to, the Taxes referred to in clause (a) of this definition;

“ VAT Group ” has the meaning ascribed thereto in Section 7.3(f); and

“ Voting Agreements ” means the voting agreements dated the date hereof and made between the Purchaser, Acquireco and the Locked-Up Shareholders setting forth the terms and conditions on which the Locked-Up Shareholders have agreed to vote their Company Shares in favour of the Arrangement Resolution.

1.2 Interpretation Not Affected by Headings

The division of this Agreement into Articles, Sections, subsections and paragraphs and the insertion of headings are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. Unless the contrary intention appears, references in this Agreement to an Article, Section, subsection, paragraph or Schedule by number or letter or both refer to the Article, Section, subsection, paragraph or Schedule, respectively, bearing that designation in this Agreement.

1.3 Number and Gender

In this Agreement, unless the contrary intention appears, words importing the singular include the plural and vice versa , and words importing gender shall include all genders.

1.4 Computation of Time

If the date on which any action is required to be taken hereunder by a Party is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day.

==> picture [210 x 36] intentionally omitted <==

C - 23

1.5 Time References

In this Agreement, unless otherwise expressly provided or unless the contrary intention appears, references to time are to local time in Vancouver, British Columbia.

1.6 Currency

Unless otherwise stated, all references in this Agreement to (a) sums of money are expressed in lawful money of Canada and “$” refers to Canadian dollars, and (b) “US$” refers to United States dollars.

1.7 Accounting Matters

Unless otherwise stated, all accounting terms used in this Agreement in respect of the Company shall have the meanings attributable thereto under IFRS and all determinations of an accounting nature in respect of the Company required to be made shall be made in accordance with IFRS consistently applied.

1.8 Knowledge

In this Agreement, references to “the knowledge of the Company” means the actual knowledge of Duncan Davies (Chief Executive Officer), Andrea Johnston (Chief Financial Officer), Scott Bax (Chief Operating Officer) and Ranj Sangra (General Counsel & Corporate Secretary), and is deemed to include the knowledge that each would have after due and diligent inquiry.

1.9 Statutes

In this Agreement, any reference to a statute refers to such statute and all rules, resolutions and regulations made under it, as it or they may have been or may from time to time be amended or reenacted, unless stated otherwise.

1.10 Agreements

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

1.11 Joint Ventures

To the extent any covenants or agreements relate to any Subsidiaries of the Company that are Joint Ventures, such covenants and agreements shall be construed as a covenant of the Company to cause such Subsidiaries that are Joint Ventures to perform the required action to the extent the Company is able to do so, taking into account the terms of the Contracts governing such Joint Ventures and the rights of the other parties to the Contracts with respect to such Joint Ventures.

==> picture [210 x 36] intentionally omitted <==

C - 24

1.12 Capitalized Terms

Unless otherwise expressly provided therein, all capitalized terms used in any Schedule or in the Company Disclosure Letter have the meanings ascribed to them in this Agreement.

1.13 Schedules

The following Schedules are annexed to this Agreement and are incorporated by reference into this Agreement and form a part hereof:

Schedule A - Form of Plan of Arrangement Schedule B - Form of Arrangement Resolution

1.14 Company Disclosure Letter

The Company Disclosure Letter itself and all information contained therein constitutes confidential information regarding the Company and is subject to the terms and conditions of the Confidentiality Agreement.

ARTICLE 2 THE ARRANGEMENT

2.1 Arrangement

The Company and the Purchaser agree that the Arrangement will be implemented in accordance with the terms and subject to the conditions contained in this Agreement and the Plan of Arrangement.

2.2 Interim Order

As soon as reasonably practicable following the execution of this Agreement, the Company shall apply to the Court in a manner acceptable to the Purchaser, acting reasonably, pursuant to Section 291 of the BCBCA and prepare, file and diligently pursue an application to the Court for the Interim Order, which shall provide, among other things:

(a) for the classes of Persons to whom notice is to be provided in respect of the Arrangement and the Company Meeting and for the manner in which such notice is to be provided;
(b) that the requisite approval for the Arrangement Resolution shall be: (i) 66⅔% of the votes cast on the Arrangement Resolution by the Company Shareholders present in person or represented by proxy at the Company Meeting; and (ii) if and to the extent required, a simple majority of the votes cast by the Company Shareholders present in person or represented by proxy at the Company Meeting, excluding the votes cast by the Company Shareholders that are required to be excluded pursuant to MI 61-101 for purposes of the Arrangement;

==> picture [210 x 36] intentionally omitted <==

C - 25

(c) that the Company Meeting may be adjourned or postponed from time to time by the Company Board subject to the terms of this Agreement without the need for additional approval of the Court;
(d) that the record date for the Company Shareholders entitled to notice of and to vote at the Company Meeting will not change in respect of any adjournment(s) or postponement(s) of the Company Meeting unless required by Law;
(e) that, in all other respects, other than as ordered by the Court, the terms, conditions and restrictions of the constating documents of the Company, including quorum requirements and other matters, shall apply in respect of the Company Meeting;
(f) for the grant of the Dissent Rights to registered holders of Company Shares as set forth in the Plan of Arrangement;
(g) for the notice requirements with respect to the presentation of the application to the Court for the Final Order;
(h) that the deadline for the submission of proxies by Company Shareholders for the Company Meeting shall be 48 hours (excluding Saturdays, Sundays and statutory holidays in Vancouver, British Columbia) prior to the Company Meeting, subject to waiver by the Company in accordance with the terms of this Agreement;
(i) confirmation of the record date for the purposes of determining the Company Shareholders entitled to receive meeting materials and vote at the Company Meeting; and
(j) for such other matters as the Purchaser or the Company may reasonably require, subject to obtaining the prior consent of the other Party, such consent not to be unreasonably withheld or delayed.

2.3 Company Meeting

Subject to the terms of this Agreement and (except in respect of Section 2.3(b)) receipt of the Interim Order, the Company shall:

(a) convene and conduct the Company Meeting in accordance with its constating documents, the Interim Order and applicable Laws, and use its commercially reasonable efforts to schedule the Company Meeting no later than April 9, 2021 and, in any event, on the date of the Purchaser Meeting, subject to the Purchaser having complied with its obligations pursuant to Section 2.5(d) and Section 2.5(e);
(b) in consultation with the Purchaser, fix and publish a record date for the purposes of determining the Company Shareholders entitled to receive notice of and vote at the Company Meeting and give notice to the Purchaser of the Company Meeting;

==> picture [210 x 36] intentionally omitted <==

C - 26

(c) not adjourn, postpone or cancel (or propose or permit the adjournment, postponement or cancellation of) the Company Meeting without the Purchaser’s prior written consent, except:
(i) as required for quorum purposes (in which case, the meeting shall be adjourned for a specified period of time and not cancelled);
(ii) as required by Law or by a Governmental Entity;
(iii) as expressly permitted under Section 5.5(l);
(iv) for adjournments of not more than ten (10) Business Days in the aggregate for the purposes of attempting to solicit proxies to obtain the Company Shareholder Approval; or
(v) to match any adjournment or postponement of the Purchaser Meeting or change in the date of the Purchaser Meeting such that the Company Meeting and the Purchaser Meeting can be held on the same day;
(d) unless the Company Board has made the Company Change in Recommendation in accordance with the applicable provisions of this Agreement, use commercially reasonable efforts to solicit proxies in favour of the Arrangement Resolution and against any resolution submitted by any Company Shareholder that is inconsistent with the Arrangement Resolution and the completion of any of the transactions contemplated by this Agreement, including, if so requested by the Purchaser and at the expense of the Purchaser, using the services of proxy solicitation firms to solicit proxies in favour of the approval of the Arrangement Resolution;
(e) provide the Purchaser with copies of or access to information regarding the Company Meeting generated by any proxy solicitation services firm engaged by the Company, as requested from time to time by the Purchaser;
(f) promptly advise the Purchaser as frequently as the Purchaser may reasonably request, and at least on a daily basis on each of the last ten (10) Business Days prior to the date of the Company Meeting, as to the aggregate tally of the proxies received by the Company in respect of the Arrangement Resolution;
(g) promptly advise the Purchaser of any written communication from any Company Shareholder in opposition to the Arrangement, written notice of dissent or purported exercise by any Company Shareholder of Dissent Rights received by the Company in relation to the Arrangement and any withdrawal of Dissent Rights received by the Company and any written communications sent by or on behalf of the Company to any Company Shareholder exercising or purporting to exercise Dissent Rights in relation to the Arrangement;
(h) provide the Purchaser with an opportunity to review and comment on any written communication sent by or on behalf of the Company to any Company Shareholder

==> picture [210 x 36] intentionally omitted <==

C - 27

exercising or purporting to exercise Dissent Rights and not make any payment or settlement offer, or agree to any payment or settlement prior to the Effective Time with respect to Dissent Rights without the prior written consent of the Purchaser;

(i) not change the record date for the Company Shareholders entitled to vote at the Company Meeting in connection with any adjournment or postponement of the Company Meeting unless required by Law;
(j) not without the prior written consent of the Purchaser, such consent not to be unreasonably withheld, conditioned or delayed, waive the deadline for the submission of proxies by Company Shareholders for the Company Meeting; and
(k) at the request of the Purchaser from time to time, promptly provide the Purchaser with a list (in both written and electronic form) of: (i) the registered Company Shareholders, together with their addresses and respective holdings of Company Shares; (ii) the names and addresses (to the extent in the Company’s possession or otherwise reasonably obtainable by the Company) and holdings of all Persons having rights issued by the Company to acquire Company Shares (including the holders of Company Options); and (iii) participants in book-based systems and nonobjecting beneficial owners of Company Shares, together with their addresses and respective holdings of Company Shares. The Company shall from time to time require that its registrar and transfer agent furnish the Purchaser with such additional information, including updated or additional lists of the Company Shareholders and lists of holdings and other assistance as the Purchaser may reasonably request.

2.4 Purchaser Meeting

Subject to the terms of this Agreement, the Purchaser shall:

(a) convene and conduct the Purchaser Meeting in accordance with its constating documents and applicable Laws, and use its commercially reasonable efforts to convene and conduct the Purchaser Meeting no later than April 9, 2021 and, in any event, on the date of the Company Meeting, subject to (i) the Company having complied with its obligations pursuant to Section 2.6(d) and Section 2.6(e), and (ii) the Purchaser having sought and obtained the approval by the FCA of the Purchaser Circular in accordance with Section 2.6(a);
(b) not adjourn, postpone or cancel (or propose or permit the adjournment, postponement or cancellation of) the Purchaser Meeting without the Company’s prior written consent, except:
(i) as required for quorum purposes (in which case, the meeting shall be adjourned for a specified period of time and not cancelled);
(ii) as required by Law or by a Governmental Entity (including where the Purchaser reasonably believes in good faith, based on the advice of outside

==> picture [210 x 36] intentionally omitted <==

C - 28

legal counsel and after consultation with the Company, that a supplement or amendment to the Purchaser Circular is required, provided that the duration of any such extension shall be the minimum number of Business Days which the Purchaser Board reasonably believes in good faith, based on the advice of outside legal counsel, is required by Law to enable the Purchaser to prepare and circulate the supplement or amendment to the Purchaser Circular and for the Purchaser Shareholders to consider such supplement or amendment);

(iii) as expressly permitted under Section 5.6(l);
(iv) for adjournments of not more than ten (10) Business Days in the aggregate for the purposes of attempting to solicit proxies to obtain the Purchaser Shareholder Approval; or
(v) to match any adjournment or postponement of the Company Meeting or change in the date of the Company Meeting such that the Purchaser Meeting and the Company Meeting can be held on the same day;
(c) unless the Purchaser Board has made the Purchaser Change in Recommendation in accordance with the applicable provisions of this Agreement, use commercially reasonable efforts to obtain the Purchaser Shareholder Approval (including by soliciting such proxies as may be required in order to pass the Purchaser Resolution and not to pass any resolution submitted by any Purchaser Shareholder that is inconsistent with the Purchaser Resolution and the completion of any of the transactions contemplated by this Agreement);
(d) provide the Company with a summary of information regarding the Purchaser Meeting generated by any proxy solicitation services firm retained by the Purchaser (and any such appointment shall be at the sole discretion of the Purchaser), as such information is reasonably requested from time to time by the Company;
(e) promptly advise the Company, provided that such information is reasonably available to the Purchaser, as to the aggregate tally of the proxies received by the Purchaser in respect of the Purchaser Resolution;
(f) promptly advise the Company of any written communication to the Purchaser from any Purchaser Shareholder in opposition to the Purchaser Resolution and/or the Arrangement;
(g) not without the prior written consent of the Company, such consent not to be unreasonably withheld, conditioned or delayed, waive the deadline for the submission of proxies by Purchaser Shareholders for the Purchaser Meeting; and
(h) procure that each of the directors of the Purchaser shall vote in favour of the Purchaser Resolution at the Purchaser Meeting in respect of all Purchaser Shares held by such director.

==> picture [210 x 36] intentionally omitted <==

C - 29

2.5 Company Circular

(a) Subject to the Purchaser’s compliance with Section 2.5(d) and Section 2.5(e), the Company shall (i) as promptly as reasonably practicable following execution of this Agreement, prepare the Company Circular together with any other documents required by applicable Laws in connection with the Company Meeting and (ii) as promptly as reasonably practicable after obtaining the Interim Order, file the Company Circular in all jurisdictions where the same is required to be filed and mail the Company Circular to each Company Shareholder and any other Person as required under applicable Laws and by the Interim Order, in each case, so as to permit the Company Meeting to be held as contemplated by Section 2.3(a).
(b) On the date of mailing thereof, the Company shall ensure that the Company Circular complies in all material respects with all applicable Laws and the Interim Order and shall contain sufficient detail to permit the Company Shareholders to form a reasoned judgment concerning the matters to be placed before them at the Company Meeting, and, without limiting the generality of the foregoing, shall ensure that the Company Circular will not contain any misrepresentation (except that the Company shall not be responsible for any information included in the Company Circular relating to the Purchaser and its affiliates that was provided by the Purchaser expressly for inclusion in the Company Circular pursuant to Section 2.5(d)).
(c) The Company Circular shall: (i) include a copy of the Company Fairness Opinions; (ii) state that the Company Board has received the Company Fairness Opinions, and has unanimously determined, after receiving legal and financial advice, that the Arrangement is fair to the Company Shareholders and that the Arrangement is in the best interests of the Company; (iii) contain the unanimous recommendation of the Company Board to the Company Shareholders that they vote in favour of the Arrangement Resolution (the “ Company Board Recommendation ”) and (iv) include statements that each of the Locked-Up Shareholders has signed a Voting Agreement, pursuant to which, and subject to the terms thereof, they have agreed to, among other things, vote their Company Shares in favour of the Arrangement Resolution.
(d) The Purchaser shall provide the Company, on a timely basis, with all such assistance (including reasonable access to and reasonable provision and assistance by professional advisers of the Purchaser) and information relating to the Purchaser and its affiliates as the Company and its advisers may reasonably request in connection with the preparation of the Company Circular. Such information shall include: (i) any information reasonably required to verify the contents of the Company Circular in respect of information provided by or regarding the Purchaser and its affiliates, and (ii) all information as is required by applicable Laws. The Purchaser shall ensure that such information does not include any misrepresentation or omission concerning the Purchaser or its affiliates.

==> picture [210 x 36] intentionally omitted <==

C - 30

(e) The Purchaser and its legal counsel shall be given a reasonable opportunity to review and comment on drafts of the Company Circular and related documents prior to the Company Circular being printed and filed with any Governmental Entity, and reasonable consideration shall be given to any comments made by the Purchaser and its legal counsel, provided that all information relating solely to the Purchaser and its affiliates included in the Company Circular shall be in form and content approved in writing by the Purchaser, acting reasonably. The Company shall provide the Purchaser with final copies of the Company Circular prior to the mailing to the Company Shareholders.
(f) The Purchaser shall indemnify and save harmless the Company and its Representatives from and against any and all liabilities, claims, demands, losses, costs, damages and expenses to which the Company or any of its Representatives may be subject or which the Company or any of its Representatives may suffer as a result of, or arising from, any misrepresentation contained in any information included in the Company Circular that was furnished by the Purchaser, its affiliates and their respective Representatives acting on their behalf, in writing, for inclusion in the Company Circular.
(g) The Company and the Purchaser shall each promptly notify the other if at any time before the Effective Date either becomes aware that the Company Circular contains a misrepresentation, or otherwise requires an amendment or supplement and the Parties shall co-operate in the preparation of any amendment or supplement to the Company Circular as required or appropriate, and the Company shall promptly mail or otherwise publicly disseminate any amendment or supplement to the Company Circular to the Company Shareholders and, if required by the Court or applicable Laws, file the same with any Governmental Entity and as otherwise required.

2.6 Purchaser Circular

(a) Subject to the Company’s compliance with Section 2.6(d) and Section 2.6(e), the Purchaser shall (i) as promptly as reasonably practicable following execution of this Agreement, prepare the Purchaser Circular together with any other documents required by applicable Laws in connection with the Purchaser Meeting and (ii) as promptly as reasonably practicable after obtaining approval of the Purchaser Circular by the FCA, and in any event within two Business Days of receipt of such approval, cause the Purchaser Circular to be posted to the Purchaser Shareholders and other Persons as required by the Purchaser’s constitutional documents and by applicable Laws, in each case using all commercially reasonable efforts so as to permit the Purchaser Meeting to be held in accordance with Section 2.4(a).
(b) On the date of mailing thereof, the Purchaser shall ensure that the Purchaser Circular complies in all material respects with all applicable Laws, and, without limiting the generality of the foregoing, shall ensure that the Purchaser Circular will not contain any misrepresentation (except that the Purchaser shall not be responsible for any information included in the Purchaser Circular relating to the

==> picture [210 x 36] intentionally omitted <==

C - 31

Company and its affiliates that was provided by the Company expressly for inclusion in the Purchaser Circular pursuant to Section 2.6(d)).

(c) The Purchaser Circular shall include a statement that the Purchaser Board has received financial advice in relation to the Arrangement and that, in the unanimous opinion of the Purchaser Board, the Arrangement is in the best interests of the Purchaser Shareholders as a whole and that the Purchaser Board unanimously recommends that Purchaser Shareholders vote in favour of the Purchaser Resolution (the “ Purchaser Board Recommendation ”).
(d) The Company shall provide the Purchaser, on a timely basis, with all such assistance (including reasonable access to and reasonable provision and assistance by professional advisers of the Company) and information relating to the Company and its affiliates as the Purchaser and its advisers may reasonably request in connection with the preparation of the Purchaser Circular. Such information shall include: (i) any information reasonably required to verify the contents of the Purchaser Circular in respect of information provided by or regarding the Company and its affiliates, and (ii) all information as is required by the UK Listing Rules and any other applicable Laws. The Company shall ensure that such information does not include any misrepresentation or omission concerning the Company or its affiliates. The Purchaser shall also use its commercially reasonable efforts to obtain any necessary consents from any of its auditors and any other advisors to the use of any financial information required to be included in the Purchaser Circular and to the identification in the Purchaser Circular of each such advisor.
(e) The Company and its legal counsel shall be given a reasonable opportunity to review and comment on drafts of the Purchaser Circular and related documents required to be posted to Purchaser Shareholders prior to the Purchaser Circular being filed with any Governmental Entity or posted to the Purchaser Shareholders, and reasonable consideration shall be given to any comments made by the Company and its legal counsel, provided that all information relating solely to the Company and its affiliates included in the Purchaser Circular shall be in form and content approved in writing by the Company, acting reasonably. In the event that the Purchaser receives any comments from the FCA or their staff with respect to the Purchaser Circular (or any amendment or supplement thereto), the Purchaser shall promptly provide a copy of such comments to the Company. The Company and its legal counsel shall be given a reasonable opportunity to review and comment upon any written responses and reasonable consideration shall be given to any comments made by the Company and its legal counsel. The Purchaser and the Company shall each use commercially reasonable efforts to respond promptly to such comments and to use commercially reasonable efforts to take such other actions as may be reasonably necessary to resolve the issues raised therein. The Purchaser shall provide the Company with a final copy of the Purchaser Circular prior to posting such Purchaser Circular to the Purchaser Shareholders.

==> picture [210 x 36] intentionally omitted <==

C - 32

(f) The Company shall indemnify and save harmless the Purchaser and its Representatives from and against any and all liabilities, claims, demands, losses, costs, damages and expenses to which the Purchaser or any of its Representatives may be subject or which the Purchaser or any of its Representatives may suffer as a result of, or arising from, any misrepresentation contained in any information included in the Purchaser Circular that was furnished by the Company, its affiliates and their respective Representatives acting on their behalf, in writing, for inclusion in the Purchaser Circular.
(g) The Company and the Purchaser shall each promptly notify the other if at any time before the Effective Date either becomes aware that the Purchaser Circular contains a misrepresentation, or otherwise requires an amendment or supplement and the Parties shall co-operate in the preparation of any amendment or supplement to the Purchaser Circular as required or appropriate, and the Purchaser shall promptly prepare any such amendment or supplement and seek the approval of the FCA to such amendment or supplement and following such approval post or otherwise publicly disseminate any such amendment or supplement to the Purchaser Shareholders and, if required by the FCA or by Law, file the same with the FCA or any other Governmental Entity.

2.7 Final Order

If: (a) the Interim Order is obtained; (b) the Company Shareholder Approval is obtained as provided for in the Interim Order and as required by applicable Law; and (c) the Purchaser Shareholder Approval is obtained, subject to the terms of this Agreement, the Company shall take all steps necessary or desirable to submit the Arrangement to the Court and diligently pursue an application for the Final Order pursuant to Section 291 of the BCBCA as soon as reasonably practicable, but in any event not later than five (5) Business Days after the date that both the Company Shareholder Approval and the Purchaser Shareholder Approval have been obtained.

2.8 Court Proceedings

Subject to the terms of this Agreement, the Purchaser shall cooperate with and assist the Company in seeking the Interim Order and the Final Order, including by providing to the Company, on a timely basis, any information reasonably required to be supplied by the Purchaser or Acquireco in connection therewith. The Company shall provide the Purchaser’s legal counsel with reasonable opportunity to review and comment upon drafts of all material to be filed with the Court in connection with the Arrangement, and will give reasonable consideration to all such comments. Subject to applicable Laws, the Company shall not file any material with the Court in connection with the Arrangement or serve any such material, and shall not agree to modify or amend materials so filed or served, except as contemplated by this Section 2.8 or with the Purchaser’s prior written consent, such consent not to be unreasonably withheld, conditioned or delayed; provided that, nothing herein shall require the Purchaser to agree or consent to any increase in or variation in the form of Consideration or other modification or amendment to such filed or served materials that expands or increases the Purchaser’s obligations, or diminishes or limits the Purchaser’s rights, set forth in any such filed or served materials or under this Agreement

==> picture [210 x 36] intentionally omitted <==

C - 33

or the Arrangement. The Company shall also provide to the Purchaser’s legal counsel on a timely basis, copies of any notice of appearance, evidence or other Court documents served on the Company in respect of the application for the Interim Order or the Final Order or any appeal therefrom and of any notice, whether written or oral, received by the Company indicating any intention to oppose the granting of the Interim Order or the Final Order or to appeal the Interim Order or the Final Order. The Company shall ensure that all materials filed with the Court in connection with the Arrangement are consistent in all material respects with the terms of this Agreement and the Plan of Arrangement. In addition, the Company shall not object to the Purchaser’s legal counsel making such submissions on the hearing of the motion for the Interim Order and the application for the Final Order as such counsel considers appropriate, provided the Purchaser advises the Company of the nature of such submissions prior to the hearing and such submissions are consistent in all material respects with the terms of this Agreement and the Plan of Arrangement. The Company shall also oppose any proposal from any party that the Final Order contain any provision inconsistent with this Agreement, and, if at any time after the issuance of the Final Order and prior to the Effective Date, the Company is required by the terms of the Final Order or by Law to return to Court with respect to the Final Order, it shall do so after notice to, and in consultation and cooperation with, the Purchaser.

2.9 Arrangement and Effective Date

(a) Closing of the Arrangement shall occur, and the Arrangement shall become effective, on the fifth Business Day following the satisfaction or waiver of all conditions to completion of the Arrangement set out in Article 6 (excluding any conditions that, by their terms, cannot be satisfied until the Effective Date, but subject to the satisfaction or, where not prohibited, waiver of those conditions as of the Effective Date by the applicable Party or Parties for whose benefit such conditions exist) or on such other time and date as may be agreed upon by the Parties in writing, and the Arrangement shall be effective at the Effective Time on the Effective Date and will have all of the effects provided by applicable Laws.
(b) The closing of the Arrangement will take place (i) by the exchange of documents by PDF or other electronic means, or (ii) at such other place as may be agreed to by the Parties, in each case on the Effective Date at such time as may be agreed to by the Parties, acting reasonably.

2.10 Payment of Consideration

The Purchaser shall, on or immediately prior to the Effective Date and in any event prior to the closing of the Arrangement, (i) provide the Depositary with sufficient funds to be held in escrow (the terms and conditions of such escrow to be satisfactory to the Parties, acting reasonably) to satisfy the aggregate Consideration payable pursuant to the Plan of Arrangement to the Company Shareholders, and (ii) provide sufficient funds to pay the aggregate amount payable by the Company to holders of Company Options and Company RSUs in consideration for the cancellation of all outstanding Company Options and Company RSUs in accordance with Sections 3.1(b) and 3.1(c) of the Plan of Arrangement, in the form of a loan to the Company.

==> picture [210 x 36] intentionally omitted <==

C - 34

2.11 Announcement and Shareholder Communications

The Purchaser and the Company shall mutually agree on the form of initial press release to be issued by each of them with respect to this Agreement as soon as practicable after its due execution. Except as required by Law, the Purchaser and the Company agree to cooperate in the preparation of presentations, if any, to the Company Shareholders and the Purchaser Shareholders regarding the transactions contemplated by this Agreement. Prior to the Effective Time, each Party shall: (a) not issue any press release or otherwise make public statements with respect to this Agreement or the Arrangement without the consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed; and (b) not make any filing with any Governmental Entity with respect to this Agreement or the Arrangement without the consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. Each Party shall enable the other Party to review and comment on all such press releases prior to the release thereof, shall enable the other Party to review and comment on such filings prior to the filing thereof (other than with respect to confidential information contained in such filing) and shall consider to incorporate the comments of the other Party in good faith; provided , however , that the foregoing shall be subject to each Party’s overriding obligation to make any disclosure or filing in accordance with applicable Laws, including Canadian Securities Laws or UK Securities Laws, as applicable, and if such disclosure or filing is required and the other Party has not reviewed or commented on the disclosure or filing, the Party making such disclosure or filing shall use commercially reasonable efforts to give prior oral or written notice to the other Party, and if such prior notice is not possible, to give such notice immediately following the making of such disclosure or filing. For the avoidance of doubt, the foregoing shall not prevent any Party from making internal announcements to employees and having discussions with shareholders and financial analysts and other stakeholders so long as such statements and announcements to the extent relating to this Agreement or the Arrangement, are consistent in all material respects with the most recent press releases, public disclosures or public statements made by the Parties with respect to this Agreement or the Arrangement. Notwithstanding the foregoing, the provisions of this Section 2.11 related to the approval or contents of filings with Governmental Entities will not apply with respect to filings in connection with the Company Circular, the Purchaser Circular, the Interim Order or the Final Order or which are governed by other Sections of this Agreement, including Sections 5.5 and 5.6.

