EXHIBIT 10.89

Lauren Holdings Inc., Earl Duffy, Paul Duffy, Maureen Duffy Cobb, Ron Keefe,
Dale Zajicek, Gordon Rogers and the 2012 BV Employee Share Ownership Trust
- and -
101610 P.E.I. Inc.
- and -
Questcor Pharmaceuticals, Inc.
- and -
BioVectra Inc.
- and –
Vendors' Representative

_________________________________________________________________________
SHARE PURCHASE AGREEMENT
January l, 2013
_________________________________________________________________________

Osler, Hoskin & Harcourt LLP
Stewart McKelvey

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

Page

ARTICLE 1 DEFINITIONS AND PRINCIPLES OF INTERPRETATION1
1.1Definitions    1
1.2Certain Rules of Interpretation    12
1.3Accounting Terms    13
1.4Knowledge    13
1.5Entire Agreement    13
1.6Vendors' Representative    13
1.7Schedules    15
ARTICLE 2 PURCHASE AND SALE16
2.1Action by Vendors and Purchaser    16
2.2Place of Closing    16
2.3Assignment of Restricted Rights    16
ARTICLE 3 PURCHASE PRICE17
3.1Purchase Price    17
3.2Satisfaction of Purchase Price    17
3.3Earn-out    18
3.4Purchase Price Adjustments    22
3.5Payments    22
3.6Tax Election    22
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE VENDORS AND THE COMPANY23

 
 
 

Corporate&Securities\1.New Models\Private M&A\Model Share PurchaseAgreementI

--------------------------------------------------------------------------------

TABLE OF CONTENTS
(continued)
Page

4.1Incorporation and Corporate Power of the Company and its Subsidiaries    23
4.2Registration    23
4.3Residence of the Vendors    23
4.4Subsidiaries    23
4.5Status of the Vendors and Right to Sell    24
4.6Capitalization    24
4.7Due Authorization and Enforceability of Obligations    24
4.8Absence of Conflicts    24
4.9Regulatory Approvals    25
4.10Investment Canada Act (Canada)    25
4.11Financial Statements    25
4.12Absence of Undisclosed and Contingent Liabilities    26
4.13Absence of Changes and Unusual Transactions    26
4.14Non-Arm’s Length Transactions    27
4.15No Joint Venture Interests or Strategic Alliances    28
4.16Major Suppliers and Customers    28
4.17Sufficiency of Assets    28
4.18Title to Certain Assets    28
4.19Condition of Certain Assets    28
4.20Location of the Assets    29
4.21Inventories    29
4.22Collectability of Accounts Receivable    29

 
 
 

Corporate&Securities\1.New Models\Private M&A\Model Share Purchase Agre

--------------------------------------------------------------------------------

TABLE OF CONTENTS
(continued)
Page

4.23Government Grants    30
4.24Business in Compliance with Law    30
4.25Governmental Authorizations    30
4.26Intellectual Property    31
4.27Equipment Contracts    32
4.28Owned Real Property    33
4.29Leased Real Property    33
4.30Real Property Generally    34
4.31Environmental Matters    36
4.32Employment Matters    39
4.33Collective Agreements    40
4.34Pension and Other Benefit Plans    41
4.35Personal Information    42
4.36Insurance    43
4.37Material Contracts    43
4.38Litigation    43
4.39Tax Matters    44
4.40Books and Records    46
4.41Corporate Records    47
4.42Trade Allowances    47
4.43Third Party Consents    47
4.44Powers of Attorney    47

 
 
 

Corporate&Securities\1.New Models\Private M&A\Model Share Purchase Agre

--------------------------------------------------------------------------------

TABLE OF CONTENTS
(continued)
Page

4.45No Broker    47
4.46Third Party Tangible Personal Property    48
4.47Full Disclosure    48
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER48
5.1Status of the Purchaser    48
5.2Status of Questcor    48
5.3Due Authorization and Enforceability of Obligations    48
5.4Absence of Conflicts    48
5.5Regulatory Approvals    49
5.6Investment Canada    49
5.7Litigation    49
5.8Financing    49
5.9No Broker    50
ARTICLE 6 NON-WAIVER; SURVIVAL50
6.1Non-Waiver    50
6.2Nature and Survival    50
ARTICLE 7 PURCHASER'S CONDITIONS PRECEDENT50
7.1Truth and Accuracy of Representations    50
7.2Performance of Obligations    51
7.3Approvals    51
7.4Encumbrances    51

 
 
 

Corporate&Securities\1.New Models\Private M&A\Model Share Purchase Agre

--------------------------------------------------------------------------------

TABLE OF CONTENTS
(continued)
Page

7.5No Proceedings    51
7.6Non-Competition    51
7.7Key Employees    51
7.8Conduct of Business After Closing    52
7.9Opinion of Counsel for Vendors    52
7.10Opinion of Counsel for Lauren Holdings Inc.    52
7.11Receipt of Closing Documentation    52
ARTICLE 8 VENDORS' CONDITIONS PRECEDENT52
8.1Truth and Accuracy of Representations of the Purchaser and Questcor at
Closing Time    52
8.2Performance of Obligations    53
8.3Key Employees    53
8.4Conduct of Business After Closing    53
8.5Opinion of Counsel for Purchaser and Questcor    53
8.6Approvals    53
8.7No Proceedings    53
8.8Receipt of Closing Documentation    53
ARTICLE 9 OTHER COVENANTS OF THE PARTIES54
9.1Interim Activities    54
9.2Access for Investigation    55
9.3Actions to Satisfy Closing Conditions    56
9.4Notice of Untrue Representation or Warranty    56

 
 
 

Corporate&Securities\1.New Models\Private M&A\Model Share Purchase Agre

--------------------------------------------------------------------------------

TABLE OF CONTENTS
(continued)
Page

9.5Stub Period Returns    57
9.6Exclusive Dealing    57
9.7Submission to Jurisdiction    57
9.8Shareholder Agreements    58
9.9Questcor Guarantee    58
ARTICLE 10 TERMINATION59
10.1Termination    59
ARTICLE 11 INDEMNIFICATION60
11.1Indemnification by the Vendors    60
11.2Indemnification by the Purchaser and Questcor    62
11.3Indemnification Procedures for Third Party Claims    63
11.4Remedies    64
11.5Limitation on Liability    65
11.6Trustee and Agent    66
11.7Release    66
ARTICLE 12 GENERAL67
12.1Public Notices, Press Releases and Announcements    67
12.2Expenses    67
12.3Notices    68
12.4Assignment    68
12.5Enurement    68

 
 
 

Corporate&Securities\1.New Models\Private M&A\Model Share Purchase Agre

--------------------------------------------------------------------------------

TABLE OF CONTENTS
(continued)
Page

12.6Amendment    68
12.7Further Assurances    68
12.8Execution and Delivery    69

    

THIS SHARE PURCHASE AGREEMENT is made as of this ______ day of January, 2013.
AMONG:
Lauren Holdings Inc., Earl Duffy, Paul Duffy, Maureen Duffy Cobb, Ron Keefe,
Dale Zajicek, Gordon Rogers and the 2012 BV Employee Share Ownership Trust
(collectively, the “Vendors”),
- and -
101610 P.E.I. Inc., a corporation governed by the laws of Prince Edward Island
(the “Purchaser”)
- and -
Questcor Pharmaceuticals, Inc., a corporation governed by the laws of the State
of California (the “Questcor”)
- and -
BioVectra Inc., a corporation governed by the laws of Prince Edward Island (the
“Company”),
- and -
Ron Keefe, in his capacity as the Vendors' Representative.
RECITALS:
A.
The Vendors own and control all of the issued and outstanding shares of the
Company.

B.
The Vendors have agreed to sell to the Purchaser and the Purchaser has agreed to
purchase from the Vendors all of the issued and outstanding shares of the
Company, on the terms and conditions of this Agreement.

THEREFORE, the Parties agree as follows:
Article 1
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1
Definitions

Whenever used in this Agreement, the following words and terms have the meanings
set out below:
“2015 Earn-Out Payment” has the meaning given in Section 3.3(c)(i).
“Accounts Receivable” means accounts receivable, bills receivable, trade
accounts, book debts and insurance claims recorded as receivable in the Books
and Records and other amounts due or deemed to be due to the Company or any of
the Subsidiaries, including refunds and rebates receivable, all as calculated in
accordance with GAAP.
“Accrued Liabilities” means ordinarily recurring operating expenses of the
Company and the Subsidiaries incurred but that are not yet due and payable and
claims against the Company and the Subsidiaries that are increasing with the
passage of time or receipt of goods or services but are not yet due and payable,
including accruals for vacation pay, customer rebates and allowances for product
returns, all as calculated in accordance with GAAP.
“Affiliate” of any Person means, at the time such determination is being made,
any other Person controlling, controlled by or under common control with such
first Person, in each case, whether directly or indirectly, and “control” and
any derivation thereof means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person whether through the ownership of voting securities, by Contract or
otherwise.
“Agreement” means this Share Purchase Agreement, including all schedules and
exhibits and all amendments or restatements, as permitted, and references to
“Article” or “Section” mean the specified Article or Section of this Agreement.
“Appurtenances” means privileges, rights, easements and appurtenances both at
Law and equity belonging to or for the benefit of Real Property, including means
of access between Real Property and a public way, rights in respect of or for
any other uses upon which the present use is dependent (such as pipelines,
cables, railway sidings) and rights existing in and to any streets, alleys,
passages and other rights-of-way.
“arm’s length” has the meaning that it has for purposes of the Income Tax Act
(Canada).
“Balance Sheet” means the consolidated balance sheet of the Company and the
Subsidiaries as at August 31, 2012, forming part of the Financial Statements.
“Base Operating Earnings” means $[***] .
“Benefit Plans” means plans, arrangements, agreements, programs, policies,
practices or undertakings, whether oral or written, formal or informal, funded
or unfunded, insured or uninsured, registered or unregistered to which the
Company or any of the Subsidiaries are a party or bound or in which the
Employees participate or under which the Company or any of the Subsidiaries
have, or will have, any liability or contingent liability, or pursuant to which
payments are made, or benefits are provided to, or an entitlement to payments or
benefits may arise with respect to its Employees or former employees, directors
or officers, individuals working on Contract with the Company or any of the
Subsidiaries or other individuals providing services to the Company or any of
the Subsidiaries of a kind normally provided by Employees (or any spouses,
dependants, survivors or beneficiaries of any such persons), and for greater
certainty including the Pension Plans but excluding Statutory Plans.
“Books and Records” means books and records of the Company and the Subsidiaries
relating to the Company or the Subsidiaries, including financial, corporate,
books of account, sales and purchase records, lists of suppliers and customers,
business reports, plans and projections and all other documents, surveys, plans,
files, records, assessments, correspondence, and other data and information,
financial or otherwise, including all data, information and databases stored on
computer-related or other electronic media.
“Business Day” means any day, other than a Saturday or Sunday, on which the
banks in the City of Toronto are open for commercial banking business during
normal banking hours.
“Change of Control” means any one of the following events:
(a)
the sale or transfer by Questcor or any of its Affiliates or the issuance of new
shares of the Company or any other transaction resulting in the direct or
indirect ownership by Questcor and its Affiliates of less than 50% of the voting
rights in the Company; or

(b)
the sale or disposition of all or substantially all of the Company’s assets.

“Claims” includes claims, demands, complaints, grievances, actions,
applications, suits, causes of action, Orders, charges, indictments,
prosecutions, informations or other similar processes, assessments or
reassessments, judgments, debts, liabilities, penalties, fines, expenses, costs,
damages or losses, contingent or otherwise, whether liquidated or unliquidated,
matured or unmatured, disputed or undisputed, contractual, legal or equitable,
including loss of value, professional fees, including fees and disbursements of
legal counsel on a full indemnity basis, and all costs incurred in investigating
or pursuing any of the foregoing or any proceeding relating to any of the
foregoing.
“Closing” means the completion of the sale to and purchase by the Purchaser of
the Purchased Shares under this Agreement.
“Closing Date” means the date that is one (1) Business Day after the date on
which all conditions set forth in Article 7 and Article 8 have been satisfied or
waived, or such other date as the Parties may agree in writing as the date upon
which the Closing takes place. Each Party shall make reasonable good faith
efforts to satisfy each of the conditions set forth in Article 7 and Article 8
on or before January 17, 2013.
“Closing Time” means 11:00 a.m. (Charlottetown time)/ 10:00 a.m. (Toronto time),
on the Closing Date or such other time on such date as the Parties may agree in
writing as the time at which the Closing takes place.
“Contracts” means contracts, licences, leases, agreements, obligations,
promises, undertakings, understandings, arrangements, documents, commitments,
entitlements or engagements to which the Company or any of the Subsidiaries is a
party or by which it is bound or under which the Company or any of the
Subsidiaries has, or will have, any liability or contingent liability (in each
case, whether written or oral, express or implied), and includes, in the case of
Material Contracts, any quotations, orders, proposals or tenders that remain
open for acceptance and warranties and guarantees.
“Disclosure Letter” has the meaning set forth in Article 4.
“Earn-Out Amounts” means the aggregate of:
(a)
the amount payable to the Vendors pursuant to Section 3.3(a), or if no amount is
payable pursuant to that Section, zero;

(b)
the amount payable to the Vendors pursuant to Section 3.3(b), or if no amount is
payable pursuant to that Section, zero; and

(c)
the amount payable to (or less any amount owed by) the Vendors pursuant to
Section 3.3(c)(ii).

“Earn-Out Calculation Statement” has the meaning given in Section 3.3(d).
“Earn-Out Objection Notice” has the meaning given in Section 3.3(f).
“Employees” means individuals employed by the Company or any of the Subsidiaries
on a full-time, part-time or temporary basis, including those employees on
disability leave, parental leave or other absence.
“Employment Contracts” means Contracts, other than Benefit Plans, whether oral
or written, relating to an Employee, including any communication or practice
relating to an Employee that imposes any obligation on the Company or any of the
Subsidiaries.
“Encumbrances” means pledges, liens, charges, security interests, leases, title
retention agreements, mortgages, restrictions, developments or similar
agreements, easements, rights-of-way, title defects, options or adverse claims
or encumbrances of any kind or character whatsoever.
“Environment” means the environment and natural environment as defined in any
Environmental Laws and includes indoor air, and any living things.
“Environmental Approvals” means permits, permissions, certificates, licences,
authorizations, consents, agreements, instructions, directions, notices,
registrations, approvals or other rights made, issued, granted, conferred or
required by a Governmental Authority pursuant to any Environmental Law relating
to the operations, business or assets of the Company or any of the Subsidiaries.
“Environmental Laws” means any Laws relating to the Environment including
without limitation Laws relating to any sewer system and to the storage,
generation, use, handling, manufacture, production, processing, labelling,
advertising, sale, display, transportation, import, export, treatment, reuse,
recycling, Release and disposal of Hazardous Substances.
“Environmental Orders” means Orders issued, filed, imposed or threatened by any
Governmental Authority pursuant to any Environmental Laws and include
certificates of property use and Orders requiring investigation, assessment,
monitoring, managing, controlling, treatment, removal, excavation or remediation
of any site or Hazardous Substance, or requiring that any Release activity or
condition be reduced, modified, managed, controlled, stopped or eliminated or
requiring that any form of payment or co-operation be provided to any
Governmental Authority.
“Equipment Contracts” means any Contracts relating to title to Tangible Personal
Property including without limitation motor vehicle leases, equipment leases,
leases of computer hardware and computer systems, conditional sales contracts,
title retention agreements and other similar agreements.
“Financial Statements” means the audited consolidated financial statements of
the Company and the Subsidiaries for the fiscal year ended August 31, 2012, with
an audit report dated November 2, 2012, consisting of the Balance Sheet and the
statements of earnings and retained earnings and cash flows and all notes
thereto, and any interim unaudited consolidated financial statements for the
months ending September 30, 2012, October 31, 2012 and November 30, 2012 for the
Company and the Subsidiaries, copies of which are set out in Section 4.11 of the
Disclosure Letter and have been made available to the Purchaser.
“GAAP” means generally accepted accounting principles applicable to private
enterprises as defined by the Accounting Standards Board of the Canadian
Institute of Chartered Accountants in the Handbook of the Canadian Institute of
Chartered Accountants as they exist on the date of this Agreement.
“Good Manufacturing Practices” or “GMPs” means the standards relating to the
then-current Good Manufacturing Practices for the testing, manufacturing,
processing, packaging, labelling, storage or distribution of active
pharmaceutical ingredients, intermediates, bulk products or finished
pharmaceutical products set forth in: (i) the Food and Drug Regulations
including those set forth in Division 2 of the Food and Drug Regulations and in
the and guidance documents and policies interpreting the requirements for Good
Manufacturing Practices promulgated by Health Canada including the Good
Manufacturing Practices (GMP) Guidelines 2009 Edition Version 2 (GUI–0001) and
its associated Annexes; and (ii) the Code of Federal Regulations at 21 C.F.R.
Parts 210 and 211, as may be amended from time to time including the published
standards of the U.S. Food and Drug Administration; and (iii) similar standards,
guidelines and regulations promulgated or otherwise required in any jurisdiction
in which the products of the Company or any Subsidiary, or produced by Company
or any Subsidiary, are distributed or sold.
“Governmental Authorities” means governments, regulatory authorities,
governmental departments, agencies, commissions, bureaus, officials, ministers,
Crown corporations, courts, bodies, boards, tribunals or dispute settlement
panels or other law, rule or regulation-making organizations or entities:
(a)
having or purporting to have jurisdiction on behalf of any nation, province,
territory or state or any other geographic or political subdivision of any of
them; or

(b)
exercising, or entitled or purporting to exercise any administrative, executive,
judicial, legislative, policy, regulatory or taxing authority or power.

“Governmental Authorizations” means authorizations, approvals, including
Environmental Approvals, franchises, Orders, certificates, consents, directives,
notices, licences, permits, variances, agreements, clearances, instructions,
registrations or other rights issued to or required by the Company or any of the
Subsidiaries by or from any Governmental Authority including those required
under the Food and Drugs Act (Canada) and the regulations promulgated
thereunder, the Controlled Drugs and Substances Act (Canada) and the regulations
promulgated thereunder and any other Governmental Authority with jurisdiction or
purported jurisdiction over the activities of the Company or any of the
Subsidiaries or the drug products or biologics manufactured, packaged, labelled,
tested, sold, marketed or distributed by the Company that regulates the quality,
identity, strength, purity, safety, efficacy, manufacturing, packaging,
labelling, testing, sales, marketing or distribution of biologic and drug
products.
“Hazardous Substances” means pollutants, contaminants, wastes of any nature,
hazardous substances, hazardous materials, toxic substances, prohibited
substances, dangerous substances or dangerous goods as defined, judicially
interpreted or identified in any Environmental Laws, including drugs,
pharmaceuticals, enzymes, hormones, living organisms, biological agents,
asbestos, asbestos-containing materials, polychlorinated biphenyls (PCBs),
petroleum hydrocarbons and their derivatives, and mould.
“Improvements” means plants, buildings, structures, fixtures, erections and
improvements located on, over, under or upon the Real Property and mechanical,
electrical, plumbing, heating and air-conditioning systems relating to the Real
Property, including any of the foregoing under construction.
“Indemnified Party” has the meaning given in Section 11.3(a).
“Independent Auditor” means PricewaterhouseCoopers LLP or such other independent
auditing firm as the Parties may otherwise agree.
“Information Technology” means computer hardware, software in source code and
object code form (including documentation, interfaces and development tools),
websites for the Company or any of the Subsidiaries, databases,
telecommunications equipment and facilities and other information technology
systems owned, used or held by the Company or any of the Subsidiaries.
“Intellectual Property” means intellectual property rights, whether registered
or not, owned, used or held by the Company or any of the Subsidiaries, including
without limitation:
(a)
inventions, pending patent applications (including divisionals, reissues,
renewals, re-examinations, continuations, continuations-in-part and extensions)
and issued patents, including those inventions, pending patent applications and
issued patents listed and described in Section 4.26(a) of the Disclosure Letter;

(b)
trade-marks, trade dress, trade-names, business names and other indicia of
origin, including those listed and described in Section 4.26(a) of the
Disclosure Letter;

(c)
trade secrets or other confidential information listed and described in Section
4.26(a) of the Disclosure Letter;

(d)
copyrights, including the copyright registrations and applications listed and
described in Section 4.26(a) of the Disclosure Letter;

(e)
industrial designs and similar rights, including those registrations and
applications listed and described in Section 4.26(a) of the Disclosure Letter;

(f)
domain name and web address registrations listed and described in Section
4.26(a) of the Disclosure Letter; and

(g)
any similar, corresponding or equivalent rights to any of the foregoing anywhere
in the world.