2.12 Withholding Taxes

The Purchaser, the Company, Acquireco and the Depositary, as applicable, shall be entitled to deduct and withhold, or to direct any Person to deduct and withhold on their behalf, from any consideration or other amounts otherwise payable or otherwise deliverable to any of the Company Shareholders (including in their capacity as former holders of Company Options), the holders of Company Options or any other Person under the Plan of Arrangement or this Agreement such amounts as the Purchaser, the Company, Acquireco or the Depositary, as applicable, reasonably determines are required to be deducted or withheld from such consideration or other amount payable under any provision of any Law in respect of Taxes. Any such amounts will be deducted and withheld from the Consideration or such other amount payable pursuant to the Plan of Arrangement or this Agreement, remitted to the relevant Governmental Entity, and treated for all purposes under this Agreement as having been paid to the Company Shareholders (including in

==> picture [210 x 36] intentionally omitted <==

C - 35

their capacity as former holders of Company Options), the holders of Company Options or any other Person in respect of which such deduction, withholding and remittance was made.

2.13 Guarantee of the Purchaser

The Purchaser hereby (a) unconditionally and irrevocably guarantees in favour of the Company the due and punctual performance by Acquireco of each and every of Acquireco’s covenants, obligations and undertakings under this Agreement and the Plan of Arrangement, including the due and punctual payment of the aggregate Consideration pursuant to the Arrangement and all other amounts payable in connection with this Agreement, which guarantee will remain in force until all such covenants, obligations and undertakings have been satisfied in full; and (b) agrees to be jointly and severally liable with Acquireco for the truth, accuracy and completeness of all of Acquireco’s representations and warranties hereunder. The Purchaser hereby agrees that its guarantee is continuing in nature and full and unconditional, and no release or extinguishments of Acquireco’s liabilities (other than in accordance with the terms of this Agreement), whether by decree in any bankruptcy proceeding or otherwise, will affect the continuing validity and enforceability of the Purchaser’s guarantee. The Purchaser hereby agrees that the Company shall not have to proceed first against Acquireco in respect of any such matter before exercising its rights under this guarantee against the Purchaser and the Purchaser agrees to be jointly and severally liable with Acquireco for all guaranteed obligations as if it were the principal obligor of such obligations. The Purchaser acknowledges that the Company is relying on this Section 2.13 in entering into this Agreement.

2.14 Adjustments to Consideration

Without limiting the rights of the Purchaser hereunder, if, between the date of this Agreement and the Effective Time, the Company sets a record date, or otherwise declares, sets aside or pays any dividend or distribution of any kind (other than a Permitted Dividend), then: (a) to the extent that the amount of such dividends or distributions per Company Share does not exceed the Consideration, the Consideration shall be reduced by the per Company Share amount of such dividends or distributions and (b) to the extent that the amount of such dividends or distributions per Company Share exceeds the Consideration, the Consideration shall be reduced to zero and such excess amount shall be placed in escrow for the account of Acquireco or another Person designated by Acquireco or the Purchaser.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

3.1 Representations and Warranties

Except as set forth in (i) the Company Disclosure Letter (which disclosure shall apply against any representations or warranties to which it is reasonably apparent it should relate) or (ii) the Company Public Documents filed since January 1, 2018 (excluding any disclosures set forth in any “risk factor” section or market risk section, in any “forward-looking statements” or any other general statements regarding risks or uncertainties to the extent that they are similarly predictive or forward-looking in nature) (and provided that the representations and warranties contained in Section 3.1(a) [ Organization ], Section 3.1(b) [ Authorization; Validity of Agreement; Company

==> picture [210 x 36] intentionally omitted <==

C - 36

Action ], Section 3.1(f) [ Subsidiaries ], Section 3.1(i) [ Capitalization ] , Section 3.1(kk) [ Brokers; Expenses ] and Section 3.1(ll) [ No “Collateral Benefit ”] shall only be qualified by reference to the Company Disclosure Letter), the Company hereby represents and warrants to the Purchaser and Acquireco the representations and warranties set forth in this Section 3.1 and acknowledges that the Purchaser and Acquireco are relying upon such representations and warranties in connection with the entering into of this Agreement and the carrying out of the transactions contemplated herein:

(a) Organization. The Company is duly organized and validly existing under the BCBCA and has the necessary corporate power and capacity to own, lease and operate its properties and to carry on its business as it is now being conducted. The Company is duly qualified or licensed to do business and in good standing in each jurisdiction where such qualification or licensing is necessary, except where the failure to be so qualified or licensed or in good standing has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) Authorization; Validity of Agreement; Company Action. The Company has all necessary corporate power and authority to execute and deliver this Agreement and the agreements and other documents to be entered into by it hereunder, and, subject to obtaining the Company Shareholder Approval in the manner required by the Interim Order and approval of the Court, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereunder and thereunder. The execution, delivery and performance by the Company of this Agreement, the Arrangement and the agreements and other documents to be entered into by it hereunder and the consummation by the Company of the transactions contemplated hereunder and thereunder, have been duly and validly authorized by the Company Board, and no other corporate proceeding on the part of the Company is necessary to authorize the execution, delivery and performance by the Company of this Agreement and the agreements and other documents to be entered into by it hereunder or the consummation of the Arrangement, other than obtaining the approval by the Company Board of the Company Circular, the Company Shareholder Approval in the manner required by the Interim Order and Law and approval by the Court. This Agreement has been duly and validly executed and delivered by the Company and, assuming due and valid authorization, execution and delivery of this Agreement by the Purchaser and Acquireco, is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency and other applicable Laws affecting the enforcement of creditors’ rights generally and subject to the qualification that equitable remedies may be granted only in the discretion of a court of competent jurisdiction.
(c) Board Approvals. The Company Board at a meeting duly called and held and after receiving financial and legal advice, and following the receipt and review of a unanimous recommendation from the Special Committee that the Arrangement is in the best interests of the Company, has unanimously: (i) determined that the

==> picture [210 x 36] intentionally omitted <==

C - 37

Arrangement is in the best interests of the Company and fair to the Company Shareholders; (ii) approved this Agreement, the Arrangement and the other transactions contemplated by this Agreement in all respects; and (iii) resolved to make the Company Board Recommendation. As of the date hereof, none of the aforesaid actions by the Company Board has been amended, rescinded or modified.

(d) Consents and Approvals; No Violations. Subject to obtaining the authorizations, consents and approvals and making the filings referred to in Section 3.1(e), the execution and delivery by the Company of this Agreement and the performance by it of its obligations hereunder and the completion of the Arrangement do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition):
(i) violate, conflict with or result in a breach of:
- (A) any provision of the notice of articles, articles or other constating documents of the Company or any of its Subsidiaries;
- (B) any Contract or Authorization to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; or
- (C) any Law to which the Company or any of its Subsidiaries is subject or by which the Company or any of its Subsidiaries is bound;
(ii) give rise to any right of termination, allow any Person to exercise any rights, or cause or permit the termination, cancellation, acceleration or other change of any material right or material obligation or the loss of any benefit to which the Company is entitled, under any Company Material Contract or Authorization to which the Company or any of its Subsidiaries is a party; or
(iii) give rise to any rights of first refusal or rights of first offer, trigger any change of control provision or any restriction or limitation, or require any consent or other action by any Person under, any Company Material Contract or Authorization, or result in the imposition of any Lien (other than a Permitted Lien) upon any of the Company’s assets or the assets of any of its Subsidiaries;

in each case, except as would not, individually or in the aggregate, have or reasonably be expected to have a Company Material Adverse Effect.

(e) Governmental Authorizations. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Arrangement requires no Authorization or consent, waiver or approval or any action by or in respect of, or filing with, or notification to, any Governmental Entity other than:

==> picture [210 x 36] intentionally omitted <==

C - 38

(i) the Interim Order and any filings required in order to obtain, and approvals required under, the Interim Order;
(ii) the Final Order, and any filings required in order to obtain the Final Order;
(iii) filings and other actions required under applicable Canadian Securities Laws and the rules and policies of the TSX;
(iv) the Key Regulatory Approvals; and
(v) any other authorizations, licences, permits, certificates, registrations, consents, approvals and filings and notifications with respect to which the failure to obtain or make same would not reasonably be expected to have a Company Material Adverse Effect.

(f) Subsidiaries.

(i) All of the Company’s Subsidiaries or equity or voting interests (whether registered or beneficial) in any Person as of the date of this Agreement are set forth in Section 3.1(f)(i) of the Company Disclosure Letter. The following information with respect to each Subsidiary of the Company as of the date of this Agreement is accurately set out in Section 3.1(f)(i) of the Company Disclosure Letter: (A) its name; (B) the number, type and principal amount, as applicable, of its outstanding equity securities or other equity interests and a list of registered holders of capital stock or other equity interests; and (C) its jurisdiction of incorporation, organization or formation. The Company does not otherwise own, directly or indirectly, any capital stock or other equity securities of any Person or have any direct or indirect equity or ownership interest in any other business as of the date of this Agreement.
(ii) Each Subsidiary of the Company is duly incorporated, formed or organized, as applicable, and is validly existing under the Laws of its jurisdiction of incorporation, formation or organization, as applicable, and, except where it has not had and would not, individually or in the aggregate, be reasonably expected to have a Company Material Adverse Effect, has the power and capacity to own its assets and conduct its business as now owned and conducted. Each Subsidiary of the Company is duly qualified to carry on business in each jurisdiction in which its assets and properties, owned, leased, licensed or otherwise held, or the nature of its activities make such qualification necessary, except where the failure to be so qualified would not, individually or in the aggregate, have a Company Material Adverse Effect.
(iii) As of the date of this Agreement the Company is, directly or indirectly, the registered and beneficial owner of the issued and outstanding securities of each Subsidiary of the Company shown to be owned by it in Section

==> picture [210 x 36] intentionally omitted <==

C - 39

3.1(f)(i) of the Company Disclosure Letter, free and clear of all Liens (other than Permitted Liens), and all such securities have been duly and validly authorized and issued, are fully paid, and if the Subsidiary is a corporation, are non-assessable. No such securities have been issued in violation of any Law or pre-emptive or similar rights.

(iv) True and complete copies of the constating documents of each of the Company’s Subsidiaries have been disclosed in the Data Room, and no action has been taken to amend or supersede such documents.

(g) Compliance with Laws and Constating Documents.

(i) The Company and its Subsidiaries have complied with all applicable Laws, except for any such non-compliances which would not, individually or in the aggregate, have a Company Material Adverse Effect. No notice, charge, claim or action has been received by the Company or any of its Subsidiaries or has been filed, commenced or, to the knowledge of the Company, brought, initiated or threatened against the Company or any of its Subsidiaries alleging any violation of any such Laws, other than violations which have not had and would not, individually or in the aggregate, have a Company Material Adverse Effect.
(ii) None of the Company or any of its Subsidiaries is in conflict with, or in default under or in violation of, its notice of articles or articles or equivalent organizational documents, in each case, in any material respect.
(h) Authorizations. Except as would not, individually or in the aggregate, have or reasonably be expected to have a Company Material Adverse Effect, the Company and its Subsidiaries have obtained all Authorizations necessary for the ownership, operation and use of the assets of the Company and its Subsidiaries or otherwise in connection with carrying on the business and operations of the Company and its Subsidiaries in compliance in all material respects with all applicable Laws. Except as would not, individually or in the aggregate, have or reasonably be expected to have a Company Material Adverse Effect: (i) such Authorizations are in full force and effect in accordance with their terms; (ii) the Company and its Subsidiaries, since January 1, 2018, have fully complied with and are in compliance with all Authorizations; (iii) there is no action, investigation or proceeding pending or, to the knowledge of the Company, threatened, regarding any Authorization; (iv) none of the Company or any of its Subsidiaries or, to the knowledge of the Company, any of their respective officers or directors has received any notice, whether written or oral, of revocation or non-renewal or material amendments of any such Authorizations, or of any intention of any Person to revoke or refuse to renew or to materially amend any of such Authorizations; and (v) all such Authorizations continue to be effective in order for the Company and its Subsidiaries to continue to conduct their respective businesses as they are currently conducted. To the knowledge of the Company, no Person other than the Company or a Subsidiary

==> picture [210 x 36] intentionally omitted <==

C - 40

thereof owns or has any proprietary, financial or other interest (direct or indirect) in any such Authorizations, except as would not, individually or in the aggregate, reasonably be material to the Company and its Subsidiaries, taken as a whole.

(i) Capitalization.

(i) The authorized capital of the Company consists of an unlimited number of Company Shares without par value and an unlimited number of preferred shares without par value. As of the close of business on the Business Day prior to the date of this Agreement, there were (A) 33,359,570 Company Shares validly issued and outstanding as fully-paid and non-assessable shares of the Company; (B) no preferred shares issued or outstanding; (C) 2,046,012 outstanding Company Options providing for the issuance of up to 2,046,012 Company Shares upon the exercise thereof; and (D) 143,867.85 outstanding Company RSUs.
(ii) Except for Company Options and Company RSUs referred to in Section 3.1(i)(i) or as disclosed in Section 3.1(i)(ii) of the Company Disclosure Letter, as of the date of this Agreement (A) there are no existing options, warrants, calls, pre-emptive rights, subscriptions or other rights, restricted share awards, restricted share unit awards, agreements, arrangements, understandings or commitments of any kind relating to the issued or unissued capital stock of, or other equity interests in, the Company or any of its Subsidiaries obligating the Company or such Subsidiary to issue, transfer, register or sell or cause to be issued, transferred, registered or sold any shares of capital stock, or other equity interest in, the Company or such Subsidiary or securities convertible into or exchangeable for such shares or equity interests or other securities, or obligating the Company or such Subsidiary to grant, extend or enter into any such option, warrant, call, subscription or other right, restricted share award, restricted stock share award, agreement, arrangement, understanding or commitment; (B) there are no outstanding agreements, arrangements, understandings or commitments of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Shares or any shares of capital stock, or other equity interest in, such Subsidiary or qualify securities for public distribution in Canada or elsewhere, or with respect to the voting or disposition of any securities of the Company or any of its Subsidiaries; and (C) there are no outstanding or authorized share appreciation, phantom share, restricted share units, performance-based awards, profit participation or other similar rights with respect to the Company or any of its Subsidiaries.
(iii) Section 3.1(i)(iii) of the Company Disclosure Letter sets forth, with respect to each Company Option and Company RSU outstanding as of the close of business on the Business Day prior to the date of this Agreement, (A) the holder of each Company Option or Company RSU; (B) the number of

==> picture [210 x 36] intentionally omitted <==

C - 41

Company Shares issuable therefor; (C) in the case of a Company Option, the exercise price payable therefor upon the exercise of each such Company Option; and (D) the date on which such Company Option or Company RSU was granted. All Company Options and Company RSUs have been granted solely to employees, officers, consultants (who are individuals) or directors of the Company or its Subsidiaries. The exercise price of each Company Option was not less than the fair market value of a Company Share as of the date of grant of such Company Option. All grants of Company Options and Company RSUs were validly issued and duly authorized by the Company Board (or a duly authorized committee or subcommittee thereof) in compliance with all applicable Laws.

(iv) All outstanding Company Shares have been duly authorized and validly issued as fully paid and non-assessable, and all Company Shares issuable upon the exercise or vesting of rights under Company Options and Company RSUs in accordance with their terms have been duly authorized for issuance in accordance with the respective terms thereof as fully paid and non-assessable.
(v) The Company Legacy Option Plan and Company LTIP and the issuances of securities under such plans have been recorded on the Company’s financial statements in accordance with IFRS, and no such grants involved any “back dating,” “forward dating,” “spring loading” or similar practices.
(vi) There are no shareholder agreements, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party relating to the voting or disposition of any securities of the Company or any of its Subsidiaries.
(vii) All dividends or distributions on securities of the Company or any of its Subsidiaries that have been declared or authorized have been paid in full.
(viii) From the close of business on the Business Day prior to the date of this Agreement to the time of execution this Agreement, (A) the Company has not issued any Company Shares except upon the exercise of Company Options or Company RSUs that were outstanding as of the close of business on the Business Day prior to the date of this Agreement, and (B) the Company has not granted any Company Options or Company RSUs.
(ix) There are no issued, outstanding or authorized bonds, debentures or other evidences of indebtedness of the Company or its Subsidiaries or any other agreements, arrangements, instruments or commitments of any kind outstanding giving any Person, directly or indirectly, the right to vote (or that are convertible or exercisable for securities having the right to vote) with Company Shareholders on any matter.

==> picture [210 x 36] intentionally omitted <==

C - 42

(j) Reporting Issuer Status and Stock Exchange Compliance.

(i) As of the date hereof, the Company is a “reporting issuer” within the meaning of applicable Canadian Securities Laws in each of the provinces and territories of Canada, and is not in default of any material requirement of any Canadian Securities Laws. There is no Order delisting, suspending or cease trading any securities of the Company. The Company Shares are listed and posted for trading on the TSX, and the Company has not applied to have the Company Shares listed on any market other than the TSX (provided that the Company Shares are quoted on the “over the counter” markets in the U.S.), and the Company is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of the TSX.
(ii) The Company has not taken any action to cease to be a “reporting issuer” within the meaning of applicable Canadian Securities Laws in any province or territory of Canada, nor has the Company received notification from the British Columbia Securities Commission or any other applicable Securities Authority of a province of Canada, in each case seeking to revoke the Company’s reporting issuer status. No delisting, suspension of trading or cease trade or other order or restriction with respect to any securities of the Company is pending, in effect, or, to the knowledge of the Company, has been threatened, and to the knowledge of the Company it is not subject to any formal or informal review, enquiry, investigation or other proceeding relating to any such order or restriction.

(k) U.S. Securities Law Matters.

(i) The Company is not an investment company registered or required to be registered under the U.S. Investment Company Act of 1940.
(ii) The Company is not, has not previously been and on the Effective Date will not be a “shell company” (as defined in Rule 405 under the U.S. Securities Act of 1933).
(l) Reports. Since February 6, 2018, the Company has timely filed true and correct copies of the Company Public Documents that the Company is required to file under Canadian Securities Laws (including “documents affecting the rights of securityholders” and “material contracts” required to be filed by Part 12 of National Instrument 51-102 – Continuous Disclosure Obligations ). The Company Public Documents, at the time filed, did not contain any misrepresentation and complied in all material respects with the applicable requirements of Canadian Securities Laws. Any amendments to the Company Public Documents required to be made have been filed on a timely basis with the applicable Governmental Entity. The Company has not filed any confidential material change report with any Governmental Entity which at the date hereof remains confidential.

==> picture [210 x 36] intentionally omitted <==

C - 43

(m) Comments, Review, Audits, Etc. As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters from any Securities Authority with respect to any of the Company Public Documents. To the knowledge of the Company, neither the Company nor any of the Company Public Documents is the subject of an ongoing audit, review, comment or investigation by the British Columbia Securities Commission, any other Securities Authority or the TSX.
(n) Financial Statements.
(i) The audited consolidated financial statements for the Company as of and for each of the fiscal years ended on December 27, 2019 and December 28, 2018 (including any notes or schedules thereto, the auditor’s report thereon and related management’s discussion and analysis) and the interim unaudited consolidated financial statements for the Company for the 13week period ended September 25, 2020 (including any notes or schedules thereto and related management’s discussion and analysis) have been, and all financial statements of the Company (including any notes or schedules thereto and related management’s discussion and analysis) which are included in the Company Public Documents in respect of any subsequent periods prior to the Effective Date will be, prepared in accordance with IFRS applied consistently to all periods presented in such financial statements, except for changes in IFRS that have been adopted on a prospective basis as permitted by IFRS, and present fairly, in all material respects, the assets, liabilities, consolidated financial position and results of operations of the Company and its Subsidiaries (other than, as applicable, certain of the Joint Ventures as described in such financial statements) as of the respective dates thereof and its results of operations and cash flows for the respective periods covered thereby (except as may be indicated expressly in the notes thereto), subject to normal year-end adjustments and the absence of notes in the case of any interim financial statements.
(ii) Except as set forth in the financial statements described in Section 3.1(n)(i), there are no off-balance sheet transactions, arrangements, obligations (including contingent obligations) or other relationships of the Company or any of its Subsidiaries with unconsolidated entities or other Persons.
(iii) The financial books, records and accounts of the Company and each of its Subsidiaries (A) have been maintained, in all material respects, in accordance with IFRS, and (B) accurately and fairly reflect the basis for the Company’s financial statements in all material respects.
(iv) The management of the Company has established and maintains a system of disclosure controls and procedures (as such term is defined in NI 52-109) designed to provide reasonable assurance that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by it under applicable Laws imposed by

==> picture [210 x 36] intentionally omitted <==

C - 44

Governmental Entities is recorded, processed, summarized and reported within the time periods specified by such applicable Laws imposed by Governmental Entities.

(v) The Company maintains internal control over financial reporting (as such term is defined in NI 52-109). Such internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS and includes policies and procedures that (A) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company and its Subsidiaries; (B) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company and its Subsidiaries are being made only with authorizations of management and directors of the Company and its Subsidiaries; and (C) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of the Company or its Subsidiaries that could have a material effect on its financial statements. To the knowledge of the Company, as of the date of this Agreement (x) there are no material weaknesses (as such term is defined in NI 52-109) in the design and implementation or maintenance of internal controls over financial reporting of the Company that are reasonably likely to adversely affect the ability of the Company to record, process, summarize and report financial information; and (y) there is no fraud, whether or not material, that involves management or other employees who have a significant role in the internal control over financial reporting of the Company.
(vi) None of the Company, any of its Subsidiaries or, to the knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any of its Subsidiaries has received any written complaint, allegation, assertion, or claim regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries or their respective internal accounting controls, which has not been resolved to the satisfaction of the audit committee of the Company Board.
(o) Undisclosed Liabilities.
(i) There are no liabilities or obligations of the Company or of any of its Subsidiaries of any nature, whether accrued, contingent, absolute or otherwise, other than liabilities and obligations (A) reflected or to the extent reserved against on the unaudited consolidated balance sheet of the Company as of September 25, 2020, (B) incurred in the Ordinary Course (as the same has been or may be varied, in good faith and on a commercially reasonable basis, as a result of any applicable COVID-19 Measures) since

==> picture [210 x 36] intentionally omitted <==

C - 45

September 25, 2020 or in connection with the execution of this Agreement, or (C) that would not, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

(ii) As of the date hereof, the approximate principal amount of all indebtedness for borrowed money of the Company and its Subsidiaries, including capital leases, is disclosed in Section 3.1(o)(ii) of the Company Disclosure Letter. As of January 29, 2021, the principal amount of all indebtedness for borrowed money of the Company and its Subsidiaries, including capital leases, is disclosed in Section 3.1(o)(ii) of the Company Disclosure Letter.
(p) Privacy. Except as would not, individually or in the aggregate, have a Company Material Adverse Effect, the Company and its Subsidiaries have at all times since January 1, 2018 complied, and are now in compliance, with all applicable Privacy Laws (including GDPR, to the extent it applies, and all applicable direct marketing, automated decision-making and advertising laws, guidelines and industry standards). No actions or investigations are pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries alleging a violation of Privacy Laws. Since January 1, 2018, there have been no Breaches of Security Safeguards involving the processing of Personal Information by or on behalf of the Company or compromise to the security, integrity or unavailability of the Company’s IT systems, except as would not, individually or in the aggregate, have a Company Material Adverse Effect.

(q) Environmental Matters.

(i) Except as would not, individually or in the aggregate, have a Company Material Adverse Effect, the Company and its Subsidiaries have since January 1, 2018 been, and currently are, in compliance with all applicable Environmental Laws, including possessing all permits, authorizations, licenses, exemptions and other governmental authorizations required for its operations under applicable Environmental Laws.
(ii) The Company and its Subsidiaries have not, since January 1, 2018, received written notice of, and are not currently subject to any pending or, to the knowledge of the Company, threatened, Environmental Claim, that would have a Company Material Adverse Effect.
(iii) With respect to real property that is currently leased or operated by the Company or any of its Subsidiaries or was formerly owned, leased, or operated by the Company or any of its Subsidiaries, to the knowledge of the Company, there have been no releases of Hazardous Substances by the Company or any of its Subsidiaries or any other Person on or underneath any of such real property other than in material compliance with applicable Environmental Laws.

==> picture [210 x 36] intentionally omitted <==

C - 46

(iv) Except as would not, individually or in the aggregate, have a Company Material Adverse Effect and except for any customary indemnification terms in Contracts and obligations under applicable Environmental Laws arising in the Ordinary Course, the Company and its Subsidiaries have not entered into any written agreement or incurred any legal obligation providing for or requiring it to pay to, reimburse, guarantee, pledge, defend, indemnify or hold harmless any Person from or against any liabilities or costs arising out of or related to the generation, manufacture, use, transportation or disposal of Hazardous Substances, or otherwise arising in connection with or under Environmental Laws.
(v) The Company has provided or made available to the Purchaser a copy of: (A) all material reports, studies, analyses and audits in its possession, custody or control relating to the Company or any of its Subsidiaries compliance with or liability under applicable Environmental Laws and prepared after January 1, 2018 and prior to the date of this Agreement; (B) all currently in force and material permits, authorizations, licenses, exemptions and other governmental authorizations issued to it pursuant to applicable Environmental Laws; and (C) all significant correspondence by the Company or any of its Subsidiaries with Governmental Entities relating to contraventions of Environmental Law or with respect to Hazardous Substances, or with other Persons as to which a material dispute has arisen pursuant to Environmental Laws or with respect to Hazardous Substances and received by the Company or sent by the Company since January 1, 2018 and prior to the date of this Agreement.

(r) Employment Matters.

(i) Section 3.1(r)(i) of the Company Disclosure Letter sets forth, as of the date hereof, a complete and accurate list (without names or employee numbers) of the employees of the Company and its Subsidiaries, together with their position, department, date of hire, current salary or hourly rate of pay, vacation accrual and annual entitlement, bonus, active or leave status, and location of employment.
(ii) The Company has provided or made available to the Purchaser current and complete copies of all written employment Contracts, or a template thereof, in respect of employees at the Director level or above to which the Company or a Subsidiary thereof is a party or otherwise bound as of the date hereof. Except as disclosed in Section 3.1(r)(ii) of the Company Disclosure Letter, on the date hereof, no employee of the Company or any of its Subsidiaries with an annual base salary in excess of $115,000 has any agreement as to length of notice or severance payment required to terminate his or her employment other than such as results by Law from the employment of an employee without an agreement as to notice or severance.

==> picture [210 x 36] intentionally omitted <==

C - 47

(iii) Except as provided in this Agreement or disclosed in Section 3.1(r)(iii) of the Company Disclosure Letter, the execution, delivery and performance of this Agreement and the consummation of the Arrangement will not (whether alone or in conjunction with any other event, such as a termination of employment) (A) result in any payment (including bonus, change of control payment, retention, retirement, notice of termination, pay in lieu of notice, severance, or other benefit) becoming due or payable to any employees, (B) increase the compensation or benefits otherwise payable to any employee of the Company or any of its Subsidiaries, including under any Company Benefit Plan, (C) result in the acceleration of, or an increase in, securing or funding obligations under any Company Benefit Plan, (D) result in the payment of any amount that could, individually or in combination with any other such payment, constitute an “excess parachute payment”, as defined in Section 280G(b)(1) of the Code, (E) entitle the recipient of any payment or benefit to receive any “gross up” payment for any income or other Taxes that might be owed with respect to such payment or benefit payments, or (F) result in the triggering or imposition of any restrictions or limitations on the rights of the Company to amend or terminate any Company Benefit Plan.
(iv) Except as disclosed in Section 3.1(r)(iv) of the Company Disclosure Letter, none of the Company or any of its Subsidiaries (A) is a party to any collective bargaining agreement with respect to any employees of the Company or any of its Subsidiaries or (B) is subject to any application for certification or, to the knowledge of the Company, threatened or apparent union-organizing campaigns and no trade union, council of trade unions, employee bargaining agency or affiliated bargaining agent holds bargaining rights with respect to any employees of the Company or any of its Subsidiaries by way of certification, interim certification, voluntary recognition or succession rights. There is no labour strike, dispute, work slowdown or stoppage pending or involving, or to the knowledge of the Company threatened against the Company or any of its Subsidiaries and, to the knowledge of the Company, no such event has occurred within the last two years.
(v) None of the Company or any of its Subsidiaries are, or in the past two years have been, engaged in any unfair labour practice and no unfair labour practice complaint, grievance or arbitration proceeding is pending or, to the knowledge of the Company, threatened, against the Company or any of its Subsidiaries nor has the Company or any of its Subsidiaries received written notice of any such complaint, grievance, or arbitration.
(vi) Neither the Company nor any of its Subsidiaries has received any notice disputing the classification of any consultants or independent contractors providing services to the Company.

==> picture [210 x 36] intentionally omitted <==

C - 48

(vii) None of the Company or any of its Subsidiaries is subject to any current, pending or, to the knowledge of the Company, threatened claim, complaint or proceeding for wrongful dismissal, constructive dismissal, discrimination or retaliation, harassment, or any other tort claim relating to employment or termination of employment of employees or independent contractors, or under any applicable Law with respect to employment and labour, including, without limitation, employment standards, privacy, labour relations, human rights, workers compensation and occupational health and safety.
(viii) Except as would not, individually or in the aggregate, have a Company Material Adverse Effect, the Company and its Subsidiaries are in compliance with all applicable Laws with respect to employment and labour, including employment and labour standards, occupational health and safety, workers’ compensation, human rights, immigration, Tax withholding, labour relations, and wage and hour Laws, and pay equity, and there are no current, pending, or to the knowledge of the Company, threatened proceedings before any court, Governmental Entity, board or tribunal with respect to any of the areas listed herein, except as would not, individually or in the aggregate, have a Company Material Adverse Effect.
(ix) Except as disclosed in Section 3.1(r)(ix) of the Company Disclosure Letter or except as would not, individually or in the aggregate, have a Company Material Adverse Effect, the Company and its Subsidiaries have taken all steps required by Law to protect the health and safety of their workers and have complied with all Orders under applicable occupational health and safety legislation and there are no outstanding inspection Orders or written equivalent made under any occupational health and safety legislation that relate to the Company or any of its Subsidiaries and there are no appeals of any Orders under any occupational health and safety legislation relating to the Company and its Subsidiaries which are currently outstanding. To the knowledge of the Company, there are no ongoing investigations under occupational health and safety legislation related to the Company or any of its Subsidiaries. There have been no fatal or critical accidents at any property of the Company or any of its Subsidiaries since January 1, 2018.
(x) Since March 16, 2020, the Company and its Subsidiaries have taken good faith steps required by Law or reasonable in the circumstances to protect the health and safety of its workers, including implementing and enforcing policies and procedures to ensure compliance in all material respects with applicable COVID-19 Measures.
(xi) Except as disclosed in Section 3.1(r)(xi) of the Company Disclosure Letter, all current assessments under workers’ compensation legislation in relation to the Company and its Subsidiaries have been paid or accrued and the Company and its Subsidiaries have not been and are not subject to any

==> picture [210 x 36] intentionally omitted <==

C - 49

additional or penalty assessment under such legislation which has not been paid and have not been given notice of any audit.

(s) Absence of Certain Changes or Events. Except as specifically contemplated by this Agreement, since December 31, 2019:
(i) through the date of this Agreement, the Company and its Subsidiaries have conducted their business in all material respects in the Ordinary Course (as the same has been varied, in good faith and on a commercially reasonable basis, as a result of any applicable COVID-19 Measures); and
(ii) the Company has not suffered a Company Material Adverse Effect.
(t) Litigation; Orders. There is no suit, claim, action, charge, proceeding, including arbitration proceeding or alternative dispute resolution proceeding, or investigation pending or, to the knowledge of the Company, threatened against or naming as a party thereto the Company or any of its Subsidiaries, or affecting any of their respective property or assets, that (i) if determined adverse to the interests of the Company or any of its Subsidiaries, would, individually or in the aggregate, have or reasonably be expected to have a Company Material Adverse Effect or (ii) has impaired, or would reasonably be expected to impair, in any material respect, the ability of the Company to consummate the Arrangement. No Order is outstanding against the Company or any of its Subsidiaries in respect of any of their respective properties or assets that (i) has had or would reasonably be expected to have a Company Material Adverse Effect or (ii) would reasonably be expected to impair, in any material respect, the ability of the Company to consummate the Arrangement.

(u) Taxes.

(i) Each of the Company and its Subsidiaries has duly and in a timely manner filed all material Tax Returns required to be filed by it with the appropriate Governmental Entity, and all such Tax Returns were complete and correct in all material respects. Neither the Company nor any of its Subsidiaries is currently a beneficiary of any extension of time within which to file any Tax Return other than extensions that are automatically granted.
(ii) The Company and each of its Subsidiaries has paid all material Taxes, including instalments required by applicable Laws on account of Taxes for the current year, which are due and payable by it (whether or not assessed by the appropriate Governmental Entity), and the Company has provided adequate accruals in accordance with IFRS in the most recently published financial statements of the Company for any Taxes of the Company and each of its Subsidiaries that have not been paid with respect to the period covered by such financial statements whether or not shown as being due on any Tax Returns. Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material

==> picture [210 x 36] intentionally omitted <==

C - 50

Adverse Effect, no liability in respect of Taxes not reflected in such statements or otherwise provided for has been assessed, proposed to be assessed, incurred or accrued, other than in the Ordinary Course.

(iii) Each of the Company and its Subsidiaries has duly and timely withheld all material Taxes required by Law to be withheld by it (including material Taxes required to be withheld by it in respect of any amount paid or credited or deemed to be paid or credited by it to or for the benefit of any Person, and, for the avoidance of doubt, any material Taxes required to be withheld by it in connection with the transactions contemplated by this Agreement) and has duly and timely remitted to the appropriate Governmental Entity such Taxes or other amounts required by Law to be remitted by it.
(iv) Each of the Company and its Subsidiaries has duly and timely collected all material amounts on account of any sales, use or transfer Taxes, including goods and services, harmonized sales, provincial and territorial sales taxes and state and local taxes, required by Law to be collected by it and has duly and timely remitted to the appropriate Governmental Entity such amounts required by Law to be remitted by it.
(v) There are no proceedings, investigations, audits or claims now pending against the Company or any of its Subsidiaries in respect of any Taxes and there are no matters under discussion, audit or appeal with any Governmental Entity relating to Taxes. Neither the Company nor any of its Subsidiaries has waived any statute of limitations on the assessment or collection of any Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course).
(vi) For the purposes of the Tax Act and any other relevant Tax purposes:
(A) The Company has at all times during its existence been resident in Canada and has never been resident in any other country;
(B) Each of its Subsidiaries has at all times during its existence been resident in the jurisdiction in which it was formed, and has never been resident in any other country; and
(C) Neither the Company nor any of its Subsidiaries has, or had, a permanent establishment in a country other than its country of residence.
(vii) Neither the Company nor any of its Subsidiaries has ever been a member of an affiliated group of corporations filing a Tax Return on a consolidated, affiliated, unitary, or similar basis, or is party to, or otherwise bound by or subject to, any Tax sharing, allocation, indemnification or similar agreement or arrangement. Neither the Company nor any of its Subsidiaries is liable for Taxes of any other Person by reason of contract, transferee

==> picture [210 x 36] intentionally omitted <==

C - 51

liability or otherwise, other than in the case of any Contract the principle subject matter of which is not Tax.

(viii) There are no Liens for Taxes upon any properties or assets of the Company or any of its Subsidiaries (other than Permitted Liens).
(ix) The Company, and each of its Subsidiaries are, and have been at all relevant times, in compliance in all material respects with all applicable transfer pricing Laws, and have maintained, in all material respects, required documentation (as required under Section 482 of the Code, paragraphs 247(4)(a) to (c) of the Tax Act, or any similar provision of applicable Tax Law), if any, for all transfer pricing arrangements.
(x) Neither the Company nor any of its Subsidiaries has received any notice or inquiry in writing from any Governmental Entity outside of the country in which the Company or the Subsidiary, as applicable, was formed, to the effect that the Company or any of its Subsidiaries is subject to net basis taxation or is tax resident or tax domiciled in any country other than the country in which the Company or the Subsidiary, as applicable, was formed.
(xi) None of the Subsidiaries have entered into any transaction or arrangement required to be reported as a “reportable transaction” within the meaning of the Code, and the regulations thereunder (or any similar provision of applicable Tax Law).
(xii) There are no circumstances existing which would reasonably be expected to result in the application of Section 17, Section 78, Section 79, or Sections 80 to 80.04 or Section 160 of the Tax Act to each of the Company and its Subsidiaries.
(xiii) All claims made by the Company or any of its Subsidiaries in respect of the Canada Emergency Wage Subsidy or the Canada Emergency Rent Subsidy pursuant to section 125.7 of the Tax Act have been made in accordance with applicable Laws in all material respects.
(xiv) None of the Company or its Subsidiaries have (A) obtained a Paycheck Protection Program Loan pursuant to Section 1102 of the CARES Act, (B) applied for loan forgiveness pursuant to Section 1106 of the CARES Act, (C) deferred payment of the employer portion of FICA and Medicare Tax pursuant to Section 2302 of the CARES Act, or (D) claimed the employee retention credit pursuant to Section 2301 of the CARES Act.
(v) Books and Records. The corporate records and minute books of the Company and its Subsidiaries are currently maintained in accordance with applicable Laws and are complete and accurate in all material respects.

==> picture [210 x 36] intentionally omitted <==

C - 52

(w) Insurance. Section 3.1(w) of the Company Disclosure Letter lists all material insurance policies maintained by or on behalf of the Company and its Subsidiaries as of the date of this Agreement. All such policies are in full force and effect and will not terminate by virtue of the transactions contemplated hereby, all premiums due thereon have been paid by the Company or one of its Subsidiaries, and the Company and its Subsidiaries are otherwise in compliance in all material respects with the terms and provisions of such policies. Furthermore, since January 1, 2019 through the date of this Agreement, (i) the Company and its Subsidiaries have not received any written or, to the knowledge of the Company, oral notice of cancellation or non-renewal of any such policy, other than in connection with the normal renewal process, nor is the termination of any such policies, to the knowledge of the Company, threatened, and (ii) to the knowledge of the Company, there is no material claim pending under any of such policies as to which coverage has been denied or disputed by the underwriters of such policies.
(x) Non-Arm’s Length Transactions. Except as disclosed in Section 3.1(x) of the Company Disclosure Letter, and other than consulting, employment or compensation agreements entered into in the Ordinary Course, no director, officer, employee or independent contractor to, the Company or any of its Subsidiaries or holder of record or beneficial owner of 10% or more of the Company Shares, or associate or affiliate of any such officer, director or beneficial owner, is a party to, or beneficiary of, any loan, guarantee or other Contract with the Company or any of its Subsidiaries.
(y) Benefit Plans.
(i) Section 3.1(y)(i) of the Company Disclosure Letter contains a true and complete list of all Company Benefit Plans as of the date of this Agreement and, in respect of each of the Company Benefit Plans, where applicable, the Company has provided or made available to the Purchaser current and complete copies of (A) the plan document(s) as amended through the date of this Agreement, or a written summary of any unwritten Company Benefit Plan, (B) the current member booklet and/or the summary plan description (together with any summaries of material modification thereto required under applicable Laws), (C) material contracts including trust agreements, insurance policies and contracts, and administrative services agreements, and (D) any non-routine correspondence within the past three years with the U.S. Department of Labor, U.S. Internal Revenue Service, or any other Governmental Entity.
(ii) Each Company Benefit Plan is and has been established, registered, qualified, funded, invested and administered, in all material respects, in accordance with all applicable Laws and in accordance with its terms.
(iii) All contributions, premiums or Taxes required to be made or paid by the Company or any of its Subsidiaries in respect of the Company Benefit Plans

==> picture [210 x 36] intentionally omitted <==

C - 53

and Statutory Plans have been made or paid in a timely fashion, and, in all material respects, in accordance with applicable Laws and the terms of the applicable Company Benefit Plan or Statutory Plan.

(iv) None of the Company Benefit Plans are subject to Title IV of ERISA, and the Company has no liability with respect to any plan that would be subject to Title IV of ERISA. None of the Company Benefit Plans is a “registered pension plan” or “retirement compensation arrangement”, as such terms are defined in the Tax Act. None of the Company Benefit Plans provide health, life insurance or other welfare type benefits to any employees or former employees (or to any spouses, dependents, survivors or beneficiaries of such persons) beyond retirement or other termination of service with the Company or any of its Subsidiaries, except as required by applicable Laws.
(v) There are no investigations by a Governmental Entity or claims (other than routine claims for payment of benefits) pending or threatened involving any Company Benefit Plan or its assets, and, to the knowledge of the Company, no facts exist which could reasonably be expected to give rise to any such investigation order or claim (other than routine claims for payment of benefits).
(vi) Each Company Benefit Plan that is intended to be qualified within the meaning of Section 401(a) of the Code has received a favorable determination letter from the IRS (or, if such plan uses a prototype or volume submitter plan document, such prototype or volume submitter plan document has received a favorable opinion from the IRS that the form meets the tax qualification requirements and the Company is entitled to rely on such favorable opinion) to the effect that such Company Benefit Plan satisfies the requirements of Section 401(a) of the Code, and to the knowledge of the Company, nothing has occurred that would reasonably be expected to cause the loss of such qualification.
(vii) Neither the Company nor any of its Subsidiaries has any formal plan or has made any promise or commitment to create any additional benefit plans which would be considered to be Company Benefit Plan once created or to materially improve or change the benefits provided under any Company Benefit Plan.
(viii) To the knowledge of the Company, all material data necessary in order for the Company to fulfil its obligations in respect of the administration of each Company Benefit Plan is in the possession of the Company, its agents or third party administrators, and such data is materially complete and accurate.
(ix) No entity, other than the Company or its Subsidiaries, is a participating employer under any Company Benefit Plan and no individuals, other than employees of the Company or its Subsidiaries (and any spouses,

==> picture [210 x 36] intentionally omitted <==

C - 54

dependants, survivors or beneficiaries of such persons) participate in, or are eligible to participate in, any of the Company Benefit Plans.

(z) Restrictions on Business Activities. Except as would not, individually or in the aggregate, have a Company Material Adverse Effect, there is no Contract or Order binding upon the Company or any of its Subsidiaries that has or could reasonably be expected to have the effect of prohibiting, restricting or impairing any business practice of the Company or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries as currently conducted (including following the transaction contemplated by this Agreement).
(aa) First Nations Claims. Neither the Company nor any of its Subsidiaries has received any written notice of any First Nations Claim which affects the Company or any of its Subsidiaries nor, to the knowledge of the Company, has any First Nations Claim been threatened which relates to any Real Property, any Authorizations, or the operation by the Company or its Subsidiaries of their respective businesses in the area in which such operations are carried on or in which such Real Property is located, in each case that would individually or in the aggregate constitute a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries has any material outstanding agreements, memorandums of understanding or similar arrangement with any First Nations Group, other than Contracts disclosed in the Data Room, and, as of the date hereof, there are no material ongoing or outstanding discussions, negotiations, or similar communications between the Company and its Subsidiaries, on one hand, and any First Nations Group, on the other hand, concerning First Nations Claims which relates to any Real Property, any Authorizations, or the operation by the Company or its Subsidiaries of their respective businesses, operations or assets in the area in which such operations are carried on or in which such Real Property is located.

(bb) Community Groups and Stakeholder Relations.

(i) Except as disclosed in Section 3.1(bb) of the Company Disclosure Letter and as would not be material to the Company and its Subsidiaries, taken as a whole, no authorized legal representative of any community in the vicinity of any of the Real Property has communicated in writing to the Company a requirement that the consent of such community be obtained as a condition to continued operation of any such Real Property, as applicable. As of the date hereof, neither the Company nor any of its Subsidiaries is a party to any material community development, social framework or similar agreement.
(ii) No material dispute exists or, to the knowledge of the Company, is threatened in writing between community groups, on one hand, and the Company and its Subsidiaries, on the other hand, with respect to the Company and its Subsidiaries’ respective businesses, assets and operations,

==> picture [210 x 36] intentionally omitted <==

C - 55

except for such disputes that would not, individually or in the aggregate, have a Company Material Adverse Effect.

(iii) No material dispute between the Company or any of its Subsidiaries, on one hand, and any First Nations Group, non-governmental organization, community or community group exists or, to the knowledge of the Company, is threatened with respect to any of the Company’s or any of its Subsidiaries’ properties or activities.

(cc)

Sustainable Biomass Sourcing.

(i) A valid “Chain of Custody” certificate under the PEFC International Standard – Chain of Custody of Forest Based Productions – Requirements (PEFC ST 2002:2013) is in place which covers each of the wood pellet plants that the Company and its Subsidiaries operate at the date hereof. As at the date hereof, not less than 60% of biomass pellets produced by the Company can be claimed as certified Forest Management material under the PEFC CoC certificate (eligible for “X% PEFC Certified” claim).
(ii) Each of the wood pellet plants that the Company and its Subsidiaries operate at the date hereof is certified by the Sustainable Biomass Program (SBP). As of the date hereof, not less than 75% of all biomass produced by the Company and its Subsidiaries could be certified as “SBP Compliant”.
(iii) All biomass produced by the Company and its Subsidiaries that cannot be (A) claimed as certified Forest Management material under the PEFC CoC certificate (eligible for “X% PEFC Certified” claim), or (B) certified as “SBP Compliant”, has been formally assessed through the Company’s PEFC due diligence system to minimize the risk of fiber originating from controversial sources (PEFC 2002-2013 Chain of Custody Standard – Second Edition).
(iv) A Green Gold Label S1 v3.1 Chain of Custody Standard and GGLS4 – Transaction and Product Certificate, as certified by Control Union Certifications, has been issued to each of the wood pellet plants that the Company and its Subsidiaries operate located in the Provinces of Alberta or British Columbia.

(dd) Material Contracts.

(i) Neither the Company or any of its Subsidiaries nor, to the knowledge of the Company, any other party, is in default in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any of the Company Material Contracts, and, to the knowledge of the Company, there has not occurred any event that, with the lapse of time or giving of notice or both, would constitute such a default. The Company has not received any written notice or, to the knowledge of

==> picture [210 x 36] intentionally omitted <==

C - 56

the Company, other notice that any party to a Company Material Contract intends to cancel, terminate or otherwise modify or not renew its relationship with the Company or any of its Subsidiaries, and, to the knowledge of the Company, no such action has been threatened.

(ii) Each of the Company Material Contracts is a valid and binding obligation of the Company or one of its Subsidiaries, and, to the knowledge of the Company, each other party thereto, enforceable against the Company or such Subsidiary and, to the knowledge of the Company each other party thereto in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency and other applicable Laws affecting the enforcement of creditors’ rights generally and subject to the qualification that equitable remedies may be granted only in the discretion of a court of competent jurisdiction.
(iii) (A) Section 3.1(dd) of the Company Disclosure Letter sets forth a list as of the date of this Agreement of the Company Material Contracts. (B) The Company has made available to the Purchaser a true, complete and correct copy (including any material amendment, modification, extension or renewal with respect thereto) of each Company Material Contract.

(ee) Leased Real Property.

(i) The Company and its Subsidiaries have good and marketable title to, or valid leasehold interests in, all of their respective properties and assets, free and clear of all Liens, except for Permitted Liens. The Company and its Subsidiaries enjoys peaceful and undisturbed possession under all occupancy agreements for Leased Real Property, in each case subject to the terms and conditions of the relevant Lease. The Company has made available to the Purchaser a true, complete and correct copy (including any amendment, modification, extension or renewal with respect thereto) of each Lease in effect as of the date hereof.
(ii) Section 3.1(ee)(ii) of the Company Disclosure Letter sets forth a true, complete and correct list, as of the date of this Agreement, of all real property leased, subleased, licensed and/or otherwise used or occupied (whether as tenant, subtenant, licensee or pursuant to any other occupancy arrangement (whether written or otherwise)) by the Company or any of its Subsidiaries in connection with the operation of the Company’s or such Subsidiary’s business as it is now being conducted (collectively, including the improvements thereon, the “ Leased Real Property ”) and the related Leases.
(iii) Except as set forth in Section 3.1(ee)(iii) of the Company Disclosure Letter, to the knowledge of the Company, no Person, other than the Company or its Subsidiaries, possesses, uses or occupies all or any portion of any Leased Real Property other than contractors and third party licensees of the

==> picture [210 x 36] intentionally omitted <==

C - 57

Company or its Subsidiaries in the Ordinary Course. Section 3.1(ee)(iii) of the Company Disclosure Letter sets forth a true, complete and correct list, as of the date of this Agreement, of all subleases, licenses or other occupancy arrangements (whether written or otherwise) pursuant to which any Person, other than the Company or its Subsidiaries, possesses, uses or occupies all or any portion of the Leased Real Property.

(iv) To the knowledge of the Company, there are no pending or threatened proceedings to take all or any portion of the Leased Real Property or any interest therein by eminent domain or any condemnation proceeding or any sale or disposition in lieu thereof.
(v) To the knowledge of the Company, no material breach of any covenant affecting the titles to Real Property is outstanding.
(vi) To the knowledge of the Company, there are no material disputes regarding boundaries, easements, covenants or other matters relating to any Real Property.
(vii) To the knowledge of the Company, the current use of any Real Property that is material to the business of the Company and its Subsidiaries, taken as a whole, is the lawful use under the relevant jurisdictions planning legislation.
(viii) To the knowledge of the Company, all required consents and approvals have been obtained in respect of the development of any Real Property and any alteration, extension or other improvement thereof.

(ff) Interest in Real Properties.

(i) All of the Company’s owned real properties (collectively, the “ Company Property ”) are set forth in Section 3.1(ff) the Company Disclosure Letter, and has good and valid title thereto, subject to Permitted Liens.
(ii) The Company or its Subsidiary is the sole legal and beneficial owner of all right, title and interest in and to the Company Property, free and clear of any Lien, other than a Permitted Lien.
(iii) There are no back-in rights, earn-in rights, purchase options, rights of first refusal or similar provisions or rights in favor of third parties, other than Permitted Liens, which would materially adversely affect any interest of the Company in the Company Property.
(iv) The Company and its Subsidiaries have not received any notice from any Governmental Entity or any third party of any revocation or intention to revoke any interest of the Company in any of the Company Property.

==> picture [210 x 36] intentionally omitted <==

C - 58

(v) To the knowledge of the Company, the Company Property is in good standing under applicable Laws and all material work required to be performed and filed in respect thereof has been performed and filed, all material Taxes, rentals, fees, expenditures and other payments required to be made in respect thereof have been paid or incurred and all material filings in respect thereof have been made.
(vi) To the knowledge of the Company, there are no material adverse claims against or challenge to the title to or ownership of any Company Property.
(vii) Except as set forth in Section 3.1(ff)(vi) of the Company Disclosure Letter and except pursuant to Permitted Liens, no Person other than the Company and its Subsidiaries has any interest in the Company Property. There are no Contracts which affect or relate to title to, or ownership, operation or management of the Company Property, except for Permitted Liens or except as would not, individually or in the aggregate, have a Company Material Adverse Effect.
(viii) Each Company Property has direct legal access to a municipal right-of-way or public highway and the Company and its Subsidiaries otherwise have such rights of entry and exit to and from the Company Property as are reasonably necessary to carry on the business of the Company and the Subsidiaries upon the Company Property as they are currently operated.
(ix) To the knowledge of the Company, except as disclosed in Section 3.1(ff)(ix) of the Company Disclosure Letter, none of the Company or any of the Subsidiaries has received any material notification of any outstanding or incomplete work orders, deficiency notices or other current non-compliance with Laws relating to any of the Real Property.
(x) To the knowledge of the Company, no improvements located on Real Property encroach in any material respect on real property not forming part of the Real Property and no buildings, structures or other improvements on adjoining lands encroach upon the Real Property in any material respect.
(gg) Title and Rights re: Other Assets. Other than Company Properties, Leases, Leased Real Property, Authorizations and Company Material Contracts (which are addressed elsewhere), the Company and each of its wholly-owned Subsidiaries have good and valid title to all material properties and material assets reflected in the most recently publicly available consolidated financial statements of the Company or valid leasehold or license interests in all material properties and material assets not reflected in such financial statements but used by the Company or its Subsidiaries, free and clear of all material Liens (other than the Permitted Liens).
(hh) Corrupt Practices Legislation. The Company and its Subsidiaries are in compliance with all applicable anti-corruption Laws, including the United States Foreign

==> picture [210 x 36] intentionally omitted <==

C - 59

Corrupt Practices Act of 1977 , as amended, and the rules and regulations thereunder, any applicable state law of the United States of America regarding corruption, the Corruption of Foreign Public Officials Act (Canada) and the U.K. Bribery Act of 2010. In connection with this Agreement, neither the Company nor its Subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or other Person acting on behalf of the Company or any of its Subsidiaries, directly or indirectly, has (prior to or upon entering this Agreement), given, made, offered or received, or will (until completion or termination of this Agreement, as applicable) give, make, offer or receive anything of value, including any payment (including a facilitation payment), gift, contribution, expenditure or other advantage (i) in violation of any applicable Laws, including any anticorruption Law; or (ii) to a Public Official with the intention of: (A) improperly influencing any act or decision of such Public Official; (B) inducing such Public Official to do or omit to do any act in violation of his lawful duty; or (C) securing any improper advantage from such Public Official, in each case in order to obtain or retain business or any business advantage. For the purposes of this Section 3.1(hh), “ Public Official ” includes any (w) officer, employee, or agent employed by, representing or acting on behalf of a (I) Governmental Entity or public international organisation or any department, agency or instrumentality thereof, (II) legislative, administrative or judicial office, or (III) government owned or controlled enterprise; (x) political party or party official, or any candidate for any political office; (y) individual who holds or performs the duties of an appointment, office or position created by custom or convention, including (as applicable) any native American tribal leader; or (x) person who holds themselves out to be an authorised representative or intermediary of anyone specified in (w), (x) or (y) above.