“Inventories” means items that are held by the Company or any of the
Subsidiaries for sale in the ordinary course of business, or are being produced
for sale, or are to be consumed, directly or indirectly, in the production of
goods or services to be available for sale, of every kind and nature and
wherever situate including inventories of raw materials, work-in-progress,
finished goods and by-products, operating supplies and packaging materials, but
does not include any inventory owned by customers of the Company which is
located or stored at the Real Property by agreement between the Company and its
customers.
“Laws” means applicable laws (including common law and civil law), statutes,
by-laws, rules, regulations, Orders, ordinances, protocols, codes, guidelines,
treaties, policies, notices, directions, decrees, judgments, awards or
requirements, in each case of any Governmental Authority.
“Leased Real Property” means lands and/or premises that are used by the Company
or any of the Subsidiaries and that are leased, subleased, licensed to or
otherwise occupied by the Company or any of the Subsidiaries and the interest of
the Company and the Subsidiaries in Improvements and Appurtenances.
“Legacy Benefit Plan Members” means persons who are not Employees nor former
employees, directors or officers, individuals working on contract with the
Company or any of the Subsidiaries or other individuals providing services to
the Company or any of the Subsidiaries of a kind normally provided by employees
(or any spouses, dependants, survivors or beneficiaries of any such persons).
"made available" means inclusion in the virtual data room maintained by the
Company and to which the Purchaser has full access at least five (5) days prior
to the date of this Agreement.
“Material Adverse Effect” means a change, effect or circumstance that, when
considered either individually or in the aggregate together with all other
adverse changes, effects or circumstances with respect to which such phrase is
used in this Agreement, is materially adverse to, or could reasonably be
expected to have a material adverse effect on, the financial condition or
results of operations or business or prospects or assets of the Company and the
Subsidiaries, taken as a whole.
“Material Contracts” means all agreements, Contracts, arrangements and
commitments to which the Company or any of the Subsidiaries is a party and which
are currently in effect and constitute any of the following:
(a)
all Contracts involving aggregate payments to or by the Company or any of the
Subsidiaries in excess of $250,000;

(b)
all Contracts that are outside the ordinary course of business;

(c)
all Contracts that restrict in any way the business or activities of the Company
or any of the Subsidiaries and which the Company would violate their restrictive
covenants upon the consummation of the transactions contemplated by this
Agreement;

(d)
all Contracts that, if terminated without the consent of the Company or any of
the Subsidiaries, would have a Material Adverse Effect;

(e)
all Contracts and agreements with major customers (other than ordinary course
purchase and sale orders);

(f)
all partnership, joint venture or limited liability company contract
arrangements or agreements;

(g)
all Contracts or other documents of the Company or any of the Subsidiaries in
respect of borrowed money, including financial instruments of indenture or
security instruments (whether or not interest-bearing) such as notes, mortgages,
loans and lines of credit;

(h)
all Contracts that grant any right of first refusal or right of first offer or
similar right to third parties or that, other than for sales of product in the
ordinary course of business, limit or purports to limit the ability of the
Company or any of the Subsidiaries in any material respect to pledge, sell,
transfer or otherwise dispose of any material amount of assets or business;

(i)
all Contracts providing for any payments that are conditioned, in whole or in
part, on a change of control with respect to the Company or any of the
Subsidiaries;

(j)
all agency, broker, sales representative, marketing or similar Contracts with
respect to which the annual sales exceed $250,000;

(k)
all Contracts relating to any merger or business combination concerning the
Company or the acquisition or disposition of any assets or any Person during the
last five years or pursuant to which the Company or any of the Subsidiaries has
any remaining rights or obligations;

(l)
all Contracts with any director, officer, Employee or Affiliate of the Company
or of any of the Subsidiaries;

(m)
all Contracts pursuant to which the Company or any of the Subsidiaries agrees to
indemnify any other party other than in the ordinary course of business;

(n)
all Contracts with any Governmental Authority; and

(o)
all Contracts or other agreements with any current or former officer, director,
Employee, consultant, agent or other representative or any agreement or
understanding pursuant to which the Company or any of the Subsidiaries is liable
for any severance or termination pay.

“Multi-Employer Plans” means Benefit Plans to which the Company or any of the
Subsidiaries is required to contribute and that are not maintained or
administered by the Company or any of the Subsidiaries or its Affiliates.
“Non-Compete Covenant” has the meaning set forth in Section 3.6.
“Notice” has the meaning given in Section 12.3.
“Operating Earnings” means the Company’s operating earnings (which are after
interest expense) before other earnings (expense) and before income taxes as set
out in the Company’s audited financial statements, prepared in accordance with
GAAP applied on a consistent and good faith basis in all periods that affect the
Earn-out Calculation Statement and as adjusted for the items set forth in
Schedule 1.1.
“Orders” means orders, injunctions, judgments, administrative complaints,
decrees, rulings, awards, assessments, directions, instructions, penalties or
sanctions issued, filed or imposed by any Governmental Authority or arbitrator,
including Environmental Orders.
“Owned Real Property” means real property, owned or purported to be owned in fee
simple, by the Company or any of the Subsidiaries, and real property, other than
Leased Real Property, in which the Company or any of the Subsidiaries has an
interest, including Improvements and Appurtenances.
“Parties” means each of the Vendors, the Purchaser, Questcor, the Company and
the Vendors' Representative collectively, and “Party” means any one of them.
“Pension Plans” means Benefit Plans providing pensions, superannuation benefits
or retirement savings including pension plans, top up pensions or supplemental
pensions, “registered retirement savings plans” (as defined in the Income Tax
Act (Canada)), “registered pension plans” (as defined in the Income Tax Act
(Canada)) and “retirement compensation arrangements” (as defined in the Income
Tax Act (Canada)).
“Pension Plan Unfunded Liability” means an unfunded liability in respect of any
Pension Plan, including a going concern unfunded liability, a solvency
deficiency or wind-up deficiency.
“Permitted Encumbrances” means the Encumbrances listed in Section 4.18 of the
Disclosure Letter.
“Person” means any individual, sole proprietorship, partnership, firm, entity,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate, Governmental Authority, and where the
context requires any of the foregoing when they are acting as trustee, executor,
administrator or other legal representative.
“Personal Information” means information in the possession or under the control
of the Company or any of the Subsidiaries about an identifiable individual.
“Preferred Shares” means all of the issued and outstanding preferred shares of
the Company, including the Class A preferred shares, the Class B preferred
shares, the Class C preferred shares and the Class D preferred shares.
“Purchase Price” has the meaning given in Section 3.1.
“Purchased Shares” means all of the issued and outstanding shares in the capital
of the Company, including the Preferred Shares.
“Purchaser Indemnified Parties” has the meaning given in Section 11.1.
“Questcor 8-K” has the meaning given in Section 12.1.
“Real Property” means Owned Real Property and Leased Real Property.
“Real Property Leases” means Contracts pursuant to which the Company or any of
the Subsidiaries uses or occupies the Leased Real Property, including all rights
to related Improvements and Appurtenances.
“Release” has the meaning prescribed in any Environmental Laws and includes any
release, spill, leak, pumping, addition, pouring, emission, emptying, discharge,
injection, escape, leaching, disposal, dumping, deposit, spraying, burial,
abandonment, incineration, seepage, placement or introduction, whether
accidental or intentional.
“Released Parties” has the meaning given in Section 11.7.
“Restricted Right” means any Contract or Governmental Authorization that by its
terms requires consent or approval of the other party or parties thereto or the
issuer for completion of the transactions contemplated by this Agreement or in
respect of which the completion of the transactions contemplated by this
Agreement will increase the obligations or decrease the rights or entitlements
of the Company or any of the Subsidiaries under such Contract or Governmental
Authorization.
“Statutory Plans” means statutory benefit plans that the Company or any of the
Subsidiaries is required to participate in or comply with, including the Canada
Pension Plan and plans administered pursuant to applicable health tax, workplace
safety insurance and employment insurance legislation.
“Subsidiaries” means corporations in which the Company has a controlling
interest including those listed in Section 4.4 of the Disclosure Letter.
“Tangible Personal Property” means machinery, equipment, furniture, furnishings,
office equipment, computer hardware, supplies, materials, vehicles, material
handling equipment, implements, parts, tools, jigs, dies, moulds, patterns,
tooling and spare parts and tangible assets (other than Real Property and
Inventory) owned or leased by the Company or any of the Subsidiaries, including
(i) any of the foregoing that are in storage or in transit; (ii) other tangible
personal property of the Company or any of the Subsidiaries whether located in
or on the Real Property or elsewhere; (iii) any of the foregoing that may be
attached to Real Property but are not Improvements, but does not include any
personal property owned or leased by customers of the Company which is located
or stored at the Real Property by agreement between the Company and its
customers.
“Tax Returns” includes all returns, reports, declarations, elections, 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
to be made, prepared or filed by Law in respect of Taxes.
“Taxes” includes any taxes, duties, fees, premiums, assessments, imposts, levies
and other charges of any kind whatsoever imposed by any Governmental Authority,
including all interest, penalties, fines, additions to tax or other additional
amounts imposed by any Governmental Authority in respect thereof, and including
those levied on, or measured by, or referred to as, income, gross receipts,
profits, capital, transfer, land transfer, sales, goods and services, harmonized
sales, use, value-added, excise, stamp, withholding, business, franchising,
property, development, occupancy, employer health, payroll, employment, health,
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 and other government pension plan premiums or contributions.
“Technical Information” means know-how and related technical knowledge owned,
used or held by the Company or any of the Subsidiaries, including:
(a)
trade secrets, confidential information and other proprietary know-how;

(b)
public information and non-proprietary know-how;

(c)
information of a scientific, technical, financial or business nature regardless
of its form;

(d)
uniform resource locators, domain names, telephone, telecopy, internet protocol
and email addresses, and UPC consumer packaging codes; and

(e)
documented research, forecasts, studies, marketing plans, budgets, market data,
developmental, demonstration or engineering work, information that can be used
to define a design or process or procure, produce, support or operate material
and equipment, methods of production and procedures, all formulas and designs
and drawings, blueprints, patterns, plans, flow charts, parts lists, manuals and
records, specifications, and test data.

“Technology” means Technical Information and Information Technology.
“Vendor’s Representative” has the meaning given in Section 1.6.
1.2
Certain Rules of Interpretation

In this Agreement:
(a)
Consent – Whenever a provision of this Agreement requires an approval or consent
and such approval or consent is not delivered within the applicable time limit,
then, unless otherwise specified, the Party whose consent or approval is
required is conclusively deemed to have withheld its approval or consent.

(b)
Currency – Unless otherwise specified, all references to money amounts are to
lawful currency of Canada.

(c)
Governing Law – This Agreement is a contract made under and is governed by and
is to be construed in accordance with the laws of the Province of Ontario and
the federal laws of Canada applicable in the Province of Ontario.

(d)
Headings – Headings of Articles and Sections are inserted for convenience of
reference only and do not affect the construction or interpretation of this
Agreement.

(e)
Including – Where the word “including” or “includes” is used in this Agreement,
it means “including (or includes) without limitation”.

(f)
No Strict Construction – The language used in this Agreement is the language
chosen by the Parties to express their mutual intent, and no rule of strict
construction is to be applied against any Party.

(g)
Number and Gender – Unless the context otherwise requires, words importing the
singular include the plural and vice versa and words importing gender include
all genders.

(h)
Severability – If, in any jurisdiction, any provision of this Agreement or its
application to any Party or circumstance is restricted, prohibited or
unenforceable, such provision is, as to such jurisdiction, ineffective only to
the extent of such restriction, prohibition or unenforceability without
invalidating the remaining provisions of this Agreement and without affecting
the validity or enforceability of such provision in any other jurisdiction or
without affecting its application to other Parties or circumstances.

(i)
Statutory references – A reference to a statute includes all regulations and
rules made pursuant to such statute and, unless otherwise specified, the
provisions of any statute, regulation or rule that amends, supplements or
supersedes any such statute, regulation or rule.

(j)
Time – Time is of the essence in the performance of the Parties’ respective
obligations.

(k)
Time Periods – Unless otherwise specified, time periods within or following
which any payment is to be made or act is to be done is calculated by excluding
the day on which the period commences and including the day on which the period
ends and by extending the period to the next Business Day following if the last
day of the period is not a Business Day.

1.3
Accounting Terms

All accounting terms not specifically defined in this Agreement are to be
interpreted in accordance with GAAP.
1.4
Knowledge

Any reference to the knowledge of any Party means to the best of the knowledge,
information and belief of such Party after reviewing all relevant records and
making due inquiries regarding the relevant matter of all relevant directors,
officers and employees of such Party. In the case of the Vendors or the Company,
knowledge of the Vendors or the Company includes knowledge of the relevant
senior managers of the Company after making due inquiries of the relevant
directors, officers and Employees of the Company and the Subsidiaries.
1.5
Entire Agreement

This Agreement, the agreements and other documents required to be delivered
pursuant to this Agreement and the Confidentiality Agreement dated June 13,
2012, constitute the entire agreement between the Parties and set out all the
covenants, promises, warranties, representations, conditions and agreements
between the Parties in connection with the subject matter of this Agreement and
supersede all prior agreements, understandings, negotiations and discussions,
whether oral or written, pre-contractual or otherwise, including the letter of
intent dated October 16, 2012. There are no covenants, promises, warranties,
representations, conditions, understandings or other agreements, whether oral or
written, pre-contractual or otherwise, express, implied or collateral between
the Parties in connection with the subject matter of this Agreement except as
specifically set forth in this Agreement and any document required to be
delivered pursuant to this Agreement.
1.6
Vendors' Representative

(a)
Each of the Vendors hereby appoints Ron Keefe as its representative and agent
and true and lawful attorney-in-fact (the “Vendors' Representative”) with the
powers and authority set out in this Agreement, and the Vendors' Representative
hereby accepts such appointment. The Vendors' Representative shall be the agent
for and on behalf of all of the Vendors in respect of all matters relating to
this Agreement, including settling matters relating to the Earn-out Amounts and
indemnification claims, by having the authority to (1) give and receive notices
and communications to or from the Purchaser or Questcor (on behalf of itself or
any other Purchaser Indemnified Parties); (2) authorize deliveries to the
Purchaser of cash or other property from the Earn-out Amounts and legally bind
each Vendor to pay cash directly to the Purchaser in satisfaction of claims
asserted by the Purchaser (on behalf of itself or any other Purchaser
Indemnified Parties, including by not objecting to such claims); (3) consent or
agree to, negotiate, enter into settlements and compromises of claims, and
comply with Orders with respect to such claims; and (4) take all actions
necessary or appropriate in the judgment of the Vendors' Representative for the
accomplishment of the foregoing, in each case without having to seek or obtain
the consent of any Person under any circumstance. The Purchaser and Questcor may
rely on any communication made by the Vendors’ Representative to the Purchaser
or Questcor, as the case may be, on behalf of the Vendors as applying to all
Vendors, and each such communication is binding on all Vendors.

(b)
None of the Vendors shall have any right to act on its own behalf with respect
to any such matters, other than with respect to any claim against or dispute
with the Vendors' Representative.

(c)
This appointment of agency and this power of attorney is coupled with an
interest and will be irrevocable and will not be terminated by any Vendor or by
operation of Law, whether by the incapacity of any Vendor or the occurrence of
any other event, and any action taken by the Vendors' Representative will be as
valid as if such incapacity or other event had not occurred, regardless of
whether or not any Vendor or the Vendors' Representative will have received any
notice thereof.

(d)
Except as otherwise set forth in this Section 1.6(d), any notice or
communication given or received by, and any decision, action, failure to act
within a designated period of time, agreement, consent, settlement, resolution
or instruction of, the Vendors' Representative that is within the scope of the
Vendors' Representative’s authority under 1.6(a) shall constitute a notice or
communication to or by, or a decision, action, failure to act within a
designated period of time, agreement, consent, settlement, resolution or
instruction of all the Vendors and shall be final, binding and conclusive upon
each of them. Each of the Purchaser and Questcor shall be entitled to rely upon
any such notice, communication, decision, action, failure to act within a
designated period of time, agreement, consent, settlement, resolution or
instruction as being a notice or communication to or by, or a decision, action,
failure to act within a designated period of time, agreement, consent,
settlement, resolution or instruction of, each and every Vendor. The Purchaser
and Questcor are each unconditionally and irrevocably relieved from any
liability to any Person for any acts done by it in accordance with any such
notice, communication, decision, action, failure to act within a designated
period of time, agreement, consent or instruction of the Vendors'
Representative.

(e)
The scope of the powers of the Vendors' Representative as agent for the Vendors
may be changed by a majority vote or consent of Vendors upon not less than 30
days’ prior written notice to the Purchaser, Questcor and the Vendors'
Representative. If Ron Keefe refuses or is no longer capable of serving as the
Vendors' Representative hereunder, then the successor Vendors’ Representative
will thereafter be Gordon Rogers, who shall serve as the Vendors' Representative
until such successor is duly appointed and qualified to act hereunder. If Gordon
Rogers refuses or is no longer capable of serving as the Vendors' Representative
hereunder, then the successor Vendors’ Representative will thereafter be Dale
Zajicek, who shall serve as the Vendors' Representative until such successor is
duly appointed and qualified to act hereunder. If Dale Zajicek refuses or is no
longer capable of serving as the Vendors' Representative hereunder, then the
Vendors representing a majority in number of the common shares of the Company
held prior to the completion of this transaction, will promptly appoint a
successor Vendors' Representative who will thereafter be a successor Vendors'
Representative hereunder, and the Vendors' Representative will serve until such
successor is duly appointed and qualified to act hereunder. In the event of a
vacancy in the position of the Vendors' Representative, or refusal or
incapability of the Vendors' Representative to serve, which continues for more
than 90 days, the Purchaser may appoint a successor Vendors' Representative who
will thereafter be a successor Vendors' Representative hereunder. If there is
not a Vendors' Representative at any time, any obligation to provide notice to
the Vendors' Representative will be deemed satisfied if such notice is delivered
to each of the Vendors at their addresses last known to the Purchaser.

(f)
Absent a finding of fraud or wilful breach by the Vendors' Representative of
this Agreement by a court of competent jurisdiction, the Vendors' Representative
shall not be liable to any of the Vendors for any act done or omitted hereunder
as the Vendors' Representative and any act done or omitted in accordance with
the advice of counsel or other expert shall be conclusive evidence of the
absence of such fraud or willful breach. The Vendors shall jointly and severally
indemnify the Vendors' Representative and hold him harmless against any loss,
liability, damage, Claim, suit, penalty, cost or expense (including fees and
expenses of counsel and any costs and expense incurred by the Vendors'
Representative to defend himself against any claim or suit by any Vendor)
incurred other than as a result of fraud or willful breach by the Vendors'
Representative of this Agreement as determined by a court of competent
jurisdiction and arising out of or in connection with the acceptance or
administration of its duties hereunder.

(g)
By his signature to this Agreement, the Vendors' Representative hereby accepts
the appointment contained in this Agreement, as confirmed and extended by this
Agreement, and agrees to act as the Vendors' Representative and to discharge the
duties and responsibilities of the Vendors' Representative pursuant to the terms
of this Agreement.

1.7
Schedules

The schedules to this Agreement, listed below, are an integral part of this
Agreement:
Schedule        Description
Schedule 1.1        Adjustments to Operating Earnings
Schedule 3.2        Allocation of Purchase Price
Schedule 3.3(m)    Arbitration
Schedule 7.3        Required Approvals
Schedule 7.6
Form of Non-Competition, Non-Solicitation & Confidentiality Agreement

Schedule 7.7        Form of Employment Agreement
Schedule 7.9        Form of Opinion from Vendors' Counsel

Schedule 7.10        Form of Opinion from Counsel for Lauren Holdings Inc.
Schedule 8.5        Form of Opinion from Purchaser’s Counsel
Schedule 11.1        Indemnity
Schedule 12.3        Notices
ARTICLE 2    
PURCHASE AND SALE
2.1
Action by Vendors and Purchaser

Subject to the provisions of this Agreement, at the Closing Time:
(l)
Purchase and Sale of Purchased Shares – the Vendors will sell and the Purchaser
will purchase the Purchased Shares;

(m)
Payment of Purchase Price – the Purchaser will pay the amount of the Purchase
Price payable at the Closing to the Vendors in accordance with Section 3.2(a);

(n)
Transfer and Delivery of the Purchased Shares – concurrent with the execution of
this Agreement, the Vendors will transfer and deliver to Stewart McKelvey, to be
held in escrow, share certificates representing the Purchased Shares duly
endorsed in blank for transfer, or accompanied by irrevocable security transfer
powers of attorney duly executed in blank, in either case by the holders of
record as of the date of this Agreement. At Closing, the Vendors' Representative
will direct Stewart McKelvey to transfer and deliver to the Purchaser the share
certificates representing the Purchased Shares duly endorsed in blank for
transfer, or accompanied by irrevocable security transfer powers of attorney
duly executed in blank and will take such steps as are necessary to cause the
Company to enter the Purchaser or its nominees(s) upon the books of the Company
as the holder of the Purchased Shares as of the Closing Date and to issue one or
more share certificates to the Purchaser or its nominee(s) representing the
Purchased Shares at Closing; and

(o)
Other Documents – the Vendors, the Purchaser and the Company will deliver such
other documents as may be necessary to complete the transactions provided for in
this Agreement, including the deliveries set forth in Article 7 and Article 8.

2.2
Place of Closing

The Closing will take place at the Closing Time at the offices of Osler, Hoskin
& Harcourt LLP in the City of Toronto, remotely via the exchange of documents
and signatures, or at such other place as may be agreed upon by the Parties.
2.3
Assignment of Restricted Rights

(a)
If at Closing there are any Restricted Rights in respect of which consents,
approvals, waivers or reasonable modifications have not been obtained, then,
following Closing, the Vendors will continue their efforts to obtain any
necessary consents, approvals, waivers or reasonable modifications.

(b)
To the extent there are any consents, approvals, waivers or reasonable
modifications outstanding at Closing, the Vendors will:

(i)
apply for and use all reasonable efforts to obtain all consents, approvals,
waivers or reasonable modifications acceptable to the Purchaser acting
reasonably. Nothing in this Section 2.3 will require the Company to make any
payment to any other party in order to obtain such consents, approvals, waivers
or reasonable modifications, and any such payments will be for the Vendors’
account; and

(ii)
take all such actions and do, or cause to be done, all such things at the
request of the Purchaser as are reasonably necessary in order that the value and
benefits of the applicable Restricted Rights are preserved and enure to the
benefit of the Purchaser.

ARTICLE 3    
PURCHASE PRICE
3.1
Purchase Price  

Subject to Section 3.4, the aggregate amount payable by the Purchaser for the
Purchased Shares (the “Purchase Price”), exclusive of all applicable sales and
transfer taxes, is equal to:
(a)
$50 million; minus

(b)
any out-of-pocket expenses of the Company in excess of $50,000 related to this
Agreement or the transactions contemplated hereby other than to the extent paid
by the Vendors in accordance with Section 12.3; plus

(c)
the Earn-Out Amounts, if any, and

in no event will the total Purchase Price exceed $100 million.
3.2
Satisfaction of Purchase Price

The Purchaser will satisfy the Purchase Price as follows:
(c)
by paying to Stewart McKelvey, in trust, on behalf of the Vendors at the Closing
Time $50 million (minus any expenses referred to in Section 3.1(b)); and

(d)
by paying the Earn-Out Amounts to the Vendors, if applicable, in accordance with
Section 3.3.

The Purchase Price shall be paid to Stewart McKelvey, in trust, on behalf of
each of the Vendors and will be distributed by Stewart McKelvey in accordance
with a direction executed by each of the Vendors and in the proportions set
forth in Schedule 3.2; for greater certainty, unless a direction is delivered by
the Vendors’ Representative to the Purchaser providing for different
instructions with respect to the payment of the Earn-Out Amounts, the Purchaser
shall deliver the applicable Earn-Out Amounts to Stewart McKelvey, in trust, on
behalf of the Vendors and such amounts will be distributed by Stewart McKelvey
in accordance with a direction executed by each of the Vendors and in the
proportions set forth in Schedule 3.2. The Purchaser shall have no
responsibility or liability relating to the distribution of the Purchase Price
by Stewart McKelvey to the Vendors.
3.3
Earn-out

(a)
2013 Earn-out Payment. If the Operating Earnings for the 12-month period ending
December 31, 2013 equals or exceeds the Base Operating Earnings, the Purchaser
will pay an Earn-Out Amount of $5,000,000 to the Vendors.

(b)
2014 Earn-out Payment. If the Operating Earnings for the 12-month period ending
December 31, 2014 equals or exceeds the Base Operating Earnings, the Purchaser
will pay an Earn-Out Amount of $5,000,000 to the Vendors.

(c)
2015 Earn-Out Amount.

(i)
“2015 Earn-Out Amount” means an amount calculated as:

(A)
[***] multiplied by a fraction:

(1)
the numerator of which is the Operating Earnings for the [***] period ending
December 31, 2015, annualized (by multiplying such amount by [***]); and

(2)
the denominator of which is the Base Operating Earnings;

minus:
(B)
the amounts, if any, paid pursuant to Sections 3.3(a) and 3.3(b).

(ii)
If:

(A)
the 2015 Earn-Out Amount is a positive number, the Purchaser will pay to the
Vendors an Earn-Out Amount equal to the lesser of:

(1)
the 2015 Earn-Out Amount; or

(2)
$50,000,000 minus the amounts, if any, paid pursuant to Sections 3.3(a) and
3.3(b); or

(B)
the 2015 Earn-Out Amount is a negative number, the Vendors will refund to the
Purchaser the lesser of (i) the absolute value of the 2015 Earn-Out Amount (i.e.
disregarding the negative) and (ii) the sum of the Earn-Out Amounts paid, if
any, pursuant to Sections 3.3(a) and 3.3(b).

(d)
Questcor and the Company shall each cause the audit of the Company’s financial
statements to occur for the four months ending December 31, 2012 and for each of
the years ending December 31, 2013, 2014 and 2015 and shall use commercially
reasonable efforts to have such audited statements completed within 45 days of
the end of each of such fiscal years or as otherwise agreed to by Questcor and
the Company acting reasonably. Within 15 days following the completion of the
audit of the Company’s financial statements for the years ending December 31,
2012, 2013 and 2014, the Purchaser will provide to the Vendors' Representative a
copy of the relevant financial statement of the Company together with a good
faith calculation of a statement of the Operating Earnings in respect of the
applicable year and in the case of the year ended December 31, 2012, the
Operating Earnings for the 4-month period ending December 31, 2012 and the
calculations used to determine whether amounts are payable pursuant to Sections
3.3(a) or 3.3(b) and within 15 days following the completion of the audit of the
Company’s financial statements for the year ending December 31, 2015, the
Purchaser will provide to the Vendors' Representative a copy of the relevant
audited financial statement of the Company together with a good faith
calculation of a statement of the Operating Earnings for the [***] period ending
December 31, 2015 and the calculations used to determine the 2015 Earn-Out
Amount (each, an “Earn-Out Calculation Statement”). The Earn-Out Calculation
Statement shall set forth the Operating Earnings for the applicable period and
shall be prepared in accordance with the provisions of this Agreement. Within 5
Business Days of any request by the Vendors’ Representative, the Purchaser will
give the Vendors’ Representative and his accountants sufficient access to the
books and records and working papers that the Company, the Purchaser and their
accountants used in the preparation of the Earn-Out Calculation Statement that
support each Earn-Out Calculation Statement; such information shall be provided
to the Vendors’ Representative to enable him to evaluate the relevant Earn-Out
Calculation Statements.

(e)
Subject to Section 3.3(f), within 30 days after delivery of an Earn-Out
Calculation Statement referred to in Section 3.3(d) in respect of a particular
period, the Purchaser or the Vendors, as applicable, will make any payment
required by Sections 3.3(a), 3.3(b) or 3.3(c), as applicable. Any payment to be
made to the Vendors shall be made in accordance with the payment instructions
set forth in Section 3.2, unless the Vendors’ Representative provides
alternative payment instructions in writing to the Purchaser within 15 days
prior to the date the payment is due.

(f)
If the Vendors' Representative objects in good faith to any item of an Earn-Out
Calculation Statement, the Vendors' Representative must so advise the Purchaser
by delivering to the Purchaser a written notice (the “Earn-Out Objection
Notice”) within 30 days after the Vendors' Representative has received the
Earn-Out Calculation Statement, provided that the Purchaser has complied with
any request by the Vendors’ Representative made pursuant to Section 3.3(d),
failing which, absent fraud or intentional misrepresentation on the part of the
Purchaser in connection with such Earn-Out Calculation Statement, the Vendors’
Representative shall lose its right to object to, and be deemed to have
accepted, the Earn-Out Calculation Statement. The Earn-Out Objection Notice must
set out the reasons for the Vendors’ Representative's objection as well as the
amount in dispute and reasonable details of the calculation of such amount. The
Vendors' Representative and the Purchaser will attempt to resolve through
negotiations, which negotiations may be with or without prejudice at the
election of Parties, all of the issues in dispute set out in any Earn-Out
Objection Notice within 30 days of receipt of the Earn-Out Objection Notice by
the Purchaser. Any issues in dispute not resolved within such 30 day period will
be referred as soon as possible thereafter by the Vendors' Representative and
the Purchaser to the Independent Auditor. The Independent Auditor will act as
expert and not as arbitrator and will be required to determine the issues in
dispute that have been referred to it as soon as reasonably practicable but in
any event not later than 30 days after the date of referral of the dispute to
it. In making its determination, the Independent Auditor will only consider the
issues in dispute placed before it. The Vendors' Representative and the
Purchaser will provide or make available all documents and information as are
reasonably required by the Independent Auditor to make its determination. The
determination of the Independent Auditor is final and binding on the Parties,
and the Earn-Out Calculation Statement will be (or not be) adjusted in
accordance with such determination. The fees and expenses of the Independent
Auditor in acting in accordance with this Section 3.3(f) will be shared equally
by the Purchaser and the Vendors, unless the Independent Auditor determines
otherwise.

(g)
The Parties hereby agree that each Earn-Out Amount paid to the Vendors under
this Section 3.3 will be treated as a deferred portion of the Purchase Price.
The Parties agree to take this position on all Tax Returns and exercise their
respective good faith efforts to argue for this result; but nothing contained in
this Agreement is considered a guaranty or indemnity by any Party of this or any
tax treatment with respect to the Earn-Out Amount.

(h)
In no event will the total Earn-Out Amounts exceed, in the aggregate, $50
million.

(i)
During the period covering the earn-out period contemplated by this Agreement:
(i) each of Questcor and the Purchaser agrees that it will operate in good faith
with respect to the Earn-Out Amounts and will not take and not cause the Company
to take any action with the intent to reduce the Earn-Out Amount realizable by
the Vendors; (ii) each of the Vendors agrees that, to the extent they are a part
of Company's management, they will not operate the Company with the intent to
maximize the Operating Earnings during the earn-out period contemplated by this
Agreement in any manner that would be inconsistent with their fiduciary
obligation to act in the best interest of the Company; (iii) Questcor and the
Purchaser shall make good faith efforts to allow the Company to operate as a
free-standing business consistent with the manner set out in the governance and
management relationship letter between the Company and Questcor, dated as of the
Closing (the “Governance Document”); and (iv) Questcor shall not (and shall
cause its Affiliates not to) enter into any agreements or arrangements with the
Company following the Closing Date providing for the Company to sell or supply
the Questcor or its Affiliates with services or products at less than fair
commercial rates. Furthermore, it is the intent of the parties that the Earn-Out
Amounts will be based solely on the operations of the Company as it exists today
and not include any operations of Company that are subsequently acquired from
third parties, whether by merger, amalgamation or consolidation or acquisition,
unless Questcor and the Vendors’ Representative mutually agree otherwise. Any
disputes shall be resolved in accordance with sub-section (m) of this Section
3.3.

(j)
In the event Questcor (or any of its subsidiaries), in its sole discretion and
without the approval by the Vendors’ Representative materially changes, proposes
to materially change, or causes a material change to, the executive management,
the business, accounting policies or methods, or operations (other than changes
necessary in maintaining compliance, or bringing the Company into compliance,
with applicable Law) of the Company from those in effect immediately prior to
the Closing Date (any such material change or proposed material change, a
“Change”), Questcor shall notify Vendors’ Representative in writing and if
Vendors' Representative reasonably believes that any such Change is likely to
decrease the amount of the Earn-Out Amount that the Vendors would have earned
absent such Change, Vendors' Representative may give written notice (the “Change
Notice”) to Questcor of such belief. In such event, Vendors' Representative and
Questcor’s Chief Financial Officer shall meet within thirty (30) days following
the receipt by Questcor of such Change Notice to discuss in good faith (which
discussions may be with or without prejudice at the election of Parties): (i)
whether the Change was in accordance with the principles as set out in the
Governance Document, (ii) whether the Change is likely to decrease the amount of
the Earn-Out Amount paid to Vendors and (iii) whether any adjustments to the
calculations used to determine the Earn-Out Amount are necessary in order to
restore the Vendors' ability to earn a comparable Earn-Out Amount that would
have been earned by the Vendors absent such Change. If the Purchaser and
Vendors' Representative disagree if or to the extent any adjustments are
necessary, or the nature of such adjustments, the dispute shall be resolved in
accordance with sub-section (m) of this Section 3.3.

(k)
In the event Questcor believes the management of the Company operated the
Company with the intent to maximize the Operating Earnings during the earn-out
period contemplated by this Agreement but failed to act in the best interest of
the Company, Questcor shall notify Vendors' Representative in writing and
Vendors' Representative and Questcor’s Chief Financial Officer shall meet to
discuss in good faith (which discussions may be with or without prejudice at the
election of Parties): whether (i) management of the Company operated the Company
with the intent to maximize the Operating Earnings during the earn-out period
contemplated by this Agreement but failed to act in the best interest of the
Company, (ii) the failure is likely to increase the amount of the Earn-Out
Amount paid to Vendors and (iii) any adjustments to the calculations used to
determine the Earn-Out Amounts are necessary in order to reduce the Earn-Out
Amount to an amount that would have been earned by Vendors absent such failure.
If the parties disagree if or to the extent any adjustments are necessary, or
the nature of such adjustments, the dispute shall be resolved in accordance with
sub-section (m) of this Section 3.3.

(l)
Until the 2015 Earn-Out Amount, if any, has been paid, the Purchaser shall not
amalgamate with the Company and no Change of Control shall occur without the
consent of the Vendors’ Representative, acting on behalf of the Vendors, which
consent shall not be unreasonably withheld, delayed or conditioned.

(m)
In the event of any controversy or dispute between the Parties hereto arising
out of or relating to sub-sections (j) or (k) of this Section 3.3, if no
resolution is reached within 30 days following the date on which one Party first
notifies the other of his or its request that such a meeting be held, then, and
in that event, the controversy or dispute shall be referred to and determined by
final and binding arbitration before a single arbitrator pursuant to the
International Commercial Arbitration Act, R.S.O. 1990 (Ontario) and the
procedures set out in Schedule 3.3(m) to this Agreement. The seat of the
arbitration shall be Ontario and the hearing shall be conducted in the City of
Toronto.

(n)
Within 30 days of Closing, the Purchaser shall cause the Company to change its
fiscal year end to December 31 and shall ensure that the Company’s fiscal year
remains December 31 until at least January 1, 2016, unless the consent of the
Vendors’ Representative is obtained to change to a different fiscal year, which
consent shall not be unreasonably withheld, delayed or conditioned.

3.4
Purchase Price Adjustments

Notwithstanding anything else in the Agreement the Purchase Price is reduced by
(i) the amount of any third party funding that the Company may be required to
re-pay due to the failure to obtain the consent or consents relating to the
agreements referenced in paragraph 1 of Section 4.8 of the Disclosure letter,
which amount, if any, shall be held back by Purchaser pending the Vendors
obtaining such consent or consents prior to the Company being required to make
(and actually making) such repayment, and (ii) the amount of any indemnity
claims paid to the Purchaser pursuant to Article 11.
3.5
Payments

Any payment required to be made by the Purchaser to the Vendors will be made by
wire transfer of immediately available funds to Stewart McKelvey, in trust. Any
payment required to be made by the Vendors to the Purchaser shall be made by
wire transfer of immediately available funds to a bank account designated in
writing by the Purchaser. Notwithstanding anything in this Agreement to the
contrary, the Purchaser shall be entitled to deduct and withhold from the
consideration otherwise payable to any Person pursuant to this Agreement any
amount as may be required to be deducted and withheld with respect to the making
of such payment under any provision of any Tax Law. To the extent that amounts
are so withheld or deducted by the Purchaser, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to such person in
respect of which such deduction and withholding was made by the Purchaser.
3.6
Tax Election

The Parties agree that the consideration for the agreement by the Vendors not to
compete in accordance with the terms of the non-competition agreement referenced
in Articles 7 and 8 hereof (the “Non-Compete Covenant”) is included in the
Purchase Price for the Purchased Shares. In accordance with the requirements of
the Income Tax Act (Canada), the regulations thereunder, the administrative
practice and policy of the Canada Revenue Agency and any applicable equivalent
or corresponding provincial or territorial legislative, regulatory and
administrative requirements, the Vendors and the Purchaser shall make and file,
in a timely manner, a joint election(s) under subsection 56.4(3)(c) of the
Income Tax Act (Canada), and any equivalent or corresponding provision under
applicable provincial or territorial tax legislation to not have the rules in
subsection 56.4(2) and any equivalent or corresponding provision under
applicable provincial or territorial tax legislation, apply in respect of the
Non-Compete Covenant. The Parties shall prepare and file their respective tax
returns in a manner consistent with subsection 56.4(9). If a Party fails to file
its tax returns in such manner, it shall indemnify and save harmless the other
Parties in respect of any resulting taxes and legal and accounting expenses paid
or incurred by the other Party.
ARTICLE 4    
REPRESENTATIONS AND WARRANTIES OF THE VENDORS AND THE COMPANY
The Vendors and the Company jointly and severally represent and warrant to the
Purchaser the matters set out below, subject to such exceptions as are
specifically disclosed in the disclosure letter from the Vendors addressed to
the Purchaser and dated as of the date of this Agreement, and as of the Closing,
as though made at the Closing (except where a representation or warranty is made
herein as of a specified date, as of such date) (the "Disclosure Letter").
4.1
Incorporation and Corporate Power of the Company and its Subsidiaries

The Company is a corporation duly incorporated and validly existing under the
laws of Prince Edward Island and has all necessary corporate power, authority
and capacity to own its assets and to carry on its business as presently
conducted. Each of the Subsidiaries is a corporation duly incorporated and
validly existing under the laws of its jurisdiction of incorporation and has all
necessary corporate power, authority and capacity to own its assets and to carry
on its business as presently conducted.
4.2
Registration

Neither the nature of the Company’s business nor the location or character of
the assets owned or leased by the Company requires it to be registered, licensed
or otherwise qualified as an extra-provincial or foreign corporation in any
jurisdiction other than in the Province of Prince Edward Island where it is duly
registered, licensed or otherwise qualified for such purpose and other than
jurisdictions where the failure to be so registered, licensed or otherwise
qualified does not have a Material Adverse Effect. Neither the nature of its
business nor the location or character of the assets owned or leased by any of
the Subsidiaries requires it to be registered, licensed or otherwise qualified
as an extra-provincial or foreign corporation in any jurisdiction other than
jurisdictions where the relevant Subsidiary is duly registered, licensed or
otherwise qualified for such purpose and other than jurisdictions where the
failure to be so registered, licensed or otherwise qualified does not have a
Material Adverse Effect.
4.3
Residence of the Vendors

Other than Earl Duffy, none of the Vendors is a non-resident of Canada for the
purposes of the Income Tax Act (Canada).
4.4
Subsidiaries

The Subsidiaries listed in Section 4.4 of the Disclosure Letter are all of the
Subsidiaries of the Company. The Company is the sole registered and beneficial
owner of all of the issued and outstanding shares in the capital of each of the
Subsidiaries, free and clear of all Encumbrances. Except as disclosed in Section
4.4 of the Disclosure Letter, the Company does not own, or have any interest in
any shares or have an ownership interest in any other Person other than its
shareholdings in the Subsidiaries.
4.5
Status of the Vendors and Right to Sell

(a)
The Vendors are, together, the sole registered owners and, other than the
beneficiaries under the 2012 BV Employee Share Ownership Trust, the sole
beneficial owners of the Purchased Shares free and clear of all Encumbrances.

(b)
Each Vendor has the exclusive right to dispose of the Purchased Shares as
provided in this Agreement and such disposition will not violate, contravene,
breach or offend against or result in any default under any Contract, charter,
share term provision, by-law provision, trust document, Order, judgment, decree,
licence, permit or Law, to which the Vendors are a party or subject or by which
the Vendors are bound or affected.

(c)
The Purchased Shares are not subject to the terms of any shareholder agreement,
other than those disclosed in Section 4.5 of the Disclosure Letter.

4.6
Capitalization

Section 4.6 of the Disclosure Letter sets forth the authorized and issued share
capital of the Company and the Subsidiaries and a true, correct and complete
list of all the Company's and each Subsidiaries' shareholders and the number of
shares owned by each shareholder. All of the Purchased Shares and all of the
shares in the Subsidiaries have been duly and validly issued and are outstanding
as fully paid and non-assessable shares. No options, warrants or other rights to
purchase shares or other securities of the Company or any of the Subsidiaries
and no securities or obligations convertible into or exchangeable for shares or
other securities of the Company or any of the Subsidiaries have been authorized
or agreed to be issued or are outstanding.
4.7
Due Authorization and Enforceability of Obligations

The Vendors and the Company have all necessary power, authority and capacity to
enter into this Agreement and to carry out their respective obligations under
this Agreement. This Agreement constitutes, and each other agreement to be
executed by the Vendors or the Company in connection with the Closing will
constitute, a valid and binding obligation of the Vendors or the Company, as the
case may be, enforceable against them in accordance with its terms.
4.8
Absence of Conflicts

Except for the Restricted Rights that are listed at Section 4.8 of the
Disclosure Letter, neither the Company nor any of the Subsidiaries is a party
to, bound or affected by or subject to any:
(a)
Contract;

(b)
charter, by-law or share term provision; or

(c)
Laws or Governmental Authorizations,

that would be violated, breached by, or under which default would occur or an
Encumbrance would be created, or in respect of which the obligations of the
Company or any of the Subsidiaries will increase or the rights or entitlements
of the Company or any of the Subsidiaries will decrease or any obligation on the
part of the Company or any of the Subsidiaries to give notice to any
Governmental Authority will arise, as a result of the execution and delivery of,
or the performance of obligations under, this Agreement or any other agreement
to be entered into under the terms of this Agreement. Except as disclosed in, or
pursuant to, the provisions of this Agreement, Section 4.8 of the Disclosure
Letter or in the ordinary course of business, there has been no sale,
assignment, subletting, licensing or granting of any rights in or other
disposition of or in respect of any of the Company’s or any of the Subsidiaries'
assets or any granting of any Contract or right capable of becoming an agreement
or option for the purchase, assignment, subletting, licensing or granting of any
rights in or other disposition of any of such assets.
4.9
Regulatory Approvals

(a)
No approval, Order, consent of or filing with any Governmental Authority is
required other than consents from any Governmental Authorities as set out on
Schedule 7.3 and other than notices to any Governmental Authorities as set out
in Section 4.43 of the Disclosure Letter on the part of the Company or any of
the Subsidiaries, in connection with the execution, delivery and performance of
this Agreement or any other documents and agreements to be delivered under this
Agreement or the performance of the Vendors’ obligations under this Agreement or
any other documents and agreements to be delivered under this Agreement.