(ii) No Contravention. To the knowledge of the Company, there have been no material violations or contraventions of its Code of Ethics, Anti-Bribery & Anti-Corruption Policy, Whistleblower policy or Related Party Transactions Policy by any officer, director, employee, independent contractor or agent of the Company or any of its Subsidiaries. No variation, exception, waiver or management override from compliance with the Code of Ethics, Anti-Bribery & Anti-Corruption Policy, Whistleblower policy or Related Party Transactions Policy of the Company has been granted, in writing, or, to the knowledge of the Company, otherwise, by the Company to any Person.
(jj) No Sanctions. Since January 1, 2018, neither the Company nor its Subsidiaries have (i) violated any applicable Laws governing economic sanctions and embargoes, anti-boycott and anti-terrorism (collectively “ Sanction Laws ”), or (ii) received any notice, report, order, directive or other information from a Governmental Entity or any other Person that alleges that the Company or its Subsidiaries, or any Person acting on behalf of the Company or its Subsidiaries are: (A) not in compliance with Sanction Laws; or (B) liable or potentially liable under Sanction Laws.

==> picture [210 x 36] intentionally omitted <==

C - 60

(kk) Brokers; Expenses. Except for the fees to be paid to the Company Financial Advisors pursuant to their respective engagement letters with the Company, true and complete copies of which have been made available to the Purchaser, none of the Company, any of its Subsidiaries, or any of their respective officers, directors or employees has employed any broker, finder, investment banker, financial advisor or other person or incurred any liability for any brokerage fees, commissions, finder’s fees, financial advisory fees or other similar fees in connection with the transactions contemplated by this Agreement.
(ll) No “Collateral Benefit”. To the knowledge of the Company and except as disclosed in Section 3.1(ll) of the Company Disclosure Letter, no related party of the Company (within the meaning of MI 61-101) together with its associated entities, beneficially owns or exercises control or direction over 1% or more of the outstanding Company Shares, except for the Purchaser and related parties who will not receive a “collateral benefit” (within the meaning of such instrument) as a consequence of the transactions contemplated by this Agreement.
(mm) Company Fairness Opinions. As of the date hereof:
(i) CIBC World Markets Inc. and Scotia Capital Inc., financial advisors to the Company and the Special Committee, respectively (the “ Company Financial Advisors ”), have delivered their respective opinion to the Company Board and the Special Committee to the effect that as of the date of such opinion, subject to the assumptions and limitations to be set out therein, the Consideration to be received by the Company Shareholders pursuant to the Arrangement is fair from a financial point of view to the Company Shareholders (the “ Company Fairness Opinions ”); and
(ii) the Company has been authorized by the Company Financial Advisors to permit inclusion of a copy of the Company Fairness Opinions and references thereto in the Company Circular, subject to each of the Company Financial Advisors’ review of the Company Circular.
(nn) No other Purchaser Representations and Warranties. Except for the representations and warranties expressly set forth in this Agreement or in any certificate delivered pursuant to this Agreement, the Company hereby acknowledges that none of the Purchaser, Acquireco or any other Person on their behalf, has made or is making any other express or implied representation or warranty with respect to the Purchaser, Acquireco or their respective business or operations, including with respect to any information provided or made available to the Company or any of its Representatives or any information developed by the Company or any of its Representatives.

==> picture [210 x 36] intentionally omitted <==

C - 61

3.2 Survival of Representations and Warranties

The representations and warranties of the Company contained in this Agreement shall not survive the completion of the Arrangement and shall expire and be terminated on the earlier of the Effective Time and the date on which this Agreement is terminated in accordance with its terms.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

4.1 Representations and Warranties

The Purchaser hereby represents and warrants to the Company the representations and warranties set forth in this Section 4.1 and acknowledges that the Company is relying upon such representations and warranties in connection with the entering into of this Agreement and the carrying out of the transactions contemplated herein:

(a) Organization. Each of the Purchaser and Acquireco is a corporation duly organized and validly existing under the Laws of the jurisdiction of its respective incorporation. Each of the Purchaser and Acquireco is duly qualified or licensed to do business in each jurisdiction where such qualification or licensing is necessary, except where the failure to be so qualified or licensed would not, individually or in the aggregate, reasonably be expected to prevent or materially impair or delay the ability of the Purchaser and Acquireco to consummate the Arrangement (a “ Purchaser Material Adverse Effect ”).
(b) Authorization; Validity of Agreement; Company Action. Each of the Purchaser and Acquireco has all necessary corporate power and authority to execute and deliver this Agreement and the agreements and other documents to be entered into by it hereunder, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereunder and thereunder. The execution, delivery and performance by the Purchaser and Acquireco of this Agreement, the Arrangement and the agreements and other documents to be entered into by it hereunder and the consummation by the Purchaser and Acquireco of the transactions contemplated hereunder and thereunder, have been duly and validly authorized by the board of directors of each of the Purchaser and Acquireco and no other corporate proceeding on the part of the Purchaser or Acquireco is necessary to authorize the execution, delivery and performance by the Purchaser and Acquireco of this Agreement and the agreements and other documents to be entered into by it hereunder or the consummation of the Arrangement, other than (i) the approval of the Purchaser Circular by the FCA, and (ii) the approval of the Purchaser Circular by the Purchaser Board, and (iii) the approval of the Purchaser Resolution by the Purchaser Shareholders at the Purchaser Meeting, as required by applicable Laws. This Agreement has been duly and validly executed and delivered by the Purchaser and Acquireco and, assuming due and valid authorization, execution and delivery of this Agreement by the Company, is a valid and binding obligation of each of the Purchaser and Acquireco enforceable against each of them in accordance with its terms, except as the enforcement thereof may be limited by

==> picture [210 x 36] intentionally omitted <==

C - 62

bankruptcy, insolvency and other applicable Laws affecting the enforcement of creditors’ rights generally and subject to the qualification that equitable remedies may be granted only in the discretion of a court of competent jurisdiction.

(c) Purchaser Board Approval. The Purchaser Board at a meeting duly called and held and after receiving financial and legal advice has unanimously and duly resolved (i) that the entry into this Agreement and consummation of the Arrangement and the other transactions contemplated by this Agreement, on the terms and subject to the conditions set forth herein, are most likely to promote the success of the Purchaser for the benefit of its stockholders as a whole, (ii) to approve entry by the Purchaser into this Agreement, the Arrangement and the other transactions contemplated by this Agreement, and (iii) that it was the intention of the Purchaser Board to convene the Purchaser Meeting to put the Purchaser Resolution to the Purchaser’s Shareholders at the Purchaser Meeting for their approval and to make the Purchaser Board Recommendation.

(d) No Conflict; Required Filings and Consent.

(i) The execution and delivery by the Purchaser and Acquireco of this Agreement and the performance by each of them of its obligations hereunder and the completion of the Arrangement do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) violate, conflict with or result in a breach of:
(A) any provision of the articles, by-laws or other constating documents of the Purchaser or Acquireco;
(B) any Contract to which the Purchaser or Acquireco is a party or by which the Purchaser or Acquireco is bound; or
(C) any Law to which the Purchaser or Acquireco is subject or by which the Purchaser or Acquireco is bound;

except as would not, individually or in the aggregate, reasonably be expected to prevent or materially delay the ability of the Purchaser and Acquireco to consummate the Arrangement.

(ii) Other than compliance with any applicable Laws, stock exchange rules and policies, the Key Regulatory Approvals, the Interim Order and the Final Order, no Authorization of, or other action by or in respect of, or filing, recording, registering or publication with, or notification to, any Governmental Entity is necessary on the part of the Purchaser or Acquireco for the consummation by the Purchaser and Acquireco of its obligations in connection with the Arrangement under this Agreement or for the completion of the Arrangement, except for such Authorizations and filings as would not, individually or in the aggregate, reasonably be expected to

==> picture [210 x 36] intentionally omitted <==

C - 63

prevent or materially delay the ability of the Purchaser and Acquireco to consummate the Arrangement.

(e) Litigation. There are no claims, actions, suits, arbitrations, inquiries, investigations or proceedings pending, or, to the knowledge of the Purchaser threatened, against the Purchaser or Acquireco before any Governmental Entity nor is the Purchaser or Acquireco subject to any outstanding judgement, order, writ, injunction or decree that, either individually or in the aggregate, is reasonably likely to have a Purchaser Material Adverse Effect.
(f) Available Funds. The Purchaser has, and the Purchaser will have at the Effective Time, sufficient available funds to consummate the Arrangement and pay the aggregate Consideration on the terms and subject to the conditions set forth herein and in the Plan of Arrangement, and to satisfy all other obligations payable at or prior to the Effective Time by the Purchaser and Acquireco pursuant to this Agreement and the Arrangement. The Purchaser’s and Acquireco’s obligations hereunder are not subject to any conditions regarding the Purchaser’s, Acquireco’s or any other Person’s ability to obtain financing for the Arrangement and the other transactions contemplated by this Agreement.
(g) Security Ownership. Neither the Purchaser, nor any of its affiliates (including Acquireco) or any Person acting jointly or in concert with the Purchaser with respect to the Company, beneficially owns or exercises control or direction over any securities of the Company.
(h) Ownership of the Acquireco. The Purchaser is, directly or indirectly, the registered and beneficial owner of all of the outstanding securities of Acquireco.
(i) No other Company Representations and Warranties. Except for the representations and warranties expressly set forth in this Agreement or in any certificate delivered pursuant to this Agreement, the Purchaser and Acquireco hereby acknowledge that none of the Company or any other Person on its behalf has made or is making any other express or implied representation or warranty with respect to the Company, its Subsidiaries or their respective business or operations, including with respect to any information provided or made available to the Purchaser or any of its Representatives or any information developed by the Purchaser or any of its Representatives.

4.2 Survival of Representations and Warranties

The representations and warranties of the Purchaser contained in this Agreement shall not survive the completion of the Arrangement and shall expire and be terminated on the earlier of the Effective Time and the date on which this Agreement is terminated in accordance with its terms.

==> picture [210 x 36] intentionally omitted <==

C - 64

ARTICLE 5 COVENANTS

5.1 Covenants of the Company Regarding the Conduct of Business

(a) The Company covenants and agrees that during the period from the date of this Agreement until the earlier of the Effective Date and the time that this Agreement is terminated in accordance with its terms, except (A) as expressly required or expressly permitted by this Agreement or the Plan of Arrangement (including any Pre-Acquisition Reorganization), (B) as required by applicable Laws or Governmental Entity, (C) as expressly set out in the Company Disclosure Letter (including the Company Budget), (D) as a result of or in connection with any COVID-19 Measures (provided that the Company shall consult with the Purchaser and consider in good faith any suggestions of the Purchaser prior to undertaking any COVID-19 Measures), or (E) with the prior written consent of the Purchaser, such consent not to be unreasonably withheld, delayed or conditioned, the Company shall, and shall cause each of its Subsidiaries to, and shall exercise its rights (if any) with respect to the Joint Ventures to cause the Joint Ventures to:
(i) conduct its and their respective businesses in the Ordinary Course; and
(ii) use commercially reasonable efforts to preserve intact its and their present business organization, goodwill, business relationships and assets and to keep available the services of its and their officers and employees as a group.
(b) Without limiting the generality of Section 5.1(a), the Company covenants and agrees that during the period from the date of this Agreement until the earlier of the Effective Date and the time that this Agreement is terminated in accordance with its terms, except (A) as expressly required or expressly permitted by this Agreement or the Plan of Arrangement (including any Pre-Acquisition Reorganization), (B) as required by applicable Laws or Governmental Entity, (C) as expressly set out in the Company Disclosure Letter (including the Company Budget), or (D) with the prior written consent of the Purchaser, such consent not to be unreasonably withheld, delayed or conditioned, the Company shall not, and shall cause each of its Subsidiaries not to, and shall exercise its rights (if any) with respect to the Joint Ventures to cause the Joint Ventures not to direct or indirectly:
(i) amend its notice of articles, articles or other constating documents;
(ii) issue, sell, grant, award, pledge, dispose of or otherwise encumber or agree to issue, sell, grant, award, pledge, dispose of or otherwise encumber any Company Shares or other equity or voting interests or any options, share appreciation rights, warrants, calls, conversion or exchange privileges or rights of any kind to acquire (whether on exchange, exercise, conversion or otherwise) any Company Shares or other equity or voting interests or other securities or, other than issuances by a wholly-owned Subsidiary of the

==> picture [210 x 36] intentionally omitted <==

C - 65

Company to the Company or another wholly-owned Subsidiary of the Company or in respect of Permitted Liens, any shares of its Subsidiaries (including, for greater certainty, Company Options or any other equity based awards), other than pursuant to (A) the exercise or vesting of Company Options or Company RSUs in accordance with their terms, (B) the grants of Company Options and Company RSUs set out in Section 5.1(b)(ii) of the Company Disclosure Letter or (C) contributions of capital made by the Company or one of its Subsidiaries to a Joint Venture in connection with the funding of capital expenditures expressly permitted by this Section 5.1 or required to be made by this Agreement;

(iii) split, combine or reclassify any outstanding Company Shares or the securities of any of its Subsidiaries;
(iv) declare, set aside or pay any dividend or make any other distribution (whether in cash, securities, or property or any combination thereof), other than the Permitted Dividends and dividends or distributions from one wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company or by a Joint Venture in the Ordinary Course;
(v) redeem, purchase or otherwise acquire or offer to purchase or otherwise acquire Company Shares or other securities of the Company or any securities of its Subsidiaries, other than the acquisition of securities of any wholly-owned Subsidiary of the Company by the Company or by any other Subsidiary of the Company;
(vi) adopt or propose a plan of liquidation or resolutions providing for the liquidation or dissolution of the Company or any of its Subsidiaries;
(vii) reorganize, amalgamate or merge the Company or its Subsidiaries with any other Person;
(viii) sell, pledge, lease, dispose of, mortgage, licence, encumber or otherwise transfer or agree to sell, pledge, lease, dispose of, mortgage, licence, encumber or otherwise transfer any tangible assets of the Company or any of its Subsidiaries or any interest in any tangible assets of the Company or any of its Subsidiaries, except (A) sales of inventory or obsolete assets in the Ordinary Course, (B) other sales of tangible assets in the Ordinary Course subject to a maximum (in terms of value of such assets or interests therein) of $5,000,000 (whether individually or in the aggregate) and (C) Permitted Liens;
(ix) (A) acquire (by merger, consolidation, acquisition of shares or assets or otherwise) or agree to acquire, directly or indirectly, in one transaction or in a series of related transactions, any Person, (B) make any investment or agree to make any investment, directly or indirectly, in one transaction or

==> picture [210 x 36] intentionally omitted <==

C - 66

in a series of related transactions, either by purchase of shares or securities, contributions of capital or otherwise (other than to wholly-owned Subsidiaries or in connection with capital expenditures expressly permitted by this Section 5.1), or (C) purchase any property or assets of any other Person, other than for greater certainty pursuant to or in connection with Ordinary Course procurement activities or the acquisition of raw materials or inventory in the Ordinary Course;

(x) incur any capital expenditures or enter into or modify any agreement obligating the Company or its Subsidiaries to provide for future capital expenditures other than (A) budgeted capital expenditures that are included in the Company Budget, or (B) any other capital expenditures not to exceed $5,000,000 in the aggregate;
(xi) make any changes in financial accounting methods, principles, policies or practices, except as required, in each case, by IFRS;
(xii) reduce the stated capital of the Company Shares or the shares or any of the Company’s Subsidiaries;
(xiii) incur, create, assume or otherwise become liable for any indebtedness for borrowed money or issue any debt securities, or guarantee, endorse or otherwise become responsible for, the obligations of any arm’s length Person or make any loans or advances, in any such individual case, in an amount in excess of $5,000,000, other than indebtedness owing by one wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company or by the Company to another wholly-owned Subsidiary of the Company and other than in connection with advances under the Company’s or any Subsidiary’s credit facilities existing on the date hereof in the Ordinary Course;
(xiv) (A) before due and owing, pay, discharge or satisfy, or (B) waive, release, assign, settle or compromise, any material claims or material liabilities (including any litigation, proceedings or investigation by any Governmental Entity);
(xv) enter into any agreement that, if entered into prior to the date hereof, would have been a Company Material Contract, or modify, amend in any material respect, transfer or terminate any Company Material Contract, or waive, release, or assign any material rights or claims thereto or thereunder;
(xvi) enter into or terminate any material interest rate, currency, equity or commodity swaps, hedges, derivatives, forward sales contracts or other financial instruments or like transaction, other than in the Ordinary Course;
(xvii) except as required by the terms of the Company Benefit Plans or any written employment Contracts in effect on the date of this Agreement and disclosed

==> picture [210 x 36] intentionally omitted <==

C - 67

in the Data Room, (A) grant, accelerate, or increase any severance, change of control or termination pay to (or amend any existing arrangement relating to the foregoing with) any director, officer, employee or individual consultant of the Company or any of its Subsidiaries; (B) grant, accelerate, or increase any payment, award (equity or otherwise) or other benefits payable to, or for the benefit of, any director, officer, employee or individual consultant of the Company or any of its Subsidiaries, except an annual cash bonus in the Ordinary Course or as may be required to comply with Section 5.3 of this Agreement; (C) increase the coverage, contributions, funding requirements or benefits available under any Company Benefit Plan, other than in the Ordinary Course, or create any new plan which would be considered to be a Company Benefit Plan once created; (D) increase compensation (in any form), bonus levels or other benefits payable to any director, officer, employee or consultant of the Company or any of its Subsidiaries or grant any general increase in the rate of wages, salaries, bonuses or other remuneration, except in the Ordinary Course; (E) make any material determination under any Company Benefit Plan that is not in the Ordinary Course, other than determinations in furtherance of acceleration, vesting or similar determinations in connection with the transactions described herein; or (F) take or propose any action to effect any of the foregoing;

(xviii) enter into, amend or terminate any employment, severance, consulting, termination or other similar agreement with any of its officers, directors, employees, agents or consultants, or any Company Benefit Plan, in each case, other than (A) severance agreements entered into in connection with terminating employees in the Ordinary Course, (B) offer letters entered into in the Ordinary Course, that do not provide for severance (except as required by applicable Law) or change in control benefits, (C) consulting agreements entered into in the Ordinary Course, (D) amendments required by Law or required to maintain the tax-qualified or registered status of any Company Benefit Plan under Section 401(a) of the Code or other applicable Law or (E) compensation arrangements that are generally consistent with past practice and entered into with employees hired after the date of this Agreement and who earn an annualized base salary or wage not greater than $115,000 (or its equivalent);
(xix) enter into any new collective agreement or union agreement or amend, modify, terminate or waive any right under any collective agreement or union agreement or agree to any such amendment, modification, termination or waiver of rights;
(xx) make or forgive any loans or advances to any of its officers, directors, employees, agents or consultants other than making loans pursuant to the terms of the Company Benefit Plans as in effect on the date hereof or change

==> picture [210 x 36] intentionally omitted <==

C - 68

its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to an employee benefit plan or otherwise;

(xxi) waive, release or condition any material non-compete, non-solicit, nondisclosure, confidentiality or other restrictive covenant owed to the Company;
(xxii) (A) hire any Person earning an annualized base salary or wage greater than $115,000 (or its equivalent) or (B) terminate, except for cause, the employment of any Person earning an annualized base salary or wage greater than $115,000 (or its equivalent);
(xxiii) take any action or fail to take any action which action or failure to act would reasonably be expected to cause any Governmental Entities to institute proceedings for the suspension of, or the revocation or limitation of rights under, any material Authorizations necessary to conduct its businesses as now conducted, or abandon or fail to diligently pursue any application or renewal for any material Authorizations; or

(xxiv) authorize or agree to do any of the foregoing.

(c) The Company shall use all commercially reasonable efforts to cause its current material insurance policies maintained by the Company or any of its Subsidiaries not to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect; provided that, subject to Section 5.8(a), neither the Company nor any of its Subsidiaries shall obtain or renew any material insurance policy for a term exceeding 12 months;
(d) The Company and each of its Subsidiaries shall not, without the prior written consent of the Purchaser, to the extent such action materially affects the Company and its Subsidiaries, taken as a whole:
(i) take any action inconsistent with past practice relating to the filing of any Tax Return or the withholding, collecting, remitting and payment of any Tax;
(ii) amend any Tax Return or change any of its methods of reporting income, deductions or accounting for income Tax purposes from those employed in the preparation of its income Tax return for the taxation year ended December 31, 2019;
(iii) make, amend, change or revoke any material Tax election, information schedule or Tax Return, other than any election that has yet to be made in

==> picture [210 x 36] intentionally omitted <==

C - 69

respect of any event or circumstance occurring prior to the date of this Agreement;

(iv) enter into any Tax sharing, Tax allocation, Tax related waiver or Tax indemnification agreement; or
(v) settle (or offer to settle), surrender or compromise any Tax claim, audit, proceeding, benefit, liability, assessment or re-assessment or enter into any material agreement with a Governmental Entity with respect to Taxes;
(e) The Company and its Subsidiaries shall not knowingly undertake or participate in any transaction or series of transactions that would or could reasonably be expected to have the effect of materially reducing or eliminating the amount of the tax cost “bump” pursuant to paragraphs 88(1)(c) and (d) of the Tax Act otherwise available to Acquireco or its successors or assigns in respect of non-depreciable capital property owned by the Company on the Effective Date;
(f) The Company shall not take any action that is inconsistent with the position that the transaction contemplated in this Agreement is a “qualified stock purchase” within the meaning of Section 338(d)(3) of the Code;
(g) The Company shall prepare, or shall cause to be prepared, and shall file prior to the Effective Date all sales and use Tax Returns of the Company and its Subsidiaries that are required to be filed on or before the Effective Date or that have not been timely filed when due, and shall remit all sales and use Taxes that are required to be paid in respect of such Tax Returns;
(h) Except as expressly set out in the Company Disclosure Letter (including the Company Budget), between the date of the Company Meeting and the Effective Date, the Company shall not make any “investments” (as defined for purposes of section 212.3 of the Tax Act) in any corporation that is a “foreign affiliate” of the Company and/or any of its Subsidiaries (including, for greater certainty, an indirect investment described in paragraph 212.3(10)(f) of the Tax Act), other than in the Ordinary Course; and
(i) The Purchaser will, promptly following the date hereof, designate two individuals from either of whom the Company may seek approval to undertake any actions not permitted to be taken under this Section 5.1, and will direct such persons to respond, on behalf of the Purchaser, to the Company’s requests as soon as reasonably practicable.

5.2 Covenants of the Parties Relating to the Arrangement

(a) Subject to Section 5.4 hereto which shall govern in relation to Regulatory Approvals and Section 5.2(b) which shall govern in relation to the Key Consent, each of the Parties covenants and agrees that, subject to the terms and conditions of this Agreement, during that period from the date of this Agreement until the earlier

==> picture [210 x 36] intentionally omitted <==

C - 70

of the Effective Time and the time that this Agreement is terminated in accordance with its terms:

(i) it shall use its commercially reasonable efforts to, and shall cause its Subsidiaries to use all commercially reasonable efforts to, satisfy (or cause the satisfaction of) the conditions precedent to its obligations hereunder as set forth in Article 6 to the extent the same is within its control and to take, or cause to be taken, all other action and to do, or cause to be done, all other things necessary, proper or advisable under all applicable Laws to complete the Arrangement and any Pre-Acquisition Reorganization, including using its commercially reasonable efforts to promptly: (A) obtain all necessary waivers, consents and approvals required to be obtained by it from parties to the Company Material Contracts (other than the Key Consent) and without being required to pay, and without committing itself or the Purchaser to pay, any consideration, or to incur any liability or obligation prior to the Effective Time, or, without the consent of the Purchaser, following the Effective Time; (B) obtain all necessary and material Authorizations as are required to be obtained by it or any of its Subsidiaries under applicable Laws; (C) fulfill all conditions and satisfy all provisions of this Agreement and the Arrangement, including delivery of the certificates of their respective officers contemplated by Sections 6.2(a), 6.2(b), 6.3(a) and 6.3(b); and (D) co-operate with the other Party in connection with the performance by it and its Subsidiaries of their obligations hereunder;
(ii) it shall not take any action, shall refrain from taking any action, and shall not permit any action to be taken or not taken, which is inconsistent with this Agreement or which would reasonably be expected to, individually or in the aggregate, materially impede or materially delay the consummation of the Arrangement or the other transactions contemplated herein;
(iii) it shall use commercially reasonable efforts to: (A) defend all lawsuits or other legal, regulatory or other Proceedings against itself or any of its Subsidiaries challenging or affecting this Agreement or the consummation of the transactions contemplated hereby; (B) appeal, overturn or have lifted or rescinded any injunction or restraining order or other order, including Orders, relating to itself or any of its Subsidiaries which may materially adversely affect the ability of the Parties to consummate the Arrangement; and (C) appeal or overturn or otherwise have lifted or rendered nonapplicable in respect of the Arrangement, any Law that makes consummation of the Arrangement illegal or otherwise prohibits or enjoins the Company or the Purchaser from consummating the Arrangement; and
(iv) it shall carry out the terms of the Interim Order and Final Order applicable to it and use commercially reasonable efforts to comply promptly with all

==> picture [210 x 36] intentionally omitted <==

C - 71

requirements which applicable Laws may impose on it or its Subsidiaries or affiliates with respect to the transactions contemplated hereby.