(b)
Neither the book value of the assets of the Company (including assets of
entities controlled by the Company), nor the gross revenues from sales in or
from Canada generated from such assets, exceed $77 million, in each case
calculated in accordance with the Competition Act (Canada) and the regulations
enacted thereunder.

4.10
Investment Canada Act (Canada)

Neither Company nor any of the Subsidiaries is engaged in any of the activities
described in section 14.1(5) of the Investment Canada Act (Canada).
4.11
Financial Statements

The Financial Statements are set forth in Section 4.11 of the Disclosure Letter
and have been made available to the Purchaser. Except as set forth in Section
4.11 of the Disclosure Letter, the Financial Statements have been prepared in
accordance with GAAP applied on a basis consistent with that of the preceding
period and present fairly:
(a)
all of the assets, liabilities and financial position of the Company and its
Subsidiaries on a consolidated basis as at August 31, 2012; and

(b)
the sales, earnings, results of operation and changes in financial position of
the Company and its Subsidiaries on a consolidated basis for the 12-month period
ended August 31, 2012.

The Company maintains internal accounting controls sufficient to provide
reasonable assurance that (i) the Company does not maintain any off-the-book
accounts and that its assets are used in accordance with the Company's
management directives; (ii) transactions are executed with management's
authorization; (iii) transactions are recorded as necessary to permit
preparation of the Financial Statements of the Company and to maintain
accountability for the Company's assets; and (iv) Accounts Receivable, notes and
other receivables and work in process Inventories are recorded accurately, and
proper and adequate procedures are implemented to effect the collection of
Accounts Receivable, notes and other receivables on a current and timely basis.
The reserves and Accrued Liabilities disclosed on or reflected in the Financial
Statements and the Books and Records, are recorded in amounts equal to the
liabilities in respect of which they have been established.
4.12
Absence of Undisclosed and Contingent Liabilities

Neither the Company, nor any of the Subsidiaries has incurred any liabilities
(whether accrued, absolute, contingent or otherwise) that continue to be
outstanding including any guarantee, surety or indemnity in respect of
indebtedness, or other obligations, of any Person, or any other commitment by
which the Company is, or is contingently, responsible for such indebtedness or
other obligations, except (a) as disclosed in the Financial Statements; (b) as
disclosed on Section 4.12 of the Disclosure Letter; or (c) as incurred in the
ordinary course of business.
4.13
Absence of Changes and Unusual Transactions

Since the date of the Balance Sheet:
(a)
there has not been any Material Adverse Effect;

(b)
there has not been any damage, destruction, loss, virus or denial of service
attack, Information Technology failure, labour dispute, organizing drive,
application for certification or other event, development or condition of any
character (whether or not covered by insurance) that has a Material Adverse
Effect;

(c)
there has not been any change in the level or value of Inventories outside the
ordinary course of business of the Company or of any of the Subsidiaries;

(d)
neither the Company, nor any of the Subsidiaries have transferred, assigned,
sold or otherwise disposed of any of the assets shown or reflected in the
Balance Sheet or cancelled any debts or entitlements except, in each case, in
the ordinary course of business;

(e)
neither the Company, nor any of the Subsidiaries have discharged or satisfied
any Encumbrance, or paid any obligation or liability (fixed or contingent) other
than liabilities included in the Balance Sheet and liabilities incurred since
the date of the Balance Sheet in the ordinary course of business;

(f)
neither the Company, nor any of the Subsidiaries have suffered an operating loss
or any unusual or extraordinary loss, waived or omitted to take any action in
respect of any rights, or entered into any commitment or transaction not in the
ordinary course of business where such loss, rights, commitment or transaction
is or would be material in relation to the Company;

(g)
other than annual general salary increases made on or about November 1, 2012 and
bonuses and profit sharing payments made on or about November 22, 2012, all as
set out in Section 4.32(a) of the Disclosure Letter, neither the Company, nor
any of the Subsidiaries have granted any bonuses, whether monetary or otherwise,
or made any general wage or salary increases in respect of its Employees or
changed the terms of employment for any Employee or entered into a written
contract with any Employee;

(h)
neither the Company, nor any of the Subsidiaries have (i) made any material
amendments to any Benefit Plan; (ii) established or promised to establish any
additional benefit plans which would be considered to be a Benefit Plan once
created; or (iii) changed or improved or promised to change or improve the
benefits provided under any Benefit Plan;

(i)
neither the Company, nor any of the Subsidiaries have hired or dismissed any
senior Employees or hired or dismissed more than 20 Employees;

(j)
except in the ordinary course of business or as set out in Section 4.13(j) of
the Disclosure Letter, neither the Company, nor any of the Subsidiaries have,
directly or indirectly, engaged in any transaction, made any loan or entered
into any arrangement with any officer, director, partner, shareholder, Employee
(whether current or former or retired), consultant, independent contractor or
agent of the Company or any of the Subsidiaries;

(k)
neither the Company, nor any of the Subsidiaries have, except for Permitted
Encumbrances, created or permitted to exist any Encumbrance affecting any of its
assets or Real Property;

(l)
except in the ordinary course of business, neither the Company, nor any of the
Subsidiaries have changed the manner of billing of, or the credit lines made
available to, any of its customers;

(m)
other than monthly dividends paid to Lauren Holdings Inc., neither the Company,
nor any of the Subsidiaries have, directly or indirectly, declared or paid any
dividends or declared or made any other payments or distributions on or in
respect of any of its shares and has not, directly or indirectly, purchased or
otherwise acquired any of its shares; and

(n)
neither the Company, nor any of the Subsidiaries have authorized, agreed or
otherwise become committed to do any of the foregoing.

4.14
Non-Arm’s Length Transactions

No director or officer, former director or officer, shareholder or Employee of,
or any other Person not dealing at arm’s length with the Company or any of the
Subsidiaries or the Vendors is engaged in any transaction or arrangement with or
is a party to a Contract with, or has any indebtedness, liability or obligation
to, the Company or any of the Subsidiaries, except as set out in Section 4.14 of
the Disclosure Letter or for employment arrangements with Employees, the terms
of which are disclosed in Section 4.32 of the Disclosure Letter.
4.15
No Joint Venture Interests or Strategic Alliances

Except as set out in Section 4.15 of the Disclosure Letter, neither the Company
nor any of the Subsidiaries is a party to any material strategic alliance or
co-operative agreement and is not a partner, beneficiary, trustee, co-tenant,
joint-venturer or otherwise a participant in any partnership, trust, joint
venture, co-tenancy or similar jointly owned business undertaking and neither
the Company nor any of the Subsidiaries have any significant investment
interests in any business owned or controlled by any third party.
4.16
Major Suppliers and Customers

Section 4.16 of the Disclosure Letter sets forth a comprehensive listing of each
supplier of goods and services to, and each customer of, the Company or any of
the Subsidiaries to whom the Company and the Subsidiaries paid or billed in
excess of $50,000 in the aggregate during the 12-month period ending August 31,
2012, together with, in each case, the amount so billed or paid. Since September
1, 2011, there has been no termination or material adverse modification or
change in the business relationship with any such supplier or customer. No such
supplier or customer has informed the Vendors of any intention to change its
relationship or the terms upon which it conducts business with the Company or
any of the Subsidiaries as a result of a sale of the Company (by change of
control or otherwise). There is not currently any dispute pending, or to the
knowledge of the Vendors, threatened, between the Company or any of the
Subsidiaries and any such customer or supplier.
4.17
Sufficiency of Assets

The Real Property, Real Property Leases, Tangible Personal Property, Equipment
Contracts, Appurtenances, Accounts Receivable, Intellectual Property,
Technology, Environmental Approvals, Governmental Authorizations, Improvements,
Inventories of the Company and the Subsidiaries and equipment of customers of
the Company or any of its Subsidiaries located on the Real Property for use by
the Company or any of its Subsidiaries, which equipment is listed in Section
4.17 of the Disclosure Letter, are sufficient for the continued conduct of the
Company’s and the Subsidiaries' businesses after the Closing in substantially
the same manner as conducted prior to the Closing.
4.18
Title to Certain Assets

Except with respect to Intellectual Property, Technology and Real Property, each
of the Company and the Subsidiaries are the sole legal and beneficial and (where
its interests are registrable) the sole registered owners of all of its assets
and interests in its assets, with good and valid title, free and clear of all
Encumbrances other than Permitted Encumbrances.
4.19
Condition of Certain Assets

The Tangible Personal Property is in good condition, repair and (where
applicable) proper working order, having regard to its use and age and such
assets have been properly and regularly maintained. All leases of Tangible
Personal Property are in full force and effect unamended and have been made
available to the Purchaser. All such leases are in good standing and there are
no outstanding defaults on the part of the Company or any of the Subsidiaries
or, to the knowledge of the Vendors, on the part of any other party thereto. All
Tangible Personal Property of the Company or any of the Subsidiaries is used,
operated, maintained and functions in accordance with all applicable Laws.
4.20
Location of the Assets

All of the assets of the Company and the Subsidiaries are located on the Real
Property.
4.21
Inventories

(a)
All Inventories are valued on the books of the Company and the Subsidiaries in
accordance with GAAP at the lower of average cost or net realizable value.
Inventories of finished goods are saleable and all other Inventories are
merchantable or usable and all Inventories are in quantities usable or saleable
in the ordinary course of business prior to the date hereof, except as reserved
for in the Balance Sheet. The Inventory levels have been maintained at the
amounts required for the operations of the Company and the Subsidiaries as
previously conducted and such Inventory levels are adequate for such operations.
The Inventories of finished goods conform in all respects with their respective
specifications and all published representations and warranties and have been,
where required, tested, manufactured, processed, packaged, labelled, and stored
in accordance with the requirements of applicable GMPs. The Company does not
have knowledge of any supply issues, pending or threatened, that would prohibit
the Company or any of the Subsidiaries from obtaining the Inventories necessary
to carry on the business in the ordinary course.

(b)
All inventories owned by customers of the Company that are located or stored at
the Real Property are stored and segregated properly and in accordance with the
terms of any agreement between the Company and such customers, and the Company
maintains policies of insurance that will cover any losses associated with such
inventories.

4.22
Collectability of Accounts Receivable

All Accounts Receivable are recorded in the financial records of the Company and
the Subsidiaries. Except as set out in Section 4.22 of the Disclosure Letter,
the Accounts Receivable are good and collectible at the aggregate recorded
amounts, except to the extent of any reserves and allowances for doubtful
accounts provided for such Accounts Receivable in the Books and Records, and are
not subject to any defence, counterclaim or set off. The Accounts Receivable
reflected on the Balance Sheet have arisen from bona fide transactions in the
ordinary course of the business of the Company and the Subsidiaries and are
valid obligations of the respective makers thereof consistent with past
practice, are not subject to any pledge, dispute, defence, set-off or other
Claim and are collectable in the ordinary course consistent with past practice,
net of reserves shown on the Balance Sheet, and no further goods or services
must be provided in order to complete the sales and to entitle the Company or
any of the Subsidiaries to collect. Except for Permitted Encumbrances, none of
such Accounts Receivable have been pledged or assigned to any other Person.
4.23
Government Grants

Section 4.23 of the Disclosure Letter sets forth a complete list of all
Contracts or agreements relating to grants or other forms of assistance,
including loans received by the Company or any of the Subsidiaries, from any
Governmental Authority.
4.24
Business in Compliance with Law

The operations of the Company and the Subsidiaries have been and are now
conducted in compliance with all Laws of each jurisdiction the Laws of which
have been and are now applicable to the business or products of, or products
produced by, the Company or any Subsidiary, including any such Laws enforced by
Health Canada, the U.S. Food and Drug Administration and comparable foreign
Governmental Authorities including applicable GMPs and neither the Company, nor
any of the Subsidiaries have received any notice of any alleged violation of any
such Laws. The Company and the Subsidiaries have developed and implemented
corporate policies and procedures designed to provide for compliance in all
material respects with applicable Laws and have complied with such policies and
procedures in all material respects. Except as set forth in Section 4.24 of the
Disclosure Letter or as related to workers’ compensation matters, there are no,
and there have not during the last five years been any, adverse or negative past
performance evaluations or ratings by any Governmental Authority relating to the
business or products of the Company and the Subsidiaries that have been
communicated to the Company or any of the Subsidiaries. Since January 1, 2007,
there has not been, nor is there currently under consideration by the Company,
or to the knowledge of the Company, any supplier, third-party manufacturer,
finished product manufacturer, component manufacturer, vendor, agent, or
distributor of any product for the Company, or to the knowledge of the Company,
any Government Authority, any recall, market withdrawal, product correction,
stock recovery, safety alert or other warning or notice that any product
designed, manufactured, marketed, sold, leased, licensed or delivered with
respect to the Company’s business or products is defective or unsafe or fails to
meet any regulations or standards promulgated or issued by any Government
Authority (whether voluntary or involuntary or whether at the request of a
Government Authority or at the direction of the Company). Since January 1, 2007,
to the knowledge of the Company, no event has occurred and no circumstances
exist that (with or without notice or lapse of time) would reasonably be
expected to result in any such liability or recall, withdrawal, product
correction, stock recovery, safety alert or other warning or notice.
4.25
Governmental Authorizations

Section 4.25 of the Disclosure Letter sets forth a complete list of the
Governmental Authorizations, other than the Environmental Approvals that are
listed in Section 4.30 of the Disclosure Letter, and, except for certain
portions of such Governmental Authorizations which have been redacted to protect
customer proprietary information, true and complete copies of such
authorizations have been delivered or made available to the Purchaser. The
Governmental Authorizations listed in Section 4.25 and 4.30 of the Disclosure
Letter are all the authorizations required by the Company and the Subsidiaries
to enable it to carry on its businesses in compliance with all Laws. Such
Governmental Authorizations are valid, in full force and effect in accordance
with their terms, and no event has occurred or circumstance exists that (with or
without notice or lapse of time) may constitute or result in a violation or
default of any such Governmental Authorization or that gives others any right of
termination, amendment or cancellation of any such Government Authorizations or
that gives rise to an obligation on the part of the Company or any of the
Subsidiaries to undertake or bear any cost. No proceedings are pending or, to
the knowledge of the Vendors, threatened and no event has occurred or facts
exist that could result in their revocation, cancellation, non-renewal, adverse
modification or limitation and all steps have been taken and filings made on a
timely basis with respect to each Governmental Authorization and its renewal.
The Company and its Subsidiaries are in compliance with all material respects
with the terms of the Governmental Authorizations. The Vendors have made
available to the Purchaser all warning letters, inspection and audit reports and
similar written correspondence relating to any Governmental Authorizations
received from Health Canada or comparable foreign Governmental Authority, all
internal assessments and audit reports generated by the Company as a result of
correspondence by Governmental Authorities, and any responses relating to the
Company's compliance or non-compliance with the Governmental Authorizations.
Neither the Company, nor to the knowledge of the Company, any of its Employees
has been or, as of the date hereof, is the subject of a notice, action or
proceeding that has subjected or could reasonably subject the Company to
permissive or mandatory disqualification, debarment or exclusion by any
Governmental Authority from participation in federal (Canadian or U.S.)
healthcare programs, and no such disqualification, debarment, suspension, or
exclusionary claims, actions, proceedings or investigations are pending or, to
the knowledge of the Company, threatened against any of it.
4.26
Intellectual Property

(a)
Section 4.26(a) of the Disclosure Letter sets forth a complete list and a brief
description of all Intellectual Property that has been registered, or for which
applications for registration have been filed, by or on behalf of the Company or
any of the Subsidiaries.

(b)
The Company manufactures products using proprietary and customer processes. All
Contracts relating to any of the Intellectual Property material to the business
of the Company have been made available to the Purchaser and are in full force
and effect and no default exists on the part of the Company or any of the
Subsidiaries or, to the knowledge of the Company or any of the Subsidiaries, on
the part of the other parties thereto.

(c)
Section 4.26(c) of the Disclosure Letter sets forth a complete list and brief
description of the Intellectual Property of which the Company or any of the
Subsidiaries licenses in and pays a royalty. The Company uses proprietary
customer Intellectual Property provided to the Company by its customers to
manufacture their products. The Company and the Subsidiaries are using or
holding the Intellectual Property of which it is not the sole beneficial and
registered owner with the consent of or a licence from the owner of such
Intellectual Property, all of which such consents or licences have been made
available to the Purchaser and are in full force and effect and no default
exists on the part of the Company or any of the Subsidiaries or, to the
knowledge of the Company, on the part of any of the parties thereto.

(d)
Except as disclosed in Section 4.26(d) of the Disclosure Letter:

(i)
all of the Intellectual Property owned by the Company is in full force and
effect and has not been used or enforced or failed to be used or enforced in a
manner that would result in its abandonment, cancellation or unenforceability;

(ii)
all Intellectual Property owned by the Company consisting of issued
registrations, or in the case of inventions, issued patents, is valid and
enforceable;

(iii)
there are no Claims by the Company or any of the Subsidiaries relating to
breaches, violations, infringements or interferences with any of the
Intellectual Property by any other Person and the Company has no knowledge of
any facts upon which such a Claim could be based;

(iv)
to the Company’s knowledge no other Person is using any of the Intellectual
Property so as to breach, violate, infringe or interfere with the rights of the
Company or any of the Subsidiaries;

(v)
to the Company’s knowledge the carrying on of the Company’s and any of the
Subsidiaries' business and the use, possession, reproduction, distribution,
sale, licensing, sublicensing or other dealings involving any of the
Intellectual Property does not breach, violate, infringe or interfere with any
rights of any other Person; and

(vi)
the Intellectual Property does not include any Intellectual Property in respect
of which any of the Company’s or any of the Subsidiaries' officers, Employees or
consultants have any rights. All current and former officers, Employees and
consultants have assigned in writing all of their rights in the Intellectual
Property either to the Company or to any of the Subsidiaries and have waived in
writing any moral rights that they may hold in any assets consisting of
copyrighted works.

4.27
Equipment Contracts

Section 4.27 of the Disclosure Letter sets forth a complete list of all
Equipment Contracts, which have been made available to the Purchaser, together
with a description of the Tangible Personal Property to which the Equipment
Contracts relate. The Equipment Contracts listed in Section 4.27 of the
Disclosure Letter are all those used to earn the revenue shown on the Financial
Statements. All of the Equipment Contracts are in full force and effect
unamended, and there are no outstanding defaults (or events that would
constitute a default with the passage of time or giving of notice or both) under
the Equipment Contracts on the part of the Company or any of the Subsidiaries
or, to the knowledge of the Vendors, on the part of any of the other parties
thereto. The interests of the Company and the Subsidiaries under each of the
Equipment Contracts is held free and clear of any Encumbrance except Permitted
Encumbrances, and all payments due under the Equipment Contracts have been duly
and punctually paid.
4.28
Owned Real Property

(a)
Section 4.28(a) of the Disclosure Letter sets forth a complete list of the Owned
Real Property in each case by reference to the owner, municipal address and
legal description.

(b)
Except as disclosed in Section 4.28(b) of the Disclosure Letter:

(vii)
the Company or the named Subsidiary, as the case may be, is the legal and
beneficial owner of the Owned Real Property in fee simple, with good and
marketable title thereto, free and clear of all Encumbrances other than
Permitted Encumbrances; and

(viii)
there are no Contracts that affect or relate to the title to, or ownership,
operation or management of, the Owned Real Property.

(c)
The lands owned by the Company and the Subsidiaries and the buildings and other
structures located thereon and the use, operation and maintenance thereof as now
used, operated and maintained, comply with all applicable Laws. None of the
buildings or other structures encroaches upon any lands not owned by the
Company, and there is no encroachment onto such lands by buildings or other
structures from any adjoining lands. There are no restrictive covenants,
municipal by-laws or other laws or regulations that in any way, individually or
in the aggregate, cause a Material Adverse Effect on the use of the lands,
buildings or structures for the purposes for which they are currently being
used, or that restrict the use of such lands, buildings or other structures so
that they cannot lawfully be used for the purposes for which they are currently
being used.

4.29
Leased Real Property

(a)
Section 4.29(a) of the Disclosure Letter sets forth a complete list of the
Leased Real Property and details for each Leased Real Property including: (i)
municipal address; (ii) legal description; (iii) area of premises; (iv) a
description of all relevant documents (including amendments, extension notices,
registered notices, non-disturbance agreements) including details of parties
thereto and dates of documents; and (v) details of annual rent payable,
applicable discounts or premiums associated therewith, current terms, renewal
rights and security deposits or prepaid rent. The Company has heretofore
delivered or made available to the Purchaser true, correct and complete fully
executed copies of all written leases of the Leased Real Property, including all
material modifications, amendments and supplements thereto and waivers
thereunder.

(b)
Except as disclosed in Section 4.29(b) of the Disclosure Letter, the Real
Property Leases have not been altered or amended and are in full force and
effect. There are no Contracts between the landlord and tenant, or sublandlord
and subtenant, or other relevant parties relating to the use and occupation of
the Leased Real Property, other than as contained in the Real Property Leases.

(c)
There are no outstanding defaults (or events that would constitute a default
with the passage of time or giving of notice or both) under the Real Property
Leases on the part of the Company or any of the Subsidiaries or, to the
knowledge of the Vendors, on the part of any other party to such Real Property
Leases.

(d)
All interests held by the Company or any of the Subsidiaries as lessee or
occupant under the Real Property Leases are free and clear of all Encumbrances
other than Permitted Encumbrances.

(e)
Neither the Company nor any of the Subsidiaries have any option, right of first
refusal or other right relating to the Leased Real Property, other than as set
out in the Real Property Leases.

(f)
Neither the Company, nor any of the Subsidiaries have waived, or omitted to take
any action in respect of any material rights under any of the Real Property
Leases.

4.30
Real Property Generally

(a)
True and complete copies of: (i) deeds, any title insurance policies, any
certificates of title, title opinions, any summaries or memoranda relating to
title to the Real Property, (ii) any appraisals, valuations or other information
evidencing the assessed value and/or market value of the Real Property, (iii)
any surveys, real property reports, reference plans, aerial photographs, site
plans, (iv) any reports or findings relating to building inspections, roof
conditions, structural elements, services or other physical conditions of the
Improvements and Real Property, (v) reports or summaries relating to the
proposed 2013 capital expenditure budgets or programs, (vi) materials evidencing
Encumbrances and Appurtenances, and (vii) materials relating to work orders,
notices or violation or deficiency notices affecting the Real Property, in each
case within the possession or control of the Company and/or its Subsidiaries,
have been delivered or made available to the Purchaser.

(b)
The Improvements are in good condition, repair and proper working order, having
regard to their use and age and such assets have been properly and regularly
maintained.

(c)
Each Owned Real Property has direct legal access to a municipal right-of-way and
the Company and the Subsidiaries otherwise have such rights of entry and exit to
and from the Real Property as are reasonably necessary to carry on the business
of the Company and the Subsidiaries upon the Real Property.

(d)
No Person has any right to purchase, option to purchase, right of first refusal
or other rights with respect to any of the Real Property other than the
Purchaser pursuant to this Agreement, and no Person other than the Company or a
Subsidiary is using or has any right to use, or is in possession or occupancy
of, any part of such Real Property.

(e)
Neither the Company, nor any of the Subsidiaries have entered into any agreement
to sell, transfer, encumber, or otherwise dispose of or impair the right, title
and interest of the Company or any of the Subsidiaries in and to the Real
Property or the air, density and easement rights relating to the Real Property,
except Permitted Encumbrances and as set out in Section 4.31 of the Disclosure
Letter.

(f)
Neither the Company, nor any of the Subsidiaries have received any notification
of and the Vendor has no knowledge of, any outstanding or incomplete work
orders, deficiency notices or other current non-compliance with Laws relating to
any of the Real Property.

(g)
The current uses of the Real Property are permitted under current zoning and
land use regulations and Laws. None of the Company or any of the Subsidiaries
has made application for any minor variance or amendments to zoning by-laws or
official plans in respect of the Real Property and the Vendor has no knowledge
of any proposed or pending changes to any zoning regulation or official plan
affecting the Real Property.

(h)
No part of the Real Property is subject to any building or use restriction that
restricts or would restrict or prevent the use and operation of the Real
Property as it has been used or operated in the ordinary course in the past by
the Company and the Subsidiaries or is located in a flood plain or is subject to
flooding.

(i)
No Improvements encroach 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.

(j)
The Vendor has no knowledge of any expropriation or condemnation or similar
proceeding pending or threatened against the Real Property or any part of the
Real Property.

(k)
Subject to statutory hold backs required by Law and except for the construction
of Improvements now underway, all accounts for work and services performed or
materials placed or furnished upon or in respect of the construction and
completion of any Improvements have been fully paid and no one is entitled to
claim a lien under applicable construction lien Laws or other similar
legislation for such work performed by or on behalf of the Company or any of the
Subsidiaries.

(l)
The Real Property is fully serviced (including water, storm and sanitary sewer
and electrical service) to a level sufficient to permit the operation of the
business of the Company and the Subsidiaries to be carried on after Closing as
it has been carried on in the ordinary course by the Company and the
Subsidiaries. Except as set out in Section 4.31(l) of the Disclosure Letter, all
municipal levies, local improvements, imposts and permit fees due and payable
prior to the Closing Date have been or shall be paid by the Company and the
Subsidiaries as at the Closing Date.

(m)
There are no outstanding defaults (or events which would constitute a default
with the passage of time or giving of notice or both) under the Permitted
Encumbrances on the part of the Company or any of the Subsidiaries or on the
part of any other party to such Permitted Encumbrances.

(n)
All Appurtenances necessary for the continued use and operation of the Real
Property as it has been used by the Company or any of the Subsidiaries in the
ordinary course in the past, are listed in Section 4.30 of the Disclosure Letter
and none of the Contracts creating or governing such Appurtenances require the
consent of any other party to the transactions contemplated by this Agreement.

(o)
There are no matters affecting the right, title and interest of the Company or
any of the Subsidiaries in and to the Real Property which, in the aggregate,
would materially and adversely affect the ability of the Company or any of the
Subsidiaries after the Closing Date to carry on the business upon the Real
Property as it has been carried on in the ordinary course by the Company and the
Subsidiaries.

4.31
Environmental Matters

(a)
All Environmental Approvals have been obtained, are valid and in full force and
effect, have been and are being complied with, and there have been and are no
applications made or proceedings commenced or threatened to revoke, suspend,
amend or alter any Environmental Approval. Section 4.31 of the Disclosure Letter
sets forth a complete list of such Environmental Approvals and true and complete
copies of all such approvals have been delivered or made available to the
Purchaser. Where required by Law, true and complete copies of all such approvals
are located at the operating site to which the approval relates. Neither the
Company nor any of the Subsidiaries have received any notice of any intention to
revoke, suspend, amend or alter any Environmental Approval and there are no
circumstances that exist that could result in the revocation, suspension,
amendment or alteration of any Environmental Approval.

(b)
All operations of the Company and the Subsidiaries have been and are now in
compliance with all Environmental Laws and any future Environmental Laws that,
to the knowledge of the Vendors, are presently planned or proposed by any
Governmental Authority and that could reasonably be expected to have a Material
Adverse Effect. Neither the Company, nor any of the Subsidiaries have received
any notice of any alleged violation of such Laws. Any Release by the Company or
any of the Subsidiaries of any Hazardous Substance into the Environment complied
and complies with all Environmental Laws. The Company and the Subsidiaries have
developed and implemented corporate policies and procedures designed to provide
for compliance in all material respects with applicable Environmental Laws and
have complied with such policies and procedures in all material respects. There
are no, and there have not during the last five years been any, adverse or
negative past performance evaluations or ratings by any Governmental Authority
in relation to Environmental Laws relating to the business or products of the
Company or any of the Subsidiaries that have been communicated to the Company or
any of the Subsidiaries.

(c)
None of the Company, the Subsidiaries or any of their respective operations or
any Real Property has been or is now the subject of any Environmental Order, nor
do the Vendors have any knowledge of any investigation or evaluation commenced
or threatened as to whether any such Environmental Order is necessary nor has
any threat of any such Environmental Order been made. Neither the Company, nor
any of the Subsidiaries has received any notice of any Environmental Order or
any notice of intention to issue an Environmental Order nor are there any
circumstances that could reasonably be expected to result in the issuance of any
such Environmental Order.

(d)
Neither the Company nor any of the Subsidiaries is currently being prosecuted
for and has been prosecuted for or convicted of any offence under any
Environmental Law, nor has the Company or any of the Subsidiaries been found
liable in any proceeding or been required by any Environmental Order to pay any
fine, penalty, damages, costs, expenses, amount or judgment to any Person as a
result of any Release or threatened Release or as a result of the breach or
contravention of any Environmental Law, and there is no basis for any such
proceeding or action. Neither the Company, nor any of the Subsidiaries has
received any Claim, summons or charge or any notice of any violation or Claim
under or alleging any contravention of any Environmental Law or any notice of
any intention to issue any Claim, summons, charge or notice of violation or
contravention of any Environmental Law.

(e)
No part of the Real Property or of any of the assets of the Company or any of
the Subsidiaries or of any property currently or formerly owned, leased, used or
occupied by or currently or formerly under the charge, management or control of
the Company or any of the Subsidiaries has ever been used by the Company or any
of the Subsidiaries as a landfill or for the disposal or deposit of waste. To
the knowledge of the Vendors, no part of the Real Property or of any of the
assets of the Company or any of the Subsidiaries or of any property currently or
formerly owned, leased, used or occupied by or currently or formerly under the
charge, management or control of the Company or any of the Subsidiaries has ever
been used by any other Person as a landfill or for the disposal or deposit of
waste.

(f)
To the knowledge of the Company, there are no rare or endangered species or any
other species that is considered extinct, endangered, rare or at risk or any
habitat of any such species present at the Real Property, any part of the Real
Property or any other of the assets of the Company or the Subsidiaries or any
property currently used or occupied by or under the charge, management or
control of the Company or any of the Subsidiaries.

(g)
A list of all material environmental audits, data and studies (including any
environmental site assessment or investigation) conducted in the last 3 years
relating to the Company and the Subsidiaries have been delivered or made
available to the Purchaser.

(h)
Any Hazardous Substances present at the Real Property are stored and used in
compliance with all Environmental Laws applicable to the Company and the Real
Property.

(i)
Except for the possibility that unintended or accidental discharges, spills or
other releases of Hazardous Substances stored, used or handled at the Real
Property may occur in the future, and except in circumstances where the
Hazardous Substances are not handled in accordance with generally accepted
industry standards (the Vendors hereby representing that they have no knowledge
of any such circumstances) the Hazardous Substances that are present in, on, at
or under any of the Real Property or any other assets of the Company or of any
of the Subsidiaries or any property currently or previously owned, leased, used
or occupied by or currently or formerly under the charge, management or control
of the Company (including underlying soils and substrata, vegetation, surface
water and groundwater): (i) could not reasonably be expected to result in or
form the basis for the issuance of an Environmental Order or a Claim under
Environmental Laws; (ii) do not exceed decommissioning or remediation standards
under any applicable Environmental Laws or standards published or administered
by the Governmental Authority responsible for establishing or applying such
standards; (iii) could not reasonably be expected to adversely effect, either
directly or indirectly, the natural, physical, chemical or biological quality of
the environment; or (iv) could not reasonably be expected to be injurious to the
health or safety of a person or be damaging to property or to plant or animal
life.

(j)
No property currently or previously owned, leased, used or occupied by or
currently or previously under the charge, management or control of the Company
or any of the Subsidiaries has been registered as a contaminated site under
Prince Edward Island’s Contaminated Site Registry.

(k)
No asbestos or asbestos containing materials or polychlorinated biphenyls (PCBs)
or equipment, waste or other materials containing polychlorinated biphenyls
(PCBs) are used, stored or otherwise present in, on or at any of the Real
Property or any other assets of the Company or any of the Subsidiaries.

(l)
There is no restriction on the use of any Real Property or any part of the Real
Property or on the operation or scope of the operations of the Company or any of
the Subsidiaries (except as may be apparent in any Environmental Approval listed
in Section 4.31 of the Disclosure Letter) imposed pursuant to any Environmental
Law, including any Environmental Order.

(m)
There are no unused or abandoned underground or above ground storage tanks on,
in, under or at the Real Property, and any above ground or underground storage
tanks formerly on, in, under or at the Real Property have been removed and any
affected soil, surface water or ground water has been remediated in compliance
with all Laws, including Environmental Laws. All above ground and underground
storage tanks currently on, in, under or at the Real Property have been
inspected, repaired, maintained and, if required, replaced in compliance with
all Laws, including Environmental Laws, and all generally accepted environmental
management practices.

(n)
The Vendors have no knowledge of any Hazardous Substance originating from any
neighbouring or adjoining properties that has migrated onto, into or under or is
migrating towards any of the Real Property or any other assets of the Company or
any of the Subsidiaries.

(o)
The Vendors have no knowledge of any Hazardous Substance originating from any of
the property currently or formerly owned, leased, used or occupied by or any
property currently or formerly under the charge, management or control of the
Company or the Subsidiaries or any other current or former assets of the Company
or of any of the Subsidiaries that has migrated onto, or is migrating towards
any other property or that has been Released into the Environment in
circumstances where it may move to any other property.

(p)
Neither the Company, nor any of the Subsidiaries has given or agreed to give, or
is a party to or bound by, any Contract, agreement, financial assurance,
guarantee, surety or indemnity in respect of Environmental Approvals,
Environmental Orders or any other matter relating to the Environment, other than
covenants in customer Contracts requiring the Company to be in compliance with
Environmental Laws.

4.32
Employment Matters

(a)
Section 4.32(a) of the Disclosure Letter sets forth a complete and accurate list
of the Employees, together with their titles, service dates and terms of
employment, including current wages, salaries or hourly rate of pay, benefits,
commissions and bonus (whether monetary or otherwise) or other material
compensation paid since the beginning of the most recently completed fiscal year
(including the date of payment) or payable to each such Employee and the date
upon which each such term of employment became effective. Section 4.33(a) of the
Disclosure Letter sets forth a description of the vacation entitlement policies
of the Company. Section 4.32(a) of the Disclosure Letter also lists Employees on
inactive status, including lay-off, short-term disability leave, long-term
disability leave, pregnancy and parental leave or other extended absences, or
receiving benefits pursuant to workers’ compensation legislation, and specifies
the last date of active employment, the reason for the absence and the expected
date of return of each such Employee.

(b)
A standard form of the Company’s employment contract is included in Section
4.32(b) of the Disclosure Letter. Each of the Employees has signed such standard
form employment contract, or another employment contract that is substantially
the same and not materially less favourable to the Company, other than as
disclosed in Section 4.32(b) of the Disclosure Letter. Except for those
Employment Contracts listed in Section 4.32(b) of the Disclosure Letter, there
are no Employment Contracts that are not terminable on the giving of reasonable
notice in accordance with applicable Law, nor are there any Employment Contracts
providing for cash, other compensation, benefits or contingent rights on
Closing. To the knowledge of the Vendors, no executive employed by the Company
or any of the Subsidiaries has any plans to terminate his or her employment in
the next 3 years.

(c)
Standard form confidentiality agreements of the Company are included in Section
4.32(c) of the Disclosure Letter. Each of the Employee’s has signed one of such
standard form confidentiality agreements, or another confidentiality agreement
that is substantially the same and not materially less favourable to the
Company, other than as disclosed in Section of 4.32(c) the Disclosure Letter.

(d)
There are no Claims, pending Claims nor, to the knowledge of the Vendors,
threatened Claims pursuant to any Laws relating to the Employees or former
employees, including employment standards, human rights, labour relations,
occupational health and safety, workers’ compensation, or pay equity. To the
knowledge of the Vendors, nothing has occurred that might lead to a Claim under
any such Laws. There are no outstanding decisions, Orders or settlements or
pending settlements relating to the Employees that place any obligation upon the
Company or any of the Subsidiaries to do or refrain from doing any act.

(e)
All current assessments under workers’ compensation legislation in relation to
the Company and the Subsidiaries and all of its contractors and subcontractors
have been paid or accrued. Neither the Company nor any of the Subsidiaries has
been or is subject to any additional or penalty assessment under such
legislation that has not been paid or has been given notice of any audit. The
Company’s and the Subsidiaries' accident cost experience is such that there are
no pending nor, to the knowledge of the Company, potential assessments,
experience rating changes or Claims that could adversely affect the Company’s or
any of the Subsidiaries' premium payments or accident cost experience or result
in any additional payments in connection with the Company or any of the
Subsidiaries.

(f)
The Company has made available to the Purchaser for review all inspection
reports, workplace audits or written equivalent, made under any occupational
health and safety legislation that relate to the Company and the Subsidiaries
for the last 3 years. There are no outstanding inspection Orders or written
equivalent made under any occupational health and safety legislation that relate
to the Company and the Subsidiaries. There have been no fatal or critical
accidents in the last three years. To the knowledge of the Vendors, there are no
materials present in the assets owned or used by the Company or any of the
Subsidiaries, or conditions present in the businesses conducted by the Company
or any of the Subsidiaries, exposure to which could result in a disease caused
by employment or peculiar to or characteristic of such materials or conditions
or characteristic of a particular industrial process, trade or occupation,
including all occupational diseases, other than those materials used in the
ordinary course of business for which monitoring controls and appropriate
standard operating procedures apply. The Company and the Subsidiaries have
complied in all respects with any Orders issued under any occupational health
and safety legislation. There are no appeals of any Orders under any
occupational health and safety legislation against the Company or any of the
Subsidiaries that are currently outstanding.

4.33 
Collective Agreements

None of the Company, the Subsidiaries or any Employee is a party to any
collective agreement with any union. There are no outstanding or threatened
labour board proceedings of any kind, including any proceedings which could
result in certification of a trade union as bargaining agent for Employees, and
there have not been any such proceedings within the last two years. There are no
threatened or apparent union organizing activities involving any Employees.
Neither the Company, nor any of the Subsidiaries has any serious labour problems
that might lead to an interruption in the operations at any location.
4.34
Pension and Other Benefit Plans

(a)
Section 4.34 of the Disclosure Letter sets forth a complete list of the Benefit
Plans. No Benefit Plans are Multi-Employer Plans.

(b)
Current and complete copies of all written Benefit Plans as amended to date or,
where oral, written summaries of the terms thereof, and all booklets and
communications concerning the Benefit Plans that have been provided to persons
entitled to benefits under the Benefit Plans have been delivered or made
available to the Purchaser together with copies of all material documents
relating to the Benefit Plans, including all trust agreements, insurance
policies, actuarial valuations, financial statements and all annual information
returns or other returns filed with, and significant correspondence with, any
Governmental Authority within the last three years in respect of the Benefit
Plans.

(c)
Each Benefit Plan is, and has been, established, registered, amended, funded,
administered and invested in compliance with the terms of such Benefit Plan
(including the terms of any documents in respect of such Benefit Plan), and all
Laws, as applicable. Neither the Company, nor any of the Subsidiaries has
received, in the last three years, any notice from any Person questioning or
challenging such compliance, and the Vendors have no knowledge of any such
notice beyond the last three years. There is no investigation by a Governmental
Authority or Claim (other than routine claims for payment of benefits) pending
or, to the knowledge of the Vendors, threatened involving any Benefit Plan or
their assets, and no facts exist that could reasonably be expected to give rise
to any such investigation or Claim (other than routine claims for payment of
benefits).

(d)
Except as disclosed in Section 4.34 of the Disclosure Letter, neither the
Company, nor any of the Subsidiaries have any formal plan or has made any
promise or commitment, whether legally binding or not, to create any additional
Benefit Plan or to improve or change the benefits provided under any Benefit
Plan.

(e)
None of the Benefit Plans provide for benefit increases or the acceleration of,
or an increase in, securing or funding obligations that are contingent upon or
will be triggered by the entering into of this Agreement or the completion of
the transactions contemplated in this Agreement.

(f)
All employer and employee payments, contributions and premiums required to be
remitted, paid to or in respect of each Benefit Plan have been paid or remitted
in a timely fashion in accordance with its terms and all Laws.

(g)
No event has occurred respecting any Pension Plan that would entitle any Person
(without the consent of the Company) to wind up or terminate any Pension Plan,
in whole or in part, or would cause any Governmental Authority to revoke the
registration of any Pension Plan. Where any Pension Plan has been partially or
fully wound up or terminated, all assets, including any surplus, attributable to
such partial or full wind-up or termination have been fully distributed in
accordance with all Laws or where such distribution of assets is pending, the
amount of the surplus attributable to such partial or full wind-up or
termination together with the date as of which such amount is determined is
disclosed in Section 4.34 of the Disclosure Letter.

(h)
Except for a deficiency set out in Section 4.34 of the Disclosure Letter, there
is no Pension Plan Unfunded Liability.

(i)
There are no entities other than the Company and the Subsidiaries participating
in any Benefit Plan. No Benefit Plan provides benefits to Legacy Benefit Plan
Members, and the Company has no liability, contingent liability or obligation to
provide employee benefits or benefits beyond retirement or other termination of
service to Legacy Benefit Plan Members.