(b) The Purchaser shall, and shall cause its Subsidiaries to use best efforts to obtain the Key Consent and, notwithstanding the generality of the foregoing, the Purchaser shall not be required to take any action, or do or cause to be done anything that would, individually or in the aggregate, reasonably be expected to materially adversely amend the existing rights, obligations and liabilities under the Contracts to which the Key Consent relate or result in material payments of any fees or costs by the Company or the Purchaser to secure the Key Consent in excess of customary consent fees, application fees, processing fees, and associated costs and expenses (including legal costs and expenses). The Company shall, and shall cause its Subsidiaries to, co-operate with the Purchaser in connection with the foregoing and, without limiting the generality of the foregoing, the Company shall, and shall cause its Subsidiaries to, provide such assistance as the Purchaser may reasonably request in connection with obtaining the Key Consent, including by promptly (i) cooperating with requests for information and supplying such financial and other information with respect to the Company and its Subsidiaries and the Joint Ventures as may reasonably be requested by the Purchaser, and (ii) executing and delivering such documents, instruments and agreements reasonably required or requested in connection with seeking and obtaining the Key Consent.
(c) Without limiting the generality of Section 5.2(a)(i), the Company shall, and shall cause its Representatives, consultants and Subsidiaries to, cooperate with and assist the Purchaser in obtaining such waivers, consents and approvals as may be determined by the Purchaser, in its discretion, to be necessary or desirable pursuant to the Company Material Contracts governing or relating to the Joint Ventures listed in Section 5.2(c) of the Company Disclosure Letter in connection with the completion of the Arrangement (the “ Third Party Consents ”), including by promptly:
(i) providing the Purchaser with such information, whether in written or oral form, as may be reasonably requested by the Purchaser in connection with seeking and obtaining any Third Party Consent;
(ii) executing and delivering such documents, instruments and agreements required or requested by the Purchaser in connection with seeking and obtaining the Third Party Consents; provided that the Company and its Subsidiaries shall not be required to execute or deliver any documents, instruments or agreements that will take effect prior to the Effective Time;
(iii) facilitating access to counterparties to Contracts in respect of the Third Party Consents and, in furtherance thereof, organizing such meetings as the Purchaser may reasonably request and directing the directors and officers of the Company to assist with the preparation of, and participate in, such

==> picture [210 x 36] intentionally omitted <==

C - 72

meetings; provided that Representatives of the Company shall have the right to attend all such meetings; and

(iv) (A) providing the Purchaser with not less than three Business Days’ prior written notice of all meetings of any of the applicable Joint Ventures, and (B) exercising all rights of the Company and its Subsidiaries with respect to the applicable Joint Ventures and unless prohibited by the Joint Venture counterparties in accordance with the terms of the agreements governing the applicable Joint Ventures, providing the Purchaser with an opportunity to attend such meetings as an observer and to provide copies of all materials prepared for such meetings; provided, however, that if the Purchaser is not able to attend any such meetings, the Company shall provide the Purchaser with a detailed summary of the discussions, developments and outcomes of such meetings.

Notwithstanding anything to the contrary contained in this Agreement, the Company shall not, and shall cause each of its Subsidiaries not to, and shall exercise its rights (if any) with respect to the applicable Joint Ventures to cause the applicable Joint Ventures not to, enter into any agreements, arrangements or understandings in respect of the applicable Joint Ventures listed in Section 5.2(c) of the Company Disclosure Letter without the prior written consent of the Purchaser.

5.3 Covenants of the Company Relating to Incentive Awards

The Company shall take such commercially reasonable actions as are necessary under the terms of the Company Legacy Option Plan, the Company LTIP and the Plan of Arrangement, to accelerate the vesting of all Company RSUs and to facilitate the surrender and termination of all Company Options at or prior to the Effective Time on the terms contemplated in the Plan of Arrangement. The Purchaser acknowledges and agrees that the Purchaser, the Company or any other Person that makes a payment to a holder of Company Options in connection with the surrender or termination of Company Options that give rise to Tax under the Tax Act will forego that portion of the income Tax deduction under the Tax Act that is attributable to such payment and will comply with the requirements described in subsection 110(1.1) of the Tax Act.

5.4 Regulatory Approvals

(a) The Company and the Purchaser shall and shall cause their respective Subsidiaries, as applicable, to:
(i) within ten (10) Business Days after the date of this Agreement or such other date as the Parties may reasonably agree, prepare and file with the Commissioner of Competition with respect to the transactions contemplated by this Agreement a request for an Advance Ruling Certificate under section 102 of the Competition Act or, in the alternative, a “No Action” letter and a waiver under s. 113(c) of the Competition Act;

==> picture [210 x 36] intentionally omitted <==

C - 73

(ii) within ten (10) Business Days after the date of this Agreement or such other date as the Parties may reasonably agree, prepare and file a notification under Part IX of the Competition Act with the Commissioner of Competition with respect to the transactions contemplated by this Agreement;
(iii) within ten (10) Business Days after the date of this Agreement, file their respective notification and report forms under the HSR Act with the United States Federal Trade Commission and United States Department of Justice;
(iv) file, as promptly as practicable after the date of this Agreement, any other filings, notifications or submissions under the Competition Act, the HSR Act, the Enterprise Act and any other applicable Antitrust Laws that the Parties may mutually agree to be required or appropriate to consummate the transactions contemplated by this Agreement;
(v) file, as promptly as practicable after the date of this Agreement, any other filings or notifications under any other applicable federal, provincial, state or foreign Law, other than under Antitrust Laws, required to obtain any other Regulatory Approvals; and
(vi) provide to each Governmental Entity all non-privileged information, documents, data and other things requested by any Governmental Entity or that are necessary or advisable to permit consummation of the transactions contemplated by this Agreement as promptly as practicable following any such request.
(b) The Purchaser shall and shall cause its Subsidiaries, as applicable, to:
(i) within five (5) Business Days after the date of this Agreement, with the assistance of the Company in accordance with this Agreement, submit to the CMA a briefing note with a view to confirming that the CMA does not intend to open a CMA Merger Investigation in respect of the transactions contemplated by this Agreement; and
(ii) if requested by the CMA following submission of the briefing note referred to in sub-paragraph (i) above, file, as promptly as practicable after such request and in any event within ten (10) Business Days of the CMA’s request, a draft of a CMA Merger Notice with respect to the transactions contemplated by this Agreement.
(c) All filing fees (including any Taxes thereon) in respect of any filing made to any Governmental Entity in respect of any Regulatory Approvals shall be paid by the Purchaser.
(d) With respect to obtaining the Regulatory Approvals, each of the Company and the Purchaser shall cooperate with one another and shall provide such assistance as any

==> picture [210 x 36] intentionally omitted <==

C - 74

other Party may reasonably request in connection with obtaining the Regulatory Approvals, including, for the avoidance of doubt, cooperation and assistance in respect of submissions and correspondence with the CMA for the purposes of determining whether UK CMA Approval will be required. In particular:

(i) no Party shall extend or consent to any extension of any applicable waiting or review period or enter into any agreement with a Governmental Entity to not consummate the transactions contemplated by this Agreement, except upon the prior written consent of the other Party;
(ii) the Parties shall exchange drafts of all submissions, material correspondence, filings, presentations, applications, plans, consent agreements and other material documents made or submitted to or filed with any Governmental Entity in respect of the transactions contemplated by this Agreement, will consider in good faith any suggestions made by the other Party and its counsel and will provide the other Party and its counsel with final copies of all such submissions, material correspondence, filings, presentations, applications, plans, consent agreements and other material documents, and all pre-existing business records or other documents, submitted to or filed with any Governmental Entity in respect of the transactions contemplated by this Agreement; provided, however, that this obligation shall not extend to (a) legally privileged information, or (b) information indicated by either Party to be competitively sensitive, in either case, which information shall be provided on an external counsel-only basis;
(iii) each Party will keep the other Party and their respective counsel fully apprised of all substantive written (including email) and oral communications and all meetings with any Governmental Entity and their staff in respect of the Regulatory Approvals, and will not participate in such material communications or meetings without giving the other Party and their respective counsel the opportunity to participate therein; provided, however, that where competitively sensitive information may be discussed or communicated, in either case the other Party’s external legal counsel shall be provided with any such communications or information on an external counsel-only basis and shall have the right to participate in any such meetings on an external counsel-only basis.
(iv) the Company shall make available its Representatives, on the reasonable request of the Purchaser and its counsel, to assist the Purchaser in obtaining the Regulatory Approvals, including by (i) making introduction and arranging meetings with key stakeholders and leaders of Governmental Entities and participating in those meetings, (ii) providing strategic input, including on any materials prepared for obtaining the Regulatory Approvals, and (iii) responding promptly to requests for support,

==> picture [210 x 36] intentionally omitted <==

C - 75

documents, information, comments or input where reasonably requested by the Purchaser in connection with the Regulatory Approvals;

(e) The Parties shall not enter into any transaction, investment, agreement, arrangement or joint venture or take any other action, the effect of which would reasonably be expected to make obtaining the Regulatory Approvals materially more difficult or challenging, or reasonably be expected to materially delay the obtaining of the Regulatory Approvals, and without limiting the generality of the foregoing the Purchaser agrees that neither it nor any of its Subsidiaries will, directly or indirectly, enter into, continue, pursue or otherwise participate in any discussions or negotiations regarding, any transaction described in Section 5.4(e) of the Company Disclosure Letter.
(f) The Purchaser shall use its (and shall cause its Subsidiaries to use their) best efforts to obtain the UK CMA Approval and commercially reasonable efforts to obtain the other Key Regulatory Approvals, in each case, as promptly as practicable after the date of this Agreement, provided that, in each case, (i) the Purchaser shall be under no obligation to negotiate or agree to the sale, divestiture or disposition (including by way of license) by the Purchaser of its or its affiliates’ assets, properties or businesses, or those of the Company or its Subsidiaries, and (ii), with respect to the UK CMA Approval only, best efforts means that the Purchaser shall be required to offer (and not withdraw) and negotiate and agree to undertakings regarding any form of behavioural remedy on its or its affiliates’ businesses, product lines, assets or properties, or those of the Company or its Subsidiaries to obtain the UK CMA Approval.
(g) Subject to the other provisions of this Section 5.4, the Purchaser shall, acting reasonably, determine and direct all matters and efforts related to the obtaining of the Key Regulatory Approvals. The Purchaser shall consider the views and input of the Company in good faith.

5.5 Company Non-Solicitation

(a) Except as otherwise expressly provided in this Section 5.5, the Company shall not and shall cause its Subsidiaries not to, directly or indirectly, through any of its Representatives:
(i) solicit, initiate, knowingly encourage or otherwise knowingly facilitate (including by way of furnishing or providing copies of, access to, or disclosure of, any confidential information, properties, facilities, books or records of the Company or any of its Subsidiaries) any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to a Company Acquisition Proposal;
(ii) enter into, engage in, continue or otherwise participate in any discussions or negotiations with any Person (other than the Purchaser and its Subsidiaries or affiliates) in respect of any inquiry, proposal or offer that

==> picture [210 x 36] intentionally omitted <==

C - 76

constitutes or may reasonably be expected to lead to a Company Acquisition Proposal; provided that the Company shall be permitted to communicate with any Person who has made a Company Acquisition Proposal for the purpose of clarifying the terms and conditions of such Company Acquisition Proposal;

(iii) make a Company Change in Recommendation; or
(iv) accept or enter into, or publicly propose to accept or enter into, any letter of intent, agreement in principle, agreement, arrangement or understanding relating to any Company Acquisition Proposal (other than a confidentiality agreement permitted pursuant to Section 5.5(e)).
(b) The Company shall, and shall cause its Subsidiaries and Representatives to immediately cease any existing solicitation, encouragement, discussions, negotiations or other activities commenced prior to the date of this Agreement with any Person (other than the Purchaser and its Subsidiaries or affiliates) conducted by the Company or any of its Subsidiaries or Representatives with respect to any inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, a Company Acquisition Proposal, and, in connection therewith, the Company shall:
(i) promptly discontinue access to and disclosure of its and its Subsidiaries’ confidential information (and not allow access to or disclosure of any such confidential information, or any data room, virtual or otherwise); and
(ii) as soon as possible request (and in any case within two Business Days), and exercise all rights it has (or cause its Subsidiaries to exercise any rights that they have) to require, the return or destruction of all confidential information (including derivative information) regarding the Company and its Subsidiaries previously provided to any Person (other than the Purchaser) in connection with a possible Company Acquisition Proposal to the extent such information has not already been returned or destroyed, and shall use its commercially reasonable efforts to ensure that such requests are fully complied with to the extent the Company is entitled.
(c) The Company represents and warrants that, in the twelve months prior to the date of this Agreement, neither the Company nor any of its Subsidiaries has waived any standstill, confidentiality, non-disclosure, business purpose, use or similar agreement or restriction to which the Company or any of its Subsidiaries is a Party in connection with any potential Company Acquisition Proposal. Subject to Section 5.5(e), the Company covenants and agrees that (i) the Company shall take all necessary action to enforce each standstill, confidentiality, non-disclosure, business purpose, use or similar agreement or restriction to which the Company or any of its Subsidiaries is a party, and (ii) neither the Company nor any of its Subsidiaries nor any of their respective Representatives will, without the prior written consent of the Purchaser, release any Person from, or waive, amend, suspend or otherwise modify

==> picture [210 x 36] intentionally omitted <==

C - 77

such Person’s obligations respecting the Company, or any of its Subsidiaries, under any standstill, confidentiality, non-disclosure, business purpose, use or similar agreement or restriction to which the Company or any of its Subsidiary is a party (it being acknowledged by the Purchaser and Acquireco that the automatic termination or automatic release, in each case pursuant to the terms thereof, of any standstill restrictions of any such agreements as a result of the entering into and announcement of this Agreement shall not be a violation of this Section 5.5(c)).

(d) If the Company, or any of its Subsidiaries or any of their respective Representatives receives or otherwise becomes aware of either:
(i) any inquiry, proposal or offer made after the date of this Agreement that constitutes or may reasonably be expected to constitute or lead to a Company Acquisition Proposal; or
(ii) any request for copies of, access to, or disclosure of, confidential information relating to the Company or any of its Subsidiaries in connection with any proposal that constitutes or may reasonably be expected to lead to a Company Acquisition Proposal, including information, access or disclosure relating to the properties, facilities, books or records of the Company or any of its Subsidiaries, in each case made after the date of this Agreement;

then, the Company shall promptly orally notify the Purchaser, and then in writing within 24 hours, of such Company Acquisition Proposal, inquiry, proposal, offer or request, including the identity of the Person making such Company Acquisition Proposal, inquiry, proposal, offer or request and the material terms and conditions thereof and copies of all written documents, correspondence or other material received in respect of, from or on behalf of any such Person. The Company shall keep the Purchaser promptly and reasonably informed of the status of material developments and (to the extent permitted by Section 5.5(e)) discussions and negotiations with respect to such Company Acquisition Proposal, inquiry, proposal, offer or request, including any material changes, modifications or other amendments thereto.

(e) Notwithstanding any other provision of this Section 5.5, if at any time following the date of this Agreement and prior to the Company Shareholder Approval having been obtained, the Company receives a written Company Acquisition Proposal, the Company (A) may engage in or participate in discussions or negotiations with such Person regarding such Company Acquisition Proposal, and (B) may provide copies of, access to or disclosure of information, properties, facilities, books or records of the Company or its Subsidiaries, if and only if:
(i) the Company Board determines, in good faith after consultation with its outside financial and legal advisors, that such Company Acquisition Proposal constitutes or could reasonably be expected to constitute or lead to a Company Superior Proposal;

==> picture [210 x 36] intentionally omitted <==

C - 78

(ii) such Person is not restricted from making a Company Acquisition Proposal pursuant to an existing standstill, confidentiality, non-disclosure, business purpose, use or similar restriction with the Company or any of its Subsidiaries;
(iii) the Company has been, and continues to be, in compliance with its obligations under this Section 5.5 in all material respects; and
(iv) prior to providing any such copies, access or disclosures, the Company enters into a confidentiality and standstill agreement with such Person, or confirms it has previously entered into such an agreement which remains in effect, in either case on terms that are not less favourable in the aggregate to the Company than the Confidentiality Agreement and any such copies, access or disclosure provided to such Person shall have already been (or simultaneously be) provided to the Purchaser.
(f) Other than in connection with a Company Acquisition Proposal that constitutes a Company Superior Proposal, the Company Board shall be permitted to effect a Company Change in Recommendation in response to a Company Intervening Event if and only if:
(i) the Company Board shall have determined in good faith (after consultation with its financial advisors and outside legal counsel) that the failure to effect a Company Change in Recommendation would be inconsistent with the Company Board’s fiduciary duties under applicable Laws;
(ii) the Company has notified the Purchaser in writing at least four Business Days (the “ Company Intervening Event Period ”) before effecting a Company Change in Recommendation that it intends to effect a Company Change in Recommendation in response to a Company Intervening Event, describing in reasonable detail the underlying facts giving rise to, and the reasons for making, such Company Change in Recommendation (a “ Company Intervening Event Notice ”) (it being understood that the Company Intervening Event Notice shall not constitute a Company Change in Recommendation for purposes of this Agreement);
(iii) if requested by the Purchaser, the Company shall have engaged in good faith negotiations with the Purchaser and its Representatives during the Company Intervening Event Period immediately following delivery by the Company to the Purchaser of the Company Intervening Event Notice with respect to adjustments to the terms and conditions of this Agreement proposed by the Purchaser to obviate the need for a Company Change in Recommendation; and
(iv) if the Purchaser shall have delivered to the Company a written, binding offer to alter the terms or conditions of this Agreement during such Company Intervening Event Period, the Company Board shall have determined in

==> picture [210 x 36] intentionally omitted <==

C - 79

good faith (after consultation with its financial advisors and outside legal counsel), after considering the modifications to this Agreement proposed by the Purchaser, that the failure to effect a Company Change in Recommendation would still be inconsistent with its fiduciary duties under applicable Laws;

(g) Nothing contained in this Agreement shall prohibit the Company Board (acting in good faith and upon advice of its outside legal and financial advisors) from making any disclosure to Company Shareholders as required by applicable Laws, including complying with section 2.17 of National Instrument 62-104 – Take-Over Bids and Issuer Bids provided, however, that if any such disclosure has the substantive effect of withdrawing or modifying the Company Board Recommendation in a manner adverse to the Purchaser, such disclosure shall be deemed to be a Company Change in Recommendation for the purposes of this Agreement.
(h) If the Company receives a Company Acquisition Proposal that constitutes a Company Superior Proposal prior to the Company Shareholder Approval having been obtained, the Company Board may, (1) make a Company Change in Recommendation in response to such Company Superior Proposal and/or (2) cause the Company to terminate this Agreement pursuant to Section 7.2(a)(iv)(B) and concurrently enter into a definitive agreement with respect to the Company Superior Proposal (other than a confidentiality agreement permitted by Section 5.5(e), a “ Company Proposed Agreement ”), if and only if:
(i) the Person making such Company Superior Proposal is not restricted from making a Company Acquisition Proposal pursuant to an existing standstill, confidentiality, non-disclosure, business purpose, use or similar restriction;
(ii) the Company has been, and continues to be, in compliance with its obligations under this Section 5.5 in all material respects;
(iii) the Company or its Representatives have delivered to the Purchaser the information required by Section 5.5(d) and a written notice of the determination of the Company Board that such Company Acquisition Proposal constitutes a Company Superior Proposal and of the intention of the Company Board to make the Company Change in Recommendation and/or terminate this Agreement pursuant to Section 7.2(a)(iv)(B) to concurrently enter into the Company Proposed Agreement with respect to such Company Superior Proposal, as applicable (the “ Company Superior Proposal Notice ”);
(iv) in the case of the Company Board exercising its rights under clause (2) of this Section 5.5(h), the Company or its Representatives have provided the Purchaser a copy of the Company Proposed Agreement and all supporting materials, including any financing documents with customary redactions supplied to the Company in connection therewith;

==> picture [210 x 36] intentionally omitted <==

C - 80

(v) five Business Days (the “ Purchaser Response Period ”) shall have elapsed from the date on which the Purchaser has received the Company Superior Proposal Notice and all documentation referred to in Section 5.5(h)(iii) and Section 5.5(h)(iv);
(vi) during any Purchaser Response Period, the Purchaser has had the opportunity (but not the obligation) in accordance with Section 5.5(i), to offer to amend this Agreement and the Plan of Arrangement in order for such Company Acquisition Proposal to cease to be a Company Superior Proposal;
(vii) after the Purchaser Response Period, the Company Board (A) has determined in good faith, after consultation with its outside legal counsel and financial advisors, that such Company Acquisition Proposal continues to constitute a Company Superior Proposal (if applicable, compared to the terms of the Arrangement as proposed to be amended by the Purchaser under Section 5.5(i)) and (B) has determined in good faith, after consultation with its outside legal counsel, that the failure by the Company Board to make the Company Change in Recommendation and/or to cause the Company to terminate this Agreement to enter into the Company Proposed Agreement, as applicable, would be inconsistent with its fiduciary duties; and
(viii) in the case of the Company Board exercising its rights under clause (2) of this Section 5.5(h), prior to or concurrently with terminating this Agreement pursuant to Section 7.2(a)(iv)(B), the Company enters into such Company Proposed Agreement and concurrently pays to the Purchaser the amounts required to be paid pursuant to Section 7.3.
(i) During the Purchaser Response Period, or such longer period as the Company may approve in writing for such purpose: (i) the Company Board shall review any offer made by the Purchaser under Section 5.5(h)(vi) to amend the terms of this Agreement and the Plan of Arrangement in good faith in order to determine whether such proposal would, upon acceptance, result in the Company Acquisition Proposal previously constituting a Company Superior Proposal ceasing to be a Company Superior Proposal; and (ii) if the Company determines that the Company Acquisition Proposal previously constituting a Company Superior Proposal would cease to be a Company Superior Proposal, the Company shall negotiate in good faith with the Purchaser to make such amendments to the terms of this Agreement and the Arrangement as would enable the Purchaser to proceed with the transactions contemplated by this Agreement on such amended terms. If the Company Board determines that such Company Acquisition Proposal would cease to be a Company Superior Proposal, the Company shall promptly so advise the Purchaser, and the Company and the Purchaser shall amend this Agreement to reflect such offer made by the Purchaser, and shall take and cause to be taken all such actions as are necessary to give effect to the foregoing.

==> picture [210 x 36] intentionally omitted <==

C - 81

(j) Each successive amendment or modification to any Company Acquisition Proposal or Company Proposed Agreement 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 Company Acquisition Proposal for the purposes of this Section 5.5, and the Purchaser shall be afforded a new five Business Day Purchaser Response Period from the date on which the Purchaser has received the notice and all documentation referred to in Section 5.5(h)(iii) and Section 5.5(h)(iv) with respect to the new Company Superior Proposal from the Company.
(k) The Company Board shall promptly reaffirm the Company Board Recommendation by press release after the Company Board determines that any Company Acquisition Proposal that is publicly announced is not a Company Superior Proposal or the Company Board determines that a proposed amendment to the terms of this Agreement as contemplated under Section 5.5(i) would result in a Company Acquisition Proposal that has been previously announced no longer being a Company Superior Proposal, and the Agreement has been so amended. The Company shall provide the Purchaser and its outside legal counsel with a reasonable opportunity to review the form and content of any such press release and shall make all reasonable amendments to such press release as requested by the Purchaser and its counsel.
(l) In circumstances where the Company provides the Purchaser with notice of a Company Superior Proposal and all documentation contemplated by Section 5.5(h)(iii) and Section 5.5(h)(iv) on a date that is less than seven Business Days prior to the scheduled date of the Company Meeting, the Company may either proceed with or postpone the Company Meeting to a date that is not more than 10 Business Days after the scheduled date of such Company Meeting, and shall postpone the Company Meeting to a date that is not more than 10 Business Days after the scheduled date of such Company Meeting if so directed by the Purchaser.
(m) Without limiting the generality of the foregoing, any violation of the restrictions set forth in this Section 5.5 by the Company, its Subsidiaries or Representatives shall be deemed to be a breach of this Section 5.5 by the Company.

5.6 Purchaser Non-Solicitation

(a) Except as otherwise expressly provided in this Section 5.6, prior to obtaining Purchaser Shareholder Approval, the Purchaser shall not and shall cause each of its Subsidiaries not to, directly or indirectly, through any of its Representatives:
(i) solicit, initiate, knowingly encourage or otherwise knowingly facilitate (including by way of furnishing or providing copies of, access to, or disclosure of, any confidential information, properties, facilities, books or records of the Purchaser or any of its Subsidiaries) any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to a Purchaser Acquisition Proposal;

==> picture [210 x 36] intentionally omitted <==

C - 82

(ii) enter into, engage in, continue or otherwise participate in any discussions or negotiations with any Person (other than the Company and its Subsidiaries or affiliates) in respect of any inquiry, proposal or offer that constitutes or may reasonably be expected to lead to a Purchaser Acquisition Proposal; provided that the Purchaser shall be permitted to communicate with any Person who has made a Purchaser Acquisition Proposal for the purpose of clarifying the terms and conditions of such Purchaser Acquisition Proposal;
(iii) make a Purchaser Change in Recommendation; or
(iv) accept or enter into, or publicly propose to accept or enter into, any letter of intent, agreement in principle, agreement, arrangement or understanding relating to any Purchaser Acquisition Proposal (other than a confidentiality agreement permitted pursuant to Section 5.6(e)).
(b) The Purchaser shall, and shall cause its Subsidiaries and Representatives to immediately cease any existing solicitation, encouragement, discussions, negotiations or other activities (including providing access to confidential information of the Purchaser and its Subsidiaries in connection with a possible Purchaser Acquisition Proposal) commenced prior to the date of this Agreement with any Person (other than the Company and its Subsidiaries or affiliates) conducted by the Purchaser or any of its Subsidiaries or Representatives with respect to any inquiry, proposal or offer that constitutes, or may reasonably be expected to constitute or lead to, a Purchaser Acquisition Proposal.
(c) The Purchaser represents and warrants that, in the twelve months prior to the date of this Agreement, neither the Purchaser nor any of its Subsidiaries has waived any standstill, confidentiality, non-disclosure, business purpose, use or similar agreement or restriction to which the Purchaser or any of its Subsidiaries is a Party in connection with any potential Purchaser Acquisition Proposal. Subject to Section 5.6(e), the Purchaser covenants and agrees that (i) the Purchaser shall take all necessary action to enforce each standstill, confidentiality, non-disclosure, business purpose, use or similar agreement or restriction to which the Purchaser or any of its Subsidiaries is a party, and (ii) neither the Purchaser nor any of its Subsidiaries nor any of their respective Representatives will, without the prior written consent of the Company, release any Person from, or waive, amend, suspend or otherwise modify such Person’s obligations respecting the Purchaser, or any of its Subsidiaries, under any standstill, confidentiality, non-disclosure, business purpose, use or similar agreement or restriction to which the Purchaser or any of its Subsidiary is a party.
(d) If, at any time prior to obtaining Purchaser Shareholder Approval, the Purchaser, or any of its Subsidiaries or any of their respective Representatives receives or otherwise becomes aware of either:

==> picture [210 x 36] intentionally omitted <==

C - 83

(i) any inquiry, proposal or offer made after the date of this Agreement that constitutes or may reasonably be expected to constitute or lead to a Purchaser Acquisition Proposal; or
(ii) any request for copies of, access to, or disclosure of, confidential information relating to the Purchaser or any of its Subsidiaries in connection with any proposal that constitutes or may reasonably be expected to lead to a Purchaser Acquisition Proposal, including information, access or disclosure relating to the properties, facilities, books or records of the Purchaser or any of its Subsidiaries, in each case made after the date of this Agreement;

then, the Purchaser shall, to the extent permitted by applicable Laws, promptly orally notify the Company, and then in writing within 24 hours, of such Purchaser Acquisition Proposal, inquiry, proposal, offer or request, including the identity of the Person making such Purchaser Acquisition Proposal, inquiry, proposal, offer or request and the material terms and conditions thereof and copies of all written documents, correspondence or other material received in respect of, from or on behalf of any such Person. The Purchaser shall keep the Company promptly and reasonably informed of the status of material developments and (to the extent permitted by Section 5.6(e)) discussions and negotiations with respect to such Purchaser Acquisition Proposal, inquiry, proposal, offer or request, including any material changes, modifications or other amendments thereto.