(j)
All data necessary to administer each Benefit Plan is in the possession of the
Company and the Subsidiaries or its agent and is in a form that is sufficient
for the proper administration of the Benefit Plan in accordance with its terms
and all Laws, and such data is complete and correct.

(k)
Except as disclosed in Section 4.34 of the Disclosure Letter, none of the
Benefit Plans, other than the Pension Plans, provide benefits beyond retirement
or other termination of service to Employees or former employees or to the
beneficiaries or dependants of such employees and where there are such Benefit
Plans disclosed in Section 4.34 of the Disclosure Letter, each such Benefit Plan
may be amended or terminated at any time without incurring any liability
thereunder other than in respect of Claims incurred prior to such amendment or
termination.

(l)
None of the Benefit Plans, or any insurance Contract relating thereto, require
or permit a retroactive increase in premiums or payments, or require additional
premiums or payments on termination of the Benefit Plan or any insurance
Contract relating thereto.

4.35
Personal Information

Except as disclosed in Section 4.35 of the Disclosure Letter:
(a)
the Company and each of the Subsidiaries, to the extent required by Law, has a
written privacy policy that governs the collection, use and disclosure of
Personal Information, and the Company is in compliance with such privacy policy;
and

(b)
to the extent required by Law, all required consents to the collection, use or
disclosure of Personal Information in connection with the conduct of the
Company’s and Subsidiaries' businesses (including disclosure to Affiliates of
the Company or any of the Subsidiaries) have been obtained.

4.36
Insurance

Each of the Company and the Subsidiaries maintains such policies of insurance,
issued by responsible insurers, as are appropriate to its operations, property
and assets, in such amounts and against such risks as are customarily carried
and insured against by owners of comparable businesses, properties and assets.
All such policies of insurance are in full force and effect, the Company or any
of the Subsidiaries is not in default, as to the payment of premiums or
otherwise, under the terms of any such policy, and the Company and each of the
Subsidiaries is otherwise in compliance with the terms and conditions of all
such policies. Neither the Company nor any of the Subsidiaries has received any
written notice of cancellation of, premium increase with respect to, or
alteration of coverage under, any of its insurance policies. There are no claims
related to the business of the Company or any of the Subsidiaries pending under
any of the insurance policies as to which coverage has been questioned, denied
or disputed or in respect of which there is an outstanding reservation of
rights. Section 4.36 of the Disclosure Letter sets forth (i) a complete list of
all policies of insurance that the Company and each of the Subsidiaries
maintains and the particulars of such policies, including the name of the
insurer, the risk insured against, the amount of coverage and the amount of any
deductible and a summary of all claims under each such policy for the past five
years; (ii) details of any self-insurance arrangements by or affecting the
Company or any of the Subsidiaries, including any reserves established
thereunder; and (iii) details of any insurance coverage provided to third
parties and details of the policies under which such coverage is provided. The
Company has made available true and complete copies of all insurance policies
listed on Section 4.36 of the Disclosure Letter.
4.37
Material Contracts

Section 4.37 of the Disclosure Letter sets forth a complete list of the Material
Contracts which are all in full force and effect unamended and there are no
outstanding defaults (or events that would constitute a default with the passage
of time or giving of notice or both) under any such Material Contract on the
part of the Company or any of the Subsidiaries, or on the part of any other
party to such Material Contracts. Each of the Company and the Subsidiaries has
the capacity, including the necessary personnel and equipment, to perform all
its obligations under the Material Contracts. Except as disclosed in Section
4.37 of the Disclosure Letter, no consent is required nor is any notice required
to be given under any Material Contract by any Person in connection with the
completion of the transaction contemplated by this Agreement in order to
maintain all rights of the Company or any of the Subsidiaries under such
Material Contract. The completion of the transactions contemplated by this
Agreement will not result in any default under any such Material Contract nor
afford any Person the right to terminate any such Material Contract, nor will
the completion of such transactions result in any additional or more onerous
obligation on the Company or any of the Subsidiaries under any such Material
Contract. True and complete copies of all Material Contracts have been made
available to the Purchaser.
4.38
Litigation

There are no Claims, investigations or other proceedings, including appeals and
applications for review, in progress, or, to the knowledge of the Vendors,
pending or threatened against or relating to the Company or any of the
Subsidiaries before any Governmental Authority, that, if determined adversely to
the Company or any of the Subsidiaries, would:
(a)
have a Material Adverse Effect;

(b)
enjoin, restrict or prohibit the transfer of all or any part of the Purchased
Shares as contemplated by this Agreement; or

(c)
delay, restrict or prevent the Vendors or the Company or any of the Subsidiaries
from fulfilling any of their obligations set out in this Agreement or arising
from this Agreement,

and neither the Vendors nor the Company have any knowledge of any existing
ground on which any such action, suit, Claim, litigation or proceeding might be
commenced with any reasonable likelihood of success. Except as disclosed in
Section 4.38 of the Disclosure Letter, there is no judgment, decree, injunction,
rule or Order of any Governmental Authority or arbitrator outstanding against
the Company or any of the Subsidiaries. Copies of all of the audit response
letters from all counsel to the Company and the Subsidiaries for the last five
(5) years have been made available to the Purchaser. Except as set out in
Section 4.38 of the Disclosure Letter and matters relating to workers’
compensation that have been made available, neither the Company, nor any of the
Subsidiaries has undergone during the last three years, or is currently
undergoing, any audit, review, inspection, investigation or examination of
records by a Governmental Authority relating to the businesses of the Company or
the Subsidiaries.
4.39
Tax Matters

Except as specifically disclosed in Section 4.39 of the Disclosure Letter:
(a)
During the last 7 years, each of the Company and the Subsidiaries has duly and
timely made or prepared all Tax Returns required to be made or prepared by it,
has duly and timely filed all Tax Returns required to be filed by it with the
appropriate Governmental Authority and has duly, completely and correctly
reported all income and all other amounts and information required to be
reported thereon.

(b)
Each of the Company and the Subsidiaries has duly and timely paid all Taxes,
including all instalments on account of Taxes for the current year, that are due
and payable by it whether or not assessed by the appropriate Governmental
Authority. Provision has been made on the Balance Sheet for amounts at least
equal to the amount of all Taxes owing by the Company that were not yet due and
payable by the date of the Balance Sheet and that relate to periods ending on or
prior to the date of the Balance Sheet.

(c)
Neither the Company, nor any of the Subsidiaries has requested, offered to enter
into or entered into any agreement or other arrangement, or executed any waiver,
providing for any extension of time within which (i) to file any Tax Return
covering any Taxes for which the Company is or may be liable; (ii) to file any
elections, designations or similar filings relating to Taxes for which the
Company or any of the Subsidiaries is or may be liable; (iii) the Company or any
of the Subsidiaries is required to pay or remit any Taxes or amounts on account
of Taxes; or (iv) any Governmental Authority may assess or collect Taxes for
which the Company or any of the Subsidiaries is or may be liable.

(d)
Other than those agreements and arrangements described in Section 4.39 of the
Disclosure Letter, the Company has not made, prepared or filed any elections,
designations or similar filings relating to Taxes or entered into any agreement
or other arrangement in respect of Taxes or Tax Returns that has effect for any
period ending after the Closing Date.

(e)
Except for a research and development tax credit claim for the fiscal year
ending on August 31, 2011, which is not yet due, all income, sales (including
goods and services, harmonized sales and provincial or territorial sales) and
capital tax liabilities of the Company have been assessed by the relevant
Governmental Authorities, and notices of assessment have been issued to the
Company and the Subsidiaries by the relevant Governmental Authorities for all
taxation years or periods ending prior to and including the taxation year or
period ended August 31, 2011.

(f)
There are no proceedings, investigations, audits or Claims now pending or
threatened against the Company or any of the Subsidiaries in respect of any
Taxes, and there are no matters under discussion, audit or appeal with any
Governmental Authority relating to Taxes.

(g)
Each of the Company and the Subsidiaries has duly and timely withheld all Taxes
and other amounts required by Law to be withheld by it (including Taxes and
other amounts 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 account or benefit
of any Person, including any Employee, officer or director and any non-resident
Person), and has duly and timely remitted to the appropriate Governmental
Authority such Taxes and other amounts required by Law to be remitted by it.

(h)
Each of the Company and the Subsidiaries has duly and timely collected all
amounts on account of any sales or transfer taxes, including goods and services,
harmonized sales and provincial or territorial sales taxes, required by Law to
be collected by it and has duly and timely remitted to the appropriate
Governmental Authority any such amounts required by Law to be remitted by it.

(i)
Except pursuant to this Agreement, as specifically disclosed in writing to the
Purchaser, or as described in Section 4.39 of the Disclosure Letter, for
purposes of the Income Tax Act (Canada) or any other applicable Tax statute, no
Person or group of Persons has ever acquired or had the right to acquire control
of the Company or any of the Subsidiaries.

(j)
None of sections 78, 80, 80.01, 80.02, 80.03 or 80.04 of the Income Tax Act
(Canada), or any equivalent provision of the Tax legislation of any province or
any other jurisdiction, have applied or will apply to the Company or any of the
Subsidiaries at any time in the last six years up to and including the Closing
Date.

(k)
Neither the Company, nor any of the Subsidiaries has acquired property from a
non-arm’s length Person, within the meaning of the Income Tax Act (Canada), for
consideration, the value of which is less than the fair market value of the
property acquired in circumstances that could subject it to a liability under
section 160 of the Income Tax Act (Canada).

(l)
Except as set out in Section 4.39(l) of the Disclosure Letter, for all
transactions between the Company or any of the Subsidiaries, and any
non-resident Person with whom the Company or any of the Subsidiaries was not
dealing at arm’s length during a taxation year commencing after 2005 and ending
on or before the Closing Date, the Company and the Subsidiaries have made or
obtained records or documents that meet the requirements of paragraphs 247(4)(a)
to (c) of the Income Tax Act (Canada).

(m)
The Company is duly registered under subdivision (d) of Division V of Part IX of
the Excise Tax Act (Canada) with respect to the goods and services tax and
harmonized sales tax.

(n)
The only reserves under the Income Tax Act (Canada) or any equivalent provincial
or territorial statute to be claimed by the Company for the taxation year ended
immediately prior to the acquisition of control by the Purchaser are disclosed
in Section 4.39 of the Disclosure Letter.

(o)
The Purchaser has been provided with copies of all Tax Returns filed in the last
7 years relating to the Taxes of the Company or any of the Subsidiaries.

(p)
More than fifty percent (50%) of the fair market value of the Shares is not
derived, and at no time during the sixty (60) month period preceding the Closing
Date was more than fifty percent (50%) of the fair market value of the Shares
derived, directly or indirectly from one or any combination of: (i) real or
immovable property situated in Canada; (ii) Canadian resource properties (within
the meaning of the Income Tax Act (Canada); (iii) timber resource properties
(within the meaning of the Income Tax Act (Canada)); or (iv) options in respect
of, or interests in, or for civil law rights in, property described in (i), (ii)
or (iii) above, whether or not the property exists. The Purchased Shares have
not been deemed to be taxable Canadian property (within the meaning of the
Income Tax Act (Canada)) under a provision of the Income Tax Act (Canada).

(q)
Neither the Company, nor any of the Subsidiaries has made an excessive eligible
dividend election, as that term is defined in the Income Tax Act (Canada),
except as described in Section 4.39 of the Disclosure Letter.

4.40
Books and Records

All Books and Records requested by the Purchaser have been delivered or made
available to the Purchaser. Such Books and Records fairly and correctly set out
and disclose in all material respects the financial position of the Company and
the Subsidiaries, and all material financial transactions relating to its
business have been accurately recorded in such Books and Records. Books and
Records stored on computer-related or other electronic media are appropriately
organized and indexed and no data conversions, translations or technology
upgrades are required before such data can be accessed, read, searched and used
by the Company’s or any of the Subsidiaries' current Information Technology.
4.41
Corporate Records

(a)
The letters patent and by-laws of the Company and the Subsidiaries, including
any and all amendments, have been delivered or made available to the Purchaser
and such letters patent and by-laws as so amended are in full force and effect
and no amendments are being made or are contemplated to be made to them.

(b)
The corporate records and minute books of the Company and the Subsidiaries have
been delivered or made available to the Purchaser. The minute books include
complete and accurate minutes of all meetings of the directors or shareholders
of the Company and the Subsidiaries held to date or resolutions passed by the
directors or shareholders on consent, since the date of its incorporation. The
share certificate book, register of shareholders, register of transfers and
register of directors for the Company and the Subsidiaries are complete and
accurate and have been made available to the Purchaser.

4.42
Trade Allowances

Except as disclosed in Section 4.42 of the Disclosure Letter, no customers of
the Company or any of the Subsidiaries are entitled to or customarily receive
discounts, allowances, rebates, credits, preferential terms, or similar
reductions in price or other trade terms arising from any agreements or
understandings (whether written or oral) with or concessions granted to any
customer. Except as described in Section 4.42 of the Disclosure Letter, all such
discounts, allowances, rebates, credits, preferential terms, or similar
reductions in price or other trade terms, including contra transactions, are at
the same levels as have been in existence for the three (3) immediately
preceding fiscal years and are consistent with industry practice. Section 4.42
of the Disclosure Letter also includes a summary of all marketing and pricing
policies, including promotions and trade allowances, that are currently in
effect or that have been in effect during any of the last three (3) years.
4.43
Third Party Consents

Section 4.43 of the Disclosure Letter sets forth a complete list of all
notifications, approvals and consents required to be obtained from third parties
by the Company or any of the Subsidiaries in connection with the execution,
delivery and performance of this Agreement or any other documents and agreements
to be delivered under this Agreement.
4.44
Powers of Attorney

Section 4.44 of the Disclosure Letter sets out a complete list of every
outstanding power of attorney granted by the Company or any of the Subsidiaries
and the names of all Persons who have been given the authority to act on behalf
of the Company or any of the Subsidiaries. Copies of all outstanding powers of
attorney granted by the Company or any of the Subsidiaries have been made
available to the Purchaser.
4.45
No Broker

The Vendors have carried on all negotiations relating to this Agreement and the
transactions contemplated in this Agreement directly and without intervention on
its behalf of any other party in such manner as to give rise to any valid claim
for a brokerage commission, finder’s fee or other like payment against the
Purchaser, the Company or any of the Subsidiaries.
4.46
Third Party Tangible Personal Property

All personal property owned or leased by customers of the Company that is
located or stored at the Real Property is in good condition, repair (and where
applicable) proper working order, and such assets have been used and maintained
properly and in accordance with the terms of any agreement between the Company
and such customers, and the Company maintains policies of insurance that will
cover any losses associated with such property.
4.47
Full Disclosure

No representation or warranty contained in this Agreement, and no statement
contained in the Disclosure Letter or any certificate, list, summary or other
disclosure document provided or to be provided to the Purchaser pursuant to this
Agreement or in connection with the transactions contemplated hereby contains or
will contain any untrue statement of a material fact, or omits or will omit to
state any material fact which is necessary in order to make the statements
contained herein not misleading.
ARTICLE 5    
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser and Questcor jointly and severally represent and warrant to the
Vendors the matters set out below and as of the Closing, as though made at the
Closing:
5.1
Status of the Purchaser

The Purchaser is a corporation existing under the laws of the Province of Prince
Edward Island.
5.2
Status of Questcor

Questcor is a corporation existing under the laws of the State of California.
5.3
Due Authorization and Enforceability of Obligations

Each of the Purchaser and Questcor have all necessary corporate power, authority
and capacity to enter into this Agreement and to carry out their obligations
under this Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action of each of the Purchaser and
Questcor. This Agreement constitutes, and each other agreement to be executed by
the Purchaser and Questcor in connection with the Closing will constitute, a
valid and binding obligation of the Purchaser and Questcor enforceable against
each of them in accordance with its terms.
5.4
Absence of Conflicts

Neither the Purchaser nor Questcor is a party to, bound or affected by or
subject to any:
(d)
indenture, mortgage, lease, agreement, obligation or instrument;

(e)
charter or by-law provision; or

(f)
Laws or Governmental Authorizations,

that would be violated, breached by, or under which default would occur or an
Encumbrance would be created as a result of the execution and delivery of, or
the performance of obligations under, this Agreement or any other agreement to
be entered into under the terms of this Agreement.
5.5
Regulatory Approvals

No approval, Order, consent of or filing with any Governmental Authority, other
than as required by applicable stock exchange rules and regulations or as
required by matters specific to the Company, is required on the part of the
Purchaser or Questcor in connection with the execution, delivery and performance
of this Agreement or any other documents and agreements to be delivered under
this Agreement or the performance of the Purchaser’s or Questcor’s obligations
under this Agreement or any other documents and agreements to be delivered under
this Agreement.
5.6
Investment Canada

The Purchaser is a “WTO investor” within the meaning of the Investment Canada
Act (Canada).
5.7
Litigation

There are no Claims, investigations or other proceedings, including appeals and
applications for review, in progress or, to the knowledge of the Purchaser or
Questcor, pending or threatened against or relating to the Purchaser or
Questcor, before any Governmental Authority that, if determined adversely to the
Purchaser or Questcor, would,
(d)
prevent the Purchaser from paying the Purchase Price to the Vendors or prevent
Questcor from complying with its guarantee set out in Section 9.9;

(e)
enjoin, restrict or prohibit the transfer of all or any part of the Purchased
Shares as contemplated by this Agreement; or

(f)
delay, restrict or prevent the Purchaser or Questcor from fulfilling any of its
obligations set out in this Agreement or arising from this Agreement,

and neither the Purchaser nor Questcor have any knowledge of any existing ground
on which any such action, suit, litigation or proceeding might be commenced with
any reasonable likelihood of success.
5.8
Financing

The Purchaser has or will have all funds on hand necessary to pay the Purchase
Price in accordance with terms of this Agreement.
5.9
No Broker

The Purchaser and Questcor have carried on all negotiations relating to this
Agreement and the transactions contemplated in this Agreement directly and
without the intervention on its behalf of any other party in such manner as to
give rise to any valid claim for a brokerage commission, finder’s fee or other
like payment.
ARTICLE 6    
NON-WAIVER; SURVIVAL
6.1
Non-Waiver

No investigations made by or on behalf of the Purchaser or Questcor at any time
have the effect of waiving, diminishing the scope of or otherwise affecting any
representation or warranty made by the Vendors or the Company in or pursuant to
this Agreement. No waiver of any condition or other provisions, in whole or in
part, constitutes a waiver of any other condition or provision (whether or not
similar), nor does such waiver constitute a continuing waiver unless otherwise
expressly provided.
6.2
Nature and Survival

All representations, warranties and covenants contained in this Agreement on the
part of each of the Parties survive:
(a)
the Closing; and

(b)
the payment of the consideration for the Purchased Shares,

in each case, for the same period of time during which an obligation to
indemnify exists pursuant to Article 11.
ARTICLE 7    
PURCHASER'S CONDITIONS PRECEDENT
The obligation of the Purchaser to complete the purchase of the Purchased Shares
under this Agreement is subject to the satisfaction of, or compliance with, at
or before the Closing Time, each of the following conditions (each of which is
acknowledged to be inserted for the exclusive benefit of the Purchaser and may
be waived in whole or in part).
7.1
Truth and Accuracy of Representations

All of the representations and warranties of the Vendors and the Company made in
or pursuant to this Agreement must be true and correct as at the Closing Time
and with the same effect as if made at and as of the Closing Time in all
material respects (except in the case of any representation or warranty that
includes a materiality qualification, which must be true and correct in all
respects) and the Purchaser must have received a certificate from a senior
officer of the Company at Closing confirming such truth and correctness of the
representations and warranties contained in this Agreement.
7.2
Performance of Obligations

The Vendors and the Company must have performed or complied with, in all
respects, all their obligations and covenants under this Agreement, and the
Purchaser must have received a certificate from a senior officer of the Company
confirming such performance or compliance.
7.3
Approvals

The Vendors and the Company must cooperate with the Purchaser and use all
reasonable efforts to obtain and diligently assist the Purchaser in obtaining
all necessary consents, approvals and authorizations under any applicable Law or
required pursuant to any Contract prior to Closing, including those consents,
approvals and authorizations set forth in Section 4.43 of the Disclosure Letter.
All consents and approvals required under the Contracts set out in Schedule 7.3
or by any Governmental Authority must have been obtained at or before the
Closing Date on terms acceptable to the Purchaser.
7.4
Encumbrances

The Purchaser must have received evidence satisfactory to it that all
Encumbrances other than Permitted Encumbrances have been discharged and that the
assets of the Company and the Subsidiaries are free and clear of all
Encumbrances other than Permitted Encumbrances.
7.5
No Proceedings

There shall be no Orders issued preventing, and no pending or threatened Claims,
or proceeding, judicial or administrative or investigation against the Company
or any of the Subsidiaries by any Governmental Authority, for the purpose of
enjoining, delaying, restricting or preventing the consummation of the
transactions contemplated by this Agreement or otherwise claiming that this
Agreement or the consummation of such transactions is improper or would give
rise to proceedings under any Laws.
7.6
Non-Competition

Each of the Vendors and Mr. Regis Duffy, in his personal capacity, must have
executed and delivered to the Purchaser a non-competition, non-solicitation and
confidentiality agreement dated as of Closing, substantially in the form
attached as Schedule 7.6, in order to restrict each of them and any of their
Affiliates from competing with the business of the Company, employing Employees
of the Company or disclosing confidential information for a period of five years
following the Closing.
7.7
Key Employees

Ron Keefe, Dale Zajicek and Gordon Rogers must have executed and delivered to
the Purchaser an employment agreement with the Company dated as of Closing,
substantially in the form attached as Schedule 7.7. In addition, the employees
who will participate as beneficiaries under the 2012 BV Employee Share Ownership
Trust shall sign new confidentiality and intellectual property assignment
agreements in a form satisfactory to the Purchaser, acting reasonably.
7.8
Conduct of Business After Closing

The Vendors must have executed and delivered to the Purchaser, a governance
document dated as of Closing in a form reasonably satisfactory to the Vendors
and the Purchaser in order to set forth the governance principles to be used to
govern the conduct of the business of the Company.
7.9
Opinion of Counsel for Vendors

Counsel for the Vendors, Stewart McKelvey, must have delivered to the Purchaser
an opinion dated the Closing Date, substantially in the form attached as
Schedule 7.9, which opinion may rely on certificates of one or more senior
officers of the Company as to factual matters and may rely on opinions of local
counsel with respect to matters governed by laws other than the laws of the
Province of Prince Edward Island.
7.10
Opinion of Counsel for Lauren Holdings Inc.

Counsel for the Lauren Holdings Inc. must have delivered to the Purchaser an
opinion dated the Closing Date, substantially in the form attached as Schedule
7.10, which opinion may rely on certificates of one or more senior officers of
Lauren Holdings Inc. as to factual matters and may rely on opinions of local
counsel with respect to matters governed by laws other than the laws of the
Province of Prince Edward Island
7.11
Receipt of Closing Documentation

All documentation relating to the due authorization and completion of the sale
and purchase of the Purchased Shares under this Agreement and all actions and
proceedings taken on or prior to Closing, in connection with the performance by
the Vendors of their obligations under this Agreement, must be satisfactory to
the Purchaser, acting reasonably, and the Purchaser must have received copies of
all such documentation or other evidence as it may reasonably request in order
to establish the consummation of the transactions contemplated in this Agreement
and the taking of all necessary proceedings in connection with such transactions
in compliance with these conditions, in form (as to certification or otherwise)
and substance satisfactory to the Purchaser, acting reasonably.
ARTICLE 8    
VENDORS' CONDITIONS PRECEDENT
The obligations of the Vendors to complete the sale of the Purchased Shares
under this Agreement are subject to the satisfaction or compliance with, at or
before the Closing Time, each of the following conditions (each of which is
acknowledged to be inserted for the exclusive joint benefit of the Vendors and
may be waived by the Vendors' Representative in whole or in part).
8.1
Truth and Accuracy of Representations of the Purchaser and Questcor at Closing
Time

All of the representations and warranties of the Purchaser and Questcor made in
or pursuant to this Agreement must be true and correct as at the Closing Time
and with the same effect as if made at and as of the Closing Time in all
material respects (except in the case of any representation or warranty that
includes a materiality qualification, which must be true and correct in all
respects), and the Vendors must have received a certificate from a senior
officer of the Purchaser at Closing confirming such truth and correctness of the
representations and warranties contained in this Agreement.
8.2
Performance of Obligations

The Purchaser must have performed or complied with, in all respects, all its
obligations and covenants under this Agreement, and a certificate from a senior
officer of the Purchaser must be provided to the Vendors confirming such
performance or compliance.
8.3
Key Employees

The Purchaser must have executed and delivered to the Vendors an employment
agreement with each of Ron Keefe, Dale Zajicek and Gordon Rogers dated as of
Closing, substantially in the form attached as Schedule 7.7.
8.4
Conduct of Business After Closing

The Purchaser must have executed and delivered to the Vendors, a governance
document dated as of Closing in a form reasonably satisfactory to the Vendors
and the Purchaser in order to set forth the governance principles to be used to
govern the conduct of the business of the Company.
8.5
Opinion of Counsel for Purchaser

Counsel for the Purchaser in Prince Edward Island must have delivered to the
Vendors an opinion dated the Closing Date, substantially in the form attached as
Schedule 8.5.
8.6
Approvals

All consents, approvals and authorizations set out in Schedule 7.3 shall have
been obtained prior to Closing.
8.7
No Proceedings

There shall be no Orders issued preventing the consummation of the transactions
contemplated by this Agreement.
8.8
Receipt of Closing Documentation

All documentation relating to the due authorization and completion of the sale
and purchase of the Purchased Shares under this Agreement and all actions and
proceedings taken on or prior to Closing, in connection with the performance by
the Purchaser of its obligations under this Agreement, must be satisfactory to
the Vendors, acting reasonably, and the Vendors must have received copies of all
such documentation, cheques or wire transfers or other evidence as they may
reasonably request in order to establish the consummation of the transactions
contemplated in this Agreement and the taking of all necessary proceedings in
connection with such transactions in compliance with these conditions, in form
(certification or otherwise) and substance satisfactory to the Vendors.
ARTICLE 9    
OTHER COVENANTS OF THE PARTIES
9.1
Interim Activities

Except as permitted or contemplated by this Agreement, prior to the Closing the
Vendors shall cause the Company and the Subsidiaries not to, and neither the
Company, nor any of the Subsidiaries shall, without the prior written approval
of the Purchaser, not to be unreasonably withheld:
(a)
(i) except for immaterial compensation and benefit increases in the ordinary
course of business consistent with past practice, increase the compensation or
benefits payable or provided by the Company or any of the Subsidiaries to any
individual; or (ii) except in the ordinary course of business, enter into or
commit itself to any new employment, management, severance or consulting
Contract with any Person, other than Contracts that can be terminated without
additional payment in less than 30 days;

(b)
issue any communication to Employees (including general communications relating
to benefits and compensation) without the prior written approval of the
Purchaser (which will not be unreasonably delayed or withheld), except for
communications that are in the ordinary course of business and do not relate to
the transactions contemplated in this Agreement;

(c)
create any additional benefit plans which would be considered to be a Benefit
Plan once created or to improve or change the benefits provided under any
Benefit Plan;

(d)
permit or allow any assets or properties of the Company or any of the
Subsidiaries to be subject to any material Encumbrance, other than a Permitted
Encumbrance;

(e)
(i) except for any Improvements under construction or projects previously
disclosed to the Purchaser, make any capital expenditure or any commitment to
make any capital expenditure, except for such expenditures or commitments made
in the ordinary course of business, (ii) acquire any securities of another
Person, (iii) acquire any assets of another Person incident to the acquisition
of a business, or (iv) organize any subsidiary or acquire any interest in
another Person, whether by merger, consolidation, joint venture, or acquisition
of securities or assets or similar transactions, other than purchases of assets
in the ordinary course of business consistent with past practices;

(f)
except in the ordinary course of business, enter into any Material Contract or
any other Contract with a non-cancellable term in excess of twelve months;

(g)
sell, lease, license, transfer or otherwise dispose of, or acquire or agree to
acquire, any material assets, except in the ordinary course of business;

(h)
incur any indebtedness, other than normal fluctuations in the Company’s
operating credit in the ordinary course of business, unless such indebtedness
will be paid off prior to the Closing, or assume, guarantee, endorse or
otherwise become responsible for obligations of any other Person, or make any
loans or advances to any Person;

(i)
change in any material respect any accounting or tax principles, methods or
policies or change or modify its credit, collection or payment policies,
procedures or practices;

(j)
settle any material Claim or waive any material rights or Claims;

(k)
issue or commit to issue any shares of capital stock or options of the Company
or any of the Subsidiaries, or grant any stock appreciation rights or grant any
Person any right to acquire any shares of capital stock or options of the
Company or any of the Subsidiaries;

(l)
amend its charter or bylaws or comparable organizational documents;

(m)
merge or amalgamate with any other Person or permit any other Person to merge
into it, consolidate with any other Person, or adopt a plan of arrangement,
liquidation or dissolution;

(n)
take any action that is intended or may reasonably be expected to result in any
of its representations and warranties set forth in this Agreement being or
becoming untrue in any material respect at any time prior to the Closing Date,
or in any of the conditions set forth in Article 7 and Article 8 not being
satisfied in any material respect or in a material violation of any provision of
this Agreement, except, in each case, as may be required by Law;

(o)
change any annual tax accounting period, adopt or change any method of tax
accounting, make or change any election, file any amended Tax Return, enter into
any closing agreement, settle any tax Claim or assessment of or relating to the
Company or any of the Subsidiaries, surrender any right to claim a refund of
Taxes, or consent to any extension or waiver of the limitation period applicable
to any tax Claim or assessment upon or relating to the Company, unless required
by applicable Law;

(p)
engage in any transaction not at arm's length, or make any payment or
distribution to any Affiliate (other than payments for services to an officer,
director, manager or Employee of the Company or any of the Subsidiaries pursuant
to existing arrangements); or

(q)
authorize, commit or agree to take any of the foregoing actions.

9.2
Access for Investigation

(a)
The Company and the Vendors shall permit the Purchaser and its representatives,
between the date of this Agreement and the Closing Time, to have access during
normal business hours to (i) the Real Property; (ii) all the Books and Records;
and (iii) the properties and assets used by the Employees, the Company and the
Subsidiaries. The Company and the Vendors shall furnish to the Purchaser copies
of Books and Records as the Purchaser shall from time to time reasonably request
to enable confirmation of the matters warranted in Article 4. Without limiting
the generality of the foregoing, the accounting representatives of the Purchaser
shall be afforded ample opportunity to make a full investigation of all aspects
of the financial affairs of the Vendor in connection with the affairs of the
Company or any of the Subsidiaries. The Purchaser shall have the right to have
the Real Property, the Tangible Personal Property and the Information Technology
inspected and tested by the Purchaser’s representatives. The Vendors shall
cooperate and assist, to the extent reasonably requested by the Purchaser, with
the Purchaser’s investigation of the property, assets, undertaking and financial
condition of the Company or any of the Subsidiaries. The Purchaser’s rights of
access shall be exercised in a manner that does not unreasonably interfere with
the operations of the Company or the Subsidiaries.

(b)
Notwithstanding Section 9.2(a), the Company, the Subsidiaries and the Vendors
shall not be required to disclose any information, records, files or other data
to the Purchaser where prohibited by any Laws. If any consent of any Person or
Governmental Authority is required to permit the Vendor to release any
information to the Purchaser, the Vendors shall promptly inform the Purchaser
thereof and shall make all reasonable efforts to obtain such consent as soon as
possible.

(c)
The Company and the Vendors shall forthwith, upon request by the Purchaser or
Purchaser’s counsel, execute and deliver to the Purchaser all necessary consents
to permit the Purchaser to have inspections made and have existing records
released to the Purchaser by the municipal building and zoning department, fire
department, public works, environmental agencies, the elevator inspections
branch of the provincial or territorial department of labour and other
appropriate authorities as the Purchaser may consider advisable between the date
of this Agreement and Closing. Such consents shall authorize and direct the
release of information to the Purchaser.

9.3
Actions to Satisfy Closing Conditions

Each of the Parties will take all such actions as are within its power to
control, and use reasonable commercial efforts to cause other actions to be
taken which are not within its power to control, so as to ensure compliance with
each of the conditions and covenants set forth in Article 7, Article 8 and
Article 9, which are for the benefit of any other Party, provided that the
Parties shall not be required to dispose of or make any changes to its business,
the business of any of its Affiliates or the business of the Company or any of
the Subsidiaries, or expense any material amounts or incur any other obligation
in order comply with this Section.
9.4
Notice of Untrue Representation or Warranty

The Vendors and the Company shall notify the Purchaser, and the Purchaser shall
notify the Vendors’ Representative and the Company, promptly upon any
representation or warranty made by it contained in this Agreement becoming
incorrect prior to Closing, and for the purposes of this Section 9.4, unless
otherwise specified, each representation and warranty shall be deemed to be
given at and as of all times from the date of this Agreement to the Closing
Date. Any such notice shall set out particulars of the untrue or incorrect
representation or warranty and details of any actions being taken by the Vendor,
the Company or the Purchaser, as the case may be, to rectify the incorrectness.
No such notice will relieve either Party of any right or remedy provided for in
this Agreement.
9.5
Stub Period Returns

The Purchaser will cause each of the Company and the Subsidiaries to duly and
timely make or prepare all Tax Returns required to be made or prepared by it and
to duly and timely file all Tax Returns required to be filed by it for any
period that ends on or before the Closing Date and for which Tax Returns have
not been filed as of such date. The Purchaser may cause the Company or any of
its Subsidiaries to make the election referred to in subsection 256(9) of the
Income Tax Act (Canada), and comparable provisions of applicable provincial or
territorial legislation, and to file such election for the Company’s and the
Subsidiaries' taxation year ending immediately before the Closing Time. The
Vendors and the Purchaser will cooperate fully with each other and make
available to each other in a timely fashion such data and other information as
may reasonably be required for the preparation of any Tax Return of the Company
and the Subsidiaries for a period ending on, prior to or including the Closing
Date and will preserve such data and other information until the expiration of
any applicable limitation period under any applicable law with respect to Taxes.
9.6
Exclusive Dealing

From the date of this Agreement to Closing, the Vendors and the Company shall
not directly or indirectly, solicit, initiate or encourage any inquiries or
proposals from, discuss or negotiate with, provide any confidential information
to, or consider the merits of other inquiries or proposals from, or enter into
any Contract with, any Person (other than the Purchaser or Questcor) relating to
any transaction involving: (a) the sale of any shares of the Company or any of
the Subsidiaries; (b) the sale of the business or any assets of the Company or
any of the Subsidiaries other than in the ordinary course; or (c) an
amalgamation, merger or consolidation of the Company or any of the Subsidiaries
with any body corporate. The Company and/or the Vendors shall promptly notify
the Purchaser of the existence of any written proposal or inquiry received after
the date of execution of this Agreement by the Company or anyone acting on its
behalf, the Person that submitted such written proposal or inquiry and the terms
thereof.
9.7
Submission to Jurisdiction

(a)
Each Party submits to the exclusive jurisdiction of any Ontario courts sitting
in Toronto in any action, application, reference or other proceeding arising out
of or relating to this Agreement, or the agreements contemplated within this
Agreement and consents to all claims in respect of any such action, application,
reference or other proceeding being heard and determined in such Ontario courts.

(b)
The Parties will not raise any objection to the venue of any action,
application, reference or other proceeding arising out of or relating to this
Agreement in the Ontario Courts sitting in Toronto, including the objection that
the proceedings have been brought in an inconvenient forum.

(c)
Each of the Purchaser and Questcor irrevocably appoints Osler, Hoskin & Harcourt
LLP (the “Purchaser Process Agent”), with an office as of the date of this
Agreement at 340 Albert Street, Suite 1900, Ottawa, Ontario, for the attention
of Craig Wright, as its agent to receive on behalf of it and its property,
service of any documents by which any action, application, reference or other
proceeding arising out of or relating to this Agreement is commenced. Such
service may be made by delivering a copy of such documents to the Purchaser or
Questcor in care of the Purchaser Process Agent at the Purchaser Process Agent’s
above address, and each of the Purchaser and Questcor irrevocably authorizes and
directs the Purchaser Process Agent to accept such service on its behalf.

(d)
Each of the Vendors and the Vendors' Representative irrevocably appoint Stewart
McKelvey (the “Vendor Process Agent”), with an office as of the date of this
Agreement at 65 Grafton Street, Charlottetown, Prince Edward Island, for the
attention of Paul Kiley, as its agent to receive on behalf of each of them and
their respective property, service of any documents by which any action,
application, reference or other proceeding arising out of or relating to this
Agreement is commenced. Such service may be made by delivering a copy of such
documents to the Vendors or the Vendors' Representative in care of the Vendor
Process Agent at the Vendor Process Agent’s above address, and the Vendors and
the Vendors' Representative irrevocably authorize and direct the Vendor Process
Agent to accept such service on its behalf.

(e)
A final judgment in any such action, application or proceeding is conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner specified by law.

9.8
Shareholder Agreements

Each of the Vendors and the Company agrees that the Shareholders Agreement dated
effective December 31, 2011 between the Company, Dale Zajicek, Gordon Rogers,
Ron Keefe, and Lauren Holdings Inc. and the Shareholders Agreement dated
effective December 31, 2011 between the Company and the Vendors (together, the
“Shareholders Agreements”) are hereby terminated effective immediately prior to
the Closing without the necessity of any further action by any of the Vendors or
the Company and the parties agree that upon Closing each of the Shareholders
Agreements shall be of no further force or effect.
9.9
Questcor Guarantee

(a)
Questcor, hereby unconditionally and irrevocably guarantees to the Vendors
payment and performance by the Purchaser of its obligations in respect of the
Purchase Price (including without limitation any payment owing pursuant to
Section 3.3) (the “Guaranteed Obligations”). The liability of Questcor by reason
of this Section 9.9 is primary, and the Vendors shall not be required to make
any demand on the Purchaser for performance of any of its obligations under this
Agreement, nor to exhaust any legal, contractual or equitable remedies against
the Purchaser, prior to proceeding against Questcor.

(b)
Questcor shall indemnify and save the Vendors harmless from and against any
losses which may arise by virtue of any of the Guaranteed Obligations being or
becoming for any reason whatsoever in whole or in part:

(i)
void, voidable, ultra vires, illegal, invalid, ineffective or otherwise
unenforceable by the Vendors in accordance with its terms; or

(ii)
released or discharged by operation of Law.

(c)
The Purchaser and Questcor acknowledge that the benefit of the guarantee
contained in this Section is for the exclusive benefit of the Vendors and the
Vendors, in their sole and absolute discretion, may claim under this guarantee
or decline to claim under this guarantee with respect to any Guaranteed
Obligation.

(d)
Questcor shall cause any successor to execute any and all documents such that
any such successor would be bound hereunder.

(e)
The liability of Questcor hereunder shall be absolute and unconditional
irrespective of:

(i)
any change or amendment to this Agreement or a change in the name or objects of
the Purchaser, provided that if this Agreement is amended in any manner, this
guarantee shall only apply to this Agreement, as amended;

(ii)
any change in the time, manner or place of payment of, amount or amounts owing
by the Purchaser hereunder, or in any other term of, or any other amendment or
waiver of or any consent to departure from this Agreement; or

(iii)
to the extent permitted by applicable law, any other circumstances which might
otherwise constitute a defence available to, or a discharge of, Questcor in
respect of the Guaranteed Obligations, or of Questcor in respect of this
Agreement.

ARTICLE 10    
TERMINATION
10.1
Termination

(d)
This Agreement may, by notice in writing given by the Vendors or the Purchaser
at or prior to the Closing, be terminated:

(i)
by mutual agreement of the Vendors and the Purchaser;

(ii)
by either the Vendors or the Purchaser if the Closing has not occurred by the
end of the date that is 60 days after execution of this Agreement, provided that
the Vendors or the Purchaser may not terminate this Agreement under this Section
10.1(ii). if it has failed to perform any one or more of its material
obligations or covenants under this Agreement required to be performed at or
prior to the Closing and the Closing has not occurred because of such failure;

(iii)
by either the Vendors or the Purchaser if there has been a material breach of
any provision of this Agreement by the other Party and such breach has not been
waived by the non-breaching Party or, provided such breach is reasonably capable
of being cured, such breach has not been cured within 15 days following notice
of such breach by the non-breaching Party; or

(iv)
by the Purchaser if there is an occurrence of any event which has a Material
Adverse Effect on the assets, business, operations or prospects of the Company
and the Subsidiaries taken as a whole.

ARTICLE 11    
INDEMNIFICATION
11.1
Indemnification by the Vendors

(g)
The Vendors will jointly and severally indemnify and save harmless the
Purchaser, Questcor, and each of their directors and officers (collectively
referred to as the “Purchaser Indemnified Parties”) from and against all Claims,
whether or not arising due to third party Claims, that may be made or brought
against the Purchaser Indemnified Parties, or that they may suffer or incur,
directly or indirectly, as a result of or in connection with or relating to:

(i)
any non-fulfilment or breach of any covenant or agreement on the part of the
Vendors or the Company contained in this Agreement or in any certificate or
other document furnished by or on behalf of the Vendors pursuant to this
Agreement;

(ii)
any misrepresentation or any incorrectness in or breach of any representation or
warranty of the Vendors or the Company contained in this Agreement or in any
certificate or other document furnished by or on behalf of the Vendors or the
Company pursuant to this Agreement disregarding for the purpose of this Section
11.1(a)(ii) any materiality or Material Adverse Effect qualification contained
in any such representation or warranty;

(iii)
liability to third Persons respecting products manufactured or sold, or services
provided, by the Company or any of the Subsidiaries prior to the Closing Date,
provided that in respect of liability for products manufactured or sold prior to
the Closing Date, other than Claims relating to the return of products based on
product or manufacturing warranties, the Company has maintained product
liability insurance that is commercially reasonable in the circumstances;

(iv)
any liability of the Company under the asset purchase agreement between the
Company and Genzyme Corporation dated November 2, 2007;

(v)
any liability for Taxes in respect of any taxation year or other period ended
prior to the Closing Date, or any portion of a taxation year or other period up
to and including the Closing Date, for which no adequate reserve has been
provided and disclosed in the Balance Sheet; or

(vi)
the failure by the party identified in Schedule 11.1 (“Construction Party”) to
reimburse the Company in relation to the construction of the facility (the
“Facility”) as set out in the supply agreement dated July 9, 2010 between the
Construction Party and the Company and the agreement on payment of construction
costs between the Construction Party and the Company dated July 10, 2012
(together, the “Construction Agreements”), subject to the Purchaser first making
reasonable efforts to enforce the Company’s rights to collect such reimbursement
from the Construction Party. The Vendors acknowledge and agree that the Purchase
Price assumes that the Construction Party will reimburse the Company in full for
the construction of the Facility.