(e) Notwithstanding any other provision of this Section 5.6, if at any time following the date of this Agreement and prior to the Purchaser Shareholder Approval having been obtained, the Purchaser receives a written Purchaser Acquisition Proposal, the Purchaser (A) may engage in or participate in discussions or negotiations with such Person regarding such Purchaser Acquisition Proposal, and (B) may provide copies of, access to or disclosure of information, properties, facilities, books or records of the Purchaser or its Subsidiaries, if and only if:
(i) the Purchaser Board determines, in good faith after consultation with its outside financial and legal advisors, that such Purchaser Acquisition Proposal constitutes or could reasonably be expected to constitute or lead to a Purchaser Superior Proposal;
(ii) such Person is not restricted from making a Purchaser Acquisition Proposal pursuant to an existing standstill, confidentiality, non-disclosure, business purpose, use or similar restriction with the Purchaser or any of its Subsidiaries;
(iii) the Purchaser has been, and continues to be, in compliance with its obligations under this Section 5.6 in all material respects; and
(iv) prior to providing any such copies, access or disclosures, the Purchaser enters into a confidentiality and standstill agreement with such Person, or

==> picture [210 x 36] intentionally omitted <==

C - 84

confirms it has previously entered into such an agreement which remains in effect, in either case containing customary terms.

(f) Other than in connection with a Purchaser Acquisition Proposal that constitutes a Purchaser Superior Proposal, the Purchaser Board shall be permitted to effect a Purchaser Change in Recommendation in response to a Purchaser Intervening Event if and only if:
(i) the Purchaser Board shall have determined in good faith (after consultation with its financial advisors and outside legal counsel) that the failure to effect a Purchaser Change in Recommendation would be inconsistent with the Purchaser Board’s fiduciary duties under applicable Laws;
(ii) the Purchaser has notified the Company in writing at least four Business Days (the “ Purchaser Intervening Event Period ”) before effecting a Purchaser Change in Recommendation that it intends to effect a Purchaser Change in Recommendation in response to a Purchaser Intervening Event, describing in reasonable detail the underlying facts giving rise to, and the reasons for making, such Purchaser Change in Recommendation (a “ Purchaser Intervening Event Notice ”) (it being understood that the Purchaser Intervening Event Notice shall not constitute a Purchaser Change in Recommendation for purposes of this Agreement);
(iii) if requested by the Company, the Purchaser shall have engaged in good faith negotiations with the Company and its Representatives during the Purchaser Intervening Event Period immediately following delivery by the Purchaser to the Company of the Purchaser Intervening Event Notice with respect to adjustments to the terms and conditions of this Agreement proposed by the Company to obviate the need for a Purchaser Change in Recommendation; and
(iv) if the Company shall have delivered to the Purchaser a written, binding offer to alter the terms or conditions of this Agreement during such Purchaser Intervening Event Period, the Purchaser Board shall have determined in good faith (after consultation with its financial advisors and outside legal counsel), after considering the modifications to this Agreement proposed by the Company, that the failure to effect a Purchaser Change in Recommendation would still be inconsistent with its fiduciary duties under applicable Laws.
(g) Nothing contained in this Agreement shall prohibit the Purchaser Board (acting in good faith and upon advice of its outside legal and financial advisors) from making any disclosure to Purchaser Shareholders as required by applicable Laws, provided, however, that if any such disclosure has the substantive effect of withdrawing or modifying the Purchaser Board Recommendation in a manner adverse to the Company, such disclosure shall be deemed to be a Purchaser Change in Recommendation for the purposes of this Agreement.

==> picture [210 x 36] intentionally omitted <==

C - 85

(h) If the Purchaser receives a Purchaser Acquisition Proposal that constitutes a Purchaser Superior Proposal prior to the Purchaser Shareholder Approval having been obtained, the Purchaser Board may, (1) make a Purchaser Change in Recommendation in response to such Purchaser Superior Proposal and/or (2) cause the Purchaser to terminate this Agreement pursuant to Section 7.2(a)(iii)(E) and concurrently enter into a definitive agreement with respect to the Purchaser Superior Proposal (other than a confidentiality agreement permitted by Section 5.6(e), a “ Purchaser Proposed Agreement ”), if and only if:
(i) the Person making such Purchaser Superior Proposal is not restricted from making a Purchaser Acquisition Proposal pursuant to an existing standstill, confidentiality, non-disclosure, business purpose, use or similar restriction;
(ii) the Purchaser has been, and continues to be, in compliance with its obligations under this Section 5.6 in all material respects;
(iii) the Purchaser or its Representatives have delivered to the Company the information required by Section 5.6(d) and a written notice of the determination of the Purchaser Board that such Purchaser Acquisition Proposal constitutes a Purchaser Superior Proposal and of the intention of the Purchaser Board to make the Purchaser Change in Recommendation and/or terminate this Agreement pursuant to Section 7.2(a)(iii)(E) to concurrently enter into the Purchaser Proposed Agreement with respect to such Purchaser Superior Proposal, as applicable (the “ Purchaser Superior Proposal Notice ”);
(iv) in the case of the Purchaser Board exercising its rights under clause (2) of this Section 5.6(h), the Purchaser or its Representatives have provided the Company a copy of the Purchaser Proposed Agreement and all supporting materials, including any financing documents with customary redactions supplied to the Purchaser in connection therewith;
(v) five Business Days (the “ Company Response Period ”) shall have elapsed from the date on which the Company has received the Purchaser Superior Proposal Notice and all documentation referred to in Section 5.6(h)(iii) and Section 5.6(h)(iv);
(vi) during any Company Response Period, the Company has had the opportunity (but not the obligation) in accordance with Section 5.6(i), to offer to amend this Agreement and the Plan of Arrangement in order for such Purchaser Acquisition Proposal to cease to be a Purchaser Superior Proposal;
(vii) after the Company Response Period, the Purchaser Board (A) has determined in good faith, after consultation with its outside legal counsel and financial advisors, that such Purchaser Acquisition Proposal continues to constitute a Purchaser Superior Proposal (if applicable, compared to the

==> picture [210 x 36] intentionally omitted <==

C - 86

terms of the Arrangement as proposed to be amended by the Company under Section 5.6(i)) and (B) has determined in good faith, after consultation with its outside legal counsel, that the failure by the Purchaser Board to make the Purchaser Change in Recommendation and/or to cause the Purchaser to terminate this Agreement to enter into the Purchaser Proposed Agreement, as applicable, would be inconsistent with its fiduciary duties; and

(viii) in the case of the Purchaser Board exercising its rights under clause (2) of this Section 5.6(h), prior to or concurrently with terminating this Agreement pursuant to Section 7.2(a)(iii)(E), the Purchaser enters into such Purchaser Proposed Agreement and concurrently pays to the Company the amounts required to be paid pursuant to Section 7.3.
(i) During the Company Response Period, or such longer period as the Purchaser may approve in writing for such purpose: (i) the Purchaser Board shall review any offer made by the Company under Section 5.6(h)(vi) to amend the terms of this Agreement and the Plan of Arrangement in good faith in order to determine whether such proposal would, upon acceptance, result in the Purchaser Acquisition Proposal previously constituting a Purchaser Superior Proposal ceasing to be a Purchaser Superior Proposal; and (ii) if the Purchaser determines that the Purchaser Acquisition Proposal previously constituting a Purchaser Superior Proposal would cease to be Purchaser Superior Proposal, the Purchaser shall negotiate in good faith with the Company to make such amendments to the terms of this Agreement and the Arrangement as would enable the Company to proceed with the transactions contemplated by this Agreement on such amended terms. If the Purchaser Board determines that such Purchaser Acquisition Proposal would cease to be a Purchaser Superior Proposal, the Purchaser shall promptly so advise the Company, and the Company and the Purchaser shall amend this Agreement to reflect such offer made by the Company, and shall take and cause to be taken all such actions as are necessary to give effect to the foregoing.
(j) Each successive amendment or modification to any Purchaser Acquisition Proposal or Purchaser Proposed Agreement that results in an increase in, or modification of, the consideration (or value of such consideration) to be received by the Purchaser Shareholders or other material terms or conditions thereof shall constitute a new Purchaser Acquisition Proposal for the purposes of this Section 5.6, and the Company shall be afforded a new five Business Day Company Response Period from the date on which the Company has received the notice and all documentation referred to in Section 5.6(h)(iii) and Section 5.6(h)(iv) with respect to the new Purchaser Superior Proposal from the Purchaser.
(k) The Purchaser Board shall promptly reaffirm the Purchaser Board Recommendation by press release after the Purchaser Board determines that any Purchaser Acquisition Proposal that is publicly announced is not a Purchaser Superior Proposal or the Purchaser Board determines that a proposed amendment

==> picture [210 x 36] intentionally omitted <==

C - 87

to the terms of this Agreement as contemplated under Section 5.6(i) would result in a Purchaser Acquisition Proposal that has been previously announced no longer being a Purchaser Superior Proposal, and the Agreement has been so amended. The Purchaser shall provide the Company and its outside legal counsel with a reasonable opportunity to review the form and content of any such press release and shall make all reasonable amendments to such press release as requested by the Company and its counsel.

(l) In circumstances where the Purchaser provides the Company with notice of a Purchaser Superior Proposal and all documentation contemplated by Section 5.6(h)(iii) and Section 5.6(h)(iv) on a date that is less than seven Business Days prior to the scheduled date of the Purchaser Meeting, the Purchaser may either proceed with or postpone the Purchaser Meeting to a date that is not more than 10 Business Days after the scheduled date of such Purchaser Meeting, and shall postpone the Purchaser Meeting to a date that is not more than 10 Business Days after the scheduled date of such Purchaser Meeting if so directed by the Company.
(m) Without limiting the generality of the foregoing, any violation of the restrictions set forth in this Section 5.6 by the Purchaser, its Subsidiaries or Representatives shall be deemed to be a breach of this Section 5.6 by the Purchaser.

5.7 Access to Information; Confidentiality

(a) From the date hereof until the earlier of the Effective Time and the termination of this Agreement pursuant to its terms, subject to compliance with applicable Laws and COVID-19 Measures and the terms of any existing Contracts, the Company shall, and shall cause its Representatives and consultants to:
(i) afford to the Purchaser and its Representatives, upon reasonable notice, such access as the Purchaser may reasonably require at all reasonable times for the purpose of furthering the consummation of the transactions contemplated by this Agreement (and integration activities related thereto) and obtaining the Third Party Consents, to its properties, books, records and Contracts;
(ii) furnish the Purchaser on a timely basis with all data and information relating to ongoing development programs at the Company Property or involving the Subsidiaries or Joint Ventures or as the Purchaser may reasonably request from time to time for the purpose of furthering the consummation of the transactions contemplated by this Agreement (and integration activities related thereto), including, if so requested by the Purchaser and at the expense of the Purchaser, allowing a Representative of the Purchaser to be present at the Company Property.

Subject to Section 5.2(c), neither the Purchaser nor any of its Representatives will contact directors, officers, employees, customers, suppliers or other business partners of the Company or any of its Subsidiaries except after receiving the prior

==> picture [210 x 36] intentionally omitted <==

C - 88

written consent of the Company; provided, however, that the foregoing shall not restrict the Purchaser from ordinary course of business communications and dealings that are unrelated to the Arrangement.

(b) The Purchaser and the Company acknowledge and agree that information furnished pursuant to this Section 5.7 shall be subject to the terms and conditions of the Confidentiality Agreement. Any such investigation by the Purchaser and its Representatives under this Section 5.7 or otherwise shall not mitigate, diminish or affect the representations and warranties of the Company contained in this Agreement or any document or certificate delivered pursuant hereto.
(c) Notwithstanding any provision of this Agreement, the Company shall not be obligated to provide access to, or to disclose, any information to the Purchaser if the Company reasonably determines that such access or disclosure would jeopardize any attorney-client or other privilege claim by the Company or any of its Subsidiaries; provided that the Company shall use its commercially reasonable efforts to otherwise make available such information to the Purchaser notwithstanding such impediment, including by causing the documents or information that are subject to such privilege to be provided in a manner that would not reasonably be expected to violate or jeopardize such privilege.
(d) Without limiting any of the foregoing, with respect to Personal Information disclosed in connection with this Agreement (the “ Disclosed Personal Information ”), the Purchaser shall use or disclose the Disclosed Personal Information only for purposes related to the transaction and, after closing, the Parties (i) shall use and disclose the Disclosed Personal Information for the purposes for which the Disclosed Personal Information was collected, permitted, to be used or disclosed before the transaction was completed or as otherwise permitted or required by applicable Laws; (ii) shall protect the Disclosed Personal Information by security safeguards appropriate to the sensitivity of the information; and (iii) shall give effect to any withdrawal of consent with respect to the Disclosed Personal Information. To the extent required by Law, the Purchaser shall notify the individuals to whom the Disclosed Personal Information relates that their Personal Information has transferred as a result of such transactions. If the transactions contemplated by this Agreement do not proceed, the Purchaser shall return to the Company or, at the Company’s request, destroy the Disclosed Personal Information within a reasonable period of time.

5.8 Insurance and Indemnification

(a) Prior to the Effective Time, the Company shall purchase customary “tail” policies of directors’ and officers’ liability, products and completed operations liability and employment practices liability insurance from a reputable and financially sound insurance carrier and containing terms and conditions no less favourable in the aggregate to the protection provided by the policies maintained by the Company and its Subsidiaries which are in effect immediately prior to the Effective Date and

==> picture [210 x 36] intentionally omitted <==

C - 89

providing protection in respect of claims arising from facts or events which occurred on or prior to the Effective Time and the Company will, and will cause its Subsidiaries to, maintain such tail policies in effect without any reduction in scope or coverage for six years from the Effective Time; provided, that the Company and its Subsidiaries shall not be required to pay any amounts in respect of such coverage prior to the Effective Time and provided further that the cost of such policies shall not exceed 300% of the Company’s current annual aggregate premium for policies currently maintained by the Company or its Subsidiaries.

(b) The Company will, and will cause its Subsidiaries to, honour all rights to indemnification or exculpation now existing in favour of present and former employees, officers and directors of the Company and its Subsidiaries under Law and under the articles or other constating documents of the Company and/or its Subsidiaries or, to the extent that they are disclosed in the Company Disclosure Letter, under any agreement or contract of any indemnified person with the Company or with any of its Subsidiaries, and acknowledges that such rights shall survive the completion of the Plan of Arrangement, and, to the extent within the control of the Company, the Company shall ensure that the same shall not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any such indemnified person and shall continue in full force and effect in accordance with their terms for a period of not less than six years from the Effective Date.
(c) From and following the Effective Time, the Purchaser will cause the Company to comply with its obligations under Section 5.8(a) and Section 5.8(b).
(d) If the Company or the Purchaser or any of their successors or assigns shall (i) amalgamate, consolidate with or merge or wind-up into any other person and shall not be the continuing or surviving corporation or entity; or (ii) transfer all or substantially all of its properties and assets to any Person, then, and in each such case, proper provisions shall be made so that the successors and assigns and transferees of the Company or the Purchaser, as the case may be, shall assume all of the obligations of the Company or the Purchaser, as applicable, set forth in this Section 5.8.
(e) The provisions of this Section 5.8 are intended for the benefit of, and shall be enforceable by, each insured or indemnified Person, his or her heirs and his or her legal representatives and, for such purpose, the Company hereby confirms that it is acting as trustee on their behalf, and agrees to enforce the provisions of this Section 5.8 on their behalf. Furthermore, this Section 5.8 shall survive the termination of this Agreement as a result of the occurrence of the Effective Date for a period of six years.

5.9 Pre-Acquisition Reorganization

(a) The Company agrees to effect such reorganization of its business, operations, subsidiaries and assets or such other transactions (each, a “ Pre-Acquisition

==> picture [210 x 36] intentionally omitted <==

C - 90

Reorganization ”) as the Purchaser or Acquireco may reasonably request prior to the Effective Date, and the Plan of Arrangement, if required, shall be modified accordingly; provided , however , that unless otherwise agreed by the Purchaser, Acquireco and the Company (i) any Pre-Acquisition Reorganization is not, in the opinion of the Company or the Company’s counsel, acting reasonably, prejudicial to the Company, the Company Shareholders or the holders of Company Options or Company RSUs, (ii) any Pre-Acquisition Reorganization does not require the Company to obtain the approval of the Company Shareholders or of any counterparty to any Contract, (iii) any Pre-Acquisition Reorganization shall not, in the opinion of the Company, acting reasonably, impair, prevent, impede or materially delay the consummation of the Arrangement, (iv) any Pre-Acquisition Reorganization shall not, in the opinion of the Company, acting reasonably, materially interfere with the ongoing operations of the Company or its Subsidiaries or the Joint Ventures, (v) any Pre-Acquisition Reorganization shall not require the Company or any of its Subsidiaries to contravene any applicable Laws, their respective organization documents or any Contract or Authorization, (vi) the Company and its Subsidiaries shall not be obligated to take any action that would reasonably be expected to result in any Taxes being imposed on, or any adverse Tax or other consequences to, any Company Shareholder or the holders of Company Options or Company RSUs that are incrementally greater than the Taxes or other consequences to such party in connection with the consummation of the Arrangement in the absence of any Pre-Acquisition Reorganization, (vii) any PreAcquisition Reorganization is effected immediately prior to, contemporaneously with, or within two Business Days prior to the Effective Date and shall not become effective unless the Purchaser and Acquireco have waived or confirmed in writing the satisfaction of all conditions in their favour under this Agreement, other than conditions that, by their terms, are to be satisfied on the Effective Date, and shall have confirmed in writing that they are prepared, and able to promptly and without condition (other than the satisfaction of conditions that, by their terms, are to be satisfied on the Effective Date), proceed to effect the Arrangement, and (viii) the Purchaser agrees that it will be responsible for all reasonable costs and expenses associated with any Pre-Acquisition Reorganization to be carried out at its request. The Purchaser shall provide written notice to the Company of any proposed PreAcquisition Reorganization in reasonable detail at least 15 Business Days prior to the date of the Company Meeting. Any step or action taken by the Company or its Subsidiaries in furtherance of a proposed Pre-Acquisition Reorganization shall not be considered to be a breach of any representation, warranty or covenant of the Company contained in this Agreement. If the Arrangement is not completed, the Purchaser or Acquireco shall forthwith reimburse the Company or at the Company’s direction, its Subsidiaries, for all reasonable fees and expenses (including any professional fees and expenses and Taxes) incurred by the Company and its Subsidiaries in considering or effecting a Pre-Acquisition Reorganization and shall be responsible for any fees, expenses and costs (including professional fees and expenses and Taxes) of the Company and its Subsidiaries in reversing or unwinding any Pre-Acquisition Reorganization that was effected prior to the Effective Date. The Purchaser hereby agrees to indemnify and save harmless the

==> picture [210 x 36] intentionally omitted <==

C - 91

Company and its Subsidiaries and their respective Representatives from and against any and all liabilities, losses, damages, claims, costs, expenses, interest, awards, judgements, Taxes and penalties suffered or incurred by any of them in connection with or as a result of any Pre-Acquisition Reorganization (including in respect of any reversal, modification or termination of a Pre-Acquisition Reorganization).

(b) The Company agrees that it shall, and shall cause each of its Subsidiaries to, cooperate with the Purchaser and Acquireco in good faith to plan, prepare and implement such Pre-Acquisition Reorganizations as are desirable and requested by the Purchaser or Acquireco in accordance with this 5.9.
(c) Without limiting the generality of the foregoing, the Company acknowledges that the Purchaser and Acquireco may enter into transactions (the “ Bump Transactions ”) designed to step up the tax basis in certain capital property of the Company for purposes of the Tax Act and agrees to use commercially reasonable efforts to provide information reasonably required by the Purchaser and Acquireco, and available to the Company, in this regard on a timely basis and to assist in the obtaining of any such information in order to facilitate a successful completion of the Bump Transactions or any such other reorganizations or transactions as is reasonably requested by the Purchaser or Acquireco, provided that the Company shall not be required to perform any calculations, prepare summaries or otherwise create records or other work product that is not in existence on the date hereof.

ARTICLE 6 CONDITIONS

6.1 Mutual Conditions Precedent

The respective obligations of the Parties to complete the Arrangement are subject to the fulfillment of each of the following conditions precedent on or before the Effective Time, each of which may only be waived with the mutual consent of the Parties:

(a) the Company Shareholder Approval shall have been obtained in accordance with the Interim Order;
(b) the Purchaser Shareholder Approval shall have been obtained;
(c) the Interim Order and the Final Order shall each have been obtained on terms consistent with this Agreement, and shall not have been set aside or modified in a manner unacceptable to either the Company or the Purchaser, each acting reasonably, on appeal or otherwise;
(d) all of the Key Regulatory Approvals shall have been obtained; and
(e) no Governmental Entity shall have enacted, issued, promulgated, enforced or entered any Order or Law which is then in effect and has the effect of making the

==> picture [210 x 36] intentionally omitted <==

C - 92

Arrangement illegal or otherwise preventing or prohibiting consummation of the Arrangement.

6.2 Additional Conditions Precedent to the Obligations of the Purchaser

The obligation of the Purchaser and Acquireco to complete the Arrangement is subject to the fulfillment of each of the following conditions precedent on or before the Effective Time (each of which is for the exclusive benefit of the Purchaser and Acquireco and may be waived by the Purchaser and Acquireco, in whole or in part at any time, each in its sole discretion, without prejudice to any other rights which the Purchaser may have):

(a) (i) the representations and warranties of the Company set forth in Section 3.1(a) [Organization] , Section 3.1(b) [Authorization; Validity of Agreement; Company Action] , Section 3.1(c) [Board Approvals] , Section 3.1(s)(ii) [No Company Material Adverse Effect] and Section 3.1(kk) [Brokers; Expenses] shall be true and correct in all respects as of the Effective Time as if made as at and as of such time (except that any such representation and warranty that by its terms speaks specifically as of the date of this Agreement or another date shall be true and correct in all respects as of such date); (ii) the representations and warranties of the Company set forth in Section 3.1(i)(i), (ii), (iii), (iv), (vi) and (viii) [Capitalization] shall be true and correct in all respects (except for de minimis inaccuracies) as of the Effective Time as if made as at and as of such time (except that any such representation and warranty that by its terms speaks specifically as of the date of this Agreement or another date shall be true and correct in all respects (except for de minimis inaccuracies) as of such date) and (iii) the other representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects (disregarding for purposes of this clause (iii) any materiality qualification or the Company Material Adverse Effect qualification contained in any such representation or warranty) as of the Effective Time as if made at and as of such time (except that any such representation and warranty that by its terms speaks specifically as of the date of this Agreement or another date shall be true and correct in all respects as of such date), except in the case of this clause (iii) where the failure to be so true and correct in all respects, individually or in the aggregate, would not have a Company Material Adverse Effect; and the Company shall have provided to the Purchaser and Acquireco a certificate of two senior officers of the Company certifying (on the Company’s behalf and without personal liability) the foregoing dated the Effective Date;
(b) the Company shall have complied in all material respects with its covenants herein to be complied with by it prior to the Effective Time and the Company shall have provided to the Purchaser and Acquireco a certificate of two senior officers of the Company certifying (on the Company’s behalf and without personal liability) compliance with such covenants dated the Effective Date;
(c) since the date of this Agreement, there shall not have occurred a Company Material Adverse Effect;

==> picture [210 x 36] intentionally omitted <==

C - 93

(d) the number of Company Shares in respect of which Dissent Rights shall have been validly exercised shall not exceed 5% of Company Shares issued and outstanding as of the date hereof;
(e) there shall be no action or proceeding pending by a Governmental Entity that is reasonably likely to:
(i) enjoin or prohibit the Purchaser’s or Acquireco’s ability to acquire, hold, or exercise full rights of ownership over, any Company Shares, including the right to vote Company Shares; or
(ii) if the Arrangement is consummated, have a Company Material Adverse Effect; and
(f) the Key Consent shall have been obtained, in form and substance acceptable to the Purchaser, acting reasonably.

6.3 Conditions Precedent to the Obligations of the Company

(a) The representations and warranties of the Purchaser set forth in (i) Section 4.1(a) [ Organization ] and Section 4.1(b) [ Authorization; Validity of Agreement; Company Action ] shall be true and correct in all respects as of the Effective Time as if made as at and as of such time (except that any such representation and warranty that by its terms speaks specifically as of the date of this Agreement or another date shall be true and correct in all respects as of such date); and (ii) the other provisions of this Agreement shall be true and correct in all respects (disregarding for purposes of this clause (ii) any materiality or the Purchaser Material Adverse Effect qualification contained in any such representation or warranty) as of the Effective Time as if made at and as of such time (except that any such representation and warranty that by its terms speaks specifically as of the date of this Agreement or another date shall be true and correct in all respects as of such date), except in the case of this clause (ii) where the failure to be so true and correct in all respects, individually and in the aggregate, would not have a Purchaser Material Adverse Effect, and the Purchaser shall have provided to the Company a certificate of two senior officers of the Purchaser certifying (on the Purchaser’s behalf and without personal liability) the foregoing dated the Effective Date; and
(b) each of the Purchaser and Acquireco shall have complied in all respects with its covenants in Section 2.10 [ Payment of Consideration ] and in all material respects with its other covenants herein to be complied with by it prior to the Effective Time and the Purchaser shall have provided to the Company a certificate of two senior

==> picture [210 x 36] intentionally omitted <==

C - 94

officers of the Purchaser certifying (on the Purchaser’s behalf and without personal liability) compliance with such covenants dated the Effective Date.

6.4 Satisfaction of Conditions

The conditions precedent set out in Section 6.1, Section 6.2 and Section 6.3 shall be conclusively deemed to have been satisfied, waived or released at the Effective Time. For greater certainty, and notwithstanding the terms of any escrow arrangement entered into between the Parties and the Depositary, all funds held in escrow by the Depositary pursuant to Section 2.10 hereof shall be released from escrow at the Effective Time without any further act or formality required on the part of any person.

6.5 Notice of Breach

(a) Each Party will give prompt notice to the other Parties of the occurrence or failure to occur (in either case, actual, anticipated, contemplated or, to the knowledge of such Party, threatened), at any time from the date hereof until the Effective Time, of any event or state of facts which occurrence or failure would, or would be likely to:
(i) cause any of the representations or warranties of such Party contained herein to be untrue or inaccurate in any material respect on the date hereof or at the Effective Date if the failure to be so true or accurate would cause any condition set forth in Section 6.2(a) or 6.3(a), as applicable, not to be satisfied; or
(ii) result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such Party prior to or at the Effective Date if the failure to so comply or satisfy would cause any condition set forth in Section 6.2(b) or 6.3(b), as applicable, not to be satisfied.
(b) Notification provided under this Section 6.5 will not affect the representations, warranties, covenants, agreements or obligations of the Parties (or remedies with respect thereto) or the conditions to the obligations of the Parties under this Agreement.

ARTICLE 7

TERM, TERMINATION, AMENDMENT AND WAIVER

7.1 Term

This Agreement shall be effective from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with its terms.

==> picture [210 x 36] intentionally omitted <==

C - 95

7.2 Termination

(a) This Agreement may be terminated at any time prior to the Effective Time:
(i) by mutual written agreement of the Company and the Purchaser;
(ii) by either the Company or the Purchaser, if:
- (A) the Effective Time shall not have occurred on or before the Outside Date, except that the right to terminate this Agreement under this Section 7.2(a)(ii)(A) shall not be available to any Party whose failure to fulfill any of its (or in the case of the Purchaser, its or Acquireco’s) covenants or agreements or breach of any of its (or in the case of the Purchaser, its or Acquireco’s) representations and warranties under this Agreement has been the cause of, or resulted in, the failure of the Effective Time to occur by such Outside Date;
- (B) after the date hereof, there shall be enacted or made any applicable Laws or Order that makes consummation of the Arrangement illegal or otherwise prohibits or enjoins the Company or the Purchaser from consummating the Arrangement and such Law or Order shall have become final and non-appealable; provided that the Party seeking to terminate this Agreement under this Section 7.2(a)(ii)(B) has complied with Sections 5.2 and 5.4 in all material respects and that the enactment or making of such Law or Order was not caused by, or the result of, the failure of such Party to comply with its (or in the case of the Purchaser, its or Acquireco’s) obligations under this Agreement; or
- (C) the Company Meeting is duly convened and held and the Company Shareholder Approval shall not have been obtained at such duly held Company Meeting as required by the Interim Order;
- (D) the Purchaser Meeting is duly convened and held and the Purchaser Shareholder Approval shall not have been obtained at such duly held Purchaser Meeting;
(iii) by the Purchaser, if:
- (A) prior to the Company Shareholder Approval having been obtained, the Company Board: (1) fails to make the Company Board Recommendation or withdraws, amends, modifies or qualifies, or publicly states an intention to withdraw, amend, modify or qualify, in a manner adverse to the Purchaser, the Company Board Recommendation, (2) accepts, approves, endorses or recommends, or publicly proposes to accept, approve, endorse or recommends a Company Acquisition Proposal or takes no position or a neutral

==> picture [210 x 36] intentionally omitted <==

C - 96

position with respect to a Company Acquisition Proposal for more than five Business Days after the public announcement of such Company Acquisition Proposal (or beyond the third Business Day prior to the date of the Company Meeting, if sooner), (3) accepts or enters into (other than a confidentiality agreement permitted by and in accordance with Section 5.5(e)) or publicly proposes to accept or enter into (other than a confidentiality agreement permitted by and in accordance with Section 5.5(e)) any agreement in respect of a Company Acquisition Proposal, or (4) fails to publicly reaffirm (without qualification) the Company Board Recommendation within five Business Days after having been requested in writing by the Purchaser to do so (or in the event the Company Meeting is scheduled to occur within such five Business Day period, prior to the third Business Day prior to the Company Meeting) (each of the foregoing described, a “ Company Change in Recommendation ”);

(B) prior to the Company Shareholder Approval having been obtained the Company shall have breached Section 5.5 in any material respect;
(C) a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company set forth in this Agreement shall have occurred that would cause the conditions set forth in Section 6.2(a) or Section 6.2(b) not to be satisfied, and such breach is not cured in accordance with the terms of Section 7.2(b); provided that neither the Purchaser nor Acquireco is then in breach of this Agreement so as to cause any condition in Section 6.3(a) or Section 6.3(b) not to be satisfied;
(D) there has occurred a Company Material Adverse Effect after the date of this Agreement which is incapable of being cured on or prior to the Outside Date; or
(E) prior to obtaining the Purchaser Shareholder Approval, the Purchaser Board makes a Purchaser Change in Recommendation or authorizes the Purchaser to enter into a Purchaser Proposed Agreement, in each case, in accordance with Section 5.6 and provided that the Purchaser is then in compliance with Section 5.6 and that concurrent with such termination the Purchaser pays the Purchaser Termination Payment in accordance with Section 7.3; or
(iv) by the Company, if:
(A) a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Purchaser or Acquireco set forth in this Agreement shall have occurred that would cause the conditions set forth in Section 6.3(a) or Section 6.3(b) not to be

==> picture [210 x 36] intentionally omitted <==

C - 97

satisfied, and such breach is not cured in accordance with the terms of Section 7.2(b); provided that the Company is not then in breach of this Agreement so as to cause any condition in Section 6.2(a) or Section 6.2(b) not to be satisfied;

(B) prior to obtaining the Company Shareholder Approval, the Company Board makes a Company Change in Recommendation or authorizes the Company to enter into a Company Proposed Agreement, in each case, in accordance with Section 5.5 and provided that the Company is then in compliance with Section 5.5 and that concurrent with such termination the Company pays the Company Termination Payment pursuant to Section 7.3; or
(C) prior to the Purchaser Shareholder Approval having been obtained, the Purchaser Board: (1) fails to make the Purchaser Board Recommendation or withdraws, amends, modifies or qualifies, or publicly states an intention to withdraw, amend, modify or qualify, in a manner adverse to the Company, the Purchaser Board Recommendation, (2) accepts, approves, endorses or recommends, or publicly proposes to accept, approve, endorse or recommend a Purchaser Acquisition Proposal or takes no position or a neutral position with respect to a Purchaser Acquisition Proposal for more than five Business Days after the public announcement of such Purchaser Acquisition Proposal (or beyond the third Business Day prior to the date of the Purchaser Meeting, if sooner), (3) accepts or enters into (other than a confidentiality agreement permitted by and in accordance with Section 5.6(e)) or publicly proposes to accept or enter into (other than a confidentiality agreement permitted by and in accordance with Section 5.6(e)) any agreement in respect of a Purchaser Acquisition Proposal, or (4) fails to publicly reaffirm (without qualification) the Purchaser Board Recommendation within five Business Days after having been requested in writing by the Company to do so (or in the event the Purchaser Meeting is scheduled to occur within such five Business Day period, prior to the third Business Day prior to the Purchaser Meeting) (each of the foregoing described, a “ Purchaser Change in Recommendation ”); or
(D) prior to the Purchaser Shareholder Approval having been obtained the Purchaser shall have breached Section 5.6 in any material respect.
(b) The Party desiring to terminate this Agreement pursuant to this Section 7.2 (other than pursuant to Section 7.2(a)(i)) (the “ Terminating Party ”) shall give written notice (“ Termination Notice ”) of such termination to the other Party (the “ Breaching Party ”), specifying in reasonable detail the basis for such Party’s

==> picture [210 x 36] intentionally omitted <==

C - 98

exercise of its termination right, which Termination Notice shall include, in the case of a termination pursuant to Section 7.2(a)(iii)(C) [ Breach of the Company Representations, Warranties or Covenants ] or Section 7.2(a)(iv)(A) [ Breach of the Purchaser Representations, Warranties or Covenants ], as the case may be, in reasonable detail, all breaches of covenants, representations and warranties or other matters which the Terminating Party asserts as the basis for such termination. In the case of a termination pursuant to Section 7.2(a)(iii)(C) [ Breach of the Company Representations, Warranties or Covenants ] or Section 7.2(a)(iv)(A) [ Breach of the Purchaser Representations, Warranties or Covenants ], after delivering a Termination Notice, as long as the Breaching Party is proceeding diligently to cure such matter and such matter is capable of being cured prior to the Outside Date ( provided that any wilful breach shall be deemed to be incapable of so being cured), the Terminating Party may not exercise such termination right until the earlier of (i) the Outside Date and (ii) the date that is 20 Business Days following receipt of such Termination Notice by the Breaching Party, if such breach has not been cured by such date.

(c) If this Agreement is terminated pursuant to Section 7.1 or Section 7.2, this Agreement shall become null and void and be of no further force or effect without liability of any Party (or any shareholder, director, officer, employee, agent, consultant or representative of such Party) to any other Party hereto, except that: (i) in the event of termination under Section 7.1 as a result of the Effective Time occurring, the provisions of this Section 7.2(c)(i) and Sections 2.5(f), 2.12, 5.8, 5.9(a), Article 8, and all related definitions set forth in Section 1.1 and the applicable interpretation provisions in Article 1 shall survive for a period of six years thereafter; (ii) in the event of termination under Section 7.2, the provisions of this Section 7.2(c) and Sections 2.5(f), 2.6(f), 5.7(b), 5.9(a), 7.3, Article 8, and all related definitions set forth in Section 1.1, the applicable interpretation provisions in Article 1 and the provisions of the Confidentiality Agreement shall survive any termination hereof pursuant to Section 7.2; and (iii) no Party shall be relieved or released from any liabilities or damages arising out of fraud or of its wilful and material breach of any provision of this Agreement.

7.3 Termination Payments

(a) Except as otherwise provided herein, all fees, costs and expenses incurred in connection with this Agreement and the Plan of Arrangement shall be paid by the Party incurring such fees, costs or expenses.
(b) For the purposes of this Agreement:
(i) “ Company Termination Payment ” means an amount equal to $12,500,000; and
(ii) “ Purchaser Termination Payment ” means an amount equal to $25,000,000 less the amount payable pursuant to Section 7.3(g) if and only

==> picture [210 x 36] intentionally omitted <==

C - 99

if such amount has been paid by the Purchaser prior to the Purchaser Termination Payment becoming due and payable under this Agreement.

(c) For the purposes of this Agreement, “ Company Termination Payment Event ” means the termination of this Agreement:
(i) by the Purchaser pursuant to Section 7.2(a)(iii)(A) [Company Change in Recommendation] or Section 7.2(a)(iii)(B) [Breach of Company NonSolicitation] ; or
(ii) by the Company pursuant to Section 7.2(a)(iv)(B) [ Company Superior Proposal or Company Intervening Event ]; or
(iii) by any Party pursuant to Section 7.2(a)(ii)(A) [Effective Time Not Occurring Prior to Outside Date] or Section 7.2(a)(ii)(C) [Failure to Obtain Company Shareholder Approval] , but only if, in these termination events, (A) following the date hereof and prior to the Company Meeting, a bona fide Company Acquisition Proposal shall have been made or publicly announced by any Person other than the Purchaser (or any of its affiliates or any Person acting jointly or in concert with any of the foregoing) and has not expired or been withdrawn, and (B) within 12 months following the date of such termination, (1) the Company or one or more of its Subsidiaries enters into a definitive agreement in respect of a Company Acquisition Proposal (whether or not such Company Acquisition Proposal is the same Company Acquisition Proposal referred to in clause (A) above) and such Company Acquisition Proposal is later consummated (whether or not within such 12 month period) or (2) a Company Acquisition Proposal shall have been consummated (whether or not such Company Acquisition Proposal is the same Company Acquisition Proposal referred to in clause (A) above); provided that for purposes of this Section 7.3(c)(iii), the term “ Company Acquisition Proposal ” shall have the meaning ascribed to such term in Section 1.1 except that a reference to “20%” therein shall be deemed to be a reference to “50%”.
(d) For the purposes of this Agreement, “ Purchaser Termination Payment Event ” means the termination of this Agreement:
(i) by the Company pursuant to Section 7.2(a)(iv)(C) [Purchaser Change in Recommendation] or Section 7.2(a)(iv)(D) [Breach of Purchaser NonSolicitation] ;
(ii) by the Purchaser pursuant to Section 7.2(a)(iii)(E) [Purchaser Superior Proposal or Purchaser Intervening Event ]; or
(iii) by any Party pursuant to Section 7.2(a)(ii)(A) [Effective Time Not Occurring Prior to Outside Date] or Section 7.2(a)(ii)(D) [Failure to Obtain Purchaser Shareholder Approval] , but only if, in these termination

==> picture [210 x 36] intentionally omitted <==

C - 100

events, (A) following the date hereof and prior to the Purchaser Meeting, a bona fide Purchaser Acquisition Proposal shall have been made or publicly announced by any Person other than the Company (or any of its affiliates or any Person acting jointly or in concert with any of the foregoing) and has not expired or been withdrawn, and (B) within 12 months following the date of such termination, (1) the Purchaser or one or more of its Subsidiaries enters into a definitive agreement in respect of a Purchaser Acquisition Proposal (whether or not such Purchaser Acquisition Proposal is the same Purchaser Acquisition Proposal referred to in clause (A) above) and such Purchaser Acquisition Proposal is later consummated (whether or not within such 12 month period) or (2) a Purchaser Acquisition Proposal shall have been consummated (whether or not such Purchaser Acquisition Proposal is the same Purchaser Acquisition Proposal referred to in clause (A) above); provided that for purposes of this Section 7.3(d)(iii), the term “ Purchaser Acquisition Proposal ” shall have the meaning ascribed to such term in Section 1.1 except that a reference to “20%” therein shall be deemed to be a reference to “50%”.

(e) If a Company Termination Payment Event occurs, the Company shall pay the Company Termination Payment to the Purchaser (or as directed by the Purchaser) by wire transfer of immediately available funds, as follows:
(i) if the Company Termination Payment is payable pursuant to Section 7.3(c)(i), the Company Termination Payment shall be payable within two Business Days following such termination;
(ii) if the Company Termination Payment is payable pursuant to Section 7.3(c)(ii), the Company Termination Payment shall be payable prior to or concurrently with such termination; or
(iii) if the Company Termination Payment is payable pursuant to Section 7.3(c)(iii), the Company Termination Payment shall be payable upon the consummation of a Company Acquisition Proposal referred to in Section 7.3(c)(iii).

For the avoidance of doubt, in no event shall the Company be obligated to pay the Company Termination Payment on more than one occasion. Payment of the Company Termination Payment shall be made to the Purchaser less any applicable withholding Tax; provided, however, that the Company shall notify the Purchaser of its intent to withhold prior to making such withholding, and if requested by the Purchaser, the Parties shall cooperate to reduce or eliminate the amount so withheld, if possible, through the provision of any Tax forms, information, reports or certificates, including, among others, filing any documents with any relevant Tax authority.

==> picture [210 x 36] intentionally omitted <==

C - 101

(f) If the Purchaser Termination Payment Event occurs, the Purchaser shall pay the Purchaser Termination Payment to the Company, by wire transfer of immediately available funds, as follows:
(i) if the Purchaser Termination Payment is payable pursuant to Section 7.3(d)(i), the Purchaser Termination Payment shall be payable within two Business Days following such termination;
(ii) if the Purchaser Termination Payment is payable pursuant to 7.3(d)(ii), the Purchaser Termination Payment shall be payable prior to or concurrently with such termination; or
(iii) if the Purchaser Termination Payment is payable pursuant to Section 7.3(d)(iii), the Purchaser Termination Payment shall be payable upon the consummation of a Purchaser Acquisition Proposal referred to in Section 7.3(d)(iii).

For the avoidance of doubt, in no event shall the Purchaser be obligated to pay the Purchaser Termination Payment on more than one occasion. Payment of the Purchaser Termination Payment shall be made to the Company less any applicable withholding Tax; provided, however, that the Purchaser shall notify the Company of its intent to withhold prior to making such withholding, and if requested by the Company, the Parties shall cooperate to reduce or eliminate the amount so withheld, if possible, through the provision of any Tax forms, information, reports or certificates, including, among others, filing any documents with any relevant Tax authority. The Purchaser acknowledges and agree that it intends to take the position the Purchaser Termination Payment is not consideration for a taxable supply such that no UK VAT is chargeable thereon and shall use reasonable best efforts to secure that treatment. Notwithstanding the foregoing, if the Purchaser (or the representative member of any group of companies for UK VAT purposes of which the Purchaser is a member (the “ VAT Group ”)) is required to account for any UK VAT in respect of a Purchaser Termination Payment, the Purchaser Termination Payment shall be reduced to such amount as will ensure that the amount of the reduced fee together with any UK VAT thereon (except to the extent recoverable as input tax by the Purchaser or the representative member of the VAT Group) is equal to the amount of the unreduced Purchaser Termination Payment and the parties shall, promptly, make such payments to each other as are necessary to give effect thereto. In the event that the Purchaser considers that UK VAT is chargeable in respect of the Purchaser Termination Payment, the Purchaser shall promptly notify the Company and the Purchaser shall (and shall procure the representative member of the VAT Group will) use reasonable best efforts to recover as input tax any such UK VAT. The Purchaser shall promptly provide the Company with reasonable evidence supporting the extent to which UK VAT is chargeable and / or recoverable as input tax and with such other information as the Company may reasonably request in connection with any payments to be made under this Section.

==> picture [210 x 36] intentionally omitted <==

C - 102

(g) In the event that any Party terminates this Agreement pursuant to Section 7.2(a)(ii)(D) [Failure to Obtain Purchaser Shareholder Approval] , then the Purchaser shall pay the Company $5,000,000, by wire transfer of immediately available funds, within two Business Days following any such termination. Notwithstanding the foregoing, no amount shall be payable by the Purchaser pursuant to this Section 7.3(g) if the Purchaser Termination Payment is otherwise payable pursuant to this Agreement. The provisions of Section 7.3(f) relating to withholding Tax and UK VAT shall apply, mutatis mutandis , in relation to the amount payable pursuant to this Section 7.3(g), as they do in relation to the Purchaser Termination Payment.
(h) Each Party acknowledges that all of the payment amounts set out in this Section 7.3 are consideration for the disposition of a Party’s rights under this Agreement and are payments of liquidated damages which are a genuine pre-estimate of the damages, which the other Party entitled to damages will suffer or incur as a result of the termination of, and disposition of all rights and obligations of the Parties under this Agreement in the circumstances giving rise to such payment and are not penalties. Each Party irrevocably waives any right it may have to raise as a defence that any such liquidated damages are excessive or punitive. For greater certainty, each Party agrees that, upon any termination of this Agreement under circumstances where the Purchaser or the Company is entitled to a Termination Payment and such Termination Payment is paid in full, the receipt of the Termination Payment by the applicable Party shall be the sole and exclusive remedy (including damages, specific performance and injunctive relief) of such Party and its affiliates against the other Party and its affiliates, and the Party entitled to the Termination Payment and its affiliates shall be in such circumstances precluded from any other remedy against the other Party at Law or in equity or otherwise (including an order for specific performance), and shall not seek to obtain any recovery, judgment, or damages of any kind, including consequential, indirect, or punitive damages, against the other Party or any of its Subsidiaries or any of their respective directors, officers, employees, partners, managers, members, shareholders or affiliates or their respective representatives in connection with this Agreement or the transactions contemplated hereby; provided that the foregoing limitations shall not apply in the event of fraud or wilful or intentional breach of this Agreement by a Party.
(i) In no event or circumstance shall the Purchaser be required to make a payment pursuant to this Section 7.3 which is more than the maximum amount permitted to be paid without the prior approval of the Purchaser Shareholders pursuant to the UK Listing Rules (the “ LR Cap ”). In the event that any payment is made which does exceed the LR Cap (taking into account any amount in respect of UK VAT that is irrecoverable), the amount of such payment shall be retrospectively reduced to the extent of the excess above the LR Cap, and the Company shall refund the amount of such excess to the Purchaser within five Business Days of demand, subject to the Purchaser having complied with Section 7.3(f) above.

==> picture [210 x 36] intentionally omitted <==

C - 103

7.4 Amendment

Subject to the provisions of the Interim Order, the Plan of Arrangement and applicable Laws, this Agreement and the Plan of Arrangement may, at any time and from time to time before or after the holding of the Company Meeting but not later than the Effective Time, be amended by mutual written agreement of the Parties, without further notice to or authorization on the part of the Company Shareholders, and any such amendment may without limitation:

(a) change the time for performance of any of the obligations or acts of the Parties;
(b) waive any inaccuracies or modify any representation or warranty contained herein or in any document delivered pursuant hereto;
(c) waive compliance with or modify any of the covenants herein contained and waive or modify performance of any of the obligations of the Parties; and/or
(d) waive compliance with or modify any mutual conditions precedent herein contained.

7.5 Waiver

The Purchaser and Acquireco, on the one hand, and the Company, on the other hand, may: (a) extend the time for the performance of any of the obligations or acts of the other Party or Parties; (b) waive compliance, except as provided herein, with any of the other Party’s or Parties’ agreements or the fulfilment of any conditions to its own obligations contained herein; or (c) waive inaccuracies in any of the other Party’s or Parties’ representations or warranties contained herein or in any document delivered by the other Party or Parties; provided , however , that any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party and, unless otherwise provided in the written waiver, will be limited to the specific breach or condition waived. A Party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a Party from any other or further exercise of that right or the exercise of any other right.

ARTICLE 8 GENERAL PROVISIONS

8.1 Notices

All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed to have been duly given and received on the day it is delivered, provided that it is delivered on a Business Day prior to 5:00 p.m. local time in the place of delivery or receipt. However, if notice is delivered after 5:00 p.m. local time or if such day is not a Business Day then the notice shall be deemed to have been given and received on the next Business Day. Notice shall be sufficiently given if delivered (either in Person or by courier), or if transmitted by email (with confirmation of transmission) to the Parties at the following addresses (or at such other addresses as shall be specified by any Party by notice to the other given in accordance with these provisions):

==> picture [210 x 36] intentionally omitted <==

C - 104

(a) if to the Purchaser and Acquireco:

Drax Group plc Drax Power Station Selby, North Yorkshire YOB 8PH

Attention: [REDACTED - PERSONAL INFORMATION] Email: [REDACTED - PERSONAL INFORMATION]

with copies (which shall not constitute notice) to:

Osler, Hoskin & Harcourt LLP 1 First Canadian Place, Suite 6200 Toronto, Ontario M5X 1B8

Attention: Emmanuel Pressman and Alex Gorka Email: [email protected] and [email protected]

(b) if to the Company:

Pinnacle Renewable Energy Inc. Vancouver Office 350 - 3600 Lysander Lane Richmond, British Columbia V7B 1C3, Canada

Attention: [REDACTED - PERSONAL INFORMATION] Email: [REDACTED - PERSONAL INFORMATION]

with copies (which shall not constitute notice) to:

Stikeman Elliott LLP 5300 Commerce Court West 199 Bay Street Toronto, Ontario M5L 1B9

Attention: Sean Vanderpol and Daniel Borlack Email: [email protected] and [email protected]

8.2 Governing Law

(a) This Agreement shall be governed, including as to validity, interpretation and effect, by the Laws of the Province of Ontario and the Laws of Canada applicable therein; provided, however, that all matters related to (i) the Company Board’s “fiduciary duties” and (ii) the effectuation of the Arrangement shall be governed by the Laws of the Province of British Columbia, in each case, without regard to its rules of conflict of Laws.

==> picture [210 x 36] intentionally omitted <==

C - 105

(b) Each of the Parties hereby irrevocably attorns to the jurisdiction of the Superior Court of Justice (Commercial List) of the Province of Ontario in respect of all matters arising under and in relation to this Agreement and the Arrangement and waives any defences to the maintenance of an action in such court.

8.3 Injunctive Relief

Subject to Section 7.3(h), the Parties agree that irreparable harm would occur for which money damages would not be an adequate remedy at Law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the Parties agree that, in the event of any breach or threatened breach of this Agreement by a Party, the non-breaching Party will be entitled, without the requirement of posting a bond or other security, to equitable relief, including injunctive relief and specific performance, and the Parties shall not object to the granting of injunctive or other equitable relief on the basis that there exists an adequate remedy at law. Subject to Section 7.3(h), such remedies will not be the exclusive remedies for any breach of this Agreement but will be in addition to all other remedies available at Law or equity to each of the Parties.

8.4 Time of Essence

Time shall be of the essence in this Agreement.

8.5 Entire Agreement, Binding Effect and Assignment

This Agreement (including the exhibits and schedules hereto and the Company Disclosure Letter) and the Confidentiality Agreement constitute the entire agreement, and supersede all other prior agreements, understandings, negotiations and discussions, both written and oral, between the Parties, or any of them, with respect to the subject matter hereof and thereof and, except as expressly provided herein, this Agreement is not intended to and shall not confer upon any Person other than the Parties any rights or remedies hereunder. There are no representations, warranties, covenants, conditions or other agreements, express or implied, collateral, statutory or otherwise, between the Parties in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement or in any certificate delivered pursuant to this Agreement. The Parties have not relied and are not relying on any other information, discussion or understanding in entering into and completing the transactions contemplated by this Agreement. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any of the Parties without the prior written consent of the other Party; provided that Acquireco may assign all or part of its rights under this Agreement to, and its obligations under this Agreement may be assumed by, any of its affiliates; provided that, for the avoidance of doubt, the Purchaser shall continue to be subject to its obligations under Section 2.13 in respect of such assignee.

8.6 No Liability

No director or officer of the Purchaser shall have any personal liability whatsoever to the Company under this Agreement, or any other document delivered in connection with the transactions

==> picture [210 x 36] intentionally omitted <==

C - 106

contemplated hereby on behalf of the Purchaser. No director or officer of the Company shall have any personal liability whatsoever to the Purchaser or Acquireco under this Agreement, or any other document delivered in connection with the transactions contemplated hereby on behalf of the Company.

8.7 Severability

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Law or public policy, that provision will be severed from this Agreement and all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

8.8 Waiver of Jury Trial

Each Party hereto (on behalf of itself and any of its affiliates, directors, officers, employees, agents and representatives) hereby waives, to the fullest extent permitted by applicable Laws, any right it may have to a trial by jury in respect of any suit, action or other proceeding arising out of this Agreement or the transactions contemplated hereby or the actions of the Parties in the negotiation, administration, performance and enforcement of this Agreement. Each Party hereto (a) certifies that no representative, agent or attorney of any other Party has represented, expressly or otherwise, that such Party would not, in the event of any action, suit or proceeding, seek to enforce the foregoing waiver and (b) acknowledges that it and the other Parties hereto have been induced to enter into this Agreement, by, among other things, the mutual waiver and certifications in this Section 8.8.