(h)
The Vendors’ obligations under Section 11.1(a) are subject to the following
limitations:

(iii)
subject to Sections 11.1(b)(ii) and 11.1(b)(iii), the obligations of the Vendors
under Sections 11.1(a) (ii) terminate on the second anniversary of the Closing
Date except with respect to bona fide Claims by a Purchaser Indemnified Party
set forth in written notices given by a Purchaser Indemnified Party to the
Vendors' Representative prior to such date;

(iv)
except with respect to bona fide Claims by a Purchaser Indemnified Party set
forth in written notices given by a Purchaser Indemnified Party to the Vendors'
Representative prior to the date described below, the obligations of the Vendors
under Section 11.1(a)(ii) in respect of any Claim relating to or affected by Tax
matters, including any Claim arising out of Section 4.39, for that particular
period, or under Section 11.1(a)(v) terminate on the date that is 90 days after
the relevant Governmental Authorities are no longer entitled to assess or
reassess liability for Taxes against the Company or any of the Subsidiaries for
that particular period, having regard, without limitation, to any waivers given
by the Company or any of the Subsidiaries in respect of any taxation year;

(v)
the obligations of the Vendors under Section 11.1(a) with respect to:

(A)
any Claims under Section 11.1(a)(i) or (a)(iv);

(B)
any Claims under Section 11.1(a)(iii) that relate to liability for products
manufactured or sold prior to the Closing Date, other than Claims relating to
the return of products based on product or manufacturing warranties;

(C)
any Claims based on any incorrectness in or breach of the representations and
warranties set out in Sections 4.1, 4.3, 4.4, 4.5, 4.6, 4.7, 4.18, or 4.30;

(D)
any Claims based on the absence of, or deficiency in, the title of the Vendors
to the Purchased Shares or the title of the Company or any of the Subsidiaries
to its assets;

(E)
any Claims based on intentional misrepresentation or fraud by the Vendors or any
Person acting for or on behalf of the Vendors,

terminate on the date that is the last day of the 15 year ultimate limitation
period;
(vi)
the obligations of the Vendors under both Section 11.1(a)(iii) relating to the
return of products based on product or manufacturing warranties or services
provided prior to the Closing Date and Section 11.1(a)(vi) will terminate on
December 31, 2015 except with respect to bona fide Claims by a Purchaser
Indemnified Party set forth in written notices given by a Purchaser Indemnified
Party to the Vendors' Representative prior to such date;

(vii)
for Claims made under Section 11.1(a)(ii),(iii), (iv), (v) or (vi) or Claims
made by the Purchaser or Questcor based on or with respect to the inaccuracy or
breach of any representation or warranty made by the Vendors or the Company
contained in this Agreement or contained in any document or certificate given to
carry out the transactions contemplated thereby the Vendors shall not be
required to pay any amount until the aggregate of all Claims exceeds $100,000
and upon the aggregate of all Claims exceeding $100,000 the Vendors shall be
required to pay the amount owing in respect of all of such Claims including the
$100,000, except that the foregoing limitation shall not apply to wilful
breaches or fraud.

(i)
Any Claim made under Section 11.1 is to first be satisfied by setting off the
amount of such Claim against any unpaid Earn-Out Amounts. To the extent that the
amount of the Claim exceeds the amount of any unpaid Earn-Out Amounts, the
Vendors will pay such amount to the Purchaser in cash.

11.2
Indemnification by the Purchaser and Questcor

(c)
The Purchaser and Questcor agree to indemnify and save harmless the Vendors from
and against all Claims, whether or not arising due to third party Claims, that
may be made or brought against any of the Vendors, or that they may suffer or
incur directly or indirectly, as a result of or in connection with or relating
to:

(i)
any non-fulfillment or breach of any covenant or agreement on the part of the
Purchaser or Questcor contained in this Agreement or in any certificate or other
document furnished by or on behalf of the Purchaser or Questcor pursuant to this
Agreement; or

(ii)
any misrepresentation or any incorrectness in or breach of any representation or
warranty of the Purchaser or Questcor contained in this Agreement or in any
certificate or other document furnished by or on behalf of the Purchaser or
Questcor pursuant to this Agreement.

(d)
The Purchaser’s obligations under Section 11.2(a) are subject to the following
limitations:

(i)
the obligations of the Purchaser and Questcor under Section 11.2(a)(ii)
terminate on the second anniversary of the Closing Date except with respect to
bona fide Claims by Vendors set forth in written notices given by the Vendors to
the Purchaser prior to such date;

(ii)
for Claims made under Section 11.2(a)(ii) or Claims made by the Vendors based on
or with respect to the inaccuracy or breach of any representation or warranty
made by Questcor or the Purchaser contained in this Agreement or contained in
any document or certificate given to carry out the transactions contemplated
thereby, the Purchaser and Questcor shall not be required to pay any amount
until the aggregate of all Claims exceeds $100,000 and upon the aggregate of all
Claims exceeding $100,000 the Purchaser and Questcor shall be required to pay
the amount owing in respect of all of such Claims including the $100,000.

(e)
Any obligation of the Purchaser to indemnify the Vendors as set forth in this
Article 11 is limited to the amount of $25,000,000 plus 50% of the Earn-Out
Amounts, excluding any such Claims based on fraud or wilful misconduct of the
Purchaser.

11.3
Indemnification Procedures for Third Party Claims

(a)
In the case of Claims made by a third party with respect to which
indemnification is sought, the party entitled to indemnification under this
Agreement (the “Indemnified Party”) will give prompt notice, and in any event
within 10 days, to the other party (the “Indemnifying Party”), which in the case
of notice to the Vendors shall be to the Vendors' Representative, of any such
Claims made upon it. If the Indemnified Party fails to give such notice, such
failure does not preclude the Indemnified Party from obtaining such
indemnification, but its right to indemnification may be reduced to the extent
that such delay prejudiced the defence of the Claim or increased the amount of
liability or cost of defense.

(b)
The Indemnifying Party may, by notice to the Indemnified Party given not later
than 30 days after receipt of the notice described in Section 11.3(a), assume
the control of the defence, compromise or settlement of the Claim, but only if
such assumption is, by its terms, without cost to the Indemnified Party and if
the Indemnifying Party acknowledges in writing the obligation of the
Indemnifying Party to indemnify the Indemnified Party in accordance with the
terms contained in this Section in respect of that Claim. Without limiting the
generality of the foregoing, the Vendors' Representative shall not have the
right to assume the control of any defence, compromise, or settlement of any
Claim if:

(iii)
the Purchaser determines in good faith that the Claim could have a Material
Adverse Effect; or

(iv)
the Claim involves Acthar or any proprietary products of Questcor or its
Affiliates in any respect.

(c)
Upon the assumption of control of any Claim by the Indemnifying Party as set out
in Section 11.3(b), the Indemnifying Party will diligently proceed with the
defence, compromise or settlement of the Claim at its sole expense, including if
necessary, employment of counsel and experts reasonably satisfactory to the
Indemnified Party and, in connection therewith, the Indemnified Party will
cooperate fully, but at the expense of the Indemnifying Party with respect to
any out-of-pocket expenses incurred, to make available to the Indemnifying Party
all pertinent information and witnesses under the Indemnified Party’s control,
make such assignments and take such other steps as in the opinion of counsel for
the Indemnifying Party are reasonably necessary to enable the Indemnifying Party
to conduct such defence. The Indemnified Party will also have the right to
participate in the negotiation, settlement or defence of any Claim at its own
expense. The Indemnifying Party will not settle any Claim without the prior
written consent of the Indemnified Party, such consent not to be unreasonably
withheld.

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

(e)
If the Indemnifying Party does not assume control of a Claim, the Indemnified
Party may make such settlement of the Claim as it determines, acting reasonably
and in good faith, and such settlement or any other final determination of the
Claim is binding upon the Indemnifying Party.

11.4
Remedies

The rights of indemnity in Section 11.1 and 11.2 are not prejudiced by the
exercise of a termination right contained in Article 10. The Purchaser,
Questcor, the Vendors and the Company acknowledge that the failure to comply
with a covenant or obligation contained in this Agreement may give rise to
irreparable injury to the other Parties inadequately compensable in damages.
Accordingly, in addition to seeking indemnification under Section 11.1 and any
other remedies otherwise available at Law, the Parties may also seek to enforce
the performance of this Agreement by injunction or specific performance upon
application to a court of competent jurisdiction without proof of actual damage
(and without requirement of posting a bond or other security). This Article 11
remains in full force and effect in all circumstances and is not terminated by
any breach (fundamental, negligent or otherwise) by any Party of its
representations, warranties or covenants under this Agreement or under any
Closing document or by any termination or rescission of this Agreement by any
Party.
11.5
Limitation on Liability

(f)
The amount of any damages which may be claimed by the Purchaser or Questcor or
any Purchaser Indemnified Party pursuant to a Claim made under this Agreement or
any agreement, certificate or other document given to carry out the transactions
contemplated hereby shall be calculated to be the cost or loss to the Purchaser
or Questcor or any Purchaser Indemnified Party after giving effect to:

(i)
any insurance proceeds actually received by the Company from the Company’s
insurance policies (and for greater certainty, not taking into account any
insurance policies of the Purchaser or Questcor) in relation to the matter which
is the subject of the Claim;

(ii)
the net present value of any related, determinable tax benefits realized, or
which will (with reasonable certainty) be realized within a five year period
following the date of incurring such cost or loss, by the Company or the
Purchaser or Questcor or any Purchaser Indemnified Party in relation to the
matter which is the subject of the Claim;

(iii)
the amount of any reduction in the Earn-Out Amounts that would otherwise have
been payable to the Vendors but for the Purchaser’s or Questcor’s or any
Purchaser Indemnified Party’s Claim hereunder arising from a cost or loss by the
Company or any of its Subsidiaries; and

(iv)
with respect to any Claim under Section 11.1(a)(vi), the greater of (i) the net
present value of net cash flow expected with reasonable certainty to be derived
from the Facility for alternative uses that would not otherwise be available but
for the breach of the Construction Agreements and (ii) the salvage value of the
Facility.

(g)
Notwithstanding any other provisions of this Agreement or of any agreement,
certificate or other document made in order to carry out the transactions
contemplated hereby, the aggregate collective liability of the Vendors to the
Purchaser or Questcor or any Purchaser Indemnified Party pursuant to this
Agreement or of any agreement, certificate or other document provided by or on
behalf of the Vendors pursuant to this Agreement, including the obligations of
the Vendors to indemnify the Purchaser or Questcor or any Purchaser Indemnified
Party as set forth in this Article 11, is limited to the amount of $25,000,000
plus 50% of the Earn-Out Amounts except as follows:

(iv)
any such Claims based on fraud or willful misconduct of the Vendors;

(v)
the aggregate liability of each Vendor is limited to the proportionate amount of
the Purchase Price received by such Vendor, but such limit does not otherwise
detract from the joint and several obligations of the Vendors under Section
11.1.

11.6
Trustee and Agent

The Vendors and the Company acknowledge that the Purchaser is acting as trustee
and agent for the remaining Purchaser Indemnified Parties, on whose behalf and
for whose benefit the indemnity in Section 11.1, is provided and that such
remaining Indemnified Parties have the full right and entitlement to take the
benefit of and enforce such indemnity notwithstanding that they may not
individually be parties to this Agreement. The Vendors agree that the Purchaser
may enforce the indemnity for and on behalf of such remaining Purchaser
Indemnified Parties and, in such event, the Vendors will not in any proceeding
to enforce the indemnity by or on behalf of such remaining Purchaser Indemnified
Parties assert any defence thereto based on the absence of authority or
consideration or privity of contract and irrevocably waives the benefit of any
such defence.
11.7
Release

Effective as of the Closing, in consideration of the mutual covenants and
agreements contained in this Agreement, including the consideration to be
received by the Vendors:
(f)
Each Vendor hereby irrevocably releases and forever discharges the Company and
the Subsidiaries and their respective divisions, predecessors, directors,
officers, members, managers, partners (general or limited), agents, and
employees and the successors, heirs, assigns, executors and administrators to
the foregoing (the “Released Parties”) of and from any and all manner or causes
of actions, Claims, suits, rights, debs, sums of money, covenants, Contracts,
damages and judgments, whatsoever, in Law or equity, which such Vendor ever had,
now has, or which he hereafter can, shall or may have, against the Released
Parties, whether known or unknown, suspected or unsuspected, matured or
unmatured, fixed or contingent, for, upon reason of any matter relating to the
Company or any of the Subsidiaries, and arising at any time on or prior to the
Closing Date, whether in such Vendor's capacity as an equity holder, director,
officer, holder of indebtedness or otherwise, and the Released Parties shall not
have liability with respect thereto; provided, however, that such release shall
not cover Claims or liabilities for amounts owed pursuant to, or other rights
set forth in, or other Claims arising in connection with this Agreement or any
agreement ancillary to this Agreement, nor shall such release cover: (i) Claims
or liabilities for amounts owed to any Vendor at the Closing and payable to such
Vendor after the Closing in respect of accrued salary and benefits payable by
the Company in the ordinary course of the Company’s business; or (ii) subject to
Section 11.7(c), any right to indemnification under the by-laws of the Company.

(g)
Each Vendor acknowledges and agrees that the release set forth in this Section
11.7 applies to all Claims or liabilities of any nature whatsoever, whether at
Law or in equity, whether known or unknown, fixed or contingent, suspected or
unsuspected, foreseen or unforeseen that it may have against the Company with
respect to the matters being released hereunder.

(h)
Questcor, the Purchaser and the Company agree that the indemnification
provisions in favour of the Company’s directors and officers currently set out
in the by-laws of the Company shall not be terminated or modified in such a
manner as to adversely affect any director or officer to whom this section
applies for a period of six years following the Closing. However, each of the
Vendors hereby waives any rights to indemnification under the Company by-laws in
respect of any Claim that Questcor or the Purchaser have against such Vendor
under this Agreement, in respect of which a Vendor has a right to
indemnification under the Company’s by-laws, but without prejudice to the
Vendors’ right to indemnification under the Company by-laws on any other matter
in the future.

ARTICLE 12    
GENERAL
12.1
Public Notices, Press Releases and Announcements

None of the Parties shall issue any press release or make any public
announcement or other disclosure relating to the existence or subject matter of
this Agreement without the prior written consent of the other Parties.
Notwithstanding the foregoing, Questcor shall be permitted to issue any press
release or make any public announcement or other disclosure relating to the
existence or subject matter of this Agreement without the prior written consent
of the Vendors and the Company, including that Questcor may make any public
announcement or disclosure concerning its publicly-traded securities it believes
in good faith is required by applicable Law, any listing or trading agreement,
or the rules and regulations of NASDAQ, including the filing by Questcor of a
Current Report on Form 8-K (the “Questcor 8-K”) to report execution of this
Agreement. In connection with the preparation of the Questcor 8-K, the Company
and the Vendors shall, upon request by Questcor, furnish to Questcor all
information as may be reasonably necessary or advisable in connection with the
transactions contemplated by this Agreement. The Vendors and the Company warrant
and represent to Questcor that all such information shall be true and correct in
all material respects and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements contained therein, in light of the circumstances under
which they were made, not misleading. On or after the date of the Agreement, the
Vendors, the Company, the Purchaser and Questcor shall jointly issue a public
announcement and/or press release and/or other disclosure, as shall be mutually
agreed, of the transactions contemplated by this Agreement. Each Party will not
unreasonably withhold approval from the other Parties with respect to any press
release or public announcement. If any Party determines with the advice of
counsel that it is required to make this Agreement and the terms of the
transaction public or otherwise issue a press release or make public disclosure
with respect thereto, it shall, at a reasonable time before making any public
disclosure, consult with the other Parties regarding such disclosure, seek such
confidential treatment for such terms or portions of this Agreement or the
transaction as may be reasonably requested by the other Parties and disclose
only such information as is legally compelled to be disclosed. This provision
will not apply to communications by any party to its counsel, accountants and
other professional advisors.
12.2
Expenses

Except as otherwise provided in this Agreement, including Section 3.1(b):
(f)
the Purchaser and Questcor will pay all costs and expenses (including the fees
and disbursements of legal counsel and other advisers) they incur in connection
with the negotiation, preparation and execution of this Agreement and the
transactions contemplated by this Agreement; and

(g)
the Vendors will pay all costs and expenses (including the fees and
disbursements of legal counsel and other advisers) incurred by the Vendors or
the Company in connection with the negotiation, preparation and execution of
this Agreement and the transactions contemplated by this Agreement.

12.3
Notices

Any notice, consent or approval required or permitted to be given in connection
with this Agreement (in this Section referred to as a “Notice”) must be in
writing and is sufficiently given if delivered (whether in person, by courier
service or other personal method of delivery) or transmitted (whether by fax or
e-mail) to the addresses or co-ordinates set out in Schedule 12.3.
Any Notice delivered or transmitted to a Party as provided above is deemed to
have been given and received on the day it is delivered or transmitted, so long
as it is delivered or transmitted on a Business Day prior to 5:00 p.m. local
time in the place of delivery or receipt. If the Notice is delivered or
transmitted after 5:00 p.m. local time or if such day is not a Business Day then
the Notice is deemed to have been given and received on the next Business Day.
Any Party may, from time to time, change its address by giving Notice to the
other Parties in accordance with the provisions of this Section.
12.4
Assignment

No Party may assign this Agreement or any rights or obligations under this
Agreement without the prior written consent of the other Parties, except that
the Purchaser may assign all or a portion of its rights hereunder to an
Affiliate of the Purchaser, but no such assignment relieves the Purchaser of its
obligations under this Agreement.
12.5
Enurement

This Agreement enures to the benefit of and is binding upon the Parties and
their respective heirs, attorneys, guardians, estate trustees, executors,
trustees and permitted assigns.
12.6
Amendment

No amendment, supplement, modification or waiver or termination of this
Agreement and, unless otherwise specified, no consent or approval by any Party,
is binding unless executed in writing by the Party to be bound thereby.
12.7
Further Assurances

The Parties will, with reasonable diligence, do all such things and provide all
such reasonable assurances as may be required to consummate the transactions
contemplated by this Agreement, and each Party will provide such further
documents or instruments required by any other Party as may be reasonably
necessary or desirable to effect the purpose of this Agreement and carry out its
provisions, whether before or after the Closing.
12.8
Execution and Delivery

This Agreement may be executed by the Parties in counterparts and may be
delivered by fax or portable document format (PDF) and all such counterparts
together constitute one agreement.
[The remainder of this page is intentionally left blank.]
IN WITNESS OF WHICH the Parties have executed this Agreement.
 
 
LAUREN HOLDINGS INC.
By:
 
 
Name:
 
Title:

SIGNED, SEALED & DELIVERED
In the presence of:
 
 
 
Witness
 
 
Earl Duffy

SIGNED, SEALED & DELIVERED
In the presence of:
 
 
 
Witness
 
 
Paul Duffy

SIGNED, SEALED & DELIVERED
In the presence of:
 
 
 
Witness
 
 
Maureen Duffy

SIGNED, SEALED & DELIVERED
In the presence of:
 
 
 
Witness
 
 
Ron Keefe

SIGNED, SEALED & DELIVERED
In the presence of:
 
 
 
Witness
 
 
Dale Zajicek

SIGNED, SEALED & DELIVERED
In the presence of:
 
 
 
Witness
 
 
Gordon Rogers

 
 
BIOVECTRA INC.
By:
 
 
Name:
 
Title:
By:
 
 
Name:
 
Title:

 
 
Ron Keefe and Gordon Rogers, as trustees on behalf of the 2012 BV EMPLOYEE SHARE
OWNERSHIP TRUST
By:
 
 
Name: Ron Keefe
 
Title: Trustee
By:
 
 
Name: Gordon Rogers
 
Title: Trustee

 
 
101610 P.E.I. INC.
By:
 
 
Name:
 
Title:

 
 
QUESTCOR PHARMACEUTICALS, INC.
By:
 
 
Name:
 
Title:

SIGNED, SEALED & DELIVERED
In the presence of:
 
 
 
Witness
 
 
Ron Keefe, as Vendors' Representative

 
 
 

Corporate&Securities\1.New Models\Private M&A\Model Share Purchase Agre