8.9 Third Party Beneficiaries

The provisions of Section 2.5(f), 5.8 and 5.9(a) are: (a) intended for the benefit of all third Persons mentioned therein, as and to the extent applicable in accordance with their terms, and shall be enforceable by each of such Persons and his or her heirs, executors administrators and other legal representatives (collectively, the “Third Party Beneficiaries”) and the Company shall hold the rights and benefits of Section 2.5(f), 5.8 and 5.9(a) in trust for and on behalf of the Third Party Beneficiaries and the Company hereby accepts such trust and agrees to hold the benefit of and enforce performance of such covenants on behalf of the Third Party Beneficiaries; and (b) in addition to, and not in substitution for, any other rights that the Third Party Beneficiaries may have by contract or otherwise. Except as provided in this Section 8.9 and except for the rights of the affected securityholders of the Company to receive the applicable consideration following the Effective Time pursuant to the Arrangement (for which purpose the Company hereby confirms that it is acting as agent on behalf of such affected securityholders), this Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

C - 107

8.10 Counterparts, Execution

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. The Parties shall be entitled to rely upon delivery of an executed facsimile or similar executed electronic copy of this Agreement, and such facsimile or similar executed electronic copy shall be legally effective to create a valid and binding agreement between the Parties.

[ Remainder of page intentionally left blank ]

C - 108

IN WITNESS WHEREOF the Parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

DRAX GROUP PLC

By: (signed) Andrew Keith Skelton Name: Andrew Keith Skelton Title: Chief Financial Officer

DRAX CANADIAN HOLDINGS INC.

By: (signed) Andrew Keith Skelton Name: Andrew Keith Skelton Title: Director

PINNACLE RENEWABLE ENERGY INC.

By: (signed) Duncan Davies Name: Duncan Davies Title: Chief Executive Officer

C - 109

SCHEDULE A FORM OF PLAN OF ARRANGEMENT

(See attached.)

==> picture [210 x 36] intentionally omitted <==

C - A - 1

PLAN OF ARRANGEMENT UNDER SECTION 288 OF THE BUSINESS CORPORATIONS ACT (BRITISH COLUMBIA)

ARTICLE 1 INTERPRETATION

1.1 Definitions

In this Plan of Arrangement, unless the context otherwise requires, the following words and terms shall have the meaning hereinafter set out:

“ Acquireco ” means Drax Canadian Holdings Inc., a corporation existing under the laws of British Columbia;

“ Affected Person ” has the meaning set forth in Section 5.3;

“ affiliate ” has the meaning ascribed thereto in National Instrument 45-106 – Prospectus Exemptions , in force as of the date of the Arrangement Agreement;

“ Arrangement ” means the arrangement of the Company under Division 5 of Part 9 of the BCBCA on the terms and subject to the conditions set out in this Plan of Arrangement, subject to any amendments or variations thereto made in accordance with the terms of the Arrangement Agreement and this Plan of Arrangement or made at the direction of the Court in the Final Order (with the prior written consent of the Company and the Purchaser, each acting reasonably);

“ Arrangement Agreement ” means the arrangement agreement dated February 7, 2021 between the Company, the Purchaser and Acquireco, and all schedules annexed thereto, as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof;

“ Arrangement Resolution ” means the special resolution of the Company Shareholders approving the Arrangement, which is to be considered at the Shareholder Meeting, substantially in the form of Schedule B to the Arrangement Agreement;

“ BCBCA ” means the Business Corporations Act (British Columbia);

==> picture [210 x 36] intentionally omitted <==

C - A - 2

“ Canadian Securities Laws ” means the Securities Act and the securities Laws of any other province or territory of Canada;

“ Company ” means Pinnacle Renewable Energy Inc., a corporation existing under the laws of British Columbia;

“ Company Board ” means the board of directors of the Company as the same is constituted from time to time;

“ Company Legacy Option Plan ” means the amended and restated stock option plan of the Company approved by the Company Board on January 29, 2018;

“ Company LTIP ” means the amended and restated omnibus long-term incentive plan of the Company dated May 7, 2019;

“ Company Options ” means outstanding options to purchase Company Shares granted under the Company Legacy Option Plan or the Company LTIP;

“ Company RSUs ” means restricted share units issued under the Company LTIP;

“ Company Shareholders ” means the registered and/or beneficial holders of Company Shares;

“ Company Shares ” means the common shares in the authorized share capital of the Company;

“ Consideration ” means $11.30 in cash per Company Share or Company RSU, as applicable;

“ Court ” means the Supreme Court of British Columbia or other competent court, as applicable;

“ Dissent Rights ” has the meaning set forth in Section 4.1(a);

“ Dissent Shares ” means Company Shares held by a Dissenting Shareholder and in respect of which the Dissenting Shareholder has validly exercised Dissent Rights;

“ Dissenting Shareholder ” means a registered Company Shareholder who has duly exercised a Dissent Right and has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights, but only in respect of Company Shares in respect of which Dissent Rights are validly exercised by such Company Shareholder;

“ Effective Date ” means the date on which the Arrangement becomes effective, as set out in Section 2.9 of the Arrangement Agreement;

“ Effective Time ” means 12:01 a.m. (Vancouver time) on the Effective Date or such other time as agreed to by the Company and the Purchaser in writing;

C - A- 3

“ final proscription date ” has the meaning set forth in Section 5.4;

“Governmental Entity ” means: (a) any international, multinational, national, federal, provincial, territorial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, commissioner, board, minister, ministry, bureau, agency or instrumentality, domestic or foreign; (b) any stock exchange, including the TSX and the London Stock Exchange; (c) any subdivision, agent, commission, board or authority of any of the foregoing; or (d) any quasi-governmental or private body, including any tribunal, commission, regulatory agency or self-regulatory organization, exercising any regulatory, antitrust, foreign investment, expropriation or taxing authority under or for the account of any of the foregoing;

“ Interim Order ” means the interim order of the Court contemplated by Section 2.2 of the Arrangement Agreement and made pursuant to the BCBCA in a form acceptable to the Company and the Purchaser, each acting reasonably, providing for, among other things, the calling and holding of the Shareholder Meeting, as the same may be amended, modified, supplemented or varied by the Court (with the consent of the Company and the Purchaser, each acting reasonably);

“ Letter of Transmittal ” means the letter of transmittal to be delivered by the Company to the registered holders of Company Shares providing for delivery of the certificates representing their Company Shares to the Depositary;

“ Liens ” means any hypothecs, mortgages, pledges, liens, charges, security interests, easements, encumbrances and adverse rights or claims, whether contingent or absolute;

C - A - 4

“ Plan of Arrangement ” means this plan of arrangement and any amendments, modifications, supplements or variations hereto made in accordance with the Arrangement Agreement and this Plan of Arrangement or upon the direction of the Court (with the prior written consent of the Company and the Purchaser, each acting reasonably) in the Final Order;

“ Purchaser ” means Drax Group PLC, a corporation existing under the laws of England and Wales;

“ Shareholder Meeting ” means the special meeting of Company Shareholders, including any adjournment or postponement thereof, to be called and held in accordance with the Interim Order to consider the Arrangement Resolution;

“ Tax Act ” means the Income Tax Act (Canada);

“ TSX ” means the Toronto Stock Exchange; and

“ Withholding Obligation ” has the meaning set forth in Section 5.3.

1.2 Interpretation Not Affected by Headings

The division of this Plan of Agreement into Articles, Sections, subsections and paragraphs and the insertion of headings are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Plan of Arrangement. Unless the contrary intention appears, references in this Plan of Arrangement to an Article, Section, subsection, paragraph or Schedule by number or letter or both refer to the Article, Section, subsection, paragraph or Schedule, respectively, bearing that designation in this Plan of Arrangement.

1.3 Number and Gender

In this Plan of Arrangement, unless the contrary intention appears, words importing the singular include the plural and vice versa , and words importing gender include all genders.

1.4 References to Persons and Statutes

A reference to a Person includes any successor to that Person. In this Plan of Arrangement, any reference to a statute refers to such statute and all rules, resolutions and regulations made under it, as it or they may have been or may from time to time be amended or reenacted, unless stated otherwise.

1.5 Currency

Unless otherwise stated, all references in this Plan of Arrangement to sums of money are expressed in lawful money of Canada and “$” refers to Canadian dollars.

C - A - 5

1.6 Computation of Time

If the date on which any action is required to be taken hereunder by a Party is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day.

1.7 Time References

References to time are to local time, Vancouver, British Columbia, unless otherwise specified.

1.8 Time

Time shall be of the essence in this Plan of Arrangement.

ARTICLE 2 EFFECT OF ARRANGEMENT

2.1 Arrangement Agreement

This Plan of Arrangement is made pursuant to and subject to the provisions of the Arrangement Agreement.

2.2 Binding Effect

At the Effective Time, this Plan of Arrangement and the Arrangement shall without any further authorization, act or formality on the part of the Court become effective and be binding upon the Purchaser, the Company, the Depositary, the registrar and transfer agent of Company, Acquireco, all registered and beneficial Company Shareholders, including Dissenting Shareholders, and all holders of Company Options and Company RSUs. ARTICLE 3 ARRANGEMENT

3.1 Arrangement

(a) Acquireco will provide a non-interest bearing loan to the Company equal to the aggregate amount payable by the Company to the holders of Company Options and Company RSUs pursuant to Section 3.1(b) and Section 3.1(c), respectively;
(b) each Company Option outstanding immediately prior to the Effective Time (whether vested or unvested), notwithstanding the terms of the Company Legacy Option Plan and the Company LTIP, shall be deemed to be unconditionally vested and exercisable, and such Company Option shall,

C - A - 6

without any further action by or on behalf of a holder of Company Options, be deemed to be assigned and transferred by such holder to the Company (free and clear of all Liens) and such holder shall cease to be a holder of such Company Option in exchange for a cash payment from the Company equal to the amount (if any) by which the Consideration in respect of each Company Share underlying each Company Option exceeds the exercise price of such Company Option, in each case, less applicable withholdings, and such Company Option shall immediately be cancelled and, for greater certainty, where such amount is zero or negative, none of the Company, the Depositary, the Purchaser nor Acquireco shall be obligated to pay the holder of such Company Option any amount in respect of such Company Option;

(c) each Company RSU outstanding immediately prior to the Effective Time (whether vested or unvested), notwithstanding the terms of the Company LTIP, shall, without any further action by or on behalf of a holder of Company RSUs, be deemed to be assigned and transferred by such holder to the Company (free and clear of all Liens) and such holder shall cease to be a holder of such Company RSU in exchange for a cash payment from the Company equal to the Consideration in respect of each Company RSU, less applicable withholdings, and such Company RSU shall immediately be cancelled;
(d) (i) the name of each holder of Company Options or Company RSUs, as the case may be, shall be removed from each applicable register maintained by Company, (ii) the Company Legacy Option Plan, the Company LTIP and all agreements relating to the Company Options and the Company RSUs shall be terminated and shall be of no further force and effect, and (iii) each such holder shall thereafter have only the right to receive from the Company the consideration, if any, to which such holder is entitled pursuant to Section 3.1(b) and Section 3.1(c), as applicable;
(e) each of the Company Shares held by Dissenting Shareholders in respect of which Dissent Rights have been validly exercised shall be deemed to have been transferred without any further act or formality to Acquireco (free and clear of all Liens) in consideration for a debt claim against Acquireco for the amount determined under Article 4, and:
(i) such Dissenting Shareholders shall cease to be the holders of such Company Shares and to have any rights as holders of such Company Shares other than the right to be paid fair value for such Company Shares as set out in Section 4.1;
(ii) such Dissenting Shareholders’ names shall be removed as the holders of such Company Shares from the central securities register of Company Shares maintained by or on behalf of Company; and
(iii) Acquireco shall be deemed to be the transferee of such Company Shares free and clear of all Liens, and Acquireco shall be entered in the central

C - A - 7

securities register of Company Shares maintained by or on behalf of Company as the holder of such Company Shares; and

(f) each Company Share outstanding immediately prior to the Effective Time (other than Company Shares held by a Dissenting Shareholder who has validly exercised their Dissent Right, the Purchaser, Acquireco or any of the Purchaser or Acquireco’s respective affiliates) shall, without any further action by or on behalf of a holder of Company Shares, be deemed to be assigned and transferred by the holder thereof to Acquireco (free and clear of all Liens) in exchange for the Consideration for each Company Share held, and:
(i) the holders of such Company Shares shall cease to be the holders thereof and to have any rights as holders of such Company Shares other than the right to be paid the Consideration by the Depositary in accordance with this Plan of Arrangement;
(ii) such holders’ names shall be removed from the central securities register of the Company Shares maintained by or on behalf of the Company; and
(iii) Acquireco shall be deemed to be the transferee of such Company Shares (free and clear of all Liens) and Acquireco shall be entered in the central securities register of the Company Shares maintained by or on behalf of the Company;

it being expressly provided that the events provided for in this Section 3.1 will be deemed to occur on the Effective Date, notwithstanding that certain procedures related thereto may not be completed until after the Effective Date.

ARTICLE 4 DISSENT RIGHTS

4.1 Dissent Rights

(a) In connection with the Arrangement, each registered Company Shareholder may exercise rights of dissent (“ Dissent Rights ”) with respect to the Company Shares held by such Company Shareholder pursuant to and in the manner set forth in sections 237 to 247 of the BCBCA, as modified by the Interim Order and this Section 4.1(a); provided that, notwithstanding section 242(1)(a) of the BCBCA, the written objection to the Arrangement Resolution referred to in section 242(1)(a) of the BCBCA must be received by Company not later than 4:00 p.m. (Vancouver time) two Business Days immediately preceding the date of the Shareholder Meeting. Company Shareholders who duly exercise Dissent Rights and who:
(i) are ultimately entitled to be paid by Acquireco fair value for their Dissent Shares (1) shall be deemed to not to have participated in the transactions in Article 3 (other than Section 3.1(e)); (2) shall be deemed

C - A - 8

to have transferred and assigned such Dissent Shares (free and clear of any Liens) to Acquireco in accordance with Section 3.1(e); (3) will be entitled to be paid the fair value of such Dissent Shares by Acquireco, which fair value, notwithstanding anything to the contrary contained in the BCBCA, shall be determined as of the close of business on the day before the Arrangement Resolution was adopted at the Shareholder Meeting; and (4) will not be entitled to any other payment or consideration, including any payment that would be payable under the Arrangement had such holders not exercised their Dissent Rights in respect of such Company Shares; or

(ii) are ultimately not entitled, for any reason, to be paid by Acquireco fair value for their Dissent Shares, shall be deemed to have participated in the Arrangement in respect of those Company Shares on the same basis as a Company Shareholder who has not exercised Dissent Rights.
(b) In no event shall Acquireco, the Purchaser or the Company or any other Person be required to recognize a Dissenting Shareholder as a registered or beneficial holder of Company Shares or any interest therein (other than the rights set out in this Section 4.1) at or after the Effective Time, and at the Effective Time the names of such Dissenting Shareholders shall be deleted from the central securities register of the Company as at the Effective Time.
(c) For greater certainty, in addition to any other restrictions in the Interim Order, no Person shall be entitled to exercise Dissent Rights with respect to Company Shares in respect of which a Person has voted or has instructed a proxyholder to vote in favour of the Arrangement Resolution.

ARTICLE 5 CERTIFICATES AND PAYMENT

5.1 Certificates and Payments

(a) Following receipt of the Final Order, on or immediately prior to the Effective Date , the Purchaser or Acquireco shall deliver or cause to be delivered to the Depositary sufficient funds to satisfy the aggregate Consideration payable to former Company Shareholders in accordance with Section 3.1(f), which cash shall be held by the Depositary in escrow as agent and nominee for such former Company Shareholders for distribution thereto in accordance with the provisions of this Article 5.
(b) Following receipt of the Final Order, on or immediately prior to the Effective Date, the Purchaser or Acquireco shall advance or cause to be advanced to the Company the loan described in Section 3.1(a) to permit the Company to satisfy the aggregate consideration payable to the holders of Company Options and Company RSUs in accordance with Section 3.1(b) and Section 3.1(c), respectively, which cash shall be held by the Company in escrow as agent and

C - A - 9

nominee for such former holders of Company Options and Company RSUs in accordance with the provisions of this Article 5.

(c) The Depositary shall deliver the Consideration in respect of those Company Shares that were transferred or deemed to be transferred pursuant to Section 3.1(f) and that were held on a book-entry basis at the time they were transferred or deemed to be transferred, less any amounts withheld pursuant to Section 5.3, in accordance with normal industry practice for payments relating to securities held on a book-entry only basis. With respect to those Company Shares not held on a book-entry basis, upon surrender to the Depositary for cancellation of a certificate, if applicable, which immediately prior to the Effective Time represented outstanding Company Shares that were transferred pursuant to Section 3.1(f), together with a duly completed and executed Letter of Transmittal and any such additional documents and instruments as the Depositary may reasonably require, the registered holder of the Company Shares represented by such surrendered certificate shall be entitled to receive in exchange therefor, and the Depositary shall deliver to such Company Shareholder, as soon as practicable, the Consideration that such Company Shareholder has the right to receive under the Arrangement for such Company Shares, less any amounts withheld pursuant to Section 5.3, and any certificate so surrendered shall forthwith be cancelled.
(d) On or as soon as reasonably possible after the Effective Date, the Company shall pay or cause to be paid the consideration, net of applicable withholdings, to be paid to former holders of Company Options and Company RSUs in accordance with Section 3.1(b) and Section 3.1(c), as applicable, either (i) pursuant to the normal payroll practices and procedures of Company, or (ii) by cheque or similar means (delivered to such holder of Company Options or Company RSUs, as applicable, as reflected on the register maintained by or on behalf of Company in respect of the Company Options and Company RSUs).
(e) After the Effective Time and until surrendered for cancellation as contemplated by Section 5.1(c), each certificate that immediately prior to the Effective Time represented one or more Company Shares (other than Company Shares held by the Purchaser, Acquireco or any of their respective affiliates) shall be deemed at all times to represent only the right to receive from the Depositary in exchange therefor the Consideration that the holder of such certificate is entitled to receive in accordance with Section 3.1, less any amounts withheld pursuant to Section 5.3.

5.2 Lost Certificates

In the event any certificate which immediately prior to the Effective Time represented one or more outstanding Company Shares that were transferred pursuant to Section 3.1(f) shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such certificate to be lost, stolen or destroyed, the Depositary will issue in exchange for such lost, stolen or destroyed certificate, the Consideration deliverable in accordance with

C - A - 10

such holder’s duly completed and executed Letter of Transmittal. When authorizing such payment in exchange for any lost, stolen or destroyed certificate, the Person to whom such cash is to be delivered shall as a condition precedent to the delivery of such Consideration, give a bond satisfactory to the Purchaser and the Depositary (acting reasonably) in such sum as the Purchaser may direct, or otherwise indemnify the Purchaser, Acquireco and the Company in a manner satisfactory to the Purchaser, Acquireco and the Company, each acting reasonably, against any claim that may be made against the Purchaser, Acquireco and the Company with respect to the certificate alleged to have been lost, stolen or destroyed.

5.3 Withholding Rights

The Purchaser, Acquireco, the Company or the Depositary shall be entitled to deduct and withhold, or direct the Purchaser, Acquireco, the Company or the Depositary to deduct and withhold on their behalf, from any amount payable to any Person under this Plan of Arrangement (an “ Affected Person ”), such amounts as the Purchaser, Acquireco, the Company or the Depositary determines, acting reasonably, are required to be deducted and withheld with respect to such payment under the Tax Act, the United States Internal Revenue Code of 1986 or any provision of any other Law (a “ Withholding Obligation ”). To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes hereof as having been paid to the Affected Person in respect of which such deduction and withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing authority.

5.4 Limitation and Proscription

To the extent that a former Company Shareholder shall not have complied with the provisions of Section 5.1 or Section 5.2 on or before the date that is six (6) years after the Effective Date (the “ final proscription date ”), then

(a) the Consideration that such former Company Shareholder was entitled to receive shall cease to represent a right or claim of any kind or nature and the right of the holder to receive the applicable consideration for the Company Shares pursuant to this Plan of Arrangement shall terminate and be deemed to be surrendered and forfeited to the Purchaser, the Company or Acquireco, as applicable, for no consideration,
(b) the Consideration that such former Company Shareholder was entitled to receive shall be delivered to the Purchaser or Acquireco, as applicable, by the Depositary,
(c) the certificates formerly representing Company Shares shall cease to represent a right or claim of any kind or nature as of such final proscription date, and
(d) any payment made by way of cheque by the Depositary pursuant to this Plan of Arrangement that has not been deposited or has been returned to the Depositary or that otherwise remains unclaimed, in each case, on or before the final proscription date shall cease to represent a right or claim of any kind or nature.

C - A - 11

5.5 No Liens

Any exchange or transfer of Company Shares pursuant to this Plan of Arrangement shall be free and clear of any Liens or other claims of third parties of any kind.

5.6 Paramountcy

From and after the Effective Time: (a) this Plan of Arrangement shall take precedence and priority over any and all Company Shares, Company Options and Company RSUs issued prior to the Effective Time; (b) the rights and obligations of the registered holders of Company Shares (other than the Purchaser, Acquireco or any of their respective affiliates), Company Options and Company RSUs, and of the Company, the Purchaser, Acquireco, the Depositary and any transfer agent or other depositary in relation thereto, shall be solely as provided for in this Plan of Arrangement and the Arrangement Agreement; and (c) all actions, causes of action, claims or proceedings (actual or contingent and whether or not previously asserted) based on or in any way relating to any Company Shares, Company Options and Company RSUs shall be deemed to have been settled, compromised, released and determined without liability except as set forth herein.

ARTICLE 6 AMENDMENTS

6.1 Amendments

(a) The Purchaser and the Company reserve the right to amend, modify and/or supplement this Plan of Arrangement at any time and from time to time prior to the Effective Time, provided that any such amendment, modification or supplement must be agreed to in writing by each of the Company and the Purchaser and filed with the Court, and, if made following the Shareholder Meeting, then: (i) approved by the Court, and (ii) if the Court directs, approved by the Company Shareholders or communicated to the Company Shareholders if and as required by the Court, and in either case in the manner required by the Court.
(b) Subject to the provisions of the Interim Order, any amendment, modification or supplement to this Plan of Arrangement, if agreed to by the Company and the Purchaser, may be proposed by the Company and the Purchaser at any time prior to or at the Shareholder Meeting, with or without any other prior notice or communication, and if so proposed and accepted by the Company Shareholders voting at the Shareholder Meeting shall become part of this Plan of Arrangement for all purposes.
(c) Any amendment, modification or supplement to this Plan of Arrangement that is approved or directed by the Court following the Shareholder Meeting will be effective only if it is agreed to in writing by each of the Company and the Purchaser and, if required by the Court, by some or all of the Company Shareholders voting in the manner directed by the Court.

C - A - 12

(d) Notwithstanding anything to the contrary contained herein, any amendment, modification or supplement to this Plan of Arrangement may be made by the Company and the Purchaser without the approval of or communication to the Court or the Company Shareholders, provided that it concerns a matter which, in the reasonable opinion of the Company and the Purchaser, is of an administrative or ministerial nature or required to better give effect to the implementation of this Plan of Arrangement and is not materially adverse to the financial or economic interests of any of the Company Shareholders.
(e) This Plan of Arrangement may be withdrawn prior to the Effective Time in accordance with the Arrangement Agreement.

ARTICLE 7 FURTHER ASSURANCES

7.1 Further Assurances

Notwithstanding that the transactions and events set out in this Plan of Arrangement shall occur and shall be deemed to occur in the order set out in this Plan of Arrangement without any further act or formality, each of the parties to the Arrangement Agreement shall make, do and execute, or cause to be made, done and executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by any of them in order further to document or evidence any of the transactions or events set out in this Plan of Arrangement.

C - A - 13

SCHEDULE B ARRANGEMENT RESOLUTION

BE IT RESOLVED THAT:

The arrangement (the “ Arrangement ”) under Section 291 of the Business Corporations Act (British Columbia) involving Pinnacle Renewable Energy Inc. (the “ Company ”), pursuant to the arrangement agreement among the Company, Drax Canadian Holdings Inc. and Drax Group plc (the “ Purchaser ”) dated February 7, 2021, as it may be modified, supplemented or amended from time to time in accordance with its terms (the “ Arrangement Agreement ”), as more particularly described and set forth in the management information circular of the Company dated  , 2021 (the “ Circular ”), and all transactions contemplated thereby, are hereby authorized, approved and adopted.
The plan of arrangement of the Company, as it has been or may be modified, supplemented or amended in accordance with the Arrangement Agreement and its terms (the “ Plan of Arrangement ”), the full text of which is set out as Appendix  to the Circular, is hereby authorized, approved and adopted.
The: (i) Arrangement Agreement and all the transactions contemplated therein; (ii) actions of the directors of the Company in approving the Arrangement and the Arrangement Agreement; and (iii) actions of the directors and officers of the Company in executing and delivering the Arrangement Agreement and any modifications, supplements or amendments thereto, and causing the performance by the Company of its obligations thereunder, are hereby ratified and approved.
The Company is hereby authorized to apply for a final order from the Supreme Court of British Columbia (the “ Court ”) to approve the Arrangement on the terms set forth in the Arrangement Agreement and the Plan of Arrangement (as they may be, or may have been, modified, supplemented or amended).
Notwithstanding that this resolution has been passed (and the Arrangement adopted) by the holders of common shares of the Company (the “ Company Shareholders ”) entitled to vote thereon or that the Arrangement has been approved by the Court, the directors of the Company are hereby authorized and empowered, without further notice to or approval of the Company Shareholders: (i) to amend, modify or supplement the Arrangement Agreement or the Plan of Arrangement to the extent permitted by their terms; and (ii) subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement and any related transactions.
Any officer or director of the Company is hereby authorized and directed, for and on behalf of the Company, to execute or cause to be executed and to deliver or cause to be delivered, whether under the corporate seal of the Company or otherwise, all such other documents and instruments and to perform or cause to be performed all such other acts and things as, in such person’s opinion, may be necessary or desirable to give full force and effect to the foregoing resolutions and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of any such other document or instrument or the doing of any such other act or thing.

==> picture [210 x 32] intentionally omitted <==

C - B - 1

APPENDIX “D” PLAN OF ARRANGEMENT

(See attached.)

D - 1

PLAN OF ARRANGEMENT UNDER SECTION 288 OF THE BUSINESS CORPORATIONS ACT (BRITISH COLUMBIA)

ARTICLE 1 INTERPRETATION

1.1 Definitions

In this Plan of Arrangement, unless the context otherwise requires, the following words and terms shall have the meaning hereinafter set out:

“ Acquireco ” means Drax Canadian Holdings Inc., a corporation existing under the laws of British Columbia;

“ Affected Person ” has the meaning set forth in Section 5.3;

“ affiliate ” has the meaning ascribed thereto in National Instrument 45-106 – Prospectus Exemptions , in force as of the date of the Arrangement Agreement;

“ BCBCA ” means the Business Corporations Act (British Columbia);

D - 2